August - 2012 - Alaska Business Monthly by Alaska Business

49th State Angel Fund â&#x2013; ConocoPhillips â&#x2013; Mat-Su Borough

August 2012

$3.95

Wind Power Making a Difference in Alaska Wind farm construction is under way across state Page 80

sPeciAl sections Building Alaska Page 66 Environmental Services Page 100

propane grill, no

hot tub, no

patio furniture, no

outdoor lighting, yes

There’s plenty to see in Alaska – America’s Last Frontier. Naturally, we’re proud to be a part of it.

XTO Energy Inc. 810 Houston Street Fort Worth, Texas 76102 817.870.2800 www.xtoenergy.com

August 2012 TA BLE OF CONTENTS dePArtMents

About the coVer Wind farms are sprouting up all across Alaska this summer, see stories beginning on page 80. STG Incorporated installed two new EWT turbines manufactured in Holland at the Kotzebue Electric Association wind farm, bringing the number of turbines to 19 for this Northwest Alaska coastal community.

From the Editor. . . . . . . . . . . . . . . . . . . 7 Inside Alaska Business . . . . . . . . . . . 8 Right Moves . . . . . . . . . . . . . . . . . . . . 64 Market Squares. . . . . . . . . . . . . . . . . 97 Alaska This Month. . . . . . . . . . . . 122 Events Calendar . . . . . . . . . . . . . . 125 Alaska Trends. . . . . . . . . . . . . . . . . 127 Ad Index . . . . . . . . . . . . . . . . . . . . . . 130

Cover photo by Jason Selars/Courtesy of STG Incorporated

FeAtures

Articles 22 | 49th State Angel Fund Giving flight to Anchorage innovators By Zaz Hollander

FINANCIAL SERVICES

26 | Room to Grow Predicting growth preserves capital and maximizes profits By Chad Steadman

TELECOM & TECHNOLOGY

28 | Internet Across Alaska Bridging the digital divide By Zaz Hollander

12 | Tanya Lee, President Alta House Vacations and Gifts Compiled by Peg Stomierowski

HEALTH & MEDICINE

POLITICS

MINING

NATIVE BUSINESS

32 | Alaska’s Rural Hospitals New innovations help address challenges By Susan Sommer

REGIONAL FOCUS

14 | Matanuska-Susitna Borough Boasting plenty of space for businesses and families to grow By Tracy Barbour

36 | Mining Nonmetallic Resources Gravel, basalt, coal among most developed By Julie Stricker

Photo courtesy of Usibelli Coal Mine

FINANCIAL SERVICES

VIEW FROM THE TOP

40 | Legislative Wrap-Up What’s done, what’s next By Rachael Petro 42 | Home is Where the Work is ANC subsidiaries set high standards in oil producing regions By Mari Gallion

Current Middle Mile

Barrow c Point Barrow Wainwright

c c

Atqasuk

Point Lay

c c

Nuiqsut Deadhorse cPrudhoe Bay

Cape Lisburne

Point Hope

c Legend

c c c

c c c c

Kivalina

MiddleSat

Alascom Alascom Gateway

Kaktovik

Red Dog Mine

c Noatak

Arctic Village

Anaktuvuk Pass

Wiseman

Venetie Kiana Ambler c EvansvilleBettles Kobuk c Noorvik c c Selawikc cc Fort c Yukon c Shishmaref Shungnak c Alatnac c c Beaver Diomede cAllakaket Deering c c Tin City Wales c Candle Stevens VillageBirch CreekCircle Hughes c c cBuckland c c c Central Teller Huslia cCircle Hot Springs King Island c Rampart c Marys Igloo c Minto Port Clarence Loran Eagle VillageEagle Council Koyuk Tanana c EsterFox cChena Hot Springs c c Nome Gambell c cElimc Nulato Ruby Manley Hotc c Solomon c Springs Nenana c c Savoonga c Chicken Shaktoolik c cGalena Anderson c Kaltag Big Delta c Boundary c c Healy Lake Poorman Unalakleet Dot Lake Healy c c Stebbins Tok Tanacross c ccSaint Michael cTetlin Lake MinchuminaKantishna c Cantwell Kotlik Paxson Northway Ophir c Emmonak c Medfra cSlana Border City cAlakanuk Graylingc Tatalinacc cNikolai Chistochina Anvik Chisana Takotna Sheldon Point cc Petersville GulkanaGakona c ShagelukFlat Talkeetna Scammon Bay NelchinaTazlina Paimiut cc Marshall cHoly Cross ccChevak cc Whitehorse TonsinaChitina McCarthy cOhogamiut cHooper c Red Devil Willow Chickaloon c Bay Haines Junction Aniakc c c c Lower Tonsinac Susitna Sleetmute c Knik c c Chuathbaluk Newtok Valdez Napamiute Eklutna cLime Village c Tyonek Hope Tatitlek Tununak Bethel Akiak cSparrevohn AFS c Mekoryuk c c Eyak cc Napakiak c Kwethluk Cordova cUmkumiute Nikiski Kenai KlukwanHaines c Cape Yakataga Whittier Johnston Point c Eek c Kasilof cKipnukc c Yakutat Chefornak Port Alsworth Soldotna Seward Middleton Island c cc c c Ninilchik cChenega c c Quinhagak Bay Kongiganak Juneau c cIliamna KoliganekNewhalen Homer Cone Mountain c c c Hoonah Elfin Cove Ekwok Igiugig Nanwalek Platinum cc Levelock Pelican c cPortlock c c Port Graham c cTogiak cc Angoon Twin Hills c cEkuk c Tenakee Springs c Naknek Manokotak c Kake cKing Salmon Sitka Wrangell Hyder c Kupreanof Egegik c Saint Paul c c Port Protection Point Baker Afognak c Kodiak c Edna Pilot PointUgashik c BaycNaukati Saint George Karluk Uyakc c Ketchikan c c c Klawock c c Uganik Craig c c Terrace cNarrow Cape Ayakulik Hydaburg Port Heiden c Akhiok c cc Kaguyak Prince Rupert c Kotzebue

Anvik GCI GCI Gateway Hughes Village Council Tlingit and Haida Yukon

MiddleMile1 AP&T Alascom GCI UUI

MiddleFiber1 ACS/AK Fiberstar AP&T Alascom CVTC GCI KKCC

Attu Shemya Station

Chignik Lake Chignik

c c cc c cIvanof Perryville c Bay cc

Nelson Lagoon

Adak Station

■ 4

150

300

Atka

450 Miles

Cold Bay cUnga c King Cove c Belkofski False Passc Sanak Akutan Unalaska Pauloff Harbor c c Fort Glenn Nikolski

MAP: Alaska Broadband Task Force/Regulatory Commission of Alaska

OIL & GAS

46 | ConocoPhillips Continues to Invest in Alaska Tax regime limits activity By Vanessa Orr

52 | The Challenges Facing Alaska LNG Exports By Larry Persily 56 | Increased Cook Inlet Activity Moving fast with new ideas By Mike Bradner 60 | Is Liberty Dead? An ambitions Alaska North Slope drilling project stalls as BP reconsiders By Wesley Loy

www.akbizmag.com • Alaska Business Monthly • August 2012

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vital

SIGNS

Dr. Christopher Manion, M.D. Orthopedic Surgeon Melissa Reiser Vice President Commercial Lending

The medical profession is about healing, improving and sometimes even saving lives. In the midst of performing such vital work, it’s sometimes easy to forget that medicine is also a business. ¶ That’s where First National Bank Alaska can really make a diﬀerence. We can help your business grow and set you free to concentrate on doing what you do best. From a complete array of cash management tools and expertise, to fast, local decisions on loans, our friendly, experienced Alaska business specialists can help your business thrive. Stop by one of our convenient local branches, for a fast, painless business checkup. Or, simply visit FNBAlaskaMedical.com.

August 2012 TA BLE OF CONTENTS Articles

special section

ENERGY, POWER & UTILITIES 84 | Wind Energy Dynamics By Nicole A. Bonham Colby

Building Alaska

88 | Oversized Freight Transporting wind farm components By Paula Cottrell

ARCHITECTURE & ENGINEERING 94 | Great Alaska Energy Challenge Where big losers and low users are winners By Gail West

ENERGY, POWER & UTILITIES 98 | Building Energy with Biomass Ketchikan GSA boiler heats up economy By Nicole A. Bonham Colby

66 | Alaska Construction Updates A small sampling of some big projects Compiled by Tasha Anderson

LOCAL NEWS

126 | GET OUT THE VOTE! Primary election roster Compliled by ABM Staff

Photo by Judy Patrick/Courtesy of CIRI

Fire Island wind farm blade at the Port of Anchorage.

special section Environmental Services Patrick Chandler (Special Programs Coordinator for the Center for Alaskan Coastal Studies) and Ryan Pallister (Gulf of Alaska Keeper) on Montague Island with a pile of debris that was gathered in 15 minutes from 50 yards of beach.

100

Photo by Mark Tanski (Center for Alaskan Coastal Studies)

100 | Cleaning Up Tsunami Debris Alaska coastal communities watch what washes ashore By Mary Lochner

112 | Permitting Natural Resources A glimpse at the enormity of time and money for project development By Joette Storm

104 | Decontaminating Kipnuk Preparing the site for a new school By Nichelle Seely

116 | ABM’s 2012 Environmental Services and Recycling Resources Directory

108 | ERM-OASIS Redefining environmental services in Alaska By Paula Cottrell ■ 6

TRANSPORTATION

70 | Women Build Houses, Friendship, Community Constructing homes with Habitat for Humanity Anchorage By Susan Sommer 74 | Tanana River Bridge Crossing the river at Salcha By Paula Cottrell 77 | Tanana River Sidebar Bridge Project Engages Salcha Students By Stephanie Wheeler 78 | Alaska’s Infrastructure Bucket List Billions in construction projects waiting to happen By Tasha Anderson 80 | Wind Power Making a Difference in Alaska Wind farm construction is under way across state By Gene Storm

CORRECTIONS An article in July about long term care insurance misstated premiums as monthly rates. The long term care insurance premiums quoted were for annual rates. Because of an editing error, information about an author was missing after an article in July. Zaz Hollander is a journalist living in Palmer.

www.akbizmag.com • Alaska Business Monthly • August 2012

FROM THE EDITOR Follow us on and

Volume 28, Number 8 Published by Alaska Business Publishing Co. Anchorage, Alaska

Dog Days of Summer

Vern C. McCorkle, Publisher 1991~2009

EDITORIAL STAFF

Managing Editor Associate Editor Editorial Assistant Art Director Art Production Photo Consultant Photo Contributor

Susan Harrington Mari Gallion Tasha Anderson David Geiger Linda Shogren Chris Arend Judy Patrick

BUSINESS STAFF

President VP Sales & Mktg. Account Mgr. Account Mgr. Survey Administrator Accountant & Circulation

Jim Martin Charles Bell Anne Campbell Bill Morris Tasha Anderson Mary Schreckenghost

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com Advertising email: materials@akbizmag.com Pacific Northwest Advertising Sales 1-800-770-4373 ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (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; Fax: (907) 279-2900, ©2012, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/archives, www. thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfi lm: Alaska Business Monthly is available on microfi lm from University Microfi lms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

elcome to the dog days of summer. No, it doesn’t mean we get to lounge around on the porch napping in the hot sun. In Alaska, it means we work like dogs to get everything ready before winter hits. In the oil and gas industry, that may mean exploring and drilling, or not. ConocoPhillips is investing, but not heavily, in Alaska. We’re coming to a crossroads with natural gas and LNG may be the way to go. Cook Inlet is heating up with activity—Liberty is not. (Stories begin on page 42.) In the construction industry, August brings ramped up work across the state, some of which we’ve covered in our quarterly Building Alaska special section (begins on page 66). We’ve included project updates, a story about women building houses, taken a look at an Alaska Railroad project up north, and started an infrastructure bucket list. We discovered that in addition to roads and bridges and buildings, a lot of the work going on this summer involves wind farm construction, so we explored several aspects of this with stories about the construction of wind farms, the dynamics of wind energy, and the transportation of the components— talk about oversized freight! August is also a month with long days of field work for mitigation, remediation, site investigations, environmental studies, and permitting for natural resources development, which our annual Environmental Services special section sheds some light on (begins on page 100). Outside Alaska, the 2012 London Summer Olympics run through Aug. 12, and we have a lone competitor: Corey Cogdell. She won the bronze in Beijing in 2008 for women’s trap, winning the first ever Olympic shooting medal for Team USA. Watch her compete Saturday, Aug. 4 (tune in to NBC beginning around midnight Friday night Alaska time, or show up in London around 9 a.m. that Saturday). August also marks the beginning of a new school year, time for another state fair, and the end of summer. It is harvest time for crops of fresh Alaska grown produce. It’s when the silvers run, and the politicians. The primary election is Tuesday, Aug. 28 and you’ll find a roster of candidates on page 126. Enjoy the magazine, take a break from working like a dog and dig in for another really great issue of Alaska Business Monthly. —Susan Harrington, Managing Editor

www.akbizmag.com • Alaska Business Monthly • August 2012

7■

INSIDE ALASKA BUSINESS

ASRC Energy Services

SRC Energy Services recently celebrated two significant safety milestones for the groups who work at Milne Point. Milne Point operations and maintenance and field managed projects combined have gone nearly three years without a lost time or recordable incident (July 27, 2012). This equates to more than 631,700 man-hours of work performed without an injury needing medical treatment and requires each person in each group, from mechanical, roads and pads, electrical and corrosion to perform as one team. Additionally, the roads and pads crew reached their own milestone by going five years without a lost time or recordable incident as of April 27, 2012.

Anchorage Police Department

nchorage Police Department Chief Mark Mew was honored with the Patriot Award by Employer Support of the Guard and Reserve. The Patriot Award is recognition given by the Department of Defense for outstanding support to a service member by their civilian employer. APD Officer Chris Simmons nominated Chief Mew for the recognition. Simmons cited he routinely has the support of both Chief Mew and the entire department during previous deployments as well as his current training tempo.

City of Sitka

n 2008, Sitka became the first Alaska community to earn a Bicycle Friendly

Compiled by Mari Gallion

Community award. On May 14, Sitka became the first Alaska community to earn a renewal of its Bicycle Friendly Community designation from the League of American Bicyclists. Sitka now is one of three recognized communities in Alaska (Anchorage earned a BFC designation in 2009 and Juneau in 2011, also at the bronze level). There currently are 214 communities in 47 states with Bicycle Friendly Community designations at the platinum, gold, silver and bronze levels.

Midnight Sun Home Care

o mark its 10 year anniversary, owner Kevin Turkington has changed the name of Senior Care of Alaska to Midnight Sun Home Care, to acknowledge the company’s many non-senior markets, including disabled and post-surgical clients, workers’ compensation clients, new moms and overworked caretaking families who need periods of respite. Midnight Sun Home Care is committed to maintaining the same high standards of care that have contributed to establishing its reputation under its former name by continuing to hire staff trained far beyond what government programs require: The Certified Companion Aides at Midnight Sun Home Care, subject to a training/testing program developed in cooperation with nationally recognized home care training experts, transcends the training level required by government programs.

• Pile Sockets • Shoring • Rock Anchors • Tie-Backs • Cofferdams • Foundations • Drilling for Large Diameter Cassons ■ 8

People Mover

eople Mover has introduced new fareboxes on its fleet and has begun

using magnetic swipe and smart card technology. With the replacement of People Mover’s 18 year-old system, the new GFI Odyssey farebox will automatically validate and process coins, currency, magnetic farecards and smart cards, ensuring valid fares and payments are received. The University of Alaska Anchorage worked closely with People Mover on this project to ensure that UAA WolfCards are integrated with the new fareboxes. UAA has a contractual relationship with People Mover that allows current UAA students, staff and faculty to ride the bus. WolfCards will be swiped in the farebox card reader identifying they are valid. A ticket vending machine located in the Downtown Transit Center will sell passes, tickets and smart cards, and allow passengers to reload smart cards with passes or tickets.

First National Bank Alaska

irst National Bank Alaska announced it fi led a Form 15 with the Office of the Comptroller of the Currency to voluntarily deregister its shares of common stock under the Securities Exchange Act of 1934, as amended. Shares of the bank’s common stock trading under the symbol FBAK will continue to trade on the Over-The-Counter Bulletin Board without interruption. The bank expects to generate annual savings by reducing accounting, legal and administrative costs associated with being a registrant. The savings will allow First National execu-

620B East Whitney Road Anchorage, AK 99501

www.pacificpile.com I (907) 276-3873

www.akbizmag.com • Alaska Business Monthly • August 2012

INSIDE ALASKA BUSINESS tives and employees to focus on other areas of the bank’s operations to further the strategic direction set by the Board of Directors.

Aleut Corp.

he Aleut Corp. acquired Analytica Group of Colorado in June. Established in 1984, Analytica Group is a state-certified water testing laboratory with offices in Anchorage, Fairbanks, Wasilla and Thornton, Colo. The company’s public water system compliance monitoring program has helped countless water utilities in Alaska and Colorado fulfi ll complex industrial compliance requirements. Analytica has played a vital role in providing clients with precise, defensible baseline data. Analytica’s clientele include public drinking water and industrial wastewater utilities, mining, oil and gas, seafood processors, manufacturing, tourism, cruise lines, school districts, construction, real estate, state and federal agencies, private homeowners and not-for-profit businesses.

Fairbanks Natural Gas LLC

airbanks Natural Gas LLC is moving forward with the development of a liquefied natural gas storage expansion in Fairbanks to increase availability of clean burning, economic natural gas to FNG customers. FNG currently owns and operates two LNG storage and regasification facilities in Fairbanks with a total storage capacity of 340,000 gallons. The new tank will be located at FNG’s existing LNG storage facility, and will be

Compiled by Mari Gallion

large enough to supply approximately 2,200 homes for an entire year. FNG will fi ll the LNG storage from its existing liquefaction facility at Port Mackenzie while continuing to develop an alternative supply of LNG from a North Slope liquefaction plant. Construction of the LNG storage facility is expected to commence next summer, with initial deliveries beginning in summer 2014.

University of Alaska

hree-member teams from Kenai Peninsula College-Anchorage Extension and University of Alaska Fairbanks Community and Technical College recently took first and second place, respectively, in the first National Simulation Troubleshooting Shootout. Hosted at Northern Oklahoma College in Tonkawa, Okla. The Alaska teams were two of eight three-member teams across the nation from process technology programs, which teach operations skills required in petrochemical, power generation, pharmaceuticals, food and beverage, and related fields. The three-round competition tested the teams’ troubleshooting skills: recognizing and resolving problems with various process-related scenarios using computer-based simulation software.

Bering Straits Native Corp.

ering Straits Native Corp. and NovaGold Resources Inc. signed a purchase and sale agreement transferring assets of the Rock Creek Mine to BSNC. The transfer is contingent upon NovaGold’s successful completion of Phase I of the reclamation plan approved by the

permitting agencies this spring. Concurrently, BSNC is in negotiations with NovaGold to purchase the Alaska Gold Co., which owns the Rock Creek mine and other assets in the Nome area, including land and gravel resources and the Big Hurrah mining claim. Rock Creek is an open-pit gold mine located six miles east of Nome. The mine is now in care and maintenance status. BSNC is continuing to evaluate whether the mine can successfully be placed back into operation on a smaller scale than previously operated. If the analysis indicates the mine cannot be profitably operated, BSNC will move toward full closure of the mine site.

Copper Valley Telecom

opper Valley Telecom, a telecommunications carrier serving customers within a 15,000 square mile region of Southcentral Alaska, announced that the company has entered into an agreement with Verizon Wireless to participate in the LTE in Rural America program. 4G LTE (4th Generation Long Term Evolution) refers to technology that enables users to access the Internet, apps and other web-based tools at high speeds.

American Fast Freight

merican Fast Freight announced groundbreaking of a new freight facility adjacent to its current facility off West International Airport Road in Anchorage. The design was completed by Gary Peterson of GPARCH Architects and the construction is being managed by Watterson Construction; both are Anchorage-based businesses.

Pacific Pile & Marine, LP (PPM) is seasoned in projects containing complicated logistics, specialized equipment, environmental constraints and long lead time materials.

276-3873 www.pacificpile.com I (907) 276-3878

Working in the Alaska market for over a decade, our team is dedicated to the preplanning schedule control and logistical support required to deliver projects in this environment. 620B East Whitney Road I Anchorage, AK 99501

www.akbizmag.com • Alaska Business Monthly • August 2012

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INSIDE ALASKA BUSINESS

Compiled by Mari Gallion

The new warehouse space will be 50 percent bigger than the old facility at nearly 30,000 square feet, and includes a high-pile-storage chill/freeze area with product receiving doors located directly in the coolers. American Fast Freight expects to begin operations from the new facility in November. AFF will continue to utilize the existing facility as extra storage and as a project freight staging area.

Captain Cook Ballroom; Northern Energy Science and Technology Fair: Aug. 15 at Dena’ina Center; Bering Strait Port Authority Workshop: Aug. 16 at Dena’ina Center; Robert O. Anderson Sustainable Arctic Award Dinner: Aug. 17 at Hotel Captain Cook; Governor Walter J. Hickel Day of the Arctic Brunch and 2nd Annual Never Sets Film Festival: Aug 18 at Hotel Captain Cook. To register for events, visit institutenorth.org.

R&M Consultants Inc.

Alutiiq Pride Shellfish Hatchery

&M Consultants Inc. has expanded its service offerings to include geographic information systems services. GIS has become a widely used and essential part of many professional services projects. A science in its own right, GIS joins geography and information technology for integration of hardware, software and geospatial data, enabling the capture, analysis and cartographic visualization of geographically referenced information. R&M’s GIS Services Department specializes in the integration of geospatial data with enterprise-level hardware and software. Having an extensive background in the ESRI ArcGIS suite of software products, R&M offers solutions using the de facto industry leader in GIS technology.

Institute of the North

he Week of the Arctic provides venues for learning more about and contributing to Alaska’s role in the Arctic. Events include Federal Research Priorities and Processes: Aug. 13 at Anchorage Museum; Arctic Council Strategic Planning and Luncheon: Aug. 14 at Hotel

s part of the AKCRRAB program, the Alutiiq Pride Shellfish Hatchery shipped 1,500 juvenile blue king crabs to the NOAA Alaska Fisheries Science Center Behavioral Ecology Lab in Newport, Oregon, and to the University of Alaska Fairbanks, Juneau Center. Since AKCRRAB began in 2006, many thousands of juvenile red and blue king crabs in multiple batches have been shipped to laboratories to advance juvenile king crab biological research. The juvenile blue king crabs shipped this spring will be used to evaluate growth rates and develop tagging techniques.

Teya Technologies

on Perry of Anchorage-based Teya Technologies, an Alaska Nativeowned 8(a) certified Small Disadvantaged Business that provides professional services to government and commercial clients, was named Teaming Contractor of the Year by America Express OPEN— the small business division of the financial services company—at their annual Victory in Procurement Awards.

Since entering the government contracting arena, the company has gained past performance experience as a subcontractor and is now the prime contractor on roughly 90 percent of their projects. The awards ceremony took place at the “Victory in Procurement: Grow Your Business through Government Contracting” event in Washington, D.C.

Coastal America Art Contest

our Alaskan students were recognized in Washington, D.C., and at the Alaska SeaLife Center for their winning entries in the national Coastal America Art Contest. Casey Lambries, a third grader at North Pole Elementary, won first place in the 3rd-5th grade category with a painting entitled “Whale Song.” At the national level, Kodiak High School student Deborah Bitanga won 2nd place in the 9th-12th grade category with her painting “The Power to Save.” Isabel Brown, a second grader from Two Rivers School in Fairbanks, won 2nd place in the K-2nd grade category. Storm Rohrer, a 4th grader at Hermon Hutchens Elementary in Valdez placed 3rd in the 3rd5th grade category with the painting “Hiding Place.” Lambries and the other 1st place winners were honored with an awards ceremony at the National Geographic Society’s Grosvenor Auditorium and Reception Area in Washington, D.C., and were on hand to assist with creating four ocean murals with Cartoonist Jim Toomey at the Smithsonian’s National Museum of Natural History.

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

www.pacificpile.com I (907) 276-3873 ■ 10

620B East Whitney Road I Anchorage, AK 99501

www.akbizmag.com • Alaska Business Monthly • August 2012

View from the Top

Compiled By Peg Stomierowski

Tanya Lee, President Alta House Vacations and Gifts

physics graduate of the University of Virginia, Tanya Lee moved to Anchorage in 1998 to work in a cancer clinic as a radiation therapist. When she moved again in 2000, she sought a slower pace in Girdwood and to indulge her passion for skiing. But she quickly realized she wasn’t up for the daily commute—she wanted to live and work in the same town. So in 2003, Tanya founded Alta House Vacations and Gifts to generate a reliable living income from a handful of remodeled investment properties. She figured out that with only a third of her units occupied, renting by the night could produce enough income to exceed longer-term rental expectations without the greater risk of property damage and devaluation. In 2009, she got her real estate license. AHV has grown into a community-oriented business, she says, with visitors enjoying fine accommodations and linking up with glacier cruises, jet boat tours, and guided fishing and hiking; and easily finding time to shop for locally made goods. Her enterprise has received attention in “Powder,” “National Geographic Traveler” and “Men’s Journal” magazines.

■ 12

VIEW FROM TOP: Business has been excellent, largely because of our new, very visible office location in the New Girdwood Townsite. We plan to boost occupancy in the slower seasons by reaching out more to corporate, conference and wedding planners who may traditionally be inclined toward placing travelers in hotels. RENTAL HUB: By adding short-term property management to our services, AHV has grown from six personal properties to 15 properties all near one another in Girdwood, close to the ski area. It continues to attract more houses and condos to broaden choices for our guests. FINE TOUCH: The idea was to make the properties feel new, with leather furniture and extras like espresso machines, decks with grills and hot tubs. I wanted a stay to be memorable. B&B IMPETUS: While I knew I wanted to manage rental properties, my experience with long-term renters had not been positive, with a lot of wear and tear occurring. I started researching B&B enterprises and found a slowly growing industry competitive with traditional hotels. Nightly vacation rentals allow me to provide more space, more privacy and many more amenities at better prices. RIDING A WAVE: More people are traveling in groups. Many are looking for deals. Group travel can slash costs, for instance, by having family members and friends stay together rather than in separate rooms. Having a kitchen and being able to cook meals together represents huge savings. The additional space, home-like amenities and fantastic views wow our guests, so they want to come back. INFORMATION HUB: Girdwood inspires a lot of small business activity. Our free information services attract potential customers and snag reservations for these companies, allowing owners, who are often busy all day guiding tours, to focus on clients. FRIEND WITH BENEFITS: My biggest competitor is also my best promoter, The Hotel Alyeska. Alyeska resort changed ownership in 2006, and with that came fresh ideas to attract more visitors year-round. I’ve seen dramatic increases in occupancy rates year-round—even while more than doubling my inventory—as guests discover our recreation mecca here. GREAT RECESSION: I think the rough economy has helped our business as travelers seek deals. Trips of a lifetime are more affordable when the costs are divided among families. 

www.akbizmag.com • Alaska Business Monthly • August 2012

Regional Focus

By Tracy Barbour

View of Matanuska Glacier with golden quaking Aspen trees in the foreground.

Boasting plenty of space for businesses and families to grow ccupying nearly 25,000 square miles in the heart of Southcentral Alaska, the Matanuska-Susitna Borough rivals the size of West Virginia. It’s an expansive area adorned with mountain ranges, rolling lowlands, river valleys, forests and wetlands. The borough encompasses parts of the Alaska Range with North America’s tallest mountain—Mount McKinley—just outside its northern borders, portions of the Chugach Mountains to the south, and the Talkeetna and Clearwater Ranges in its interior. The Mat-Su Borough is renowned for being home to the official start of the legendary Iditarod Trail Sled Dog race as well as the Iron Dog snowmobile race from Wasilla to Nome to Fair■ 14

banks. The borough is also the state’s largest agricultural producer, growing over-sized cabbages, rutabagas and other vegetables. The borough’s pristine landscape is dotted with farms, quaint towns, suburban homes and remote cabins. Nearly 90,000 people call Mat-Su home. Most of them live in the incorporated communities of Palmer and Wasilla, as well as places like Knik-Fairview, Lakes, Tanaina and Gateway. Wasilla, which is located on the northern point of Cook Inlet, is a commuter suburb of Anchorage. It is the borough’s largest city and is experiencing phenomenal growth. In 2008, the city gained international prominence when Sarah Palin, Wasilla’s former

Photo courtesy of MSB

BY TRACY BARBOUR

Matanuska-Susitna Borough Mayor Larry DeVilbiss.

www.akbizmag.com • Alaska Business Monthly • August 2012

4 Mayors of the Mat-Su invite you to a Climate of Free Enterprise

(Left to right) Houston Mayor Virgie Thompson, Matanuska-Susitna Borough Mayor Larr Larry DeVilbiss, Palmer Mayor DeLena Johnson, Wasilla Mayor Vern Rupright

Mat-Su is the most tax friendly environment for business in Alaska

Taxes on inventory allow $1 million in goods to be exempt. Taxes on business infrastructure don’t exist. No sales tax exists on Borough lands. Taxes on real estate and business property across the Mat-Su are lower than Alaska’s two largest cities. Tourism bed taxes are lower, and car rental taxes are collected somewhere else.

Ship approaching barge at Port MacKenzie

Palmer airport: Fly in and golf at awe-inspiring Palmer Golf Course

Companies moving to Mat-Su

In the first six months of 2012, some 660 companies filed for new business licenses in the Mat-Su. Last year, the Mat-Su added 400 jobs.

Goose Creek Correctional Center aerial: 371 jobs coming online

Growing customer market

Susitna Valley Jr./Sr. High School: Only $5.4 million in cargo is off-loaded at Port MacKenzie on one vessel in May the Mat-Su school district is growing.

The Mat-Su population grew 50 percent in the last US Census, today the pop. is 91,607. One neighborhood of Knik-Fairview is the 5th largest community in Alaska. The increased school enrollment—alone—in Mat-Su from 2001-2011 would be the 5th largest school district.

http://www.cityofpalmer.org/ http://www.cityofwasilla.com/ http://houstonak.com/ http://www.matsugov.us/publicaffairs

Skilled, young labor pool

• 10 percent of us are entrepreneurs • Median age is 34 • Voters support education, passing a $215 million school bond last year • The Mat-Su offers more land, more house, for less money (Mat-Su average home sales price in July $220,464; Anchorage average home sales price in July $280,179) • Big mountains, big fish, rich life to enjoy

www.akbizmag.com • Alaska Business Monthly • August 2012 http://www.matsugov.us/economicdevelopment/

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Photo courtesy of MSB

mayor and the state’s former governor, served as the vice-presidential running mate of John McCain in the country’s presidential election. Palmer, often called Wasilla’s “twin” city, is a densely-populated area with the ambiance of a small western town. Each year, Palmer holds the Alaska State Fair and hosts thousands of visitors. People also visit the city for its abundance of recreational activities, including skiing at nearby Hatcher Pass.

Industries

The economy of the Mat-Su Borough is stable and growing, says Borough Mayor Larry DeVilbiss. The reason: “We have not experienced the downturn that was more typical of the rest of the country,” DeVilbiss says. “Add to that the fact that we have a huge capacity for growth.” For several decades, Mat-Su has been the state’s fastest-growing area. It grew more than 50 percent from 2000 to 2010, going from a population of 59,322 to 88,995. Much of that growth was fueled by the movement of people from other parts of the state. According to the 2010 Mat-Su Economic Development Strategic Plan, more than half of the individuals who migrate to Mat-Su come from another borough in Alaska. The Anchorage Municipality is the leading origin of new residents to MatSu as well as the leading destination of former residents. Officially part of the Anchorage Metropolitan Statistical Area, the borough’s economy, livelihood and people are closely connected to Anchorage. As many as 20,000 people commute from the borough to Anchorage, according to Don Dyer, the borough’s economic development director. However, the rate of growth in the number of commuters from Mat-Su to Anchorage is slowing: The increase in the number of Mat-Su residents working in Anchorage fell from 37 percent between 1997 and 2002 to 18 percent between 2002 and 2007; while the number of local residents employed in Mat-Su continued to increase at a constant rate. As more people move to the borough, its economy continues to grow and diversify. Currently, the leading industries in the borough include retail, construction, health care/social services, ■ 16

Don Dyer, economic development director of the Matanuska-Susitna Borough.

accommodation/food services, government, transportation and warehousing, and personal services.

Trends

Interestingly, recent job growth patterns show that Mat-Su has added employment in industries that support its rising population: real estate, retail trade, health care and construction. Mat-Su’s high employment totals for construction and real estate indicate rapid growth--in a less dynamic place, these job totals would be lower. In terms of who’s providing the jobs, the Mat-Su Borough has a limited number of major private-sector employers. The top private employers are predominately retail businesses: Wal-Mart/Sam’s Club, Fred Meyer, Carrs/Safeway, Home Depot, Lowes and Target. Other major employers are the Matanuska-Susitna Borough School District, State of Alaska, Mat-Su Regional Medical Center, Matanuska-Susitna Borough, the federal government and University of Alaska. DeVilbiss is noticing a number of employment-related trends at work. For instance, in the mid ‘80s, close to 50 percent of the borough’s workforce was tied directly to the oil industry. Now, that number is down to around 13 percent. “I’m happy about that,” he says. “The more we can diversity our economy, the less vulnerable we’re going to be to outside negative forces.” Another trend DeVilbiss is seeing is an increased interest in the high-qual-

ity coal in the Matanuska drainage basin. Earlier this year, Riversdale Alaska LLC won a bid to lease nearly 10,000 acres of coal-bearing lands in the MatSu Valley. A wholly-owned subsidiary of Australian Riversdale Resources Pty Ltd., Riversdale and its management previously engaged in the development of the Benga Coal Project, an anthracite coal mine in Mozambique. “They are involved with anthracite coal mining around the world and have high expectations to be able to export our coal for steel production,” DeVilbiss says. “So far, they seem to be well received in the community.”

Economic Development

DeVilbiss touts Mat-Su Borough as a very pro-business place with plenty of land for business development—and minimal restrictions on the use of that land. The borough has no sales tax, no tax on alcohol and one of the lowest—if not the lowest—property taxes in the state. “We are, without question, the most business-friendly and low-tax place in Alaska,” DeVilbiss says. As part of its low-tax stance, the Mat-Su Borough is positioning itself to eliminate its inventory tax. In May, the borough took a step toward raising the cap for inventory exemption from $250,000 to $1 million. “The plan is to eliminate it completely next year,” DeVilbiss says. Eradicating the inventory tax is a big deal. It would open the door for ware-

www.akbizmag.com • Alaska Business Monthly • August 2012

housing, commercial development and other opportunities, DeVilbiss says. It would also provide practical benefits. Complying with the inventory tax is a hassle for some stores, especially those that track their inventory manually. It creates an added expense that’s reflected in grocery bills, so omitting the tax would also save consumers money in the long run. The borough is also considering its business license process. This would allow licensees to obtain a single license instead of needing separate permits to operate in Palmer, Wasilla and other communities within the borough. Title 43 is yet another example of MatSu’s business-friendly environment. Title 43 streamlines the subdividing process, so there are fewer steps and requires less time for land development, according Dyer. He says the borough’s abundance of raw land—and sophisticated labor force—offers an advantage to businesses wanting to expand in the area. “There’s an opportunity for companies to relocate, put branch offices in the borough and tap into an excellent workforce,” he says.

Title 26 is another initiative designed to encourage business activity. The code outlines incentives for businesses that bring jobs to the community. The borough’s streamlined licensing and taxes are all part of its aim to outgrow the “bedroom community” syndrome, DeVilbiss says. The goal is to create an economy that’s within its own boundaries, which will ultimately enhance services, jobs and economic stability. The Mat-Su Borough is pursuing a number of other opportunities to simulate the economy. Port MacKenzie is a hot spot in the area, where various aspects of development are unfolding. Primary initiatives are the Port MacKenzie development and rail extension projects. These projects are scheduled to be completed in multiple phases. The Knik Arm Bridge is another key project involving Port MacKenzie. The bridge will link the port with Anchorage, lessen congestion on the roadway and create thousands of jobs. But the importance of the project goes way beyond the borough, DeVilbiss says. The bridge and deepwater port will facilitate the placement of numerous min-

eral concentrates and resources on the global market. “The right of way has been purchased for the bridge,” DeVilbiss says. “We’re hoping to turn dirt in 2013.” Economic development is also progressing at Hatcher Pass. According to Dyer, the road is being built into Hatcher Pass and a contract was recently awarded to develop Nordic ski trails in the area. The road and trails are scheduled to be completed this summer. Future plans also include building a convention center and other facilities around Hatcher Pass. The borough is also moving forward with the South Denali Visitors Center. The facility, being constructed at the southern end of Denali State Park, will be a world-center facility with yearround access to beautiful views of the Alaska Range. While the Mat-Su Borough has plenty of potential for growth, it also has a number of limiting factors. One of them is the lack of bed space in the MatSu Valley. This, in turn, diminishes the area’s ability to host large-scale conventions, meetings and other events. The

www.akbizmag.com • Alaska Business Monthly • August 2012

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The Mat-Su Convention and Visitors Bureau is located in the Mat-Su Visitors Center at Mile 35.5 of the Parks Highway, beneath Pioneer Peak.

borough’s current available bed space is 1,200, according to Dyer. Other weaknesses of the borough, according to its 2010 Economic Development Strategic Plan, include the seasonality of the economy, road infrastructure, freight transportation costs, cost and availability of energy and broadband infrastructure. However, the report also detailed strengths that include the borough’s population and job growth, skilled labor pool, developable land, proximity to military installations, affordable housing and natural resources.

Commercial Real Estate

With its wide-open landscape, the Mat-Su Borough has an abundance of “buildable” land available for commercial, industrial and residential development. Much of this land sits within easy reach of the road system, adding to its appeal and potential. According to Dyer, the borough owns a large amount of land that can be used to accommodate businesses wanting to open or relocate to the area. In addition, Mat-Su imposes few stipulations on the use of the land, which helps to facilitate business development. However, Mat-Su is somewhat limited on warehouse space, Dyer says. Realtor Mark Lee agrees. His company—Lee Realty LLC—specializes in residential, warehouse, office, retail, industrial and undeveloped land for lease or sale ■ 18

within the Mat-Su Valley. Lee says the warehouse/office category has the least amount of space, while office and retail properties have the most availability. Most of the borough’s existing warehouse space is located in Palmer and Wasilla, with very little available in outlying areas like Healy and Sutton. One example of warehouse space that’s currently available in Wasilla is at Pioneer Plaza. Conveniently situated near the Parks Highway, the building has 1,500 square feet of warehouse space, plus 750 square feet of office space for lease. Lee says the borough has a sufficient amount of commercial real estate inventory, and the market is good for established buildings. But there’s limited availability of Class A space, which is typically offered with newer buildings with elevators, tiled floors and other amenities. “They’re just a handful of buildings,” he says. “Most of them were built in the 1980s, but they’re well maintained.” There’s not a lot of new construction taking place in the borough’s commercial real estate market. The development that is happening is mainly being done by owners who are purchasing land to build properties for their own use. Higher building costs have somewhat softened the borough’s commercial real estate market, as it has in many other places around the country. This is making renting a more viable option for businesses. Currently, commercial properties in Palmer and

Wasilla are renting out for about $1.25 to $2.50 per square foot, compared to much higher costs for constructing a new building. “If you were to build a building today, the land cost would be between $2.50 and $5 per square foot. On top of that, you have the building costs, and then you’re looking at $150 to $250 per square foot for other costs, depending on what you’re building,” Lee says. In terms of activity, the only properties that seem to be moving in the borough now are older-user buildings. That makes sense, considering that existing buildings typically lease for about half the cost of new ones. “When you can find a space for $1.25 to $1.50 per square foot, you’ll take that space instead of $3 per square foot,” Lee says. Although the borough is limited in warehouses—especially warehouses with office space—there’s quite a bit of retail and office space for lease: Lee Realty manages an office building with about five empty spaces available near the Wal-Mart in Wasilla. The units are 1,500 square feet each and rent for about $2.50 a square foot. “We have some good national companies in there,” Lee says. “The property is paid for, so we can sit and hold and still get a decent price. Everything is negotiable.” Another commercial lease opportunity is available on the Park side of town in the Trans-Alaska Title building. The property has one space of about 1,800 square feet on the lower floor and units of varying sizes upstairs. Century Plaza on the Knik-Goose Creek Road also has several spaces, ranging from 400 to 1,000 square feet. Along the Palmer-Wasilla Highway—where commercial space gets snapped up fairly quickly—there’s a 1,200-square-foot unit available. The Class A space has exposure in the front of the building, making it the ideal spot for a retail outlet. Lee feels that the borough has a very pro-business attitude, and he encourages new businesses to come set up shop. “We’re looking for people to move here and become part of our community. If businesses are built here, it will save a lot of employees an opportunity to avoid commuting to Anchorage and will take some of that traffic off the road,” he says.

www.akbizmag.com • Alaska Business Monthly • August 2012

Education

In addition to fostering a businessfriendly environment, the Mat-Su Borough strives to maintain an atmosphere that’s supportive of education. Borough residents recently approved a five-year, $214 million bond package to support the construction of new schools. It was the largest such bond passed in the state, according to DeVilbiss. Thanks to the funding, the borough will be building a new high and middle school to address the explosive growth in the Knik-Fairview area. It also plans to construct a new high/ middle school near Wasilla. The borough’s education-related infrastructure also includes an increasing number of charter schools, as well as alternative-education schools. The Mat-Su Borough School District educates about 17,400 students at almost 45 facilities. Dyer says the borough’s high schools are designed to do more than just offer a diploma; they prepare students for a career. Students have an opportunity to graduate from high school with a certification in welding, automotive

mechanics or Cisco programs. Some classes are even geared to the aviation industry. Graduating with technical skills makes students more competitive in the job market, Dyer says. “It’s so much better to hire locals than to bring in people from Outside. They’re already used to the weather and can find their way around. Many times when you hire someone and bring them in from Outside, they turn around and leave, and that money’s been wasted.” Another educational asset of the borough is the Matanuska-Susitna College. MSC held a ribbon-cutting in May for the new 3.5 million dollar expansion of Snodgrass Hall. The new addition to the college will feature classrooms and support rooms for its paramedic and nurse training programs. DeVilbiss is excited about the upcoming expansion of the college’s nursing program. “We will be getting our own paramedics and nurses from right here in the Valley,” he says. An extended college of the University of Alaska Anchorage, MSC serves almost 2,000 students per semester.

The main campus is located between Palmer and Wasilla on a 950-acre site on Trunk Road. The modern 102,676-square-foot facility houses most of the college’s educational activities. MSC offers Associate of Arts degree programs, career/technical programs, occupational endorsement certificates and professional development courses.

Port MacKenzie

Port MacKenzie is an important component of the Mat-Su Borough’s infrastructure. The deep-draft dock is equipped with a 5-foot-wide conveyor system capable of loading bulk commodities at 2,000 tons per hour, according to the borough’s website. Recently, the port expanded its barge dock from 6.5 acres to 14.7 acres. Port MacKenzie is the only Southcentral port site not constrained by urbanization. It features 14 square miles of uplands that are dedicated solely for commercial/industrial development. A ferry, bridge and railroad spur are all programmed for Port MacKenzie. This fall, the ferry is scheduled to start

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www.akbizmag.com • Alaska Business Monthly • August 2012

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Matanuska-SusitnaBorough Demographics PEOPLE QUICKFACTS

MATANUSKA-SUSITNA BOROUGH ALASKA

Population, 2011 estimate Population, 2010 Population, percent change, 2000 to 2010 Population, 2000 Persons under 5 years, percent, 2010 Persons under 18 years, percent, 2010 Persons 65 years and over, percent, 2010 Female persons, percent, 2010 White persons, percent, 2010 (a) Black persons, percent, 2010 (a) American Indian and Alaska Native persons, percent, 2010 (a) Asian persons, percent, 2010 (a) Native Hawaiian and Other Paciﬁc Islander, percent, 2010 (a) Persons reporting two or more races, percent, 2010 Persons of Hispanic or Latino origin, percent, 2010 (b) White persons not Hispanic, percent, 2010 Living in same house 1 year & over, 2006-2010 Foreign born persons, percent, 2006-2010 Language other than English spoken at home, pct age 5+, 2006-2010 High school graduates, percent of persons age 25+, 2006-2010 Bachelor’s degree or higher, pct of persons age 25+, 2006-2010 Veterans, 2006-2010 Mean travel time to work (minutes), workers age 16+, 2006-2010 Housing units, 2010 Homeownership rate, 2006-2010 Housing units in multi-unit structures, percent, 2006-2010 Median value of owner-occupied housing units, 2006-2010 Households, 2006-2010 Persons per household, 2006-2010 Per capita money income in past 12 months (2010 dollars) 2006-2010 Median household income 2006-2010 Persons below poverty level, percent, 2006-2010 BUSINESS QUICKFACTS

1,939 14,869 54.2% 6,014 7,646 S 4.1% 1.0% F S 25.7% 0 136,960 853,888 $10,362 113,679 53 434,891

19,901 252,882 23.4% 51,137 68,728 1.5% 10.0% 3.1% 0.3% S 25.9% 8,204,030 4,563,605 9,303,387 $13,635 1,851,293 904 11,922,341

MATANUSKA-SUSITNA BOROUGH ALASKA

Land area in square miles, 2010 24,607.90 Persons per square mile, 2010 3.6 FIPS Code 170 Metropolitan or Micropolitan Statistical Area: Anchorage, AK Metro Area (a) Includes persons reporting only one race. (b) Hispanics may be of any race, so also are included in applicable race categories. FN: Footnote on this item for this area in place of data NA: Not available D: Suppressed to avoid disclosure of conﬁdential information X: Not applicable S: Suppressed; does not meet publication standards Z: Value greater than zero but less than half unit of measure shown F: Fewer than 100 ﬁrms Source: US Census Bureau State & County QuickFacts

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722,718 710,231 13.3% 626,932 7.6% 26.4% 7.7% 48.0% 66.7% 3.3% 14.8% 5.4% 1.0% 7.3% 5.5% 64.1% 78.6% 7.2% 16.5% 90.7% 27.0% 71,798 18.1 306,967 64.7% 24.6% $229,100 248,248 2.68 $30,726 $66,521 9.5%

MATANUSKA-SUSITNA BOROUGHALASKA

Private nonfarm establishments, 2009 Private nonfarm employment, 2009 Private nonfarm employment, percent change 2000-2009 Nonemployer establishments, 2009 Total number of firms, 2007 Black-owned firms, percent, 2007 American Indian- and Alaska Native-owned firms, percent, 2007 Asian-owned firms, percent, 2007 Native Hawaiian and Other Pacific Islander-owned firms, percent, 2007 Hispanic-owned firms, percent, 2007 Women-owned firms, percent, 2007 Manufacturers shipments, 2007 ($1000) Merchant wholesaler sales, 2007 ($1000) Retail sales, 2007 ($1000) Retail sales per capita, 2007 Accommodation and food services sales, 2007 ($1000) Building permits, 2010 Federal spending, 2009 GEOGRAPHY QUICKFACTS

NA 88,995 50.0% 59,322 7.8% 28.9% 7.9% 48.3% 84.9% 1.0% 5.5% 1.2% 0.2% 6.5% 3.7% 82.8% 83.8% 3.2% 5.7% 91.8% 20.8% 9,163 33.4 41,329 79.2% 10.1% $212,000 29,361 2.81 $27,910 $67,703 9.9%

570,640.95 1.2 2

operating between Anchorage and Port MacKenzie. Also, this summer, the port will begin regular monthly barge service, according to Dyer. PacArctic will bring a barge from Seattle to Port MacKenzie to Kodiak and back to Seattle. This will provide opportunities to back-haul freight to Kodiak and Seattle as well.

Mat-Su Regional Medical Center

The Mat-Su Regional Medical Center forms the core of the borough’s health care system. Located in Palmer, MatSu Regional has more than 70 licensed beds and 660 hospital employees. The hospital provides a variety of services to the Matanuska-Susitna Valley community and surrounding areas. Mat-Su Regional Medical Center is the 2010 recipient of Mountain-Pacific Quality Health’s Quality Achievement Award. The highest such honor given by the organization, the award recognizes select hospitals throughout Alaska for their commitment to ensuring their patients receive the highest quality of care in the clinical areas of heart attack, heart failure, pneumonia and preventing surgical infection.

Goose Creek Correctional

The Mat-Su Borough recently saw the completion of the Goose Creek Correctional Center. The facility, officially set to open in July, is a 1,536-bed mediumsecurity correctional center for longterm male felony offenders. The $240 million center sits on a 330-acre tract about nine miles from Port MacKenzie and is a joint effort between the Matanuska-Susitna Borough and the State of Alaska Department of Corrections. Goose Creek Correctional Center is a much-anticipated addition to the borough’s infrastructure. “This facility will bring to our valley close to 350 new jobs and no doubt an additional stimulus to related spin offs,” DeVilbiss says. “I anticipate a significant flurry of new housing in that vicinity, and then things will really pop when the (Knik Arm) bridge comes in.”  Writer Tracy Barbour owns a marketing company in Tennessee.

www.akbizmag.com • Alaska Business Monthly • August 2012

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FinAnciAl serVices

49th State Angel Fund Giving ﬂight to Anchorage innovators BY ZAZ HOLLANDER Jill Dean in her GrassRoots Fair Trade Store in Anchorage. Angel investor Eric McCallum has helped Dean with financing, mentoring and business advice. Photo courtesy of GrassRoots Fair Trade Store

he Municipality of Anchorage is looking to become a city of angels. The Municipality has created the 49th State Angel Fund with $13.2 million in federal stimulus funds from the U.S. Department of the Treasury. Anchorage is the first city in the country to get such funds. The 49SAF, as it’s called, seeks to stimulate the development of small, innovative startups that benefit the Anchorage economy through a type of financing called angel investment. Angel investment targets startups struggling to find traditional financing. An established investor buys a partnership in the company, providing funds but also advice. Big risk and big returns can follow: a third of angel-invested startups fail completely but companies that succeed can generate a 10-fold return on investment. The city will spend $12.6 between now and May 2014 on the Angel Fund. ■ 22

Roughly $480,000 will go toward the cost of running the program. The municipality won’t have to pay anything besides some minimal labor costs, according to municipality managers. The municipality hopes to see about a third of the 49SAF funds go to earlystage, high-growth businesses showing significant economic potential. The city plans to make direct investments, not grants. Recipients must achieve a 10:1 private capital leverage ratio by 2017, and applicants need to demonstrate that a $1 investment from 49SAF will lead to $10 of new private lending or equity investment. “Businesses really have to make a compelling case for this investment,” says 49SAF program manager Joe Morrison, who works out of the office of Anchorage CFO, Lucinda Mahoney. “This isn’t a giveaway. This is us taking an equity position in your business and with the gains from that investment helping fund other high-growth businesses in the city.”

Max Bullock, a sophomore studying business management and law at the University of Alaska Anchorage, expects to apply for a share of direct investment from the Angel Fund. Bullock plans to apply for $30,000 to start a new business, Alaska Aviation Snow Management, clearing heavy accumulation off plane wings at Merrill Field, Lake Hood and Birchwood. Bullock hopes to meet a municipal requirement to match any Angel Fund investment by tapping family investors. He’s finalizing a business plan with help from the Alaska Small Business Development Center in Anchorage. Bullock says there’s a need for his business. His pilot father spent two hours every snowstorm driving to the airport to clear snow. At least two other less diligent aviators suffered damaged wings. But he also thinks he’s got the drive to generate the kind of fast growth the municipality is looking for before investing. “Mine would be $30,000 to $300,000

www.akbizmag.com • Alaska Business Monthly • August 2012

in five years,” he says. “I definitely believe I can meet that.”

Angel Networking

Along with direct investment, Angel Fund managers also hope to create a new network of qualified angel investors to provide money and business acumen to startups. Managers hope to distribute about two-thirds of the federal funds by taking a partnership interest in locally focused angel or venture capital funds that participate in the application process. As part of that segment, the city hopes to draw out individual and corporate investors looking to take part in an angel investment network that will outlast the life of the stimulus funds. There are pockets of angel investors in Anchorage, but nothing in the way of an established network. As Morrison, the city’s 49SAF program manager puts it, there’s a “hole in the capital continuum.” The network-building aspect of the 49SAF really captivates Allan Johnston, a longtime Anchorage angel investor and businessman who helped snag the federal stimulus funds. Johnston has talked for years about creating some kind of angel investor network. He tossed out some examples that could result from strategic partnership arising from the 49SAF: ■ The University of Alaska might get a fund where the municipality invests to commercialize technologies coming out of the university system. ■There might be companies with existing technologies attracted to Alaska by the new availability of venture capital and the Alaskan lifestyle and tax structure. ■ The fund may help create a new kind of software or call center that cuts the cost of rural medicine. Established angel investor Eric McCallum, CEO of Arctic Wire Rope and Supply Inc., doesn’t know if he’ll get deeply involved in the program or just keep doing his own vetting and investment. But what the 49SAF brings, McCallum says, is another much-needed source of early-stage, high-risk capital. “If I see a deal that looks good and I’ve vetted it for me I may bring it to

Joe,” he says. “The one thing I need is follow-on investors. I’m not doing the whole thing myself. That’s always the problem with individuals.”

Help from Above

Jill Dean started her Anchorage company, GrassRoots Fair Trade Store, in 2008 after spending 30 years as an attorney. Her 18-year-old daughter’s one job at a coffee shop constituted the sum total of the family’s retail experience. Dean took out a second mortgage on her home to start the store, filled with brilliant colors and good smells—

coffee, natural grass baskets—from products she buys from disadvantaged third-world artisans. But when Dean wanted to expand, her initial startup funds were spent. She kept hearing about a local businessman she should talk to: McCallum. He had a history of angel investment, with a dozen companies in his portfolio: a battery technology company near Boston; a server-farm energy reduction company; electronic voting-machine technology; a medical answering service used by Alaska practices; and SimplySocial, a company that develops me-

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But along with high-return investments, McCallum also mixes sociallyconscious companies into his angel portfolio. McCallum was an early investor in Plan B, the “morning-after pill” that prevents pregnancy. He is a guarantor for a $25 million microcredit fund that provides loans to microfinance institutions all over the world. Because of the personal risk involved, angel investors must perform rigorous due diligence, McCallum says. He talks to a prospective loan recipient’s clients or customers, looks at the books and conducts third-party validation. But he also relies on the recipient’s character and their ability to listen and take advice. “You can borrow money from a bank even without a good business plan if you have lots of collateral,” he said. “They don’t take ownership.” Dean finally met with McCallum a few years ago. They talked for three hours. McCallum listened to Dean’s plans for the future, nodded, then told her there was no way she could do it all and helped her come up with one realistic goal: They agreed on an 8 percent loan. Not exactly a low interest rate, Dean admits, but one that reflected the degree of risk involved with investing in a small company like hers. More importantly, she says, McCallum continues to provide regular business advice. She’s looking to expand again, into online sales and other projects. McCallum has agreed to extend the loan. “He has just been an incredible sounding board. We try to get together at least once a quarter. I bring all my finances, all my questions, he brings all his questions,” Dean says. “I don’t know if this is typical, but for me this has been the hugest contribution he has made, helped me learn to run a store and be financially sustainable.”

How the 49SAF Works

Municipal program managers accepted 49SAF applications from potential recipients through Aug. 5. There will be two more application periods next year. The 49SAF will invest anywhere be■ 24

tween $30,000 and $3 million in a particular business venture based on a variety of factors that are outlined on the 49SAF website at 49saf.com. Any highgrowth business that shows significant economic potential for Anchorage is a good candidate. The companies will need to match whatever investment they get from the fund with new debt or equity financing. “Our hope is the other party will be interested in monitoring their investment,” Morrison says. “While I will work very hard to work with every business we invest in, ultimately it’s the private sector that’s going to be able to do that better.” Morrison says he’s encouraging applicants for direct investment to get in touch with him before filing their application. Applicants for the indirect funding pool must consist of at least two accredited or qualified investors. As defined by the Securities and Exchange Commission, accredited individual investors need to be worth more than $1 million—not including their home’s value—or earning more than $200,000 a year in income. The Anchorage Economic Development Corp. and 49SAF program staff review applications. Select plans are then sent to the 49SAF Advisory Committee, a group made up of members of the business, finance and economic development community for investment recommendations. Lt. Gov. Mead Treadwell serves on the nine-person committee. Potential investments then undergo due diligence and are forwarded to Mayor Dan Sullivan and Municipal Chief Financial Officer Mahoney for final approval.

City Not State

The Angel Fund program was originally going to be statewide. The Alaska Department of Commerce, Community and Economic Development - not the Muni - put in an application for the federal stimulus funds behind the 49SAF. Johnston assisted as an informal advisor. Soon after submitting the application, the AKDCCED withdrew the application after questions arose about the state’s statutory authority to accept the money. That was on a Thursday. The application deadline was the following Monday. Johnston, who’s been working on

angel investment for 20 years, said his first choice was to revise the application to include Anchorage, Fairbanks and Juneau. But there just wasn’t time. So Johnston turned to his friend Mahoney. “The unfortunate thing: Alaska is the only state that doesn’t have an organized angel investment network. So the need is imperative,” he says. “She took on this risk-slash-opportunity to salvage those funds.” The pair, with a little help, worked up a new application over the weekend at Mahoney’s home. The money stayed in Alaska—but, Johnston admits, the Anchorage-specific focus put strain on the state from other communities that wanted in. Palmer is a hotbed of innovation, with companies working on renewable energy and aviation technologies, among other things. An initiative formed by Juneau’s Economic Development Council is looking to expand ocean, forest and visitor products industries as well as foster renewable energy. The University of Alaska Fairbanks is the only research institution in the state, according to Jim Dodson, president and chief executive officer. A task force works with UAF researchers and investors to find ways to take the innovation coming out of the university and turn it into jobs. “There’s a need for angel investment all across Alaska,” said Jim Dodson, president/CEO of the Fairbanks Economic Development Council.

New Frontier

Other states, including Maine, have founded successful angel investment funds already, so the concept of a government-administered fund isn’t new—but Alaska is new to the angel investment scene, and Anchorage’s angel investor network is much smaller than many. The city may be the only entity that got federal stimulus money without some type of existing program to augment angel investment services. “Alaska is going bareback,” Johnston says. “It’s a new frontier, not just on the government side, but also the private sector side. But just because we don’t have it doesn’t mean we don’t need it.” Zaz Hollander is a journalist living in Palmer.

www.akbizmag.com • Alaska Business Monthly • August 2012

FinAnciAl serVices

Room to

Grow Predicting growth preserves capital and maximizes proﬁts

BY CHAD STEADMAN

experienced my first real growth spurt in the fifth grade. I think I grew five to seven inches that year and enjoyed being taller than my classmates for several years. By the seventh grade, I was about 5 feet, 8 inches and towered over some of the smaller kids. I have a picture of myself and one of my best friends—his head barely coming up to my shoulder. I quickly outgrew my shirts, shoes and pants. But the day I’ll never forget is the day my mom no longer “looked down” on me. It was amazing to me how fast things changed. With that type of growth over a short period of time, there were a lot of awkward moments while my coordination adjusted to the new size. Between youth and adolescence, it’s tough to be ready for the accompanying physical and mental growth. Each of us grows in different ways. I have three brothers, and the growth came very differently for each one.

Monitoring Business Growth

Business growth is not that much different. It’s hard to predict in terms of when and how much is going to happen. For some there is a period of rapid development and then a leveling out into expected sales. For others it’s gradual and consistent, and for some that can be annoyingly slow. During rapid growth periods, a business is awkwardly trying to find itself ■ 26

and adjust to its new sales size. Overpredicting progress can be a waste of capital and detrimental to a business. Short selling your potential brings about lost opportunity and lost profits. Therefore, the first step in managing business growth is to anticipate how much will happen and when it will happen. This will help you take the second step, determining the proper path to access capital and fund the advancement of your business. There are three main ways to fund growth: ■ Personal or business equity ■ Bank loans ■Investment equity from individuals and investment firms—such as the 49th Angel Fund The first growth-funding option, personal or business equity, is typically used by firms that are experiencing slow to medium expansion. In this ideal situation, the owner or business has excess cash on hand to be used for purchase of the needed supplies, inventory, capital improvements and expansion of trade receivables that will occur with the new growth. This of course can happen if a business’ net profits are large enough to be reinvested back into the company and either match or exceed the needed expansion. Sometimes the owner of the business has

personal liquidity to fund the growth out of pocket, allowing the owner(s) of the business the greatest return on investment without additional burdens of creditors’ or investors’ expectations. The second funding option is new credit or expansion of existing credit from your bank. This traditional financing option is used for businesses in all the stages of growth, and can range from term loans to provide permanent working capital, asset purchases or capital expenditures for equipment. For short term capital needs, a business can use a banking service that allows companies to outsource payment processing to the bank and in turn convert account receivables into cash in as short as 24 hours. The path you choose can be determined by assessing your need, your credit worthiness, and your ability to repay the credit facility. The downside of credit is the burden of debt. With this option, there are the increased requirements like loan covenants, the borrowing of base certificates or the bank requiring frequent supply of fi nancial statements. Local, community banks are usually the most willing to take into account your individual needs and make adjustments as necessary. The third funding option is typical for high to extreme business growth. Expected growth can quickly outstrip your working capital and requires large upfront capital expenditures. This type of growth requires an outside equity partner. Investors such as these rely on well-written business plans and strong management teams to execute plans. In return for their equity contribution, they typically will require a percentage of ownership and an exit plan to recapture their investment. With this option, there are two types of investment firms commonly used—a venture capitalist and what is known as an angel fund. Typically, a venture capitalist wants to deal with young established businesses that are looking to rapidly expand in the marketplace. Angel funds are usually set to take more risk and work with start-up businesses and very newly

www.akbizmag.com • Alaska Business Monthly • August 2012

formed companies looking to grow. Angel funds try to package together capital and advice, while venture capitalists offer funds with expectations. The US Department of Treasury State Small Business Credit Initiative allocated the Municipality of Anchorage $13.2 million to invest in Anchorage businesses and angel funds. It’s called the 49th State Angel Fund. To find out more go to www.49saf.com.

An Example

The growth story of this community business helps illustrate how bank loans can help grow your business. Cheap Wheels Rent-a-Car has been an Alaskan-owned business for more than a decade in Anchorage. In 2004, Mike and Cindy Speer pooled their life savings and purchased the business from the original owner. The Speers received a commercial loan from First National Bank Alaska for the purchase of vehicles. They started purchasing used vehicles wherever they could find them in the newspapers ads, Craigslist and even ones for sale on the side of roads. In a

short period of time, they built a rental fleet to approximately 10 vehicles during that first year. The business began to grow rapidly—the fleet, the revenue and the profits. The relationship between First National and the Speers worked. Today, Cheap Wheels Rent-a-Car has a fleet of 50 to 60 cars and continues to be a successful community business. They could also have sought out investment equity in the form of an investment partnership, but would have had to give up equity in their business and also a share of the profits. In this case, the use of commercial loans was the right fit for the owners of the business.

Getting Taller

After my physical growth spurt during my youth, I enjoyed several years of being taller than the other kids in my class. A little height goes a long way at that age and it helped me exceed in athletics. Unfortunately, all great things must come to an end and by my freshman year in high school I reached my max height at six feet—actually it’s offi-

cially 5-foot-11.75. But in basketball you always round up. Oh, and that friend who came up to my shoulder had his growth spurt in high school and ended up 6-foot-2.  Chad Steadman is a vice president at First National Bank Alaska. He specializes in commercial underwriting and lending credit to corporations and commercial contractors. He holds a degree from Utah State University in ﬁnance with minors in ﬁnancial planning and economics. He has a diploma from the Graduate School of Banking at LSU and was commercial banker of the year for his organization in 2008. Chad was raised in Soldotna and has recently returned to Anchorage with his wife to raise his three daughters and one son in Alaska.

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www.akbizmag.com • Alaska Business Monthly • August 2012

27 ■

telecoM & technology

Internet Across Alaska Bridging the digital divide BY ZAZ HOLLANDER Current Middle Mile

Barrow

c Point Barrow Wainwright

c c

Atqasuk

Point Lay

c c

NuiqsutcDeadhorse Prudhoe Bay

Cape Lisburne

Point Hope

c Legend

c c c

c c c c

Alascom

Red Dog Mine

c Noatak

Arctic Village

Anaktuvuk Pass

Wiseman

c Venetie Kiana Ambler c EvansvilleBettles Kobuk c Noorvik c c Selawikc cc Fort c Yukon c Shungnak c Alatnac c Beaver cAllakaket c c c Candle Stevens VillageBirch CreekCircle Hughes c c cBuckland c c c Central Teller Huslia cCircle Hot Springs King Island c Rampart c Marys Igloo c Minto Port Clarence Loran Eagle VillageEagle Council Koyuk Tanana c EsterFox cChena Hot Springs c c Nome c Elimc Gambell c Nulato Ruby c c Manley Hot Springs Solomon Nenana c c c Shaktoolik c cGalena Savoonga c Chicken Anderson c Kaltag Big Delta c Boundary c c Healy Lake Poorman Unalakleet Dot Lake Healy c c Stebbins Tok Tanacross c Kantishna ccSaint Michael cTetlin Lake Minchumina c Cantwell Kotlik Paxson Northway Ophir Medfra c Emmonak c cSlana Border City cAlakanuk Graylingc Tatalinac Chistochina Anvik c cNikolai Chisana Takotna Sheldon Point cc Petersville GulkanaGakona c ShagelukFlat Talkeetna Scammon Bay Tazlina Nelchina c Paimiut cc Marshall cHoly Cross ccChevak c Whitehorse TonsinaChitina McCarthy cOhogamiut cHooper c Red Devil Willow Chickaloon c Bay Haines Junction Aniakc c c c Lower Tonsinac Susitna Knik cSleetmute c c Chuathbaluk Newtok Valdez Napamiute Lime Village Eklutna c c Tyonek Hope Tatitlek Tununak Bethel Akiak cSparrevohn AFS c Mekoryuk c c Eyak cc Napakiak c Kwethluk Cordova cUmkumiute Nikiski Kenai KlukwanHaines c Cape Yakataga Whittier Johnston Point c Eek c Kasilof cKipnukc c Yakutat c Chefornak Port Alsworth Soldotna Seward Middleton Island c cc c Ninilchik cChenega c c Bay KongiganakQuinhagak Juneau c cIliamna KoliganekNewhalen Homer Cone Mountain c c c Hoonah Elfin Cove Ekwok Igiugig Nanwalek Platinum cc Levelock Pelican c cPortlock c c Port Graham c cTogiak cc Angoon Twin Hills c cEkuk c Tenakee Springs c Naknek Manokotak c Kake cKing Salmon Sitka Wrangell Hyder c Kupreanof Egegik c Saint Paul c c Port Protection Point Baker Afognak ccKodiak c Edna Pilot PointUgashik c BaycNaukati Saint George Karluk Uyak c Ketchikan c c c Klawock c c Uganik Craig c c Terrace cNarrow Cape Ayakulik Hydaburg Port Heiden c Akhiok c cc Kaguyak Prince Rupert c

Alascom Gateway

Kotzebue

Anvik GCI

Diomede Tin City Wales

GCI Gateway Hughes Village Council Tlingit and Haida Yukon

Shishmaref

Deering

MiddleMile1 AP&T Alascom GCI UUI

MiddleFiber1 ACS/AK Fiberstar AP&T Alascom CVTC GCI KKCC

Attu Shemya Station

Chignik Lake Chignik

c cc cc cIvanof Perryville c Bay cc

Nelson Lagoon

Adak Station

150

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Atka

Cold Bay cUnga c King Cove c Belkofski False Passc Sanak Akutan Unalaska Pauloff Harbor c c Fort Glenn Nikolski

450 Miles

orget texting, Twitter and Facebook. Sheryle Charlie doesn’t even have a computer at home. “I can’t afford it,” says Charlie, tribal administrator for the Village of Minto, a 100-household community 130 miles northwest of Fairbanks. “I’m the only one working in my home of four people. My husband is disabled ... I don’t even have a telephone at my house.” It can cost about $325 just to set up a satellite Internet account in Minto through GCI: $24.99 for the most basic account at 56 kilobits per second—a speed considered obsolete by some—and another $299.99 for modem and antenna. Compare that to Palmer, where a much faster fiber optic connection through GCI starts at $29.99 for a basic cable modem plan at 10 megabits, or ■ 28

10,000 kilobits, per second. Of the 258,000 households in Alaska, 93 percent or about 240,700 have access to broadband service of at least 768 kilobits per second download speed, according to Connect Alaska—but many rural residents access the Internet through unwieldy and slow satellite connections. Slight delays in signal transit time make Internet games and stock trades risky at best. Loading software is fraught with service drop-outs. Limited capacity makes online movie watching ridiculous: Best to start downloading in the morning so it’s ready to watch by evening—talk about a digital divide. In Alaska, the divide boils down to geography and demography. There are hundreds, sometimes thousands of miles between Bush Alaska and the

fiber optic networks that provide fast broadband service to road-system residents in Juneau, Fairbanks, or Anchorage. But the small populations of many remote villages are too small to justify the cost to telecom providers of installing expensive broadband systems. “It’s a divide between developed and undeveloped markets,” said Bill Popp, president and CEO of the Anchorage Economic Development Corp., who serves as chairman of the Alaska Broadband Task Force. “It’s an infrastructure and a marketplace issue.”

Left Behind

In 1970, Alaska’s telecommunications scene in villages outside regional hubs like Bethel or Nome didn’t extend much beyond short wave radio. Even short wave

www.akbizmag.com • Alaska Business Monthly • August 2012

MAP: Alaska Broadband Task Force/Regulatory Commission of Alaska

Kivalina

MiddleSat

Kaktovik

was sketchy. Transmissions would conk out when the Aurora Borealis was active. By the early 1980s, largely through the efforts of the state and RCA Alaska Communications, most villages had phone service, TVs with at least a few channels and radio broadcast service, according to Dr. Alex Hills, a Palmer resident and consultant credited with building the first Wi-Fi network with a team at Carnegie Mellon University. “Between the early eighties and the two-thousands there was pretty much a long dry spell,” says Hills, who also helped pioneer telecommunications in Alaska. “We got Internet, Wi-Fi, the world moved forward ... but not to the villages.” There was some movement, however. In 1995, the Regulatory Commission of Alaska and Federal Communications Commission gave GCI permission to deploy a new technology to 50 rural villages using a satellite technology called DAMA (demand assigned multiple access), according to GCI spokesman David Morris. “As a result, faxes worked for the first time and dial-up Internet worked,” Morris says. It also created the basic network that

brought telemedicine and distance education throughout rural Alaska. This last development was made possible by the passing of the 1996 Telecommunication Acts, a legacy of Sen. Ted Stevens that created competition in the telecom industry, but also a funding mechanism to support medical facilities, schools and libraries throughout rural Alaska. Later on, this same infrastructure led to the deployment in 150 villages of the first generation Wireless Internet Service Providers, initially found in rural areas not covered by cable or DSL. Then, in 2005, GCI subsidiary United Utilities built the DeltaNet system to connect Yukon-Kuskokwim villages and Bethel using microwave technology.

The Middle-Mile Problem

However, nothing connected the DeltaNet system back to Anchorage and its fast, fiber optic infrastructure. That’s where the middle-mile problem comes in. The middle mile represents the infrastructure—or lack thereof—connecting communities on a broadband network. In Alaska, it’s a lot more than a mile. Most of Alaska’s road system is con-

nected to the Internet via fiber optic cables—otherwise known as a terrestrial connection—where the relatively large population justifies the expense of putting in the pricey lines. But in the small villages scattered across Alaska, where it’s cost-prohibitive to bring a terrestrial connection, most residents are connected by satellite. All told, the state’s far flung communities are served by more than a dozen broadband providers and small utilities. An antenna beams the broadband signal to satellites located 22,300 miles over the Equator. Satellite transmissions operate at the speed of light: 186,000 miles per second. But the signal still needs to make a 45,000-mile round trip. The distance traveled ends up creating a slight delay known as “latency.” Then, because of the way websites talk to each other, the acknowledgements and “handshakes” involved, any delay tends to get multiplied, according to Will Johnson, who owns Fairbanks-based HughesNet dealer Alaska Satellite Internet. The resulting three- to 12-second delay can drive online gamers, stock traders, or eBay “snipers” nuts. Technical ServiceS

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29 ■

Still, satellite service works for places without terrestrial connections, Johnson says. “I’ve been a ham radio operator since I was a kid. I’ve always been fascinated with bringing communications to remote sites,” he says. “To me it’s amazing that we can set up a dish almost anywhere and give folks a way they didn’t otherwise have to stay connected.”

TERRA Firming Up

There’s one project that will bring immediate relief to the middle-mile problem, at least in one part of the state. Using a hybrid microwave-fiber optic system, this summer GCI is launching TERRA-Southwest, a new terrestrial connection to 65 remote rural communities in Bristol Bay and the YukonKuskokwim Delta. The system builds on the DeltaNet infrastructure. Jeelan Kroenke and her husband, Seth, own Alaska’s River Wild Lodge on Lake Clark, providing luxury fishing and adventure trips for guests treated to swanky digs and first-class cuisine. But the Kroenke’s satellite Internet service is so slow they can’t abide watching YouTube videos for the slow load time. Signals drop in and out in bad weather. Downloading software is an exercise in irritation. “You live in the Bush, you kind of accept a certain degree of frustration on that end,” Jeelan Kroenke says. “It’s just the way it is.” That’s before the $146 million TERRA project comes on line starting this summer. The money comes from the federal stimulus package, which earmarked $7.7 billion for telecommunications. GCI subsidiary, United Utilities, received $44 million in grants, according to Morris. The remaining $102 million, he says, is GCI at-risk capital, including a $44 million Federal Rural Utilities Service loan. The project consists of a fiber optic cable that runs from Anchorage to Levelock on the Kvichak River, through Lake Iliamna, and then is connected to Dillingham and Bethel and 64 surrounding villages via microwave towers. The change, which GCI started deploying in June, should be rolled out to the region by mid-October. Communities served by the satellite-based WISP system will experience download speeds eight to 16 times faster on similarly priced plans, ■ 30

according to GCI. Customers also will experience a substantial increase in service quality because TERRA-Southwest eliminates satellite-related latency. “In rural Alaska, because it takes so long to download a page or send e-mail, getting rid of latency means a faster experience,” Morris says. “It’s much closer to what we associate with an urban experience.” The Alaska Broadband Task Force has commissioned an initial impact analysis of TERRA by the Institute of Social and Economic Research at the University of Alaska Anchorage, according to Popp. “It’s the most current thing we’ve got to look at to understand what effect immediate connectivity will have,” he says.

Wireless Partners

Another major change is expected for smart phone users with the announcement in June of the Alaska Wireless Network, a partnership between GCI and Alaska Communications. The companies decided to band together before national telecom giant Verizon Wireless sets up shop in Alaska later this year or early next year. By combining the existing Alaska Communications network with GCI’s wireless network, Alaska Communications will be able to offer service in new areas like Kotzebue, Dillingham and Bethel, according to spokeswoman Heather Cavanaugh. The Alaska Wireless Network will provide wireless coverage to more than 95 percent of Alaska’s population, which includes many of Alaska’s rural areas, and is more than Alaska Communications or GCI alone covers today, as written by Cavanaugh in an e-mail. The Network will improve smart phone access in rural areas too, GCI spokesman Morris says. But data speed will still depend on access to terrestrial versus satellite service. “You can have the latest and greatest iPhone and it’s going to work to a certain degree even in the most remote village but as far as when it gets down to data, it’s going to be a different experience,” Morris says.

Connecting Alaska

The 22-person Statewide Broadband Task Force seeks to “open broadband connectivity to as many nooks and crannies of Alaska that we can get it into,” as Popp puts it.

The task force was initiated by Commissioner Susan Bell of the Department of Commerce, Community, and Economic Development as part of a grant to integrate broadband and Internet technology into state and local economies so that Alaskans could better compete in the greater digital economy. The grant, part of the federally mandated State Broadband Initiative, created a nonprofit public-private partnership with Connect Alaska to work with DCCED on a plan to accelerate the deployment and availability of affordable broadband technology throughout the state. Popp says he expects the task force to deliver a report to Bell by year’s end. Four working groups are analyzing parts of the broadband puzzle. One is focusing on community and e-government: health care and education providers and local governments that stand to benefit from higher level broadband service. Another is looking at the regulatory climate and telecommunications policies including proposed changes to the Federal Communication Commission’s Universal Service Fund program that could reduce Alaska’s share. A third working group is analyzing what kind of broadband technologies make sense not only today but in 10 years: microwave, fiber optic and satellite. The task force set a “big, hairy, audacious” goal of 100 MB per second, but may end up adjusting that number based on cost-per-mile and number of users served, Popp says. A fourth working group is focusing on economic impact of extending higher quality broadband connectivity into more communities. Everything from comparison shopping online to increasing business startup opportunities will be on the table. Asked about the philosophy that rural residents should expect fewer services, Popp demurred, calling that a “short-sighted” perspective. “If Alaska wants to grow it needs to make investments in its ‘frontier’ areas, for lack of a better expression,” he says. “We do that in different ways. We build roads. We build bridges. We build airports ... but we have to remember that connectivity is also key to growth.”  Zaz Hollander is a journalist living in Palmer.

www.akbizmag.com • Alaska Business Monthly • August 2012

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heAlth & Medicine

Alaska’s Rural Hospitals

Photo courtesy of Providence Kodiak Island Medical Center

Providence Kodiak Island Medical Center also has an independent, nonprofit community health clinic.

New innovations help address challenges BY SUSAN SOMMER

pen 24/7, staffed and ready to admit patients for everything from dire injuries to cancer treatment to physical therapy, a hospital is always ready for guests who hope they never have to visit. Small, rural hospitals are legally bound by the same laws as larger urban facilities. So how are Alaska’s rural hospitals—many of which are far off the road system—faring these days?

Challenges for Rural Alaska Hospitals

“Health care and hospital care in particular is changing and improving ■ 32

rapidly in the US. It is increasingly complex,” says Karen Perdue, president and CEO of Alaska State Hospital and Nursing Home Association. “Small hospitals need to and strive to comply with the same complex rules as their larger peers. Special challenges include low volumes and the need to maintain surge capacity. Most people will use the inpatient part of the hospital very infrequently in their life, but when they need the service it must be open and ready to serve. In addition, some of our hospitals see seasonal surges in need—such as Ketchikan and Homer.” Challenges for Alaska’s rural hospi-

tals are many, including high costs of doing business in Alaska, finding and retaining professional health care workers and keeping up with technology.

Costs

Seventy-five percent of Alaska’s communities are not connected by road to a hospital. It’s expensive for rural patients without a hospital in their community to travel to the nearest one or to one of the state’s bigger hospitals for more serious treatment and care. A recent Alaska Health Care Commission study found that hospital payments are 38 percent higher in Alaska than in six

www.akbizmag.com • Alaska Business Monthly • August 2012

other western states. The farther away Alaskans live from the hospital the less likely they are to get timely needed care, and the more it costs to treat them. Rural hospitals must be in compliance despite the higher costs associated with Alaska’s vast geography; that often means passing the costs on to the consumer, or spending time and resources to find grant funding. Transportation of goods and equipment alone to rural communities results in increased prices for associated services offered to residents. By law hospitals cannot turn away anyone needing care, even if they are unable to pay. In 2009, Alaska hospitals reported $410 million in lost revenue from underpayments and uncompensated care.

Staffing

Another challenge is recruiting and retaining qualified staff; it takes a certain type of person to live long-term in places as remote as Barrow or Dillingham. Employment opportunities in health care are growing in all regions of Alaska, though, and programs such

as the University of Alaska’s School of Nursing is helping educate, train and retain nurses. Nurses working in rural Alaska—whether they are community residents or traveling professionals—must be skilled in a wide range of health services. “Our staff is our greatest asset,” says Noel Rea, CEO of Wrangell Medical Center. He recognizes the future challenge, though, of replacing long-term core staff members who are starting to retire with new graduates that don’t have the range of skills. According to ASHNHA, to recruit and retain first-rate staff in Alaska, many hospitals pay higher salaries, a larger portion of health insurance premiums, and offer more flexible time-off programs than facilities in the rest of the nation. The flexible time-off programs are required to overcome the misconception of remoteness Alaska carries in the recruiting process. Patrick Branco, CEO for PeaceHealth Ketchikan Medical Center, says his team’s challenges in Ketchikan are typical for any rural hospital, especially one located “on an island 800 miles from

the next higher level of care accessible only by wind or wave.” The biggest challenge has been finding and retaining topnotch physicians. Attracting visiting nurses to Ketchikan, though, should be easier since its hospital was named in 2010 and 2011 as the most traveler-friendly facility in the nation. Ketchikan Medical Center beat other illustrious medical facilities such as Seattle Children’s Hospital, CedarsSinai Outpatient Cancer Center and Stanford Hospital and Clinics for the award by TravelNursing.com, which surveyed more than 3,400 nurses. Job vacancy rates in rural Alaska hospitals are generally much higher than urban rates. And as Alaska’s population ages, the demand for services will only increase. Alaska’s small community hospitals often have nursing homes attached to them, making the facility a major local employer. Job listings can be found at sites such as alaskaphysicianjobs.net; positions include hospitalist, internal medicine physician, anesthesiologist and more for hospitals in Homer, Fairbanks, Ketchikan and elsewhere.

www.akbizmag.com • Alaska Business Monthly • August 2012

33 ■

Hospitals located outside Alaska’s three main population centers SOUTHCENTRAL Central Peninsula General Hospital (Soldotna) Cordova Community Medical Center Providence Kodiak Island Medical Center Providence Seward Medical and Care Center Providence Valdez Medical Center South Peninsula Hospital (Homer) SOUTHEAST PeaceHealth Ketchikan Medical Center SEARHC | Mt. Edgecumbe Southeast Alaska Regional Health Consortium (Sitka) Sitka Community Hospital Petersburg Medical Center Wrangell Medical Center

Acute Beds

Swing Beds

LongTerm Care Beds

62 13 25 6 11 22

8 4 25 6 n/a 4

n/a 10 19 43 10 25

39 27

n/a n/a

29 n/a

12 12 8

12 5 4

15 15 14

16 50

4 3

n/a n/a

17 19 18

n/a n/a n/a

n/a 15 n/a

SOUTHWEST Kanakanak Hospital (Dillingham) Yukon-Kuskokwim Delta Regional Hospital (Bethel) NORTHERN Maniilaq Health Center (Kotzebue) Norton Sound Health Corporation (Nome) Samuel Simmonds Memorial Hospital (Barrow)

Chart: Susan Sommer

In addition to the University of Alaska’s School of Nursing, the Alaska Center for Rural Health-Area Health Education Center, a statewide university-industry partnership, is dedicated to increasing the number of health care workers across Alaska. They help arrange clinical rotations for students at rural and underserved

sites and provide continuing education. ASHNHA has also launched a specialty nurse training program, focused on perioperative or operating room nurses. Indirect hospital-related jobs are also robust; for example, construction spending for Alaska hospitals was forecast at $305 million in 2011.

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Technology

Keeping abreast of current technology can also strain rural hospital resources. For example, incentives for physicians and hospitals that use electronic medical records by 2015 are part of a federal act adopted in 2009; those who don’t make the switch from paper records will be penalized. Don Rush, CEO of Providence Kodiak Island Medical Center, says one advantage to adopting a new electronic records method is that patients across the Providence system will be able to access their own medical records online. Patients’ records also follow them across all care settings in the Providence system, eliminating unnecessary redundancy. Reporting all the data to various agencies is also a challenge for rural hospitals says Patricia Carr, who heads the State of Alaska Office of Rural Health. The sheer volume of all the reporting can be difficult, and sometimes rural facilities don’t have the right tools or training despite their best efforts. Telemedicine is only available in a few of Alaska’s hospitals. The State of Alaska Department of Health and Social Services reports the goal of the Alaska Telehealth Advisory Council is to support efforts to bring telemedicine to all communities in Alaska. Ketchikan’s hospital is making exceptional progress. “One of the most exciting innovations we have achieved here is with our telepathology program,” Patrick Branco says. “We do not have a fulltime pathologist on site and we rely on our partnership with NW Pathology out of Bellingham, Wash., to provide coverage. The special part of the arrangement is a new device that looks a great

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deal like a desktop computer but is actually a phenomenal digital microscope that allows a surgeon in Ketchikan to excise a piece of a tumor from a patient in our operating room, have a lab tech prepare the specimen by mounting and staining, and then inserting it into the microscope where it is instantly available to the pathologist in Bellingham. The pathologist can then report immediately to the surgeon whether the specimen is malignant or benign or whether the surgeon got ‘all’ of the tumor. We are the only ones in the nation using this technology for this purpose and it is fantastic!” The hospital in Kodiak also uses telemedicine equipment, in its intensive care unit. “Since the implementation of eICU technology in 2010, PKIMC has used it to monitor and treat 76 patients,” Rush says. “Because of PKIMC’s participation in the eICU program, 17 patients were able to remain on-island for treatment. This equates to huge savings for the patients and their families who don’t have to leave the island for treatment and incur additional expenses for transport, additional medical costs and

lodging costs for his or her family. Most importantly, the eICU allows our quality of care to be enhanced because having eICU provides immediate access to specialist physicians.”

Looking Ahead

In general, outpatient care and day surgery are growing along with Alaska’s aging population. Doctors and rural hospitals are forming partnerships more often than in the past to provide better patient care. Many rural Alaska communities are getting new and expanded hospitals. Nome’s new facility is nearly complete. Wrangell’s is under way. Barrow’s replacement hospital will be four times larger than the current facility; they expect to double the staff. Ketchikan’s hospital is replacing its existing surgical suites and medical office building, and addressing parking issues. Kodiak’s hospital is replacing its award-winning, but 40-year-old, long-term care center so that residents will have a better place to live out their golden years. “Our residents will have private rooms, private bathrooms and a com-

fortable home setting for some of our most vulnerable population,” Rush says. “For example, one of our residents loves to make cookies, but we don’t have a kitchen in our current long-term care center. In her new home, we’ll be able to make that happen.” Alaska now has eight rural Level IV trauma centers, which provide initial evaluation, assessment, stabilization and transfer of critical patients to higher level trauma centers. They are located in Bethel, Nome, Dillingham, Seward, Valdez, Kodiak and two in Sitka. “Small hospitals in Alaska are changing and surviving in an increasingly complex world,” says ASHNHA’s Perdue. They are investing millions in technology and building improvements to serve their patients, and they are trying new things to improve quality and attract health personnel. The key thing is that hospitals need to be there for their communities as they have been since territorial days.”  Susan Sommer is a freelance writer and editor living in Eagle River.

– where i belong –

PEOPLE FIRST › “I went to school at UAF and then spent the next five years working down south. It was a great job, but I knew I wanted to come back to Fairbanks because the nursing staff at FMH holds such high standards. Then I finally got the call from FMH — now I live in a place I love and work at a hospital that’s a vital part of this community.” Jolene / R.N., Pediatrics

community-owned fmhdc.com

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Mining

Mining Nonmetallic Resources Gravel, basalt, coal among most developed

Photo courtesy of Browns Hill Quarry

BY JULIE STRICKER

Browns Hill Quarry is Interior Alaska’s only source of basalt.

popular bumper sticker seen on well-worn pickup trucks in Alaska reads: “If it can’t be grown, it’s gotta be mined.” And while most people think of gold, silver and other precious metals when they think of mining, it’s the more prosaic materials such as gravel, rock and coal that have a more immediate effect on Alaskans’ day-to-day lives. The state has more than 120 active rock quarries and sand and gravel operations, according to the Alaska Miners Association. Although most operations are small, together they pack an economic punch, accounting for approximately $80 million in production in 2011. The key is location, location, location, ■ 36

says Fairbanks geologist Jeff Rogers. “There are a lot of gravel pit operations,” he says, adding that these are generally one-person operations, which supply gravel for roads, house foundations, septic systems and leachfields. For products with a low intrinsic value such as gravel, operators have to pay close attention to the details of the business. “There are a lot of things that kind of play into whether anyone makes any money off of it,” he says. The same goes for the buyer. “There’s a very localized demand,” he says. “You want to go with a gravel source as close as you can get.” Even with larger projects, location is a

key consideration in keeping costs down. When the Alaska Railroad started looking for a rock source for the construction of a bridge over the Tanana River at Salcha, they had a few options. The railroad has several quarries along the Railbelt, but found their rock source much closer at hand. The Browns Hill Quarry between Fairbanks and North Pole was established in 1972 when Yutan Construction purchased the site as a local source for rock and aggregate products. Brice Companies bought the quarry in 1999. In 2010, Calista Corp. acquired Brice Inc., but Brice family members still oversee operations at the quarry.

www.akbizmag.com • Alaska Business Monthly • August 2012

Basalt

Browns Hill is Interior Alaska’s only commercial source of basalt. Alaska road crews use it to sand icy roads because it’s versatile enough to be manufactured into sand, but tough enough to stand up to traffic. It can also be extracted in 2- to 3-foot chunks, which are ideal to use as riprap. While basalt, an igneous rock, isn’t rare in Interior Alaska, Browns Hill is the only site developed for commercial use, says Luther Brice, vice president of Brice Inc. Browns Hill has been a landmark in the North Pole area for decades. The hill rises several hundred feet above the flatlands of the Tanana River valley, but in the past year, mining activity at the quarry has resulted in an obvious saddle in the hill. “We did 10 years of mining in a year,” Brice says. For weeks in 2011, the quarry operated around the clock to supply the rock to support an 11,000-foot levee in Salcha. The levee will help protect a 3,300foot bridge designed to carry both trains and vehicles. When completed, it will be the longest bridge in Alaska.

416,000 tons of rock for the project, al-

“We did 10 years of mining in a though that could change as operations move forward. Brice’s portion of the conyear.” —Luther Brice Vice President of Brice Inc.

It is part of the Alaska Railroad’s Northern Rail Extension, a possibly $850 million project that will add an 83-mile leg to the Alaska Railroad from Eielson Air Force Base to Delta Junction. The extension will provide freight and potentially passenger service to the Delta region and provide access to Department of Defense training areas south of the Tanana River that are now accessed via ice roads. It is viewed as a likely stepping off spot for a long-talked-about AlaskaCanada rail connection. The route crosses the Tanana River in Salcha, which is where the Browns Hill rock is going as part of Phase 1 of the project. Nebraska-based Kiewit Corp. is the general contractor on the $188.2 million bridge project. They broke ground in fall 2011. The mine is about 30 miles from the levee site. Brice estimates it will require about

tract is worth $10 million to $15 million. Quarry workers use hard-tail Caterpillar wagons, which hold about 40 tons each. Work this year will continue until freezeup, about the first of October, and resume in summer 2013 for about three months. Brice says the quarry is keeping its other customers in mind while fulfilling the levee contract. “We’re stockpiling everything,” Brice says. “The quarry will still be a viable source for quite awhile.” Reclamation at the site has already begun, even as mining continues, Brice says. Some of the silt displaced during mining operations has been reshaped and hydroseeded and is already greening up with the abundant rain Interior Alaska received in June.

Limestone

Another valuable rock, limestone, is also found in Interior Alaska. Deposits have been identified north of Fairbanks in the Amy Creek and Grapefruit Rocks areas. However, Rogers, the geologist,

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Coal

Perhaps one of the most abundant and valuable rocks in Alaska is coal. Alaska contains half of the total coal reserves in the United States, but has only one operating mine, Usibelli Coal Mine. If mining is the family farm of the north, as another bumper sticker reads, the Usibelli family is one of Alaska’s pre-eminent “farmers.” The mine was founded in 1943 by Emil Usibelli and is now owned and operated by a fourth generation of the Usibelli family. “We’re going strong,” says Bill Brophy, UCM spokesman. Coal seams in the area have been mined for more than a century in the area known as Suntrana. In 1943, Emil Usibelli obtained a one-year contract to supply 10,000 tons of coal to Ladd Airfield near Fairbanks. Equipped with a dozer and a converted logging truck, Usibelli fulfilled the contract by using unconventional surface mining techniques. Since then, the mine has grown and prospered. In 2012, Usibelli expects to produce 2.4 million tons of ultra-low sulfur coal. About half goes to six Interior Alaska power plants, fueling about 40 percent of Interior Alaska’s electricity. The remainder is exported to countries around the Pacific Rim. That is a significant boost in production, Brophy says. Five years ago, Usibelli produced 1.25 million tons. Strong interest overseas is driving the increase, ■ 38

Photo courtesy of Usibelli Coal Mine

says the lack of local demand for limestone limits development prospects. Limestone is used to make lime, which is used in cement and other manufacturing processes. Alaska has no cement industry and Rogers says he doesn’t believe the limestone deposits would in themselves create such a industry. There are industrial uses for lime. Gold mines use limestone to treat their tailings, which tend to be acidic because of high sulfide levels in the ore. But the largest and nearest gold mine, Fort Knox, has such low levels of sulfide in its ore that it uses little lime in the milling process, Rogers says. There is the Livengood gold project, which is located just a few miles from Amy Creek. The project is still in prefeasibility stages, but if it finds it needs lime in its milling process, at least there’s a local source, Rogers says.

The Caterpillar 785 Truck is capable of moving 150 tons of coal or overburden.

he says, and Usibelli has been ramping up its sales and production teams to meet the demand. The mine employs 144 workers and recently acquired an eighth 150-ton truck. “That was a big deal for us,” Brophy says. The mine’s ultra-low-sulfur coal is in high demand because it is relatively clean-burning. Usibelli’s coal contains less than two-tenths of a percent of sulfur, he says. Coal deposits elsewhere may contain 4 or 5 percent sulfur. Brophy says he used to get a couple of inquiries a month from entities interested in the coal, but is now fielding several calls per week. “Life is good,” he says. “We’re excited about the future.” The mine ships coal by rail for export overseas to a holding yard in Seward, where it is then loaded onto freighters. Its main markets are in South Korea, Japan and Chile. People driving along the Parks Highway west of Healy can easily see the coal seams in the ridges above the Nenana River, as well as the mine’s BucyrusErie 1300W walking dragline, which was named the “Ace in the Hole” by local schoolchildren when it began working in the Poker Flats area in the 1970s. The dragline is the largest land-mobile piece of equipment in Alaska, according to UCM. More recently, Usibelli has been mining the same area for years, Two Bull Ridge. Soon, it will following the seam a

few miles away to the Jumbo Dome area. Usibelli has received permits to mine at Jumbo Dome and is in the process of building a road to the area. Usibelli expects to extract 80 million to 90 million tons of coal from Jumbo Dome over the next 30 years. One key to the mine’s success is its location adjacent to the Alaska Railroad. “We have a terrific relationship with the railroad,” Brophy says. Usibelli moves coal by rail to five of the six power plants it supplies. The sixth, just across the river in Healy, has its coal delivered directly from the mine by truck. The railroad gives UCM easy access to infrastructure and support systems. In addition, it has allowed a stable community, Healy, to flourish nearby, allowing workers to have a fairly routine work and family life, he says. UCM holds exploration permits at Hoseanna Creek and Healy Valley, but Brophy says Usibelli hasn’t spent much time doing extensive exploration in the area. Usibelli’s current leases contain about 700 million tons of coal reachable by surface mining. “At 2 million tons a year, we’ve got more than a 350 year supply,” he says. Usibelli has also filed for an exploration permit at Wishbone Hill, a bituminous coal deposit 40 miles northeast of Anchorage that has been mined since the early 1900s. Work at Wishbone Hill is in the early stages, he says. Other coal deposits in Southcentral Alaska are under exploration. Chuitna,

www.akbizmag.com • Alaska Business Monthly • August 2012

on the west side of Cook Inlet about 45 miles west of Anchorage is in the permitting phase. Chuitna is a low-sulfur, sub-bituminous deposit located in the Beluga Coal Field. It is under development by PacRim Coal LLC, which has not released a time frame for the project. Other companies are looking at an alternative use of coal to generate electricity through a process called underground coal gasification. The process targets coalfields that are too deep to develop using traditional methods and uses the coal where it lies underground. UCG converts coal to a gas through a method that combines heat, oxygen, coal and water. The synthetic gas that results can be converted to liquid fuels through gas-to-liquid technology as well as in electricity generation. Linc Energy, a Brisbane, Australiabased company, has successfully used the technology in its Chinchilla facility. It has acquired coal exploration licenses in Central and Southcentral Alaska covering 181,414 acres from the Alaska Mental Health Trust Authority. Linc Energy is exploring coal deposits near Anderson and has completed seismic work and is in the process of analyzing the data, according to communications manager Maria VanderKolk. Linc plans to drill a test hole in the Anderson bloc during the winter of 2012-13, she says. Cook Inlet Region Inc., the Alaska Native regional corporation for Southcentral Alaska, is also working on a UCG project with Houston-based Laurus Energy Inc. Seismic testing on the Stone Horn Ridge project has been completed with generally positive results, according to CIRI spokesman Jim Jager. The data was incorporated into 3D underground maps and the data is being analyzed this summer, he says. “The engineers are putting together plans,” Jager says. “We’ve got one more round of test drilling and permitting and we’ll be getting to it this fall.” Commercial operations could start in 2015 and the first syngas produced is expected to fuel a new 100-megawatt power plant to generate electricity for Southcentral Alaska. 

Naturally occurring coal outcroppings along Hoseanna Creek at Usibelli Coal Mine. Photo courtesy of Usibelli Coal Mine

Julie Stricker is a writer living near Fairbanks.

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Politics

Legislative Wrap-Up What’s done, what’s next BY R ACHAEL PETRO

s president and chief executive officer of the premiere business organization in the state of Alaska, it is my responsibility to advocate for my members and their employees, all of whom care deeply about the state’s economy and its ability to offer quality, sustainable jobs for all residents, from Ketchikan to Barrow. With that in mind, the Alaska State Chamber of Commerce and our members have been hard at work over the last year. The 27th Alaska Legislature session provided ample opportunity to advocate for pro-business policies. For example, in 2011, reforming the state’s oil tax structure was a high priority again because of the unquestioned importance of the oil and gas industry to the state’s economic health. Unfortunately, the session ended without any substantive changes, which means Alaska Chamber members will be back at it again next year, hopefully with more legislators in the House and Senate who understand what drives economic growth. It is critical that we elect legislators who understand that private sector investment—not government spending—creates economic prosperity. Many Alaskans, me included, are weary of the debate surrounding oil tax reform. Weary or not, Alaska’s economic future demands continued focus on the issue. Alaska Chamber members understand that demonizing any single industry, especially one that serves as the lifeblood for our state’s economy, does not serve Alaskans well.

Shift in Philosophy

It is possible that we may see a philosophical shift in the make up of the 28th Alaska Legislature. With 59 ■ 40

Rachael Petro

out of 60 state legislative seats up for election, now is the time for Alaskans concerned about the future of our state’s economy to engage in the political process. In an effort to help voters cut through the rhetoric, the Alaska Chamber, together with the Resource Development Council, the Alaska Support Industry Alliance and Prosperity Alaska, issued the Alaska Business Report Card. The Alaska Business Report Card group believes our elected leaders must be held accountable for the decisions they make. Letter grades are provided for each legislator, as well as the governor and the House and Senate majority and minorities, for votes on issues related to creating a friendly business environment in Alaska. Before casting your ballots in August and November please visit alaskabusinessreportcard.com to see how incum-

bent lawmakers fared on pro-business legislation. To be clear, this report card has nothing to do with the likeability of legislators. Instead, it simply reflects how legislators faired compared to the positions and priorities of the participating business organizations. The Alaska Chamber supported or opposed 46 pieces of legislation during the 27th Alaska Legislature. The report card group based its grades on over 60 pieces of legislation with focuses in six areas: fiscal responsibility, oil tax reform, regulatory efficiency, litigation reform, general business climate and strategic infrastructure. It is also worth noting that grading legislators is not a new approach for advocacy organizations; groups like the NRA, NEA and the Sierra Club have been using it as an educational tool for their members for years. Some legislators expressed disappointment in their grades. This disappointment is shared, but it underscores the importance of holding lawmakers accountable for the policy decisions they make affecting business in Alaska.

Other Priorities

The Alaska Chamber advocates for priorities other than oil and gas development. In addition to the almost 30 positions members set during its fall 2011 legislative policy forum, members selected three top state priorities. In addition to oil tax reform, Alaska Chamber members chose litigation reform related to resource development in the state and reducing the high cost of energy in Alaska. Alaska Chamber members believe that accountability must be brought to the appeals and litigation process for community and resource

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development projects. Curtailing frivolous lawsuits that serve only to delay projects remains a high priority. It is because of this commitment to a predictable process that the Alaska Chamber is on the record opposing the Environmental Protection Agency’s Bristol Bay Watershed Assessment. In an unprecedented move, the EPA prepared an assessment in advance of any permit application from any project in the area. The Alaska Chamber believes this could have a chilling impact on any resource development in the state: Why would a prospective developer make a sizable investment in scientific study when a federal agency can unilaterally shut it down before it even it submits a plan? The high cost of energy is a huge barrier to economic development throughout Alaska. As such, the Alaska Chamber supports initiatives that lower these crippling costs by developing new energy resources. Not only does expensive energy cause financial hardship in the rural and Interior regions of the state, but it limits economic growth statewide. Finding solutions to this problem are key to unlocking the untapped economic potential of Alaska.

Public Policy

The Alaska Chamber is also tasked with informing our members about public policy decisions that could adversely affect economic development in the state. In August, Alaskans will be asked to reinstate a coastal zone management program via Ballot Measure 2. While the idea of local communities having more say in how to manage coastal resources sounds reasonable, this particular ballot initiative is so vague and poorly worded that the resulting unintended consequences may cripple development. At 15 pages long, Ballot Measure 2 would create additional bureaucratic red tape that may serve only to delay and block resource development projects. That’s bad enough, but because the initiative’s wording is so unclear, even private property owners living miles inland may find themselves grappling

with rules and regulations imposed by unelected officials living hundreds of miles away. Imagine trying to install a new dock at a lakeside cabin and being told “no” by a panel of political appointees from another community. The litigation and constitutional challenges that will result from the initiative’s passage is another reason to vote no on Ballot Measure 2. As indicated by our priorities and advocacy on behalf of pro-business policies, the Alaska Chamber actively supports pro-business candidates. The Alaska Business Political Action Committee, or ABPAC, is the avenue by which Alaska Chamber members and pro-business Alaskans show this support. The purpose of ABPAC is to provide an opportunity for individuals interested in the future of Alaska business to contribute to worthy candidates for the Alaska State Legislature, the office of lieutenant governor, and the office of governor; and to support business community interests in ballot initiative campaigns. ABPAC is a nonprofit, bipartisan political action committee comprised of Alaska business leaders committed to electing candidates who support the issues important to the state’s business community. More information on ABPAC is available under Advocacy on our website at alaskachamber.com. The Alaska Chamber and its members share one overarching important goal: to promote a positive business climate in Alaska. It is serious work to advocate for the future well being of our state, but it is work we are proud to do. By working together, we believe we can improve Alaska’s business climate and secure Alaska’s economic future. Join us as we continue the unrelenting work of creating a vibrant, healthy economy for current and future generations of Alaskans. To learn more about the Alaska Chamber, please visit alaskachamber.com.  Rachael Petro is the president and chief executive ofﬁcer of the Alaska State Chamber.

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FREE! Photo by Michail Shestakov Courtesy of Vitus Marine LLC

The Russian-flagged T/V Renda preparing to fuel in Dutch Harbor Jan. 3 for the historic voyage across the frozen Bering Sea to deliver 1.3 million gallons of winter fuel to Nome with an escort by the U.S. Coast Guard Cutter Healy, the Coast Guards only operational polar icebreaker.

was to keep the customer out of risk if the fuel didn’t arrive.” Smith and his people at Vitus Marine got busy with the logistics of the operation and started making contact with all the parties that would be involved in what was to become the history making first commercial winter delivery of petroleum through sea ice to Nome. “Sitnasuak and Vitus Marine inquired and appealed for support to Lt. Governor Meade Treadwell and the congressional delegation,” Smith says. “John Kotula of the Alaska Department of Environmental Conservation and USGC Captain Jason Fosdick were instrumental in providing regulatory oversight and prevention strategies. Bob King, legislative assistant for Sen. Mark Begich provided a lot of sup-

port as did Bob Walsh from Sen. Lisa Murkowski’s office.” Sitnasuak announced the contract Dec. 5 last year for Vitus Marine LLC to deliver, via the Renda, the rest of Nome’s winter fuel, approximately1.3 million gallons. “The Coast Guard has done an excellent job in working with us to execute an innovative and complex solution to the fuel crisis that currently faces the community of Nome,” said Sitnasuak Board Chairman Jason Evans when announcing the contract Dec. 5. “They are currently investigating the use of the Coast Guard icebreaker Healy to ensure the Russian tanker is able to make it through the ice to Nome. We really appreciate their assistance.”

US COAST GUARD TO THE RESCUE

The Healy happened to be on its way home from a seven-month scientific mission in the Arctic Ocean and extended its Alaska stay another month to make sure the Renda made it through the sea ice to Nome. The Seattle-based 420-foot polar icebreaker with 80 crewmembers onboard is the country’s largest, and only working, icebreaker. The Coast Guard agreed to help, with conditions: “The Healy’s participation is contingent upon the following four items: the Renda passes the Coast Guard port state control exam, there are no inordinate delays, the fuel transfer plans meet federal and state requirements and on scene weather conditions permit safe passage. If all these conditions are met the Healy will assist the Renda’s transit

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nAtiVe business

Home is Where the Work is ANC subsidiaries set high standards in oil producing regions BY MARI GALLION

Kakivik Asset Management LLC

Kakivik Asset Management LLC is a wholly owned subsidiary of Bristol Bay Native Corp. that specializes in internal and external corrosion inspections, integrity management, quality control and quality assurance, statutory inspections, code compliance inspections, fitness-for-service evaluations, and data management. The majority of Kakivik’s work is on the North Slope, but they also have clients in Cook Inlet and on the road system, and have in the past worked in Wyoming, Texas, North Dakota, overseas in United States territories—and are currently doing some work in Australia. Clients include Alaska’s major producers as well as industrial, utility and other service providers. The bulk of Kakivik’s effort, according to president Ben Schoffmann, is assessing the current condition of a compa■ 42

Photo by Judy Patrick

here is much diversity within the definition of “oilfield services,” understood to indicate a company that provides services to the oil industry without producing the oil themselves—a natural fit for Alaska Native Corporations whose workers may have ancestral ties to the land upon which oil producers work. Several wholly owned subsidiaries of Alaska Native Corporations have found their niches in the oil patch, specializing in services that are vital to keeping Alaska’s oil flowing. With a combined commitment to service, safety and shareholders, many Native-owned subsidiaries have become household names, earning distinction—as well as long-running contracts with BP, ConocoPhillips and the like. However, as a direct result of the diversity of the oilfield service industry, many of these household names are not much more than that—names—to those outside the oil industry. Who are these wholly owned subsidiaries, and what do they do? Although not a complete list, Kakivik Asset Management, CCI Industrial Services, Doyon Drilling and NANA Oilfield Service Co. have each identified and enhanced individual ways of contributing to the lives of their shareholders and the Alaska economy.

Kakivik Asset Management LLC employees conducting a C-Arm Inspection on a North Slope pipeline.

ny’s legacy assets—pipelines, tanks, pressure vessels, etc.— to ensure their clients have the information and operating integrity in place to continue performing for years to come. However, Kakivik also assists with new construction projects, making sure that the quality of workmanship for these assets are appropriate and following all required standards. Thus, Kakivik’s work, according to Schoffmann, is “not only about just looking for corrosion and other defects, but helping our partners prevent premature failures and keeping oil and gas in the systems where they belong, thereby ensuring safety and protection of the environment.” Key to Kakivik’s consistent industry demand is their ability to look for corrosion under insulation, which is an area of significant concern for operations around the world—whether in an Arctic environment, a tropical environment, on land or near the ocean, there are corrosive environments—and corrosion happening “out of sight, out of mind” is one of the lurking dan-

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gers that Kakivik specializes in addressing and preventing. “You can’t directly see what condition (an asset) is in unless you pull all the insulation off, and that would be a huge undertaking. So Kakivik has developed technology, processes and procedures that help us look through insulation to pick up early signs of corrosion or damage,” Schoffmann says. Another extraordinary component of Kakivik’s services is their ability to inspect customarily hard to reach places in processing plants or facilities through deployment of their Rope Access Technicians. Also known as RAT Techs, these inspectors—logically— perform inspections while hanging from ropes as opposed to waiting for scaffolding to be built or choosing other methods of access, which are neither as safe, nor as practical. And thanks to Kakivik’s highlytrained personnel and its emphasis on safety, Kakivik has consistently posted a strong safety record. When asked about this safety record, Schoffmann responds, “It’s about being proactive, beginning with pre-job planning. A properly planned job is not only going to go safely, but it’s also going to go well from both efficiency and safety standpoints. We’re going to meet the needs of the client and the goals of the company that we set out to do. It just all ties together.”

CCI Industrial Services LLC

CCI Industrial Services LLC, also owned by BBNC, specializes in asbestos and lead abatement, oil spill response and technical support, pipeline insulation removal and repair, maintenance and construction, tank and vessel cleaning, hazardous waste removal, industrial cleaning solutions, sandblasting, and providing specialty coatings for weather proofing, water proofing, fireproofing and insulating. Much like Kakivik, CCI Industrial concentrates on making sure that assets and facilities—be they new or longstanding—last for a good long time. CCI Industrial has predominantly a North Slope presence within the oil industry, but is also doing work for municipalities, utilities, schools and hospitals around the state; and provide services and responders to in four of the state’s five oil spill response organizations.

How Do You Develop Arctic Offshore Resources? Just Ask Golder. Golder Associates has been part of the offshore oil and gas industry in Alaska and the arctic for more than 30 years. We provide integrated services that include geotechnical-permafrost engineering, marine sciences, met-ocean data collection and analysis, along with a passion for sustainable solutions to arctic development. Engineering Earth’s Development, Preserving Earth’s Integrity.

Anchorage +1 907 344 6001 Canada +1 800 414 8314 solutions@golder.com www.golder.com

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Despite its many areas of specialization, Schoffmann admits that growth for CCI Industrial in the Alaska market is currently a bit challenging due to their business being tied to the general activity level in the oil industry. “Alaska is not experiencing the boom that the rest of the US is, largely due to fiscal policy,” Schoffmann says. “Right now, we are basically attempting to sustain in the current Alaska market. If we were in North Dakota or Texas, I would probably have a more positive outlook.”

Doyon Drilling Inc.

Doyon Drilling Inc., a wholly owned subsidiary of Doyon Ltd. (the largest private land owner in North America), operates on the North Slope of Alaska with rigs specially designed to drill in northern Alaska conditions, and are some of the most technologically adNOSI employees conducing maintenance checks on the newly installed tank farm, which can hold up to 1.2 million gallons of fuel on the North Slope. © 2012 Cris Arend

vanced land drilling rigs in the world. Fully enclosed and larger than typical land rigs, DDI rigs can operate about five months longer on Alaska’s North Slope than those designed for milder climates. As a direct result, DDI operates efficiently year round in temperatures ranging from 50 below to 80 above Fahrenheit—and there is no shortage of industry interest in utilizing these rigs: “We have drill rigs all over the place,” says Aaron Schutt, president and CEO of Doyon Ltd. “Historically, we’ve drilled practically everywhere there’s been activity: Nenana, NPR-A, Kuparuk, Endicott, Badami, Prudhoe Bay, and offshore sites.” According to its website, DDI is continually investigating new technologies and implementing those that add value to Arctic drilling operations. A rigorous maintenance program sustains rig downtime to less than 0.5 percent of operating hours throughout their rig fleet, and DDI takes pride in providing its customers with drilling systems and equipment proven efficient and sound for remote drilling operations. Schutt attributes much of Doyon’s renown to its commitment to the longterm, with both employees and clients. “We work with our employees when there’s a downturn, for example, making sure we take care of them. One of the reasons we’re a good contractor is that we have consistency,” which naturally helps retain qualified employees. In regard to clients, “If the market’s hot, we don’t try to charge more, but then when the market’s down, we hope that our customers will remember us, and that has worked out well.”

NANA Oilfield Services Inc.

NANA Oilfield Services Inc., a wholly owned subsidiary of NANA Development Corp., which is a wholly owned subsidiary of NANA Regional Corp., has been in business for decades. The company provides delivery of fuel, lubricant and potable water to camp and exploration sites across the North Slope and Red Dog Mine from its service complex near

■ 44

the Deadhorse Airport, which features a 270,000-gallon tank farm. With a staff of 30 to 40 employees, most of whom are drivers, NOSI is—according to president Brad Osborne—“working hard to meet their customer needs.” “With all the activity up there, we’re providing the service that keeps the equipment running,” he says. “The water in the camps, and the lubricant for the equipment—so as long as there’s activity up there, we’re going to be busy.” With a new shop built just last year and a new tank farm going up as well, NOSI is prepared for anything—and a commitment to the long-term is highlighted as a key to success. “We’re one of NANA’s longest running companies—we started three years after NANA was formed,” Osborne says. “We’re positioning ourselves to serve— much like we have in the last 35 years— for the next 35 to 40 years.” For NOSI, safety is lauded as a core component in the company’s record of efficiency and dependability. NOSI hasn’t had a recordable incident in 18 months—which, in NOSI’s industry, equates to roughly 100,000 man hours. “We spend a lot of time on the road driving trucks—there’s always room for errors to occur. But our drivers go the extra mile in precaution—it speaks a lot when we have 18 months without an incident.”

Common Ground

All four subsidiaries agree that what sets wholly owned subsidiaries apart from other service companies is a combination of three things that seem to go together: Shareholder relations, environmental responsibility and excellent employee relations. “We exist not only for profit so that we can pay dividends to our shareholders, but also to provide them meaningful opportunity for employment and growth,” Schoffmann says. And for BBNC shareholders, “the tie to the land is a huge issue. For us, respecting the land is not just a slogan… because we are tied to this particular land, and for many years our shareholders have lived off this land, they know the importance of protecting it so it can provide not only for themselves, but for their children, and their children’s children. That ramps it up for us to being more than just a good way to do business—but the absolute right way to do business.”

www.akbizmag.com • Alaska Business Monthly • August 2012

Photo by Judy Patrick

According to Schutt, “Development is certainly a component of why we own lands, but we want to do things better—certainly better than the legal minimum requirements, and you see that reflected … from the producers all the way down to the contractors.” And the presidents of all these subsidiaries agree: A satisfied workforce is a stable workforce. Brad Osborne from NOSI expresses his interest in providing viable work situations for NOSI employees, roughly 60 percent of whom are shareholders, that allow them to make a long-term commitment to work while keeping their lives in balance. “Our workers are on a two and two schedule, so they can come up to the Slope and then go home—that’s been very helpful to our shareholder employees living in the region,” Osborne says. “We want our employees to want to come and work for us.” “We really work with our employees when there’s a downturn,” Schutt says. “Making sure we take care of them—those are things that keep people for a long time. That’s one of the reasons we’re a good contractor: We have real consistency.”

CCI Industrial Services LLC workers applying specialty coatings on a North Slope jobsite.

Schoffmann emphasizes safety as an important part of employee relations. “Our focus on safety is personal because real people are involved. In the event that something happens, there are spouses, kids, parents, friends and co-workers to take care

of. So it’s about being proactive, and properly planning to ensure safety comes first.”  Mari Gallion is associate editor at Alaska Business Monthly.

Our Future The easy oil on the North Slope is gone, and getting to the remaining oil will be a challenge — for Alaska’s future. that will require the state and the industry to work together --

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oil & gAs

CONOCOPHILLIPS CONTINUES TO INVEST IN ALASKA

ConocoPhillips’ custom-built coiled tubing drilling rig, CDR-5, was designed to optimize drilling operations. It maximizes oil recovery through the use of a continuous string of tubing spooled off a reel into an existing wellbore. The ﬂexible tubing is used instead of pipe to deliver and control drill bits and other tools in the reservoir. Photo courtesy of ConocoPhillips Alaska

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www.akbizmag.com • Alaska Business Monthly • August 2012

Tax regime limits activity BY VANESSA ORR

or more than 50 years, ConocoPhillips has played a major role in the development of Alaska’s oil and gas industry. As the largest oil producer and one of the largest gas producers in the state, the company employs nearly 1,100 people through its facilities on the North Slope and in Southcentral Alaska, and at its headquarters in Anchorage. In addition, the company indirectly employs thousands of contractors’ employees. In 2011, ConocoPhillips earned $1.9 billion in Alaska, and paid an estimated $4 billion in taxes and royalties to the state while producing 215,000 barrels of liquid a day. It spent $775 million out of a proposed $900 million budget; the same amount that it has budgeted for Alaska this year. ConocoPhillips’ current holdings in the state include significant ownership interests in three oil fields located on the North Slope—Kuparuk (56 percent), Prudhoe Bay (36 percent) and Alpine (78 percent), which the company operates. In Southcentral Alaska, ConocoPhillips has 100 percent ownership and operates the Kenai liquefied natural gas plant and the Tyonek platform in North Cook Inlet. ConocoPhillips operates the Beluga River natural gas field, of which it owns 33 percent, and is also a 28.3 percent owner in the TransAlaska Pipeline System. In 2012, ConocoPhillips made headlines by aligning with other oil and gas giants BP, ExxonMobil and Canadian pipeline operator TransCanada to work on a plan to commercialize North Slope natural gas resources within an Alaska Gasline Inducement Act framework as an alternative to a natural gas pipeline through Alberta. The company also recently took part in developing groundbreaking technology to get methane gas out of hydrates on the North Slope that could result in a potential new gas source in the future. ConocoPhillips also completed a major corporate restructuring within the past year, changing from one large

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Photos courtesy of ConocoPhillips Alaska

The main Alpine pad and processing facilities in summer. The pipeline in the foreground is coming from the CD4 satellite, also known as Fiord.

integrated oil and gas company to two large companies that handle upstream and downstream operations separately. “ConocoPhillips will be focusing on its core competencies as an independent exploration and production company, while the downstream company, Phillips 66, will focus on its core competencies,” says Trond-Erik

Johansen, president, ConocoPhillips Alaska. “Alaska really won’t see any changes, because we’ve always been an upstream company here.”

Investing in Alaska

While ConocoPhillips continues to invest in Alaska, the majority of the money that it spends is earmarked for

renewal and maintenance projects. According to Johansen, the $900 million that the company is investing in 2012 is relatively flat compared to the money being spent in other parts of the country. “Alaska has a lot going for it: There are a lot of resources left,” he says. “But the state is lagging behind other parts of the world because of its high tax system. If the state were to get that right, I believe that it would see much more development activity.” In Alaska, more than 70 percent of the income that the company generates goes to state and federal governments, compared to 50 to 60 percent in other states such as Texas and North Dakota, says Johansen. “In the last few years, we have tripled our investments in the Lower 48, while our investment in Alaska has remained flat,” he says. “Companies are willing to take more risks when they share more of the reward.” Between 2009 and 2012, ConocoPhillips’ oil and gas investments in the Lower 48 have grown from $1.6 billion to $4.8 billion. ConocoPhillips plans to spend this year’s capital budget replacing

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www.akbizmag.com • Alaska Business Monthly • August 2012

a number of older facilities and updating current facilities to ensure employee and operational safety. “We will be drilling a moderate amount—mainly infill drilling in existing fields where it makes economic sense,” says Johansen. One new project is CD-5 in the National Petroleum Reserve-Alaska (NPRA) that, once sanctioned for funding, will be a new satellite field west of the Alpine development on the North Slope. “We tried for more than five years to get approval for this field, but it was held up by the U.S. Army Corps of Engineers,” explained Johansen. “We finally reached an agreement and got formal approval this past Christmas, so we are hoping to sanction to proceed this year, with most of the capital investment being spent in 2014 and 2015.” Construction at CD-5 will include drill site facilities, gravel roads, pipelines and power systems, and production is expected to begin in late 2015. The project is expected to produce between 10,000 and 18,000 barrels per day of new oil, and was originally bud-

“In the last few years, we have tripled our investments in the Lower 48, while our investment in Alaska has remained flat. Companies are willing to take more risks when they share more of the reward.”

—Trond-Erik Johansen President, ConocoPhillips Alaska

geted in 2009 at $600 million, though that number will be revisited before the project proceeds. ConocoPhillips also has plans to drill a well in 2014 on its Chukchi Sea leases. On March 1, the company submitted its exploration plan to the federal Bureau of Ocean Energy Man-

agement. “We have a good acreage position of 98 blocks in the Chukchi Sea, which we are hoping to move on in a reasonable timeframe,” says Johansen. “It is a very complicated, expensive and time-consuming process because there are so many federal agencies involved, but we do have a good dialogue

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going so we’ve got our fingers crossed that we will get an approval soon and can proceed.”

Exploring New Horizons

While the idea of building a natural gas pipeline from the North Slope through Alberta to the Lower 48 has been discussed for years, ConocoPhillips and other leading oil and gas producers launched a new initiative in March of 2012 that would instead encourage the large-scale export of LNG from Southcentral Alaska to other markets. “There is already plenty of natural gas in the Lower 48, so we would prefer to see Prudhoe Bay and Point Thomson gas used as a potential source for a new LNG plant in Southcentral Alaska, perhaps in Cook Inlet or Valdez,” says Johansen. “While it has not yet been determined whether an LNG project would be commercially viable or where this liquefied natural gas would be sold, there is potential in the Asia Pacific market.” While ConocoPhillips has successfully operated an LNG plant in Kenai for more than 40 years, the type of technology that the plant uses is just one alternative that the company, BP and ExxonMobil will be exploring. The companies are currently in the process of putting together technical and concept selection plans, which they hope to have completed by the end of this year. Once it is determined that the project is technically feasible, the group will work on the regulatory framework, explore commercial issues relating to marketing and securing gas buyers, and work on establishing competitive and stable fiscal terms with the state of Alaska. “We know we can do it; I can’t think of a stronger group of companies to find the solutions the state needs on this issue,” says Johansen. While exploring new markets for its oil and gas production, ConocoPhillips is also experimenting with new technologies to recover resources. In 2008, the U.S. Department of Energy joined ConocoPhillips to execute the first field trial of a groundbreaking new technology to produce methane gas from hydrates locked in the tundra on the North Slope. This technology, tested successfully in 2012, could result in a ■ 50

www.akbizmag.com • Alaska Business Monthly • August 2012

Photo courtesy of ConocoPhillips Alaska

potential new gas source in the future. While excited about the results, Johansen is realistic about the timeframe involved. “This was a very small-scale project and it was very expensive to do, so we’re not fooling ourselves—it could be decades before we can use this technology to bring more gas out of the ground,” he says. While ConocoPhillips would like to move forward on some potential projects, including a limited expansion of West Sak viscous oil production in the Kuparuk River field and the evaluation of a conventional oil development at the Shark Tooth exploratory well at Kuparuk, these developments are on hold right now because they are not competitive in the company’s global portfolio. “While we hope to have more projects in Alaska in the future, we are limited in what we can do by the state’s current tax regime,” says Johansen, adding that the company is continuing to work with the governor and the Legislature to explore ways to make improvements to the tax system. “We’ll continue to do what we’ve been doing to ensure that our assets in

Aerial view of the Kuparuk Operations Center, including Central Processing Facility 1 (CPF1) in the foreground. The Kuparuk field is celebrating its 30th year of operation in 2012.

the state remain healthy and to get oil and gas out of the ground, but unfortunately, this means that we will continue to see production decline because it is becoming more expensive and more challenging to produce every barrel,” he says. “It is our hope that the industry,

the Legislature and the governor can work together on key issues to make it more attractive to invest in Alaska.”  Vanessa Orr is a writer living in western Pennsylvania.

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oil & gAs

The Challenges Facing Alaska LNG Exports

BY L ARRY PERSILY

Liquiﬁed natural gas tanker loading LNG at an Asian liquification plant.

he logistics of getting natural gas from Alaska to Asian buyers are relatively straightforward. About 800 miles via pipeline from the North Slope to tidewater somewhere in Cook Inlet or maybe Valdez. Liquefy the gas, load it aboard tankers, then 3,400 miles by sea to Japan. Or a little farther to China. Pretty simple to draw the lines on a map. The tanker route from Alaska to Japan is half the distance as the route from the Middle East, and it’s two-thirds shorter than the distance from proposed liquefied natural gas export terminals on the U.S. Gulf Coast. (It’s about the same from Australia as it is Alaska.) A round-trip from Alaska to Japan would take about 20 days. Longer trips cost a lot of money. LNG charters were running as high as $150,000 a day in the spring, though long-term charters were less. The relative proximity of Alaska to Asian buyers provides the easy numbers that work in favor of an Alaska project. But competition from other LNG suppliers, construction costs, op■ 52

erating costs and commodity pricing — those are the tough numbers.

Eyeing Japan and China

Alaska once had the Japanese LNG market all to itself. That was 43 years ago, when the liquefaction plant at Nikiski inaugurated the trade for shipping liquefied gas to the Pacific Rim nation. But since then, 16 other countries have gotten into the business of selling gas to Japan. Alaska’s share of the market in 2011 was 0.5 percent. “The country has a fairly balanced portfolio, with no one supplier having a market share greater than roughly 20 percent,” according to a U.S. Energy Information Administration analysis of Japan’s energy needs. LNG deliveries last year came in from Southeast Asia (Malaysia, Indonesia, Brunei), the Middle East (Qatar, United Arab Emirates, Oman, Yemen), Africa (Algeria, Egypt, Nigeria, Equatorial Guinea), Russia, Australia, Norway, Trinidad and Tobago, Peru and Alaska. China, another Asian growth market of interest to Alaska LNG proponents,

last year accepted deliveries from 11 countries. But unlike Japan, China has significant domestic production and a pipeline option – it took almost as much natural gas via a pipeline from Turkmenistan last year as it did via LNG tanker. Guy Broggi, senior adviser at the LNG division of Total Gas & Power, part of the French oil and gas major Total, is skeptical that China will be buying as much LNG as some predict. Instead, the nation will load up on less expensive pipeline gas from Turkmenistan, Myanmar, maybe even Russia, Broggi said at an LNG conference in Houston in May. “China will not be the one to take the highest price,” Broggi said. Another issue for China is that the government sets the price companies can charge for gas, keeping it low to aid consumers. But that means importers, such as utilities, lose money on the fuel. China has embarked on a pilot project to allow buyers to charge up to $12 per million Btu for gas — more than twice

www.akbizmag.com • Alaska Business Monthly • August 2012

the current subsidized rate and near the actual cost — though it’s too early to know how consumer demand will respond if people have to pay close to the real value of the fuel. And though demand is growing in China, it is a small market: A full day’s worth of LNG in China last year would have lasted about half an hour with U.S. consumers. An Asia-market plus for Alaska, however, is that many of Japan’s LNG supply contracts, with extensions, date from the 1970s and 1980s and will expire over the next decade, pushing buyers to negotiate new deals. Of course, suppliers in those 16 other countries that sent gas to Japan last year are thinking the same thing, as are new players coming to the market.

A Boom in LNG Projects

About $200 billion in projects under development in Australia and Papua New Guinea are on schedule to add more than 9 billion cubic feet of gas per day to the global LNG supply capacity by 2016. These projects will provide almost 30 percent more capacity than LNG buyers consumed worldwide last year.

And rather than depending solely on others to sell them gas, Japanese utilities, oil and gas producers and trading companies are getting into the business themselves. They own stakes in five Australian LNG export projects — one that went online this year and four others under or ready to start construction. They also hold equity shares in operating and proposed projects in Russia, Indonesia and Canada, plus several more gas plays worldwide that could develop into LNG export operations. Meanwhile, the next wave could come from the East African nations of Mozambique and Tanzania. Anadarko Petroleum, Italy’s Eni and Norway’s Statoil and partners have discovered more than 100 trillion cubic feet of natural gas in reservoirs offshore these nations. Gas from these discoveries could find its way aboard LNG tankers in the next decade. Economic growth in China and India, along with permanent closure of Japan’s nuclear power plants, could create enough demand to take all that gas, including Alaska’s. Or not. Among the unknowns are how fast China’s economy will grow, how quickly

it will develop its own shale gas resources, how much more gas will be piped from Turkmenistan and possibly Russia, and how many nuclear plants go back online in Japan. These unknowns are key risks facing developers of LNG projects.

LNG Price Another Unknown

Price for LNG is another risk, an especially important one for capital-intensive projects such as liquefaction terminals. International energy research firm Wood Mackenzie last year estimated a liquefaction plant and export terminal at Valdez, capable of sending out an average 2.7 billion cubic feet per day, could cost about $24 billion. The 800-mile pipeline from the North Slope and tankers would be additional. Wood Mackenzie estimated liquefaction would add about $4 per thousand cubic feet to the price of LNG from North Slope gas, plus production, gas treatment, pipeline and tanker charges. A smaller Alaska LNG project likely would encounter higher liquefaction costs — losing the economies of scale. It adds up to the reality that it would take high LNG prices to pay off the

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debt and recover the investment on an Alaska project. Asian buyers of LNG — particularly Japan, with no pipeline option — over the years have been willing to pay high prices. But with so many new suppliers coming to market, there has been wide speculation that Asian buyers will use the opportunity to break the traditional Btu-equivalent link between LNG and oil prices. With world oil prices moving between $100 and $120 a barrel for the first half of the year, LNG spot-cargo prices in Japan have been between $15 and $18 per million Btu (roughly 1,000 cubic feet), with long-term contract prices a little lower. Tokyo Electric Power Co. is considering buying North American shale gas starting in 2016 as it looks to lower its fuel costs. A Japanese business newspaper reported the utility believes it can buy U.S. shale gas at half the price it pays for oil-price-linked LNG deliveries. “The link to the crude-oil price is no longer that reasonable, so we need to break that linkage,” said Mitsunori Torihara, chairman of Tokyo Gas and the Japan Gas Association. An erosion of oil-linked pricing is possible as new projects come into the market worldwide, said Mark Habib, a director with Standard & Poor’s energy team. “The supply response could be quite significant … and help erode the link to crude,” Habib said at an LNG conference in Houston in May.

North American Competition?

Buyers are looking to potential lower-cost supplies from North America — which is awash with shale gas production and reserves — to put pressure on high prices in Asian markets. But there is some political and consumer opposition in the United States to sending natural gas overseas, and that uncertainty worries Asia buyers who value certainty of supply. The U.S. government has given its full approval to just one export project, with eight others on hold pending further studies of how exports could impact U.S. natural gas prices and the nation’s economy. No decisions are expected until later this year, at the earliest. Cheniere Energy’s proposed export terminal at Sabine Pass, La., is the only new U.S. project to have full regulatory ■ 54

and export approvals in hand. It has gas buyers under contract in 20-year deals linked to the U.S. natural gas benchmark price (Henry Hub, La.), meaning LNG could be delivered to Japan at under $9 per million Btu at today’s U.S. gas prices — liquefaction and shipping included in that price. That price looks appealing to buyers in Asia today. Korea Gas has signed up to buy an average 500 million cubic feet of gas a day from Cheniere’s proposed terminal starting in 2017. But what about the future for LNG pricing? Bet on world oil prices, or bet on U.S. natural gas prices? “We can’t be certain where Henry Hub will be in five years, much less 20 years,” David Lang, a Hong Kong-based partner specializing in China and energy transactions and projects at law firm Vinson & Elkins, told the LNG conference in Houston. Contrary to today’s rock-bottom prices, Henry Hub soared above $10 per million Btu in December 2000, February 2003, fall 2005 and summer 2008. “Long-term contracts are for 25 years or so, and betting gas prices will remain low for 25 years is a big gamble for consumers,” Hamad Rashid al-Mohannadi, managing director of RasGas, Qatar’s second biggest LNG producer, said June 6 at a gas conference in Malaysia. Alaska’s competition for LNG buyers also includes Canada. There are trillions of cubic feet of shale gas in northeastern British Columbia, with producers Shell, Encana, Apache and others looking to bring the gas to tidewater at Kitimat, B.C., liquefy it, and grab a piece of the Asian market. Pricing will be an issue for Canadian projects — oil-linked or gaslinked — as will the fact that the B.C. projects will bear the extra costs of developing the gas fields and building pipelines, storage tanks and docks. U.S. Gulf of Mexico projects already have most of that in place. Many of them propose simply adding liquefaction capabilities to existing U.S. LNG import terminals. That head start puts U.S. projects at an advantage to Canadian proposals, said Bevin Wirzba, a Calgary-based managing director at RBC Capital Markets.

Fighting Over U.S. Exports

Korea Gas Corp., the world’s single big-

gest importer of liquefied natural gas, believes U.S. politics will determine how much LNG the country is allowed to export and whether those shipments will undermine the 40-year-old oillinked price mechanism used in Asia. It is not alone in that belief. “There is a lot of lobbying in the U.S. to limit LNG exports and to instead use the gas to allow the domestic industry to benefit from low energy prices,” said Jayesh Parmar, of Baringa Partners, a London-based management consulting firm that focuses on energy issues. Industrial lobbying in the United States is likely to put a cap on potentially huge natural gas exports, benefiting domestic industries such as petrochemicals and power generation but limiting export profits from gas-hungry Asia and Europe, Parmar said. “Petrochemicals and refined products, as well transportation industries that use natural gas, stand to gain from such a policy.” Those are fighting words to others. “It would be political suicide to try to stop it (exports),” said Barry Worthington, executive director of the U.S. Energy Association. The main opponents to exports, he said, are environmentalists who link it to hydraulic fracturing and shale gas production, and large gas customers that want to keep U.S. prices low. The political battle may not matter much for Alaska. Because it is not connected by a pipeline to Lower 48 markets, opponents couldn’t argue that shipping Alaska gas overseas would deprive U.S. buyers. An Alaska export project still would require federal approvals, though they could prove much less controversial than Gulf Coast or East Coast terminals.  Larry Persily is Federal Coordinator for Alaska Natural Gas Transportation Projects. Persily, who was appointed by President Barack Obama in December 2009, served almost 10 years with the Alaska Department of Revenue, governor’s ofﬁce and as a legislative aide on oil and gas issues before taking a turn at federal service. He previously worked as a newspaper reporter, editor and owner in Alaska for almost 25 years.

www.akbizmag.com • Alaska Business Monthly • August 2012

oil & gAs

Increased Cook Inlet Activity Moving fast with new ideas BY MIKE BRADNER

renaissance appears to be under way for Cook Inlet’s oil and gas industry, and Alaskans are keeping their fi ngers crossed. Explorers are busy, helped by generous incentives from the state that can pay well over half the cost of test drilling. New companies, small and large, are on the scene, including fi rms experienced in redeveloping mature, depleted oil fields. One is Hilcorp Energy, a large privately held company which purchased the Inlet’s aged oil platforms in early 2012, has a solid track record in breathing new life into old fields in Louisiana and Texas. Another is Apache Corp., which has a record, from the North Sea and other places, in doing new exploration and making discoveries in older oil and gas basins. Hilcorp and Apache are large independent companies, meaning they specialize in the “upstream” part of the business in finding and producing and oil and gas, but are not integrated “downstream” with their own refineries and marketing, unlike Chevron Corp., Marathon and other companies that previously dominated Cook Inlet. There are also smaller independent companies engaged in redeveloping older producing wells and facilities, like Armstrong Oil and Gas, which is now producing gas from a small, previously discovered deposit near Homer, and Cook Inlet Energy, which is working on the west side of the Inlet. These companies are entrepreneurial and move fast with new ideas. Finally, there are the small explorers, smaller independent companies like Furie Operating Alaska, formerly known as Escopeta Oil, which is now drilling in Cook Inlet with a jack-up rig; Buccaneer Energy, which will soon be drilling in the Inlet with a second jackup rig, but which has meanwhile found

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new gas on the Kenai Peninsula and is now producing with one well. Another small independent, NordAq Energy, an Alaska-based independent, is exploring on the Kenai Peninsula and has made a discovery in the Kenai National Wildlife Refuge on lands owned by Cook Inlet Region Inc., the regional Alaska Native Corporation based in Anchorage. NordAq is still assessing its discovery and no decision has been made to develop it. Buccaneer is meanwhile working to expand its gas production with new wells drilled in its Kenai Loop gas field near the City of Kenai.

which encountered financial problems and went bankrupt. Out of the bankruptcy came the formation of Cook Inlet Energy by individuals who were part of Pacific Energy’s management team, who then persuaded Miller Energy of Tennessee to buy the company. The cycle begins anew. Miller, through its Cook Inlet Energy subsidiary, is making a substantial investment in new equipment and drilling, and the Alaska management team is quite enthused about prospects. There are still big challenges, however. One is that the company must pay very high transportation costs to move its oil

Only limited storage is available on the platforms on the west side including Cook Inlet Energy’s, and because larger amounts of oil cannot be stored more frequent small shipments of oil must be made to the loading terminal. Early Stages

All of this sounds good, but the Inlet’s revival is still at a critical early state. Alaskans remember earlier revivals which fizzled. Years ago Forcenergy, a Texas-based firm, came to Alaska with new ideas and a burst of enthusiasm. The company purchased and expanded small producing properties like the small West MacArthur River field on the west side, which is now owned by Cook Inlet Energy. Forcenergy and subsequently Forest Oil Co., which purchased Forcenergy, also developed the small Redoubt Shoals prospect on the west side and built the Osprey production platform, the first new platform in the Inlet in years. Forest Oil’s initiative failed partly because of corporate problems and partly because West MacArthur River and Redoubt Shoal did not perform as well as expected. The properties were sold to Pacific Energy, a small California firm

across the Inlet to the Tesoro refinery, the customer. The field is connected by pipeline to a loading terminal at Drift River, but bulk oil storage tanks there have been closed since a flooding due to nearby volcanic eruptions. Only limited storage is available on the platforms on the west side including Cook Inlet Energy’s, and because larger amounts of oil cannot be stored more frequent small shipments of oil must be made to the loading terminal. This means the shuttle tankers used by Tesoro to ship the oil cannot be fully loaded, and therefore the overall efficiency of the operation is reduced. This is a problem shared by Hilcorp at the nearby Trading Bay and MacArthur River fields. Hilcorp is working to reactivate the storage tanks later this year, which will allow more oil to be stored and will allow tankers to be less frequent and fully loaded. It will ease, but not remove the problem. Cook In-

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let Energy’s ultimate solution is a new pipeline west to east across the Inlet to carry oil, but more oil will have to be found to make this feasible.

Cautionary Tale

Another part of Cook Inlet’s cautionary tale is the experience of Pioneer Natural Resources with the Cosmopolitan oil deposit on the Inlet’s east side, just offshore Anchor Point. Cosmopolitan is a known oil discovery that was actually found years ago in the first wave of Inlet exploration but not developed because it was small. ConocoPhillips became interested, acquired the property, and invested substantially in new exploration and test-production. There were problems, however. Pioneer, a large independent company which successfully developed the small Oooguruk field on the North Slope, came in as a partner with ConocoPhillips and eventually purchased all of Cosmopolitan. Pioneer invested in new drilling and new production but was obviously dis-

appointed because part of the block of leases were given up and returned to the state. The acreage that was released was subsequently picked up by Apache when the state offered the land in a lease sale. Pioneer then sold the core of the project, in the remaining leases, to Buccaneer. That company hopes to do more drilling in late 2012 at Cosmopolitan when its jack-up rig arrives in Cook Inlet and after the initial two offshore Cook Inlet wells assigned for the rig are drilled. Once again, the Cook Inlet cycle is turning, this time at Cosmopolitan. The principal challenge at Cosmopolitan is how the deposit could be developed. It is near shore and the hope of ConocoPhillips and Pioneer was that the field could be drilled and produced with high-angle “extended reach” wells drilled from shore, which would mean no offshore platform would be needed, a major cost consideration. However, the exploration wells drilled to the deposit from onshore had to penetrate extensive coal seams, which

created problems in drilling and in conducting flow tests after the wells were fi nished (the soft coal tended to cave in). Buccaneer has an advantage in owning a mobile jack-up rig which can position itself, although temporarily, offshore and directly above or closer to the underground reservoir. This will at least allow for more exploration drilling and more efficient flow tests. However, the company, along with its neighbor, Apache, will have to resolve the long-term answer of whether a production platform will be needed to produce the field. Meanwhile, getting more and better information on the deposit is important However, it’s important to note that Pioneer’s decision on Cosmopolitan was influenced as much, or possibly even more, by more attractive investment opportunities in the Lower 48, in the shale oil and gas plays where the company is active, as dealing with the technical problems of Cosmopolitan. Buccaneer is, for now, very focused on

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AIDEA made an equity investment in the rig to help Buccaneer with the financing, the goal being to help ensure that at least one jack-up rig gets to Cook Inlet (at the time, there was still a lot of uncertainty about the Escopeta, now Furie, jack-up rig). Cook Inlet, as is Apache, which now owns the leases adjacent to the core Cosmopolitan leases. The take-home message from this is that all of these companies make decisions based on their own sets of opportunities and challenges elsewhere, and which are different for each company. Apache, for its part, has been taking a very careful and measured approach to Cook Inlet, acquiring a very large lease and acreage position and then doing a thorough evaluation, including through a largest seismic program ever done in Cook Inlet. Apache will drill its first exploration well late this year at an onshore site on the west side of the Inlet, and also plans an onshore test well on the east side, most likely in 2013. The company’s seismic program on the Inlet’s west side is complete, and a marine seismic program is scheduled for Cook

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Inlet this summer and an onshore program on the Kenai Peninsula, on the Inlet’s east side, is set for later this year. That will give Apache a comprehensive look at Cook Inlet’s potential.

Jack-Up Rigs

Another company now active in the Inlet, and which has attracted some controversy, is Furie Operating Alaska, the new name of Escopeta Oil Co. Furie is drilling exploration wells in the Inlet this summer after having brought a jack-up rig to the region and started one well last fall. The drilling last year resulted in a gas discovery but the company closed down operations for the winter before the fi nd could be fully assessed. The rig was brought back to the site earlier this summer and drilling has resumed. Furie intends to test the gas discovery made

last fall and then to drill deeper to test possible oil-bearing rocks at greater depths. When the well is fi nished Furie will move the rig to a second nearby location and drill a second well. There is some controversy around Furie. Under its previous name, Escopeta, and a previous management, the company moved the jack-up rig to Alaska using a Chinese-built heavy-lift vessel for part of the voyage. The heavylift vessel was needed to move the rig from the U.S. Gulf of Mexico around the tip of South America because the unit was too big to transit the Panama Canal. However, the U.S. Jones Act requires cargoes moved between U.S. ports to be on American-built ships. Escopeta argued there was no US vessel capable of the job available that could meet the company’s tight schedule. Also, the Chinese vessel moved the rig to Vancouver, British Columbia., where it was oﬄoaded for work. The subsequent move to Cook Inlet was made under tow by US-owned tugs. Escopeta argued it had not violated the Jones Act because the Chinese ship was used to move the rig to a Canadian port. The

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federal Department of Homeland Security, which administers the Jones Act, did not agree, and slapped the company with a $15 million fine. Ironically, Escopeta had gotten a waiver of the Jones Act to move the rig in 2006 but the move did not occur because of financing problems. When the company did secure financing, in 2010, the waiver had expired. The federal administration had meanwhile changed and the waiver was not renewed. Escopeta worked hard on the renewal, and was helped by Alaska’s congressional delegation, but the Homeland Security department would not budge. In any event, Furie may have found a significant gas discovery and still hopes to find oil. Even as the discovery is being confirmed the company is moving ahead with engineering and planning for a small production platform and a pipeline to connect the hoped-for discovery with nearby infrastructure. There will also be a second jack-up rig in Cook Inlet this summer. This is a rig being brought from Singapore that is owned by Buccaneer Energy and two partners, one of them, interestingly, being the state development corporation, the Alaska Industrial Development and Export Authority. AIDEA made an equity investment in the rig to help Buccaneer with the financing, the goal being to help ensure that at least one jack-up rig gets to Cook Inlet (at the time, there was still a lot of uncertainty about the Escopeta, now Furie, jack-up rig). The AIDEA agreement provides for the private partners to buy out its interest after a period. This rig, which is larger than the unit being used by Furie, will arrive in the Inlet this summer or early fall, and is scheduled to drill two wells for Buccaneer on offshore prospects. Buccaneer is very optimistic about the drilling because both are near where prior drilling was done, years ago, which found oil. At the time those discoveries were uneconomic, but Buccaneer feels that modern exploration tools, including more advanced seismic, will allow it to find a part of the prospect that will yield a commercial discovery.  Mike Bradner is editor and publisher of Alaska Legislative Digest.

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oil & gAs

A 2010 aerial shot of BP’s Liberty rig, standing on the Endicott satellite drilling island west of the Liberty deposit.

IS LIBERTY DEAD? An ambitious Alaska North Slope drilling project stalls as BP reconsiders

BY WESLEY LOY

n a manmade island in the Beaufort Sea, a colossal drilling rig billed as one of the most powerful in the world juts 240 feet into the Arctic sky. BP installed the rig to punch horizontal holes of unprecedented length to a rich, offshore oil accumulation known as Liberty. Under the original plan, crude from Liberty should have started flowing in 2011, helping to stem the worrisome production decline from Alaska’s North Slope. But the big blue super rig so far hasn’t sunk a single hole, standing idle for months in a mystery that seems almost as deep as the wells it was supposed to drill. No one, it seems, is willing to say much. But the best available evidence suggests BP’s $1.5 billion Liberty project is hung up in tough circumstances, including fallout from the Deepwater Horizon disaster and an apparent conflict with the rig’s builder, Parker Drilling Co. of Houston, Texas. The situation begs the question: Is Liberty dead? “We are in a review stage on this project that has been under way for some time now,” Steve Rinehart, spokesman for BP Exploration (Alaska) Inc., said in a June 5 interview.

“When we’re ready to say more, we will.” What began as a decent oil find evolved into a highly ambitious project. Liberty is located on federal leases in shallow water, about 20 feet deep, in the Beaufort Sea about six miles offshore and 15 miles east of Prudhoe Bay. BP drilled and tested Liberty No. 1, the discovery well, in early 1997. On May 2 of that year the company announced a commercial discovery estimated at more than 100 million barrels of recoverable oil. A find of that size is modest compared to Alaska giants such as the BP-operated Prudhoe Bay field, which has produced more than 12 billion barrels of oil to date, and the ConocoPhillips-operated Kuparuk River field, which has produced nearly 2.5 billion barrels. But make no mistake, a field capable of producing 100 million barrels is a huge prize. BP has said production could plateau at 40,000 barrels per day. Overall North Slope production through the first five months of this year averaged less than 600,000 barrels per day. The question for BP was how to produce the offshore discovery. The initial idea was to build a gravel island

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www.akbizmag.com • Alaska Business Monthly • August 2012

Map courtesy of BP

miles

The BP Liberty rig is located east of Endicott on the SDI (satellite drilling island) west of the Liberty deposit.

at Liberty with production facilities and a buried subsea pipeline to carry the oil to shore. That’s what BP did for its Northstar field, which sits in federal and state waters northwest of Prudhoe Bay. Northstar has produced 154 million barrels of oil so far. Later, BP would come to favor a different approach. With new drilling technology, the company determined it could tap Liberty by boring extendedreach wells from its existing Endicott offshore field to the west. The rig would operate on a satellite drilling island built as part of the Endicott installation. This approach offered real advantages. By not constructing a new island farther offshore at Liberty, BP could limit its footprint and avoid potential impacts to bowhead whales vital for Native subsistence hunters, and a unique kelp bed known as the Boulder Patch. From a practical standpoint, BP could use the existing processing facilities and pipeline at Endicott to produce the Liberty oil. Plus, a causeway connects Endicott to the mainland, providing handy road access. But the drilling BP contemplated for Liberty would be something truly bold. These would be ultra extended-reach wells, going down two miles and bending out horizontally for six to eight miles to tap the oil reservoir. The Liberty wells would be the longest extended-reach wells ever attempted, BP said. And to drill them would take a monster rig powerful enough

to rotate the long drill pipe. Up to six wells would be needed to develop the field. “This is an incredible project,” Andy Inglis, then BP’s exploration and production chief, said in 2009 in an in-house magazine feature on Liberty. “In the past, a new island and offshore pipelines would have been required. This project is an example of what BP can deliver, bringing technology and capability together to do what, not long ago, was considered impossible. This is BP at its best.” In January 2008, Interior Department drilling regulators approved BP’s Liberty development and production plan. Parker Drilling went to work fabricating the drilling rig for BP at Vancouver, Wash., at a cost of hundreds of millions of dollars. The rig components arrived by barge on the North Slope in July 2009, completing a 3,300-mile sea voyage, and workers began the job of assembly, testing and training. The Liberty project seemed a definite go. Then in April 2010 came the Deepwater Horizon blowout in the Gulf of Mexico, which seemed to portray BP not at its best, but its worst. The Gulf disaster prompted the Obama administration to impose a temporary moratorium on deepwater drilling, and on exploratory drilling in the Arctic. Although Liberty drilling was exempted from the moratorium because the drilling would be done from the Endicott satellite island, close to shore, the project nevertheless drew increased

LIBERTY UPDATE On June 28, BP provided an update on the future of the Liberty project. “We have always said that we will not proceed with the project unless we can do it safely and meet all of our standards. In the end, the project as currently designed does not meet our test,” said Dawn Patience, BP Alaska spokeswoman. “After a full review of project engineering and economics, BP has decided not to pursue the proposed Liberty project, in its current form,” she said. “BP is in the process of working with regulators to discuss the potential forward plans for the project.” The decision comes after “a detailed 18-month review of the rig systems, an analysis of the project’s risk and economics, and an assessment of the evolving regulatory framework,” Patience said. The rig needs substantial modiﬁcations to its mud, hydraulics, pipe handling, heating and other systems, she said, adding no decision has been made about what to do with the rig. BP now believes project costs would be at least double the original $1.5 billion estimate, and “it would take several more years before drilling could commence,” Patience said. She stopped short of saying the Liberty project is canceled. —Wesley Loy

attention and criticism. The New York Times published a June 23, 2010, article suggesting that BP itself and not federal regulators conducted the environmental review of the project, that extendedreach wells are more prone to dangerous “gas kicks,” and that Liberty was

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Endicott satellite drilling island with the Liberty rig, looking north, taken in 2010. In late 2010 BP chose to suspend the physical construction of the Liberty rig on site, while it reviews certain engineering and design elements of the rig. Photo courtesy of BP

really an offshore project as a large oil spill would quickly overwhelm the tiny drilling island and flow into the sea. U.S. Sen. Frank Lautenberg, D-N.J., called for a halt to Liberty. “In the Liberty project, BP has set a new standard for impudence and demonstrated its continued commitment to profits over safety and the environment,” Lautenberg said in a June 24, 2010, letter to the Obama administration. “In an attempt to escape federal regulation of offshore drilling, BP has built an artificial island in the Beaufort Sea and claimed its project is therefore being carried out ‘onshore.’” Sen. Mark Begich, D-Alaska, promptly wrote Lautenberg to vouch for Liberty, noting it was an intensely scrutinized shallow-water project very different from the deepwater project that went tragically wrong in the Gulf. Interior Department officials said at the time that, in light of the Gulf spill and new safety requirements, “we will be reviewing the adequacy of the current version of the Liberty project’s spill plan.” Spokesmen for the Bureau of Safety and Environmental Enforcement, one of the new Interior Department agencies created after Deepwater Horizon to regulate offshore drilling, were asked repeatedly to provide a Liberty status update for this story. They failed to do so. ■ 62

Deepwater Horizon shook BP to the core, forcing the company to sell off billions of dollars in assets to raise cash. For a time, speculation ran hot that BP’s North Slope assets were in play. But Liberty planning continued. In a Nov. 17, 2010, speech in Anchorage, BP Alaska President John Mingé said close to a third of his company’s $800 million capital budget for 2011 would go toward Liberty. Later that month, however, came a new wrinkle: BP said it was suspending work on the Liberty drilling rig, saying it needed an engineering review. The review apparently is still ongoing. Parker Drilling addressed the Liberty situation in a May 4 filing with the U.S. Securities and Exchange Commission. “In November 2010, BP informed us that it was suspending construction on the project to review the rig’s engineering and design, including its safety systems,” the filing said. “The Liberty rig construction contract expired on Feb. 8, 2011, prior to completion of the rig. Before expiration of the construction contract, BP identified several areas of concern relating to design, construction and invoicing for which it asked us to provide explanations and documentation, and we have done so. Although we provided BP with the requested information, we do not know when or how these issues

will be resolved with our client.” The Parker filing went on to say that under a subsequent consulting agreement, “we assisted BP in a review of the rig’s design, the creation of a new statement of requirements for the rig, and the transition of documentation and materials to BP. All work under the consulting agreement has been completed and we are engaged with BP on construction contract close-out resolution.” BP spokesman Rinehart said the rig had not be dismantled, or “stacked,” and was still standing on the Endicott satellite island. The rig has been weather-protected, he said. The state’s drilling regulator, the Alaska Oil and Gas Conservation Commission, also has permitting authority over the Liberty wells because the surface locations are on state land. The agency’s chair, Cathy Foerster, said she doesn’t believe there’s actually much mystery behind Liberty’s stalled status. “The impression I have is, BP pulled in their plan and they’re still trying to decide what to do,” she says. “It’s not the feds, and I know it’s not us, that told them to go back to the drawing board.”  Wesley Loy is a journalist living in Anchorage.

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RIGHT MOVES

Compiled by Mari Gallion

Stewart Title

Administration from the University of Montana and is a member of the American Institute of Certified Public Accountants. Thomas holds a Bachelor of Business Administration in Accounting from the University of Alaska Fairbanks, and is also a certified public accountant.

Alaska Communications Systems

Lozano

Buchite

Stewart Title of Alaska is pleased to announce Samantha Buchite has rejoined the company as an escrow officer. Buchite has more than 11 years in the title and real estate industry and holds and associate degree in accounting. Michele Lozano recently joined Stewart Title of Alaska as an escrow assistant. Lozano brings with her more than 15 years of banking industry experience and an associate degree in business and accounting.

ASRC Energy Services Inc.

Alaska Communications announces the election of Margaret L. (Margie) Brown to its board of directors. Brown is president and chief executive officer of CIRI. During her tenure, CIRI has developed a reputation for disciplined growth Brown with diversified interests in energy development, construction services, environmental services, real estate, tourism and hospitality, telecommunications, aerospace defense and venture capital investment.

Cook Inlet Region Inc.

O’Meara

Waltman

ASRC Energy Services Inc. announces the promotion of Corey O’Meara to the position of project manager. O’Meara will oversee all phases of fabrication projects at the Anchorage Fabrication Facility. AES also promoted Jeremy Waltman to the position of shop superintendent. In his new role, he will be responsible for supervising all craft disciplines and managing the daily fabrication activities.

Alaska Pacific Bancshares Inc.

Alaska Pacific Bancshares Inc. has announced that Maxwell S. Rule has been named chairman of the board and Linda C. Thomas has been named vice chairwoman. Rule holds a B.S. in Business

CIRI’s Board of Directors named current chief operating officer Sophie Minich to succeed Margie Brown as CIRI president and chief executive officer after Brown retires early next year. Minich is Athabascan and grew up in Seward, Alaska. She is a CIRI and Doyon shareholder who became CIRI’s chief operating officer in September 2007. She earned a bachelor’s degree in finance from the University of Alaska Anchorage.

R&M Consultants Inc.

Luke Boggess, GISP joined R&M as a senior GIS specialist. Boggess holds an A.S. in General Studies from Weber State University, an A.A. in General Studies from the University of Alaska Anchorage and a Certificate in Geomatics Crowe and Applied Mapping Sciences from Weber State University.

Alex Jones joined R&M as a senior GIS developer. Jones has six years of experience in GIS development. Jones holds a B.S. in Urban Planning from New Mexico State University. Josh Crowe P.E. passed the Principles & Practice of Engineering Exam, gaining his license in civil engineering. Crowe holds an M.S. and a B.S. in Civil and Environmental Engineering from Marquette University.

Alaska DOT & PF

Alaska Department of Transportation and Public Facilities announced the following promotions within the Maintenance and Operations Division: Steve Potter accepted a promotion to the Northern Region maintenance manager. Potter, who has 25 years of excellent service with DOT&PF, will be based in Fairbanks. Dan Schacher was promoted to Fairbanks district superintendent. Schacher will be based in Fairbanks.

US Army Corps of Engineers

Colonel Christopher D. Lestochi has assumed command of the U.S. Army Corps of Engineers, Alaska District. Lestochi was commissioned in the Corps of Engineers in 1989 from Pennsylvania State University. He holds Coullahan a B.S. in Architectural Engineering, Master of Science in Civil Engineering from Penn State, and Master of Strategic Studies from the US Army War College. Patrick M. Coullahan, P.E., PMP, CFM, F.SAME, chief of Construction and Operations Division with the US Army Corps of Engineers, Alaska District, received the Wheeler Medal from the Society of American Military Engineers.

US Arctic Research Commission

President Obama has appointed Dave Benton of Juneau to the US Arctic Research Commission. Benton is a former deputy commissioner of the Alaska Department of Fish and Game,

OH MY! ■ 64

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RIGHT MOVES

Compiled by Mari Gallion

and served as chairman of the North Pacific Fisheries Management Council and North Pacific Research Board.

Prudential Jack White/ Vista Real Estate

Stephan

Prudential Jack White/ Vista Real Estate named Gabe Stephan broker for all of its three offices statewide. Stephan has over 30 years of experience in real estate, and has worked as sales manager for the Anchorage office since 2000.

Blood Bank of Alaska

Blood Bank of Alaska welcomes Robert “Bob” Scanlon as the organization’s new chief executive officer. Prior to this role, he served as the area director of manufacturing for American Red Cross Biomedical Services in Meridian, Idaho. Scanlon also served as an infantry officer with the US Marine Corps, serving in Honduras, Panama, Desert Shield and Desert Storm.

University of Alaska Foundation

University of Alaska Foundation has named Megan Riebe associate vice president of development and executive director of the UA Foundation. She comes to the UA Foundation from Gonzaga University where she was the Riebe director of development for strategy and leadership gifts. Riebe has a B.A. in Business Administration and Marketing from WSU.

K-12 Outreach Operations

K-12 Outreach Operations announces the hire of Kathryn Berry Bertram, Ph.D. as the new director. Bertram has earned a doctoral degree in Education Research and Cross-Cultural Studies from the

University of Alaska Fairbanks. Prior to her Ph.D., Bertram earned a Master of Public Administration and Affairs from Indiana University, and a Bachelor of Science Education and Public Relations from Wittenberg University.

Imaging Associates of Providence

Keith Radecic recently joined Imaging Associates of Providence as chief exe cutive of f icer. Ra decic is highly regarded for his leadership and winning strategies as both a practice manager and as a former collegiate Radecic and professional football player. Radecic earned a Bachelor of Science in Finance and Accounting from Penn State University.

Denali Alaskan FCU

Whitney Tillman was promoted to marketing coordinator at Denali Alaskan Federal Credit Union. Throughout her employment with Denali Alaskan, Tillman has attended the University of Alaska Anchorage, and in December, she Tillman will receive her BA in Journalism and Public Communications.

manager. Prior to joining DCCED, Dunn was the vice president of marketing and sales for the Alaska Travel Industry Association.

Anchorage Economic Development Corp.

Kyzer

Starzec

The AEDC recently named Will Kyzer the new business and economic development assistant director for the organization and James Starzec the new research coordinator. Kyzer earned a B.A. in English, with distinction, as well as a Certificate in Entrepreneurial Management, from the University of Iowa. Starzec earned a B.S. in Economics from the University of Alaska, Anchorage and is currently working to complete a master’s in urban planning from the University of Wisconsin-Milwaukee.

Stoel Rives LLP

MSI Communications

Mike Leon, a veteran creative director who has developed advertising campaigns for some of the best-known brands in the world, has joined MSI Communications as creative director. He attended Art Center College of Design and holds a B.A. from Cal State Los Angeles.

State of Alaska

Kathleen Dunn will join the Department of Commerce, Community, and Economic Development as the new tourism marketing

Torgerson

Perkins

James E. Torgerson and Joseph J. Perkins Jr. of the firm’s Anchorage office have been selected as leading US lawyers by independent legal research team Chambers and Partners. Torgerson is managing partner of the Anchorage office. Chambers researchers found Perkins is widely viewed as a go-to practitioner for mineral industry transactions and dirt mining work.

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special section

Building Alaska

Alaska Construction Updates A small sampling of some big projects COMPILED BY TASHA ANDERSON Alaska Scientific Detection Laboratory-Anchorage

Owner: State of Alaska Contractor: Neeser Construction Inc. Cost: $87.5 million Project: An 84,000 square foot building replaced a 19,200 square foot building. The larger space includes: a firearms and toolmark lab; a latent prints, or fingerprint analysis lab; a breath alcohol lab; a blood alcohol lab; a controlled substances or drug lab; a biological screening lab; a DNA analysis lab; and a DNA data basing lab. Update: Construction was completed and the crime lab opened in early June.

Anchorage Neighborhood Health Center-Anchorage

Owner: Anchorage Neighborhood Health Center Contractor: Roger Hickel Contracting Cost: $28 million Project: The new Health Center is located on C Street near the intersection of International Airport Road. This new facility will provide expanded medical clinics, an expanded dental clinic, expanded support facilities and increase access to care. Update: Ground broke for the new health center in June 2011 and it will be open this September.

Deadhorse Aviation Center-Deadhorse

The Anchorage Neighborhood Health Center, designed by Livingston Slone Architecture and being built by Roger Hickel Contracting, is scheduled to open in September.

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Owners: Offshore Support Services LLC; Fairweather LLC; Kaktovik Iñupiat Corp. Contractor: Ukpeaġvik Iñupiat Corp. Cost: $35 million Project: The Deadhorse Aviation Center is 70,000 square feet, offers secure taxiway access and features an ergonomically designed hangar, airport terminal, multiple secure office suites, a

www.akbizmag.com • Alaska Business Monthly • August 2012

medical clinic, tenant and staff housing, dining facilities, a logistics center and a pristine 10.4-acre laydown yard. Update: The Aviation Center is open and operational as of this June.

Girdwood Wastewater Treatment Facility Upgrade-Girdwood

Owner: Anchorage Water and Wastewater Utility Contractor: MKB Construction Cost: $10 million (Phase 1); estimated $40 million to $60 million (entire project) Project: Upgrading Girdwood’s aging wastewater treatment facility, located off Ruane Road. The upgrades will enable the wastewater treatment facility to process the increased volume of wastewater generated by Girdwood’s growing population, and improve the quality of wastewater treatment. Update: The project is currently in Phase I, which will solve existing operational problems, targeting select improvements. Construction began in June. Phase II is anticipated to begin 2016 and will provide expanded, upgraded wastewater treatment capability.

Samuel Simmonds Memorial Hospital Replacement Project-Barrow

Owner: Arctic Slope Native Association Contractor: ASRC SKW Eskimos Cost: $84.7 million Project: The new hospital will be 100,000 square feet, four times larger than the currents hospital. It will have additional outpatient exam rooms and ER beds. Other services will include single bed inpatient rooms, physical therapy, CT, optometry, a specialty clinic with new audiology and endoscopy capabilities, a meditation room and employee facilities. Update: Construction is progressing on time and on budget. The replacement hospital is expected to be completed December of this year.

Goose Creek Correctional Center-Port MacKenzie

Owners: Matanuska-Susitna Borough; State of Alaska Department of Corrections Contractor: Neeser Construction Inc. Cost: $240 million Project: The Goose Creek Correc-

tional Center is a new, 1,536 bed medium-security correctional center for long-term male felony offenders located at the intersection of Point MacKenzie Road and Alsop Road near the Point MacKenzie Prison Farm in the Matanuska-Susitna Borough. Update: Construction is completed. Furniture, fixtures and equipment installation was taking place in early July. Operations began in mid-July with the initial transfer of 128 prisoners, training of 95 staff, and testing of systems. Complete staffing and populating of the prison will be phased in over the next year beginning with instate overflow prisoners from other facilities and culminating with the eventual return to Alaska of prisoners housed in Colorado.

Norton Sound Regional Hospital-Nome

Owner: Norton South Health Corp. Contractors: Neeser Construction Inc.; Inuit Services Inc. Cost: $91 million Project: A 150,000-square-foot hospital, to be located in Nome. Update: The hospital is currently under

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construction and is 90 percent complete. It will reach substantial completion at the end of this October, and furnishing will begin in November. It will be open for patient care this December.

Seward Highway Reconstruction-Anchorage

Owner: Municipality of Anchorage Contractor: Quality Asphalt Paving Cost: $40 million Project: This project will expand the highway from four to six lanes between Tudor and Dowling roads, add pathways along the frontage roads and allow for the Campbell Creek trail to be connected below the highway. Update: Homer Drive from Tudor to Dowling is closed; Campbell Creek access is currently restricted at the New Seward Highway bridges until the fall of 2013.

Tsaina Lodge-Valdez

Owners: Jeff and Ingrid Fraser Contractor: Criterion General Cost: Privately Owned, Not Disclosed Project: The old lodge had fallen into disrepair and was demolished. The new lodge, by the same name and at the same location, is a 24-room, upscale, boutique lodge built with Thompson Pass and heli-skiers in mind. Update: Ground broke for the lodge in August 2011, and it opened for business this March.

West Dowling Road Phase I-Anchorage

Owner: Municipality of Anchorage Contractor: Quality Asphalt Paving Cost: $13.5 million Project: Phase I of the project will provide improved accessibility between the Old Seward Highway and C Street. Phase II will connect C Street to Minnesota Drive. Update: Dowling is closed from A Street to B Street until October; Dowling will be closed between the Old Seward Highway and Potter Road through October; there are and will continue to be intermittent lane closures on C Street between Dowling and 64th Avenue. The development and planning stage of Phase II is currently under way.  Tasha Anderson is the editorial assistant for Alaska Business Monthly. ■ 68

www.akbizmag.com • Alaska Business Monthly • August 2012

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special section

Building Alaska

Women Build Houses, Friendship, Community Constructing homes with Habitat for Humanity Anchorage STORY AND PHOTOS BY SUSAN SOMMER

Women volunteers work on an Anchorage project during Habitat for Humanity’s Women Build Week.

aughter and quiet music drift out the open door of a house under construction on an overcast spring day in northeast Anchorage. Inside, a handful of women in purple t-shirts layered over long-sleeve tops wield paint brushes and rollers; others tap door frames with hammers, then close the unfinished doors to see if they line up straight. Team leaders instruct patiently, showing the volunteers how to handle the tools and master the tech■ 70

niques. There is no yelling. No one is rushing. Cooperation and teamwork are a given. Welcome to a Habitat for Humanity Anchorage Women Build Day.

National Women Build Week

Habitat for Humanity Anchorage is part of the larger Habitat for Humanity International, a nonprofit, nondenominational Christian housing ministry. All Habitat affiliates welcome all people regardless of race, sex, color, age, dis-

ability, religion, familial status or national origin or any other difference to participate as a volunteer, staff or homeowner. Since its founding in 1976, Habitat for Humanity has helped build or repair more than 500,000 houses and served more than 2 million people around the world. The Anchorage affiliate’s mission is “to eliminate substandard housing in Anchorage, Alaska, and make affordable housing a matter of conscience

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and action.” HFHA was founded in 1992 and has built 76 homes in the municipality. Additional Alaska affiliates assist families in Fairbanks, Mat-Su, Homer and Soldotna. Women Build is one of Habitat’s volunteer programs; in partnership with Lowe’s, it trains women who want to learn construction skills and build homes and communities. National Women Build Week is held each year around the country, usually just before Mother’s Day, in recognition of the housing challenges facing so many women and children globally. During the week, women volunteers devote at least one full day to a Habitat project. This year’s theme, “The Build Generation,” focused on recruiting and training women volunteers ages 18 to 24. On Saturday, May 12, Anchorage’s Oklahoma Commons Build 2011-2012 project at the intersection of Oklahoma Street and East Fourth Avenue attracted more than 20 women volunteers. Olympic ski champion Kikkan Randall stopped in for a lunch-time chat and painting with volunteers. Partner

Homes in the Habitat for Humanity project in northeast Anchorage consist of a variety of ﬂoor plans.

families visited and worked with the volunteers on the houses throughout the day, hauling paint buckets, making new friends and counting the days until they move in.

Volunteers are Essential

Volunteers and future homeowners build or repair Habitat homes under trained supervision by team leaders and construction managers. In sup-

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port of the organization’s National Ricker says women volunteers are eaWomen Build Week in May, the An- ger to learn and are happy to be there. chorage Lowe’s store donated a $5,000 “They’re enthusiastic, hard workers. gift card to HFHA, as well as in-store It’s generally a very happy jobsite,” he volunteer training. says. The work can be a bit more physi“Long-term volunteers are very valu- cally challenging for women volunteers able,” says Harry Ricker, Habitat con- than for men, but teamwork steps in struction manager in Anchorage. He where brute strength can’t. And Habiexplains that he and the team leaders tat is not in a hurry: the experience the have to assume at the beginning of volunteers get is more important than each work day that volunteers, whether finishing quickly. male or female, have no knowledge of Women’s Build Day also offers volthe tools and techniques they’ll en- unteers the opportunity for some facecounter on the construction site. Part time with a local celebrity. This year’s of his job is to provide a safety and special guest was Kikkan Randall, who information briefing each morning; it besides staying busy as a professional includes making sure that each volun- athlete with racing, marketing herself teer understands Habitat for Human- and travel, also runs the US branch of ity’s mission and the potential hazards the Canadian organization Fast and of the jobsite. He also tries to instill in Female. Fast and Female works with them the confidence that they are part female Olympians to empower, inspire of a team and that they can learn new and motivate girls nine to 19 years old skills, even if they’ve never, for exam- across North America to engage in ple, operated a power drill or put up sports and pursue a healthy lifestyle. drywall. Most volunteers, especially Randall’s first event in Anchorage the women, are learning construction drew 160 girls; 280 signed up the next skills for the first time. year. Randall’s contribution to the 2012 Both men and women volunteer for Women’s Build Day in Anchorage mirHabitat projects during Women Build rored Habitat’s job of securing sponsorWeek, but Habitat actively recruits ship, creating role models, promoting women volunteers to help during that health and teaching new skills. specific time frame. Habitat volunteers visiting with HFHA Volunteer Coordinator Chris the Olympian chatted excitedly about Mabeus said that Habitat hosts as many the possibility of expanding her Fast as 50 volunteers per day and more than and Female program to include older 1,000 different volunteers each year. women like themselves. That’s the Volunteers have the opportunity to nature of Habitat’s women builders— lend a hand to their community and they have an appetite for learning and learn skills to return home with; they love having fun. then share their newfound confidence “That’s why I fell in love with Habitat,” and knowledge with their own families says Mabeus about the volunteers. “You and friends. can just see (the pride and excitement) Twenty-two Anchorage women showed in their eyes at the end of the day.” up for the May 12 Women’s Day Build Sponsors & Partners this year. Karen Zehrung was one of Individual house sponsorthem—she’s been a Habitat volunteer ships help finance construcsince 2004. “I loved those home retion of Habitat homes. Sponmodel TV shows,” she says. “I sors names are shown on the saw a Women Build episode, outside of the house during and our church was construction, recognized sponsoring a Habion HFHA’s website and tat home.” ZehTo volunteer listed in the organizarung worked as a to help build tion’s newsletters and other volunteer coordinator homes, build hope and change lives appropriate materials. The on that project, and in your community, Oklahoma Commons Build was thrilled to be the call Chris Mabeus 2011-2012 includes four sepaone to hand the house at 907-272-0800 rate buildings, three of which keys to the family or email her at cmabeus@hfhanchorage.org are duplexes. All moving in. ■ 72

seven homes have a one-car garage. One home is handicap accessible, while all of the others are handicap adaptable. Additional houses will be built on the same property in 2012-2014. Sponsors for the 2011-2012 build are: ■ The Community House: individuals, community service organizations, foundations, small businesses and corporations ■ Energy Partnership House: consortium of energy industry companies ■ 100 Women House: individual women, groups of women, women’s organizations and small businesses and corporations owned and/or lead by women ■ Builders’ House: two retired members of the Alaska construction industry who wish to remain anonymous ■Faith House: 16 local congregations and faith groups ■ Keller Williams House: Keller Williams Realty Alaska Group ■ Michael’s House: estate of an anonymous donor The concept of the 100 Women House was conceived by a small group of Alaska women. Their goal is to find 100 women in Anchorage to contribute $1,000 annually to build a home and make a significant change in one family’s life each year. Since 2008 their idea has sponsored five homes. Corporations also partner with Habitat for Humanity. Lowe’s, the world’s second-largest home improvement retailer, underwrites the Women Build program and provides grants, funding and how-to clinics. By 2013, Lowe’s will have contributed nearly $40 million to Habitat for Humanity.

Habitat Families

Partner families are selected based on their need for housing, their income, their ability to repay a mortgage, and their willingness to work in partnership with Habitat. They get mentoring in workforce skill development and fi nancial management to help them successfully navigate the process of homeownership. Families selected for a Habitat home must volunteer between 250 and 500 hours to the building of their future houses. They then purchase the home with an interestfree loan.

www.akbizmag.com • Alaska Business Monthly • August 2012

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Habitat for Humanity Family Partners Kadhom and Yousif Abu Saeed visit their future home. Families must volunteer on the project before moving into their new homes.

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Habitat gets the word out within the community about their housing programs via the faith community, newsletters and other outreach methods. Many families who apply are refugees; additional applicants are often single mothers who have seen hard times but are willing and able to put in the sweat equity required to become a Habitat homeowner. The Oklahoma Commons Build in northeast Anchorage will house families who’ve fled from Iraq, the Democratic Republic of Congo, Russia, Thailand and other countries, as well as long-time Alaskan families. One family is excited to move from their cramped and draft y trailer to a home with reliable heat. Another family is happy to move from an expensive apartment to a home they can afford. Yet another looks forward to raising her daughter in a safer neighborhood. Mabeus emphasized that “Habitat gives people a hand up, not a hand out.”  Susan Sommer is a freelance writer and editor living in Anchorage.

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special section

Building Alaska

Photo courtesy of Alaska Railroad

Overview of the staging operations with construction equipment and materials for the Tanana River Bridge at Salcha.

Tanana River Bridge Crossing the river at Salcha

“

BY PAULA COTTRELL

e’re finally going to build a bridge to somewhere” Congressman Don Young said Sept. 28, 2011, as he stood alongside former U.S. Senator and Governor Frank Murkowski and former Governor Bill Sheffield at the groundbreaking ceremony for the Tanana River Bridge—the first phase of what many hope will eventually become the Northern Rail Extension. But where exactly is “somewhere?” In this case, somewhere begins in Salcha, a small Alaska town located near a wide stretch of the Tanana River about 40 miles south of Fairbanks on the Richardson Highway. With a population of just over 1,000 people, Salcha was little more than a two-lodge town until work began on the first phase of the Alaska Railroad Corp.’s Northern Rail Extension—a proposed 80-mile rail extension connecting Eielson Air Force Base to Delta Junction.

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Phase One of the Northern Rail Extension—the only phase of the project to receive funding thus far—encompasses the construction of a railroad bridge and access road that will span a 3,300 foot section of the Tanana River near Salcha. Once completed, this bridge will provide year-round access to the Department of Defense’s training areas south of the Tanana River between Fairbanks and Delta Junction known as the Joint Pacific Area Range Complex. Currently, access to these training grounds is limited to ice roads six to eight weeks each winter.

Staging Grounds

Phase One of the project began in the fall of 2011 with the clearing of 70 acres for the project staging area. Timber was cleared from the area and 40 acres of wood, or about 220 cords, was harvested, cut, split and provided free of charge

to the Salcha community through a permitting process. “Wood is a valuable commodity in this part of Alaska,” says Mark Peterburs, project director for AARC. “This area is hard pressed when it comes to resources for home heating. There is no natural gas, which leaves heating oil—which is quite expensive—electricity and wood. The free wood program was designed to give back to the Salcha community.” Home heating fuel is not the only way AARC is hoping to give back to the Salcha community during this project. An important component to the Tanana River Bridge is the construction of a two-mile long levee designed to stabilize that portion of the river and protect it from seasonal overflow and ice jams. “We are building the bridge over a section of the Tanana River that floods on a regular basis,” says Brian Lindamood, director of project man-

www.akbizmag.com • Alaska Business Monthly • August 2012

Photo courtesy of Alaska Railroad

Aerial view of the levee construction for the Tanana River Bridge at Salcha.

agement for AARC. “This is not new to the residents of the area and this last spring was no exception. We anticipate that the levee will mitigate these occurrences in the future.” Construction of the levee is expected to be completed by late July and then work will begin on the temporary causeway that will provide access during construction of the permanent bridge. Parts of the causeway were manufactured locally in North Pole, Alaska, while the pilings and other large components were shipped to Valdez and transported via truck to the job site.

Alaska hire percentage will go as high as 80-90 percent,” says Peterburs. While the project has had some challenges—most were related to seasonal flooding—they did not come as a surprise to the project manager. “We anticipated the problems we encountered and we were prepared, but we also learned from them along the way. The experience we gained building the levee will serve us well while we build the causeway,” says Peterburs. “All in all, it’s been a good project. We are on schedule and within budget.”

Year-Round Work

Solid project execution at this stage does not come as a surprise to Lindamood. “This project utilized the Construction Manager/General Contractor (CM/GC) Project Delivery Method which took the plan from a conceptual level to a more constructible project by marrying up the designers and engineers with the construction manager—in this case Kiewit— and the general contractors during the permitting and design phase,” he says. HDR Alaska Inc. was selected to engineer and design the levee system and Hanson Inc. was tasked with designing the actual bridge and rail components. “As the engineers tackled the complexity of the project, they have benefited from expertise in not only building large bridge structures and levees, but how to construct them in Alaska’s extreme conditions.” This cooperative approach eases the project manager’s job by assisting all involved participants in understanding limitations and expanding communication throughout the full duration of the

Designed to withstand the treacherous waters of the Tanana River, the stout structure will have 19 piers 165 feet apart, each encased in concrete. Utilizing coffer dams and the temporary causeway, it is estimated that it will take 44 days to complete a single pier, however for the sake of efficiency the piers will be built in strings of five, according to Peterburs. From this point forward, crews will be working year-round to complete the first phase of the Northern Rail Extension. There are about 100 people currently working on the project, but those numbers are expected to reach 200-250 people during the height of construction. According to a quarterly project report filed by ARRC, 79 percent of the personnel currently working on the project are Alaskan hires. “In the early stages of the project, we required a lot of management oversight and technical expertise. As the construction on the bridge gears up, we anticipate our

Innovative Approach

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project. “By bringing everyone in from the beginning, the contractors understand why they are building what they are building and the designers come to understand why it might not be viable to incorporate certain design aspects. It’s a win-win situation,” adds Lindamood. Instrumental in providing technical oversight and helping the project gain traction over the last decade was the Surface Transportation Board and the Federal Railroad Administration. They assisted in development of the Environmental Impact Statement and worked with several federal agencies including the Bureau of Land Management, the Alaska Command, the U.S. Air Force 354th Fighter Wing, the U.S. Army Corps of Engineers, the Federal Transit Administration and the U.S. Coast Guard to wade through the permitting process. “With a project as complex as this one, it made more sense to work together,” says Lindamood. “I’m not sure how it was for the regulators, but I think it must be comforting for them to be sitting at the table expressing their concerns with the people that are actually doing the work. “ Development of the Northern Rail Extension has been broken down into four phases. The price tag for the first phase of the rail extension currently under construction is projected to cost $188.2 million. $104.2 million was received in federal funding from several DOD defense appropriate bills over the last four years and the remaining $84 million in funding was provided by the State of Alaska. Future phases necessary to complete the Northern Rail Extension include Phase Two: Rail construction from Moose Creek near North Pole to the Salcha crossing; Phase Three: Rail construction from the Salcha crossing to the Donnelly Military Training Area; and Phase Four: Rail construction from Donnelly to Delta Junction. Although future funding sources have not been identified, additional construction costs for the rail are expected to reach between $650 and $850 million. But for now, with an estimated completion date set for fall 2014, it’s all about Phase One.  Paula Cottrell is a writer living in Anchorage. ■ 76

www.akbizmag.com • Alaska Business Monthly • August 2012

Bridge Project Engages Salcha Students BY STEPHENIE WHEELER

n Friday, May 11, the entire 91-student body of Salcha Elementary School arrived by school bus and quickly swarmed along the banks of Piledriver Slough, a small Salcha-area waterway running roughly parallel to the Tanana River. It looked like a fresh-aired field trip for antsy children nearing the end of the school year. In reality, the delighted squeals, curious questions and furious note-taking will play a part in the Alaska Railroad’s project to build a bridge over the Tanana River and to build a levee to keep the river on course near Salcha. This is Phase One of the Northern Rail Extension (NRE). While primarily groundwater-fed, Piledriver Slough periodically fills with Tanana River flood waters during spring break-up and other high-water events. That won’t happen once the completed levee closes the slough’s mouth to the river. The Alaska Department of Fish & Game (ADFG) wants to monitor the levee’s impact to fish in the slough. The impact boils down to beavers. These busy critters build dams along the dozen or so study miles of the meandering slough. Seasonal flooding typically destroys some of the beaver dams, thereby facilitating water flow and presumably fish passage. If dams are no longer broken up by a spring flush, will the fish still be able to move upstream to spawn in the slough? That’s what ADFG wants to know. On May 11, the children were on their first assignment as part of an ADFG blessed partnership between the Alaska Railroad, the Tanana Valley Watershed Association (TVWA) and Salcha School. The alliance was formed to carry out a 10-year beaver dam mitigation measure noted by the NRE environmental Impact Statement (EIS) and included in the ADFG permit required to proceed with levee construction. Here’s how the partnership works: For the next decade, at least twice a year, students (kindergarten through

Photo by Stephanie Wheeler/Courtesy of Alaska Railroad

As part of a school-business partnership to observe the area for the next decade, a Salcha Elementary School student takes notes at one of several sites where beavers have built dams along Piledriver Slough.

6th grade) will visit the slough—just after spring break-up (before school adjourns) and just before freeze-up (after school convenes)—and possibly during summer school camp in June. Students will assess the slough habitat, test water quality (sediment) and observe, identify and count fish. To assist with the field assignments, the NRE project equipped each child with a kit including waterproof paper and field notebooks. The U.S. Fish & Wildlife Service has supplied educational materials, including fish viewfinders, minnow-traps, and technical expertise for fish identification guides. On the day prior to the field assignment, TVWA field technicians locate beaver dams and set baited minnow traps to catch and count young fish. As fish and habitat are observed, c Based on data, TVWA may recommend beaver dam removal as needed. According to TVWA Executive Director Jewelz Nutter, the association’s activity alone satisfies the ADFG permit conditions. Far exceeding permit requirements, the school’s involvement is the brain child of NRE Project Manager and Community Liaison Mark Peterburs with enthusiastic support from Salcha School Principal Annie Keep-Barnes. She values the opportunity to introduce and boost youth interest in factbased hands-on science as it pertains to their world.

“We have added a lot to the learning experience. Literacy is a big part of the program. Our classes have spent time preparing by reading about the animals and fish we’ll see along the river,” said Kindergarten/First Grade Teacher Tori Brannen, who has lived along the Tanana River her entire life. “It is exciting and rewarding to share my experiences with the river and to get these kids excited about science. We can use our local knowledge—such as flood history and beaver dam locations—and it’s very personal to these kids.” Indeed, 3rd grader Mason Wolverton pointed to his back yard just meters away, noting that he would make his scientific observations close to home. “I especially like all the questions because I can figure out what lives here and what doesn’t live here. I can discover something. Some day I’d like to be an explorer and discover new plants and stuff and then give them to scientists to study more.”  Stephenie Wheeler is the corporate communications ofﬁcer for the Alaska Railroad Corporation. This article is from “Wye of It: Customers and Communities” in the “All Aboard 14” 2nd Quarter 2012 publication of the Alaska Railroad and is reprinted with permission.

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special section

Building Alaska

Alaska’s Infrastructure Bucket List Billions in construction projects waiting to happen BY TASHA ANDERSON

enerally, a “bucket list” is a collection of things to do before you die, but Alaska has too bright of a future for that. Instead, the projects listed here are generally good ideas that 1) require many years and almost unreal amounts of money, 2) may be implemented in parts, but not fully completed, or 3) may never even see a beginning. Every item on this list is the center of controversy stemming from environmental, cultural and monetary concerns, as well as doubts that the benefits of the finished projects will ever justify the range of tangible and intangible costs. Controversy aside, here’s a brief glance at a few of the projects we Alaskans have been discussing for years.

Knik Arm Crossing

Where: Knik Arm, connecting the Port of Anchorage to Port MacKenzie Cost: Estimated $650 million to $700 million The Idea: Commuting is awful. The Glenn and Parks Highways are clogged twice daily with commuters going to and from work. The approximately 2.7 mile vehicular toll bridge would ease traffic and decrease driving time for some commuters. Latest Update: The December 2012 the Record of Decision (ROD) was signed by the Federal Highway Administration (FHWA). The ROD is necessary in order to obtain federal funding, permits, right-of-way acquisition, and begin construction. Estimated Finish: 2016

Northern Rail Extension

Where: North Pole to Delta Junction Cost: $650 million to $850 million (for all Phases) The Idea: Railroads are good. Let’s build an approximately 80 mile rail extension, including a bridge over the Tanana River. Th is project is part of an even larger proposal to connect Alaska and the Yukon with the North American Railroad system in British Columbia, starting at Delta Junction. The base construction cost for this international line was $7 billion, but adding in other costs raised that figure to $11 billion, or $7.2 million per mile. The Alaska segment of the line is necessary for the larger project, but does lose purpose or functionality if the remainder of the line is never completed. Latest Update: The project is currently in Phase I, which includes the bridge, approach road and levee associated with the crossing of the Tanana River near Salcha. As of April 2012, the utility relocation had been completed, and the next step is to build up the north bank levee. Phases II, III and IV involve the actual rail extension. ■ 78

Estimated Finish: Phase I-March 2014; Remaining Phases-Unknown, funding dependent.

Gas Pipeline

Where: Prudhoe Bay to Valdez or Alberta, Canada. Cost: $20 billion to $41 billion (depending on route) The Idea: There is too much natural gas in Prudhoe Bay and not enough every other place. Providing a minimum of five in-state natural gas delivery points, the “gasline” would allow commercialization of Alaska North Slope natural gas. Latest Update: In May 2012, the Alaska Gas Pipeline Project Office announced that the favored plan was to focus on large-scale liquified natural gas exports, routed to Valdez, rather than a pipeline through Alberta. Approximately half of the work done so far on the Alberta option, including engineering and environmental studies, is applicable to an instate LNG line. Estimated Finish: 2020

www.akbizmag.com • Alaska Business Monthly • August 2012

Roads to Resources

Where: Tanana, Umiat, Ambler Mining District, the Klondike Highway Cost: Estimated $1.7 billion to $2.4 billion The Idea: Alaska is full of natural, valuable resources; unfortunately, roads aren’t one of them. These roads would provide affordable access to natural resource deposits as well as providing a less expensive way to supply remote areas with fuel and supplies. Latest Update: Governor Sean Parnell proposed $28.5 million in total funding for Roads to Resources in his fiscal year 2013 budget: $2.5 million to refurbishing and strengthening the Klondike Highway near Skagway; $4 million to provide all-season access for exploration and development of natural resources and defi ne an optimal corridor, proceed with permitting and environmental work, and establish a right-of–way in Ambler; $10 million to support preliminary routing, permitting, and environmental work on a road to Tanana from the existing highway system; and $10 million to fund environmental assessment work and eventual construction of routes to Umiat. Estimated Finish: Unknown

The Idea: There’s a lot of stuff on the way to Nome, we should put a road there. The road would encourage economic growth in Nome and in other small communities along the proposed route. In addition, it would provide access to natural resources along the route, and decrease the costs of supplies to local residents. Latest Update: In January 2012, the Western Access Alaska Planning Study was concluded. DOT&PF is starting work on the Manley to Tanana segment of the project, and efforts currently under way include obtaining satellite imagery, aerial

photography and topographic mapping, identifying some of the potential economic benefits of the road, and collecting existing wetlands mapping. Estimated Finish: Unknown This is by no means an exhaustive list; Alaska is a largely untamed wilderness of precious resources and breathtaking experiences, and the people who live here have ideas just as vast and intriguing as the surrounding landscape. We at Alaska Business Monthly look forward to tracking the status of these projects and the innovative proposals yet to come. 

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Deep Draft Arctic Port

Where: Unknown Cost: $3 million (for the current study) The Idea: Most Arctic ships are large ships, it would be good to be able to dock them somewhere. A deep-draft port would maintain sovereignty in light of increased Arctic traffic and activity; diversify Alaska’s economy; improve Arctic search and rescue coverage and response; and protect U.S. air, land and sea borders. Latest Update: Currently, the state is gathering information in the Alaska Deep Draft Arctic Ports Study, which is a three-year project. Various port locations are being discussed, with Nome being an early frontrunner. Estimated Finish: The study should be completed in November 2012, with more detailed site investigations occurring in 2013 and 2014.

Road to Nome

Where: Manley Hot Springs to Nome Cost: Estimated $2.7 billion

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special section

Building Alaska

Photo by Oscar Edwin Avellandea/Courtesy of CIRI

CIRI’s Fire Island Wind Project included burying an electrical transmission cable four to six feet beneath the ﬂoor of Cook Inlet during low tides from Fire Island to Anchorage.

Wind Power Making a Difference in Alaska Wind farm construction is under way across state BY GENE STORM “The answer, my friend, is blowin’ in the wind.” —Bob Dylan, 1962

2012. Before the end of the year, energy generated by wind turbines will make significant new contributions to electrical grids in communities and villages across the state. The renewable energy generated provides, in part, an answer to issues regarding diesel fuel costs and potential natural gas supply shortages that have

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www.akbizmag.com • Alaska Business Monthly • August 2012

ob Dylan’s musical refrain for peace and social justice in the 1960s could well serve as an anthem for alternative energy in Alaska in

plagued power providers in recent years. Uutility scale wind farm projects in Southcentral Alaska and the Interior will garner most of the attention this summer, but they are by no means the only places where wind is making a difference in energy production. In Kotzebue and on Kodiak Island, local utilities

are adding new turbines to already existing wind farms. In Southwest Alaska, the Yup’ik villages of Kwigillingok, Kongiganak and Tuntutuliak are recycling 15 refurbished wind turbines from the California desert as a hedge against the high cost of electricity generated by burning diesel fuel. The $10 million project is partially funded through the Alaska Renewable Energy Grant Fund established by the legislature in 2008. For the some 1,200 residents of the three villages, the addition of wind power will offer some welcome relief to energy costs that bear heavily on their largely subsistence way of life.

Fire Island Project Under Way

On Fire Island, three miles west of Anchorage, Cook Inlet Region Incorporated is developing the first phase of a wind farm that will have a generation capacity of 17.6 megawatts. Being developed through CIRI’s subsidiary, Fire Island Wind LLC, 11 General Electric XLE 1.6 MW turbines will supply more than 50,000 MW-hours of power to Chugach Electric Association annually, enough electricity to power about 6,000

homes. It is the first phase of what could be up to 33 turbines, depending on future wind power purchase agreements. The cost of this phase of the project is estimated at $65 million plus the cost of new transmission infrastructure. The project is expected to qualify for more than $18 million in tax credits from the American Recovery and Reinvestment Tax Act of 2009. The State of Alaska also granted $25 million for submarine and mainland transmission infrastructure. Fire Island Wind began preparing the site in 2010, including road work and turbine pad construction. Last year, the Regulatory Commission of Alaska (RCA) gave its stamp of approval to a purchase agreement between Fire Island Wind and Chugach Electric. In Anchorage, crews completed clearing land for a transmission line that will travel both above and below ground on its route to a Chugach Electric substation. The pace of construction quickened earlier this year with the installation of submarine and shore-side transmission cable. By July, turbine components were riding the high tides on trips from the Port of Anchorage to Fire Island. Com-

pletion of this phase, commissioning and commercial operations are scheduled for September. With a tower or hub height of 242 feet and each of the three blades measuring 131 feet, the GE wind turbines will offer a striking view to those with vantage points along Anchorage’s Cook Inlet shoreline or for airline passengers flying in and out of the city. That is a good thing, says Chris Rose, executive director of the Renewable Energy Alaska Project. “Thousands of people will fly over Fire Island every year and see that wind is working in Alaska,” says Rose. “That will help REAP educate the public about the benefits of locally produced and predictably priced renewable energy.”

Eva Creek Under Construction

Golden Valley Electric Association is building the largest wind farm in the state at Ferry near Healy, accessible only by the Alaska Railroad or a footbridge. The $93 million Eva Creek Wind Project will have a 24 MW capacity from 12 German-built REPower Systems turbines. While the electric cooperative has been studying wind potential in the area since

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Photo courtesy of Golden Valley Electric Association

Workers give perspective to the size of the turbine foundation under construction at the Eva Creek Wind Project.

2003, it wasn’t until June of last year that the GVEA board unanimously approved the project. The wind farm is seen as a big step towards meeting GVEA’s Renewable Energy Pledge that targets 20 percent of system peak load from renewable energy by 2014. The utility cooperative anticipates the project will help “kick the oil habit” by displacing more than 76.6 million kilowatt-hours of oil with renewable energy annually. The Eva Creek turbines began arriving at the Port of Anchorage in late May and were trucked to Healy where they were transferred to rail car for the trip to Ferry. Once on site, crews from Wisconsin based Michaels Wind Energy started the job of erecting the turbines. A very large crane, also imported from Wisconsin, was assembled on site. It will be the workhorse in assembling the turbines that measure 262 feet at the hub with a total structure height of 410 feet when incorporating the blade length of 148 feet. GVEA notes that the total turbine height is 105 feet taller than the Statue of Liberty, adding some perspective to the size of the structure. It is anticipated that the entire project, including substation construction and testing, will be complete by the middle of September with wind power coming on line by the middle of October. In offsetting the use of fossil fuels in the generation of electricity, the Eva Creek Wind Project ■ 82

will save GVEA ratepayers an estimated $13.6 million over the next 20 years, assuming oil prices of $90 per barrel.

Kotzebue Wind Farm Grows

For the Kotzebue Electric Association, generating power from the wind is nothing new. They have been doing it since 1997 when KEA launched the first wind farm in Alaska with the installation of three AOC 15/50 wind turbines. Early this spring, two new Dutch manufactured EWT 900 turbines were added to the mix, bringing the number of turbines installed over the years to 19. The two new turbines will add 1.8 MWs of production to the 1.1 MW already produced by the wind farm located some four miles outside of the Chuckchi Sea coastal city, home to some 3,200 residents. The $11 million cost of the newest additions to the wind farm along with a 3.7 MW flow battery were covered in part by the Alaska Renewable Energy Grant Fund. Wind conditions in Kotzebue are well suited for producing electricity. The average annual wind speed at KEA’s wind farm is 13.5 miles per hour and is stronger in the winter when electricity demands are higher. Other wind factors contributing to the success of the Kotzebue experience include the higher density of the cold air masses at sea level atmospheric pressure and the flat tundra setting that allows the wind to blow at full force.

The KEA wind farm experience has attracted attention over the years, particularly from other Arctic nations interested in learning about erecting wind turbines on the tundra. “We’ve had visitors from all over,” says Brad Reeves, KEA’s general manager. One particularly interesting visit occurred in 2003. “We heard a delegation was coming from the Russian Far East, but were surprised when this unmarked, white 727 landed at our airport one afternoon,” Reeves says. The jet disgorged more than 70 visitors led by then Governor of Chuktoka Roman Abramovich, a flamboyant Russian billionaire. “I had to round up just about every vehicle in town to truck them out to the wind farm,” Reeves recalls. While notable, international visitors may provide a diversion from the dayto-day routine, it is the details of operating and innovating the wind farm that pays dividends for members of KEA. To capture higher levels of wind generation, KEA is working on installing a 500kW/3.7MWh flow battery. When completed, the battery project will increase wind farm capacity beyond KEA’s peak electrical demand, providing thermal energy for residential or commercial heating without burning fossil fuel. Reducing expensive fossil fuel consumption is at the forefront of the wind power movement in Alaska. “Every gallon of diesel fuel that we replace with wind energy is economic gain for this community,” Reeves says.

Pillar Mountain Gains Power

The Kodiak Electric Association (KEA) is also upping its wind power production with the addition of three new units to its Pillar Mountain Wind Project, a wind farm that began operation 2009 with three General Electric 1.5 MW SLE wind turbines. The new GE turbines will double the wind farms output to 9MW. They are expected to begin commercial operation by the first week in September. In combination with the two hydroelectric turbine generators at Terror Lake with another slated to come on line soon, the Kodiak utility is making big strides towards fulfilling its vision of achieving 95 percent renewable energy production by the year 2020.

www.akbizmag.com • Alaska Business Monthly • August 2012

Currently, wind power accounts for just less than 10 percent of KEA’s production, hydro energy accounting for more than 76 percent of production, and diesel generation contributing just over 14 percent of total output. With the threeturbine configuration, KEA has been able to displace about 900,000 gallons of diesel fuel annually. The new wind turbines will double the output for the Pillar Mountain Wind Farm, saving even more money for KEA and its ratepayers. Part of the wind farm expansion includes the installation of a battery backup system that will in combination with Terror Lake provide grid stability when wind conditions are slack. Xtreme Power of Kyle, Texas, produces the Dynamic Power Resource battery system.

Building Hybrids

Another factor bringing wind energy to the forefront in Alaska is the development of wind-diesel hybrid systems. These applications marry diesel generation with wind turbines through sophisticated control systems that optimize power output. There are more than 20 applications installed across the state,

including the Kotzebue wind farm, the villages using the recycled turbines in Southwest Alaska, and in Kodiak where the hybrid system blends hydro, wind and diesel. The hybrid technology is making Alaska a world leader in the development of wind-diesel systems. REAP, along with the University of Alaska’s Alaska Center for Energy & Power and the National Renewable Energy Laboratory, has helped host two International wind-diesel conferences since 2008, attracting participants from around the world. “As Alaska continues to optimize its own wind-diesel systems with the addition of energy storage and more advanced controls, the state is in a position to begin exporting its know-how to an energy hungry world,” Rose says. With the technological know-how and funding sources emerging, some answers to escalating energy prices and uncertain supplies may, indeed, “be blowin’ in the wind.”  Gene Storm, a writer living in Anchorage, has covered Alaska business 41 years.

Photo courtesy of PDC Inc. Engineers

The Manitowoc crane 16000 is capable of lifting up to 440 US tons, and came from Wisconsin for the Golden Valley Electric Association Eva Creek wind project.

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energy, Power & utilities

Wind Energy Dynamics T

he fluid resource that flows above the 49th state—its wind—is fast becoming among Alaska’s cache of valuable natural resources, with a variety of private and public projects in the works. With its economy historically built on the heavy industrial sectors—oil and gas, mining, timber harvest—Alaska is poised to join the global renewable energy wave, looking to the successes of northern countries like Denmark and others as example. To add teeth to the state’s intent to become a long-term wind-energy player, the Alaska Energy Authority developed a wind energy program. The program’s vision statement highlights its critical interest in using wind-energy to benefit utilities and ratepayers, specifically. Among program goals is to shift the public’s mindset from seeing a wind turbine as a stand-alone component, to instead considering a turbine as an integrated energy source that is part of a larger power generation and distribution system for a community. A critical step in the evaluation of any energy program is the common-sense check to verify that wind energy, when integrated with the existing power infrastructure, is a good fit—and the most cost-effective solution. Wind energy projects are most simply categorized in three groups: first, large-scale wind power generation; second, small wind energy efforts of the consumer-grade scale; and, third, utility-scale wind-diesel hybrid systems. Efforts are afoot in Alaska in each of the three arenas, fueled by both public and private commercial funding.

What It Takes

When asked if Alaska has what it takes to become a major wind player on the global front, Rich Stromberg, Wind Program manager for the Alaska Energy Authority (AEA), says, “The simple answer is ‘Yes,’ we have that. The more complex ■ 84

Photo by Judy Patrick/Courtesy of CIRI

BY NICOLE A. BONHAM COLBY

Fire Island blades being ofﬂoaded at the Port of Anchorage.

answer is that there are still challenges.” Those challenges include that some of the best wind resource in Alaska is also in areas that are remote—the Aleutians, the lower Y-K Delta. Compared to traditional design-build construction in populated or developed areas, the cost is not surprisingly higher to mobilize construction equipment and crews for isolated areas. Building on the soil conditions is difficult, he says, such as with permafrost. Finally, the project must be economically feasible at the end of the day. On the positive side, rural and remote villages and towns in Alaska are long familiar with the challenges of developing a reliable energy source and appear open to considering innovative solutions like wind energy as an alternative, he says. “Most of the communities are interested in getting a new type

of energy,” Stromberg says. “The benefit is that they have had to live with diesel power and they know the benefits and costs…they are best suited to weigh the options of what wind will bring.” When asked if Alaska has a supportive environment for renewable energy, AEA spokesman Karsten Rodvik responds with a “resounding ‘Yes,’” and points to the Legislature and state’s support of renewable energy through programs like the Renewable Energy Fund and the Emerging Energy Technology Fund. The intent of the “Alaska Energy Authority is to reduce the cost of energy in Alaska,” he says. “We have a number of very significant programs that deal with this big picture in both rural and urban Alaska.” Research and support of integrated wind energy projects is

www.akbizmag.com • Alaska Business Monthly • August 2012

among those efforts. As background, he refers to the increased interest by rural communities to improve their energy platforms. “The vast majority of Alaska is off the grid. The many villages with which we deal have independent power systems,” he says. Some “90 percent of rural Alaska is powered by diesel. There are communities that have encountered some difficulties in recent years with the escalating cost of diesel.” That, and other factors, has led to increased interest in creative energy solutions, like wind. As example of the state’s interest in promoting innovative development of energy solutions, Rodvik highlights the Renewable Energy Fund—a program with several years of success funding renewable energy projects across the state of Alaska. “In 2008, the Alaska State legislature established the Renewable Energy Fund,” he says. “That placed Alaska at or near the forefront of the 50 states in terms of funding for renewable energy. AEA administers this program, soliciting the applications…then after a thorough evaluation process, we go back to the Legislature…with our recommendations for projects to be funded. As of June 2012, the Legislature has funded 208 renewable energy projects across Alaska in both rural and Railbelt areas of the state,” he says. “And $202 million has been appropriated.”

Integrating Solutions

With a state as geographically large and diverse as Alaska, there is no single solution for integrating wind energy into the local energy landscape, says Stromberg. The intent of the AEA’s wind effort is to assist communities and utility companies in evaluating what they have now, and to determine how wind energy could improve or streamline the operation and save cost. “It would be nice to have a cookie-cutter approach to all these communities,” says Stromberg. “But each community, their size, layout of the community... and wind regime, is all different.” While the inputs may differ radically between sites, the process for evaluating potential solutions is similar, with a structured approach to the conceptual design approach. That process includes considering the existing system, what aspects of the current system require replacement

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to be compatible with wind, “so you get the best total project,” says Stromberg. “Our feasibility stage….that’s gotten a lot more detailed on all these factors, so we have a good idea of what the costs are and the challenges when it comes time for construction.”

Wind Corridors

With key wind corridors scattered across the state, the economics of other available resources also plays a role in the prevalence of wind energy development. For example, while wind energy has been a long-standing effort in towns like Kotzebue, wind energy has been slower to take off in regions like Southeast, where, given the availability of water, the focus has been on hydropower. “Because of the pervasive availability of hydroelectric, that has been the focus,” says Stromberg. As a result, less data about wind energy potential is available for that region. However, communities including Ketchikan, Kake and Haines have indicated some interest, and started to collect data. As with the hybrid approach seen with other integrated systems around the

state, “wind would work well with a lot of these hydro projects,” he says. Also, factors like a community’s transportation infrastructure can make a difference in the development of alternative energy. Stromberg points to Kodiak’s Pillar Mountain project, where wind energy will provide a portion of the community’s power needs. “There is a very high penetration of renewables on that system,” Stromberg says. “Kodiak is big enough….and shipping in and out is frequent enough that it is cheaper to get economies of scale in a community of that size,” he says.

Small Systems Offset Energy Costs

Not all wind projects are of the largescale, commercial wind-farm generation style. Wind is being used every day in Alaska by lodges, airlines, agriculture and residents as an alternative means to offset power costs and outages. Among the leaders answering the call for technical design, installation and support is Standard Steel Inc., dba Nikiski-based Alaskan Wind Industries, a renewable energy specialty contractor offering

turnkey operations for wind turbines in the 5kW and 50kW range. The company’s service spans the full project cycle, from structural steel erection, welding services, tower climbing maintenance to wind turbine installations. The company’s financial team assists clients in finding funds and incentives to offset the cost of installing renewable energy solutions. Recent projects have included a 30foot wind turbine for Alaska Airlines adjacent to the Nome Terminal in 2011 and installation of a 6kW wind-diesel hybrid system at Bear Lake Lodge outside Port Moller.

Wind-Diesel Hybrid

The wind-diesel hybrid concept captures a holistic, integrated approach to energy delivery by combining two forms of available power: traditional diesel fuel and renewable wind energy. The Alaska Wind-Diesel Applications Center (WiDAC) was developed by the Alaska Center for Energy and Power at the University of Alaska, the Alaska Energy Authority, and the National Renewable Energy Laboratory to sup-

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port deployment of cost-effective winddiesel technologies to streamline the cost of energy delivery to Alaska’s rural towns and villages. The center focuses on three goals: first, independent analysis and testing; second, technical support; and third, workforce development and education. In the analysis realm, the center focuses on closing the technology gaps in the wind-diesel application and also on Alaska-specific solutions to rural energy needs. Regarding technical support, the center provides Alaska towns and villages with direct information necessary to understand and design a system to address specific local needs. Finally, the center coordinates with the state and private industry to train the engineers and technicians who will work in the wind energy field. The center accomplished an important milestone in June toward its goal of providing independent analysis and testing, with the commissioning of a new test bed—perhaps the only one of its kind in the nation, says Jason Meyer, program manager for Emerging Energy Technology at the Alaska Center for Energy and Power. Various research engineers and equipment manufacturers helped commission the system, which simulates a grid in rural Alaska in small-scale. The test bed will help researchers evaluate various solutions and integrations to help Alaska towns and villages develop new energy solutions. “It’s pretty exciting,” says Meyers. “It’s not necessarily just for wind. You could simulate solar systems…any of these intermittent power sources feeding into a rural grid scenario. That’s the big, latest news.” Toward the center’s goal of developing additional workforce opportunities and training, its Alaska Wind for Schools Program, formed in partnership with the Renewable Energy Alaska Project, is designed to pique students’ curiosity about innovations in energy technology by “bringing in schools on the Railbelt and rural Alaska and getting them excited about wind and wind energy technology,” says Meyers. 

Energy for Alaska's Future We're finding answers and taking action. Golden Valley Electric Association is committed to Eva Creek Wind finding solutions while meeting climate change goals, keeping costs down and maintaining reliable electric service. We're taking action today to find short and long-term solutions for the energy needs of Alaskans.

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Oversized Freight

Photo courtesy of Golden Valley Electric Association

trAnsPortAtion

Unloading the Eva Creek turbine components at the Port of Anchorage; three sections of tower (like the one pictured) form the post of each wind turbine.

Transporting Wind Farm Components BY PAULA COTTRELL

ith several wind farm projects in the works across the state, it is clear that wind energy is gaining momentum as an increasingly popular power source in Alaska. While the state has some excellent areas that generate wind at levels necessary to make a wind farm a viable operation, these sites come with their own logistical challenges—location, location, location. The sites for most of the wind farms in Alaska that have been built or are currently under construction are not on the main road system. This combined with the sheer size of the commercial windmill components requires a lot of planning, experience and ingenuity.

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Fire Island Wind Project

The Fire Island Wind Project, located just three miles west of Anchorage in Cook Inlet on CIRI’s Fire Island property, will have 11 General Electric wind turbines—each 242 feet high with three 131-foot-long wind turbine blades and a rotor diameter of 271 feet. These enormous structures aren’t expected to start generating power until this fall, but the project has already accomplished some amazing feats, and that is just getting the equipment to Fire Island. Anderson Trucking Service Inc., or ATS, the largest heavy haul transportation firm in North America, was subcontracted by Tetra Tech Construction, the general contractor for the Fire

Island Wind Project, to oversee the turbine transportation scope of the project. This encompassed everything from shipping the turbines to Alaska to ensuring they arrived at the island safely and on schedule. The first wind turbine components arrived in Anchorage in early April from Tacoma and were oﬄoaded at the Port of Anchorage and stored at a nearby location by Totem Ocean Trailer Express, North Star Terminal & Stevedore Co., and Carlile Transportation Systems Inc., according to Kyle Settle, project manager for Tetra Tech Construction. Before the wind turbines would make their appearance on the island

www.akbizmag.com • Alaska Business Monthly • August 2012

in the early part of July, landing areas on the project site had to be constructed so the barges transporting equipment, supplies and personnel could safely beach on the island. ATS relied on a lot of local knowledge and experience to tackle the logistical challenges of transporting large components and equipment to an area with no docking facilities. With more than 70 years experience operating in upper Cook Inlet, Cook Inlet Tug and Barge was contracted by Tetra Tech Construction to perform the marine transportation for the project, with the exception of the wind turbine components. Those would be transported utilizing a specially designed articulated tug and barge (A.T.B.) by Brice Marine, a marine service company working in Alaska more than 40 years. With no docking facilities on Fire Island, Cook Inlet Tug and Barge and Brice Marine had to rely on tidal schedules to reach the island. “You load your barge in time to ride the tide over to the island,” says Settle. “When the tide goes out, the barge is beached and ready to be unloaded and reloaded before the

Working with Cook Inlet tides is critical for successful transport of oversized freight. Workers are ofﬂoading equipment from Cook Inlet Tug and Barge’s Double K ﬂat deck barge on the Fire Island beach for CIRI’s wind project. Photo by Judy Patrick/ Courtesy of CIRI

next tide comes in. With tides that change each day, choreographing barging operations requires patience, skill and organization.” “It’s a tide cycle show,” says Alba Brice, vice president of Brice Companies. “A critical element to successful operations is ensuring the landings go smoothly. The actual transport of the wind turbine components three miles to Fire Island from Anchorage is not necessarily the big challenge of this

operation. Coordinating the tidally affected landings and making sure everyone is ready to move on each side—the loading and the unloading—is definitely the most challenging aspect of the operation.” Brice Marine’s A.T.B. is well suited for transporting the oversized hubs and blades of the wind turbines across the potentially treacherous Cook Inlet waters, according to Brice. Instead of the traditional tug/barge set-up that utilizes

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Photo courtesy of Golden Valley Electric Association

Railcars were specially designed to transport the Eva Creek blades from the manufacturer in Arkansas. These cars went from the Union Pacific Railroad to Seattle, where they were barged to Whittier, where they came by rail to Ferry.

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nel make it to the job site. Building the

“The key is being able to unload the trailers and get them back on wind farm is a piece of cake. Getting the equipment there is the challenge,” the barge so they can go out with the next tide cycle.” —Alba Brice Vice President of Brice Companies

a tow wire connected to a tug boat, the A.T.B. tug is attached to the barge by large hydraulic rams on the tug that fit into receivers on the barge. This “singlevessel” configuration increases maneuverability of the tug and barge and eliminates the extra time needed to reel in tow wires. “The A.T.B. is capable of landing, dropping its ramp, discharging its cargo, reloading and backing away from the beach ready to depart to its next destination,” says Brice. For this project, the oversized components will be loaded onto trailers, driven onto the barge and driven off the barge for unloading once they reach the island. “The key is being able to unload the trailers and get them back on the barge so they can go out with the next tide cycle,” adds Brice. With only two tide cycles and unpredictable weather conditions, around the clock work schedules can easily be compromised. “Missed tide cycles mean project delays and with only three weeks to complete the transport of the components, every tide cycle counts,” says Settle. “Cook Inlet is a severe working environment,” says Katrina Anderson, operations manager for Cook Inlet Tug and Barge Inc. “Mother Nature is always a force to be worked with. We make suggestions to our customers on how they can keep their equipment safe on unstable beaches as well as having staging areas built to accommodate landing barges safely. It’s a tricky business, but we live on the inlet and it’s a part of our day—being aware of how to work with the tides and current.”

for Michels Wind Energy, the general contractor on the project. “This project is a logistics puzzle,” says Greg Wyman, project manager for the Eva Creek Wind Farm. “The bulk of the project and planning is the logistical side—making sure the cranes and equipment as well as the person-

adds Wyman. The wind turbines being constructed at the Eva Creek Wind Project are 262 feet high, have a 148foot blade length and a rotor diameter of 303 feet. One of the most challenging aspects of this project is limited access to the job site. “Because there is no road crossing over the Nenana River in Ferry, the only way to get to the wind farm is by railcar or across the four-wheeler/footbridge bridge and traveling by a vehicle

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Eva Creek Wind Project

More than 300 miles away in Interior Alaska near a small community called Ferry, Golden Valley Electric Association’s Eva Creek Wind Project is under construction. Transporting the 12 wind turbines that comprise the wind farm would have its own unique challenges

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Photo courtesy of Golden Valley Electric Association

The Eva Creek blades arrived in Whittier by ship and were transferred to railcar for the journey to Ferry. Here they are pictured getting trucked up the 10-mile Ferry road to the project site.

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that is staged on the other side,” says Wyman. “99.9 percent of our entire project has traveled the railroad.” ATS was also contracted to oversee the transportation for the Eva Creek Wind Project. The nacelles and hubs that arrived by ship from Germany and the towers that arrived by ship from Korea were oﬄoaded at the Port of Anchorage and transported to Healy by Carlile Transportation Systems. To not disrupt traffic flow, trucking was completed during early morning hours. Upon arrival in Healy, the components were inspected and then loaded by two cranes onto a railcar for the 13mile train ride to Ferry. Once in Ferry, the pieces were oﬄoaded onto trucks by two more cranes and delivered to the project site on an access road constructed specifically for the project. According to Wyman, the turbine blades were manufactured in Little Rock, Ark., and transported to Seattle, Wash., by modified railcars on the Union Pacific Railroad. To accommodate the 148-foot-long blades, three railcars were connected and transformed to carry two blades each. The blades were then staged in Seattle until they made their voyage by barge to Whittier, Alaska. Once in Whittier, the cargo was brought to Anchorage to be placed on the proper unit train and from there they traveled by railcar directly to the project site. “Michels Wind Energy has done an excellent job working with the Alaska Railroad to provide dedicated crew and shuttle train service in between their regularly scheduled trains,” says Wyman. “The railroad has been great to work with. Coordinating with them to control traffic on the tracks is critical to not only avoiding train delays since we are using the main line, but to ensure safe operations as well.” Once completed, access to the Eva Creek Wind Project site will still be restricted to the footbridge and railcar. But GVEA Power Systems Manager, Henri Dale, is not too concerned about that. “It’s not like we are surrounded by water,” he says with a chuckle.  Paula Cottrell is a writer living in Anchorage.

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Architecture & engineering

Great Alaska Energy Challenge Where big losers and low users are winners BY GAIL WEST

he entries are in and the judging is over—and Alaska has significant energy savings to show for the contest. Initiated in 2011, the Great Alaska Energy Challenge was organized by the Renewable Energy Alaska Project and sponsored by Alaska Housing Finance Corp. with support from Brown’s Electric and Alaska Business Monthly. The Challenge sought to raise awareness about energy efficiency and conservation and to save both the State and its municipalities much needed money. Under Challenge guidelines, contestants were judged in four categories:

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■ Biggest Loser—Heat ■ Lowest Use—Heat ■ Biggest Loser—Electricity ■ Lowest Use—Electricity With the contest over for the first year, Shaina Kilcoyne, REAP’s energy efficiency director, says that thanks to combined energy efficiency and conservation efforts, the teams shaved more than $40,000 from their electricity and heat costs compared to the year before, and avoided more than 500,000 pounds of carbon dioxide emissions.

“Alaskans pay some of the highest energy costs in the nation, and a large amount goes to heat and light our buildings,” Kilcoyne says. “Simple changes, such as turning off appliances that are not in use, installing more energy-efficient appliances and building more efficiently to begin with can add up to huge savings.” Any school or public building was eligible to enter the contest and teams could be comprised of participants from one building or a number of buildings. If a team represents more than one building, however, all the buildings must be owned by the same entity.

www.akbizmag.com • Alaska Business Monthly • August 2012

“We had all sorts of buildings entered,” Kilcoyne says. “We had everything from a sewer treatment plant to an airport terminal. It certainly was not a one-size-fits-all competition.” REAP, a nonprofit coalition of Alaska utilities, businesses, conservation and consumer groups, Alaska Native organizations and municipal, state and federal entities, was originated with the goal of increasing the production of renewable energy and protracting the benefits of clean, economic and inexhaustible renewable power to Alaskans. “We generally work on education, outreach, collaboration and advocacy,” Kilcoyne says. “The idea for this competition has been floating around REAP for the past three years, and we launched it in October of last year. We wanted to encourage saving energy in the workplace, create a buzz around energy efficiency and conservation and educate students about their energy use.” The energy challenge began Oct. 1, 2011, and ended March 31, 2012. When a team registered for the competition, it had to provide the most recent 24 months of utility bills for both electricity and all heating fuels, then submit copies of all bills for the entire challenge period. A few suggestions REAP made to the contestants included unplugging equipment that isn’t being used and installing more efficient lighting fixtures. Eleven teams entered the contest this first year: n Palmer Junior Middle School n Palmer High School n Tanana K-12 n Tanana Elders’ Office n Alaska Energy Authority n Homer Police and Fire Station n Homer Sewer Treatment Plant n Homer Airport Terminal n Bristol Bay School n Cordova High School n Skagway Public Library “Unfortunately,” Kilcoyne says, “the Skagway library didn’t submit their final data so they couldn’t be included in the judging.” “Everyone could win in each category,” Kilcoyne says, “and some

entries were very focused on the sewer plant team captured the greatelectricity categories, so those were est savings in electricity over the last easy to judge. However, heating was year per square foot per heating-demore difficult. Some of the heating gree day during the contest period. ENGINEERED data wasn’t sufficient, so we couldn’t According to City of Homer Public SOLUTIONS analyze everyone. My biggest chal- Works Director Carey Meyer, the GROUP INC. lenge in judging was analyzing the city is more sensitive to energy use buildings and adjusting for size and and employees think more about enclimate variations.” ergy conservation and sustainability. Solutions Once all the data was analyzed and The sewerEngineered treatment plant alone cut G R O U P I N Csaving the contest judged, REAP announced energy use by nearly a sixth, Engineered Solutions Group Inc. the four winners. In the category of enough electricity to power more Biggest Loser—Electricity, the win- than eight homes for a year. “We have seen energy use reducner was the City of Homer Water/ Sewer Treatment Plant. Homer’s tions at all the facilities that received ENGINEERED SOLUTIONS GROUP INC.

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energy efficiency improvements using Alaska Energy Authority grant funds,” Meyer says. In the Lowest Use—Electricity category, the winner is the Cordova High School for using the least amount of electricity per square foot. Jim Nygaard, superintendent of Cordova School District, said, “There is no easier or cheaper fi x for today’s world than education. In this case education of our students and staff in more efficient use of our electricity has paid immediate dividends for our schools and community. I am proud of the efforts of (science teacher) Heath Kocan and the students involved.”Alaska Energy Authority won the category of the Biggest Loser—Heat. This team reduced their heating energy use per square foot per heating degree day by the greatest amount. AEA, a State agency, operates a commercial office building in Anchorage with about 75 people in the building during office hours. By following the energy use policies and procedures established for the Alaska Industrial Development and Export Authority and AEA in May of 2010.

2012 Great Alaska Energy Challenge Look for more information on the 2012 Great Alaska Energy Challenge on REAP’s website akenergyefﬁciency.org/energychallenge. The contest that begins this year will not limit participation to public buildings. Those interested in participating in the Challenge can contact Shaina at 907-929-7770 or s.kilcoyne@realaska.org The policy covered measures for employees and for the organization itself, ranging from computer use and window coverings to paper conservation. It also set measures into place to track and report energy use. Winner of the Lowest Use—Heat category, using the least heat energy per square foot per heating degree day, is the Palmer Jr. Middle School Energy Dawgs. “The district applauds the work of the Palmer Jr. Middle School leadership class and their teacher, Mrs. Heck. By conserving energy and encouraging their classmates to turn out the lights and close the blinds, the students are teaching themselves about conservation and stewardship,” Superintendent Deena Paramo says.

Kilcoyne added a short list of things an average commercial building owner can do to save energy, and consequently money: ■ Track your energy usage and costs ■ Get an Investment Grade Energy Audit to identify real savings ■ Ensure all building occupants and visitors are aware of energy-saving efforts ■ Turn off lights, office equipment and appliances when not in use and use natural daylight when possible ■ Lower the building’s thermostat when the building is not in use ■ Let sunshine warm your office during colder months by opening blinds; close them at night to better retain heat

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■ Clean and maintain equipment routinely for more efficient operation The energy challenge, Kilcoyne says, is a part of a broader statewide effort to reduce energy costs by improving efficiency and mandating energy efficiency retrofits on public buildings. Scott Waterman, energy specialist for AHFC says, “Energy efficiency and conservation are the quickest, easiest way for businesses, schools and homeowners to save money. By sparking a little friendly competition, we hope to get everyone thinking about ways to use less energy at work and at home.” Waterman adds that those contestants who submitted baseline energy data for the competition would also be eligible for loans from the Alaska Energy Efficiency Revolving Loan Fund, a $250 million fund established to help public facilities make permanent improvements in buildings to lower energy use and costs. Savings from the

energy efficiency improvements are used to repay the loan. The statewide effort described by Kilcoyne is the result of two energy bills passed in 2010. Senate Bill 220, the Alaska Sustainable Energy Act, and House Bill 306, which established a statewide energy policy, set a 50 percent renewable electricity goal for the state by 2025—one of the most aggressive in the country, according to REAP—and set the goal of reducing per capita electricity use in the state by 15 percent by 2020. The Senate bill gave AHFC bonding power to create the revolving loan fund to help finance energy efficiency retrofits in public buildings and mandated that 25 percent of the State’s public buildings be retrofitted by 2020. Buildings consume nearly 40 percent of the energy in United States. So the dust has settled on the contest, but what did the biggest losers and lowest users win? Well, Kilcoyne, says, that’s yet to be determined.

“Our immediate goal has been to determine the winners,” she says. “We’ve been working with each of them to determine what prize will best help them maintain their efforts. After following up with them recently, it seems that their savings in energy may be the best prize of all. Of course, we’ll give them certificates to recognize their efforts too.” With the first Great Alaska Energy Challenge now almost history, Kilcoyne says REAP is working to hold comparable competitions for both public and private buildings in the future. “We were focused first on buildings,” she says. “Buildings use more energy than all transportation combined. public buildings offered us the opportunity to save a significant amount of public money.”  Freelance writer Gail West lives in Anchorage.

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energy, Power & utilities

Building Energy with Biomass B Ketchikan GSA boiler heats up economy BY NICOLE A. BONHAM COLBY

elieved to be the first-ever installation of a biomass boiler for a General Services Administration-owned building in the nation, the new boiler at the United States Federal Building in Ketchikan successfully heated the facility over the winter to positive tenant reviews. Part of a larger conversion from steam heat to a hydronic, or hot water, heating system, the biomass boiler burns waste-wood pellets generated by the timber industry, marking a milestone in the evolution from outdated oil-fired steam heat to innovative renewable energy for the government facility. Perhaps of greater interest to those in Southeast is the business opportunity to supply the waste wood necessary for the heating system. That the innovative renewable-energy upgrade would specifically occur in Ketchikan—long seen as Ground Zero in the highly politicized boomand-bust cycle of the traditional timber industry—is an interesting juxtaposition, and hints at a potential new niche for Tongass timber and smallbusiness operators.

Component of Larger Upgrade

The $4.7 million American Recovery and Reinvestment Act Energy Improvement Project fully replaced the building’s heat generation, distribution, and automated control systems, along with other energy upgrades, including installation of the new biomass boiler system. The GSA replaced the building’s outdated, inefficient 1964 steam heating system with an energy-saving, hydronic heating system that includes the biomass boiler and one high-efficiency, oil-fired boiler for back-up, according to project managers. This first year of operation is designed to test the efficiency and effectiveness of biomass to heat the building, with GSA running both the high-efficiency oil and biomass boilers. Engineers will use the resulting information to improve the efficiency of all GSA-managed facilities. By using both systems, GSA anticipates reducing fuel-oil consumption roughly 50 percent during the first year. The Ketchikan Federal Building historically burned up to 9,000 gallons of fuel oil each year. The project team reports it is pleased with the progress so far, says Mike Rayburn, project manager for the upgrade effort. The GSA received “lot of compliments,” he says. “It’s pretty uniform heat.” Particularly with tenants such as the U.S. Forest Service and other federal agencies, “they ■ 98

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like to see that we’re using renewable resources,” he says. While the design for a primary unit and back-up unit will likely always continue for contingency purposes, “the goal is to have the biomass heat be our primary heat source,” says Rayburn.

Energy in Pellet Form

The biomass boiler burns waste-wood pellets as its energy source. The pellets are stored in a large silo. Keeping the silo loaded is a two-stage process, and entails contractual relations with two, separate providers. Project managers anticipate the unit to require between 90 to 110 tons of pellets per season. That constant need creates an opportunity for local mill operators and haulers. Given that other private and government facilities are going online with similar biomass units, there is potential for a growing need for milled pellets and peripheral logistics support. Right now, Sealaska Corp. has the contract to supply the pellets to the Federal Building in Ketchikan. The wood product currently originates outside the state and is shipped to the community, where local operator Larry Jackson picks up the material and loads the silo. With several similar systems on tap for facilities around the region, project managers say there could be a burgeoning market niche for a Southeast cottage industry to develop milling and hauling the wood pellets that feed such biomass boilers. That residual impact to the local business landscape is a welcome byproduct of the large government project. “One of the goals is to have...other mills in the area; to be the supplier for these (units) and to create this kind of industry,” Rayburn says. Part of the Recovery Act is to look at new technologies and methods of building that will test methods not used in government buildings in the past, says Todd Gillis. While biomass is an existing technology, it has not been used extensively in government buildings in the past. In considering the GSAs options for the upgrade, project managers saw an opportunity “to create a market in the area that would take advantage of the natural resources that exist there now,” says Gillis. Looking at the market, the project team knew that other regional entities, including Sealaska Corp., were also considering or already operating biomass-based heat

systems. Selecting the native corporation to supply the pellets was a natural choice, “as they already had that supply chain process in place,” he says.

Gaining Popularity in Southeast

The GSA joins a growing list of government and commercial organizations in Southeast Alaska turning to biomass as a sustainable alternative to oil-fueled heating systems. The Tongass National Forest installed a similar biomass boiler at the Southeast Alaska Discovery Center next to the Ketchikan Federal Building, says the GSA’s Regional Public Affairs Manager Stephanie Kenitzer. Sealaska Corp. installed one of the region’s first commercial biomass heating systems at its Juneau headquarters in 2010. The project team reports that the method is being considered for the new Ketchikan City Library and at the U.S. Coast Guard Station Ketchikan. “Hopefully all of us working together can spur that industry,” says Rayburn. Sealaska Corp. announced a similar business-incubation intent in 2010 when it converted its corporate headquarters to renewable bio-energy as an alternative to its annual use of 35,000 gallons of heating oil. At the time, the regional Native corporation lauded the concept of a wood-pelletfired boiler as one component of its green initiatives to build sustainable Southeast Alaska economies. The corporation saw three benefits: first, that the conversion to biomass can save money; second, that it would reduce hydrocarbon-based footprints; and, third, that it would create anchor demand for resources that can be manufactured within the region. Studies by the entity found ample, underutilized wood biomass resources available in the region. Increased demand would spawn consumable biomass manufacturing facilities in the Panhandle. James Grof, center director at the Southeast Alaska Discovery Center, lauded that system’s performance since its installation last fall. The center’s biomass unit serves as a primary source, with the legacy heating-oil system now used as backup. “This is a great system,” Grof says. The center is an approximate 21,000-square-foot building featuring 40-foot ceilings in places. “Every area was the same temperature,” Grof says. “So far, I love this system.” The Discovery Center bio-fuel system currently uses the same waste-wood pel-

lets as the Federal Building and is similarly served via a contract with Sealaska Corp., but will eventually migrate to a hockey-puck-style waste-wood product. Key among that facility’s concerns was that it would select a supplier with local ties and that could ultimately supply the service contract via Alaska wood. “That’s why we took our time in trying to get a supplier; because we want to make sure it was Alaska local, and that in the future they would be able to produce (the material) from Alaska,” Grof reports. While the pellets are currently originating outside the state, “that’s definitely not the future plan,” he says. The idea that facilities located in the Tongass National Forest would utilize the wasteproduct of the Tongass timber industry is a natural. “It just makes sense and would take off,” he says. According to the GSA, biomass is one approach that federal agencies in particular are turning to in an effort to make the federal government more sustainable. An Executive Order signed by President Obama in October 2009 requires all agencies to set and achieve goals for reducing greenhouse gas emissions and increase use of renewable energy. Biomass is considered a more sustainable heating option than oil because it is manufactured from a renewable resource, efficiently produced from waste generated by the timber industry, and could be produced locally in southeast Alaska, saving the time and carbon emissions produced by barging oil to southeast Alaska, according to Kenitzer and the project team. The GSA biomass heating system in Ketchikan was installed by Southwest Construction, a small, woman-owned business with operations in Anchorage. When the Act passed in 2009, the GSA received money that had to be obligated by key milestones, according to the Federal Building project team. The timeframes were condensed from normal delivery methods and so used contractors that were already established in the supply chain system. The Ketchikan project also included input by a number of local providers, including Schmolck Mechanical Contractors of Ketchikan.  Nicole A. Bonham Colby writes from Ketchikan.

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special section

Environmental Services

Cleaning Up Tsunami Debris

Crew members from Center for Alaskan Coastal Studies and Gulf of Alaska Keeper taking bags of marine debris to load on to Zodiacs and eventually transport off of Montague Island. Photos by Mark Tanski (Center for Alaskan Coastal Studies)

Alaskan coastal communities watch what washes ashore BY MARY LOCHNER

n Yakutat, a small Southeast Alaska community where beach walking is a favorite local past time, the unusual gifts brought on the cold January current in 2012 did not take long to arouse interest and attention from the town’s inhabitants. Those who had seen the large pieces of Styrofoam washing up on shore asked their friends and neighbors if they’d been down to the beach, drawing more people to the spectacle. Every day the ocean’s waves unloaded new revelations on Yakutat’s shores, of what had been carried unseen on its currents since the March 11 tsunami raked whole towns from Japan’s northeastern coastlines the year before. Mostly it was Styrofoam, Yakutat Tlingit Tribe President Victoria Demmert says—but they’d also see 50-gallon drums, and plastic bottles with Japanese writing on them. Sometimes, someone would reach down to the sandy shore and retrieve a shoe from its place of rest. According to Demmert, everyone picked up as they could, and said prayers ■ 100

for the people whose lives these oceanborne messengers of tragedy had once been a part of. Despite assurances from authorities that it was too early for tsunami debris to be hitting Alaska’s shores, Demmert says locals knew right away what the debris was when it started arriving this past January. “We know what normally comes up on our beach,” she says. “This was unusual—and a lot of it. You could fill up your truck and within half an hour, you’d have your truck filled up with debris.”

The Gates of Prince William Sound

Currents and winds have carried— and continue to carry—tsunami debris toward the northwest coast of the contiguous United States. From there it sweeps south and north, with the north-traveling debris pushing up along the Alaska panhandle until it curls northwest across the Gulf of Alaska, depositing the bulk of debris along the outer coasts. At the entry to Prince William Sound, the massive Montague

and Hinchinbrook islands lie diagonally in a southwest-to-northeast direction, standing guard and acting, along with smaller islands, as a gate protecting the sound from the majority of the debris. Their geography has made these islands the long-time collectors of thick tangles of drift wood, and more recently, of the bits of plastic that for decades have accumulated in the Pacific Ocean and been redistributed on Pacific shores. While many parts of Alaska’s Gulf Coast remain untouched or little impacted by the tsunami debris, places like Montague and Hinchinbrook islands bear the brunt of it. That’s according to Chris Pallister, director of Gulf Keepers of Alaska. Pallister and his professional clean-up crew have been picking up man-made marine debris on Alaska’s Gulf Coast for 11 years. The nonprofit’s mission is simple: clean the beaches. “I’m just a garbage man,” Pallister says. His group’s main source of funding is the Marine Conservation Alliance, a Juneau-based organization founded in

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2001 by commercial fishing harvesters, processors and other fisheries interests. Pallister says debris coming in this season is much larger in volume and different in kind from what his crew has seen in seasons past. He estimates about 30 to 40 percent by volume of manmade marine debris he’s seeing now is from the tsunami—and, he says, for the first time in the Gulf Keepers’ history, its crew had to get HAZMAT certified in order to deal with hazardous waste washing up on coastal areas that have been highly impacted by tsunami debris, such as at Montague Island. According to Pallister, as of June 13, he and his crew have cleaned roughly 20 miles of shoreline on Montague Island and nearby Latouche Island in May and June 2012. They’ve encountered “everything from small fuel containers to large drums of unidentified chemicals,” Pallister says, and he has “personally found blobs of refined petroleum products, similar to tar balls, from ruptured containers on several of the tsunami-debris impacted beaches.” Pallister says it’s been common for his team to come across Japanese-labeled petroleum-based lubricants at Montague Island this year, as well as Japanese gasoline and kerosene fuel containers and sealed 50-gallon Japanese-labeled containers with “unidentified liquids” inside. Most of the containers are empty, he says, or nearly so. His crew has been trained to identify potentially hazardous material, handle it safely and remove it to higher ground where it won’t be washed back into the sea. But after that, he says, it’s anybody’s guess as to who will deal with it. It’s not something his crew has the certification or training to do, he says. They’ll take GPS coordinates and report it, but he doesn’t know who’s going to be responsible for flying trained experts in to some of these remote locations to dispose of it. As of press time, that’s an unanswered question, according to John Whitney, National Oceanic Atmospheric Administration’s scientific support coordinator in Alaska. Whitney takes reports of hazardous wastes in the marine environment, he says, but “it’s the US Coast Guard’s responsibility to direct the clean-up of hazardous materials and oil and the marine environment,” and he’s not sure what lo

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gistics will be worked out to deal with tsunami-related hazardous wastes. According to Whitney, Alaska historically has dealt more with oil spills, not chemical spills. “We have to deal with it so infrequently, I don’t know what hazardous materials we’ll be encountering.” Senator Lisa Murkowski says NOAA initially had roughly $4.5 million in the current federal budget to deal with general marine debris clean-up nationwide. Murkowski says another $5 million to deal specifically with tsunami debris was recently inserted into NOAA’s budget by the Appropriations Committee, which Murkowski sits on. However, “There’s disagreement about who’s responsible for the cleanup,” Murkowski says. “NOAA says once debris hits the coastline it becomes the landowner’s responsibility, which in Alaska would mean us. But then again much of Alaska is owned by the federal government, so the question of who’s in charge here is a legitimate one to ask.” Murkowski visited Cordova on June 9 and was flown by helicopter with the US Coast Guard to survey tsunami debris from the air on Kayak Island, an-

Hauling tsunami debris: Patrick Chandler (Special Programs Coordinator for the Center for Alaskan Coastal Studies) hauling tsunami debris on the Gulf of Alaska side of Montague Island. Photo by Ryan Pallister (Gulf of Alaska Keeper)

other island that has been exceptionally impacted. On the issue of hazardous wastes washing ashore, Murkowski says, “In talking with the Coast Guard about it, their immediate response is, we just haven’t seen anything that has come to shore; we haven’t seen anything that suggests that there is fuel or any hazardous substance inside. And you know what they do is they investigate everything that is out there and if in fact they do come across some of that, they also

have folks that are prepared to deal with that.”

Impacts on Business, Local Governments

Thanks in part to natural barriers such as Montague Island, however, a number of Gulf of Alaska beaches remain protected from the worst of the impacts from tsunami debris, Pallister says. Jordan Hess, owner-operator of Alaska Glacier Lodge at Hideaway Cove in Homer, says the interior of Kachemak

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Bay, where his lodge is, remains unaffected. Hess has run the Glacier Lodge for 17 years. “We’re not seeing anything over here,” he said when asked whether tsunami debris had impacted his business. “I think most of the debris is hitting the outer coast. The way the currents work, the Coriolis effect keeps things swirling in the gulf. A lot of it doesn’t come into Kachemak Bay.” Alaska Seafood Institute spokesman Tyson Fick says Alaska’s fish tissue monitoring program ensures that fish caught in Alaska waters are free of contaminants, and that he thinks negative public perception about Alaska’s fisheries poses a greater threat to them than any tsunami-related debris. With regards to hazardous wastes, Fick says that fishermen he’s talked to “have expressed more concern with damaged perception and fear-mongering that will harm the reputation and value of our fisheries, rather than with actually finding specific cause for alarm.” Early after the Japanese tsunami caused a failure at the Fukushima Nuclear Reactor, there was public concern

about radiation in fish such as Alaska salmon. Federal scientists have found no radiation levels in Alaska salmon, and an Alaska Seafood Institute fact sheet notes that Alaska salmon do not migrate “anywhere close to Japan.” Fick says, “Now that we are finding debris on our shores, we are again facing sensationalism. Once again, we are trying to get quality, factual information to concerned consumers, distributors and fishermen of Alaska seafood.” Pallister says he thinks tsunami debris cleanup needs to be taken seriously and addressed swiftly to prevent real harm to Alaska salmon in the future. “We’re not saying there’s contamination in the fish,” he says, “and we don’t want anybody to think there’s contamination in the fish. We just want to make sure it doesn’t happen.” In Yakutat, Demmert says the community is facing another kind of local impact from tsunami debris: lack of landfill storage space, and lack of resources to clean remote beaches. She says locals keep nearby beaches clean by picking up debris every day and bringing it to the local landfill—

but they can’t get to some of the lessaccessible beaches to clean them, and they don’t have enough room at the local landfill to keep what they do clean. She’s also concerned about all that Styrofoam breaking down in the landfill and getting into the groundwater. Murkowski says it’s uncertain at this time how the issue of tsunami debris storage and disposal could be handled in small, remote Alaska communities, where landfill storage is limited. She says there’s not necessarily a federal funding source at present that would help Yakutat with its acute debris disposal need. But, Murkowski says, she’s heard ideas from constituents, such as using fishing vessels and tenders to transport debris at the end of the fishing season, or outfitting a tender with a plastics chipper so that plastic debris could be collected and sold as scrap. “How we address this will require us as Alaskans to be creative with solutions,” Murkowski says.  Mary Lochner is a journalist living in Eagle River.

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special section

Environmental Services

Decontaminating Kipnuk Preparing the site for a new school STORY AND PHOTOS BY NICHELLE SEELY

hen I visited the village of Kipnuk in the spring of 2010 to inspect the recently completed teacher housing, I noticed a pervasive odor near the main entrance of the school. The adjacent sewage lagoon had overflowed and some of the runoff had accumulated, along with snowmelt, in a broad pond at the base of the entry ramp. Two girls in rubber boots splashed through the water, laughing as they kicked through chunks of ice. The shortcomings of the sewage treatment pond were well-known by the villagers, and I learned that they dealt with it in practical rural style. During the winter, a man with a chainsaw would carve out chunks of frozen eﬄuent and drag them out of the lagoon and onto the river ice, to be carried out to sea during spring breakup. Not a great solution, but surely healthier than allowing liquid sewage to flood the schoolyard. When the Lower Kuskokwim School District awarded Bezek Durst Seiser Architects and our team of consulting engineers the opportunity to renovate the old school and design a new addition, we discovered the site was also contaminated in other ways. Spillage from the district fuel tank farm and individual residential tanks on the property was going to require remediation of the surrounding soils. Several small structures slated to be demolished contained asbestos and other hazardous materials. In addition, when the geotech team extracted core samples for analysis, a spark from the machinery

Kipnuk cemetery with backhoe in distant background.

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Fenced in sewage lagoon was removed and the site remediated for one wing of the Kipnuk school addition.

ignited a spurt of flame from the newly drilled hole. The ground was permeated with methane gas. BDS has a lot of experience designing for rural Alaska, and—with the exception of the methane—we knew we would encounter these kinds of environmental issues. Problems like these are common in these roadless areas so isolated from urban infrastructure. Even the presence of methane gas is not unheard of—it bubbles up in tundra lakes and emanates from landfills. Anywhere significant amounts of organics are decaying, it will be found. We engaged R&M Consultants of Anchorage to perform civil engineering tasks, Oasis Environmental to help us deal with the sewage lagoon as well as assist with the contaminated soil, and

EHS-Alaska for their expertise in hazardous building materials. Together with our consultants, BDS developed a plan to address the various problems.

Removing the Sewage Lagoon

First on the list was the lagoon. Not only was its proximity to the school unhealthy, it was right where we needed to build one wing of the addition. Fortunately, the village had just completed a new centralized treatment pond. Now it was a matter of transferring the eﬄuent, treating and capping the sludge, and turning the area into a buildable site. The design team developed a process plan to take place in 2011. There was

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plenty of time—the new school wasn’t slated to begin construction until the summer of 2012. LKSD successfully transferred the liquid from the old lagoon to the new one via pumps and hoses. Only the sludge remained. The plan called for treatment with quicklime, which would dry it out, raise the pH and deactivate the bacteria and viruses. Afterwards, sandy soil from the surrounding berm would be mixed in, the treated sludge would be covered with geotextile, and the remaining swale would be capped with gravel to make a suitable building site. However, nature does not consider the plans of humanity. Before the sludge could be treated, on Nov. 9 a hurricane-force storm of unprecedented proportions swept across the Bering Sea. The storm surge backed up the river, flooded the village and refilled the sewage lagoon with brackish water. Residents took shelter in the school, high and dry on its pilings. Winter had arrived with a vengeance, and if the water were not removed within the next few days, it would be impossible to empty the lagoon before freeze-up. In addition, the bags of quicklime had gotten wet in the flood. Although the material was still useful, it had lost its potency, and more would be needed to successfully treat the sludge. When Plan A doesn’t work, it’s time for Plan B. The school district applied to the Alaska Department of Environmental Conservation for emergency authorization to pump the contaminated brackish water away from the community. LKSD personnel again emptied the lagoon using a specially designed system to minimize entrainment of solids. The district and BDS design team agreed that the treatment of sewage solids could be added to the overall school project and become part of the task of the winning contractor. As this article goes to press, the plan is for LKSD to once again empty the lagoon, mobilize additional quicklime to the site, and turn the site over to Dokoozian Construction to finish the treatment and earthwork. If all goes well, the lagoon will be gone by the end of the summer, and ready to accept the new building foundation.

Contaminated Soil Mitigation

Although the problem of open sewage

is the issue that grabs the most attention, no less important is the problem of contaminated surface soils. As with most rural Alaska communities, Kipnuk runs on imported fuel. Individual houses have day tanks for diesel and propane; the village has a large tank farm where tens of thousands of gallons of fuel are stored, including aviation fuel. As a separate entity, LKSD maintains its own massive storage tanks and an intermediate tank to run the school. All this fuel storage and use results in leaks and spills. This is where the expertise of Oasis Environmental comes in. Their methodology is straightforward and effective. First, a conceptual site model is developed, identifying everything on the site that might be a source of contamination. Second, a field screening technique is identified to establish the clean and contaminated areas. Third, soil samples are collected and sent to a lab to determine the type and concentration of the contamination, if any. In the field, the process works like this: a representative from Oasis would approach a potential source of contamination—for example, a day tank. Guided by fuel odors and staining and field screening using a photoionization detector (PID), the field team assesses the site. Samples are heated and the PID utilizes the air given off to determine the order of magnitude of the contamination, informing the field team whether the amount merits additional investigation. Oasis Environmental then correlates the field screening with the laboratory analytical results to establish the extent of required clean-up. Once the extent of contamination is determined, the design team has to figure out what to do with it. Soil with low concentrations of contaminants (below state cleanup levels) can be left in place. Higher concentrations of non-leaching substances can be removed and placed in the local landfill, without posing a danger to surrounding soils and water sources. Severely contaminated soil or that which contains leachable substances or hazardous chemicals must be removed and shipped to a special landfill designed to handle toxic materials. The nearest ones to Alaska are in Oregon. On a messy jobsite surrounded by rumbling machines churning up

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the muck, quality control is a necessity. Oasis Environmental will send a representative out with the building crew to identify which soils can go to the landfi ll and which must be backhauled. It’s all part of the intricate dance of compliance, self-enforced by the BDS design team and law-abiding construction contractors.

Hazardous Material Mitigation

The third source of toxics is hazardous materials in existing buildings. The area slated to host the new school addition is cluttered with fuel tanks, water tanks, boardwalks and buildings, all of which must be demolished to make way for new construction. Some of the buildings will be dragged away for reuse; some of the material is salvageable and will be given to the community. Some of the material is recyclable—and to spare the small village landfill which will be strained by coming construction waste, BDS specified that jobsite metals are to be collected and backhauled for recycling. However, hazardous materials cannot be reused or recycled or simply thrown away. To deal with this,

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Boardwalk bridge over utilidor and water line.

BDS hired EHS-Alaska, a hazmat investigation firm based in Eagle River. As hazmat experts, EHS-Alaska looked for multiple things which experience has shown are likely to be present: mercury in poured gymnasium floors and light

bulbs, lead in paints and coatings, polychlorinated biphenyls (PCBs) in light ballasts, and radioactive elements in exit signs. By far the most pervasive material is asbestos, which can show up in sheet vinyl, wall finishes, insulation, mastics,

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sealants and window gaskets to name just a few of the possible sources. Any of these items that contain asbestos are considered to be hazardous materials. EHS-Alaska began by studying available background material and blueprints of the buildings, looking to find possible sources. Source list in hand, investigators performed a physical inspection, sampling materials in the existing school and the buildings slated for relocation or demolition. The school building is fairly clean, having been built in the 1980s after use of lead and asbestos was reduced. Not so the old teacher housing, which is found to be full of asbestos. Asbestos is a naturally occurring mineral, and it isn’t a health hazard until it becomes airborne as dust, when the fibers can find their way into the human body with lethal consequences. Construction activity by its nature creates a lot of dust: all asbestos-containing materials that may be disturbed must be removed by specially trained workers. Since Kipnuk does not have a landfill that is permitted to receive asbestos, it all gets removed from the village, and, like the contaminated soil, taken to a specialized disposal site.

Fire in the Hole

And what of the unexpected methane gas? Without a specialized investigation, the design team couldn’t identify a source with certainty. It might be a result of leakage from the sewage lagoon; it might be coming from an old buried landfi ll; it might be the result of melting permafrost and subsequent decay of organic material. In a perfect world, the gas could be harvested and used as an on-site energy source. However, developing such a source without an investigation of its magnitude and locality is years and years away, and would need far more infrastructure than currently exists in Kipnuk. For now, the methane remains an unmitigated anomaly, a nuisance to be wary of, but not a big enough problem to prevent construction. The contractor has been alerted, and now has another good reason to ban smoking on the jobsite.  Nichelle Seely is an architect for Bezek Durst Seiser Architects and Planners in Anchorage.

Methane ﬂame ignited by an equipment spark in the geotech core sample hole at Kipnuk school site.

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special section

Environmental Services

ERM-OASIS Redeﬁning environmental services in Alaska BY PAULA COTTRELL

hen OASIS Environmental Inc. opened its office in Anchorage in the fall of 1995, Senior Principals Max Schwenne, Brad Authier and Teresa O’Carroll set out to create the best environmental consulting business in Alaska. Veterans of environmental work in Alaska, they saw a need for environmental services that delivered professional results with exceptional customer service. Starting with seven employees, a business loan, a small office in midtown and a vision of providing high value environmental consulting services to their customers, OASIS initially offered contaminated site investigation and cleanup, risk assessment and baseline biological survey services. Their customer base included both private industry and government entities alike. ■ 108

Photo courtesy of ERM-OASIS

Field sampling provides the raw data by which ERM-OASIS helps clients ensure compliance with federal, state and local environmental regulations.

In March 1996, OASIS received its first substantial contract from Alyeska Pipeline Service Co. working on the TAPS Mainline Valve Project. This opportunity served to propel the company forward on a path of steady growth. “Our recipe for success has been in our belief that the best value for the client comes with recognizing their unique needs and providing solid, cost effective solutions,” says Founding Partner Brad Authier. Satisfied clients led to an increased demand for a wider range of services, which grew to include environmental permitting, hydrology, water quality, wetlands delineation and mitigation, river reconstruction and habitat restoration, oil spill contingency planning, and health, safety and environmental management systems development and implementation. OASIS business philosophies fueled growth and sustained their professional environmental service offerings in Alaska. “The Oasis business model has always been simple; get work, do work and selectively hire good people,” Authier says. “We have always resisted the

urge to grow too big too fast, and have avoided layoffs by not over-hiring,” Authier added. Managing Partner Jeff Leety said, “At the top of the list is recognizing that OASIS employees and its leaders make the company what it is. They enable what we do, and they establish how we do it. Without a healthy, engaged, and fulfilled workforce, success in our business is not possible,” added Leety. “Another priority is controlled growth,” says Max Schwenne, founding partner and longtime president of OASIS. In 2006 Schwenne bluntly proclaimed “grow or die.” The company nearly doubled in size since that time. OASIS believes superior customer service is another key to success. “When you provide high value services combined with superior customer service, customers come back to you when they need help or require third party environmental services,” Leety stated. With success came expansion and the staff of engineers and technical experts grew to more than 100 professionals as additional offices were opened in

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Fairbanks, Seattle and two locations in Montana. Leety finished by stating, “The simple business philosophies adopted by the OASIS founders combined with hard work resulted in steady growth of 8 to 15 percent each year and a refocused vision of being the best environmental consulting firm in the eyes of our clients and employees alike.” These philosophies and results led OASIS to become known as trusted experts specializing in oil and gas, mining and government concerns, especially in the Alaska market. Although OASIS participated in projects around the world, the firm spent a large portion of its years in business working on Alaska projects. This experience, combined with the long-term successful business relationships developed over the years with the major players in Alaska industry and government, established OASIS as a solid and reputable multi-services environmental consulting firm. Between 2007 and 2010, OASIS Partners David Trudgen, Thomas Beckman and Robert Newman (Seattle, Wash.) unanimously agreed with Schwenne, Authier and Leety that a succession plan would need to be devised to address transition as retirement considerations for some employees was forecasted on the distant horizon. The two primary options considered included development of a more robust employee stock ownership plan and some form of merger or acquisition. A merger or acquisition was determined most logical given timing and mechanics tied to a revised employee ownership plan. “The right merger would provide more professional growth opportunities for our existing staff while taking away some of the risks involved with expanding operations worldwide,” Schwenne said.

tal services in some of the most challenging locations across the globe, ERM has built its reputation on consistently helping their clients uncover sustainability value by integrating social, economic and environmental considerations into their business strategy, culture, operations and decision-making processes. ERM clients include companies such as Exxon, Rio Tinto, Chevron, DuPont, General Electric and Shell International Petroleum Ltd. In the past five years, ERM has worked for more than 70 percent of the Global Fortune 100

and more than 50 percent of the Global Fortune 500. Adopting the motto “One Planet. One Company. ERM.” locations worldwide work collaboratively to bring their collective expertise to each project. In 2007, ERM opened its first office in Alaska as a direct response to requests from their largest clients providing a variety of environmental consulting services including risk management, impact assessment, air quality and contaminated site management. According to ERM Western Division Managing Director Rusty Benkosky it was stra-

Enter ERM

Environmental Resource Management has been a leader in providing environmental, health and safety as well as risk and social consulting services for more than 40 years. With 4,200 employees operating from 140 offices in 40 countries worldwide, ERM strives to be the world’s leading environmental and sustainability consultancy. A large company capable of performing a wide range of environmen

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109 ■

tegically imperative to have a location in Alaska. “We focus on three key sectors—oil and gas, mining and power,” Benkosky says. “Alaska was a logical location to expand our services in these sectors as these industries continue to develop and grow.” Employing eight people, the Alaska ERM office was gaining some traction but was not getting the scale of projects the company was capable of performing. The global company sought a solution to expand their operations and gain scale in the Alaska market.

Win-Win Situation

The principals at OASIS were not actively marketing a merger or acquisition when they were approached by several companies over recent years, ERM included. ERM caught their attention between 2007 and late 2010. In 2009, ERM worked with OASIS on a gap analysis project in Europe and both companies found shared commonalities in corporate culture and environmental stewardship. With the succession plan in the back of their minds, the managing principals of OASIS were approached by ERM and began discussions. In October 2011, ERM acquired OASIS Environmental Inc. to become ERM-OASIS. “It was good timing,” Authier says. “We had experienced some growing pains through the years. As our systems needed to advance further, taking our business to the next level by merging with a global company definitely has its benefits.” Integrating the two companies seemed very natural and seamless. “OASIS and ERM selected each other,” Schwenne says. “There were a lot of common threads between the two companies. It was more like adding people to our team, not restructuring the whole company.” To complement and expand air quality services in Alaska, ERM-OASIS brought on Denise Newbould in April 2012. Founder of Aware Consulting, LLC., Newbould brings almost 30 years of experience in the environmental field in Alaska and also specializes in permitting, industrial facility compliance for oil and gas, mining and electrical utility clients, as well as compliance auditing, ISO 14001 consulting services, and other health, safety and ■ 110

www.akbizmag.com • Alaska Business Monthly • August 2012

Photos by Farrar Photography/ Courtesy of ERM-OASIS

Max Schwenne

Brad Authier

environmental management system consulting expertise.

One + One = Three

Immediately after the stock purchase, ERM moved their offices into the OASIS location in downtown Anchorage. “It was important for us to combine our offices right away for synergy,” Benkosky says. “For ERM, we were going from an eight person office to a 70 person office,” Benkosky added. As the companies continued to integrate, ERM and OASIS found they had more in common than “just wanting to be the world’s leading environmental consultancy in the eyes of their clients and employees,” Leety says. They share an identical vision on employee devel-

Jeff Leety

Dave Trudgen

opment, environmental stewardship and company values. Furthermore, he added, “ERM sees value in our tenure as Alaskans managing business in Alaska, and has kept the leadership, people and proven business philosophies in place moving forward.” With more than 4,200 highly skilled staff members with unique capabilities, ERM-OASIS is expanding its level of environmental expertise to Alaska. “The more everyone got into the process of the acquisition, the more everyone realized it was a natural fit,” Benkosky says. “What OASIS lacks, ERM has and what ERM lacks, OASIS has. It was like one plus one equals three. Together our companies became three times as strong.”

Thomas Beckman

Denise Newbould

Having just completed work on one of the largest wind farms in North America in the Kansas plains, the company sees a lot of potential for renewable energy in Alaska. “One thing OASIS had that ERM didn’t was access to clients,” Benkosky says. “OASIS has developed a lot of relationships with the oil and gas, mining, utility and government sectors in Alaska. With the combined expertise of our professional staff, we see nothing but continued growth and expansion in all service lines to support the needs of clients in these business sectors.”  Paula Cottrell is a writer living in Anchorage.

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special section

Environmental Services

Permitting Natural Resources A glimpse at the enormity of time and money for project development

BY JOETTE STORM

ermitting. The very word may strike fear in the heart of a resource developer who thinks the permitting process will delay the project and cost a lot of money. In reality, it is a creative collaboration involving land managers and users that protects what belongs to the public while suggesting best practices that lead to successful projects. However, permitting does take time and money. Managing the development of Alaska’s lands, waters and resources in the ”public trust” has given rise to a complex web of permitting procedures that span local, federal and state entities. The body of regulations and laws that guide management of public lands and waters creates challenges and opportunities for users and managers alike. Three agencies provide the bulk of permitting on state land while any number of local or federal agencies have responsibility for approving access to other public lands. Alaska Department of Natural Resources is the primary leasing agent, the Alaska Department of Environmental Conservation has wide-ranging health and safety responsibilities that place it in the middle of permitting functions, while the Alaska Department of Fish and Game scrutinizes the effects of projects on the fish and game and their habitat. A glance at the ADNR website (dnr.alaska.gov/mlw/permit_lease/) gives an idea of the range and type of permits. There are permits for any type of mining, commercial recreation businesses, scientific research and overland travel, among other activities. Some permits are for temporary use, others can cover five to 10 years with provisions for renewal. For example, a backcountry guiding business wishing to establish a base camp complete with yurt and storage facilities on state land will need a lease and perhaps several permits. The lease will cover a five-year period. Government entities, such as the National Resource Conservation Service, intending to install scientific equip-

■ 112

ment to measure snow or wind, will also require a permit and pay fees for placement of the device on state land. Aquaculture operations require a lease that starts at $450 for the first acre and a number of permits ranging from $169 to $500. Filing and permit fees can total more than $2,000. The permits set out various requirements, including collecting water samples and sending them to ADEC. The permitting might take six to nine months depending upon the location of the lease and the extent to which other landowners are affected.

Scope and Scale

Larger scale projects such as coal mines or oil and gas development demand coordination among many more players. That is where the Office of Project Management and Permitting comes into play, says Thomas Crafford, OPMP director. His role is to bring all the agencies and the developer to the table to identify requirements and begin what he calls the iterative process of exchanging information about standards and best practices. Crafford’s office ensures that state agencies provide consistent recommendations to the project applicant. However, this service is only available to projects requiring multiple authorizations and whose applicants are willing to pay for the OPMP service, he says. On the federal side, a working group established in 2011 by President Barack Obama’s Executive Order provides similar coordination among all the federal departments with regard specifically to energy resources. David Hayes, deputy secretary of the Interior, heads the group addressing renewable energy projects, including hydropower, biofuels and energy efficiency. Hayes has made two trips to Alaska this year alone for dialogue with agency personnel and members of the public. Both the state and federal governments have lead agencies for large projects. Tom Crafford is state lead for the Chuitna Coal

Project, a 20,571-acre lease on Mental Health Trust Authority land, originally leased in the 1970s, that PacRim Coal LP has proposed a 5,000-acre mine development on. Crafford says the state made a decision to issue the permit in the 1990s to Diamond Alaska, the former operator of the leases, but Diamond backed away from the project at that time. Resurrected in 2006 when the price of coal rebounded, the permitting had to start over due to changing conditions and changing players. The discovery of significant cultural resources required consideration as well, he says. The proposal now includes the surface mine, an all-weather road, electric transmission, an elevated coal transport conveyor, an airstrip, employee housing and the Ladd Landing Development, a coal export facility in the tidelands. In the current round of permitting these last six years, the company has spent in excess of $30 million, according to Joe Lucas, vice president at PacRim Coal LP. PacRim has a Memorandum of Understanding with OPMP that establishes an annual budget for the state employees’ services, he says. Lucas says as part of the consultation process since reinitiating the project, the company has modified its project several times since reinitiating the project. It reduced the number of stream crossings from seven to one due to negotiations with the Tyonek Native Corp., a private landowner whose land is within the larger project area. The elevated conveyor system, agreed to in those negotiations, will allow the use of existing public highways to access the mine, resulting in reduction of new road construction, Lucas explained. Other modifications in design are the result of consultation with the US Army Corps of Engineers, lead agency responsible for permits under certain sections of the Federal Clean Water Act. It is evaluating PacRim’s permit appli-

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POTENTIAL ACTIVITY DRIVEN PERMITS AND PROCESSES

Cook Inlet Onshore O Exploration Per Application & App Process

DRILLING STATE: AOGCC Class II Development Well AOGCC Class II Injection Well ADNR-DMLW Temporary Water Use Permit ADNR-DO&G Lease Operations Approval ADNR-DO&G Bond ADNR-DO&G Miscellaneous Land Use Permit for Geophysical Exploration

SPILL PREVENTION FEDERAL: Federal OPA Requirements (EPA) STATE: ADEC-SPAR Certificate of Financial Responsibility ADEC-SPAR Oil Spill Contingency Plan

WASTE STORAGE AND DISPOSAL FEDERAL: NPDES General Permit (ADEC Jurisdiction October 2011)

DRILL PAD

STATE:

FEDERAL: USACE Section 404 Permit

AOGCC Class II Injection Well ADEC-DOW CWA 401 Water Quality Certification ADEC-AIR Minor Air Permit ADEC-DOW Waste Water Disposal Permit ADEC-EH Solid Waste Disposal Permit ADEC-EH Temporary Storage of Drilling Waste

STATE: ADNR-DO&G Lease Operations Approval ADNR-DO&G Bond ADNR-DMLW Land Use Permit ADF&G Title 5 Special Areas Permit ADNR-SHPO Cultural Clearance ADEC-DOW CWA 401 Water Quality Certification LOCAL: KPB Material Site Permits

Legend

A step in the process where d and slow down the permitt

The clock on the review pro stopped.

OVERLAND ACCESS

State Permits and

FEDERAL: USACE Section 404 Permit

Federal Permits a

STATE: ADNR-DO&G Lease Operations Approval ADNR-DMLW Land Use Permit (ROW) ADF&G Title 16 Stream Crossing ADF&G Title 5 Special Areas Permit ADNR-SHPO Cultural Clearance

Kenai Peninsula B Permits and App

LOCAL: KPB Material Site Permits

CAMP FACILITIES

Permit Subject to Consistency Re

STATE: ADEC Consolidated Camp Permit ADEC-AIR Minor Air Permit ADEC-DOW Waste Water Disposal Permit ADEC-EH Solid Waste Disposal Permit

Prepared By

Permit Application Submittal

Kenai Peninsula Borough Conditional Use Permit / Materials Use Permit (KPB 21.18.080 & KPB 21.25)

Application Submittal

Endangered Species Act Section 7 Informal Consultation

Federal Action Federal Permit application review

CEQ NEPA EIS Process (40 CFR 1502)

Significant Impact Agency action is determined to significantly affect the environment.

Notice of Hearing -30 day public comment period is started. -Public hearing at the end of 30 days.

RFAI KPB requests additional information (RFAI).

Additional Information Applicant supplies requested additional information

ESA Section 7 Review Process

Federal Agency Determination Federal agency determines action “may affect” a listed species or its habitat.

Endangered Species Act Section 7 Formal Consultation

Completeness Review -21 days after submittal

Early Application of NEPA Federal agencies are required to provide the early application of NEPA to cases where actions are planned by non-Federal entities. (§1501.2(d))

Endangered Species List 50 CFR 402.12(c) Action Agency requests or prepares species list.

Initiate Formal Consultation 50 CFR 402.14(c) Permitting agency submits a written request of initiation of formal consultation.

Notice of Intent Notice of Intent (NOI) to prepare an EIS.

Application Submittal Applicant determines eligibility requirements under the general permit.

Yes Species Present Listed species/critical habitat present? No

Yes

BO Clock Starts for 50 CFR 402.14(e) Consultation 90-day clock starts from date of receipt.

Additional Data 50 CFR 402.14(f) USFWS/NMFS may request additional data to formulate BO. Time extension is agreed upon with Permitting Agency.

Appropriate Scoping Agency determines content of the EIS. Continues over the course of the EIS process until the final EIS is published. Participation and comment from federal, state, local agencies and the public. 30 day comment period.(§1501.7)

General Permit NonEligibility No, not eligible for general pemit.

Clean Water Act, National Pollutant Discharge Elimination System (NPDES) Section 402 General Permit (40 CFR 122-124)(33 USC 1342)

Concurrence on List 50 CFR 402.12(d) USFWS/NMFS prepares list or concurs with Permitting Agency’s list within 30 days of request

Review of Information Is information provided complete?

General Permit Eligibility Yes, eligible for general permit.

Public Hearing Planning Commission hearing to either approve, modify or disapprove the application.

Planning Commission Report KPB staff drafts permit and report for planning commission.

Pre-Application Meeting (Optional) (33. CFR 325.1 (b))

Application Submittal Form ENNG 4345

USACE Sufficiency/Completeness Review District Engineer (DE) reviews the application for completeness. Public notice is prepared during this time (unless exempted under nation-wide permit, general permit or categorical exclusion). Coordination occurs with other public notice requirements (e.g. coastal management or 401 certification).

NOI Review The 7-day NOI review period will typically begin the day a complete electronic NOI is transmitted. The 7-day waiting period provides ADEC, U.S. Fish and Wildlife Service (USFWS) and National Marine Fisheries Service (NMFS) an opportunity to evaluate NOIs and possibly delay authorization.

EA Required 30 day public review.

EIS Required See Appendix B of 33 CFR 230 for procedures. (Potential 3 year process.)

Section 106 of the National Historic Preservation Act Consultation with the State Historic Preservation Office (35 CFR 800)

Project Information Submittal Agency/applicant submits project information to the State Historic Preservation Office (SHPO) and initiates the Section 106 Process (§800.3).**

Response Period The SHPO has 30 days from receipt of project information to respond.

Permit Application Submittal

cation under Section 10 of the Rivers and Harbors Act and Section 404 of the Clean Water Act via a Supplemental Environmental Impact State. The SEIS will ensure compliance with the National Environmental Policy Act and address issues related to the Alaska Surface Coal Mining Control and Reclamation Act permit, which governs all aspects of the mining operation and infrastructure.

Water Permits

For many years, the Federal Clean Water Act required the Environmental Protection Agency to regulate and oversee pollutant or wastewater discharge. That program, called the National Pollut■ 114

No Response The SHPO does not respond within 30 days of receipt of project information. Response The SHPO responds within 30 days of receipt of project information.

End Consultation 50 CFR 402.13(a) Return to permit process Major Construction Activity? 50 CFR 402(b)

Biological Opinion (BO) USFWS/NMFS formulates BO and incidental take statement in conjunction with Permitting Agency.

Public Hearings Minimum 45 day period. Can be extended to 60-90 days. (§1503.1)

Section 401 Water Quality Certification Potential 30-60 day certification process (Section 404). NEPA Process Determination EA or EIS.

Yes

End Consultation 50 CFR 402.12(d)(1) Return to permit process

Request For Additional Information (RFAI) Within 15 days of receipt of the application any additional information. Applicant has 30 days for response.

United States Army Corp of Engineers (USACE) Clean Water Act (CWA) Section 404 Permit Individual Permit (excluding Nationwide and General Permit) (33 CFR 322 – 323)

Permit Issued Within 2 weeks.

Yes

Biological Assessment (BA) 50 CFR 402.12(i) Permitting Agency has 180 day to complete BA.

Optional discussions between parties resulting in “no effect” determination. 50 CFR 402.13(a)

Requested BO Review 50 CFR 402.14(g)(5) Review of draft BO and incidental by Permitting Agency or Applicant.

Response to BA 50 CFR 402.12(j) USFWS/NMFS has 30 days to respond to BA Finding.

Yes

Formal consultation required. See separate flowchart.

No End Consultation 50 CFR 402.13(a) Return to permit process

Written concurrence from USFWS/NMFS

Final Delivery of Final BO and incidental take statement to Permitting Agency. End of formal consultation.

Extension of Formal Consultation 50 CFR 402.14(e) If USFWS/NMFS NMFS and the Action Agency do not agree to conclude consultation within 90 days, USFWS/NMFS NMFS may 1. if agreed to end before 150 days, submit to Action Agency reason why a longer period is required. 2. if more than 150 days, obtain consent of the applicant to extended period.

Record of Decision Addresses all comments and responses from other agencies and the public.(§1505.2)

Final EIS Addresses all substantive comments and makes changes to the draft EIS. (§1502.9(b)) (§1503.4)

Use of BA 50 CFR 402.12(k) USFWS/NMFS determine if action is likely to adversely affect species or critical habitat?

Implementation and Monitoring (§1505.3)

NEPA EIS Process Complete

Additional Action Requested During the 7-day NOI review period following NOI posting on the website, ADEC may notify the NOI submitter that additional action must be taken before discharge authorization is obtained.

Section 402 Stormwater Discharge Pemit Applicant must complete individual permit application for stormwater discharge. Note this is a separate process shown on a separate flow chart.

NOI Submittal Operator submits Notice of Intent (NOI) to the Alaska Department of Environmental Conservation (ADEC).

Affect to Species/Habitat May affect species or critical habitat?

BO Clock Starts 50 CFR 402.14(e) Data received and complete. 90day clock starts.

Draft EIS Can take up to 12 months up to 3 years depending on type, size and complexity of project.(§1502.9(a))

Permit Decision Determination is made 1-2 days after the PH.

SECTION 106 IS COMPLETE The agency/applicant official can proceed to the next step in the process based on its finding or determination.

Review The SHPO reviews the agency/applicant identification of Historic Properties (or lack of) within the Area of Potential Effect (APE) and determination of eligibility to the National Register of Historic Places, if applicable (§ 800.4).

Authorization granted.* * Authorization may not be granted until the Alaska Coastal Management Program coastal consistency review is complete.

Prepare Public Notice (33 CFR 325.3) Within 15 days of receipt of complete application USACE will issue a public notice. Public comment period of 15-30 days (15 days for routine and non-controversial projects). Consult with other state and federal agencies: o CZM (DCOM) see 33 CFR 320.3(b). DCOM has 60 days to concur with the USACE on consistency determination. o US Coast Guard (Section 10) o Water Quality Division (DEC) o ESA (FWS) o National Historic Preservation Act (Section 106 process) or Preservation of Historical and Archeological Data Act NEPA analysis – prepare FONSI (Finding of No Significant Impact) and ROD (Record of Decision) DE will consider need for public hearing depending on RFAI’s. (33 CFR 327)

Or The agency/applicant can consult with the Advisory Council on Historic Preservation (ACHP) in lieu of the SHPO. If the SHPO re-enters the Section 106 process, the agency official shall continue the consultation without being required to reconsider previous findings or determinations.

RFAI The SHPO requests additional information from agency/applicant (RFAI).

No Historic Properties The SHPO makes a finding of “no historic properties affected.”

SECTION 106 PROCESS COMPLETE

Historic Properties The SHPO makes a finding of “historic properties affected.” *

Archaeological Survey If SHPO requests archaeological survey, applicant may need to apply for a investigation and collection permit (11 AAC 16.030).

ant Discharge Elimination System, has gradually been delegated to the State of Alaska over the past several years. Now permits for discharging wastewater to surface waters are processed according to the Alaska Pollutant Discharge Elimination System, administered by ADEC. Wade Strickland, manager of the program, says gray water, seafood processing water, domestic wastewater and stormwater operations must have permits. While all of this may seem hopelessly time consuming and complicated there are tips and tools to help entrepreneurs and developers navigate the system. The State websites have a wealth of information to help identify pertinent laws, nec-

Finding of No Adverse Effect

Finding of Adverse Effect

SECTION 106 PROCESS COMPLETE

Assess Adverse Effects (§800.5)

Resolve Adverse Effects (§800.5).

Memorandum of Agreement Outlining agreed-upon measures the agency/applicant will take to avoid, minimize, or mitigate the adverse effects (§800.6(c)).

essary permits, timelines and fees. Last year ADNR Commissioner Dan Sullivan challenged state employees to overhaul the department’s permitting process when he learned there was a substantial backlog of cases that had built up over time due to a gradual increase in applications compounded by staff turnover and the layering of rules and regulations year after year. “Focusing on five areas—I tasked the staff to improve and modernize internal permitting structures and processes such as our IT systems; scrub the regulations and statues to eliminate duplication and outdated rules; and improve interagency coordination,” Sullivan

www.akbizmag.com • Alaska Business Monthly • August 2012

SEC

Permit Application Submittal

Oil & Gas rmit proval

Application Submittal Applicant submits Unit Plan of Operations Application to ADNR Commisioner.

Alaska Department of Natural Resources (DNR) Division of Oil & Gas (DOG) Lease/Unit Operations Approval (11 AAC 83.158 & 11 AAC 83.346)

Public Notice ADNR opens 30 day public notice.

Amendment Needed Commissioner determines amendments needed to Plan of Operations needed to protect state’s best interest.

Best Interest Finding ADNR issues a best interest finding.

No Amendment Commissioner determines no extra amendments needed to Plan of Operations.

Alaska Department of Natural Resources (ADNR)

Coastal Zone Review See DNR, DCOM consistency review flow chart

delay may occur ting process.

Alaska Department of Natural Resources (DNR) Division of Oil and Gas (DOG) Miscellaneous Land Use Permit (MLUP) Geophysical Exploration (11 AAC 96.030)

Application Submittal Applicant submits complete application to the Alaska DNR, DOG.

Application Submittal Applicant submits complete application * For tidelands, applicant submits supplemental questionnaire for use of marine waters, to DNR, ML&W

Alaska Department of Natural Resources (DNR) Division of Mining, Land, and Water (DMLW) Land Use Permit (11 AAC 96.010)

Completeness Review DNR, DOG reviews the application for completeness.

Application Submittal Applicant submits Temporary Water Use Permit (TWUP) application.

Completeness Review DNR, ML&W will review the application for completeness. The applicant will be given 30 days to submit supplemental information, if needed.

Alaska Department of Natural Resources (ADNR) Division of Oil & Gas (DOG) Bond 11 AAC 83.160

Public Notice DNR, DOG will give notice to an upland owner of an application involving shoreland, tideland, or submerged land adjacent to the upland owner's property. DNR, DOG may also give public notice for the application.

Notice DNR, ML&W will give notice to an upland owner of an application involving shoreland, tideland, or submerged land adjacent to the upland owner's property. DNR, ML&W may also give public notice for the application. GCD Incorporation Applicant notification and GDC requirements incorporated into application.

GCD Coverage Yes, activity is covered by a GCD.

CPQ and Evaluation Submittal Applicant submits Coastal Project Questionnaire (CPQ) and coastal consistency evaluation to Division of Coastal and Ocean Management (DCOM).

ocess may be

Public Notice A public notice with a 17–day public comment period is required with a 30-day review and a 34day public comment period is required with a 50day review. Day 1 of the consistency review is the date when the public notice is provided.

Alaska Oil & Gas Conservation Commission (AOGCC) Permit to Drill/Class II Injection (20 AAC 25.005 – .008)

Application Submittal Form 10-401.

and Approvals

RFAI Commission requests addition/revised information

Permit issuance or denial.

Permit Issuance Permits are generally issued within 30 days of receipt of a completed application, or after the Alaska Coastal Management Program consistency review is complete.

RFAI Period Reviewers may request additional information. Information may be requested no later than day 13 in a 30-day review or day 25 in a 50day review.

Applicant Notification On or before Day 3, DCOM notifies applicant of review schedule and provides each review participant the needed information.

New Information is submitted and the agency which submitted the RFAI has 7 calendar days to evaluate the new information and respond.

COASTAL CONSISTENCY DETERMINATION COMPLETE Elevation Review Deadline for notification of elevation for a 30day review is on day 29 and day 49 for a 50day review. Elevation is an appeal process that allows further review. Each elevation review lasts a maximum of 15 days.

Proposed consistency determination is usually issued on day 25 of a 30day review or day 44 of a 50-day review.

No RFAI No Request for Additional Information (RFAI).

If new information is adequate the consistency review will start back up on the day that the review was stopped.

The final consistency determination is issued on day 30 or day 50.

Application Approval Routine production and injection wells 5 5 days to receive a complete application. Exploratory wells are issued within 15 days.

Commissioner Review Completed application is forwarded to the three Commissioners for review.

Processing and Completeness Review Commission reviews application for completeness.

Permitted operations may begin.

See DNR, DCOM consistency review flow chart.

Comment Request DNR, ML&W will request comments on the application from the Alaska Department of Fish and Game and the Alaska Department of Environmental Conservation.

Application Re-Submittal Substantive changes needed to application and re-submittal is needed.

d Approvals

RFAI Request for Additional Information (RFAI) may lead to the temporary suspension of the consistency review while new information is being gathered and presented to the commenting agency. If applicants submits requested information immediately, DCOM may not stop the clock.

Completeness Review DCOM has 21 days from the date of submittal to determine if an application is complete and begin the Alaska Coastal Management Program (ACMP) consistency review. (11 AAC 110.410(C))

Furnish Bond Applicant furnishes DO&G at least $10,000 before operations commence on a state oil and gas lease. An acceptable bond is typically a provision on the permit or lease. Use form

LUP Permit Process Complete

Review Process Duration Determination DCOM determines the length of the consistency review process, 30 days or 50 days, This is determined by required authorizations on the C-List.

Alaska Department of Natural Resources (DNR) Division of Coastal and Ocean Management (DCOM) Alaska Coastal Management Program Coastal Consistency Determination (11 AAC 110.010 – .990)

Applicant receives mineral lease or permit

Permit issuance or denial.

Activity Approved DNR, DOG notifies (or concurs with) the applicant that the activity is covered by a GCD and that standard alternatives measures associated with the GCD must be incorporated into the project before proceeding.

GDC Coverage Yes, activity is covered by a GCD.

No GCD Coverage No, activity is not covered by a GCD.

Coastal Zone Project Review If project is within the coastal zone, DNR, ML&W determines if activity falls within a General Consistent Determination (GCD).

Unit Plan of Operations Process Complete

No Project is not within the coastal zone.

Coastal Zone Project Review DNR DCOM is notified of complete application.

Alaska Department of Natural Resources (DNR) Division of Mining, Land, and Water (DMLW) Temporary Water Use Permit (11 AAC 93.210 – .220)

Decision Approval or denial of Unit Plan of Operations by Commissioner.

No GDC Coverage No, activity is not covered by a GCD.

Yes Project is within the coastal zone. Does a GCD apply?

Coastal Zone Project Review If project is within the coastal zone, DNR, DOG determines if activity falls within a General Consistent Determination (GCD).

Completeness Review DNR, ML&W reviews the application for completeness.

Amendments Provided Submit amendment fulfilling provisions outlined under 11 AAC 83. 346 (e) to ADNR Commisioner.

Decision Unit Plan of Operations approved or denied.

RFAI Submittal Operator submits additional/revised information to Commission.

Coastal eview

Alaska Department of Fish and Game (ADF&G) Title 16 Fish Habitat Permit (5 AAC 95.011)

Sufficient Application ADF&G determines permit application provides sufficient specifications.

Application Submittal 5 AAC 95.700

Alaska Department of Fish and Game (ADF&G) Special Area Permit 5 Critical Habitat Area (5 AAC 95.400 – .440)

Applicant submits completed application to ADF&G habitat division office representing the region or area in which the proposed activity will occur.

Activity not covered by a GCD on the ABC list. Yes

No Continue with individual permit application

Application Submittal Submit application to ADEC 30 days before operation for the solid waste general permit. (18 AAC 60.255)

Yes Activity Authorized.

Alaska Department of Environmental Conservation (ADEC)

Pre-Application Meeting (18 AAC 60.210) The applicant should schedule a preapplication meeting with ADEC.

Permit Decision 5 AAC 95.710

commencement of the operation.

Approval ADEC approves use of general permit.

Coastal Zone Consistency Review ADEC will notify DNR, Division of Coastal and Ocean Management (DCOM) of complete application.

No Proceed with individual application.

Application Submittal (18 AAC 15.020) Applicant submits completed application and supporting information to ADEC, Division of Water 60 days before commencement of the operation.

General Permit

Request for Additional Information (18 AAC 15.040)

Public Notice (18 AAC 15.050) Immediately after a complete application, ADEC will publish two consecutive notices. Public hearing may be required.

If within the 60 days, ADEC may request either further information or a site visit and establish a deadline for requested information or the site visit.

Reasonable Assurance.

ADEC Review ADEC reviews the project as described in the USACE project public notice; coordinates with other state and federal agencies and local governments; reviews any public comments; and either approves, approves with conditions, waives, or denies the project.

Individual Permit Criteria For individual USACE permit, ADEC applies criteria to determine if ADEC will issue a waiver of water quality certification.

Alaska Department of Environmental Conservation (ADEC) Division of Air (AIR) Minor Air Permit (18 AAC 50.540)

Application Submittal Applicant submits application to ADEC. 18 AAC 50.540

ADEC Public Notice Once the application is determined to be complete, ADEC gives notice and allows for any person 15-days to request a 30-day public comment period.

Completeness Review ADEC reviews application for completeness.

Coastal Zone Consistency Review

Alaska Department of Environmental Conservation (ADEC) Division of Spill Prevention and Response (SPAR) Oil Spill Contingency Plan (18 AAC 75.455)

ADEC Notification of Intent At least 60 days prior to submitting an application for approval, the applicant must notify the ADEC of its intent to submit an application.

Pre-Application Meeting (18 AAC 75.405)

Application Submittal

No, not sufficient. ADEC requests additional information. Sufficient Application Within 7 working days, ADEC determines if application and plan are sufficient

Yes, sufficient.

Preissuance Conference (18 AAC 15.070) At any time the applicant may request a preissuance conference from ADEC to discuss the progress of the application and narrow areas of disagreement.

No Public Request No Public Request for 30day comment period

Public Notice (18 AAC 15.050) Immediately after a complete application, ADEC will publish two consecutive notices. A public hearing may be required.

Preissuance Conference (18 AAC 15.070) At any time the applicant may request a preissuance conference from ADEC to discuss the progress of the application and narrow areas of disagreement.

Decision on Application (18 AAC 15.080)

USACE Notification ADEC notifies the USACE that ADEC is either issuing water quality certification or denying the application after the expiration date of the USACE Public Notice or after the issuance of the Final Consistency Determination by DCOM, whichever is later.

Section 401 Certification Complete

USACE Notification ADEC notifies the USACE that ADEC is waiving water quality certification after the expiration date of the USACE Public Notice or after the issuance of the Final Consistency Determination by DCOM, whichever is later.

Section 401 Certification Complete

Preliminary Decision No later than 30 days after application is determined to be complete ADEC makes preliminary decision to approve or deny the application.

Public Notice ADEC gives notice and opens a 30 day period for public comment.

ADEC Minor Air Permit Process Complete

Compliance Criteria Not Met Application does not meet compliance criteria for Fast Track ambient air quality screening analysis. Compliance Criteria Met Application meets compliance criteria for Fast Track ambient air quality screening analysis.

See DNR, DCOM consistency review flow chart.

Public Notice 30-day comment period. Notice is sent DNR, DF&G, affected coastal districts, regional citizens advisory councils, and others who have made a written request.

Request for Additional Information (18 AAC 15.040) If within the 60 days, ADEC may request either further information or a site visit and establish a deadline for requested information or the site visit.

Criteria Met If criteria is met and there are no agency or public comments about water quality concerns, ADEC will make a final decision to waive the project after the completion of the public comment period by the USACE and after the CZM determination has been completed.

Public Request Public Request for 30-day comment period.

ADEC RFAI ADEC requests more information.

See DNR, DCOM consistency review flow chart.

Criteria Not Met If criteria is not met, ADEC will either issue a water quality certification or deny the permit application.

Section 401 Certification Complete

Alaska Department of Environmental Conservation (ADEC) Application Submittal The public noticed by the USACE for an Division of Water (DOW) individual 404 permit serves as the CWA Section 401 Water Quality Certification ADEC application for a Certificate of (33 CFR 320.2(a))(33 U.S.C 401)

Issue A permit will be issued if requirements of the special area are met.

Application Process Complete

Issue A permit will be issued if requirements of the special area are met.

Follow procedures outlined in General Permit to obtain coverage.

Does a General Permit apply to the activity?

Application Submittal

Alaska Department of Environmental Conservation (ADEC) (18 AAC 15.020) Division of Water (DOW) Applicant submits completed application Mixing Zone Approval/Waste Water Disposal and supporting information to ADEC, Division of Water 60 days before (18 AAC 70.240)

ADF&G approves application.

Plan Submittal Thirty (30) days before operation, submit Drilling Waste Management Plan to ADEC.

No Storage Duration Will storage of drilling waste be greater than one year? Yes

Alaska Department of Environmental Conservation (ADEC) Division of Environmental Health (EH) Solid Waste Disposal (18 AAC 60.200)

Denial The applicant will be notified in writing of reason for the denial.

Permit Decision 5 AAC 95.710

Denial The applicant will be notified in writing of reason for the denial. No

Alaska Department of Environmental Conservation (ADEC) Division of Environmental Health (EH) Temporary Storage of Drilling Waste (18 AAC 60.430)

Activity subject to a Coastal Consistency Review. Refer to Coastal Consistency Determination flowchart.

Activity covered by a Generally Consistent Determination (GCD) on the ABC list.

Is project located in the coastal zone?

See DNR, DCOM consistency review flow chart.

Title 16 process complete.

Approval of permit application usually occurs within 30 days of submittal.

Yes Activity Allowed. Allowable Use Determine if activity is an allowable use.

Coastal Zone Project Review ADF&G notifies DNR DCOM of completed application.

Hearing Initiation The agency/applicant may, within 90 days of receiving the notice from ADF&G, initiate a hearing under AS 44.62.370.

Insufficient Application ADF&G finds plans and specifications insufficient for proper protection of fish and game.

Review ADF&G reviews application.

Application Submittal Applicant submits Title 16 Fish Habitat Permit application.

Complete Application If no additional information needed, ADEC will determine if application is complete within 2 days after the end of the 30-day comment period..

Request for Additional Information Between the 18th and 25th day of the comment period, ADEC will convey to the applicant any requests for additional information.

ADEC Minor Air Permit Process Complete

Permit issued within 30 days of receiving application.

Comment Period Extension The comment period is extended until information is received, plus 10 additional days.

Additional Information Sufficient ADEC will make a determination in 7 days whether the additional information provided is sufficient.

Decision Following comment deadline, including extension, and within 65 days after application and plan are complete, ADEC provide a decision.

Public Hearing ADEC may hold a public hearing, if needed.

Alaska Department of Environmental Conservation (ADEC) Division of Spill Prevention and Preparedness (SPAR) Certificate of Financial Responsibility 18 AAC 75.205

Application Submittal The applicant must submit the application at least 30 days, but no earlier than 90 days before operations are proposed to begin. Nontank vessels must submit 15 days prior to operations.

Decision ADEC provides applicant decision on application.

Camps > 24 People

Alaska Department of Environmental Conservation (ADEC) Division of Air; Division of Water; Division of Environmental Health Temporary Camps

Camps < 24 People on Average

Wastewater Permit Division of Water Application Submittal

Refer to Wastewater Disposal / Mixing Zone Disposal Flowchart. Sufficient Application

CTION 106 PROCESS COMPLETE

Solid Waste Permit Division of Environmental Health

Refer to Solid Waste Disposal Flowchart.

Air Permit Division of Air

Refer to Minor Air Permit Flowchart.

Food Services Permit Division of Environmental Health

Application and Plan Submittal (18 AAC 31.030 / 18 AAC 31.040) 30-days prior to construction, applicant submits application and plans.

Plan Review and Inspection

Decision ADEC approves or denies plan.

Permit issuance Typically issued 30 days from application submittal.

Permit Application Submittal

says. “I liken the effort to repairing an airplane while it is flying. It could have resulted in an even greater backlog.” Thanks to bipartisan support in the Legislature, ADNR was able to fill 36 new and vacant positions. In the first six months, the department reduced the backlog by 20 percent. In addition to these government efforts, Alaska has more than 50 consulting firms offering environmental or permitting services. Many of the firms are staffed by some of the very people who once worked for government agencies issuing permits. Long-time consultant Carl Overpeck is an environmental scientist with Ecology and Environment Inc. A chemist by train

ing, he has worked in logging, mining and construction as well as on environmental cleanup projects removing lead and underground storage tanks. Currently he is an EPA Superfund Technical Assistance Response Team consultant. Overpeck has a passion for solving the problems of development in Alaska’s challenging conditions. He sees every project as an opportunity to apply his on-the-ground experiences in a creative way that contributes to the success of the project. It can be very advantageous to have a permitting expert involved in project design from the very beginning, says Overpeck. Knowledge of permitting requirements and techniques that meet the standards can make

the difference in the success of a project. Tom Crafford says an important point to make is that government doesn’t tell an applicant how to do the work in order to get a permit. “The process is a continuing dialogue, a back and forth where we examine standards and suggest techniques that have successfully met those standards,” he says. “Every project is different. Depending upon the size of the development, the scope and the number of jurisdictions and applicable laws, the cost and time will vary. While it can be a lengthy, expensive process, it is necessary to protect the state’s resources and ensure that projects will be successful.” 

www.akbizmag.com • Alaska Business Monthly • August 2012

115 ■

Graphic: State of Alaska Department of Natural Resources

Alaska Department of Fish and Game (ADF&G)

Borough provals

ABM’s 2012 Environmental Services and Recycling Resources Directory Photo courtesy of Emerald Alaska Inc.

ENVIRONMENTAL SERVICES Company Company

Top Executive Top Executive

3M Alaska 11151 Calaska Cir. Anchorage, AK 99515 Phone: 907-522-5200 Fax: 907-522-1645

Paul Sander, Mgr.

Acuren 600 E. 57th Pl., Suite B Anchorage, AK 99518 Phone: 907-569-5000 Fax: 907-569-5005

Dennis Lee, Managing Dir.

AECOM 1835 S. Bragaw St. Anchorage, AK 99508-3439 Phone: 907-561-5700 Fax: 907-273-4555

Chris Humphrey, VP

Alaska Analytical Laboratory 1956 Richardson Hwy. North Pole, AK 99705 Phone: 907-488-1271 Fax: 907-488-0772

Stefan Mack, PE/Pres.

Alaska Soil Recycling 1040 O'Malley Rd. Anchorage, AK 99515 Phone: 907-348-6700 Fax: 907-344-2844

Brad Quade, Operations Mgr.

Alaska Waste 6301 Rosewood St. Anchorage, AK 99518 Phone: 907-563-3717 Fax: 907-273-2797

Craig Gales, Sales Mgr.

Analytica Environmental Laboratories 4307 Arctic Blvd. Anchorage, AK 99503 Phone: 907-229-9816 Fax: 907-258-6634

Elizabeth Rensch, Principal

Anchorage Soil & Water Conserv. Dist. PO Box 110309 Anchorage, AK 99511-0309 Phone: 907-677-7645 Fax: 907-677-7645

Bret Burroughs, Chair

ARCTOS LLC 130 Int'l Airport Rd., Suite R Anchorage, AK 99518 Phone: 907-632-1006 Fax: 866-532-3915

Kirsten Ballard, CEO

ASRC Energy Services Inc. 3900 C St., Suite 701 Anchorage, AK 99503 Phone: 907-339-6200 Fax: 907-339-6212

Jeff Kinneeveauk, Pres./CEO

B.C. Excavating LLC 2251 Cinnabar Lp. Anchorage, AK 99507 Phone: 907-344-4490 Fax: 907-344-4492

Gordon Bartel, Pres.

Bell Tech Inc. PO Box 3467 Valdez, AK 99686 Phone: 800-537-6949 Fax: 907-835-4535

Randy Bell, CEO

Blue Skies Solutions LLC 3312 Robin St. Anchorage, AK 99504 Phone: 907-230-4372

Michael Knapp, Principal

■ 116

AK Estab. Empls. Empls. Estab.

Business Activity Services

1976

We manufacture a wide range of products covering every market in Alaska. In the area of natural resources, we provide products and services to aid the oil and gas and mining industries in worker safety, electrical and communications, welding, corrosion protection and cementing density control.

2002

100

Materials engineering, nondestructive examination and integrity management for the oil and gas, power, mining, transportation and construction industries.

1977

Wide range of environmental and energy development services, including environmental compliance, planning and permitting, site assessment and integrated site closure.

2008

Environmental testing laboratory. Soil and water analysis for methods 8021B, AK101, AK102, AK103 and ADEC certified.

1988

Remediation of petroleum-impacted soils. Environmental remediation.

2004

175

Providing residential and commercial refuse and recycling services. Offering curbside co-mingled recycling to households in Anchorage and Eagle River, office and dumpster recycling to commercial users. The roll-off containers can be used on industrial projects for C&D recycling.

1991

Analytica is the largest state certified laboratory in Alaska, specializing in drinking water, wastewater and general water quality testing. Locations in Anchorage, Fairbanks, and Wasilla, Alaska.

1997

Anchorage Woodlot, property owner and development support and services, conservation and development planning, confidential assistance to property owners, land managers, and development industry.

2007

Oil spill prevention and response planning services. API certified tank and piping inspections, contingency plans, incident management team staffing and training, HSE, imaging and mapping. Compliance assistance with state, federal regulations and response planning for oil and gas industry in Alaska.

innovation.3malaska@mmm.com www.3m.com

www.acuren.com

mike.jones2@aecom.com www.aecom.com

klovejoy@alaska-analytical.com www.alaska-analytical.com

www.anchsand.com

recycling@akwaste.com www.alaskawaste.com

er@analyticagroup.com www.analyticagroup.com

aswcd@aswcd.org www.aswcd.org

www.arctosak.com 1985

info@asrcenergy.com www.asrcenergy.com

5,000 AES offers expertise from the earliest regulatory stage to exploration, drilling support, engineering, fabrication, construction, project management, operations and maintenance and field abandonment.

1982

Remediation services, soil farming, site cleanup for PCB, TCE, diesel/gasoline contamination, etc.

1990

Bell Tech Inc. specializes in ecological management as it relates to the recovery and restoration of spill response activities. With over 24 years of experience, Bell Tech has developed successful procedures addressing the recovery of contamination from any surface including vessels, shoreline and frozen tundra.

2003

Blue Skies specializes in geographic information systems (GIS) training and consulting. Our instructor is an Esri Certified Trainer and also a Certified Technical Trainer (CTT+) through CompTIA. We work with state, federal, local, non-profit, and private companies; helping them to create and manage their geospatial data.

admin@bcxllc.net www.bcxllc.net

belltechconsultants.com

info2@blueskiessolutions.net http://www.blueskiessolutions.net

www.akbizmag.com • Alaska Business Monthly • August 2012

ABM’s 2012 Environmental Services and Recycling Resources Directory ENVIRONMENTAL SERVICES

Company Company

Top Executive Top Executive

Brice Environmental Services Corp. PO Box 73520 Fairbanks, AK 99707 Phone: 907-456-1955 Fax: 907-452-1067

Craig Jones, Pres./Gen. Mgr.

Bristol Engineering Services Corporation 111 W. 16th Ave., Third Floor Anchorage, AK 99501 Phone: 907-563-0013 Fax: 907-563-6713

Travis Woods, Sr. Civil Engineer/CEO

Bristol Environmental Remediation Svcs. 111 W. 16th Ave., Third Floor Anchorage, AK 99501 Phone: 907-563-0013 Fax: 907-563-6713

Steve Johnson, CEO

Capitol Disposal Inc. 5600 Tonsgard Ct. Juneau, AK 99801 Phone: 907-780-7801 Fax: 907-780-4235

Eric Vance, Dist. Mgr.

CCI Industrial Services, LLC 560 E. 34th Ave., Suite 200 Anchorage, AK 99503-4161 Phone: 907-258-5755 Fax: 907-770-9452

A. Ben Schoffmann, Pres./CEO

Central Environmental Inc. 311 N. Sitka Anchorage, AK 99501 Phone: 907-561-0125 Fax: 907-561-0178

Stuart Jacques, Pres.

CH2M HILL 949 E. 36th Ave., Suite 500 Anchorage, AK 99508 Phone: 907-762-1500 Fax: 907-762-1595

Mark Lasswell, Alaska Pres. & GM

Chilkat Environmental LLC 223 Old Hart Box 865 Haines, AK 99827 Phone: 907-303-7899 Fax: 907-303-7899

Elijah Donat, Sr. Project Mgr.

Colville Inc. Pouch 340012 Prudhoe Bay, AK 99734 Phone: 907-659-3189 Fax: 907-659-3190

Eric Helzer, Pres./CEO

CRW Engineering Group, LLC 3940 Arctic Blvd., Suite 300 Anchorage, AK 99503 Phone: 907-562-3252 Fax: 907-561-2273

D. Michael Rabe, Managing Principal

Cultural Resource Consultants 3504 E. 67th Ave. Anchorage, AK 99507 Phone: 907-349-3445 Fax: 480-772-4185

Michael Yarborough, Sr. Archaeologist

DOWL HKM 4041 B St. Anchorage, AK 99503 Phone: 907-562-2000 Fax: 907-563-3953

Stewart Osgood, Pres.

Doyon Emerald 11500 C St., Suite 150 Anchorage, AK 99515 Phone: 907-258-8137 Fax: 907-258-8124

Troy Johnson, Pres./Gen. Mgr.

EHS-Alaska Inc. 11901 Business Blvd., Suite 208 Eagle River, AK 99577 Phone: 907-694-1383 Fax: 907-694-1382

Robert French, Principal

Emerald Alaska Inc. 425 Outer Springer Lp. Palmer, AK 99645 Phone: 907-258-1558 Fax: 907-746-3651

Blake Hillis, Pres.

Entrix 1600 A St. Anchorage, AK 99501 Phone: 907-563-0438 Fax: 907-563-0439

Sue Ban , Project Mgr.

AK Estab. Estab. Empls. Empls.

Services Business Activity

1991

Brice Environmental is an 8(a) Native owned small business specializing in remediation of heavy metal contaminated soils, and remote site demolition, environmental construction and remediation. Project history throughout Alaska and the lower 48 states and Hawaii.

1994

Bristol's services include: civil engineering, permitting, planning; total project management encompassing planning, design and construction. Bristol has access to an $8 million fleet (market value) of heavy equipment, including bulldozers, loaders, excavators, crushers and haulers.

2006

Providing environmental consulting, environmental remediation, and waste characterization/disposal services to private and public sector. Services include remediation and cleanup of contaminated sites, as well as preparation of remedial action plans and reports to support our cleanup projects. 8(a).

1978

Landfills, sanitary.

1989

150

Corrosion-under-insulation refurbishment; asbestos and lead surveys and abatement; specialty coatings; sandblasting; tank and vessel cleaning; fire proofing; demolition and hazardous waste removal; operations, maintenance and construction; oil spill response; heat treat services.

1984

Provides civil/environmental construction services including: contaminated soils handling, excavation and site restoration, asbestos abatement, lead abatement, hazardous materials abatement, handling and demolition.

craigj@briceenvironmental.com www.briceenvironmental.com

reception@bristol-companies.com www.bristol-companies.com

lbartlet@wm.com

info@cciindustrial.com www.cciindustrial.com

www.cei-alaska.com 1964

bclemenz@ch2m.com www.ch2m.com/alaska

3,100 CH2M HILL offers consulting, engineering, procurement, logistics, fabrication, construction, construction management, operations and maintenance services all under one roof, supporting entire project life cycles. We support oil & gas, mining, environmental, water, power, transportation, government and other energy projects.

2007

1981

125

Arctic full-service fuel logistic contractor, solid waste services and industrial supply, NAPA, True Value, VIPAR, offshore logistics.

1981

Civil engineering, surveying, electrical engineering, planning, environmental permitting, and construction management.

1975

Cultural Resource Consultants LLC specializes in identifying, evaluating and mitigating historic, archaeological, and traditional cultural property sites on private and public lands in Alaska, advises clients on cultural resource issues and assists them in complying with their obligations under federal and state laws.

1962

350

NEPA documentation, agency scoping and permitting and public involvement. Environmental studies and analysis including: wetland delineations, vegetation mapping, eagle nest monitoring, and environmental assessments.

1996

Provides health, safety, security and environmental consulting including development and integration of environmental management systems, project management, environmental site assessments, regulatory and permitting, NEPA support, SPCC, SWPPP, environmental planning, and community relations.

1986

Hazardous materials removal design, workplace health and safety, employee training and construction monitoring. Staff includes professional engineers, industrial hygienists and environmental specialists committed to the safe control, removal and disposal.

2002

100

Hazardous/non-hazardous waste disposal, petroleum product recycling, industrial cleaning services, vacuum truck services, emergency spill response, automotive fluids recycling and sales, environmentally friendly cleaners/degreasers, site clean-up and remediation. Anchorage, Kenai, Deadhorse and Fairbanks.

1984

Full-service, nationwide environmental consulting firm providing specialized technical services by more than 450 environmental professionals in environmental impact assessments (NEPA); environmental planning, permitting and compliance.

chilkat@chilkatenvironmental.com www.chilkatenvironmental.com

info@colvilleinc.com www.colvilleinc.com

info@crweng.com www.crweng.com

mail@crcalaska.com www.crcalaska.com

jpayne@dowlhkm.com www.dowlhkm.com

info@doyonemerald.com www.doyonemerald.com

ehsak@ehs-alaska.com www.ehs-alaska.com

pauln@emeraldnw.com www.emeraldnw.com

mheiken@bristol-companies.com entrix.com

Contaminated sites, NEPA, wetlands and permitting, fisheries studies, project management, Tribal environmental services and grant writing.

www.akbizmag.com • Alaska Business Monthly • August 2012

117 ■

ABM’s 2012 Environmental Services and Recycling Resources Directory ENVIRONMENTAL SERVICES Company Company

Top Executive Top Executive

Environmental Compliance Consultants 1500 Post Rd. Anchorage, AK 99501 Phone: 907-644-0428 Fax: 907-677-9328

Mark Goodwin, CEO

ERM-OASIS 825 W. 8th Ave. Anchorage, AK 99501 Phone: 907-258-4880 Fax: 907-258-4033

Jeffrey Leety, Managing Partner

G&S Management Services LLC 1200 E. 76th Ave., Suite 1206 Anchorage, AK 99518 Phone: 907-344-3658 Fax: 907-344-3657

Gilberto Guarderas, GM

Golder Associates Inc. 2121 Abbott Rd. Anchorage, AK 99507 Phone: 907-344-6001 Fax: 907-344-6011

Mark Musial, Principal, Mgr.

Green Star, Inc. 333 W. Fourth Ave., Suite 310 Anchorage, AK 99501 Phone: 907-278-7827 Fax: 907-279-5868

Kim Kovol, Exec. Dir.

HDR Alaska Inc. 2525 C St., Suite 305 Anchorage, AK 99503 Phone: 907-644-2000 Fax: 907-644-2022

Mark Dalton, Sr. VP

Interior Alaska Green Star PO Box 82391 Fairbanks, AK 99708 Phone: 907-452-4152

Andrea Miller, Exec. Dir.

Jacobs 4300 B St., Suite 600 Anchorage, AK 99503 Phone: 907-563-3322 Fax: 907-563-3320

Terry Heikkila, Dir., Pac. Rim Fed. Ops

Kakivik Asset Management LLC 560 E. 34th Ave., Suite 200 Anchorage, AK 99503-4161 Phone: 907-770-9400 Fax: 907-770-9450

A. Ben Schoffmann, Pres./CEO

Kinnetic Laboratories Inc. 1102 W. Seventh Ave. Anchorage, AK 99501 Phone: 907-276-6178 Fax: 907-278-6881

Mark Savoie, VP

Kumin Associates Inc. 808 E St., Suite 200 Anchorage, AK 99501 Phone: 907-272-8833 Fax: 907-272-7733

Charles Banister, Principal

Marsh Creek LLC 2000 E. 88th Ave. Anchorage, AK 99507 Phone: 907-258-0050 Fax: 907-279-5710

Mick McKay, CEO

Michael Baker Jr. Inc. 1400 W. Benson Blvd., Suite 200 Anchorage, AK 99503 Phone: 907-273-1600 Fax: 907-273-1699

Jeffrey Baker, AK Office Principal

Michael L. Foster & Associates Inc. 13135 Old Glenn Hwy., Suite 200 Eagle River, AK 99577 Phone: 907-696-6200 Fax: 907-696-6202

Michael Foster, PE/Owner

New Horizons Telecom Inc. 901 Cope Industrial Way Palmer, AK 99645 Phone: 907-761-6000 Fax: 907-761-6001

John Lee, Owner/CEO

NORTECH Inc. 2400 College Rd. Fairbanks, AK 99709-3754 Phone: 907-452-5688 Fax: 907-452-5694

John Hargesheimer, Pres.

■ 118

AK Estab. Estab. Empls. Empls.

Services Business Activity

1999

A full-service environmental company dedicated to providing clients with quality environmental services. Experienced in the disciplines of hazardous waste materials management, transportation, environmental consulting, assessment, remediation recycling, demolition and more.

1995

100

Full environmental consulting services, including: ecological sciences (assessment, permitting, restoration), site remediation (investigation, engineering, closure), air quality, EHS management (systems, compliance, auditing, sustainability), and water resources (engineering, hydrology, wetlands, stream restoration).

2003

Experts in underground storage tanks, above-ground storage tanks and oil-water separators.

1980

Arctic and geotechnical engineering, groundwater resource development, environmental sciences and remedial investigation.

1996

Green Star, Inc., is a green business certification program that assists, certifies, and recognizes Alaska businesses that are committed to fully integrating resource efficiency and environmental leadership initiatives into their business plans and practices.

1979

125

1998

Interior Alaska Green Star sponsors monthly electronics recycling collections on the third weekend of every month, along with ongoing education and outreach for recycling options in Fairbanks. They publish the Fairbanks Recycling Guide; contact the organization to request printed copies or download it from their website.

1947

Professional services provider in the federal and oil and gas markets. Services include environmental permitting, compliance, investigation, remediation and emergency response; munitions response; energy conservation including HVAC retrocommissioning; engineering design; and construction management.

1999

200

Nondestructive testing, internal and external corrosion investigations, quality program management, integrity program management, field chemical/corrosion inhibition management, heat treat, corrosion-under-insulation investigation, infrared thermography, rope access technology, and in-line inspection data interpretation.

1972

Offers environmental consulting and oceanography; marine monitoring for biological, chemical, physical and toxicological parameters; oceanographic and current modeling, including NPDES Ocean Discharge Criteria Evaluation; database design, administration, management; and NPDES permit support.

1977

Kumin Associates provides planning and architectural and interior design for urban, rural and remote facilities throughout Alaska and in Washington, Greenland, Antarctica, and the Russian Far East.

2004

100

Energy systems, environmental, construction, telecommunications.

1942

Regulatory and permit support, hydrological assessments and surveys, geotechnical investigations, and NEPA document services.

1998

Environmental planning documents (EA/EIS), and full-service A/E firm with design/build, construction management, and general contracting capabilities.

1978

Services include program management of remediation designs, surveys, sampling, contamination delineation and environmental remediation.

1979

Environmental engineering, health and safety: A multidisciplined professional consulting firm with registered engineers and certified industrial hygienists on staff providing environmental, engineering, energy auditing industrial hygiene and health and safety professional services throughout Alaska.

rod@eccalaska.com www.eccalaska.com

www.oasisenviro.com

gilberto@cys.,com www.gs-ak.com

www.golder.com

info@greenstarinc.org www.greenstarinc.org

info@hdrinc.com www.hdrinc.com

info@iagreenstar.org www.iagreenstar.org

www.jacobs.com

info@kakivik.com www.kakivik.com

www.kinneticlabs.com

kai@kuminalaska.com www.kuminalaska.com

Extensive environmental experience includes solid waste, biological assessments, permitting, wetland delineations, water quality, aquatic resources analysis, fisheries analysis, public involvement, planning, right-of-way, environmental document preparation, and cultural resource evaluations. HDR founded in Alaska in 1990.

gina.heath@marshcreekllc.com www.marshcreekllc.com

www.mbakercorp.com

hlm@mlfaalaska.com www.mlfalaaska.com

info@nhtiusa.com www.nhtiusa.com

hargy@nortechengr.com www.nortechengr.com

www.akbizmag.com • Alaska Business Monthly • August 2012

ABM’s 2012 Environmental Services and Recycling Resources Directory ENVIRONMENTAL SERVICES

Company Company

Top Executive Top Executive

North Wind Inc. 235 E. Eighth Ave., Suite 210 Anchorage, AK 99501 Phone: 907-277-5488 Fax: 907-277-5422

Sylvia Medina, Pres.

Northern Ecological Services 3373 Hillside Rd. Deming, WA 98244 Phone: 360-592-4267 Fax: 360-592-4267

John Morsell, Principal/Sr. Biologist

Northern Land Use Research Inc. PO Box 83990 Fairbanks, AK 99708 Phone: 907-474-9684 Fax: 907-474-8370

Peter Bowers, Pres.

O.E.S. 3201 C St., Suite 700 Anchorage, AK 99503 Phone: 907-562-8738 Fax: 907-562-8751

Pat McCormick, GM

AK Estab. Estab. Empls. Empls.

Services Business Activity

1997

330

1987

Fish and aquatic habitat surveys for Pogo and Donlin Creek mine projects. Fish research and mitigation planning for Bradley Lake, Mahoney Lake and Cooper Lake hydroelectric projects.

1991

Services include assessing historic and archaeological sites, and guiding development projects through the permitting process.

1997

122

A wide range of environmental management and remediation; oilfield support; environmental training, tank and pipeline cleaning, inspection and related services. Experienced working in remote and Arctic regions, O.E.S. is a subsidiary of Olgoonik Corp., the Alaska Native Corp. of Wainwright.

Pacific NW Resources Consultants Alaska Pat McClenahan, Principal PO Box 771203 Eagle River, AK 99577 plmcclenahan@gmail.com Phone: 907-696-4549 Fax: 907-696-7505 www.pnrcalaska.com

1986

Services include environmental impact research, analysis and regulatory compliance, land use planning, cultural resources compliance and research, Sec. 106 NHPA documentation, NEPA documentation, geomorphology, soils studies and regional environmental change.

PDC Inc. Engineers 1028 Aurora Dr. Fairbanks, AK 99709 Phone: 907-452-1414 Fax: 907-456-2707

Royce Conlon, Envr. Principal/Pres.

1975

Supports highway, aviation, utility, and facility projects by providing environmental expertise for routes and site selection; assessing potential impacts to specific environmental categories such as wetlands and hazardous materials and developing designs to address identified environmental issues.

PENCO - Pacific Environmental Corp. 6000 A St. Anchorage, AK 99518 Phone: 907-562-5420 Fax: 907-562-5426

Matthew Melton, Alaska Area Mgr.

1985

Hazmat/oil-spill response and cleanup, and environmental restoration throughout the Pacific Basin.

PSC Environmental Services 8100 Petersburg St. Anchorage, AK 99507 Phone: 907-272-9007 Fax: 907-272-6805

Larry Reiter, Location Mgr.

1972

Environmental services cleanup, disposal and recycling.

R&M Consultants Inc. 9101 Vanguard Dr. Anchorage, AK 99507-4447 Phone: 907-522-1707 Fax: 907-522-3403

Bret Coburn, CEO

1969

125

NEPA documentation and compliance, initial site assessments, phase I and II ESAs, environmental assessments, soil and groundwater monitoring, remediation programs, UST removal/decommissioning, site selection, revegetation and restoration, erosion control and more.

SGS North America Inc. 200 W. Potter Dr. Anchorage, AK 99518-1605 Phone: 907-562-2343 Fax: 907-562-0119

Charles Homestead, Gen. Mgr.

1964

Environmental Services: Providing full-service environmental testing since 1964. The Alaska division has branches in Anchorage and Fairbanks. Extensive experience in DoD, oil industry, PWSID, mining.

Shannon & Wilson Inc. 2355 Hill Rd. Fairbanks, AK 99709-5326 Phone: 907-458-3103 Fax: 907-479-5691

Stafford Glashan, VP/Anch. Offc. Mgr.

1974

315

Shannon & Wilson is a nationally renowned engineering and applied earth sciences firm with offices in Anchorage, Fairbanks, and the Lower 48. Our services include geotechnical analysis and design; frozen ground engineering; environmental compliance, assessments, and remediation; earthquake analysis; and materials testing.

Shaw Alaska, Inc. 2000 W. Int'l Airport Rd., Suite D-3 Anchorage, AK 99502 Phone: 907-243-6300 Fax: 907-243-6301

Kim Marcus, Dist. Mgr./Principal

2002

A vertically-integrated provider of technology, engineering, consulting, procurement, pipe fabrication, construction and maintenance services for government and private-sector clients in the energy, chemicals, environmental and infrastructure markets.

SLR International Corporation 2700 Gambell St., Suite 200 Anchorage, AK 99503 Phone: 907-222-1112 Fax: 907-222-1113

Brian Hoefler, SLR Alaska Mgr.

2000

160

Air permitting, air measurements, project permitting, environmental compliance, site investigation, remediation, risk assessment, oil spill contingency planning.

Soil Processing Inc. PO Box 211382 Anchorage, AK 99521-1382 Phone: 907-274-3000

Jennie Sharpe, CEO

1990

Specializes in the treatment of crude oil, bunker C and diesel-contaminated soil, using an ADEC-approved and -permitted thermal desorbtion unit.

Solar Environmental Services Inc. 7401 Meadow St. Anchorage, AK 99507 Phone: 907-349-7705 Fax: 907-349-7944

Grace Torrijos, Pres.

1991

Testing, engineering, indoor air-quality monitoring; and consulting for asbestos, lead (pb), hazardous materials, mold and bacteria.

Spill Shield Inc. 5610 Silverado Way, Suite A10 Anchorage, AK 99518 Phone: 907-561-6033 Fax: 907-561-4504

Ken Bauer, Sales Mgr.

1992

Supplier for Smart Ash, Oil Away, Drug Terminator and MediBurn incinerators. Absorbents, water scrubbers, oil spill response kits and related oil spill cleanup products. We also supply the Titan fluid recycler that will clean diesel fuel or low viscosity hydraulic oil at 3 or 6 gallons per minute.

kkearney@northwindgrp.com www.northwindgrp.com

jmorsell@northernecological.com

nlur@northernlanduse.com www.northernlanduse.com

oesinfo@olgoonik.com www.oesinc.org

www.pdceng.com

alaska@penco.org www.penco.org

Environmental investigation, restoration and remediation; engineering; permitting; natural and cultural resources; NEPA services; GIS services; construction; demolition; waste management; regulatory support; public involvement; health and safety support; and mine reclamation.

www.pscnow.com

email@rmconsult.com www.rmconsult.com

charles.homestead@sgs.com www.us.sgs.com

eam@shanwil.com shannonwilson.com

jack.james@shawgrp.com www.shawgrp.com

bhoefler@slrconsulting.com www.slrconsulting.com

spialaska@aol.com

sesenvir@alaska.net www.solar-environmental.com

spillshield@ak.net www.spillshield.com

www.akbizmag.com • Alaska Business Monthly • August 2012

119 ■

ABM’s 2012 Environmental Services and Recycling Resources Directory ENVIRONMENTAL SERVICES Company Company

Top Executive Top Executive

St. George Tanaq Corporation 4141 B St., Suite 301 Anchorage, AK 99503 Phone: 907-272-9886 Fax: 907-272-9855

Leo Merculief, Chairman/Pres.

Taiga Ventures 2700 S. Cushman St. Fairbanks, AK 99701 Phone: 907-452-6631 Fax: 907-451-8632

Mike Tolbert, Pres.

TELLUS, Ltd. 2551 Susitna Dr. Anchorage, AK 99517-1148 Phone: 907-248-8055 Fax: 907-248-8055

Scott Erdmann, Pres./Prof. Geologist

Three Parameters Plus, Inc. 2000 W. International Airport Rd., Suite B6 Anchorage, AK 99502 Phone: 907-248-1500 Fax: 907-248-1501

Cheryl Moody, Pres./CEO

AK Estab. Estab. Empls. Empls.

Services Business Activity

1972

Specializes in land assessments and environmental investigations, commodity distributorship, logistics and field operations support.

1979

Provides all supplies necessary for remote work. Provides logistical support (portable camp, food and vehicles) for environmental cleanups statewide. Full-scale expediting service to include well and water monitoring pipe and supplies.

1997

Project management, environmental assessment and compliance, corrective action programs.

1992

Natural resource consulting firm specializing in: wetland determinations, delineations & functional assessments; wetland compensatory mitigation; regulatory assistance; mineral exploration & mine permitting; terrestrial habitat evaluations & impact assessments; aquatic & hydrologic investigations; water quality monitoring.

Travis/Peterson Environmental Consulting Laurence Peterson, Ops. Mgr./Owner 329 Second St. Fairbanks, AK 99701 larry@tpeci.com Phone: 907-455-7225 Fax: 907-455-7228 www.tpeci.com

1998

TPECI: Services include environmental site assessments (Phases I and II), LUST remediation, site characterization, hazardous material management, compliance audits, engineering analysis and design, field sampling, surface water/groundwater evaluations, NEPA, and wetlands delineations and permitting.

TTT Environmental Instruments & Supplies Deborah Tompkins, Owner 4201 B St. Anchorage, AK 99503 info@tttenviro.com Phone: 907-770-9041 Fax: 907-770-9046 www.tttenviro.com

2003

Portable gas detection, health and safety monitoring, environmental equipment. Rentals, sales, service and supplies. Warranty center. Woman-owned small business.

Tutka LLC (Wasilla) 5825 E. Mayflower Ct., Suite B Wasilla, AK 99654 Phone: 907-357-2238 Fax: 907-357-2215

Amie Sommer, Member

1999

Certified DBE/WBE (ADOT&PF, MOA),EDWOSB/WOSB, HUBZone, CCR/ORCA registered. General contractor, heavy civil construction, environmental cleanup and consulting, wastewater pre-treatment systems operations and maintenance services.

Unitech of Alaska 7600 King St. Anchorage, AK 99518 Phone: 907-349-5142 Fax: 907-349-2733

Don Rogahn, Pres.

1985

Full-service oil spill remediation/environmental/industrial/safety supplies. Sorbents/ drums-steel-poly and fiber/portable tanker/boom/berms and incinerators.

URS 700 G St., Suite 500 Anchorage, AK 99501 Phone: 907-562-3366 Fax: 907-562-1297

Joe Hegna, Alaska Ops Mgr./VP

1904

100

Civil/structural/transportation engineering design services, analysis/response, containment sites, cultural/historical/archaeological/land use/noise & threatened/ endangered species studies, fisheries/geology/soils expertise, GIS/AutoCAD, Section4f evaluations, wetland delineation, wildlife/vegetation/socioeconomic analyses.

USKH Inc. 2515 A St. Anchorage, AK 99503 Phone: 907-276-4245 Fax: 907-258-4653

Timothy Vig, Pres./Principal

1972

125

USKH is a full-service architectural and engineering firm, providing vertical and horizontal design for projects across Alaska. USKH's environmental services staff includes experienced environmental planners and analysts with varied backgrounds in fisheries, wetlands, NEPA documentation, public involvement and permitting.

Waste Management 310 K St., Suite 200 Anchorage, AK 99501 Phone: 907-264-6784 Fax: 907-264-6602

Mike Holzschuh, Territory Mgr./N.Am.

1969

Hazardous and nonhazardous waste disposal, project management, complete logistical oversight, complete U.S. and Canadian manifesting, rail transportation, over-the-road transportation, marine transportation and turnkey remedial services.

Weston Solutions Inc. 425 G St., Suite 300 Anchorage, AK 99501 Phone: 907-276-6610 Fax: 907-276-6694

Patrick Flynn, Alaska Business Mgr.

2001

Upstream oil and gas support including permitting, construction management, incident response and remediation.

White Environmental Consultants Inc. 383 Industrial Way, Suite 300 Anchorage, AK 99501 Phone: 907-258-8661 Fax: 907-258-8662

Matt White, Pres.

1996

Asbestos, lead, IAQ and hazardous materials consulting. Laboratory analysis of asbestos and lead samples.

Xzeres Corporation 9025 SW Hillman Ct., Suite 3126 WIlsonville, OR 97070 Phone: 503-388-7357 Fax: 503-210-0738

Frank Greco, CEO

2010

Small wind energy.

info@stgeorgetanaq.com www.stgeorgetanaq.com

taiga@taigaventures.com www.taigaventures.com

tellus@acsalaska.net

info@3ppi.com www.3ppi.com

amie@tutkallc.com www.tutkallc.com

info@unitechofalaska.com www.unitechofalaska.com

www.urscorp.com

marketing@uskh.com www.uskh.com

mholzschuh@wm.com www.wm.com

Robert.Hunter@westonsolutions.com westonsolutions.com

bekah@wecenv.com wecenv.com

www.xzeres.com

RECYCLING RESOURCES Company Company

Top Executive Top Executive

Alaska Car Crushing and Recycling PO Box 875188 Wasilla, AK 99687 Phone: 907-892-5865 Fax: 907-357-2123

Gary Jacobsen, Owner

■ 120

chevelle@mtaonline.net www.alaskacarcrushing.com

AK Estab. Estab. Empls. Empls. 1998

Services Business Activity Recycling of all kinds of scrap metal including appliances, junk vehicles, batteries, copper, aluminum and catalytic converters. We are a full service company, we have a fleet of tow trucks picking up cars and trucks, we have crushers and balers, and we can do remote jobs. We are licensed and insured.

www.akbizmag.com • Alaska Business Monthly • August 2012

ABM’s 2012 Environmental Services and Recycling Resources Directory RECYCLING RESOURCES Company Company

Top Executive Top Executive

Alaska Soil Recycling 1040 O'Malley Rd. Anchorage, AK 99515 Phone: 907-348-6700 Fax: 907-344-2844

Brad Quade, Operations Mgr.

Alaska Waste 6301 Rosewood St. Anchorage, AK 99518 Phone: 907-563-3717 Fax: 907-273-2797

Craig Gales, Sales Mgr.

Anchorage Soil & Water Conserv. Dist. PO Box 110309 Anchorage, AK 99511-0309 Phone: 907-677-7645 Fax: 907-677-7645

Bret Burroughs, Chair

Capitol Disposal Inc. 5600 Tonsgard Ct. Juneau, AK 99801 Phone: 907-780-7801 Fax: 907-780-4235

Eric Vance, Dist. Mgr.

Central Recycling Services Inc. 2400 Railroad Ave. Anchorage, AK 99501 Phone: 907-748-7400 Fax: 907-561-0178

Stuart Jacques, Pres.

Emerald Alaska Inc. 425 Outer Springer Lp. Palmer, AK 99645 Phone: 907-258-1558 Fax: 907-746-3651

Blake Hillis, Pres.

Environmental Compliance Consultants 1500 Post Rd. Anchorage, AK 99501 Phone: 907-644-0428 Fax: 907-677-9328

Mark Goodwin, CEO

Green Star, Inc. 333 W. Fourth Ave., Suite 310 Anchorage, AK 99501 Phone: 907-278-7827 Fax: 907-279-5868

Kim Kovol, Exec. Dir.

Interior Alaska Green Star PO Box 82391 Fairbanks, AK 99708 Phone: 907-452-4152

Andrea Miller, Exec. Dir.

Nick's Auto Salvage & Metal Recycling 346 Sargent Creek Rd. Kodiak, AK 99615 Phone: 907-487-2755

Services Business Activity

1988

Remediation of petroleum-impacted soils. Environmental remediation.

2004

175

1997

Anchorage Woodlot, property owner and development support and services, conservation and development planning, confidential assistance to property owners, land managers, and development industry.

1978

Landfills, sanitary.

2009

Inert debris recycling facility. Accepts separated and mixed loads of recyclable debris including wood, plastic, metals, concrete, asphalt, cardboard, tires, sheetrock etc. Waste Management Plans and LEEDS consulting. Sales of salvaged and recycled building materials.

2002

100

1999

1996

1998

Nick Troxell, Owner

2002

Metal, automobile, and paper recycling.

PSC Environmental Services 8100 Petersburg St. Anchorage, AK 99507 Phone: 907-272-9007 Fax: 907-272-6805

Larry Reiter, Location Mgr.

1972

Environmental services cleanup, disposal and recycling.

Richmond Steel Recycling 11760 Mitchell Rd. Richmond, BC V6V1V8 Phone: 907-280-8180 Fax: 604-324-8617

Harbinder Dhillon, Gen. Mgr.

1970

Auto hulk shredding, mobile car crusher, industrial steel accounts including full-container service, mobile shears, dock facilities and confidential shredding/destruction.

RockTenn Recycling 6161 Rosewood St. Anchorage, AK 99518 Phone: 907-562-2267 Fax: 907- 565-4459

Randy Virgin, Gen. Mgr.

1999

Services for general public and commercial sector; including cardboard, newspaper, mixed paper, office paper, aluminum cans, #1 and #2 plastic bottles. Buy non-ferrous metals.

Shred Alaska Inc. 801 E. 82nd Ave., Suite B-1 Anchorage, AK 99518 Phone: 907-929-1154 Fax: 907-929-8042

Robyn Forbes, Pres/GM

2000

On-site and drop-off document shredding services to all customers throughout Southcentral Alaska.

Spill Shield Inc. 5610 Silverado Way, Suite A10 Anchorage, AK 99518 Phone: 907-561-6033 Fax: 907-561-4504

Ken Bauer, Sales Mgr.

1992

1998

Recycling Center: Receiving recyclables from MSB businesses, agencies and residents and communities connected along the highway system. Processing Plant: Turning recovered material into commodities for market. Education: Providing field trips, curriculum kits, and presentations on why and how of recycling.

www.anchsand.com

recycling@akwaste.com www.alaskawaste.com

aswcd@aswcd.org www.aswcd.org

lbartlet@wm.com

crs@crs-alaska.com www.centralrecyclingservices.com

pauln@emeraldnw.com www.emeraldnw.com

rod@eccalaska.com www.eccalaska.com

info@greenstarinc.org www.greenstarinc.org

info@iagreenstar.org www.iagreenstar.org

www.pscnow.com

shirah.roth@simsmm.com www.simsmm.com

info@shredalaska.com www.shredalaska.com

spillshield@ak.net www.spillshield.com

Valley Community For Recycling Solutions Mollie Boyer, Exec. Dir. PO Box 876464 Wasilla, AK 99687 community@valleyrecycling.org Phone: 907-745-5544 Fax: 907-745-5569 www.valleyrecycling.org

AK Estab. Estab. Empls. Empls.

www.akbizmag.com • Alaska Business Monthly • August 2012

121 ■

ALASKA THIS MONTH Compiled By Nancy Pounds

dining

Photo courtesy of Webb’s Consulting and Management Services Inc.

Anchorage Market Dishes Up Fair-Food Delights

Longtime food vendors, including Salmon Express and its salmon quesadillas, join newcomers for this year’s Anchorage Market and Festival on weekends.

! k o o b e c a F Like us on

www.facebook.com/AKBusinessMonth or see

akbizmag.com ■ 122

ining at the Anchorage Market and Festival can satisfy the palettes of adventurous eaters. And visitors to the downtown weekend event seeking regular favorites can fi nd popular booths featuring salmon quesadillas and kettle corn again this year. Some vendors have logged 20 years at the market, which also turns 20 this summer. The Anchorage Market is located at Third Avenue between C and E streets. The market runs every Saturday and Sunday from 10 a.m. to 6 p.m. through Sept. 10. This year’s market includes about 300 vendors selling fresh produce, Alaska souvenirs, crafts and various epicurean delights. Market Manager Bill Webb touts the market as “the largest restaurant in the city,” and says the outdoor venue buoys visitors’ appetites. Also, everyone in a group can find something to order, from stuffed bananas to halibut fries. “Nowhere else has got that kind of variety,” Webb says. Webb easily recounts favorites from new additions to this year’s lineup, including piroshkis from A Taste of Russia. Other new food vendors include Alaska Fry Bread Co., Alaska Eggrolls and More, On the Grill with its hog wings in hot or blueberry sauce, Los Tacos, which features steak tacos, and Alex’s Korean food with chicken teriyaki. Urban Sushi offers a California roll and an Alaska roll. Noodles on the Loose is also new to the market, featuring fettuccine and macaroni and cheese. “We had them at Bear Paw (Festival) last year, and they were a real hit,” Webb says. 

www.akbizmag.com • Alaska Business Monthly • August 2012

ALASKA THIS MONTH Compiled By Nancy Pounds

trAVel

Photo courtesy of CIRI Alaska Tourism Corp.

Lodge Features Mountain Views, Access to Activities

The Talkeetna Alaskan Lodge offers fine dining and views of Mount McKinley.

late-summer weekend getaway in Alaska doesn’t always have to include an RV or a tent. Travelers to the Talkeetna Alaskan Lodge can discover fine dining, possible views of Mount McKinley and day trips, including a new zipline tour. The 212-room lodge, which operates from mid-May to mid-September, is located 113 miles north of Anchorage on the Parks Highway and 12 miles down the Talkeetna Spur Road. August and September can be special times to visit the lodge, according to Dee Buchanon, marketing director for lodge owner CIRI Alaska Tourism Corp., a subsidiary of Cook Inlet Region Inc. “September is our best kept secret—fabulous rates for lodging, and the Northern Lights are on display in September as the weather gets cooler,” she says. “The fall foliage is out in its radiant colors.” The lodge and its Foraker Dining Room have received the Wine Spectator Award of Excellence annually since 2003. This year, lodge managers have organized an event featuring international wines each Saturday. Live musicians perform on Sundays. Nearby activities include flight-seeing, jet-boat tours, guided fishing trips, float trips, hiking tours, sled dog kennel tours and the new zipline tour. Denali Zipline Tours features a three-hour tour from treetop platforms above the forest, offering views of Mount McKinley and the Alaska Range. (talkeetnalodge.com) 

www.akbizmag.com • Alaska Business Monthly • August 2012

123 ■

ALASKA THIS MONTH Compiled By Nancy Pounds

entertAinMent

Photo by Clark James Mishler/Courtesy of Alaska State Fair

State Fair Boasts Bevy of Entertainers

An audience at the Alaska State Fair revels in a live performance at the Palmer Fairgrounds.

Prepare to Compete in Today’s New Job Market! MASTER OF SCIENCE IN GLOBAL SUPPLY CHAIN MANAGEMENT A new cohort group of the Master of Science in Global Supply Chain Management, limited to 25 qualified participants, will begin January 2013 and graduate in August 2014. Designed to meet the needs of working professionals, classes will meet four weekends per semester, with additional online and group activities. Complete application files requested by September 7, 2012. UAA’s Logistics Department also offers undergraduate and certificate programs.

For information and admission requirements, contact: CBPP Graduate Programs, Rasmuson Hall, Suite 304, (907) 786-4171, supplychain@uaa.alaska.edu. Visit us at http://logistics.alaska.edu. The UAA College of Business & Public Policy is accredited by AACSB. UAA is an EEO/AA employer and educational institution.

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sojourn to the Alaska State Fair tickles the senses: Toe-tapping tunes reverberate throughout the Palmer fairgrounds, and the scent of cooking fair-food lingers long. The Alaska State Fair in Palmer runs Aug. 23 to Sept. 3. Th is year’s featured performers include Air Supply, country singers Jo Dee Messina and Gary Allan, classic rock stars Styx, George Thorogood, rock band Creed and Big and Rich with Cowboy Troy and Bradley Gaskin, and more. Comedian and ventriloquist Jeff Dunham will perform Aug. 30. Other performing groups include Pirates for Hire, with a Captain Jack Sparrow look-alike. The group returns to the fair following their popularity last year, according to Kelly Larson, fair marketing coordinator. Canine Allstars will perform for the first time this year. This group of rescue dogs has been trained to perform various tricks. Also new for 2012 is Equi-mazing, an Alaska horse entertainment group that will perform high-speed vaults, stunts, drills and tricks. The Raven’s People program will feature Alaska Native live performances including the blanket toss, plus arts and crafts demonstrations. As always, the fair also features carnival rides, vendor and food booths, livestock, agriculture and craft exhibits, and various demonstrations. The popular 17th annual Giant Cabbage Weigh-off is set for Aug. 31. The winner earns $2,000. (alaskastatefair.org) 

www.akbizmag.com • Alaska Business Monthly • August 2012

EVENTS CALENDAR

Compiled by Tasha Anderson

Anchorage 2

11-12 Miranda Lambert

Miranda is country’s reigning female vocalist of the year, as bestowed by both the Country Music Association and the Academy of Country Music. She is performing one night in Alaska. Sullivan Arena. mirandalambert.com

Live @ the Library

Bel Canto opera is one of the summer series of free concerts held at Loussac Public Library. Wilda Marston theatre, noon. muni.org

Tuesday Nights at the Zoo

Special guest Alexander Dolitsky, president/chairman for the AlaskaSiberia Research Center in Juneau presents “The Amur (Siberian) Tiger, Tales and Legends from the North.” Program will include a book signing with Dolitsky who is an educator, researcher and author. alaskazoo.org

Hot Club of Cowtown

This Austin trio mixes western swing and hot jazz. Presented by Whistling Swan Productions. Alaska Center for the Performing Arts Snow Goose Theater, 7 p.m. alaskapac.centertix.net

7/27-9/2

Gold Rush Girls

Inspired by the book “Good Time Girls” and directed by Ed Bourgeois, this musical combines several musical styles of the Alaska gold rush era and entertains with the people and places of that period. Cyrano’s, 7 p.m. cyranos.org

Fairbanks 3-12

“The Age of Asparagus” Tanana Valley State Fair

Events include a baby show, Fairbanks Has Talent! competition, a pet show and live music. The many exhibits include quilting, ceramics, agriculture, handicrafts and cake decorating. Tanana Valley State Fairgrounds, opens 9 a.m. tananavalleystatefair.com

12-14

Denali Adventure Festival

Enjoy river sports, mountain marathon, community barbeque and live music. Denali National Park, various times. explorefairbanks.com

24-26

Girdwood 8/31-9/2

Alyeska Fungus Fair

Events include forays, naturalist presentations, an outdoor concert, and the fabulous fungus formal. Guest speakers this year include Steve Trudell and Else Vellinga. The fair benefits the Girdwood Trails Committee. Various locations and times. fungusfair.com

Juneau 10-12

Golden North Salmon Derby

Prize categories include derby winner, scholarship fish winners, highfive ticket numbers and special prize winners. Prizes awarded Thursday. Centennial Hall, 7 p.m. goldennorthsalmonderby.org

Ketchikan 4

Blueberry Arts Festival

Thousands celebrate the blueberry in style with an art show, contests, battle of the bands, gigglefeet dance festival, trout fishing in America poetry slam, and many choices of blueberry cuisine. Various locations and times. ketchikanarts.org

Knik 5

Alaska State Triathlon Championship and Duathlon

This is Alaska’s only Olympic-distance triathlon, and is a qualifying race for the Best of the US Championship. The course consists of a 1,500-M swim in Knik Lake, a 40-K bike, and a 10-K run. Knik Lake, 10 a.m. akstatetriathlon.com

Ninilchik 3-5

Salmonstock Festival

This music and art festival showcases Alaska and Northwestern musical artists as well as visual and physical arts. There will be an extensive beer garden, and educational opportunities in the awareness and action centers. Kenai Peninsula Fairgrounds, various times. salmonstock.org

17-19 “It’s a Reelin’ Squeelin’ Good Time!” Kenai Peninsula State Fair The fair includes live music starting daily at noon: food, crafts and service vendors; a junior market livestock auction, family games and activities, and various 4-H events. Kenai Peninsula Fairgrounds, various times. kenaipeninsulafair.com

Peters Creek 8/2-9/27

Farmer’s Market

The Ladies Auxiliary of the American Legion Post 33 in Peters Creek hosts a farmer’s market every Thursday through September. Peters Creek American Legion parking lot. alaskastar.com

Seward 11-19

Silver Salmon Derby

This is one of the oldest and largest fishing derbies in the state. Anglers vie for the largest coho (silver) salmon, try to catch tagged fish worth prizes, and turn their fish in daily, which are sold to raise funds for fish enhancement efforts. Derby Headquarters, 6 a.m. sewardchamber.org

Sitka

Tanana Valley Sandhill Crane Festival

Events include art shows, outdoor slides shows, nature walks, and talks. The featured guest is Dr. George Archibald, co-founder of the International Crane Foundation. Creamer’s Field Migratory Waterfowl Refuge, 5 p.m. creamersfield.org

“By The Sea” Arts and Seafood Festival

Attendees can enjoy fine arts, crafts, music, fresh seafood, a farmer’s market, fisherman’s poetry, a beer/wine garden and more. Coffman Cove. ketchikanarts.org

10-11

Seafood Festival

Events include seafood signature dish contest, wedding cake competition, Scottish Highland/Island games and home brewing contest and beer tasting. Various locations and times. sitkaseafoodfestival.org

Skagway 1-31

The Days of ‘98 Show

The show stupefies and bedazzles audiences with the tale of Soapy Smith, Alaska’s most notorious outlaw, featuring can-can dancers, ragtime music, riotous humor, and the great con-man himself, Soapy Smith. Eagles Hall, various times. thedaysof98show.com

Soldotna 18

Annual Soup Supper & Auction

Hosted by the Kenai Peninsula Food Bank, this empty bowl event features pottery bowls created by local potters. The soup is provided by area restaurants and chefs. Funds raised during the silent and live auctions benefit the Food Bank feeding programs. Kenai Central High School, 5:30 p.m. kpfoodbank.org

Valdez 1-5

Valdez Gold Rush Days

Events include Fishnet & Feathers carwash, family fun at Ruth pond, live music, Dutch oven demonstration, saloon night and parade. Various locations and times. valdezgoldrushdays.org

www.akbizmag.com • Alaska Business Monthly • August 2012

125 ■

locAl news

GET OUT THE VOTE! Ballot Measure #1 Bill Increasing the Maximum Residential Property Tax Exemption

Primary Election August 28 Polls are open 7 a.m. to 8 p.m. elections.alaska.gov

District 7 ■ Lupe Marroquin-D ■ Wes Keller-R District 24 ■ Roger O. Purcell-R ■ Patti Higgins-D District 8 Ballot Measure #2 ■ Charisse E. Millett-R Establishment of an Alaska Coastal Management Program ■ Daniel H. Hamm-R District 25 ■ Shelley Hughes-R ■ Lynette Moreno Hinz-D District 9 Primary candidates are listed in the house or senate district for ■ Pete Petersen-D which they are registered according to the April 5, 2012, Amended ■ Mark A. Ewing-R ■ Lance D. Pruitt-R Proclamation of Redistricting as ordered by the Alaska Supreme ■ Lynn Gattis-R District 26 Court on May 22, 2012. akredistricting.org ■ Blake A. Merrifield-D ■ Roberta C. Goughnour-D District 10 ■ Lora Reinbold-R ■ Mark A. Neuman-R US House District M ■ Kim Skipper-R ■ Pam Rahn-D ■ Don Young-R ■ Harry T. Crawford Jr.-D ■ Larry D. Wood-R District 11 ■ Bettye Davis-D District 27 ■ Thomas Connelly-R ■ Anna I. Fairclough-R State Senate ■ Mike Hawker-R ■ Bill Stoltze-R District A District N District 28 District 12 ■ John B. Coghill Jr.-R ■ Joe Arness-R ■ Charles M. Chenault-R ■ Glen A. Eichenlaub-R ■ Joe J. Thomas-D ■ Catherine A. Giessel-R District 29 ■ Dan Saddler-R District B District O ■ Gary A. Knopp-R District 13 ■ Joe Paskvan-D ■ Peter A. Micciche-R ■ Kurt E. Olson-R ■ Pete Kelly-R ■ Thomas H. “Tom” Wagoner-R ■ Hal P. Gazaway-D District 30 ■ Gabrielle LeDoux-R District C District Q ■ Elizabeth R. Diament-D District 14 ■ Click Bishop-R ■ Albert M. Kookesh-D ■ Jon D. Faulkner-R ■ Max F. Gruenberg Jr.-D ■ David Eastman-R ■ Bert K. Stedman-R ■ Paul Seaton-R ■ Don Hadley-R ■ Ralph C. Seekins-R District R District 31 District 15 ■ Anne Sudkamp-D ■ Gary L. Stevens-R ■ Cathy Muñoz-R ■ Andrew L. Josephson-D ■ Robert J. Henrichs-D District D District 32 ■ Dick Traini-R ■ Mike J. Dunleavy-R District S ■ Beth Kerttula-D District 16 ■ Linda K. Menard-R ■ Lyman F. Hoffman-D District 33 ■ Hugh R. Brown III-D District E District T ■ Patti Mackey-R ■ Jimmy Crawford-R ■ Susan M. Parsons Herman-D ■ Allen Minish-R ■ Agnes C. Moran-R ■ Harriet A. Drummond-D ■ Charles R. Huggins-R ■ Donald C. Olson-D ■ Matt Olsen-D ■ Roman R. Romanovski-R District F ■ Peggy Wilson-R District 17 ■ Fred J. Dyson-R State House District 34 ■ Cean Stevens-R ■ Martin J. Lindeke-D District 1 ■ William A. Thomas Jr.-R ■ Geran Tarr-D District G ■ Lynette Bergh-R ■ Jonathan S. ■ Cal Williams-D ■ Paul D. Brown-R ■ Bob Roses-R Kreiss-Tomkins-D District 18 ■ David W. Gardner-R ■ Bill Wielechowski-D District 35 ■ Cris A. Eichenlaub Jr.-R ■ Janice L. Golub-D District H ■ Alan Austerman-R ■ Les S. Gara-D ■ Doug Isaacson-R ■ Berta Gardner-D District 36 District 19 ■ Clint Hess-R District 2 ■ Bryce Edgmon-D ■ Anand Dubey-R ■ Don Smith-R ■ Bob Miller-D ■ Carl M. Morgan Jr.-R ■ Lindsey Holmes-D ■ Tammie Wilson-R District I District 37 District 20 ■ Paul D. Kendall-R District 3 ■ Bob Herron-D ■ Mia Costello-R ■ Johnny Ellis-D ■ Steve M. Thompson-R District 38 ■ Tamara L. Von District J District 4 ■ Alan S. Dick-R Gemmingen-R ■ Bob Bell-R ■ Scott J. Kawasaki-D ■ David Guttenberg-D ■ Michelle Scannell-D ■ Hollis S. French II-D ■ David Pruhs-R District 39 District 21 ■ Elizabeth Vazquez-R District 5 ■ Neal W. Foster-D ■ Jodie S. Dominguez-D District K ■ Pete Higgins-R ■ Woodie W. Salmon-D ■ Craig W. Johnson-R ■ Aaron N. Lojewski-R ■ Roselynn Cacy-D District 40 District 22 ■ David Watts-D ■ Jeff Landfield-R ■ Adeline R. Hopson-D ■ Chris Tuck-D ■ Lesil L. McGuire-R District 6 ■ Benjamin P. Nageak-D ■ Lisa M. Vaught-R District L ■ Jamey E. Duhamel-D ■ Robert K. Nelson-D District 23 ■ Eric A. Feige-R ■ Jacob O. Hale-D ■ Greta Schuerch-D ■ Bob Lynn-R ■ George Rauscher-R ■ Kevin Meyer-R ■ 126 www.akbizmag.com • Alaska Business Monthly • August 2012

ALASKA TRENDS

Copper A long-term view

By Paul Davidson Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

average price per metric ton in the 110-year data-set was in 1916 with $9,360 per metric ton. The lowest yearly average price in the same data-set is 2002 with $1,510 per metric ton. May 2012 showed an average monthly price of $5,617 per metric ton in 1998 dollars, according the London Metal Exchange, 47.5 percent greater than the 110-year average. Mainly due to China’s growing demand, world production has increased overall with an upward curve growing steeper in the past several years. According to the U.S. Geological Survey, production in 2010 was 16.1 million tons, 3.2 times greater than the 110-year average.

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

opper use dates back 10,000 years, at least, and is increasingly common. Copper’s malleability, ductility, thermal and electrical conductivity account for its prevalence, especially in electrical related use—where roughly 75 percent of copper is used today. Building construction demands the most copper, followed by electrical and electronic products, transportation, industrial machinery and consumer Copper Price and Production and general products. More than 30 1900-2010 percent of global copper production is accounted for by Argentina for the $18,000 years 2001-2005. Indonesia, Argen$16,000 tina and the United States combined account for about half of the global $14,000 copper production of the same $12,000 period. Alaska’s history contains multiple copper mines; however, $10,000 Price per Ton Alaska currently has no significant $8,000 copper production. China’s growing World Production $6,000 demand for copper accounts for 20 percent of global copper consump$4,000 tion for 2001-2005. $2,000 The chart shows global copper prices per metric ton in 1998 dol$lars to control for inflation and total world production in thousands of metric tons. The highest yearly Source: State of Alaska Department of Labor and Workforce Development: labor.alaska.gov/research

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN MARINE/PENCO

www.akbizmag.com • Alaska Business Monthly • August 2012

127 ■

ALASKA TRENDS

Indicator

GENERAL Personal Income–Alaska Personal Income–United States Consumer Prices–Anchorage Consumer Prices–United States Bankruptcies Alaska Total Anchorage Total Fairbanks Total EMPLOYMENT Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Sectorial Distribution–Alaska Total Nonfarm Goods Producing Services Providing Mining and Logging Mining Oil & Gas Construction Manufacturing Seafood Processing Trade/Transportation/Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information Telecommunications Financial Activities Professional & Business Services Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Services & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government Labor Force Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Unemployment Rate Alaska Anchorage & Mat-Su Fairbanks

■ 128

By Paul Davidson Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

US $ US $ 1982-1984 = 100 1982-1984 = 100

4th Q11 4th Q11 2nd H11 2nd H11

33,342 13,137,224 202.58 226.28

33,043 13,033,756 200.28 223.60

31,760 12,701,052 195.455 218.576

4.98% 3.43% 3.64% 3.52%

Number Filed Number Filed Number Filed

April April April

59 43 5

88 67 12

94 69 15

-37.23% -37.68% -66.67%

Thousands Thousands Thousands Thousands Thousands

April April April April April

336.64 186.30 43.86 36.53 35.84

336.35 186.59 43.54 35.13 35.82

331.04 184.29 43.25 36.10 34.29

1.69% 1.09% 1.42% 1.19% 4.51%

Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands

April April April April April April April April April April April April April April April April April April April April April April April April April April April April April April April April April

321.1 38.7 282.4 16.3 15.9 13.2 11.6 10.8 7.6 61.8 6.0 34.7 6.3 9.6 21.1 5.6 6.3 4.1 14.5 27.3 46.4 32.3 29.4 6.2 18.8 10.9 85.8 16.2 26.6 8.6 43.0 25.8 3.8

319.9 39.7 280.2 16.1 15.8 13.2 11.4 12.2 8.9 60.3 6.0 33.6 6.1 9.4 20.7 5.5 4.1 4.1 14.6 27.2 46.2 32.0 28.9 6.1 18.5 10.9 85.8 16.1 26.5 8.6 43.2 25.7 3.7

321.4 40.3 281.1 16.0 15.6 13.1 14.5 12.5 6.4 62.7 6.0 35.1 6.1 10.0 21.6 5.6 6.4 4.3 15.1 26.1 43.1 31.5 30.3 6.0 19.7 11.6 85.8 16.7 26.7 8.6 42.4 25.5 3.7

-0.09% -3.97% 0.46% 1.88% 1.92% 0.76% -20.00% -13.60% 18.75% -1.44% 0.00% -1.14% 3.28% -4.00% -2.31% 0.00% -1.56% -4.65% -3.97% 4.60% 7.66% 2.54% -2.97% 3.33% -4.57% -6.03% 0.00% -2.99% -0.37% 0.00% 1.42% 1.18% 2.70%

Thousands Thousands Thousands Thousands Thousands

April April April April April

362.89 198.76 46.89 39.26 39.09

365.12 200.21 46.91 38.30 39.45

358.80 197.86 46.37 39.00 37.87

1.14% 0.46% 1.13% 0.67% 3.22%

Percent Percent Percent

April April April

7.2 6.3 6.5

7.9 6.8 7.2

7.7 6.9 6.7

-6.49% -8.70% -2.99%

www.akbizmag.com • Alaska Business Monthly • August 2012

ALASKA TRENDS

By Paul Davidson Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

Percent Percent Percent

April April April

7 8.3 7.7

8.3 9.2 8.4

7.4 9.5 8.7

-5.41% -12.63% -11.49%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

April April April

16.57 8.99 119.95

17.59 9.61 122.68

18.18 10.08 120.86

-8.86% -10.85% -0.76%

Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. Per Pound

April April April April April

8 1962 1,649.30 31.55 1.00

7 1979 1,674.41 32.95 1.00

5 1790 1,474.12 36.75 1.19

60.00% 9.61% 11.88% -14.15% -15.82%

Millions of $ Millions of $ Millions of $

April April April

30.39 15.76 14.62

51.34 9.22 42.12

64.00 15.17 48.83

-52.52% 3.94% -70.05%

Total Deeds

April

961

1040

628

53.03%

VISITOR INDUSTRY Total Air Passenger Traffic–Anchorage Total Air Passenger Traffic–Fairbanks

Thousands Thousands

April April

323.75 59.70

355.32 70.96

331.86 64.14

-2.44% -6.92%

ALASKA PERMANENT FUND Equity Assets Net Income Net Income–Year to Date Marketable Debt Securities Real Estate Investments Preferred and Common Stock

Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

April April April April April April April

41,642.10 42,130.10 128.4 1,468.1 80.6 77.10 (245.7)

41,525.10 42,142.00 198.3 1,339.7 (75.8) 1.10 147.3

41,171.30 41,762.40 145.7 $1,155.4 130.5 92.9 711.4

1.14% 0.88% -11.87% 27.06% -38.24% -17.01% -134.54%

BANKING (excludes interstate branches) Total Bank Assets–Alaska Cash & Balances Due Securities Net Loans and Leases Other Real Estate Owned Total Liabilities Total Bank Deposits–Alaska Noninterest-bearing deposits Interest- bearing deposits

Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11

2,088.25 46.12 151.97 1,119.55 6.26 1,827.29 1,783.65 550.20 1,233.44

2,105.62 49.64 156.23 1,097.05 7.05 1,847.06 1,800.05 543.72 1,256.33

2,098.95 43.60 155.42 1,123.90 12.37 1,849.81 1,809.77 528.42 1,281.35

-0.51% 5.77% -2.22% -0.39% -49.37% -1.22% -1.44% 4.12% -3.74%

FOREIGN TRADE Value of the Dollar In Japanese Yen In Canadian Dollars In British Pounds In European Monetary Unit In Chinese Yuan

Yen Canadian $ Pounds Euro Yuan

April April April April April

81.43 0.99 0.63 0.76 6.31

82.42 0.99 0.63 0.76 6.32

83.29 0.96 0.61 0.69 6.53

-2.24% 3.67% 2.18% 9.60% -3.27%

Indicator

Southeast Gulf Coast United States PETROLEUM/MINING Crude Oil Production–Alaska Natural Gas Field Production–Alaska ANS West Cost Average Spot Price Hughes Rig Count Alaska United States Gold Prices Silver Prices Zinc Prices REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Deeds of Trust Recorded Anchorage–Recording District

Editors note: Beginning next month we will be bringing Alaska Trends more current and will publish two months of data.

www.akbizmag.com • Alaska Business Monthly • August 2012

129 ■

AdVertisers indeX Alaska Air Transit ........................................123 Alaska Enterprise Solutions ...................23 Alaska Housing Finance Corp. .............131 Alaska USA Federal Credit Union .......71 Allen Marine ....................................................90 American Fast Freight................................89 American Marine / PENCO ..................127 Anchorage Opera.......................................124 Arctic Office Products (Machines) ......85 Arctic Slope Telephone Association....29 ASRC Energy Services - AES .................51 AT&T Alaska .......................................................11 Azimuth Adventure Photography......87 Bell Tech ...............................................................31 Bezek Durst Seiser ......................................111 Business Insurance Associates Inc. ....73 Calista Corp. .............................................27, 29 Capture the Fun Alaska LLC ..................97 Caring For Women .......................................34 Carlile Transportation Systems ........... 21 CCI Industrial Services ............................. 48 Central Environmental Inc. ...................113 Chris Arend Photography.....................130

■ 130

CIRI .........................................................................86 City of Houston ..............................................15 City of Palmer ...................................................15 City of Wasilla...................................................15 Clarion Suites Downtown / Quality Suites Near Convention Center ...123 Conoco Phillips ...............................................45 Construction Machinery Industrial LLC . . .2 Cook Inlet Tug & Barge Inc. ....................93 Design Alaska................................................105 Donlin Gold .......................................................27 Dowland-Bach Corp. ...............................101 Doyon Drilling Inc. .......................................50 EDC Inc. ................................................................73 EHS-Alaska Inc............................................ 106 Emerald Alaska ............................................102 Engineered Solutions Group .................95 ERA Helicopters.............................................47 ESS Support/Labor Services ................59 Fairbanks Memorial Hospital.................35 First National Bank Alaska.........................5 GCI ......................................................25, 33, 53, Golden Valley Electric Association .....87

Golder Associates Inc. ...............................43 Great Originals Inc. ......................................85 Judy Patrick Photography .......................96 Kakivik Asset Management ................... 57 Kendall Ford Wasilla ...................................58 Kinross Fort Knox ..........................................37 Lynden Inc. .........................................................55 Matanuska Susitna Borough ................ 15 Microcom............................................................39 N C Machinery ................................................63 NALCO Energy Servivces........................43 New York Life....................................................13 North Wind Inc. ......................................... 106 Northern Air Cargo ............................64, 65 Northern Industrial Training .................79 NTCL .....................................................................92 Offshore Systems Inc. ................................49 PacArctic Logistics ....................................... 93 Pacific Alaska Freightways ......................75 Pacific Pile & Marine ......................8, 9, 10 Paramount Supply ........................................97 Parker, Smith & Feek ...................................69 Peak Oilfield Service Co. ........................50

Pen Air ..................................................................59 Personnel Plus..............................................122 Polar Supply Co ......................................... 109 ProComm Alaska ........................................... 76 RSA Engineering Inc. ................................... 76 SGS.......................................................................107 Shannon and Wilson ................................103 Shred Alaska .....................................................47 Span Alaska Consolidators ......................19 Spenard Builders Supply .......................... 67 Stellar Designs Inc. .......................................97 STG Incorporated .........................................81 The Growth Company ............................101 The Superior Group.....................................83 Totem Ocean Trailer Express ................ 91 Tutka LLC ............................................................68 UAA .....................................................................124 Unit Co. ................................................................68 URS Corp. ........................................................105 Washington Crane & Hoist......................17 Waste Management ................................110 Wells Fargo .....................................................132 XTO Energy .........................................................3

www.akbizmag.com • Alaska Business Monthly • August 2012

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