Alaska Business Monthly February 2015 by Alaska Business

February 2015

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International Trade Special Section page 58

Engineering Special Section page 14

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February 2015 TAB LE

CONTENTS ABOUT THE COVER

DEPARTMENTS From the Editor �� 7 Market Squares �� 99 Right Moves �� 100 Inside Alaska Business �� 102 Agenda �� 105 Alaska This Month �� 106 Events Calendar �� 109 Alaska Trends ��110 Ad Index ��114

Commercial salmon fishing in Prince William Sound’s Esther Passage is part of the big catch for Alaska—the top export commodity. “Seafood: Alaska’s Sustainable Bounty” by Will Swagel begins on page 68 of Alaska Business Monthly’s annual International Trade Special Section, which begins on page 58. © Daryl Pederson /AlaskaStock.com

ARTICLES

Policy

8 | An Alaska Higher Education Land-Grant Equivalency Plan: It’s Time By Patrick K. Gamble, President, University of Alaska System © Earl Brock

Oil & Gas

Financial Services

Transportation

54 | U.S. Condensate Sale, Easing of Crude Oil Export Ban, and What It Means for Alaska: Cracks In The Door By Sourabh Gupta and Dr. Ashok K. Roy 74 | Passengers First, Cargo Second: International Transportation in Alaska By Kirsten Swann

Mining

78 | Mining Districts in Alaska A geographically diversified economic base By Mike Bradner

88 | Multiple Industries Drive Business Expansion Financing throughout Alaska By Tracy Barbour Volunteer Lucas Smith providing service to the community of Nuiqsut. © Kyle Ragan

92 | Volunteer Tax & Loan Program Celebrates 20 Years Alaska Business Development Center helps bring millions back to rural communities By Mannie Boitz

12 Homer Spit marine vessel haulout using rolling inflatable bladders.

Entrepreneurs

12 | Homer Beach Haulout New entrepreneur brings ancient knowledge to Kachemak Bay By Naomi Klouda

Oil & Gas

40 | Arctic Engineering Evolving High-Tech Geomatics By Tom Anderson 46 | Temporary Man Camps and Oilfield Shops Mobile facilities adorn the North Slope By Margaret Sharpe

82 Construction

82 | Innovations in Alaska Building Techniques Efficiency and sustainability coming ‘full circle’ By Kirsten Swann

Legal Speak

87 | Things to Consider When Contracting for Professional Services By Renea I. Saade

The Bullitt Center produces more electricity from the solar array on its roof than it uses in a year, in Seattle. Some Alaska architects are designing a netpositive building in Anchorage. © Nic Lehoux

Healthcare

94 | Elder Care Facilities in Alaska New models, new buildings, new aging population By Louise Freeman

96 | Stroke Treatment Advances Minimizing neurological damage By Gail West

Alaska Business Monthly | February 2015 www.akbizmag.com

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February 2015 TAB LE

CONTENTS

special section

Architects & Engineers

International Trade

14 | Engineering New Horizons National Engineers Week General Information and 2015 Schedule of Events

58 | China’s Role in Alaska’s Economy Decade of the Dragon setting records By Greg Wolf

16 | Engineer of the Year Nominees By Jeanne M. Bowie, PE, PhD, PTOE

60 | Alaska-Singapore Connection Interesting parallels and an instructive model By Greg Wolf

20 | Shining Light on Alaska’s Solar Energy Future Engineering bright ideas and installations By Tom Anderson 26 | Alaska Energy Infrastructure and Engineering By Julie Stricker 32 | Alaska Business Monthly’s 2015 Architects & Engineers Directory

62 | Trans-Pacific Partnership Update Negotiations on track for reducing barriers By Alex Salov 64 | Exporting Business Success from the 49th State Tips for trade in products, commodities, and services By Rindi White

68 | Seafood: Alaska’s Sustainable Bounty By Will Swagel 71 | Preparing Students for Leadership on the Frontiers of a Changing World UAA develops educational and research collaborations in China By Tom Case, Rashmi Prasad, Qiujie (Angie) Zheng 72 | Alaska’s Arctic Ambitions IV Annual conference focuses on infrastructure in 2015 By Alex Salov and Greg Wolf 73 | State Exports via Alaska Total U.S. Exports (Origin of Movement) via Alaska SOURCE: U.S. Census Bureau

Corrections In the December 2014 article “AGC’s Top Construction Projects and Safety Awards” we did not properly credit two photos by Ken Graham and incorrectly captioned one of them. Also, in the same issue, a photograph in the article “Anchorage’s Title 21 Update” was improperly credited to Ken Graham. The three photos in question are shown here, with corrections.

Photo courtesy of Cook Inlet Housing Authority

Eklutna Estates senior housing in northeast Anchorage. 6

Parker, Smith & Feek sponsored Excellence in Construction Award for Buildings between $5 million and $15 million: Cornerstone General Contractors, Inc.— AVTEC Dormitory Replacement, Seward. Parker, Smith & Feek sponsored Excellence in Construction Award for Buildings over $15 million: Cornerstone General Contractors, Inc.—UAA Alaska Airlines Center Sports Arena, Anchorage.

Alaska Business Monthly | February 2015 www.akbizmag.com

FROM THE EDITOR Follow us on and

Volume 31, Number 2 Published by Alaska Business Publishing Co. Anchorage, Alaska Jim Martin, Publisher 1989~2014

EDITORIAL STAFF

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

Susan Harrington Russ Slaten Tasha Anderson David Geiger Linda Shogren Chris Arend Judy Patrick

BUSINESS STAFF

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

Billie Martin Jason Martin Charles Bell Anne Tompkins Bill Morris Tasha Anderson Melinda Schwab

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, ©2014, 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. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

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Austerity for Alaska’s Prosperity

s I write this in mid-January oil continues going down—getting closer and closer to $40 a barrel by the day. There is no indication when it will stop or what will end up being collected from oil royalties this year. What is evident, though, is that state revenues collected from oil royalties will be a fraction of recent years, though still hundreds of millions more than not so terribly long ago. Initially people were quoting Chicken Little: “The sky is falling! The sky is falling!” After all, how could life in Alaska possibly continue with a few billion dollars less oil royalty revenue for the state’s annual coffers? Then as the sun continued to rise a little earlier every day (it’s that time of year), and in spite of the persisting downward spiral in oil prices, people began to realize the world is not going to end just yet. That’s when I started hearing William Shakespeare’s words: “True is that we have seen better days,” from his play “As You Like It.” Well, of course, and worse ones too, which is why I offer some wise words from James Reston, a very insightful former editor of The New York Times, where he also served as a columnist and Washington correspondent. “Americans have always been able to handle austerity and even adversity. Prosperity is what is doing us in.” Well there you have it: prosperity has done us in. We need austerity for our prosperity. We’ve been too indulgent with our spending and this is fast becoming “the winter of our discontent,” to borrow another line from Shakespeare, this one from his play “Richard III.” At any rate, it should be an interesting legislative session in Juneau this year. Stay tuned and don’t forget to help this new administration—your ideas are being solicited in the “Voices for Vision Budget Survey” at gov.alaska.gov/Walker/press-room/budget-survey.html. Also, for specific case work issues, email governor@alaska.gov or call 907-465-3500. It’s a clever contest actually, and the people with the top five ideas win lunch with the governor and lieutenant governor. Folks are asked to pick up to three types of cost-saving measures (Spending Cuts, Additional Revenue, Restructuring, or Partnerships) and areas of government (Education, Consumer Energy, Transportation & Infrastructure, Public Safety, Environmental Conservation, Fish & Game, Health & Social Services, Labor & Workforce Development, Administration, Legislature, Natural Resources, Military & Veteran Affairs, or Other) and then provide specific recommendations. Speaking of recommendations, let me recommend the “2015 Power List,” which is available in print as well as the increasingly popular Excel download—go to akbizmag.com for that. Also, check out the app we released last month (read the magazine on any device) and our re-launched website (optimized for cross-platform viewing). There are also some great ideas throughout the magazine this month and in the two excellent special sections: Architects & Engineers and International Trade. The team has put together another really great magazine—enjoy! —Susan Harrington, Managing Editor February 2015 | Alaska Business Monthly

POLICY

Alaska State capitol in Juneau.

An Alaska Higher Education Land-Grant Equivalency Plan: It’s Time

By Patrick K. Gamble, President, University of Alaska System

n 1917 the Territorial Legislature formally incorporated Alaska’s first public higher education institution: the Alaska Agricultural College and School of Mines. Congress, anticipating the territory would want the college to join the extensive community of US land-grant colleges, reserved up to 20 million acres in 1915. That potential grant, however, depended upon the federal lands under consideration to 8

be surveyed first, and that never happened. A whole series of efforts over many years failed to create the university land dowry. By the time statehood arrived, Alaska’s land-grant university only owned about 111,000 acres, thanks mostly to an outright grant of 100,000 acres by Congress in 1929 to make up for the lack of any progress conveying the original 1915 land reservation as a grant to the university.

Land Grant Backstory As the volume of legislative dialogue picked up along the road toward statehood, the federal government and the Territory of Alaska eventually began negotiating potential transfer details. The university land-grant issue was rekindled. Revenue from the paltry, low value property land-grant (University President Patty in 1955 called it “Moose pasture”) had generated only about

Alaska Business Monthly | February 2015 www.akbizmag.com

$227 between 1917 and 1946, and the grant was clearly not functioning as a source of revenue as intended. Unsuccessful statehood bills in 1949 contained proposals for 10 million acres to go to the university. Until 1957, virtually every legislative submission supporting statehood contained at least 1 million acres to be part of the University of Alaska (UA) entitlement. Proponents spoke up. Alaska’s Commissioner of Education Dan Dafoe wrote Territorial Delegate Bartlett in 1957: “Whether or not Alaska has a good solid permanent school fund 50 years from now will depend on how carefully school land matters are handled at this time.” Patty (1954) wrote to the Secretary of the Interior suggesting that 1 million acres of the Naval Petroleum Reserve should comprise a coherent, purposeful grant, given its oil revenue potential. It all was for naught. In the end, statehood ended the government’s participation

a time in the history of the state when some great financial crisis will develop. If the university had, by that time, developed an important endowment, then income from this might be very helpful in tiding the university through the difficult period.” Reason number ten said, “A subsidiary endowment income will help to make the difference between a moderately good university and an outstanding university.” He went on in his letter, “What a wonderful thing it would be for all Alaska if a great oil bonanza should be developed on university land and we could accumulate an endowment of $50 million and use the income from this in perpetuity.” He added, “I would expect that our grandchildren would conclude that we had great foresight.” But the governor’s continued objection ended the legislative effort. UA President Wood tried unsuccessfully at the federal level, petitioning Secretary of the Interior Udall as well

Here we sit, number forty-nine in land-grant holdings out of fifty states, fifty-five years after Egan’s veto. That unfortunate turn of events took away the best chance UA ever had to establish a sovereign higher education fund, a fund created by the financial benefits paid out from a university land-grant as envisioned in the Morrill Act of 1862. in the dialogue. The 1915 Congressional land reservation for higher education in Alaska, and all previous recommendations for 1 million acres or more to go to the UA, were simply consolidated into the overall land conveyance by the federal government to the new state, Alaska. As a result, all future university disposition would be left for the state legislature to resolve. And resolve it they (almost) did. It is significant to note that the very first Alaska legislature in March 1959 passed HB176 granting lands in the amount of 1 million acres for UA. The bill was co-sponsored by 40 percent of the entire body and passed in the House 26-10, and in the Senate 20-0. Surprise followed Governor Egan’s veto. He was personally against earmarking any public revenues that could be derived from the grant on the basis of provisions he read in the Alaska Constitution. Patty was shocked. He sent a letter in February 1960 citing ten reasons the legislation was essential. Reason number five said, “There may come www.akbizmag.com

as Senator Bartlett to intercede. Egan would not yield, unless, he said, the land came from the federal holdings of the newly created Arctic Wildlife Range (now the Arctic National Wildlife Refuge or ANWR). That brief initiative stalled out quickly at the federal level. Governor Hickel (1966) began again to lobby for the federal land use idea, but Alaska land use and value was now changing rapidly and dramatically as a result of growing resource development and Alaska Native rights debate. As a result, Secretary Udall, in December 1966, placed a freeze on land development pending better control. Native Land Claims (1971), TAPS (1974-77), and ANILCA (1980) split the Alaska land interests into a complex federal and state patchwork, with development made even more problematic by the addition of growing national interest in environmental protection. In later years, follow-on attempts met with a similar fate. UA, to this day, remains the landgrant college without the land.

also obviate a need for the annual trip to Juneau by UA representatives to compete directly with state agencies for annual declining capital dollars, a huge win-win-win for all concerned parties. Our conclusion, therefore, is that the original objectives of the land-grant model are still valid, and Alaska’s land still holds financial promise to UA worthy of a serious reassessment. The winning solution is one that would have to avoid repeating legal history and would incorporate a healthy dash of innovation as well.

The Texas Option Consider the Permanent University Fund (PUF) of Texas. Established in the 1876 Constitution of the State of Texas, the PUF grant of 2 million acres was integral to the establishment of the University of Texas System (University of Texas, Texas A&M). In 1883 another 1 million acres of “worthless land” went into the PUF. Since Texas retained its lands in the annexation of 1845, these were Texas

February 2015 | Alaska Business Monthly

public lands. Oil discoveries around the turn of the century began a long history of PUF land management and associated revenues, especially notable when oil was discovered right on PUF land in 1923. PUF earnings were directed into a newly created Available University Fund (AUF) which in turn were then distributed according to the Texas Constitution and amendments, by the board of regents of the University of Texas System and the Texas A&M University System. In 1928 permission was given by the State Attorney General to issue bonds against the AUF revenue stream and as the PUF value grew the bond cap limit was raised to 30 percent of the PUF corpus in 1984. Oil and gas revenue grew. In that same year voters approved another constitutional amendment creating a separate higher education account called the Higher Education Assistance Fund to cover the number of college/ university institutions not included in the PUF. In 1996 an investment firm took over management of the PUF, and in 1999 the “prudent investor” standards for investment introduced even more management flexibility. Distributions from the PUF to the AUF in the 2001-2008 period varied annually between about 4.75 to 5.0 percent while the account was growing at about a 10 percent annual rate. Today the PUF receives land proceeds from oil, gas, sulphur, and water royalties, mineral leases, and fiduciary investment gains. Grazing leases and other surface rights income, however, go directly into the AUF. At one time the PUF was the chief source of income for the University of Texas. Today it pays out 5 percent of its $17 billion in holdings (does not include property value) to the AUF for higher education purposes. Texas also has a Permanent School Fund for K-12 of a similar nature, established in 1854, and worth today about $30 billion.

A New Model: Equivalency Inspired by ideas emanating from the embers of Alaska’s desire for a higher education fund, and apprised of a state higher education model in Texas, it seems clear state best interests would be served if Alaska could adopt a UA model that could meet the spirit and intent of what the land-grant bill of 1862 was all 10

With the growing effort to expand resource production in Alaska, our fiscal future holds great promise, mostly untapped. Finding alternative sources of revenue in amounts significant enough to help defray even a small percentage of the annual capital costs of our multi-billion dollar university asset, given the small population of Alaska, is highly challenging. about, be surprisingly simple to design, and highly effective in its outcome.

Proposal Create an Alaska Higher Education Land-Grant Equivalency Plan. Despite the best intentions of the Alaska Legislature, recognize the improbability of ever receiving a significant selection of accessible, high-value state land. Change the model to one of equivalency; a legislatively controlled account would accumulate funds through a minor percentage distribution from any future contracted resource development revenues (definition to be determined by the Legislature) coming to the state. The model is intended to avoid deducting returns from any current contract revenue streams in consideration of the political frictions that could cause. An agreed percentage distribution would go into effect only if/ when new resource development contracts were activated or old ones were reinitiated under new terms. Legislative agreement to operationalize the plan would also signal a consensus among the body that while these revenues would be general fund dollars, allocation and distribution of the funding would recognize higher education needs first. The details of the plan would be worked out to avoid the very same philosophical and constitutional concern that troubled Governor Egan in 1960 and designed to recreate the plan’s solidarity indicated by the broad sponsorship and favorable vote margin of the 1960 legislature at the same time. Revenues would not go toward operating costs. Rather they would contribute earnings in excess of an inviolate corpus toward capital requirements: the University building fund, deferred maintenance, repair and rehabilitation, and capital equipment requirements that would be approved by the UA board of regents. In summary, the Legislature would control sources and amounts of

annual fund disbursements, while the board of regents would control uses of that annual disbursement within UA. Should the fund be approved by the Legislature for bonding purposes, caps or limits would be theirs to determine. With the growing effort to expand resource production in Alaska, our fiscal future holds great promise, mostly untapped. Finding alternative sources of revenue in amounts significant enough to help defray even a small percentage of the annual capital costs of our multi-billion dollar university asset, given the small population of Alaska, is highly challenging. Options beyond wholesale cutting and restructuring each tight budget year are few and far between. We must generate revenue. The only other source of additional, significant higher education revenue that even comes close is tuition, which would have to be raised at a double digit rate each year. That is plainly unacceptable on the one hand, and is actually unsustainable on the other. A mere half century ago in our short history as a state, the Legislature and University President Patty had it right. They thought so highly of the need for a state land-based revenue source for investment in Alaska’s young university that it was among the very first legislative actions they undertook and passed. It is fifty-four years later. It still makes excellent long-term economic and business sense. It’s time. R Patrick K. Gamble is the President of the University of Alaska System. Gamble is a retired four-star general of the US Air Force and was the President of the Alaska Railroad Corporation.

Alaska Business Monthly | February 2015 www.akbizmag.com

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ENTREPRENEURS

Homer Beach Haulout New entrepreneur brings ancient knowledge to Kachemak Bay

By Naomi Klouda

n ancient process for hauling ships out of the water for repairs has gained a lot of attention in Homer this past year, an engineering feat that saves time and money for large vessel owners that used to require far-away shipyards. Alaska statesman Clem Tillion of Halibut Cove, for one, needed work done on the sixty-five-foot MV Stormbird. His World War II era ship is a former Army T Boat built to perform light towing, cargo, and personnel transportation. Today, it’s the mail runner from Homer to the cove. Tillion says he’s had to travel to Bellingham, Washington, in the past to get repairs—expensive in both time and money. Last spring, he was able to get repairs completed more handily and less expensively on Homer’s beach. Logistics for heavy steel ships like the Stormbird call for airbags specially manufactured in China to carry up to fifteen thousand tons of steel out of the water— paired with time-tested techniques used by ancient Egyptians. It is done by Earl Brock’s Salvage and Sales.

Local Maintenance Once Earl Brock, the entrepreneur who developed the method, orchestrates their haul out, the vessels sit on dry land near the Pier One Theatre on the Homer Spit to get repaired by marine tradesmen. Since Homer doesn’t yet have a heavy vessel haulout facility, the process for pulling these behemoth boats out of the water is a large logistical undertaking that until Brock recently wasn’t done routinely at Alaska harbors. Northern Boat Enterprises of Homer routinely hauls out vessels under sixty-five feet, serving a huge fleet of charter boats, fishing vessels, and pleasure cruisers. But when it came to larger vessels in the past, Homer boats needed to go elsewhere. 12

“I had to figure the process out. I had no mentor and few resources when I started [in 2006],” Brock says. “I watched them do it on an easy boat and thought, ‘I would never do it that way.’” Brock has hauled out boats in Nome, Bethel, and other coastal areas for the past nine years. He brought his operation to Homer when requests came in last year. A succession of more than a dozen vessels sat onshore near the Homer harbor to get their work done in 2014. The advantage allows big vessels to remain near their own home port, instead of expensive travel to one of Alaska’s shipyards in Seward, Kodiak, Ketchikan, or Dutch Harbor—or farther away to Puget Sound shipyards. “All of the shipyards have their own circumstances,” Brock says. “You might wait six months in Ketchikan to get your boat in. In Seward, you might get your boat in, but won’t have all the marine trades you need to get things done.” Homer’s focus on developing a one-stop networking association called Homer Marine Trades has made large vessel maintenance possible. Spearheaded by Nomar Manufacturing founder Kate Mitchell and others, the goal was to make all services available locally from prop repair to complicated hull work. She launched her own marine trade business in Homer in the late 1970s, inventing the brailer fish bag that leaves no marks on fish. The name Nomar came from the promise of “no marks.”

Ancient Concepts Brock’s system uses high-powered haul equipment, industrial air bags, and natural tidal power to bring even the largest boats in the harbor to dry shore. It’s a careful series of steps based on ancient concepts probably first strategized in Egypt, Brock says.

The Stormbird getting repairs on a beach down from Pier One Theatre on the Homer Spit.

“I think of it as a logistical opera or opus,” says Peter Ford, one of Brock’s crew. “There are so many movements. Each has to be in place and doing its part, and it has to come together all at once.” Take the airbags, which are inserted in the outgoing tide: filling them with air takes a room-sized air compressor. The bags themselves range from ten thousand to fifteen thousand ton capacity—made in China for launching boats all over the world. Brock is one of the few in Alaska currently using them to also haul out vessels. They are described as thicker than an inner tube but not as thick as a tire. “We set the bags [uninflated] in the tide and we literally ‘catch’ the vessel as the high tide comes in,” Brock says. “We inflate the bags in position underneath the vessel.” The vessel rides onto the airbags. Think of tires, since the airbags act as rollers on a beaching vessel. Under a tractor’s power, the vessel is towed to shore. “I thought it would make a good joke to pull a vessel all the way to the Safeway parking lot [five miles away]. To show that we could literally walk a boat all the way to Safeway on these air bags,” Brock says. Once ashore, he uses blocks to replace the deflating airbags. Brock’s job is now finished. Once the vessel is ready to go back into the water, he launches it using a similar reverse procedure. To avoid airbag punctures, teams from Salvage and Sales sweep the beach by going on an “FOB walk.” That’s short for fallen off debris, Ford explains. Like other mariner nations across the globe with their own kinks to work out, an Alaska haulout needs special considerations. Brock’s modifications come

Alaska Business Monthly | February 2015 www.akbizmag.com

almost project-to-project. Getting a vessel ashore in Nome, for example, takes a slightly different process because it doesn’t have the twenty-foot tidal variations of Kachemak Bay, he notes. Nome’s beaches are flat. “There you might see a two-foot tide difference,” he says. Also, the process accounts for differences in prop locations on the boat to protect it during the removal. “And we’re able to do much more complicated hulls and various sized vessels in Homer.”

Environmental Safety How safe is this work on a stormy beach that sees one hundred mile per hour winds and wrathful rains? Brock says he requires certain steps, among them the removal of fuels and fluids as much as possible prior to setting a boat onshore. A filter fabric is spread beneath the boat to receive the paint chips and any fluids. A giant “vacuum” system sucks up debris at the end of a project. “I don’t have any control over a project—my job is done as soon as I’ve hauled the boat ashore,” Brock says. “But I do have influence. To get back in the water, you have to work with me.”

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Harbor Master Bryan Hawkins says activities are limited under state regulations followed by the harbor. The work area is on city land. “It is safe because we limit the types of activities they are allowed to do,” Hawkins says. “We have them put down the ground cover. Rain water will go through it, but any dirt or grindings off the boat won’t. We talk about control of the fluids—nothing gets discharged off the boat—and what to do if there is an accident, so the soils are removed by a contractor.” Hawkins oversees each haulout with his list of requirements. He is informed of the scope of work ahead and questions boat owners about their fuel onboard. He emphasizes this is not a boat storage option.

New Industry for Homer Since this is a new industry, essentially, tariffs in place to charge for the vessels aren’t quite adequate. Hawkins is in the process of writing new tariffs that were to be submitted for Homer City Council approval in January. Still, a 17 cents per square foot tariff adds a new revenue stream to the harbor. “I want to make it attractive. This is absolutely a new source of revenue for

the harbor,” Hawkins says. “It serves our fleet, attracts new customers, and it supports a growing industry in this community. I’m glad they can figure out how to do this.” Brock feels the demand indicates a public need. His haulouts are timed to the tides, with about fifteen planned in the months ahead. The staging area around the Pier One Theatre will at times look like a boat yard. Hawkins and the Homer City Council hope for a new haulout vessel facility to be constructed near the boat harbor sometime in the near future. The council voted to place a funding request on its top five capital improvement project list to go before the Alaska Legislature this year. Although given this year’s state budget crisis, a new facility might not be a realistic goal just yet, Representative Paul Seaton and Senator Gary Stevens nonetheless have vowed to carry it forward. R Naomi Klouda is the former editor of both the Homer Tribune and the Tundra Drums. She is a lifelong Alaskan and freelances from Anchorage.

February 2015 | Alaska Business Monthly

special section

Engineers & Architects

ENGINEERING NEW HORIZONS National Engineers Week (E-Week) is an annual event to bring public attention to the work and contributions of our nationâ&#x20AC;&#x2122;s engineers. Anchorageâ&#x20AC;&#x2122;s E-Week is filled with many activities for adults and kids, offering numerous volunteer opportunities. Help enhance the image of engineering in our community by getting involved.

CONTRIBUTIONS Your local E-Week committee is a non-profit organization and our events are entirely funded through donations. For information about sponsoring specific E-Week events or making a general financial contribution to E-Week, contact Greg Jernstrom (gjernstrom@jernstromengineering.com) or Melissa Branch (branchm@eei.team). The E-Week committee is also accepting donations for our Scholarship Raffle (held at Awards Banquet). Wish list items include electronics (iPads, iPods, Kindle, etc.), artwork, gift baskets, gift cards, event tickets, etc. All proceeds from raffle ticket sales go directly into the E-Week scholarship fund. In 2014, we awarded $14,000 in scholarships to graduating seniors. For more information or to donate a raffle item, contact Andrea Story (astory@rmconsult.com).

LOCAL SPONSORING SOCIETIES Alaska Society of Professional Engineers | American Society of Civil Engineers | American Society of Heating, Refrigerating and Air Conditioning Engineers | American Society of Landscape Architects | American Society of Mechanical Engineers | Illuminating Engineering Society | Institute of Transportation Engineers | Society for Marketing Professional Services | Society of American Military Engineers | Society of Petroleum Engineers | Society of Women Engineers | Structural Engineers Association of Alaska

2015 SCHEDULE OF EVENTS 2015 EVENTS February 28OF | UAA Wells Fargo Center 2015 SCHEDULE SCHEDULE OF EVENTS

INEERING EXHIBITS

ary 20 - March 2 | ASD Schools

STUDENT COMPETITIONS

2015 SCHEDULE OF EVENTS

displayed by local engineering companies and societies. nt provides a fantastic opportunity to learn more about local ng societies and companies, the services they provide and hey are working on.

The UAA College of Engineering and local engineering societies sponsor student competitions for local elementary, middle and high school students. The premier event that always gets the biggest reaction from students is the Bridge - students construct a bridge out of balsa wood at home or in school and then find out what sort of load STUDENT COMPETITIONS informationENGINEERING contact Mark KimererEXHIBITS (mkimerer@ it can withstand before it fails. Other competitions include Egg Drop, ENGINEERING EXHIBITS STUDENT February 20 - March 2 | ASD Schools February 28 |COMPETITIONS UAA Wells Fargo Center thnorth.com). Floatable Moatable, Paper Airplane Distance Toss, Shake and Break, February 20 -byMarch 2 | ASDcompanies Schoolsand societies. February 28 | Engineering UAA Wells Center Exhibits displayed local engineering The UAA College of andFargo local engineering societies Exhibits displayed engineering companies The UAAstudent Collegecompetitions of Engineering engineering societies This event providesbya local fantastic opportunity to learn and moresocieties. about and local more. sponsor forand locallocal elementary, middle and high

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The annual and E-Week more. Awards Banquet is a fitting wrap-up to an action contact Zach Zaletel (zzaletel@gmail.com). For more information Zach Zaletel (zzaletel@gmail.com). packed week. The banquetcontact includes presentation of the EngineerinformationFebruary or local to volunteer contact Tenison (paul. For more information contact Zach Zaletel (zzaletel@gmail.com). 23 -committee March Paul 5 | Local The E-Week reaches out toSchools local public and private of-the-Year Award, Junior Engineer Scholarships, and new this year AWARDS BANQUET localgiving E-Week committee out to local public and private schools, them access toreaches presentations on engineering. In @bp.com) or The Martha White (martha.white@worleyparsons. Engineering Excellence| Awards. AWARDS schools, themthan access to presentations on give engineering. February 28BANQUET Sheraton Hotel Anchorage a typical giving year, more 30 volunteer speakers nearly 40In

SCHOOL February 23PRESENTATIONS - March 5 | Local Schools

February 28 | Awards Sheraton Hotel Anchorage apresentations, typical year, more thanapproximately 30 volunteer speakers give nearly 40 The annual E-Week Banquet is a fitting wrap-up to an action reaching 1,000 students. For moreThe information or toAwards makeincludes banquet reservations, contact presentations, reaching approximately 1,000 students. annual E-Week Banquetpresentation is a fitting wrap-up to an action packed week. The banquet of the EngineerFor more information or to volunteer contact DENT TOURS contact Paul Tenison (paul. Randy Kinney (randykinney@kinneyeng.com). packed week. The banquet includesScholarships, presentation of Engineerof-the-Year Award, Junior Engineer andthenew this year Paul Tenison (paul.tenison@bp.com) or Paul Tenison (paul. For more information or to volunteer contact tenison@bp.com) or Airlines Martha WhiteCenter (martha.white@worleyparsons. ary 27 | UAA Alaska of-the-Year Award, JuniorAwards. Engineer Scholarships, and new this year - Engineering Excellence Martha tenison@bp.com) or Martha White (martha.white@worleyparsons. com). White (martha.white@worleyparsons.com). - Engineering Excellence Awards. E-Week committee has arranged a tour of the UAA Alaska For more information or to make com). makebanquet banquetreservations, reservations,contact contact enter for local high school TOURS students with an interest in STUDENT Randy Kinney (randykinney@kinneyeng.com). For more information or to make banquet reservations, contact Randy Kinney (randykinney@kinneyeng.com). VOLUNTEER OPPORTUNITIES ng. This tourSTUDENT includes presentations by localAirlines engineers and Randy Kinney (randykinney@kinneyeng.com). February 27 |TOURS UAA Alaska Center How do you get involved? February 27 |committee UAAand Alaska Airlines TheAnchorage’s local E-Week hasprivate arranged a tour Center of the UAA Alaska students from public schools. The localCenter E-Week has arranged UAA Alaska Airlines for committee local high school studentsa tour with of anthe interest in The 2015 E-Week events offer plenty of opportunities to get involved.VOLUNTEER Contact any of the OPPORTUNITIES event chairs for a specific event. Center forGundersen localincludes high school students with an interest in and engineering. This tour presentations by local engineers informationAirlines contact Erik (egundersen@crweng. VOLUNTEER OPPORTUNITIES How do you get involved? engineering. This tour presentations local engineers involves students fromincludes Anchorage’s public andbyprivate schools. and Nathaniel Cox (cox.nathaniel@gmail.com). How doE-Week you get involved? The 2015 events offer plenty of opportunities to get involves students from Anchorage’s public and private schools. If you are not sure how you want to take part or are unsure of The 2015Contact E-Weekany events offer plenty of opportunities get involved. of the event chairs for a specific to event. For more information contact contact Erik Erik Gundersen Gundersen (egundersen@crweng. where your talents could best be used contact committee chair involved. Contact any of the event chairs for a specific event. OR ENGINEER SCHOLARSHIPS (egundersen@crweng.com) orErik Gundersen (egundersen@crweng. For information contact com)more or Nathaniel Cox (cox.nathaniel@gmail.com). If you are not sure how you want to take part or are unsure of Brian Looney (blooney@crweng.com). Nathaniel Cox (cox.nathaniel@gmail.com). com) orbe Nathaniel Cox (cox.nathaniel@gmail.com). ations must postmarked by January 15 Ifwhere you are sure how want to takecontact part orcommittee are unsurechair of yournottalents couldyou best be used ENGINEER SCHOLARSHIPS scholarshipsJUNIOR to high school seniors who wish to pursue a where your talents could best be used contact committee chair Brian Looney (blooney@crweng.com). JUNIOR ENGINEER SCHOLARSHIPS Applications must be postmarked by January 15 Brian Looney (blooney@crweng.com). engineering. In 2014, the must local E-Week committee awarded Applications beschool postmarked Provides scholarships to high seniors whoby wishJanuary to pursue15 a in scholarships to Alaskan high school seniors. Provides school seniors who wish to pursue a degree inscholarships engineering.toInhigh 2014, the local E-Week committee awarded degree 2014, the local E-Weekseniors. committee awarded $14,000in inengineering. scholarshipsIn to Alaskan high school information$14,000 contactinBeth Heim to(elizabeth.heim@alaska. scholarships Alaskan high school seniors. For more information contact Beth Heim (elizabeth.heim@alaska. oann Mitchell (joannmitchell@kinneyeng.com). For information contact Beth Heim Heim (elizabeth.heim@alaska. gov)more or Joann Mitchell (joannmitchell@kinneyeng.com). For more information contact Beth (elizabeth.heim@alaska.gov) gov) or Joann Mitchell (joannmitchell@kinneyeng.com). or Joann Mitchell (joannmitchell@kinneyeng.com).

eweekak.org weekak.org eweekak.org eweekak.org

FEBRUARY22-28, 22-28, 2015 FEBRUARY 2015 FEBRUARY 22-28, 2015

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Engineers & Architects as a speaker for the SWE Region J Conference. Her conference presentation discussed how she used her existing skills and successfully applied it to fuels system engineering for military projects throughout the world. Chmielowski has a passion for engineering and encouraging others to find their passion of math and science. She also has a passion for giving back to her community, focusing her energy on encouraging students as they explore math and science. She is the Executive Director of Alaska MATHCOUNTS on the AEEF board and has served for several years as the State MATHCOUNTS Coordinator.

By Jeanne M. Bowie, PE, PhD, PTOE

ach year, local engineering professional societies nominate worthy engineers to be considered for the Alaska Engineer of the Year award. Nominees are judged by representatives from each of the societies based on five main areas of accomplishment:  Significant engineering contributions  Publications  Activity in professional organizations  Other service to the professional community  Service to the wider community These areas highlight the values of the engineering profession to promote the health, safety, and welfare of the general public through good design, by sharing knowledge, and through service to our profession and the community. Please join us in celebrating the nominees for 2014 Engineer of the Year!

Greg Hobbs, PE Nominated by the Society of Petroleum Engineers

reg Hobbs, PE, is a Staff Drilling Engineer for ConocoPhillips Alaska with the Alpine Drilling Team. With twenty-five years’ experience, Hobbs’ assignments include drilling and production roles on the Alaska North Slope as well as drilling roles in the Deepwater Gulf of Mexico, Washakie (Wyoming), and Permian (Texas) Basins. Hobbs has coauthored two SPE papers on the deployment of new completion and drilling technologies. Hobbs is a current member of the Alaska Section of the Society of Petroleum Engineers and the Alaska Chapter of the American Association of Drilling Engineers. He has served both organizations as a Student Chapter Liaison to the University of Alaska Fairbanks, where he graduated in 1989 with a Bachelor of Science in Petroleum Engineering. Hobbs is also a past treasurer and director of the SPE Alaska Section and a past president of the AADE Alaska Chapter. In the community, Hobbs is extremely active in Boy Scouts with his two sons. He is also

Greg Hobbs, PE a member of the Industry Advisory Board for the Petroleum Engineering Department at the University of Alaska Fairbanks, where he is a former Adjunct Professor and Senior Design Project Mentor. Hobbs supports his local food pantry, Bean’s Café, the United Way Food Drive, and volunteers at the Love INC Thanksgiving event in Eagle River.

Captain Trenton “Cale” Reeves Nominated by the Society of American Military Engineers

aptain Trenton “Cale” Reeves is the Readiness and Emergency Management Flight Commander, 773rd Civil Engineer Squadron at Joint Base Elmendorf-Richardson, Alaska. His seventeen-member flight is responsible for the contingency-preparedness planning, education, and training of sixteen thousand

LaQuita Chmielowski, PE, LEED AP Nominated by the Society of Women Engineers

aQuita Chmielowski, PE, LEED, is currently an Associate and project manager in the Civil Department at Enterprise Engineering, Inc. Chmielowski earned her civil engineering degree from the University of Nevada, Las Vegas. During the almost fifteen years she has worked as an engineer, she has had the opportunity to work on diverse projects not only in Alaska, but also worldwide. Chmielowski has a wide range of experience in site development, planning, environmental permitting, and roadway design. At Enterprise Engineering, Inc., Chmielowski has shifted some of her focus to large-scale military fuel projects. One of Chmielowski’s greatest accomplishments in 2014 was to be chosen 16

LaQuita Chmielowski, PE, LEED AP

Captain Trenton “Cale” Reeves

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assigned military personnel, supporting three Air Force wings and two Army brigades. Reeves began his career as an Air Force Civil Engineer upon graduation from the United States Air Force Academy in 2008, assigned as a Project Programmer at Moody Air Force Base, Georgia. While at Moody, he planned, programmed, and managed over $240 million in MILCON projects, including the USAF’s first LEED Gold certified dormitory. His time at Moody included back-to-back deployments to Iraq and Afghanistan, totaling over 460 days overseas. In Afghanistan, as Engineer, Provincial Reconstruction Team-Paktya, Reeves directed projects in fourteen provincial districts and mentored seven provincial government officials in the planning, construction, and maintenance of electric and roadway infrastructure. Management of such dispersed projects required forty-two ground missions into unsecured territory, and more than one hundred meetings with provincial leadership. In 2012 Reeves moved to Alaska to join the 773rd Civil Engineer Squadron, first as Operations Flight Commander, then taking his current position. He deployed again in early 2014, serving six months as the USAF Officer in Charge of Troop Construction, Afghanistanwide, supporting retrograde operations across the country. Reeves is a member of SAME and an Engineer in Training.

Steven K. Noble, PE, PTOE, AVS Nominated by the Institute of Transportation Engineers

teven K. Noble, PE, PTOE, AVS, has a Master’s Degree in Civil and Environmental Engineering and is Vice President at DOWL, overseeing operations and 160 staff working in six Alaska offices. His responsibilities include company operations and making sure high quality professional planning, environmental, engineering, and construction services are delivered to private and public sector clients across Alaska. Noble is a recognized expert in traffic en-

gineering and a seasoned project manager with experience on several large transportation planning and engineering projects over his nineteen-year career. Recent project highlights include his leadership on the new Glenn Highway-Bragaw Street Interchange, East and West Dowling Road Extensions, and Ambler Mining District Industrial Access Road. Noble has served as adjunct faculty at UAA and in numerous professional society leadership roles. Noble is a Board Member on the Anchorage Economic Development Corporation and the Civil Engineering Academic Advisory Board for his alma mater. Noble and his wife Brenda have been married for twenty years and have six children. Steve is active in scouting and enjoys skiing, biking, and running on Alaska’s trails.

Patrick M. Coullahan, PE Nominated by Alaska Society of Professional Engineers

atrick M. Coullahan, PE, is Chief, Construction/Operations Division for the US Army Corps of Engineers, Alaska District. In this capacity, since 2008, he has been responsible for the Alaska District’s Civil Works and Military construction programs and operations statewide. Coullahan was URS Corporation Senior Vice President/Alaska Operations Manager from 2004 to 2008, directing a professional full service engineering and environmental team statewide. From 2001 to 2004 he was senior engineer for the Missile Defense Agency Ground-based Midcourse Defense in Alaska. He is a retired United States Air Force Colonel and was a career civil engineer officer from 1972 to 2001, with key Alaska assignments. Coullahan received numerous military awards: the Air Force Civil Engineering Meritorious Achievement Award, the Air Force Chief of Staff Award for Productivity Improvement, and the Air Force Civil Engineering Senior Military Manager of the Year. He received the Society of American Military Engineers (SAME) Sverdrup Medal as most outstanding young military engineer in all services. He received the SAME LTG Wheeler Medal for outstanding contributions to military engineering by a civilian Army engineer. Coullahan is a SAME Fellow and a National Society of Professional Engineers Fellow. He holds a Bachelor of Science in Industrial Engineering from New Jersey Institute of Technology and an MS in Systems Management from University of Southern California, and is a Professional Engineer (Texas).

Patrick M. Coullahan, PE his engineering career in Alaska in 1972 as a surveyor and drafter for Dickinson Oswald and Associates, now DOWL. He also worked with R&M Consultants and the Alaska Department of Natural Resources. In 1980, he became a registered Professional Civil Engineer in Alaska. In 1981 he joined Arctic Foundations where he is now the president and chief engineer. Yarmak has been an active member of ASCE Technical Council on Cold Regions Engineering serving as a member of the Frozen Ground Committee and the chairman of Structures and Foundations Committee. He is also a member of the National Society of Professional Engineers, the American Society of Mechanical Engineers, the International Permafrost Association, and the United States Permafrost Association as Past-President. Yarmak has had a long and distinguished career in Alaska and is a recognized leader in Arctic engineering and foundations on permafrost. He was the recipient of the 2014 ASCE Harold R. Peyton Award for Cold Regions Engineering. R

Edward Yarmak, PE Nominated by American Society of Civil Engineers

E Steven K. Noble, PE, PTOE, AVS 18

dward Yarmak, PE, is the President and Chief Engineer for Arctic Foundations, Inc. He is a lifelong Alaskan and graduated with a Bachelor of Science in Civil Engineering from the University of Alaska Fairbanks in 1976 and a Master of Science in Engineering from University of California Berkeley in 1978. He started

Edward Yarmak, PE

Alaska Business Monthly | February 2015 www.akbizmag.com

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Engineers & Architects

Shining Light on Alaska’s Solar Energy Future Engineering bright ideas and installations By Tom Anderson

hat is 4.6 billion years old, 864,938 miles in diameter, 10,000 Degrees Fahrenheit in its photosphere and 92,960,000 miles from the Earth? Perhaps an easier question to answer is what shines light on Earth of such intensity that humans can harness its radiant energy to power buildings, equipment, and appliances? Right—the sun. The proliferation of solar energy applications in Alaska is benefitting our environment, pocketbooks, and the industries that focus on solar technology. From the design stage of panels and harnessing the sun’s enormous energy to the complexity of engineering and integration to the actual installation and implementation of the technology, the sun has become a partner in Alaska commerce and infrastructure. As the future brightens for business and development, when it comes to solar power and synergy, Alaskans may just be getting the best end of the deal.

Let there be Lime— The Design Phase Jesse Moe and Chet Dyson were high school pals in Anchorage. They shared interest in owning their own business and being entrepreneurs. They both had an affinity to burgeoning technologies evolving in the world of alternative and renewable energy. Dyson pursued an education and trade skills in construction. Moe enrolled in the University of Alaska Anchorage’s engineering program and became an electrical engineer. They partnered in 2011 and formed Lime Solar. Lime Solar sells solar modules and thermal equipment for homes, businesses, and government facilities and offices. The company’s inventory in20

cludes wind turbines, batteries, and inverters. Lime Solar also offers design consultation and direction for projects large and small. Over the last three years Moe estimates he has designed the majority of grid-tie solar projects in state. “One of the primary reasons I entered the renewable energy market in Alaska is the lack of expertise in the state. The myriad benefits of utilizing solar power range, from cost savings to the reduction of carbon emissions, were also important considerations,” says Moe. Over 2014, Moe designed projects including an 80kw (kilowatt) solar panel array in the Glenn Square commercial center in Anchorage’s Mountain View neighborhood. The installation will be completed in 2015 for the Cook Inlet Housing Authority. Another set of designs was made for 38kw and 40kw solar panel systems within low income housing units on Lake Otis. The project was encouraged by the Alaska Housing Finance Corporation (AHFC) and is intended to alleviate tenant electricity costs. One housing unit is built and the remaining will be completed in 2015. In Fairbanks, Moe designed a 12.5kw array for the University of Alaska Fairbanks (UAF) Sustainability Program. This solar project had a dual purpose: UAF students could study the technology and application while lowering building electricity costs, which in a small but cumulative way beneficially affects the state budget and tax payer liability. In the same region, Lime Solar designed a 19kw solar array for dormitories on Eielson Air Force Base to reduce electricity costs. “A real champion of alternative energy partnership is Golden Valley Electric Association [GVEA] in Fairbanks,” adds

Moe. “GVEA’s clean energy incentives, earned through its SNAP program, encourage smaller renewable energy projects in conjunction with net metering and power grid relief.” Based on its website, GVEA has seventy-five members participating in the SNAP program with a combined capacity of 1.5 megawatts. Moe says that in 2014 an 80kw solar array, the largest in Alaska, was designed in the Bristol Bay community of Naknek for its high school. The power goes directly to the school and lowers the electricity costs. Similar to UAF, students can also get exposure and an overview of the technology. “Home owners, businesses, and even governmental entities are looking for ways to reduce pollution, monthly costs, and expenses throughout our state. Many rural communities are seeking the best option for alternative energy within harsh and inclement Alaskan conditions and climates,” notes Moe. Lime Solar recently designed a 200kw solar array for a prospective project in Bethel. Should the engineering and installment come to fruition, set-up will be the largest and most powerful solar array in the state.

Making Sunshine Work— The Engineering Phase After design, typically the next phase of a solar array project in Alaska is the engineering. In solar energy parlance, photovoltaic (PV) effect is the term describing the conversion of light (photons) into electricity, which is measured by voltage. Most people enjoy the fact that the sun emits energy in the forms of light and heat. Achieving the PV effect involves the sun’s radiation, which is known as sunlight. The sunlight shines on a photovoltaic cell that is most often made of two layers of

Alaska Business Monthly | February 2015 www.akbizmag.com

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“In the solar energy building process, the electrical engineer provides the design that interconnects the solar panels and brings wiring down into inverters, and then from inverters back-feeding into the electrical system.”

—Eric Cowling EIC Engineers

silicon for semi-conduction, chemically treated, and referred to as P and N. A diode is formed within the boundaries of P and N so that the photons from the sun’s rays, and the electrons from the diodes, interact and cause voltage. Granted, this is a simplified explanation, but engineers in Alaska are surfacing with the vision and goal to work with alternative energy paradigms like solar electric and heating systems that create voltage and critical power systems to operate and maintain infrastructure from urban to rural locations. One such company is EIC Engineers. EIC was founded by an electrical engineer named Eric Cowling who came to Alaska in 1994. The company’s professional electrical engineering services are geared for industrial, commercial, and residential projects throughout Alaska. Cowling has a staff of seven and he and his team have worked on several alternative energy power and solar systems in 2014, which includes feasibility, lifecycle cost, and energy analysis. The engineering package he offers to designers like Moe at Lime Solar is “immeasurably helpful,” as Moe describes the relationship, and “integral to the process” of solar energy implementation in the state. Whether on an existing or new building, while companies like Lime Solar provide concept and components like inverters, panels, and design drawings, it’s the electrical engineers and electricians who must devise and construct. Solar panels act in parallel with electric systems. Older models used to be off an electrical grid, requiring batteries. Today solar panels parallel feeds with the electric utility, producing an interconnected system. Cowling’s company worked on the

Lake Otis low income housing units in 2014, as well as a new Snow City South restaurant coming to a mall in Anchorage. EIC also worked with Lime Solar on the Naknek high school gymnasium project on all engineering aspects of the solar panel build. “In the solar energy building process, the electrical engineer provides the design that interconnects the solar panels and brings wiring down into inverters, and then from inverters back-feeding into the electrical system,” notes Cowling. Cowling and his team perform the majority of the engineering design from their office in Anchorage. “Our take on the solar energy model and integration in commercial and residential settings in Alaska is that it’s an up-and-coming technology that will enable buildings to become more efficient and economical. Granted, there’s a first-cost component to the budget equation when the technology is purchased, but without the need for batteries and because of an expanding availability to procure product, renewable energy systems like solar panels are gaining in popularity throughout our state,” Cowling says.

Spendy Upfront Costs Both Moe and Cowling are transparent about the costs, disclaiming that solar energy systems range in price, and the very first cost is the initial investment. Whether small or large, an initial cost outlay is required that may raise an eyebrow to a homeowner, business, or bureaucrat who may erroneously think there’s an immediate savings in electric costs. For the most part, solar energy systems save the owner money in the long run, not immediately, suggest both engineers. Cowling reminds that power is relatively inexpensive in Anchorage in comparison to rural Alaska, with the difference often as much as 12 cents in the city per kw hour versus 60 cents per kw hour in rural locations. This tangible financial realization has enticed rural communities to consider enhancing or building a new solar energy system for their home, business, or government offices. Another Alaskan firm that helps design alternative energy systems, including solar projects, is RSA Engineering. RSA just celebrated its 20th anniversary in 2013. The company’s specialty is

Alaska Business Monthly | February 2015 www.akbizmag.com

Affordable Solar

he price of solar PV has dropped more than 80 percent in the last five years, leading many remote communities in Alaska that are reliant on diesel to generate power to consider adding some panels. Particularly in places that already have wind-diesel hybrid systems and the controls to tie everything together, solar is beginning to become a viable option. Around the world, large-scale concentrated solar power is taking off, with prices already competitive with grid power in some

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in both rural and urban electrical and mechanical design, from power plants to waste treatment plants and from full electrical to renewable energy systems. Milaud Baumgartner is a twentytwo-year old mechanical engineer born and raised in Anchorage, recently graduating from UAF in May 2014. With just six months of real world engineering application work, primarily building HVAC, plumbing, and energy modeling, Baumgartner has broadened his emerging expertise to alternative energy systems. For solar photovoltaic cells client in 2014, Baumgartner and another professional engineer wrote a commissioning report on a PV system that was installed on the Coronado Senior Housing building in Eagle River. “The PV array there was designed to be a solar thermal system that would interact with the building’s primary heating system and provide complimentary and supplemental heat to the building,” Baumgartner delineated. Baumgartner notes the other project, still in its early phases, is the housing unit on Lake Otis referenced by Jesse Moe. “PV cells are being utilized in this project to offset the total projected power consumption of these buildings. RSA worked up two different energy model/analysis of the building design on behalf of the building owner and the architect for the project. One energy model incorporated and took into account the reduction in energy usage on account of the PV cells and the other model did not,” says Baumgartner.

markets. At some point I think Alaskans will begin to use the sun to fuel hybrid cars and four wheelers that can run on either electricity or petroleum. Think of the tens of millions of dollars we export from our state’s economy every year to import gasoline during the summer when the sun is shining twenty hours a day. —Chris Rose Executive Director Renewable Energy Alaska Project (REAP) Baumgartner appreciates the teamwork approach to renewable energy projects in the state. He explains that Jesse Moe with Lime Solar helped size and estimate the cost of the PV arrays based on the information that RSA was able to generate with its energy models. “The primary goal for these energy models was to get alternative energy ‘points’ under the Alaska Building Energy Efficiency Standard, BEES, which is governed by the Alaska Housing Finance Corporation, AHFC, so that the owner could receive financial assistance for the construction of the project,” he says. RSA was successfully able to provide an energy model that incorporated PV cells, among other alternative energy sources, such as geothermal, in such a way that AHFC found satisfactory. To that end, Baumgartner explained that PV cells have the capability to become an integral part of alternative energy generation throughout Alaska. “As technology is advancing at an almost exponential rate, it is only a matter of time before PV [solar energy] turns into one of the most cost effective sources of alternative energy,” he adds.

Let the Sun Shine In—The Installation Phase Davis Constructors & Engineers has been building in Alaska since 1976. In its more-than-thirty-eight years, the company has completed nearly three hundred projects. The residential, commercial, and government infrastructure it has constructed is valued at over $2.25 billion across Alaska. As one of

Alaska Business Monthly | February 2015 www.akbizmag.com

the state’s largest general contractors, the Davis team recognizes the importance of understanding and becoming experts in renewable energy technology and applications. Jed Shandy is a project engineer and principal at Davis. Shandy is overseeing the installation of solar panels alongside Lime Solar for the Cook Inlet Housing Authority project in Mountain View. The company is assessing inclusion of solar and thermal applications for a project on the University of Hawaii, Kona, campus. Davis is also considering solar applications for its new office complex in midtown Anchorage. “Solar technology is a growing market that Davis is expanding our capabilities for and investing in to meet Alaskan’s needs,” says Shandy. “In fact, Davis’ new offices will have geothermal technology, and we’re evaluating a solar PV component in the building.” Shandy is eager to see renewable energy technologies become more viable in the state. In conjunction with Alcan Electrical & Engineering as its electrical contractor, installation of basic to complex solar energy systems in Alas-

kan homes and businesses is a field that is wide open for companies targeting such niche in Alaska. Shandy and team are cognizant that training and education of Davis employees is what elevates their company’s value and credibility. Despite the fact that only a few sizable solar arrays have been designed and installed for commercial application in Alaska in 2014, Shandy foresees a growing and comprehensive range of renewable energy systems, particularly solar-related, in the coming years.

Solar Makes a Difference Renewable energy applications are diverse. As mankind recognizes the unsustainability of a purely fossil fuel technology to generate power and energy, resources like tidal water, wind, and solar power are a welcomed and increasingly popular alternative. Alaska, in its geographic complexity and vastness, is surfacing as the treasure trove for renewable energy applications. Solar power is one such source of clean, consistent energy that keeps power charged and costs reduced. As Lime Solar’s Jesse Moe and EIC En-

gineers’ Eric Cowling reflected, all solar projects are unique in our state. “It’s very rare to go 100 percent off the grid with solar or not have an electric bill whatsoever, but the opportunity to reduce one’s monthly and annual bill is tangible,” says Moe. Cowling added that “some reductions in cost are as little as 5 percent to 10 percent monthly, but if that’s off of a $20,000 per month electric bill, the impact is substantive for commercial properties.” No matter the level of investment in solar technology in Alaska, there is clearly a ray of hope for growth in the industry. Benefits including a reduction in fossil fuel dependence, financial savings, and support of well-intended entrepreneurs who value alternative, clean energy are appearing project after project. In the case of solar energy, the star power is making life and function a sustainable ecosystem we can all be part of and support in Alaska thanks to the designers, engineers, and construction professionals helping harness the power of our sun. R Tom Anderson writes from across Alaska.

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Engineers & Architects

Alaska Energy Infrastructure and Engineering By Julie Stricker

t’s the dead of winter, but steam is rising from a remote valley on Alaska’s Seward Peninsula. A large frame building and a few outbuildings are clustered on the valley floor, surrounded by cottonwood trees—a rare sight in the mostly treeless landscape of western Alaska. The trees grow there because of an unusual isolated geothermal resource that keeps the surrounding area warmer than its surroundings: Pilgrim Hot Springs. The site of a former Catholic orphanage listed on the National Register of Historic Places, the springs have a long history of local use. They also may hold the key to a reliable energy source for the community of Nome, sixty road miles away. But developing Pilgrim Hot Springs and getting the energy to Nome won’t be easy. It’s an example of some of the hurdles facing Alaska, a top energy producer whose residents pay some of the highest energy costs in the country.

Geothermal energy exploration activities at Pilgrim Hot Springs near Nome. Photos by Chris Pike/ ACEP

‘Islanded System’ “One of the major challenges of remote communities everywhere is that they were originally settled due to being prime locations for transportation/ trade or access to food resources, not energy resources,” says Gwen Holdmann, director, Alaska Center for Energy and Power (ACEP). “Where there is an intersection of good resources and population density, it is often a happy accident.” Because of this, Alaska’s energy infrastructure is fragmented, according to Michael Rovito, director of member and public relations for the Alaska Power Association. Unlike the Lower

Alaska Business Monthly | February 2015 www.akbizmag.com

Pilgrim Hot Springs near Nome holds geothermal reserves.

48 states, which are criss-crossed by grids of interconnected interties, most of Alaska’s communities stand alone. “Alaska’s infrastructure is known as an islanded system because of that lack of an intertie,” Rovito says. “Another issue is the cost of goods and materials up here as well. If you’re going to build any sort of infrastructure in Alaska, it’s typically more costly than the Lower 48.” The logistics of getting materials and crews to remote locations can be a challenge, Rovito says. Materials have to be ordered months in advance for delivery within a narrow window, with the weather playing a huge role. Hundreds of Alaska villages rely on diesel-powered generators for energy. Most are only accessible by air, boat, or snowmachine, depending on the season. That isolation can have ripple effects. “In most places in the Lower 48, it’s really easy to assemble linemen and get them out to those places without power,” Rovito says, noting that within hours of Superstorm Sandy’s landfall in New Jersey and New York in 2012, thousands of linemen from all over the country were converging on the devastated region. “In Alaska, in most places, it’s not that simple,” he says. “You’ve got to fly in or take a boat. It’s almost like a search and rescue operation. If the weather conditions are just too poor, they can’t get in there.”

Failed Power Plants This winter alone, residents in three villages have found themselves without power and dependent on help coming from hundreds of miles away. www.akbizmag.com

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In November, the power plant in the village of Tuluksak in western Alaska failed. It took more than a week for a replacement generator to be located and flown into the village of four hundred, accompanied by a technician to install it. Due to warmer than normal temperatures, tons of food in local freezers spoiled. In early December, three of the four generators in Fort Yukon failed, sparking a state of emergency in which villagers were asked to use as little energy as possible to keep the sole operating

Alaska Business Monthly | February 2015 www.akbizmag.com

generator from overloading. Local businesses, the school, and city and tribal offices were closed until a part and a technician arrived from Anchorage a few days later to get the generators back up. Also in December, the remote village of Little Diomede in the Bering Sea lost power. In that case, residents took refuge in the local school until an Alaska National Guard Black Hawk helicopter was able to transport an electrician from Nome to the tiny community 140 miles away. The only other aircraft in the region capable of flying in the severe winter conditions to the island was down for maintenance. While more communities are getting a boost from alternative renewable energy sources such as wind or biomass, most rely on diesel, Rovito notes.

Geothermal Resources Energy development at Pilgrim Hot Springs has the potential to solve a portion of these issues for the nearly four thousand residents of Nome. For the past three summers, ACEP has been exploring the area to map the geothermal resource and calculate its energy potential. ACEP is working with landowner Unaatuq LLC, a consortium made up of Alaska Native organizations and nonprofits from the Bering Straits region, the Energy Department’s Geothermal Technologies Office, and Nome Joint Utility System. So far, the results have been promising, Holdmann says. “Pilgrim is certainly viable from the perspective of developing meaningful amounts of energy,” Holdmann says. “Our resource evaluation estimates 2 megawatts of power could be produced and exported or used on site.” One issue is the cost of building a transmission line from the springs to Nome. Estimates of the approximately

“So all the pieces are in place for a project to proceed if there is some appetite for financial risk. We will have a clearer idea of that by next spring.”

—Gwen Holdmann Director, Alaska Center for Energy and Power (ACEP)

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fifty-mile line hover in the range of $1 million per mile. “If the resource were located on the outskirts of Nome, it would be an absolute no-brainer to develop,” Holdmann says. “Instead, the cost of transmission becomes a major impediment. At this point, it is up to the private sector to determine if it is economic to develop.” Holdmann notes an agreement is in place between Unaatuq and developer Potelco, as well as a power purchase agreement with the Nome utility. “So all the pieces are in place for a project to proceed if there is some appetite for financial risk,” she says. “We will have a clearer idea of that by next spring.” A nearby world-class graphite deposit, as well as plans to develop a major port to the west at Port Clarence, could also boost development. “In the meantime, the landowners are working with us to assess options for exporting energy throughout the region by other means—such as local food production—instead of electrons,” Holdmann says. “I think there is a high probability something could be developed. Energy export needs to be considered more broadly than just electric power production.”

Another Town, Another Challenge It’s not only remote villages that face big hurdles when it comes to energy in Alaska. Juneau, Alaska’s capital city, has had its share of problems, as well. The city gets 99 percent of its electricity from the Snettisham Hydroelectric Project about thirty miles south of town, says Alec Mesdag, director of energy services at Alaska Electric Light & Power Co. Diesel supplies the fraction remaining, mostly during maintenance periods, he says. As a result, Juneau residents enjoy some of the least expensive energy in the state, about 12 cents per kilowatthour. In some villages, residents pay nearly 80 cents per kilowatt-hour. But in April 2008, Juneau residents got a brief taste of village energy prices when an avalanche knocked out several towers along the transmission line and the utility had to rely on its diesel backup. The transmission line from Snettish30

Alaska Business Monthly | February 2015 www.akbizmag.com

“In the meantime, the landowners are working with us to assess options for exporting energy throughout the region by other means—such as local food production—instead of electrons. I think there is a high probability something could be developed. Energy export needs to be considered more broadly than just electric power production.”

—Gwen Holdmann Director, Alaska Center for Energy and Power (ACEP)

am to Juneau runs through steep, rugged country before it dives below Taku Inlet for three miles. The avalanche destroyed three towers and damaged others, Mesdag says. The towers were all south of Taku Inlet and accessible only by helicopter. “It took about six weeks to get the Snettisham power plant back up,” he says. “During that time, the vast majority of the power was diesel-powered and [the price] quintupled. That was a pretty big shock. At least it wasn’t longer than it was.” Since then, the utility has installed three avalanche diverters on the towers

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most exposed to avalanche risk, Mesdag says. The diverters are huge steel wedges about forty feet tall mounted uphill from the towers. The wedges, which cost about $2.2 million apiece, are designed to force the flow of snow from an avalanche to either side of the tower. In 2012, one of the structures successfully diverted a medium-size avalanche that could have caused significant damage to the line. Whether they will work on the scale of 2008’s massive avalanche remains to be seen, Mesdag says. The utility hopes to prevent such an avalanche in the future by ramping up its avalanche mitigation experts. The

utility employs a seasonal avalanche specialist, who tries to trigger smaller avalanches to prevent larger ones from building up. In the past, the avalanches were triggered by dynamite tossed from helicopters onto high-risk slopes, but Alaska Electric Light & Power recently acquired a French-made device called a Daisy Bell, Mesdag says. The Daisy Bell is mounted beneath a helicopter, which hovers up to thirty feet above the selected avalanche start zone. It explodes a mixture of hydrogen and oxygen, triggered remotely from the helicopter, which sends a shockwave over the unstable snow, triggering the avalanche. Between the diversion towers, routine tree clearing and the use of the Daisy Bell, Alaska Electric Light & Power has garnered a reputation as a leader in avalanche mitigation. Whatever it takes to keep the lights on. R Julie Stricker is a journalist living near Fairbanks.

February 2015 | Alaska Business Monthly

ARCHITECTS

ALASKA BUSINESS MONTHLY | 2015 ARCHITECTS & ENGINEERS DIRECTORY

Company

Top Executive

Architects Alaska 900 W. Fifth Ave., Suite 403 Anchorage, AK 99501 Phone: 907-272-3567 Fax: 907-277-1732

Mark Kneedler, Pres.

Bettisworth North Architects & Planners 212 Front St., Suite 200 Fairbanks, AK 99701 Phone: 907-456-5780 Fax: 907-451-8522

Tracy Vanairsdale, Mng. Prin. Arch.

Blue Sky Studio 6771 Lauden Cir. Anchorage, AK 99502 Phone: 907-677-9078 Fax: 907-677-9079

Catherine Call, Owner

Design Alaska, Inc. 601 College Rd. Fairbanks, AK 99701 Phone: 907-452-1241 Fax: 907-456-6883

Chris Miller, President

ECI/Hyer, Inc. 101 W. Benson Blvd., Suite 306 Anchorage, AK 99503 Phone: 907-561-5543 Fax: 907-562-3213

Brian Meissner, Principal

GParch Architects 207 E. Northern Lights Blvd., Suite 110 Anchorage, AK 99503 Phone: 907-563-1942 Fax: 907-561-6847

Gary Peterson, Pres.

Ivy & Co. Architects/Mark A. Ivy Corp. 3835 Spenard Rd. Anchorage, AK 99517 Phone: 907-563-5656 Fax: 907-563-5657

Mark Ivy, Principal Architect

Ke Mell Architects PO Box 21898 Juneau, AK 99802 Phone: 907-463-3942

Ke Mell, Owner

kpb architects 500 L St., Suite 400 Anchorage, AK 99501 Phone: 907-274-7443 Fax: 907-274-7407

Mike Prozeralik, Pres.

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

Charles Banister, Principal

LCG Lantech, Inc. 250 H St. Anchorage, AK 99501 Phone: 907-243-8985 Fax: 907-243-5629

Wallace Swanson, Pres./CEO

Little Susitna Construction Co. 821 N St., Suite 207 Anchorage, AK 99501 Phone: 907-274-7571 Fax: 907-277-3300

Tammie Smith, Gen. Mgr.

Livingston Slone, Inc. 3900 Arctic Blvd., Suite 301 Anchorage, AK 99503 Phone: 907-550-7400 Fax: 907-561-4528

Tom Livingston, Principal

McCool Carlson Green 421 W. First Ave., Suite 300 Anchorage, AK 99501 Phone: 907-563-8474 Fax: 907-563-4572

John Weir, President, CEO

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

RIM Architects, LLC 645 G St., Suite 400 Anchorage, AK 99501 Phone: 907-258-7777 Fax: 907-279-8195

Larry Cash, Pres./CEO

Simpson Associates, Inc. PO Box 240125 Anchorage, AK 99524 Phone: 907-562-0944 Fax: 907-562-3944 Stantec 2515 A St. Anchorage, AK 99503 Phone: 907-276-4245 Fax: 907-258-4653

COMPANY

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1950 1950

25 25

Architectural design, space planning, interior design, and master planning for commercial, industrial, residential, medical, religious and educational facilities statewide.

1976 1976

36 36

Anchorage Office: 2600 Denali Street, Suite 710, Roy Rountree, AIA, Principal. Architecture, landscape architecture, interior design, planning & energy services for healthcare, education, military, housing, libraries, museums, public safety, civic buildings, senior care, and commercial development.

2002 2002

2 2

Architecture with a focus on residential and food service projects.

1957 1957

60 60

Design Alaska provides architecture; civil, structural, mechanical, fire protection, electrical, and environmental engineering; landscape architecture; and surveying. The firm also offers planning, condition assessments, energy modeling, LEED, construction administration and commissioning.

1981 1981

18 18

ECI/Hyer is an award-winning architecture, interior design, and planning firm based in Anchorage, Alaska. For over 30 years, our firm has been creating people places.

1982 1982

3 3

Architectural design. Gary Peterson & Associates

1984 1984

5 5

Innovative residential and commercial designs for the Alaska environment.

1987 1987

1 1

Architecture, including design and construction documents, planning and consulting.

1981 1981

17 17

Award winning full service cold climate/arctic design experts in architecture, planning, landscape architecture, interior design, design-build; Native, federal, housing, healthcare, K-12 schools, retail/commercial projects; client oriented pre-design and energy efficient renovation/expansion leader.

1977 1977

16 16

Kumin provides professional, award-winning architecture, planning, and interior design for a wide range of project types. We are committed to making our clientsÕ project experience as efficient and effective as possible, while ensuring that goals, budget and schedule are met.

1993 1993

25 25

LCG Lantech, Inc. (Larsen Consulting Group) is a multi-disciplined firm providing architecture, structural, civil engineering, land surveying and mapping services to our rural and urban client-base. In 2014, we acquired a surveying company, moved downtown, changed our name and launched a new logo.

1980 1980

18 12

A general, mechanical and electrical contractor. Architects, civil, mechanical and electrical engineers, licensed in twelve states. Construction project management. Importer, exporter and global project consultation.

1975 1975

16 16

Architecture services for new construction & renovations, including building condition surveys & energy assessments/upgrades. Interior design, master planning, space programming & building design standards. Planning & design for laboratory, medical, food service & FF&E.

1983 1983

18 18

McCool Carlson Green is an Alaskan-owned architecture firm providing planning, interiors, and design services. The firm focus is the design of high-quality educational, civic, commercial, military, and healthcare facilities that flourish in complex Alaskan environments.

1998 1998

30 30

Environmental planning documents (EA/EIS), environmental remediation, and fullservice A/E firm with design/build, construction management, and general contracting capabilities.

1986 1986

80 32

RIM Architects has provided excellence in comprehensive architectural design and client service throughout Alaska since 1986. RIM also has offices in California, Guam, and Hawaii. The firm provides full-service architectural design for projects of all sizes and scope.

Mark Simpson, Pres./Architect

1975 1975

1 1

Architectural services and construction management. Consultant based company to manage design teams for specific projects.

Bob Gomes, CEO

1954 1972

marketing@architectsalaska.com architectsalaska.com

info@bettisworthnorth.com bettisworthnorth.com

catherine@callbluesky.com callbluesky.com

mail@designalaska.com designalaska.com

contact@ecihyer.com ecihyer.com

gparch.net

ivyco@alaska.net ivyandco.com

kemell@alaskan.com

info@kpbarchitects.com kpbarchitects.com

kai@kuminalaska.com kuminalaska.com

holly@lcgak.com lcgak.com

littlesu@ak.net littlesu.com

lsi@livingstonslone.com livingstonslone.com

ryanoshek@mcgalaska.com mcgalaska.com

hlm@mlfaalaska.com mlfalaaska.com

info@rim-ak.com rimarchitects.com

twitter.com/Stantec stantec.com

14,000 Stantec unites more than 14,000 employees from over 230 locations. Our 92 workÑconsulting in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project managementÑbegins at the intersection of community, creativity, and client relationships.

Alaska Business Monthly | February 2015 www.akbizmag.com

UMIAQ 6700 Arctic Spur Rd. Anchorage, AK 99518 Phone: 907-677-8220 Fax: 907-677-8286

Richard S. Reich, P.E. , Gen. Mgr.

WHPacific, Inc. 3111 C St., Suite 300 Anchorage, AK 99503 Phone: 907-339-6500 Fax: 907-339-5327 Company

Harold L. Hollis, P.E., VP AK Reg.

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

info@uicumiaq.com uicumiaq.com

info@whpacific.com

whpacific.com Top Executive

Pat Cusick, President

ARCADIS 880 H St., Suite 101 Anchorage, AK 99501 Phone: 907-276-8095 Fax: 907-276-8609

Roe Sturgulewski, AK Ops Leader

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

Jeff Kinneeveauk, Pres./CEO

BBFM Engineers, Inc. 510 L St., Suite 200 Anchorage, AK 99501-1949 Phone: 907-274-2236 Fax: 907-274-2520

Dennis Berry, Pres.

Bratslavsky Consulting Engineers, Inc. 500 W. 27th Avenue, Suite A Anchorage, AK 99503 Phone: 907-272-5264 Fax: 907-272-5214

Tanya Bratslavsky, Pres.

Bristol Engineering Services Corporation 111 W. 16th Ave., Third Floor Anchorage, AK 99501 Phone: 800-563-0013 Fax: 907-563-6713

Traviw Woods, Pres./CEO

CH2M HILL 949 E. 36th Ave., Suite 500 Anchorage, AK 99508 Phone: 907-762-1500 Fax: 907-762-1600

Terry Bailey, Sr. VP/AK Reg. Mgr.

ChemTrack Alaska, Inc. 11711 S. Gambell St. Anchorage, AK 99515 Phone: 907-349-2511 Fax: 907-522-3150

Carrie Lindow, Pres.

Coffman Engineers 800 F St. Anchorage, AK 99501 Phone: 907-276-6664 Fax: 907-276-5042

Dave Gardner, Managing Principal

Combs Engineering 503 Charteris St. Sitka, AK 99835-7042 Phone: 907-747-5725

info@amc-engineers.com amc-engineers.com

cynthia.oistad@arcadis-us.com arcadis-us.com

info@asrcenergy.com asrcenergy.com

cmaynard@bbfm.com bbfm.com

mail@bce-ak.com bce-ak.com

bristol-companies.com

bclemenz@ch2m.com ch2m.com/alaska

Services

SERVICES

1982 1982

200

UMIAQ is a member of the Ukpeagvik Inupiat Corporation (UIC) family of companies. UMIAQ services include resource development, design, architecture, engineering, regulatory planning, stakeholder relations, surveying, logistics, onshore/offshore spill response, Arctic science support, etc.

1981 1981

360 90

Professional consulting services for Energy, Water/Environmental, Development/ Facilities, Surveying, Transportation, and Construction/Program Management.

AK Estab. Empls. 1981 1981

32 32

Services An award winning consulting firm specializing in mechanical, electrical, plumbing, lighting, security, control, and telecommunications system design and engineering.

1959 1994

28,000 ARCADIS is the leading global natural and built asset design & consultancy firm working 23 in partnership with our clients to deliver exceptional and sustainable outcomes through the application of design, consultancy, engineering, project and management services.

1985 1985

3,862 ASRC Energy Services is Alaskaﾃ不 largest provider of comprehensive oil and gas 3,305 services with more than 30 years of project experience. We offer a full range of services from exploration, permitting and field development to production optimization and decommissioning as well as offshore oil response.

1996 1996

12 12

Structural engineering design and construction admin. for new buildings and additions to existing buildings, analysis of existing buildings, including seismic evaluations and condition surveys, design of tanks and modules and design of bridges. Specialize in cold climates: Alaska and Antarctica.

1985 1985

15 10

A multi-discipline engineering and project management company specializing in full design, value engineering, tenant improvements, facility condition and ADA assessments, permitting, energy upgrades and audits, construction management and inspections, QA/QC, and other services.

1994 1994

18 18

Civil engineering, permitting and planning; total project management encompassing planning, design and construction. facebook.com/BristolAllianceOfCompanies

1946 1962

26,175 Premier Alaskan oil & gas contractor; offering consulting, engineering, procurement, 2,424 logistics, fabrication, construction, construction management, operations and maintenance service all under one roof; supporting oil & gas, mining, environmental, water, power, transportation and government.

1973 1973

8-25 Please check out our Statement of Qualifications at chemtrack.net/about_us.htm. 8-25

1979 1979

260 90

Chris Combs, PE

1994 1994

1 1

Mechanical engineer providing HVAC and plumbing design services.

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

D. Michael Rabe, Mng. Principal

1981 1981

60 60

Civil, Electrical and Mechanical Engineering, Surveying, Planning, Permitting, and Construction Management.

Design Alaska, Inc. 601 College Rd. Fairbanks, AK 99701 Phone: 907-452-1241 Fax: 907-456-6883

Chris Miller, President

1957 1957

60 60

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

Stewart Osgood, President

1962 1962

415 175

DOWL provides public involvement; land use planning; environmental services and permitting; civil, geotechnical, transportation, and geotechnical engineering; landscape architecture; land surveying; GIS; construction administration; and materials testing, and construction inspection.

Doyon Anvil 509 W. Third Ave. Anchorage, AK 99501 Phone: 907-276-2747 Fax: 907-279-4088

Werner Plagge, Gen. Mgr.

1984 1984

40 40

Full service consulting engineering for the Petro chemical industry.

EDC, Inc. 213 W. Fireweed Ln. Anchorage, AK 99503 Phone: 907-276-7933 Fax: 907-276-4763

John Faschan, President

1980 1980

10 10

Mechanical and Electrical Engineering services. Rural Water & Sewer Systems, HVAC & Energy, Fuel Systems, Fire Protection, Piping & Pumping Systems, Facility Power systems, SCADA & Controls, Roadway Lighting.

EEIS Consulting Engineers 4400 Business Park Blvd., Suite B-100 Anchorage, AK 99503 Phone: 907-258-3231 Fax: 907-272-1288

Rick Button, Pres./Principal Engineer

1989 1989

18 16

Architectural services, structural, civil, mechanical, mechanical process, electrical and instrumentation engineering. Projects include camps, office buildings, warehouses, hangars and various projects for rig and production support.

www.akbizmag.com

info@chemtrack.net chemtrack.net

anchorageinfo@coffman.com coffman.com

mrabe@crweng.com crweng.com

mail@designalaska.com designalaska.com

jpayne@dowl.com dowl.com

doyonanvil.com

info@edc-alaska.com edc-alaska.com

eeis@alaska.net eeis.net

Civil, structural, industrial mechanical, process piping, commercial mechanical, electrical engineering and controls, lighting, project management, commissioning, and corrosion control engineering.

February 2015 | Alaska Business Monthly

ENGINEERS

AMC Engineers 701 E. Tudor Rd., Suite 250 Anchorage, AK 99503-7457 Phone: 907-257-9100 Fax: 907-257-9191

WORLDWIDE\AK EMPLOYEES

ARCHITECTS

Top Executive

COMPANY

ALASKA BUSINESS MONTHLY | 2015 ARCHITECTS & ENGINEERS DIRECTORY

Company

ENGINEERS

ALASKA BUSINESS MONTHLY | 2015 ARCHITECTS & ENGINEERS DIRECTORY

Company

Top Executive

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

Robert French, PE, PIC

Electric Power Systems 3305 Arctic Blvd., Suite 201 Anchorage, AK 99503 Phone: 907-522-1953 Fax: 907-522-1182

David Burlingame , Pres.

EMC Engineering LLC 4701 Business Park Blvd., Suite J-15 Anchorage, AK 99503 Phone: 907-644-3923

Ryan Bloom, Owner

Enterprise Engineering, Inc. 2525 Gambell St., Suite 200 Anchorage, AK 99503 Phone: 907-563-3835 Fax: 907-563-3817

Kevin Murphy, President

Environmental Management, Inc. 206 E. Fireweed Ln., Suite 201 Anchorage, AK 99503 Phone: 907-272-9336 Fax: 907-272-4159

Larry Helgeson, Principal Eng.

F. Robert Bell & Associates 801 W. Fireweed Ln., Suite 201 Anchorage, AK 99503-1801 Phone: 907-274-5257 Fax: 907-743-3480

Bob Bell, PE/LS/CEO

Franklin & Associates 225 E. Fireweed Ln., Suite 202 Anchorage, AK 99503-2080 Phone: 907-277-1631 Fax: 907-277-2939

COMPANY

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1986 1986

7 7

Specializing in asbestos, lead, PCB & other hazardous building materials identification & design of abatement and remediation projects. Oversight of demolition & abatement projects. AHERA mngmnt. plans, expert witness support. Indoor Air Quality investigations Mold, Ventilation Studies.

1996 1996

250 200

EPS provides substation, generation, controls, protection, system planning and analysis and distribution engineering for utility, industrial, and governmental clients. EPS holds a number of long term and alliance type contracts and relationships.

2002 2002

49 49

We provide construction administration, civil engineering, quality control management, materials testing and special inspection services.

1972 1992

49 37

EEI provides multidiscipline engineering and specialty services throughout Alaska and worldwide. As experts in fuel systems and civil site design, the Anchorage office is home to a thriving team of 38 professionals who are excited to solve complex problems and meet the specific needs of each client.

1988 1988

12 12

Environmental & civil engineering, compliance & consulting such as Phase I, Phase II, asbestos mgmt. & design, HUD lead paint activities, UST removals, SWPPPs, SPCCs, & related contamination remediation services & training. A team of dedicated professionals working to make Alaska cleaner & safer.

1974 1974

90 90

Engineering services and land surveying services.

Nelson Franklin, PE/Owner

1990 1990

1 1

Engineering services, structural engineering.

Fugro 5761 Silverado Way, Suite O Anchorage, AK 99518 Phone: 907-561-3478 Fax: 907-561-5123

Rada Khadjinova, AK Div. Mgr.

1962 2005

12,500 Offshore: marine geophysics and seafloor mapping, metocean services and 10 geotechnical investigations. Onshore: aerial and satellite mapping, precise positioning, geotechnical investigations, and regulatory and environmental assessments.

Golder Associates, Inc. 2121 Abbott Rd., Suite 100 Anchorage, AK 99507 Phone: 907-344-6001 Fax: 907-344-6011

Mitchells Richard, Mgr. AK Operations

1960 1980

8,000 Arctic and geotechnical engineering, groundwater resource development, environmental 44 sciences and remedial investigation.

rfrench@ehs-alaska.com ehs-alaska.com

jaxley@epsinc.com esgrp.net

info@emcalaska.com www.emcalaska.com

info@eeiteam.com eeiteam.com

lhelgeson@emi-alaska.com emi-alaska.com

bbell@frbcmh.com frobertbell.com

searl@fugro.comM fugro.com

golder.com

Alaska Business Monthly | February 2015 www.akbizmag.com

Haight & Associates, Inc. 526 Main St. Juneau, AK 99801 Phone: 907-586-9788 Fax: 907-586-5774

Benjamin Haight, Pres./CEO

Hart Crowser 310 K St., Suite 243 Anchorage, AK 99501 Phone: 907-276-7475 Fax: 425-778-9417

Jason Stutes, AK Office Mgr.

Hasz Consulting LLC PO Box 1229 Delta Junction, AK 99737 Phone: 907-895-4770 Fax: 907-895-4346

John Hasz, President

Hattenburg Dilley & Linnell 3335 Arctic Blvd., Suite 100 Anchorage, AK 99503 Phone: 907-564-2120

Scott Hattenburg, Principal/Pres.

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

Duane Hippe, Sr. VP/PE

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

Terry Heikkila, Dir. AK Ops

COMPANY

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

ben@haight-assoc.com haight-assoc.com

jason.stutes@hartcrowser.com hartcrowser.com

jrhasz@haszconsulting.com haszconsulting.com

info@hdlalaska.com hdlalaska.com

info@hdrinc.com hdrinc.com

jacobs.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1980 1980

7 7

Consulting electrical engineers serving Southeast Alaska since 1980.

1974 1985

115 2

Providing natural resources; environmental and geotechnical engineering; and hydrogeology support. Includes NEPA services, environmental permitting, baseline surveys (biological and chemical), fisheries, Endangered Species Act compliance, wetlands, and shoreline and in-water restoration.

1993 1998

8 8

Services in the fields of vibration analysis and manufacturing technology. Our state-ofthe-art analytical equipment and experienced field personnel enable us to solve the most difficult problems. HC has experience working in many countries throughout Europe, Asia and South America.

2000 2000

70 70

Hattenburg Dilley & Linnell, LLC is an Alaskan consulting firm specializing in civil, geotechnical, transportation, and arctic engineering, environmental and earth science, surveying, and construction management for government and industry.

1979 1979

8,500 Engineering services cover civil and structural engineering for transportation, water/ 140 wastewater, solid waste, federal, military, and oil & gas infrastructure. Specialty services in design-build. Engineering supported by full range of environmental/planning staff, and 8,500 HDR employees nationwide.

1947 1993

70,000 Professional services provider to federal and energy clients. AK services include 70 environmental permitting, compliance, investigation & remediation; energy conservation; logistics; upstream design; feasibility analysis & construction management.

Langdon Engineering & Scientific Services Albert Swank Jr., PE/Owner 318 W. Tenth Ave. Anchorage, AK 99501 le-m@ak.net Phone: 907-272-1789 Fax: 907-272-1790

1980 1980

3 1

Engineering physics, bioengineering, cryogenics, ultra high vacuum, thermal & mechanical engineering. High energy particle accelerators. Manufacturing engineering, machine design, design build of engineering/scientific systems. Machine, fabrication shops & offices located in AK & WA.

LCG Lantech, Inc. 250 H St. Anchorage, AK 99501 Phone: 907-243-8985 Fax: 907-243-5629

Wallace Swanson, Pres./CEO

1993 1993

25 25

Lifewater Engineering Company 1936 Donald Ave. Fairbanks, AK 99701 Phone: 907-458-7024 Fax: 907-458-7025

Bob Tsigonis, President/PE

1998 1998

10 10

Manufacture and designer of sewage treatment and drinking water treatment plants, commercial and residential. Specializing in design, permitting, fabrication, training, and operation. Plants built to work in the most extreme environments and most remote places. Plastic tank fabrication.

www.akbizmag.com

holly@lcgak.com lcgak.com

Bob@LifewaterEngineering.com LifewaterEngineering.com

February 2015 | Alaska Business Monthly

ENGINEERS

Top Executive

ALASKA BUSINESS MONTHLY | 2015 ARCHITECTS & ENGINEERS DIRECTORY

Company

ENGINEERS

ALASKA BUSINESS MONTHLY | 2015 ARCHITECTS & ENGINEERS DIRECTORY

AK Estab. Empls.

Company

Top Executive

Lounsbury & Associates 5300 A St. Anchorage, AK 99518 Phone: 907-272-5451 Fax: 907-272-9065

Jim Sawhill, Pres.

M-E-B Engineering Services 561 Iliamna Pl. Fairbanks, AK 99712 Phone: 907-457-1895 Fax: 907-457-1895

Dennis Bolz, Owner

MBA Consulting Engineers, Inc. 3812 Spenard Rd., Suite 200 Anchorage, AK 99517 Phone: 907-274-2622 Fax: 907-274-0914

Bradley Sordahl, Principal/CME

Merrick Alaska 3201 C. St., Suite105 Anchorage, AK 99503 Phone: 907-341-4725

David Huelskamp, CEO

Michael Baker Jr., Inc. 3900 C St., Suite 900 Anchorage, AK 99503 Phone: 907-273-1600 Fax: 907-273-1699

Jeffrey Baker, Regional Director

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

Moffatt & Nichol 880 H St., Suite 208 Anchorage, AK 99501-3450 Phone: 907-677-7500 Fax: 907-677-7577

Shaun McFarlane, Alaska Manager

Monrean Engineering & Associates PO Box 9343 Ketchikan, AK 99901-4343 Phone: 907-247-5920 Fax: 907-247-5918

Fred Monrean, PE

Morris Engineering Group LLC PO Box 210049 Auke Bay, AK 99821 Phone: 907-789-3350 Fax: 907-789-3360

Mark Morris, Principal

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

k.ayers@lounsburyinc.com lounsburyinc.com

mebeng@acsalaska.net

mbaconsulting@alaska.com mba-consulting.net

charlie.barnwell@merrick.com merrick.com

ANCHORAGE

mbakerintl.com

hlm@mlfaalaska.com mlfalaaska.com

smcfarlane@moffattnichol.com moffattnichol.com

fmonrean@kpunet.net

info@morrisengineeringgroup.com morrisengineeringgroup.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1949 1949

85 85

Civil engineering, land surveying, planning, construction management. Servicing local and state government, oil and gas industry and more.

1989 1989

1 1

Engineering Services

1989 1989

14 14

MBA Consulting Engineers, Inc., established in 1989, is a full service mechanical and electrical consulting engineering firm specializing in arctic, subarctic and northern maritime design.

1955 2014

500 50

Engineering, surveying, energy systems, geospatial, LiDAR software.

1940 1942

6,000 Engineering: transportation, pipeline, geotechnical, mechanical, civil; GIS & LiDAR; 75 Environmental/Permitting/NEPA; public involvement.

1998 1998

30 30

Environmental planning documents (EA/EIS), environmental remediation, and fullservice A/E firm with design/build, construction management, and general contracting capabilities.

1945 2012

610 4

Moffatt & Nichol has provided waterfront engineering services to the energy industry since our founding in 1945. Today, we serve clients globally for projects ranging from piers & wharves to deep foundations, offshore floating facilities, liquid & dry bulk terminals, and offshore mooring systems.

1997 1997

1 1

Civil engineering, surveying, wastewater design, subdivisions, structural engineering, storm drainage design, foundation engineering, inspections, engineering reports, marine structures, permitting, etc.

1997 2004

12 12

Electrical consulting; engineering; design; inspection; construction administration.

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Innovating Today for Alaskaâ&#x20AC;&#x2122;s Tomorrow 36

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Alaska Business Monthly | February 2015 www.akbizmag.com

MWH 1835 S. Bragaw St., Suite 350 Anchorage, AK 99508 Phone: 907-248-8883 Fax: 907-248-8884

Chris Brown, Alaska Reg. Mgr.

NANA WorleyParsons PO Box 111100 Anchorage, AK 99511 Phone: 907-273-3900 Fax: 907-273-3990

Rock Hengen, Pres./Gen. Mgr.

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

John Hargesheimer, President

Northern Geotechnical/Terra Firma 11301 Olive Ln. Anchorage, AK 99515 Phone: 907-344-5934 Fax: 907-344-5993

Keith Mobley, President

Northern Land Use Research Alaska LLC 234 Front St. Fairbanks, AK 99701 Phone: 907-474-9684 Fax: 907-474-8370

Burr Neely, Gen. Mgr.

Northern Mechanical Engineering PO Box 113076 Anchorage, AK 99511-3076 Phone: 907-243-7254 Fax: 907-243-8495

Jay Smith, PE/Pres.

O'Neill Surveying & Engineering PO Box 1849 Sitka, AK 99835 Phone: 907-747-6700 Fax: 907-747-7590

Patrick O'Neill, PE/RLS/Owner

PDC Inc. Engineers 1028 Aurora Dr. Fairbanks, AK 99709 Phone: 907-452-1414 Fax: 907-456-2707

Royce Conlon, Pres./Principal

PM&E Services LLC 123 E. 24th Ave. #11 Anchorage, AK 99503 Phone: 907-222-5059 Fax: 907-222-5489

Damien Stella, Principal

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

chris.brown@mwhglobal.com mwhglobal.com

info@nanaworleyparsons.com nanaworleyparsons.com

hargy@nortechengr.com nortechengr.com

nge-tft.com

nlur@northernlanduse.com northernlanduse.com

nmeinc@earthlink.net

oneillengr@ak.net

pdceng.com

dstella@gci.net

1977 1982

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

8,000 Water, wastewater, environmental remediation, permitting and power. 30

ENGINEERS

Top Executive

COMPANY

1997 1997

500 500

A project delivery company focused on multi-discipline engineering and design, procurement and construction management services for the Hydrocarbons, Power, Minerals & Metals, and Infrastructure & Environment industries.

1979 1979

25 25

A multidisciplined 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.

1998 1998

22 22

We specialize in cold-regions geotechnical exploration and engineering, as well as provide materials testing, third-party QA/QC, and special inspection services throughout Alaska and around the world.

1991 1991

15+ 15+

National Historic Preservation Act Sec. 106 assessments; identification, evaluation, mitigation services-prehistoric/historic archaeology, historic architecture, cultural landscapes, and subsistence investigations; documents to satisfy NEPA and permitting requirements; reg compliance; consultation.

1991 1991

1-5 1-5

Automotive engineering, accident reconstruction, failure analysis, machine design, stress analysis.

1997 1997

4 4

O'Neill Surveying & Engineering is a land surveying and civil engineering company specializing in land development, but active in all aspects of land surveying as well as road and utility development and design.

1975 1975

82 82

PDC is a 100% employee-owned multi-disciplined firm with 80+ employees in three office locations. We specialize in designing for the ever changing Arctic environment with expertise in Civil, Electrical, Environmental, Fire Protection, Mechanical and Structural engineering and Land Survey & Planning.

1999 1999

1 1

Project management and civil engineering support to a broad range of clients from municipal utilities to commercial and light industrial facilities.

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February 2015 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY | 2015 ARCHITECTS & ENGINEERS DIRECTORY

Company

ENGINEERS

ALASKA BUSINESS MONTHLY | 2015 ARCHITECTS & ENGINEERS DIRECTORY

Company

Top Executive

PND Engineers, Inc. 1506 W. 36th Ave. Anchorage, AK 99503 Phone: 907-561-1011 Fax: 907-563-4220

John Pickering, President

Quest Engineering, Inc. PO Box 210863 Anchorage, AK 99521 Phone: 907-561-6530 Fax: 907-770-5511

Marc Cottini, Pres./Owner

R&M Consultants, Inc. 9101 Vanguard Dr. Anchorage, AK 99507-4447 Phone: 907-522-1707 Fax: 907-522-3403

Len Story, COO

RBA Engineers, Inc. 301 E. Fireweed Ln., Suite 100 Anchorage, AK 99503 Phone: 907-276-3768 Fax: 907-276-4269

Raj Bhargava, Branch Manager

Reid Middleton, Inc. 4300 B St., Suite 302 Anchorage, AK 99503 Phone: 907-562-3439 Fax: 907-561-5319

Bob Galteland, President

Rodney P. Kinney Associates, Inc. 16515 Centerfield Dr., Suite 101 Eagle River, AK 99577 Phone: 907-694-2332 Fax: 907-694-1807

Rodney Kinney, Jr. PE/Pres.

RSA Engineering, Inc. 670 W. Fireweed Ln., Suite 200 Anchorage, AK 99503 Phone: 907-276-0521 Fax: 907-276-1751

Timothy Hall, President

Schneider Structural Engineers 8811 Toloff St. Anchorage, AK 99507 Phone: 907-561-2135 Fax: 907-561-2136

Jeff Robertson, PE/Principal

Shannon & Wilson, Inc. 2355 Hill Rd. Fairbanks, AK 99709-5326 Phone: 907-479-0600 Fax: 907-479-5691

Chris Darrah, Assoc/FBX Ofc. Mgr.

Shannon & Wilson, Inc. 5430 Fairbanks St., Suite 3 Anchorage, AK 99518-1263 Phone: 907-561-2120 Fax: 907-561-4483

Stafford Glashan, VP/Anch. Ofc. Mgr.

Stantec 2515 A St. Anchorage, AK 99503 Phone: 907-276-4245 Fax: 907-258-4653

Bob Gomes, CEO

Stephl Engineering LLC 3900 Arctic Blvd., Suite 204 Anchorage, AK 99503 Phone: 907-562-1468

Matt Stephl, PE

Sustainable Design Group 247 S. Alaska St. Palmer, AK 99645 Phone: 907-745-3500 Fax: 907-622-1505

Eric Morey, Principal

Tauriainen Engineering & Testing 35186 Kenai Spur Hwy. Soldotna, AK 99669-7620 Phone: 907-262-4624 Fax: 907-262-5777

Mike Tauriainen, Principal Engineer

UAF Institute of Northern Engineering PO Box 755910 Fairbanks, AK 99775 Phone: 907-474-5457 Fax: 907-474-7041

Daniel White, Director

UMIAQ 6700 Arctic Spur Rd. Anchorage, AK 99518 Phone: 907-677-8220 Fax: 907-677-8286

Richard S. Reich, P.E. , Gen. Mgr.

VEI Consultants 1345 Rudakof Cir., Suite 201 Anchorage, AK 99508-6105 Phone: 907-337-3330 Fax: 907-338-5386

Vern Roelfs, Pres.

WHPacific, Inc. 3111 C St., Suite 300 Anchorage, AK 99503 Phone: 907-339-6500 Fax: 907-339-5327

Harold L. Hollis, P.E., VP AK Reg.

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

pndengineers.com

engineers@questengineers.com

email@rmconsult.com rmconsult.com

raj@rbaengineers.com RBAEngineers.com

kandersen@reidmiddleton.com reidmiddleton.com

rpka@rpka.net rpka.net

thall@rsa-ak.com rsa-ak.com

sastructural.com

info-fairbanks@shanwil.com shannonwilson.com

info-anchorage@shanwil.com shannonwilson.com

twitter.com/Stantec stantec.com

mstephl@stephleng.com stephlengineering.com

info@sdg-ak.com sdg-ak.com

engineeringalaska@gci.net

ncripley@alaska.edu ine.uaf.edu

info@uicumiaq.com uicumiaq.com

vernr@veiconsultants.com veiconsultants.com

info@whpacific.com whpacific.com

AK Estab. Empls.

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1979 1979

133 87

General civil, structural, geotechnical, arctic, marine, and coastal engineering; survey; permitting; hydrology; metocean; quality assurance; inspection; among others.

1996 1996

3 3

Civil engineering, environmental compliance, and construction management services.

1969 1969

140 140

Civil, Waterfront (Marine), Structural and Geotechnical Engineering; Land Surveying; Geology; Environmental; Transportation and Land Use Planning; Construction Administration; Materials Testing; Special Inspection; Hydrology; Right of Way and Lands Consulting; GIS Services; Public Involvement.

1977 1977

12 10

Provides mechanical & electrical engineering services statewide inclusive of enhanced commissioning, specially for military construction. In 2014, the firm has embarked upon its 37th year with US Fish & Wildlife Service, Clear AFS, FTW & JBER Commissioning, and Merrill Field Shop & Paint Hangar.

1953 1991

92 8

We offer engineering, planning, and surveying through the disciplines of structural, civil, aviation, waterfront, and transportation to public and private sector clients throughout the Pacific Northwest and Alaska. Our Anchorage office is one of the most service oriented structural firms in Alaska.

1980 1980

23 23

A family-owned and Native American civil engineering and surveying firm which was founded in 1980. The firm is operated by the three Kinney brothers who are tribal members of the Native Village of Savoonga. RPKA has the knowledge and expertise to assist with delivering transportation projects.

1983 1983

47 47

Mechanical/electrical consulting engineering services. Notable projects: IDIQ A/E Services & Engineering for Various NSF Projects at Antarctica, MSB Knik Area Middle/ High School, Pt. Hope Tikigaq School Renovation, UAF West Ridge Animal Resources and Cape Newenham Power Station Upgrades.

2000 2003

41 17

Engineering services.

1954 1974

300 30

Environmental site assessments; soil/water sampling; hazardous materials surveys; regulatory compliance; remediation design; storm water management. Also geotechnical analysis/design; frozen ground engineering; earthquake analysis; AASHTO-accredited testing lab for soils, concrete, asphalt.

1954 1974

350 70

Shannon & Wilson is a nationally renowned engineering & applied earth sciences firm with offices in Anchorage, Fairbanks & the Lower 48. Our services include geotechnical analysis and design; frozen ground engineering; environmental compliance, assessments & remediation; earthquake analysis; etc.

1954 1972

1996 1996

5 5

Engineering firm specializing in trenchless technology engineering including horizontal directional drilling, cured in place pipe lining water sewer, closed circuit television inspection (CCTV), pipe condition assessment, sliplining, auger boring and structure rehabilitation.

2009 2009

5 5

Sustainable Design Group, LLC (SDG) is a woman-owned and veteran-owned, small business, design firm offering full landscape architecture and land planning services, with a focus on Community and Economic Development specializing in environmental planning, site development and sustainable design.

1978 1978

9 9

Civil, structural, geotechnical & environmental engineering; construction materials testing; water lab; serving AlaskaÕs construction and natural resource industries since 1978.

1982 1982

63 60

The Institute of Northern Engineering (INE) at the University of Alaska Fairbanks provides solutions for the ArcticÕs intractable engineering problems. INE focuses on research and development in civil, environmental, petroleum, mining, geological, electrical, computer and mechanical engineering.

1982 1982

200

1981 1981

6 6

1981 1981

360 90

Civil and environmental engineering, land surveying for local communities, governments and private clients. Full range of services from feasibility studies through design, permitting and construction administration. Professional consulting services for Energy, Water/Environmental, Development/ Facilities, Surveying, Transportation, and Construction/Program Management.

Alaska Business Monthly | February 2015 www.akbizmag.com

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OIL & GAS

T Evolving High-Tech Geomatics By Tom Anderson 40

he fields of science and technology are growing exponentially in Alaska as resource development becomes even more inextricably linked to the stateâ&#x20AC;&#x2122;s budget and economy. Engineering, and specifically geomatics engineering, is now an essential player in the modernization of efficient, environmentally safe oil and gas transportation. Perusing University of Alaska Anchorage (UAA) and University of Alaska Fair-

banks (UAF) engineering course offerings online finds the Arctic Engineering programs state-of-the-art in curriculum and applicability to Alaska development projects on the North Slope. The Universityâ&#x20AC;&#x2122;s Arctic Engineering Graduate Programs cover facets of the industry like multi-modal transportation improvements in cold regions, design and operation of constructed works where ice and frozen ground effect conventional meth-

Alaska Business Monthly | February 2015 www.akbizmag.com

Merrick surveyor working on the trans-Alaska oil pipeline. Photo by Merrick

ods, and the evaluation of climate change impacts on Arctic infrastructure. The field is on the map and enticing to engineering students seeking a niche. While UAA has a master’s program, UAF has both a master’s and a doctoral program. It appears 2015 is the year for the best and brightest Alaska engineering professionals being retained to enhance Arctic pipeline performance and functionality.

Considering the diversity of Alaska geography and weather, remote sensing technology for environmental management is critical. New Player in Alaska In 2013 there was an effort by survey engineering firms to be awarded a contract by Alyeska Pipeline Service Company. Alyeska, the company that formed in 1970 to design, build, maintain, and operate the Trans Alaska Pipeline System (TAPS), awarded the surveying services contract to Merrick & Company in March 2014. Merrick is an employeeowned civil engineering and surveying company formed in 1955 in Colorado and covers everything from geospatial and planning solutions to architecture and engineering around the globe, with offices in the United States, Canada, Mexico, and the United Kingdom. Charlie Barnwell, recently hired by Merrick, came to Alaska with his family in 1963 when he was eight years old. His father was a geologist and worked for Sinclair, an oil and gas company that later became part of ARCO. Sinclair was one of the original resource development explorers in the state. Barnwell, at the time a third grader, moved from Libya, Africa, to the very opposite state of Alaska and was bright eyed and anxious to see firsthand the beauty of the Arctic. Barnwell held tight to his passion for Alaska’s wilderness and geography. After graduating from Dimond High School in Anchorage and successfully pursuing a bachelor’s degree in Geology from the University of Wisconsin at Madison, www.akbizmag.com

Do you need to develop Arctic resources and infrastructure? Just Ask Golder. Extreme weather, remote locations, and complex geology are challenging enough. Add regulatory, social, and environmental issues and you can understand why resource and infrastructure is a challenge in the arctic. Engineering Earth’s Development, Preserving Earth’s Integrity.

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he completed a master’s degree at the University of Alaska Anchorage in Planning. Following tenure with engineering firms and GIS (geographic information systems) companies, Barnwell joined the Merrick team in August 2014 as regional geomatics manager. His Alaska geology and GIS expertise will undoubtedly benefit Merrick as the company performs its five year, multi-million dollar engineering survey operations for Alyeska Pipeline and other clients.

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Geomatics Wide Range The definition of geomatics engineering is evolving. The field includes a wide range of activities that include acquiring and UMIAQ_ABM_FEB_2015.indd 1 12/22/2014 10:39:58 AM analyzing remote sensing and site-specific spatial data at different resolutions. Considering the diversity of Alaska geography and weather, remote sensing technology for environmental management is critical. Add to the science’s necessity one of the largest pipeline systems in the world, stretching from Alaska’s North Slope eight hundred miles to Valdez, and there is a coveted engineering service that is not only essential, but imperative in Alaska Arctic resource development. In Merrick’s case, the geomatics scope involves a team of nearly eighty professionals that support engineers and technicians under the overall direction of Merrick’s Alyeska Pipeline aded Industrial & Hydraulic Hose • Custom & Domestic Wire Rope, Chain & r G c i t c r A project manager, Vern Lee. From sur• ication • Hydrostatic Pressure Testing & Certification Synthetic Sling Fabr veying and mapping to GIS, the layers oleum Handling Equipment • Oilfield Fittings & Accessories r t e P p m e T w o L of the field are across the board. • • Sheet Rubber, Gasket Material & Adhesives Barnwell admits that Arctic engineering has its obstacles: literally. An eight Proud to be Employee Owned. hundred-mile, forty-eight-inch pipeline in northern Alaska is exposed to all elements and temperatures imaginable. Alaska Rubber Group & RIGGING SUPPLY TAPS crosses mountain ranges, earthANCHORAGE • FAIRBANKS • KENAI • WASILLA quake fault zones, numerous lakes and www.alaskarubber.com • Toll Free: 800-478-7600 rivers, and throughout is often exposed

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Alaska Business Monthly | February 2015 www.akbizmag.com

to harsh weather or is buried beneath brutal soils. The entire line requires constant monitoring and oversight. Merrick specifically sought the Arctic contract because of the company’s stateof-the-art technology, which includes specialized high-tech mapping called HDS, or high definition surveying. Barnwell noted that Merrick also has expertise and full capability in operating LIDAR technology and products. LIDAR is a remote sensing technology. The system uses laser scanning to map earth surfaces from the air or from the ground to map pipeline and other facilities. If a segment of the pipeline rests near a river, for example, surveyors are tasked with locating and monitoring the geographic site, specifically measuring and recording features of interest involved with pipeline integrity. Absent erosion, most people don’t think about the necessary survey precautions, but once degradation occurs, and should a leak or problem ensue, it’s too late for survey data to prevent, and, by that point, everyone is concerned.

An Arctic Survey Engineer’s Day Arctic engineering isn’t an easy task. The men and women within the field recognize that exigent circumstances can arise, as can the necessity to access remote and uninhabitable locations along the North Slope that most people would rather avoid. In terms of Merrick’s business mentality as a new company in Alaska, it welcomes the challenge and actually wants to expand in the state and bring more engineering talent, particularly as part of any new gas line construction. Barnwell alluded to the fact most people don’t have a tangible understanding as to how remote and large TAPS is in comparison to most infrastructure that engineers monitor. Crossing over challenging terrain like the Brooks Range is no small feat. Arctic engineers, whether in the field of geomatics or nearly any other specialty, face shifting environment. The geomatics specialists have an additional expectation as they are required by federal and state law to assiduously survey and record data such as time, location, status, and condition and include survey grade measurements of pipeline function. Consider the cost of process and the dependency on oil flowing in TAPS and suddenly Arctic surveying isn’t just www.akbizmag.com

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February 2015 | Alaska Business Monthly

“In the raw field our engineers can suffer twenty below Fahrenheit temperatures and inclement weather to record a construction dig or assess a potential spill or check on a suspicious valve. It’s a rewarding and important field and a growing industry in the Arctic. The access challenges and Arctic environment make me respect our engineers that much more considering the multitude of warmer climates they could choose to work in alternatively.” truckwell.biz

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—Charlie Barnwell Regional Geomatics Manager Merrick & Company

rote and inconsequential but rather a profoundly important component to the oil transportation equation Alaska’s and international markets rely on. Surveyors are tasked with driving up and down the pipeline corridor, many parts of which are not always accessible by road. Helicopters, small planes, and even all-terrain-vehicles are often utilized to get the job done. That translates to an Anchorage survey engineer getting an early morning call to report to the airport to fly to Prudhoe Bay or Coldfoot Camp or another hub from which the next leg is via myriad Arctic transport means to reach the pipeline location that requires oversight and data collection. “In the raw field our engineers can suffer twenty below Fahrenheit temperatures and inclement weather to record a construction dig or assess a potential spill or check on a suspicious valve,” adds Barnwell. “It’s a rewarding and important field and a growing industry in the Arctic. The access challenges and Arctic environment make me respect our engineers that much more considering the multitude of warmer climates they could choose to work in alternatively.” Merrick survey engineers use the LIDAR technology to scan pipeline condition, dimensions, and relationship to other assets. The surveyor with the right equipment scans and images fa-

Alaska Business Monthly | February 2015 www.akbizmag.com

cilities, producing a model of the plant either outside or inside. “It’s revolutionary,” says Barnwell. “You have a 3D model. Every location on the model is exact in measurement so, in the case of the pipeline assessment, we can determine and record detailed information like the length, connection, and depth. No companies in Alaska really performed this service prior to Merrick’s arrival in 2014,” adds Barnwell. “We have the capability to generate panoramic and internal scanning using the instruments along the entire pipeline structure, which aids in ensuring pipeline integrity in the surrounding areas.” Beyond LIDAR ground implementation, Merrick also performs airborne surveys that can map and monitor the entire pipeline, from ground terrain to vegetation condition. “It’s encouraging to see Merrick enter the Alaska engineering and surveying market with the latest technology, like LIDAR, because it makes for a safer and more efficiently managed pipeline,” notes Barnwell.

An Engineering Necessity with Benefits Ultimately, natural resource development will continue to expand in Alaska’s Arctic as minerals, oil, and gas continue to be explored for and extracted. Engineering companies like Merrick, and geomatics experts like Charlie Barnwell, plan to broaden the benefits of geomatics engineering in the state through education, technological advancement, and inclusion in survey paradigms. As the prospective gas line comes into sight and reality with a supportive state administration and Legislature, the cycle of oil production and monitoring will be closely scrutinized. The success of future resource projects like new pipelines will be dependent on current operational and safety protocols that indicate efficient, safe practices. Credit goes to Alaska’s geomatics survey engineers and companies like Merrick whose technical knowledge and efforts are ensuring TAPS flows smoothly and investment potential remains a worthy consideration to business and governments alike. R Tom Anderson writes from across Alaska. www.akbizmag.com

February 2015 | Alaska Business Monthly

OIL & GAS

Mobile facilities adorn the North Slope By Margaret Sharpe 46

ost oil and gas related structures on the North Slope can technically be called temporary by terms of the lease, since no permanent structures can be placed on the land. Pretty much every building up there is on a temporary foundation and designed to come apart for eventual removal from the lot. The dismantling

process will be simply the reverse of how they were pieced together, which is how most arrive on the Slopeâ&#x20AC;&#x201D;in pieces on trucks, barges, or by air. Once a module gets to Deadhorse, its level of movability defines it as temporary, or relocatable, and directs where and when it is used. Some modules arrive on wheels and keep on rolling

Alaska Business Monthly | February 2015 www.akbizmag.com

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(trucked) to destinations throughout the oil patch on the existing road system. Other units are mounted on skids on I-beams (like a runner on a sled) or skis, and those are dragged over snow and ice using dozers or tracked vehicles. “You can spot a temporary camp just about every two miles,” says one operator/driver for MagTec. “All the ‘OCs’ www.akbizmag.com

have them—satellites too.” OC means operations center, so just add those two words after Prudhoe Bay, Kuparuk, and Base, respectively, and you get PBOC, KOC, and BOC.

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Providing Facilities MagTec Alaska LLC is one of the providers of temporary facilities in Greater February 2015 | Alaska Business Monthly

“At the end of a camp’s project timeline, the site is ‘blown down’ [demobed], brought back to our service center in Deadhorse, and cold stacked [which means stored and out of service] while awaiting a new user. A lot of times, for example, you have a project that doesn’t need thirty-five beds. We will try to rent those out to others for you, and they’ll bus their people to your camp.”

—Roger Wilson North Slope Operations Manager, MagTec

Prudhoe Bay; in fact, relocatable units are their specialty. “MagTec is a provider of the rental asset,” says Roger Wilson, North Slope operations manager. “Any remote site structure—camps, shops,

enviro-vacs [a Slope term for an environmentally friendly bathroom unit], break shacks, office complexes—we provide all types of mobile buildings.” Wilson uses the term “relocatable”

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instead of “temporary” to emphasize the reusability factor. Camps can be left in place for the next user or shared by multiple users. “At the end of a camp’s project timeline, the site is ‘blown down’ [demobed], brought back to our service center in Deadhorse, and cold stacked [which means stored and out of service] while awaiting a new user. A lot of times, for example, you have a project that doesn’t need thirty-five beds. We will try to rent those out to others for you, and they’ll bus their people to your camp. For instance, it may be preferable to bus your crew for twenty miles to a site instead of sixty miles. I try to make that option known to many before I pull one of the assets back to Deadhorse. Remarketing to somebody I know in that area can be a win-win for more than one party.” Sometimes no mobilization is needed because an existing camp can be used for other purposes. “These are the same [winter] camps. Not very many camps come back to Deadhorse and get cold stacked,” he says. “Not too many because the level of activity in and around Deadhorse during dirt season—it’s a shift in activity, not really a shift in volume.” Although the levels of activity change, the location might not. “Our camp goes out for a client. When the project is done, another client might have use for it and can move in,” he says. Wilson likens this shift to hermit crabs exchanging shells. “Most new camps that are being built today are designed to be multimode, where they can go on the rail, on a truck, or across the Prudhoe Bay field,” Wilson says. “That way you’re not restricted to only being able to utilize them solely in Prudhoe Bay. Our mobile camps are completely truckable on the highway system, which makes them more versatile to various customers at other locations, such as for mining sites, in the Cook Inlet oilfields, and other remote sites in Alaska.”

Alaska Business Monthly | February 2015 www.akbizmag.com

Photo by Michael Swart

A Doyon three-story facility being trucked to its remote location.

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February 2015 | Alaska Business Monthly

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The Next Step After MagTec matches the client’s parameters, expectations, and ultimate location with a portable facility, the next step is timing. “Most times, these camps are associated with ice-road activity, so you have to define your timeframe,” Wilson says. “The most requested type of camp is the moveable, easily relocatable model. So much activity is ice-dependent. Be it ice pad or ice road for access, you have to get in late December or January, get the camp down, get it set up, and get whatever you are doing there—construction or drilling or seismic, whatever reason you need to have warm bodies on site and in quantity—get it up and running. The timeframe is also defined by how far you are taking the unit, how remote. “Once the ice road or ice pad is prepped and ready, along comes the carrier—such as Cruz, Peak, AFC [Alaska Frontier Constructors], CH2M Hill—who come pick up the units from MagTec’s Deadhorse base and transport them to the required site. They also generally send out a crew of assemblers, or setup staff, depending on the permitting of the site. Sometimes camps have to be placed in secondary containment or have to be placed on rig mats only. Sometimes there are no stipulations— part of the plan defined by the permit. At that point, you would set up the camp and energize.” The “energize” process brings the site to life and makes it livable. “When you set up in winter, the modules are cold, stone-cold like the outside environment, and nothing is running. So we energize it, bring it up to temperature for forty-eight hours, and start adding fluids and food. Then along comes our catering staff who set up the kitchen, and then the linens, beds… all of that can be done in seven to ten days in good weather,” Wilson says. Winter activity on the North Slope occurs from January to the middle of May; then tall structures on ice have to be demobed and set back on dirt or gravel pads, usually in Deadhorse. Sometimes operation can continue during summer if the structure location is not on ice. “Summer work is in equal volume,” Wilson says. “However, it’s a different type of work because it involves ac-

Alaska Business Monthly | February 2015 www.akbizmag.com

“Permanent camps are built, for the most part, in the three camp building facilities in Alaska: Alutiiq’s Port MacKenzie facility; NANA’s complex at Big Lake; and BCI [Builders Choice] in Anchorage. Today’s modular construction can produce units that are two-or three-stories high.”

—Roger Wilson North Slope Operations Manager, MagTec

tivities that you need to do when the ground is not frozen. There’s dirt work and camps that are set up to support environmental impact studies for future development.” MagTec performs the same services as for winter camps—determining client needs and matching camp structure type, arranging mobilization to the site, and even providing catering/housekeeping services. The MagTec permanent camp and service center in Deadhorse are modular units that sit on pilings. The rig support camp is a multi-purpose, seventyfour-man connex-style camp. “Our Base Camp in Deadhorse is occupied by a lot of different folks—Baker Hughes, ConocoPhillips, ENI, Brooks Range Pe-

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troleum,” Wilson says. “These folks all have permanent rooms in that camp. Even though their business might be out at Kuparuk, everyone needs a Deadhorse base.”

Module Transportation and Deployment “Permanent camps are built, for the most part, in the three camp building facilities in Alaska: Alutiiq’s Port MacKenzie facility; NANA’s complex at Big Lake; and BCI [Builders Choice] in Anchorage.” Wilson says these three Alaska firms build oversized modules that are transportable by truck and assembled (ultimately stacked together in a permanent configuration) at the

destination location. “Today’s modular construction can produce units that are two-or three-stories high.” MagTec has been providing portable buildings and associated services for six years—and they’ve been building on that experience. “There are a lot of very standard practices that have evolved over time. A lot of companies have gotten good at it.” Wilson says of their relocatable facility business: “We are good at it.” As Wilson mentioned, MagTec works with several companies to transport their modules to the camp sites on the North Slope, such as Peak Oilfield Service Company, CH2M Hill, AFC, and Cruz. Whether the camp is on skis, skids, or truckable, these companies have the proper equipment needed to move loads to site locations using trucks, dozers, and low-ground-pressure vehicles that minimize impact to the tundra. Cruz Construction, Inc. not only transports modules for companies like MagTec, they have their own mobile work camps for their construction crews as well as for hire. Their highly

February 2015 | Alaska Business Monthly

“Our camps have waterholding and sewage-holding capabilities. We sometimes use an engineered septic system or waste can be hauled off when [the storage tank] gets full—same thing with water. The units have fully functioning bathrooms and commercial kitchens.”

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mobile camps can be set up in as little as a day and are self-sufficient, with food, beds, plumbing, waste management, and maintenance facilities. An example camp for winter work is their sleigh camp, which has compartments connected to each other and mounted on skis. Depending on how many units are attached, then the necessary number of Steigers or PistenBullys pulls the convoy across the tundra like a train. Cruz camps are also deployed during the summer season, and they have camps in the Nikiski area and in Healy. “Our camps have water-holding and sewage-holding capabilities. We sometimes use an engineered septic system or waste can be hauled off when [the storage tank] gets full—same thing with water,” says Chad Rigdon, camp maintenance manager for Cruz. “The units have fully functioning bathrooms and commercial kitchens.” These selfcontained camps can also include shops and maintenance facilities large enough to repair all project equipment on site, allowing Cruz to boast the ability to create a complete work site location just about anywhere.

Afognak’s Unique Services Afognak Leasing LLC is also a provider of temporary man camps. Matt Thorpe, senior VP of Operations, explains the uniqueness of their services: “We are a camp designer, manufacturer, and have our own delivery. We have our own setup and assembly crew, and we can even operate the facility. As a turnkey, one-stop facility, Afognak provides everything in-house so you don’t have to get a camp from one vendor, contract

Alaska Business Monthly | February 2015 www.akbizmag.com

another to mobe and set up, and then another to manage the camp. “We provide exploration camps, hotel-style permanent housing in Deadhorse, and the highly mobile, rapidsetup exploration-type camps as well,” Thorpe says. The deployable units are mounted on steel skids that are designed to go on “roll back” trucks (winch-type trucks), which then deliver to the drilling or exploration site. “The drill camps we build have a lot of comforts that you would expect—a fitness center, TV room, and rec center—all the amenities to give you more of a home-style feel. Most of our assets that are deployed are in the Greater Prudhoe Bay area, based out of Deadhorse. The majority of those are delivered to the oilfield via the road system, but a portion of the locations are accessed by ice road.” In his discussion, Thorpe lays out the life-cycle of an exploration site. “Generally, we put in a forward camp, which is extremely high deployable but is more like a twenty- to twenty-eightbed unit. That goes out there to support the people making the ice road. Then we deploy a drilling-type facility that would have sixty to one hundred beds; this is like a hotel, with fitness center, all internet, televisions—everything you can think of that you would want. And that structure stays on site for four to five months as they are doing their drilling and such.” All the major players and independents in oil and gas on the North Slope use their facilities. “But we don’t solely service the [oil and gas] community. We also service mining and road construction in rural areas.” As an example, Thorpe cites a road project where the contractor has to travel great distances to reach a job site. “They might set up a project facility and operate it on location, which saves the work force from having to traveling two hours or more to the worksite every day.” Afognak owns the modular living facilities and their subsidiary, Alutiiq, performs the camp operating services, including staffing, maintenance, billeting, safety, and customer service support. Thorpe lists how this joint force can tune the product to meet the needs of a client: complete design/build for new camp facilities, offering lease or purchase, leasing existing facilities www.akbizmag.com

from Afognak’s inventory, retrofitting and updating existing camps, assembly and disassembly services, and consultation for efficient camp operations. “Our Eagle camp in Deadhorse is more like a ‘retreat.’ It’s really nice. But that’s not a deployable, drilling-style facility,” Thorpe says. “Our drilling-style facilities are equally as nice, though.” From the highly relocatable skid and sleigh camps to Deadhorse-based “retreats” that have all the creature comforts, portable “container camps” are the underpinning of many remote-site

projects. These prefab temporary modules populate the Greater Prudhoe Bay area—from Quonset hut shells and trailers to completely plumbed man camps. Although not a new concept in Alaska’s oilfield, what has changed is the intricacy, level of comfort, and mobility of these workhorses of the North Slope. R Margaret Sharpe writes from Palmer.

February 2015 | Alaska Business Monthly

OIL & GAS

U.S. Condensate Sale, Easing of Crude Oil Export Ban, and What It Means for Alaska: Cracks In The Door By Sourabh Gupta and Dr. Ashok K. Roy © Lucas Payne/AlaskaStock.com

The opinions expressed herein are the author’s own and not those of the University of Alaska System or Alaska Business Publishing Company, Inc.

Light Pillars and a drilling rig in the Prudhoe Bay Oilfield near Deadhorse on the North Slope of Alaska during winter in the Arctic.

“Since we cannot change reality, let us change the eyes which see reality.” —Nikos Kazantzakis “Progress is impossible without change, and those who cannot change their minds cannot change anything.” —George Bernard Shaw

uring the first week of November 2014, even as plummeting oil prices were roiling the global economy, global oil markets witnessed a minor revolution. On November 4, 2014, the Anglo-Australian resources giant BHP Billiton announced a US$50 million deal to sell 650,000 barrels of Texas lightly-processed, ultra-light oil, known as condensate, to the Swiss trading firm Vitol SA. By stitching up the sale, BHP Billiton is poised to become the first commercial entity to sell US domestically-produced oil overseas without the express permission of the federal government. The sale constitutes the foremost crack in the four decade-long ban that has governed US crude oil export policy, with minor exceptions. In time, the BHP Billiton sale is expected to be the first of many such deals as voluminous North American oil and natural gas production seeks new markets and higher prices abroad.

A US policy of banning crude oil exports that was built to cope during an age of energy scarcity is giving way, gradually, in this era of growing abundance.

Export Ban History The origins of the US crude oil export ban date back to the mid-1970s. To alleviate fears of shortages and spiraling inflation in the wake of the Middle East Oil Crisis, as well as to channel thennewly-flowing Alaska North Slope oil to the US West Coast rather than to Japan, the US Congress enacted the Energy Policy and Conservation Act in 1975. The law directed the president to issue regulations that would prohibit the export of domestically-produced crude oil overseas. Limited waiver authority “consistent with the national interest and the purposes” of the law was appended to the Act and, to date, seven exceptions to the ban including exports from Alaska’s Cook Inlet to Canada have been permitted. In important respects, the Energy Policy and Conservation Act bears some interesting parallels with the earlier Natural Gas Act of 1938. This pre-World War II Act required the US Department of Energy to make an affirmative determination that all permits issued to export natural gas from the

United States were consistent with the American “public interest.” As a practical matter, this “public interest” determination has since been applicable to those countries with which the United States does not have a free trade agreement—in effect, to most countries given that the United States has very few such free trade agreements in force. As such, both the Energy Policy Act and the Natural Gas Act provide discretionary, non-automatic licensing authority to federal government agencies to determine the scope of US-originating, cross-border energy flows. Determinations in favor have been few and far between—in effect, heaping a layer of distortion on an already-distorted international energy market. Equally, both laws, by way of their interpretation today, are tantamount to being deemed as ‘export restraints,’ which would place US compliance with its international trade obligations in questionable territory. As per the 1994 General Agreement on Tariffs and Trade rules to which the United States is a signatory, a country may enjoy a limited exception to the otherwise generalized prohibition on export restraints if such prohibitions or restrictions are: temporary, related to essential products that are in short sup-

Alaska Business Monthly | February 2015 www.akbizmag.com

ply, applied in conjunction with other conservationist objectives, or made with an express national security objective in mind. In an era of energy insecurity and national peril, discretionary, non-automatic licensing authority for crude oil and natural gas exports may have comported with the above criteria.

The Age of Abundance In an age of production abundance, this case is much harder to make. Between 2005 and 2013, US production of natural gas increased by 33 percent from 18 to 24 trillion cubic feet per year—with the production of shale gas increasing from 0.75 to 8.5 trillion cubic feet. Over the same period, US production of liquid fuels too increased by 52 percent, with the contribution of ultra-light/ tight oil increasing from 0.29 million barrels per day to 3.48 million barrels per day. The United States is expected to soon overtake Russia (gets approximately 50 percent of its state revenues from oil exports) and Saudi Arabia as the world’s top oil producer, as per International Energy Agency projections. Crude oil and natural gas are no

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longer in short supply and their export overseas does not impair US national security. The ban on their export in fact stands today on questionable legal ground. The proximate driver of the relaxation of the crude oil export ban—and thereby BHP Billiton’s recent condensate sale to Vitol SA, can be traced back to this prodigious discovery and extraction of tight oil. In mid-June 2014, the Bureau of Industry and Security, a littleknown office within the US Commerce Department tasked with administering the Energy Policy Act of 1975, issued a reinterpretation of the Act. It ruled that with minimal processing of crude oil to a low-density variety, called condensate (to ensure its stability and safe transport), the crude would henceforth officially be classified as having undergone transformation into a petroleum product—and hence liable for export without the need for a license. Refined oil products have long been exported license-free from the United States; the Energy Policy Act ban was limited to crude only. Further, at the time of this relaxation, government officials let it be

known that such “self-classification” of transformation to a petroleum product, and export thereafter, would quietly be encouraged henceforth without having new rulings to be issued.

Saturated Markets The catalyst of the Bureau of Industry and Security’s regulatory relaxation was a US Energy Information Administration (EIA) report of late-May 2014 which found that the US light crude oil market was at risk of saturation given the inherently limited domestic capacity to refine such light oil. Should the crude oil export ban not be relaxed, fresh investments in domestic hydraulic fracturing and horizontal drilling infrastructure would itself have been in jeopardy. Indeed at this time, existing US refineries in the Midwest and along the Gulf Coast, which are configured to process heavier (imported) crude from Mexico, Venezuela, and Canada, continue to typically demand that light oil producers sell their product at a discount—sometimes running as high as double-digit percentage points. At this discounted price, which has

February 2015 | Alaska Business Monthly

been further exacerbated by the recent plunge in international prices, new wells are uneconomical to drill and the hydraulic fracturing revolution liable to be stopped in its tracks until further light crude refining capacity is domestically brought on-stream. As per the EIA report, facilitating foreign market entry, and market prices, for US light oil will enable US light oil producers to generate healthier cash flows—in turn, facilitating a virtuous cycle of reinvestment in US domestic shale oil production. The Commerce Department’s June 2014 ruling was a timely and appropriate response to the predicament laid out in the EIA report. The ruling is also likely to be greeted warmly by Asian consumers across the Pacific, given their economies’ inexorable need for energy as well as their desire to diversify sources of supply beyond Middle East producers. As per International Energy Agency forecasts, Asia’s demand for oil imports is expected to rise from 12 to 27 million barrels per day between 2012 and 2035. At this time of writing, Enterprise Product Partners LP, a Houston-based pipeline

and oil storage operator, and Pioneer Natural Resources Company, a Dallasbased oil producer, have also received special permission from the US government to export such minimally processed oil. Enterprise Partners already has two term contracts with Japanese traders Mitsui and Mitsubishi for condensate supply and reportedly is looking to make further sales of condensate from South Texas’ Eagle Ford shale formation to Asia in 2015.

USA Oil Eminence Going forward, as the United States gradually displaces Saudi Arabia and Russia later this decade to become the world’s foremost oil producer, it stands to eminent reason that the four decades-old crude export ban be lifted in stages too. Protectionist arguments which claim that US oil must be confined within US borders to hold prices down and assist the nation’s manufacturing sector recovery are fundamentally misguided. The fungible nature of international oil markets, unlike that for natural gas which require dedicated pipeline or liq-

uefaction infrastructure, means that the greatest penalty for failure will instead be borne by US shale oil producers at the hands of their domestic refining counterparts. Equally, energy intensive sectors—primarily chemicals, primary metals, paper, and print—constitute a small share of US manufacturing and a bare fraction of US GDP. US ‘reindustrialization’ will not be manufactured on the back of cheap energy; rather that will be a function of technological breakthroughs like 3D printing and additive manufacturing, which are already transforming the way modernday manufacturing is conducted. Hydraulic fracturing in the United States has redrawn geo-political maps and fundamentally altered oil markets. The United States was and still remains the world’s largest consumer of oil. In 2005, the United States had to import 60 percent of its supplies; today it imports only 30 percent. As fracking increases domestic production, the United States will switch from being a net importer to a net exporter of oil and that will change the world’s political alliances forever.

Alaska Business Monthly | February 2015 www.akbizmag.com

Let us give a less known but classic example of how the geopolitical sands are shifting. A few years back, Greenland was imagining independence from Denmark and riches from an oil bonanza as the price of crude approached $150 a barrel (the US Geological Survey estimates 50 billion barrels of oil and gas beneath Greenland’s waters) and, accordingly, licenses were awarded to oil companies such as BP, ConocoPhillips, Shell, and others. Today, due to a drop in oil prices, all those hopes have been dashed. Crude oil from the shale fields of North Dakota is a major factor in the surge in US domestic oil production. This surplus has led to a debate over whether it is time to lift US restrictions on oil exports. Proponents of lifting the export ban include giant oil companies such as ExxonMobil and Chevron. The crucial breakeven points have been trending lower and lower in recent years due to technological advances that have made oil producers dramatically more efficient. Despite tumbling prices, the

OPEC cartel surprised everyone by deciding to keep pumping oil at current levels. One motivation appears to be to put financial pressure on the higher-cost producers in the United States, Canada, and Brazil. We feel, like in every aspect of life, that the strong players will remain while the weak ones will disappear. Lifting the ban on the export of domestically-produced crude will allow the North American shale oil revolution to continue apace, generating jobs, profits, and tax revenues while enabling the United States to remain in compliance with its international trade, as well as global stakeholder obligations. As Alaska has an abundance of oil and gas, and especially as the state’s operating budget depends inordinately on oil revenues, this state of play on US law/regulation has titanic financial implications for Alaska. The US Congress has its work cut out for itself as the global energy landscape gets reshaped. R

Sourabh Gupta is Senior Research Associate at Samuels International, Inc. in Washington, DC. He holds graduate degrees from Syracuse University and Georgetown University and was an East Asia Forum Distinguished Fellow. Gupta has published widely on international relations, foreign policy, and policy analysis. Dr. Ashok K. Roy is the Vice President for Finance & Administration/Chief Financial Officer of the University of Alaska System and Associate Professor of Business Administration at UAF. Roy holds six university degrees and five professional certifications and has authored over eighty-five publications.

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February 2015 | Alaska Business Monthly

special section

International Trade

China’s Role in Alaska’s Economy Decade of the Dragon setting records By Greg Wolf

Top Export Commodities At almost 55 percent of the total, seafood is the state’s major export commodity to China, and China is the state’s largest export market for seafood. The ongoing growth in seafood shipments to the country can be attributed to both China’s role as a major reprocessing center (for re-export to other countries, including the United States) as well as growing domestic consumption by an increasingly affluent consumer class. According to a recent report by the Alaska Seafood Marketing Institute,

Alaska’s China Era Continues

(2000 – 2013 Comparison, USD Million) $1,477 $1,354 $1,250

$1,500 $1,200 $900

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D he

“T

$600 $300 $103 $102

$148 $154

$921

$716 $733 $586 $474

$241

$337

$0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

fresh and chilled seafood has been preferred by consumers; however, frozen forms are becoming popular, as well. They note also that E-commerce has boosted domestic sales of seafood in China, appealing to a younger generation of customers. Alaska’s ground fish, such as cod and pollock, along with salmon, are the major export species to China. The report also notes that while Chinese consumers recognize products such as king crab, black cod, and yellow fin sole as high-end and healthy, lesser known products like sockeye salmon, pacific cod, and pollock roe are gaining increased attention from consumers. Mineral ores, primarily lead and zinc, are the second largest export commodity at 35 percent of Alaska’s exports

In addition to natural resource exports, Alaska firms are increasingly finding opportunities to do business in China. These companies are in the service sectors and are exporting know-how and technology. 58

” de

a ec

to China. Forest products, mainly consisting of whole round logs, followed by fish meal are the other two primary export categories at 6 percent and 4 percent, respectively. As large and important of a customer as China is now for Alaska, there are ample reasons to believe that further growth lies ahead. For example, as new mineral and metal mining projects come online, or as existing mines expand, China will inevitably be there as a major customer. Should the Alaska LNG (liquefied natural gas) project be developed, China could emerge as a significant buyer. These developments, and other such opportunities that may arise, portend continuing growth of the Alaska-China trade relationship for many years to come. In addition to natural resource exports, Alaska firms are increasingly finding opportunities to do business in China. These companies are in the service sectors and are exporting knowhow and technology. For example, RIM Architects, a leading Anchorage-based

Alaska Business Monthly | February 2015 www.akbizmag.com

SOURCE: US Census Bureau

or more than a decade, the headline story for Alaska’s export industries has been the rise of China as a burgeoning market for the state’s vast natural resources. The Middle Kingdom is now Alaska’s largest overseas customer and all indications point to this continuing for the foreseeable future. Beyond just exports, China is also playing an important role elsewhere in the Alaska economy in a variety of areas including air cargo, tourism, and investment. Shipments to China account for nearly 30 percent of the state’s total overseas exports. The growth of these exports has been unprecedented, rising from approximately $100 million in 2000 to a record $1.4 billion in 2011, in what has been dubbed The Dragon Decade. During the first nine months of 2014, exports from Alaska to China totaled $1.3 billion. When the final numbers for the year are counted, 2014 will, in all likelihood, set a new record or register as the second highest year to date.

Alaska’s Total Overseas Exports

Full Year 2013 ($4.56 Billion)

SOURCE: US Census Bureau

Ranking Country 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

China Japan South Korea Canada Germany Singapore Spain Netherlands Belgium Australia Others Total

Amount

(USD Millions)

$1,250 $745 $683 $603 $288 $209 $141 $111 $65 $62 $408 $4,565

architectural firm, was recently awarded the Governor’s North Star Award for International Excellence for their design work for hotel and resort projects in China. Another Alaska firm, ADS-B Technologies, has also been recognized for their sales of air traffic management systems to Chinese customers.

Air Transportation: Cargo & Tourists China’s massive trade with the United States mainland is creating considerable air cargo traffic through the Ted Stevens Anchorage International Airport. As an important stop for refueling, crew changes, and cargo transfers, four Chinese cargo airlines and one Hong Kong carrier utilize Anchorage as they transit back and forth across the Pacific Ocean. The four mainland Chinese airlines are Air China Cargo, China Southern Cargo, China Cargo Airlines, and Yangtze River Express. Hong Kong-based Cathay Pacific Cargo also is a longtime customer of the airport. In addition to the Chinese carriers, a number of US cargo airlines such as FedEx, UPS, and Polar-Atlas operate hundreds of flights to and from China through Anchorage. Moving forward, it won’t just be pallets and containers of cargo flowing through the Anchorage airport. With China now the world’s largest outbound tourism market, Alaska is anticipating strong growth in the number of Chinese visitors to the state. While www.akbizmag.com

Chinese investment dollars are beginning to find their way to companies and projects in Alaska. comprehensive numbers are not readily available, it is estimated that several thousand Chinese travelers currently visit Alaska each year, primarily during the summer months. The commencement of direct flights to Alaska, and the establishment of local, China-focused inbound tour operators, will serve to hasten this growth. Already, Alaska’s tourism industry participants are gearing up for increasing numbers of Chinese tourists to visit the state. According to Sarah Leonard, president and CEO of the Alaska Travel Industry Association (ATIA), “Many ATIA member businesses who participate in State of Alaska trade shows, both domestic and international, have said they’ve noticed an increase in the number of business appointments with inbound Chinese tour operators. This indicates a clear interest in Alaska as a destination of choice for this emerging market.” She also notes that “ATIA is getting requests for assistance in translating tour materials, members are looking to hire Chinese speaking tour guides, accommodations are adapting to preferences of Chinese guests, all in an effort to prepare for the Chinese visitor.” Initially, charter operations may serve as the precursor to regularly scheduled service. At the end of last year, Dynamic Airways, a US carrier, commenced charter flights from China that include a stopover at Anchorage en route to Los Angeles. The flights originate from Changsha, a city of 7 million people in Southcentral China. Changsha is the largest city and capital of Hunan Province.

Indirect Investments Chinese investment dollars are beginning to find their way to companies and projects in Alaska. One example is in the mining sector. In 2009, during the financial crisis, Vancouver-based Teck Resources, the operator of the Red Dog Mine outside of Kotzebue, announced that it was selling a 17.5 percent interest in their company to China Investment Corporation, of one of the country’s sovereign wealth funds, for $1.5 billion. Red Dog is one of the world’s largest

zinc producers and China is the world’s largest consumer of zinc. Chinese companies are also becoming active in Alaska’s oil and gas sector. OOGC, a US subsidiary of China National Offshore Oil Corporation, has acquired a working interest in offshore oil and gas leases in the Chukchi Sea, alongside ConocoPhillips and Statoil. While neither of these examples is technically considered as a direct investment in Alaska, both are clear signals that China has put Alaska on its radar screen and is exploring opportunities to participate in the development of natural resource projects. China has enormous needs of natural resources to fuel its ongoing economic growth. Increasingly, it can be found not only to be a major customer of these resources but, indeed, an investor in the projects that yield them. Alaska and China are natural trading partners. For the past fifty years, Alaska’s export industries benefitted greatly from Japan’s remarkable post-war economic expansion. Looking ahead to the next fifty years, it will be China’s economic growth and modernization that will drive Alaska’s export industries to new heights. As the relationship broadens and deepens, Alaska businesses will reap the rewards of this important partnership. The Dragon Decade, when looked back upon years from now, may, indeed, be recognized as just the starting gate for a long era of prosperity. R Greg Wolf has been the Executive Director of World Trade Center Anchorage since 2002. Prior to joining the Center, he served as the State of Alaska’s Director of International Trade and Market Development and was the Vice President of Overseas Projects for the Anchorage Economic Development Corporation.

February 2015 | Alaska Business Monthly

special section

International Trade

Alaska-Singapore Connection Interesting parallels and an instructive model By Greg Wolf

t first glance, one could wonder: “What do Alaska and Singapore have in common? A fair question. It is certainly an easier task to identify how they are different. However, upon closer examination, some interesting parallels can be found. Further, Singapore may provide an example of an economic development model that is instructive for Alaska.

Obvious Differences Let’s start with some of the obvious differences: Singapore is located in Southeast Asia and enjoys a sub-tropical climate while Alaska is located near the top of the world, in the Arctic, and for most of the year experiences a cold-weather climate. Singapore is a tiny country, really a city-state, of only 277 square miles of land. Meanwhile, Alaska is a huge land mass, twice the size of Texas, encompassing more than 660,000 square miles. Singapore is a very densely populated island nation of 5.5 million people while Alaska has a sparse population of some 700,000. And, while Singapore is essentially devoid of natural resources, Alaska has them in abundance. Some Similarities How about the similarities? Modern Singapore and Alaska are approximately the same age. Singapore gained self-rule from Great Britain in 1955 and became an independent nation in 1963. Alaska achieved statehood in 1959. So, both are roughly fifty years old, give or take a few years. Both Alaska and Singapore have a major role in global energy markets: 60

Singapore is the oil hub of Asia and one of the world’s top three export refining centers, with a refining capacity of 1.3 million barrels per day. It is now moving to expand its role as an LNG (liquefied natural gas) trading hub. Singapore is the oil hub of Asia and one of the world’s top three export refining centers, with a refining capacity of 1.3 million barrels per day. It is now moving to expand its role as an LNG (liquefied natural gas) trading hub. Alaska is the fourth largest oil producer in the United States and is now endeavoring to play a greater role in the global LNG market with development of the Alaska LNG Project, an export project that would deliver LNG to energy hungry countries in Asia. Both Singapore and Alaska have sovereign wealth funds, albeit with some significant differences. Singapore launched its first fund, Temasek Holdings, in 1974. The value of its assets under management is now $223 billion. Alaska launched the Alaska Permanent Fund in 1976 and the fund now has assets of approximately $50 billion. The capital for Singapore’s sovereign wealth funds, like most other Asian funds, originates from excess foreign reserves earned through exports, while the capital for Alaska’s fund is derived from income from oil and gas.

Successful Transition At the time of becoming an independent nation, Singapore was an economic backwater. Poor by any standard, the fledgling state suffered from high levels of unemployment, lack of sanitation, scarce supplies of potable water, and ethnic conflict. The country lacked virtually any natural resources and its millions of people were crowded into a tiny piece of land. Three decades later, Singapore has emerged from this unenviable condition to become one of the fastest growing economies in the world. They would be dubbed one of the “Asian Tigers” en route to becoming one of the most prosperous nations in the world. Their highly successful transition from “Third World to First” has become a much studied model of economic development, usually referred to as simply “The Singapore Model.” Acting in some ways more like a corporation than a typical government, the term “Singapore, Inc.” is frequently used to describe its economic behavior. ‘Hands On’ Strategy Singapore does not employ a “hope and pray” strategy when it comes to economic development. Rather, their approach is very hands on. They have a history of taking proactive steps to attract particular industries to their country in order to achieve a national goal or priority. In some cases this has included making direct investments in companies and projects they are seeking to attract, and, at times, actually creating and funding new companies to achieve these ends.

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A recent example is Pavillion Energy. Already a major player in oil storage, refining, distribution, and trading, Singapore is now looking to do the same with the Asian LNG market. To do so, the Singapore Government, through Temasek, established Pavillion Energy. The company, launched in 2013, aims to help Singapore become an important player in Asia’s LNG market. It will do so through investments in key LNG assets and related LNG businesses. The company is 100 percent owned by Temasek. The company will make investments in upstream assets and through its subsidiary, Pavillion Gas, will manage downstream gas operations in Singapore. The company will be involved in storage, distribution, and trading of LNG in the Asia region.

High Tech Another example, this time in the high tech sector, also highlights the country’s willingness to “put skin in the game” in order to attract a particular industry or specific segment of an industry. In this case, Singapore sought to establish semiconductor

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wafer fabrication plants on the island. Wafer fabrication, known as the “front end” of semiconductor manufacturing, would complement Singapore’s existing “back end” operations that include final test, assembly, and distribution of the chips. In other words, this would give them vertical integration of the semiconductor manufacturing process. In the early ‘90s, in order to jump start recruitment of this segment of the industry, the Singapore Government, using the Economic Development Board of Singapore as the vehicle, offered to put up 26 percent of the $300 million investment capital needed to build the facility. They then sought partners from the global semiconductor industry to put up the other 74 percent. Three companies answered the call: Texas Instruments invested 26 percent, Hewlett-Packard 24 percent, and Canon the other 24 percent. The company was named TECH Semiconductor. In 2011, the facility was sold to American chip maker Micron Technology. At the time of Micron’s purchase, TECH was valued at $1.2 billion.

Considerations These are just two examples of the approach taken by Singapore to foster economic growth and diversification of their economy. It may not be an approach that can be easily duplicated by others, but it has certainly been successful for them. Some elements of this approach may have applications here in Alaska and merit consideration by Alaskans. R Greg Wolf has been the Executive Director of World Trade Center Anchorage since 2002. Prior to joining the Center, he served as the State of Alaska’s Director of International Trade and Market Development and was the Vice President of Overseas Projects for the Anchorage Economic Development Corporation.

February 2015 | Alaska Business Monthly

special section

International Trade

Trans-Pacific Partnership Update Negotiations on track for reducing barriers By Alex Salov

he Trans-Pacific Partnership (TPP) is a regional free trade agreement (FTA) between the United States and eleven countries around the Pacific Ocean basin. The purpose of the TPP is to expand trade of nearly all goods and services within the region by reducing the existing barriers. The TPP is currently at an advanced stage of negotiations, and optimistic participants indicate that the agreement can be in place by mid-2015. For Alaska this trade agreement can be important because 70 percent of state exports are heading to the Asia Pacific region annually.

Geopolitical Aspects The TPP began in 2005 as a small regional preferential trade agreement between Brunei, Chile, New Zealand, and Singapore called the Trans-Pacific Strategic Economic Partnership. One of the goals of the original agreement was to create a successful model that could potentially attract new members from the Asia Pacific region. In 2008, the United States entered the negotiations, followed by Australia, Peru, and Vietnam. Malaysia, Canada, Mexico, and most recently Japan all became TPP negotiation participants in subsequent years. By press time, TPP officials last met in Washington, DC in December 2014. Collectively, the twelve negotiating countries represent around 40 percent of the world’s GDP (2013) and 25 percent of overall world trade. The President’s Office of the Trade Representative announced that “the TPP countries will be by far the largest export market for the United States.” From the US perspective, the TPP has more geopolitical aspects to it than economic outcomes. Bilateral FTAs between the United States and Australia, 62

Canada, Chile, South Korea (not a part of TPP), Mexico, Peru, and Singapore already exist. Therefore there is no expectation of a dramatic increase of US exports to the region. TPP is often portrayed as a part of America’s “Pivot to Asia” and a tool to prevent further economic expansion of China. On the other hand, ASEAN-China FTA is frequently being criticized as an attempt to establish Chinese dominance and to reduce the US presence in the region. The 21st century’s international economies are highly interconnected and some analysts argue that regional trade blocks potentially harm the excluded countries. Currently, there are forty-seven existing bilateral trade agreements in the Asia Pacific region besides trade blocks.

Two Trade Tracks Peterson Institute for International Economics (Washington, DC) divides the trade cooperation efforts in Asia into two tracks: “Trans-Pacific track” (mainly TPP) and “Asian track” (mainly ASEAN + China, Japan, and Korea). The United States dominates the former track and China dominates the latter. Both tracks are stimulating each other’s development and some scenarios assume that both tracks will merge into a regional FTA at some point in the future. In the earlier stages of both tracks, developing countries will benefit from preferential access to the US and China markets. Some of the smaller players will join both tracks in the intermediate stages. The United States and China will have less significant gains; however, larger markets such as Japan and Korea will expand benefits for them as well. In the final stages, the United States and China will be among the few players

without each other’s markets’ preferential access. Peterson Institute estimates the Trans-Pacific track to yield $295 billion in income gains to the global economy by 2025 and the Asian track—$500 billion. The difference lies in the reality that the Asian track has to overcome many existing trade barriers and therefore the results for the participants could be higher.

Under Discussion The TPP negotiation rounds are continuously being held around the region and many of the outcomes are not presently available to the public. There are several issues influencing the speed of negotiations that are worth mentioning here. A frequently discussed trade issue—agricultural imports—has slowed Japanese participation in the TPP. Historically, the Japanese agricultural sector is protected and heavily subsidized by the government, and Japanese government demanded exceptions for this sector in previous trade agreements. The country takes pride in its agriculture and, despite the small territory, considers itself self-sufficient in certain staples like rice and eggs. If the tariffs on agricultural imports are going to be lifted, Japanese consumers will have more choices of domestic and foreign food stuffs, but the government is worried that the national producers will suffer. The United States, in turn, maintains tariffs on Japanese automotive industry imports, and these mutual tariffs currently compromise each other. For several years, Japan was undergoing political debates on whether or not to join the TPP. Since Prime Minister Shinzo Abe was elected for the second term in 2012, joining TPP became a part of Abe’s economic policy, so-called “Abenomics.”

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On December 14, 2014, Prime Minister Abe was re-elected and the official congratulatory statement by the White House mentioned the TPP: “The United States looks forward to deepening our close alliance cooperation with the government and people of Japan to promote global and regional security and prosperity, and bilateral cooperation on defense guidelines revision, TPP and maritime security.” Another issue is export subsidies. Countries apply these subsidies to boost

TPP rules of origin (for example, “yarnforward” rule for textiles). As for the United States, pharmaceutical IPR remain an important issue. TPP negotiating countries’ IPR standards vary: some countries have no data protection period for pharmaceuticals, some have five years, some eight years; the current US standard is twelve years. The United States also maintains its strong position on criminal punishment for copyright infringement while several countries, including Australia and Sin-

Another issue is export subsidies. Countries apply these subsidies to boost exports of their commodities when international prices are lower than domestic. In other words, governments reimburse their exporters for price difference in global markets. exports of their commodities when international prices are lower than domestic. In other words, governments reimburse their exporters for price difference in global markets. As an example, Australian agricultural producers cannot equally compete with their US counterparts in Japanese market because US producers are heavily subsidized and Australia, like several other TPP negotiators, doesn’t have an export subsidies program.

Gap Issues The next set of issues lies in the gap between the level of economies participating in the TPP and their interests. Developing countries with predominantly export-oriented economies see the TPP as a path to expand the market access for their products. Advanced economies and larger markets are more concerned about issues such as technical barriers to trade, intellectual property rights (IPR) protection, and investment. Malaysia, for instance, remains a strong proponent of its state-owned enterprises and its “affirmative action” policies where ethnic Malays are given preferences in certain areas of government procurement. For Vietnam, a major issue is its strong political and economic affiliation with China. Since many Vietnamese producers are heavily dependent on Chinese supplies, their products may not qualify for zero tariffs under the www.akbizmag.com

gapore, oppose that. E-commerce and its privacy issues is another concern.

Delays and Negotiations Several TPP countries, including Japan, are reluctant to make their final offers in the negotiations until they see a solid indication that the US Congress passes Trade Promotion Authority (TPA) also known as a fast-track. TPA allows a trade agreement to be voted on quickly without amendments that might hinder or stall it. TPA is currently not in place and a new TPA bill could be introduced in early 2015. Canada’s elections in October 2015 can also delay the TPP negotiations as the government may avoid dealing with controversial issues prior to the elections. Korea, another important player in the region, is currently left out of TPP negotiations despite the fact that other participants represent some of its major trading partners. One of the reasons is the existing Korea-US (KORUS) FTA that entered into force in 2012. Another reason is the current complexity of TPP negotiations and that Korea’s participation may further delay the ratification the agreement. During the last round of negotiations in Washington, DC, Malaysian Prime Minister Najib Razak noted that “while the [TPP] was an important undertaking and that Malaysia was committed to the negotiations, we will only accept an outcome which addresses our concerns and is beneficial to the country.”

This statement applies to the rest of the participants of the agreement.

Potential for Progress The TPP enactment can potentially result in stronger economic links in the region, increased access to new markets, new FTAs between its members, new opportunities for goods and commodities to be used in mutual manufacturing and production processes, and new or increased opportunities for small and medium sized enterprises in the participating markets. So far, it is not clear whether Alaska companies will be affected by the TPP, but this agreement involves some of the state’s neighbors and major trading partners. For example, the TPP can create additional opportunities for the muchdiscussed Alaska LNG exports to Asia. World Trade Center Anchorage has pioneered trade development work to open Asia Pacific opportunities for Alaska businesses. The Center conducted a business conference on India and Singapore in 2006 and led the first Alaska trade mission to the region in 2010. World Trade Center’s program “New Markets, New Customers” focuses on development of emerging markets in Asia, and the Center will continue to identify opportunities that will emerge from the TPP. Several TPP participants are developing countries that share common trends including urbanization, emerging middle class, rapid industrialization, and strong demand for infrastructure. An increased demand for Alaska resources and expertise is anticipated as these trends continue to grow. R Alex Salov is the Business Operations Manager of World Trade Center Anchorage and has been working at the Center since 2004. He has a master’s degree in global supply chain management from the University of Alaska Anchorage. Since 2005, Salov has taught in the Japanese Language department at the University of Alaska Anchorage as an adjunct instructor.

February 2015 | Alaska Business Monthly

special section

International Trade

Exporting Business Success from the 49th State

Tips for trade in products, commodities, and services By Rindi White

il, zinc, lead, coal, gold, copper, salmon, cod, and pollock and crab—most Alaskans could probably name the top ten Alaska exports. But the list of exports from Alaska is growing, and it includes a number of intangible items, such as architectural expertise, kitchen gadget designs, and even a satellite-based aircraft radar broadcast aimed at making flying in rural or semi-rural areas more safe. Whether it’s commodities or architectural plans being shipped, people who have experience in overseas exports say there are a few key things people interested in exporting should remember.  Rob Brown, Vice President of Business Development for Usibelli Coal Mine Exports coal primarily to Korea, Japan, and Chile Hot tip: Accentuate the positive and do what you do best. “It’s challenging when you’re selling something on the international market because you’re competing against other countries. The reason we’re able to still be successful in the international market is our coal is very low in sulfur … we’re 64

also a very long-term, stable supplier. The utilities really appreciate that.” Usibelli Coal Mine has been operating for seventy-one years and sending coal overseas for thirty. Brown says until about eight years ago, the company worked primarily with a Korean company that operated the Seward coal terminal and marketed the coal exclusively to one Korean utility. But the Korean company went out of business, so Usibelli put in place “Aurora Energy Services,” a subsidiary to operate the coal terminal, and Usibelli employees began directly marketing the coal overseas. The coal from Healy is low-sulfur, which is desirable throughout the Pacific Rim, but it also doesn’t have as high a heating value as some other types of coal. Add to that the fact that competitors with similar-quality coal are mining in Indonesia, where wages are lower than in the United States and environmental regulations are less strict. Brown says the current coal export market is challenging for these reasons. But the end users—typically utility providers—value the stability of Alaska coal and the tonnage Usibelli can pro-

vide. In 2011, the company saw a peak in its exports. That year, 1.1 million metric tons were shipped through the Seward coal terminal. “Since, we’ve been steadily coming back down,” Brown says. “Prices have been coming down, so as a result we’re curtailing some of our production.” Having a strong domestic business boosts Usibelli. “We are able to continue to supply low-cost energy to the Interior—that’s our bread and butter,” Brown says. In 2011 the company’s portfolio was split about 50/50 between exports and domestic sales. In 2014, about 35 percent was exported; the bulk was sold within Alaska, about 1 million tons. It went to Golden Valley Electric Association, Clear Air Force Base, forts Wainwright and Eielson, the University of Alaska Fairbanks, and the energy plant in downtown Fairbanks. Brown says Usibelli is examining expansion options, but it’s unlikely to make a move until coal prices rise. Australian coal (the benchmark coal for the Pacific Rim) that in 2010 was selling for around US$110 a ton is today selling for about US$65, a roughly 40 percent drop in value.

Alaska Business Monthly | February 2015 www.akbizmag.com

Loading Alaska coal for export at Usibelli’s Seward terminal. © Chris Arend

 Skip Nelson, President of ADS-B Technologies Exporter of a cost-effective, highly reliable and precise alternative to conventional Air Traffic Control RADAR Hot tip: “Never go into a market cold. Network your way in, either through people who are already doing business there or through the US Department of Commerce or through professional organizations.” Nelson’s business is based on the technology developed in the Capstone Program, an aviation safety program funded by the federal government between 1999 and 2006. Capstone was created after a rash of private airplane crashes in the late 1990s. At that time, Nelson says, Alaska was seeing a private plane accident every three days, with a fatality about every nine days. “Bush flying was officially the most dangerous profession in the US at that time,” he says. ADS-B, which stands for Automatic Dependent Surveillance—Broadcast, was developed as the cornerstone of the Capstone program. The system uses Global Navigation Satellite Syswww.akbizmag.com

February 2015 | Alaska Business Monthly

A coal ship loaded for export at the Usibelli terminal in Seward. © Chris Arend

tem, or GNSS, technology and a fairly simple broadcast communications link to transmit signals to other ADS-Bequipped aircraft or to a satellite communications transceiver on the ground. “ADS-B is the designated, worldwide replacement for air traffic control surveillance RADAR,” Nelson says. Nelson, a former US Navy fighter pilot and TOPGUN graduate, lived more than twelve years overseas and moved to Alaska in 1998. He flies one of the few ADS-B research aircraft in the world and participated in Capstone. “I was the first pilot in the world to fly with a certified ADS-B system in January 2001 and, at FAA [Federal Aviation Administration] behest, I began to promote it all over the world. In 2004, I began ADS-B Technologies. We do engineering; we do consulting; we do a little bit of manufacturing,” he says. Nelson says one of the first tasks was to scout for places that could benefit from ADS-B technology in the same way that Alaska had—places with rural environments, high mid-air collision rates, and other similar features. China stuck out as a natural market for the technology. Nelson focused his first export efforts there. “We were the first to install ADS-B on the Asian continent in 2005. One of the things we used to help us to get there was the World Trade Center-Alaska and the US Department of Commerce,” he says. One might say the business really took off. ADS-B Technologies got connected with the Civil Aviation Flight Univer66

sity of China, the main training school for commercial pilots, flight attendants, and aircraft mechanics in China. CAFUC, as it’s commonly shortened to, has nine campuses and more than six thousand students, Nelson says. In the four years following ADS-B’s 2005 launch, Nelson says his company exported more than $4 million worth of systems. In that time, the company installed nine ground communications transceivers and equipped more than three hundred aircraft with ADS-B technology. Today, Nelson says more than nine hundred aircraft in China have been equipped with the technology. He’s made more than forty trips to China to facilitate business and runs offices in Beijing and Hong Kong. “The skill sets I needed to do that were developed with World Trade Center Alaska and the US Department of Commerce,” Nelson says. ADS-B Technologies has since expanded further. The company has worked with the Korean Aerospace Research Institute, Korea’s equivalent to the National Aeronautics and Space Administration, and with the Japanese Aerospace Exploration Agency, or JAXA, as well as Australia. In 2006, ADS-B Technologies became the first company to fly ADS-B in Africa. While being referred into a country or using networking contacts to begin sales there are common ways to get started, Nelson says there are plenty of other things to keep in mind. “Know the import regulations cold, es-

pecially ITARS [the International Treaty on Arms Regulation]. That prevents us from sending centrifuges to Iran—from exporting technologies that might affect our own safety. Know the shipping regulations and terms,” he says. “That will save you money and time.”  Kelly and Jim Dyer, Owners, Spice Ratchet Mills LLC Exporter of kitchen utensils Hot tip: Know your audience. “When you go to different markets, with different cultures or customer bases, you have to have different products. Kelly has started to address that with products that are more Europeancentric,” says Jim Dyer. The Dyers, of Anchorage, are uniquely suited to their positions running Spice Ratchet Mills. The couple met in Taiwan, where both worked for a Swedish telecom company, and they lived in Taipei, Taiwan, and Kuala Lumpur, Malaysia, for several years, later moving to Anchorage. Jim worked as director of wireless operations for GCI until March of this year, when he left to help Kelly run the business full-time. “It’s kind of like the perfect thing for us, a chance for us to really leverage our cultural knowledge,” Jim says. “For me, the advantage that I have is my brother is taking care of most of the business in advance and also running the manufacturing for me,” Kelly says. She and her family are Taiwanese; her brother

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has worked in the trade and manufacturing field for thirty years, first in Taiwan and then as the owner of a China-based factory. His specialty is spice grinders, which is where Kelly got her start. She began by promoting the ceramicmechanism spice grinders her brother made in the United States. In 2007 she shopped it around at houseware shows, particularly at the International Home + Housewares Show in Chicago. The mills generated interest, but perhaps the most valuable connection Kelly made at the show was with a distributor of imported goods, New Jersey-based Harold Import Company. “I started working with them from my very first item… now I have twenty-eight items and I am still with them. They have sales teams all over the US, from the northeast to the west coast, and that gives me a great benefit. I don’t have to do all the sales myself,” Kelly says. In the seven years since her company launched, Kelly has designed a host of other products. After the spice mills launched, she realized she needed to have a new item ready to present at the next year’s International Home + Housewares Show, so she worked with her brother’s research and development team to design the Blossom Trivet, a silicone trivet that has a surprising range of other uses. A flax seed grinder came next, then a dual-chamber grater ideal for grating chocolate, nuts, and cheese. Most recently, Kelly came up with a design for silicone lids that work with Mason jars, which are seeing a resurgence in popularity as everything from drinking glasses to decorative elements. The uCap lid line includes a no-spill, airtight storage cap, a sipper cap, and a flower frog cap, designed to look similar to the Blossom trivet motif, but with holes that allow it to be used for flower arranging. These Mason jar caps have only been available since mid-2014, but they’re already very popular. “It just hit the market six months ago and we’ve received quite a positive response on this collection. People like it very much. In six months, we’ve sold ninety-seven thousand units of the cap. We’re very lucky to have achieved that,” she says. About 95 percent of Spice Ratchet Mills’ inventory is shipped directly from China and Taiwan to her distributor in New Jersey and marketed in the Lower www.akbizmag.com

48. Most of the rest is shipped to Alaska, where the Dyers have a small warehouse to fulfill their online sales orders and to stock their Saturday Market booth through the summer. Last year, a Japanese company placed a large order of trivets, a little more than 1 percent of the company’s 2014 sales, which was shipped directly from China. Also in 2014, a Taiwanese company placed a large order of goods for direct shipment from China. Next year, the couple hopes to expand their sales to Canada and Europe. A yearly consumer goods trade show— roughly five times the size of the Chicago Home + Housewares show, Kelly says—is held in Germany in February. The Dyers plan to be there to market Spice Ratchet Mills’ goods, with hopes of picking up orders for companies in Canada, Germany, northern Europe, and China. In preparation for that market, Jim says the company is tweaking some of its designs to be compatible with European users. Their canning jars have different dimensions than a Mason jar, for example. Jim says they’ll also be looking for distributors in each of the foreign markets they hope to expand into. Nearly as important as having a good relationship with a trustworthy manufacturer, having a good distributor can determine whether a business sinks or flies. It also makes a difference when it comes to cost, Kelly says. “If we want to ship from China to the US and then to Canada, we have to pay special [customs] duty for goods manufactured outside the US,” she says. “Shipping direct, we can avoid paying so much duty.”  David McVeigh, Executive Vice President and COO, RIM Architects Exports architectural services to Guam, Japan, Korea, and China Hot tip: Focus on growing relationships, not conquering territory. “In all the locations we’ve created [offices at], it’s because we have been invited to be there. We don’t really go to plant flags.” For nearly thirty years, RIM Architects has been serving Alaska. The company recently designed the Dena`ina Civic and Convention Center, the Denali Visitor Center in Denali National Park, and the South Peninsula Hospital in Homer. The company also runs offices in San

Francisco, Hawaii, and Guam, offices that have been open for nearly as long as the company has been in existence. “Larry Cash started this company to diversify. We are very susceptible to the peaks and valleys of the economy and, in our business, that’s very unpredictable. He set out to start an office in Guam, so when one economy is down, maybe another is up. We share work when that’s needed: it helps stabilize our staffing and it also helps us when things are down in another economy,” McVeigh says. McVeigh returned to Alaska seven years ago, after having spent a dozen years in the company’s Guam office and seven more in its Hawaii office. RIM does work around the world for the US military in addition to individual clients overseas. The amount of overseas business the company does varies from year to year, McVeigh says. A couple years ago the company had six projects going overseas. This year there weren’t any. But a number of foreign projects are in the works. “We are looking at some very large work,” he says. Many of the clients they work with are looking for Western-minded designs. But McVeigh says the company is careful to work within the culture of its clients, a principal that he says has helped make the company’s work in the United States succeed. “In trying to understand other cultures, that makes us more aware of the cultures we have here. We get exposure to projects we wouldn’t normally get exposure to, so our people get an opportunity to work on projects we wouldn’t normally work on,” he says. McVeigh says the company is seeking opportunities to expand its business in China. RIM’s work there has so far been focused on hospitality. RIM doesn’t have an office there yet, he says, although it does work with an affiliate in Shanghai. It’s likely the company will open an office in that city within the next year, he says, giving RIM employees the opportunity to grow the business the way most businesses grow—by meeting people and responding to questions they have. R Rindi White is a freelance journalist living in Palmer.

February 2015 | Alaska Business Monthly

special section

International Trade

Fishermen in the Bering Sea working on pollock haul back.

Seafood: Alaska’s Sustainable Bounty By Will Swagel

hen counting fish, Alaska is a world class producer. In fact, if it were a separate country, Alaska would place among the top dozen fishing nations in the world and rank as the sixth largest seafood exporter. Economic studies peg Alaska as producing about $4.5 billion in seafood annually (first wholesale value). More than sixty thousand workers harvest, process, manage, and market Alaska’s seafood with in-state net earnings and payroll of about $1.7 billion. That’s not counting indirect employment and multiplier effects, which create an additional eleven thousand jobs in Alaska. It’s also not counting quality of life improvements for Alaskans in scores of coastal towns and villages. The commercial fishing fleet provides valuable backhaul for shippers and helps to increase the market for—thus lowering the price

of—fuel, food, and other supplies. Local fleets support the banking, telecommunications, and fabrication industries. Tyson Fick, communications director for the Alaska Seafood Marketing Institute (ASMI), says he has been told by transportation industry reps that Alaska consumers would have to pay higher freight rates if ships and planes were not using their southbound leg to carry fish. “Large parts of the state are unaware of how valuable and significant commercial fishing is,” says Gunnar Knapp, director of the Institute of Economic and Social Research at the University of Alaska Anchorage (ISER). Knapp has studied the Alaska commercial fishing industry for more than three decades. “It’s an immensely large and valuable industry,” Fick says. “This sometimes gets missed by people who don’t live along the coast, either outside a fishing

area or outside the industry itself.”

Quality Leader Alaska dominates world production of sockeye salmon and Pacific halibut and is a major producer of other species such as Alaskan pollock, Pacific cod, king crab, and pink salmon. Alaska’s commercial catch includes a broad number of species: pollock and cod; all five species of Pacific salmon; halibut; rockfish; sablefish; king, opilio, and Dungeness crab; and several kinds of invertebrates, such as geoduck clams and sea cucumbers. Globally, Alaska produces one to two percent of all seafood and 10 to 13 percent of the world’s salmon. Alaskan fishermen typically catch about 55 percent of the entire US seafood harvest by volume. As Americans eat more and more fish produced on (mostly foreign) fish farms, Alaska-caught products enjoy a world-

Alaska Business Monthly | February 2015 www.akbizmag.com

wide reputation for the highest quality and for coming from a sustainable wild fishery. “There is a growing preference for wild fish and pristine environments and healthy fish runs,” says ASMI’s Fick. “That’s something that the rest of the world doesn’t have. It gives us a huge marketing advantage.” Alaska-caught fish command a price premium over other fish, Fick says. Alaska crab and pollock, for instance, are priced higher than Russian-caught crab and pollock. Consumer advocates have found mislabeling of fish in some markets, passing off farmed Atlantic salmon as wild Alaska fish. While troubling, the mislabeling is also a sign of the appeal of Alaska-caught wild salmon. “I’m not too worried about it,” Fick says. “I’d rather be in a position where other people were trying to claim their fish was ours, rather than [the reverse]. It’s good to be on top.”

Toward a Rational Fishery Alaska seafood’s reputation for purity and quality is no accident. It is the result of tough negotiations and hard choices—true any time that fish need to be apportioned among competing groups. Take halibut caught in the Gulf of Alaska, for example. In the 1980s, the fishery was a frantic derby, open to anyone. For a couple of days, Gulf residents would take a break from their jobs as schoolteachers and shopkeepers to venture out among the professional fishermen. A guy in a skiff could make $1,000 or more per day— those on larger boats much more. With such a bounty at stake, fishermen would fish regardless of the weather. Then, nearly the entire halibut catch would hit the market at the same time—making it harder to process and market the fish. Today, the Gulf’s halibut has been allocated to about 1,300 fishermen under an IFQ system (Individual Fishery Quota). Individual fishermen control a set amount of the overall quota, which they can harvest depending on market demands. The fish can be handled with the utmost care and fishermen can afford to sit out storms. With the higher quality has come a better reputation and high prices. The industry’s commitment to firstrate handling and creative marketing bears a lot of the credit for Alaska’s sucwww.akbizmag.com

“Some people say government is wasteful. [But] we can only protect the wild resource with an excellent and adequatelyfunded management system. For a healthy fishery you need government. So my advice is to keep investing in management, research, and enforcement.”

—Gunnar Knapp Director of the Institute of Economic and Social Research (ISER) University of Alaska Anchorage

cessful fisheries. But ISER’s Knapp says the health of the fish stocks is paramount and that both state and federal managers are key to keeping stocks healthy. “Some people say government is wasteful,” says Knapp. “[But] we can only protect the wild resource with an excellent and adequately-funded management system. For a healthy fishery you need government. So my advice is to keep investing in management, research, and enforcement.” While Knapp says there are many healthy fisheries in the world, there is some overfishing in the waters off developing nations and on the high seas. “The governments are not strong enough to protect the stocks or no single government is in charge,” he says.

Pink Salmon Dreams “If you’re talking about what’s been hot in the last ten years, seining [for pink and chum salmon] has probably been as good as anything,” says Andy Wink, a seafood analyst with McDowell Group, Alaska-based economic consultants. Pink prices rose from 9 cents (a pound) in 2003 to more than 40 cents in 2013, Wink says, although the price this year has dropped slightly because of the record 2013 harvest. It is typical in fisheries—as in other commodities—that as the supply increases, the price decreases. But in the early 2000s, salmon prices were low and the harvest poor (not just for pinks, but other species as well). “That led to a flat-out crisis [for salmon fishermen, processors, and coastal communities],” Wink says. Prices crashed because a new product— farm-raised Atlantic salmon—flooded the market at prices the wild fishery could not match. Alaska chose to sit out the salmon farm boom and commit to the wild industry. Meanwhile, British Columbia,

Norway, and Chile, among others, threw themselves into salmon farming. As the market adjusted to the influx of farmed fish, Alaskans were not idle. Groups like ASMI pushed the superior quality and sustainability of wild fish. Former Senator Ted Stevens and Representative Don Young were also instrumental in securing grant funding, which was matched by industry dollars, serving to revitalize the salmon industry. Grant and loan programs and significant investment from the companies themselves helped the industry diversify into other products, such as frozen portions, salmon burgers, and even high-end pet snacks (made from chum salmon carcasses). “You go back to 2002 and about 80 percent of pinks went in a can [with 20 percent used for frozen products],” says ASMI’s Fick. “Fast forward to 2013 and 2014: Now we’re freezing more than we’re canning.” The price for canned salmon has also been strong. In 2004, says Fick, the ex-vessel value of pink salmon fishery for the entire state came in at $39 million. Last year, high prices and a record run combined to raise that figure to $285 million. The improving situation for pink salmon is also illustrated in permit prices. The average price of a Southeast seine permit has increased by 817 percent since 2003. “In the last fifteen years the world finally came to recognize, industrially, the use of pink salmon,” says Tom Sunderland, Vice President of Marketing and Communications at Ocean Beauty Seafoods. Ocean Beauty operates six processing plants in Alaska, from Naknek to Petersburg. “[Pink salmon] is an abundant, relatively mild-eating fish that is a good value for a good protein—and it’s reliable. The reliable nature is one reason why the world finally caught up to it,” he says. Sunderland is the chair of ASMI’s Retail Salmon Committee.

February 2015 | Alaska Business Monthly

Give credit for some of the pinks’ reliability to the efforts of Alaska’s statesupported and private non-profit hatcheries. These facilities hatch eggs and rear juvenile fish that are then released into the wild to feed, mature, and hopefully return in two or more years to be caught by fishermen. These salmon are said to be “ranched” rather than farmed and are marketed as wild fish. This is apt considering that—on average—only three percent of hatchery-reared pink salmon return as adults, while the rest join the food chain. “On average, hatcheries account for about 28 percent of Alaska’s salmon catch,” says ISER’s Knapp. The majority of pink salmon caught in Prince William Sound began their life in a hatchery, notes McDowell’s Wink.

Russian Roulette To predict the demand for and price of fish in any given region, it may help to gauge the amount of political turmoil there. Russia closed its borders to all products from the United States in 2014—including Alaska seafood. This was in response to economic sanctions imposed on Russia by the West, after Russia’s incursion into Ukraine. Before the embargo, Ocean Beauty sold a lot of lower-priced pink salmon roe—called green roe—to Russians. Ukraine was another market for Ocean Beauty’s green roe. The Ukrainian border was wide open to the product, but the tanking of the Ukrainian hryvnia made the roe too expensive for many. With salmon from the United States getting a nyet, Chile is selling more product to the Russians, says Wink. Norway was a big exporter of salmon to Russia, fish that may be looking for other markets, such as the United States. “It’s kind of a musical chairs situation,” Wink says. “The product has to go somewhere.” Russia’s pollock fishery is as massive as Alaska’s. Pollock and cod make up nearly two-thirds of Alaska’s total catch by volume. Recently Russia received sustainability certification for the bulk of its pollock, which has allowed them to access more lucrative European markets. Alaska crab prices continue to be impacted by illegally-caught Russian crab, Wink says. China has been a strong market for Dungeness crab. Highpriced black cod sales have been strong 70

Value and Harvest Volume of Alaska Seafood Industry - 2013

SALMON HERRING CRAB OTHER SHELLFISH & MOLLUSCS HALIBUT BLACK COD ALASKA POLLOCK PACIFIC COD FLATFISH ROCKFISH & ATKA MACKEREL Other (mostly Skates) Total

Harvest Volume (Millions lbs) 1,044.6 83.6 87.7 4.1 28.7 32.0 3,019.7 702.9 729.7 186.0 25.2 5,944.2

Ex-Vessel Value ($ Millions) 741.2 16.6 255.8 19.2 111.5 90.9 455.8 167.0 104.7 43.9 7.0 2,013.6

First Wholesale Value ($ Millions) 1,802.8 46.9 370.6 23.9 128.9 102.3 1,329.0 389.7 234.4 107.2 10.6 4,546.3

Sources: Alaska Department of Fish and Game Commercial Operator’s Annual Report (COAR) and National Marine Fisheries Service (SAFE and NOAA Commercial Fisheries Statistics), compiled by McDowell Group.

in Japan, despite the sagging yen. China is a growing market for Alaska seafood, not only for the domestic market to consume, but for Chinese companies to process the fish further and export the value-added product to other countries.

Maximizing Benefits Before farmed salmon, Alaska had a much bigger share of the global salmon market. Now Alaska has a smaller share, but the global market is much, much larger. More people in more places are eating more salmon, both farmed and wild. Salmon farmers who want to increase their output can expand or build a new farm. But Alaska’s wild fisheries rise and fall with mostly natural rhythms— although helped by hatchery input. “In my opinion, the seafood industry has the brightest future of any other major Alaska industry because it is based on a sustainable and unique resource,” says Wink, who was a labor analyst with the State of Alaska prior to joining McDowell Group. “There is a vast amount of untapped economic potential for Alaska.” Currently, Wink says, non-residents account for a slightly larger share of fishing earnings and far more processing earnings than residents. “That,” he says, “is a by-product of history and demographics. Remember, Alaska would need to add three cities the size

of Fairbanks just to match the population of Dayton, Ohio. So, given the fact that 90 percent of our five-plus billion pound harvest comes from areas containing less than 10 percent of the state’s population, it is easy to see the need for additional labor. However, that can change over time, and if it does the industry’s impact in Alaska will become even larger even if we don’t catch any more fish.” Despite the involvement of non-residents, “Seafood comes out well when compared to other resource industries in the amount of Alaskan participation,” says Wink. “It accounts for about 7 percent of the state’s resident earnings in private sector industries. That’s nearly as much as construction or transportation, and several times more than mineral and metal mining.” ISER’s Knapp stresses that protecting the wild fisheries is paramount to ensure a strong future. Cutbacks to fisheries research, management, and enforcement could hinder industry growth. Knapp says fisheries “critically rely” on such agencies as the National Marine Fisheries Service and the Alaska Department of Fish and Game, adding: “The fishing industry needs to continually make its case to the state that ‘We’re here! We’re important!’” R Alaskan author and journalist Will Swagel writes from Sitka.

Alaska Business Monthly | February 2015 www.akbizmag.com

special section

International Trade

Photos courtesy of UAA CBPP

Preparing Students for Leadership on the Frontiers of a Changing World UAA develops educational and research collaborations in China By Tom Case, Rashmi Prasad, Qiujie (Angie) Zheng

s the preeminent center for business education and policy research in Alaska, the College of Business and Public Policy (CBPP) at the University of Alaska Anchorage (UAA) focuses on preparing students for leadership at the frontiers of a changing world. Building partnerships with peer institutions across the Pacific and Arctic regions will benefit UAA and Alaska by increasing the flow of knowledge and innovation with our main trading partners. A deepening partnership between UAA and China’s famed Nankai University, focusing on collaborations in research and education, is a major step forward in the university’s internationalization strategy. This past June, a UAA delegation composed of administrators and faculty was invited to visit Nankai University in China to sign two agreements for collaboration in the areas of business education and Experimental Economics research. Agreement on a joint MBA program was signed by UAA Chancellor Tom Case and Nankai President Ke Gong. In the Nankai-UAA joint MBA program, enrolled Chinese students will complete a year of study in the Institute of State Economy at Nankai University in China and then another 1 to 1.5 years at UAA. The program will kick this fall with the expected arrival of the first cohort of students from China. In recent years UAA has created an area of distinction in Experimental Economics, ranking among the top 10 percent in this field worldwide. The CBPP Experimental Economics Lab so impressed a delegation of visitors from www.akbizmag.com

Nankai University in 2013 that they sought our assistance in the development of their own lab. Rashmi Prasad, Dean of CBPP at UAA, Bin Xia, Dean of Institute of State Economy, and Qi Liang, Dean of the School of Economics at Nankai University, signed a joint venture initiative to build an experimental economics laboratory in Nankai named after Vernon L. Smith, the 2002 Noble Laureate and also the first CBPP Rasmuson Chair in Economics. The CBPP Experimental Economics Laboratory was created under the guidance of Professor Smith. CBPP Professor James Murphy was appointed to a visiting professorship at Nankai University and as director of the new laboratory as part of the agreement. Our conversations with Nankai regarding collaboration started in November 2013. At that time, we invited a Nankai delegation to attend events celebrating the tenth anniversary of the Rasmuson Endowed Chair in Economics hosted by the CBPP Economics Department. During their visit, the Nankai delegation was impressed by our strong capacity for research in the Experimental Economics field and by our internationally-accredited MBA program. Since then, both universities worked closely together to form a partnership that continues to deepen. Nankai University was founded in 1919 and is located in city of Tianjin, close to the largest port in Northern China and the main maritime gateway to China’s capital city of Beijing. Nankai is a top multidisciplinary and research-

Angie Zheng in China last June as part of the UAA delegation.

oriented university in China. The university is home to many of China’s leading centers for education and academic research and influential think tanks which exercise considerable impact on regional and national public policy. Through our collaborations with Nankai, we expect to bring high quality Chinese students into our MBA student body and involve local students in a multicultural classroom environment. This is critical to preparing Alaskans for the complex and highly-connected world of 21st century business. Additionally, research collaboration deepens the intellectual capital that UAA faculty and students provide for the state. Alaska, a state that relies on international trade, needs globally-networked universities. UAA’s partnership with Nankai University is an important milestone along that journey. R Chancellor Tom Case is the Chief Executive Officer of UAA. Chancellor Case, his cabinet, and board of community advisors govern UAA. Dr. Rashmi Prasad is Dean of the College of Business and Public Policy at the University of Alaska Anchorage. Qiujie (Angie) Zheng is a Term Assistant Professor in the Economics Department, College of Business & Public Policy at UAA.

February 2015 | Alaska Business Monthly

special section

International Trade

Alaska’s Arctic Ambitions IV By Alex Salov and Greg Wolf

rctic development continues to garner worldwide attention. Not only is it a subject of great interest to the nations that directly border the region but also to countries far removed from it. In addition to the eight nations that comprise the Arctic Council, twelve non-Arctic nations have applied for and received the status of permanent observers to the Council. Several of these observer nations are playing an increasingly important role in the Alaska economy and are among the state’s major trading partners.

China and Singapore China, for example, in recent years has become an active participant of Arctic development and is a permanent observer to the Council. In July 2014, China signed its first Free Trade Agreement with a European country—Iceland—and is currently one of the major investors in Greenland’s mining industry. In August 2013, the Chinese cargo ship Yong Sheng sailed from Dalian to Rotterdam via the Northern Sea Route (NSR) and reached its destination two weeks earlier, covering a distance 22 percent shorter, than it would have using the traditional Suez Canal route. Chinese analysts optimistically predict that during the next decade up to 15 percent of China’s international trade may be shipped via the NSR. Singapore, another market of interest for Alaska, has also become a permanent observer to the Council. Singapore is a major shipping hub, one of the world’s largest oil refiners and offshore oil platform builders. It has a vested interest in the development of global shipping and resource extraction industries. If the NSR becomes the major shipping route, Singapore worries that it could lose a share of its business to the new route. This explains why the country is proactively looking at the opportunities that emerge from Arctic development and could possibly seek to establish a foot72

Annual conference focuses on infrastructure in 2015

hold along this Northern route through port development and management.

Northern Sea Route Navigation via the NSR continues to grow. In 2010, only four cargo ships transited through the NSR, while in 2011 there were thirty-four ships, in 2012 there were forty-six, and 2013 saw seventy-one vessels plying the route. The sailing season for the NSR is limited to six months: it starts in June and ends in November. As the ice continues to recede, the sailing season may become longer as time goes by. Most of the ships require an icebreaking escort. Rosatomflot, a Russian company operating a fleet of nuclear-powered icebreakers, currently provides escorts to the cargo ships. Russia is clearly the main player in terms of icebreaking capabilities. According to a report by the United States Coast Guard, Russia currently has a fleet of thirty-seven icebreakers with another twelve either under construction or planned. The Nordic nations of Finland and Sweden are next on the roster having seven icebreakers each. Meanwhile, the United States currently has five with an additional one on the drawing board. A World Trade Center Alaska member, Finnish company Arctia Shipping operates the Finnish fleet of smaller icebreakers and leases them to companies that conduct offshore operations in the Arctic. Their ships provide a variety of services including ice management and oil spill response. Capital Investment Needed Successful commercial operations in the Arctic will require a significant infrastructure build out. The majority of the Arctic Ocean’s coast is undeveloped, lacking even minimal infrastructure. Such development will require an enormous amount of capital investment. It is estimated that the cost of construction of this infrastructure will require more than $100 billion over the next decade. Such capital requirement spells opportunities for investment banks, private

equity firms, sovereign wealth funds, and other sources of large-scale capital. Some describe the situation in terms of “which comes first, the chicken or the egg?” Meaning, they wonder whether it will be the presence of commercial activity that drives the infrastructure build out, or will the presence of the necessary infrastructure enable commercial activities to ensue. Due to the magnitude of investment dollars required for the infrastructure, one can speculate it will necessitate correspondingly significant commercial activity, such as oil and gas, to trigger the development. This brings up the question of who pays? Will it be governments, private sector companies, or a combination of the two through public-private partnerships, so-called PPPs.

Arctic Ambitions IV Endeavoring to answer this question will be one of the major themes at the upcoming Arctic Ambitions IV Conference, organized by World Trade Center Anchorage. The Center will be conducting the 4th Annual Arctic Ambitions Conference in downtown Anchorage March 10 through 11. It will concentrate on the theme of infrastructure development in the Arctic. This international conference uniquely focuses on trade, commerce, and investment opportunities that flow from Arctic development. The previous three conferences brought together presenters from Canada, Finland, Norway, Russia, Korea, and Alaska. Government officials and business executives discussed their roles as developments unfolded in the region. This year’s agenda includes a full day of presentations, a keynote address, and an evening networking reception. The following day will feature panel discussions on various methods of financing the Arctic infrastructure. The conference will take place at the Hilton Anchorage Hotel. For registration information visit wtcanc.org or call 907- 27-TRADE. R

Alaska Business Monthly | February 2015 www.akbizmag.com

International Trade special section

State Exports via Alaska Total U.S. Exports (Origin of Movement) via Alaska

Rank — — 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

HS Code — — 260800 260700 30499 271019 30475 30312 30389 30390 30363 440320 30339 260300 261690 30367 30614 230120 30311 270900 880000 30351 270119 271012 710812 30213 30221

Description Total Alaska Exports And % Share Of U.S. Total Total, Top 25 Commodities And % Share Of State Total Zinc Ores And Concentrates Lead Ores And Concentrates Fish Meat, Frozen, Nesoi Petrol Oil Bitum Mineral (Nt Crud) Etc Nt Bio Alaska Pollock Fillets, Frozen Pacific Salmon, Frozen, Nesoi Fish, Frozen, Nesoi Fish Livers And Roes, Frozen Cod, Frozen Coniferous Wood In The Rough, Not Treated Flat Fish Nesoi Except Fillets, Livers, Roes Copper Ores And Concentrates Precious Metal Ores & Concentrates, Except Si Alaska Pollock, Frozen Crabs, Including In Shell, Frozen Flour Meal & Pellet Of Fish Crustaceans Etc I Sockeye Salmon, Frozen Crude Oil From Petroleum And Bituminous Miner Civilian Aircraft, Engines, And Parts Herrings, Frozen Coal Nesoi, Not Agglomerated Lt Oils, Preps Gt=70% Petroleum/Bitum Nt Biod Gold, Nonmonetary, Unwrought Nesoi Pacific Salmon, Fresh Or Chilled Halibut/Greenland Turbot Ex Fillet, Lvr, Roe

2010 Value 4,155 2,442 877 402 270 27 0 0 0 0 0 114 95 37 20 0 73 46 132 0 49 35 4 0 213 0 47

2011 Value 5,259 3,151 972 495 319 125 0 0 0 0 0 118 74 199 142 0 113 62 132 0 33 38 31 0 266 0 30

2012 Value 4,543 4,094 796 428 369 178 207 147 378 215 250 151 85 169 108 105 126 44 89 0 73 23 31 2 82 20 19

2013 Value 4,528 4,315 814 389 341 285 284 258 251 246 231 163 161 150 140 112 99 77 61 50 46 45 27 24 22 21 18

2010 % Share 0.3 58.8 21.1 9.7 6.5 0.6 0 0 0 0 0 2.7 2.3 0.9 0.5 0 1.7 1.1 3.2 0 1.2 0.9 0.1 0 5.1 0 1.1

2011 % Share 0.4 59.9 18.5 9.4 6.1 2.4 0 0 0 0 0 2.2 1.4 3.8 2.7 0 2.2 1.2 2.5 0 0.6 0.7 0.6 0 5.1 0 0.6

2012 % Share 0.3 90.1 17.5 9.4 8.1 3.9 4.6 3.2 8.3 4.7 5.5 3.3 1.9 3.7 2.4 2.3 2.8 1 2 0 1.6 0.5 0.7 0 1.8 0.4 0.4

2013 % Share 0.3 95.3 18 8.6 7.5 6.3 6.3 5.7 5.5 5.4 5.1 3.6 3.6 3.3 3.1 2.5 2.2 1.7 1.3 1.1 1 1 0.6 0.5 0.5 0.5 0.4

% Change, 2012-2013 -0.3 5.4 2.2 -9 -7.6 60.1 37.1 75.2 -33.5 14.5 -7.3 7.7 89.7 -11.4 29.9 5.9 -21.1 75.5 -32 0 -36.4 97 -12.8 (Z) -73 6.2 -3.7

‘(Z)’ indicates a percent change greater than 500.

SOURCE: U.S. Census Bureau

Top 25 6-digit HS Commodities Based on 2013 Dollar—Value U.S. Exports by Origin State (Origin of Movement Series). Values in millions of dollars. Percent Change is from 2012 - 2013.

Rank — — 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Country Total Alaska Exports and % Share of U.S. Total Total, Top 25 Countries and % Share of State Total China Korea, South Japan Canada Germany Singapore Spain Netherlands Belgium Australia France Finland Thailand Ukraine Lithuania United Kingdom Hong Kong Denmark Chile Taiwan Portugal Russia Indonesia Italy Panama

2010 Value 4,155 3,875 921 477 1,218 391 174 8 163 115 64 66 41 41 21 9 5 29 12 8 23 23 33 11 0 21 0

2011 Value 5,259 4,893 1,477 642 1,086 586 261 11 205 173 31 96 48 60 35 18 11 18 13 19 21 20 31 16 4 10 0

2012 Value 4,543 4,384 1,353 663 780 467 274 124 151 121 59 108 37 45 12 21 13 24 13 13 21 17 32 9 11 14 0

2013 Value 4,528 4,481 1,236 705 688 604 289 217 141 112 65 62 50 43 41 39 33 28 24 17 17 16 15 13 9 8 8

2010 % Share 0.3 93.3 22.2 11.5 29.3 9.4 4.2 0.2 3.9 2.8 1.5 1.6 1 1 0.5 0.2 0.1 0.7 0.3 0.2 0.6 0.6 0.8 0.3 0 0.5 0

2011 % Share 0.4 93 28.1 12.2 20.6 11.2 5 0.2 3.9 3.3 0.6 1.8 0.9 1.1 0.7 0.3 0.2 0.3 0.2 0.4 0.4 0.4 0.6 0.3 0.1 0.2 0

2012 % Share 0.3 96.5 29.8 14.6 17.2 10.3 6 2.7 3.3 2.7 1.3 2.4 0.8 1 0.3 0.5 0.3 0.5 0.3 0.3 0.5 0.4 0.7 0.2 0.2 0.3 0

2013 % Share 0.3 99 27.3 15.6 15.2 13.3 6.4 4.8 3.1 2.5 1.4 1.4 1.1 0.9 0.9 0.9 0.7 0.6 0.5 0.4 0.4 0.4 0.3 0.3 0.2 0.2 0.2

% Change, 2012-2013 -0.3 2.2 -8.7 6.3 -11.8 29.4 5.3 75 -6.6 -7.8 9.7 -42.5 34.7 -5.1 255.3 88.1 144.2 15.5 82.9 29.4 -18 -3.9 -54.5 41.6 -15.4 -38.9 (Z)

‘(Z)’ indicates a percent change greater than 500. www.akbizmag.com

February 2015 | Alaska Business Monthly

SOURCE: U.S. Census Bureau

Top 25 Countries Based on 2013 Dollar Value—U.S. Exports by Origin State (Origin of Movement Series). Values in millions of dollars. Percent Change is from 2012 - 2013.

TRANSPORTATION

Photo courtesy TSAIA

International carriers at Ted Stevens Anchorage International Airport.

Passengers First, Cargo Second: International Transportation in Alaska By Kirsten Swann

ome to the Air Crossroads of the World and more coastline than all the other states combined, Alaska plays an important role in the world of international transportation. By sea, ports in Anchorage and Valdez serve as conduits to major Pacific Rim trade routes, ferrying everything from passengers to everyday consumer items to crude oil. By air, Ted Stevens Anchorage International Airport (TSAIA) and Fairbanks International Airport serve tens of thousands of commercial flights annually—both passenger and cargo planes from Asia, Europe, and beyond. Those hubs generate hundreds of millions of dollars in combined economic impact every year, according to the State of Alaska. Still, some parts of the state’s international transportation industry are faring better than others.

The FedEx hub located at TSAIA stands out against a generally flat cargo shipping scene, continuing to build business after the international company projected a record-setting holiday season in December 2014. A first-quarter earnings report released in September heralded a surge in profits “primarily due to higher volumes and increased yields at all three transportation segments.” FedEx spokesman Jim McCluskey says the Anchorage hub played an important role in that success. “We provide the same solid portfolio of services in Alaska that we provide across our network: what you can get here in Memphis or in Paris or in any other major city or town across the globe,” McCluskey says. “You have to understand, too, that whole hub location [in Anchorage], that’s a significant presence.”

The Anchorage FedEx hub, which occupies a five hundred thousandsquare-foot complex within TSAIA, is open around the clock every day of the year and serves more than five hundred flights per month, according to the corporation. The location holds a major advantage for international transport: Anchorage is located just a nine-and-ahalf hour flight away from 90 percent of the industrialized world, with connections to distribution centers in London, Paris, Frankfurt, Tokyo, Hong Kong, and other Asian cities. Time zone differences mean cargo from Anchorage can reach key locations around the globe within twenty-four hours, according to FedEx. The company says its shipping hub there, which connects to more than 220 countries spread over six continents, has experienced a 30 percent growth rate over the last decade,

Alaska Business Monthly | February 2015 www.akbizmag.com

due in part to its important role in the global web of cargo transportation. “Bottom line is, services we provide in Alaska are the same as we provide anywhere else in the world,” McCluskey says.

Flat Cargo Year But despite growth among some individual carriers like FedEx, TSAIA has seen “essentially flat” numbers when it comes to cargo traffic. Trudy Wassel, an Alaska Department of Transportation and Public Facilities division operations manager working at the Anchorage airport, says the airport measures cargo based on certified maximum gross take-off weight and does not distinguish between national and international carriers when measuring that number. The amount of cargo passing through the airport decreased by nearly 2 percent between 2013 and 2014, despite seeing very slight month-to-month increases as of December 2014, according to the operations manager. “We of course want all traffic to increase, and the airport team works to provide a safe and efficient airport for the car-

riers to operate,” Wassel says in an email. The airport currently serves more than thirty large air carriers, including Cathay Pacific Airways, Air China Cargo Company Ltd., Condor, and Nippon Cargo Airlines. About ten logistics companies and freight forwarders also work out of TSAIA. According to an economic impact report released by the McDowell Group in 2012, the Anchorage airport handled nearly three-quarters of the 2.1 billion pounds of cargo traveling from the United States to Asia in 2010. When it comes to inbound cargo, the airport sees even larger numbers. The McDowell Group states that more than 80 percent of the 4.1 billion pounds of cargo traveling to the United States from Asia in 2010 passed through TSAIA. “[TSAIA] plays an important global role supporting the movement of air cargo between North America and Asia, as well as other international destinations,” the consulting firm stated in its 2012 report, the most recent available as of December 2014. “Air cargo trends at ANC are often a good indicator of the ebbs and flows of the global

Your stuff will make it to port, even if you can’t.

economy, particularly the trade flows between North America and Asia.” For Anchorage, one of the busiest air cargo hubs in the world, 2014 was unremarkable. At Fairbanks International Airport, the second hub in the Alaska International Airport System, international cargo traffic also remained relatively flat after taking a steep dive in 2005 and 2006, according to the Alaska International Airport System. A baseline cargo tonnage forecast released by the international airport system predicted slight but steady international growth at Fairbanks International Airport through 2030, combined with stagnant in-state cargo traffic for an average 1.3 percent growth rate.

Decreasing Port Volume But Alaska’s international airports aren’t the only major transportation centers faced with plodding international cargo volumes. At the Port of Anchorage, that number isn’t going anywhere fast. “It’s a very predictable demand,” says Port Director Steve Ribuffo.

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The Port, recently embroiled in an over-budget and incomplete expansion project, decided in mid-2014 to scale back its efforts and focus on modernizing the existing facilities. Ribuffo says there’s been a common misconception about cargo traffic at the Port that many people seem to believe the aging facility has reached its limit. The Port director says that in reality there’s plenty of room for more cargo and current shipping and population trends suggest the Port will be able to handle new business well into the future. An average of 240,000 containers pass through the Port annually, shipped to Alaska on container vessels owned by Horizon Lines, Inc. and Totem Ocean Trailer Express. But according to a ten-year report examining dock-tonnage from 2003 to 2013, cargo volumes at the Port have decreased noticeably over the past decade. Despite significant increases in NOS (“not otherwise specified”) freight, iron, and steel cargo, massive drops in other categories led to an overall 25 percent decrease in Port of Anchorage dock tonnage since 2004.

Dry bulk cement cargo decreased from nearly 123,000 tons in 2004 to slightly more than 112,000 in 2013. While nearly 3,000 tons worth of vehicles crossed the docks in 2004, the 2013 tonnage report showed nothing for that category. Rail rack and dockside petroleum tonnage— totaling more than 2.7 million tons in 2004—hovered around 1.5 million tons in 2013, according to the Port. Meanwhile, the Port facility is moving forward with a modernization project that involves adding additional acreage and rebuilding two aging terminals. Barring a massive, unprecedented increase in the state’s population, Ribuffo says expanding the Port is unnecessary. The cargo traffic just isn’t there.

Passengers Increasing Passenger traffic, especially air traffic from international destinations, is a different matter altogether. In fact, a draft version of the Ted Stevens Anchorage International Airport Master Plan—the document that guides long-term airport growth—predicts enplaned international passenger traffic will be the fastest-growing segment

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of all passenger air travel over the next fifteen years; increasing at nearly triple the rate of all other passenger types. According to the Alaska Department of Commerce, Community and Economic Development, the state saw a 24 percent increase in the number of international air passengers in the 201314 fall and winter season, mainly due to an increase in Japan Airlines traffic out of Fairbanks International Airport. In Anchorage, Wassel says, enplanements at TSAIA were up by nearly 6 percent month-to-month in 2014, a “good increase in overall passenger traffic.” Caryn McConkie, a development specialist with the state’s tourism research section, says one key development in particular is furthering Alaska’s international ties and helping bring more people to the Last Frontier. “We’ve got new air service from Icelandair that’s making a difference,” McConkie says. The service began in 2013 with twicea-week seasonal flights between Anchorage and Reykjavik, and McConkie says the additional passenger traffic is adding up.

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Photo courtesy of TSAIA

Giant freighters on the tarmac at Ted Stevens Anchorage International Airport.

The state reports that over the summer of 2013, the most recent year for which data was available in December 2014, the number of passengers leaving Alaska via international air increased by 6 percent. While the state is quick to note that most international travelers exit the state via domestic flights or cruise ships, those numbers also saw comparable gains. Besides the relatively new Icelandair flights, Wassel says the Anchorage airport also offers summer seasonal international scheduled service on Condor and Yakutia, as well as charters by

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Korean Air. Luckily, passenger traffic doesn’t seem to correspond with cargo, and Wassel says the airport is looking forward to expanding its international offerings even further. “We are hopeful for some charters from China,” she says. “Hopeful.” Even in the face of uncertainty, one thing about international transportation by air or sea remains unchanged. Alaska’s prime location between US, Asian and European markets leave it poised at the front of the pack, wherever that may lead. The state’s interna-

tional hubs are ready, from the Port and its modernization project to Alaska’s two international airports and their forward-looking master plans. “I think we have a great relationship with all of our carriers and continue to provide support as they hopefully will grow their operations here at the Anchorage airport as well as the Fairbanks airport,” Wassel says. R Kirsten Swann is an independent journalist based in Anchorage.

February 2015 | Alaska Business Monthly

MINING

Map courtesy of Alaska Miners Association

Mining Districts in Alaska A geographically diversified economic base

By Mike Bradner

laska’s oil and gas resources seem to be concentrated on the North Slope and Cook Inlet, at least those discovered so far. But the state’s rich mineral endowment is spread statewide, which holds the promise of a geographically diversified economic base as mineral discoveries are made and mines are developed over time. There are discovered minerals and mines at the advanced exploration stage 78

in different parts of the state, but there are also producing mines, so that the effect of mining in diversifying the state’s economy is a fact, not just potential. Mining created about five thousand Alaska jobs in 2013 and $630 million in annual payroll. A job in Alaska mining pays over $100,000 a year on average.

Southeast Southeast Alaska is the state’s old-

est minerals producing district. The discovery of gold at Juneau led to that city being established and eventually wrestling away the honor of being the capital of the then-territory from Sitka, the capital in Russian days and the early years of Alaska’s being a part of the United States. Today there are significant operating mines near Juneau: the Greens Creek Mine on Admiralty Island and the

Alaska Business Monthly | February 2015 www.akbizmag.com

Kensington Mine at Berner’s Bay, north of the capital city. Both are underground mines, Greens Creek producing a mix of silver, gold, and zinc and Kensington being a gold mine like the first mines developed in Juneau. There are also two mine development projects farther to the south, at the southern tip of Prince of Wales Island near Ketchikan. The Niblack and Bokan Mountain-Dotsen Ridge projects are both underground mine projects in advanced stages of exploration and development planning, and if the stars align both could be producing in a few years. Bokan Mountain is unique because it would be a rare earths project, producing an unusual and scarce set of minerals that are used in high-technology manufacturing. As the demand for high-tech expands, particularly for military uses, the need for these minerals will grow. There are strategic security issues as well because China now supplies much of the world’s rare earth minerals and the United States is considered too dependent on Chinese production. Ucore Rare Metals, Inc., the company developing the Bokan Mountain deposit about forty miles from Ketchikan, has been exploring the deposit for several years. In 2014 a 5,500-meter drilling program was completed. The bulk of the 2014 drilling was for “infill” test holes drilled between previous test holes on a more widely-spaced grid. This is needed to better model the ore body and increase the company’s confidence that the mineable ore believed to be present is actually there. There was also deep drilling aimed at expanding the known resource at deeper levels and geotechnical and groundwater drilling that was needed to provide information for development permit applications. Ucore issued a Request for Proposals in mid-October for a consulting firm to prepare a Bankable Feasibility Study, or BFS, a major step. This is a detailed study of a quality sufficient that financing can be raised in Canadian equity markets. One interesting aspect of Bokan Mountain is that Ucore is working on a way to electronically sort low-grade ore and process only higher grades, which will increase the efficiency of the ore processing. Ucore is also experimenting with procedures to process the rare www.akbizmag.com

earth minerals at the mine rather than shipping concentrates out of state to a processing facility. The development plan is for a mine producing about 1,500 tons of ore daily. A capital investment of $221 million is estimated. The Niblack deposit, also on southern Prince of Wales, would also be an underground mine, but one producing a mixture of metals much like the Greens Creek Mine near Juneau. Niblack is at an advanced exploration and engineering stage, similar to Bokan Mountain.

If Niblack is developed, its owner, Heatherdale Resources, plans to ship raw ore to a processing plant near Ketchikan rather than “milling” the ore on site. This is mainly to take advantage of hydro power available in Ketchikan, which is less costly than power for a plant at the mine generated with diesel. Heatherdale has invested about $37 million to date in Niblack exploration and planning. Previous exploration investments totaled $50 million. The two operating mines near Juneau are real success stories. Greens Creek

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is the crown jewel of producing mines for Hecla Mines, its owner. It is now the largest silver producer in North America. Production was started in 1989 by Kennecott Minerals with Hecla as a minority owner, and Hecla ultimately bought out Kennecott’s share. Exploration has increased the size of the discovered ore body, and last fall Hecla received final US Forest Service approval for an expansion of its tailings storage facility, which will allow more minerals to be mined and the operating life of the mine to be extended. Greens Creek was projected to produce between 6.5 million and 7 million ounces of silver in 2014 along with 55,000 ounces of gold. The Kensington gold mine at Berner’s Bay is equally a success for its owner, Coeur Mining, Inc. of Idaho. Kensington had its challenges in starting up, but a redevelopment program by Coeur led to more efficient production and the mine is now meeting expectations. Kensington produced 114,821 ounces of gold in 2013 and listed its resources as 566,000 ounces in the measured and indicated category and an additional 263,000 ounces in the inferred category. The mine employed about 318 people in 2013.

The Interior In Interior Alaska, the Pogo Mine east of Delta has turned out to be a real winner for Sumitomo, its Japanese owner. The mine, an underground gold producer, has overcome early challenges after its startup, mainly in the efficiency of its ore milling and high turnover rates among its underground miners. Those problems are now under control and Pogo is now on an aggressive expansion program to tap nearby gold ore deposits and extend its operating life. Pogo produced about 337,000 ounces of gold in 2013 and 2014 production is expected to be about the same. The mine employs about 314 with an additional 80 contractor employees. Typically the contractor workforce increases to about 180 in the summer. Currently the mine has 4.97 million ounces of unproduced gold reserves, enough to operate until 2019, but the company is confident additional reserves will be added through the development and exploration work now underway. In the meantime, Pogo is a major economic stimulus in Interior Alaska, with 80

a 2012 payroll of $38.5 million and an average wage of $116,916 that year, more than twice the Alaska statewide average pay in 2012. The mine also spent $127.2 million with about 290 Alaskabased vendors in 2012, $82.7 million of it in the Interior region. Pogo also paid $24.3 million in state taxes and royalty payments in 2012. The Fort Knox gold mine northeast of Fairbanks, a surface mine, is likewise a major economic contributor to the Interior region. The mine, owned by Kinross Gold Corp., was projected to produce about 380,000 ounces of gold in 2014. It employs about 650, the vast majority living in Fairbanks and commuting to the mine; it pays about $81 million in annual payroll, $23 million in state and local taxes, and about $43 million per year to Golden Valley Electric Association, the Interior electric cooperative, for electricity purchases. Gold production began at Fort Knox in 1996 and mining will continue for several years, but as the higher-grade portions of the ore deposit are depleted the mine may be approaching the end of its conventional milling operating, phasing more into the processing of ore by its heap leach, which is now underway for low-grade ore. The heap leach operation begun in 2009 is proving successful. At the end of 2013 Fort Knox had 2.86 million ounces of proven and probable reserves; 1.147 million ounces of resources in the measure and indicated category and another 176,000 ounces of resources in the inferred category. On December 18, 2013, the mine produced its 6 millionth ounce of gold. Since mining began, about a quarter billion tons of ore have been mined and processed at Fort Knox. It is not yet constructed, but a surface gold mine larger than Fort Knox could be developed near Livengood, about sixty miles north of Fairbanks. International Tower Hills Mines’ (ITH) Livengood Mine project is a large, undeveloped, low-grade ore deposit close to the Elliot Highway. Extensive exploration has been done at the deposit and about 20 million ounces of gold resources have been identified by almost eight hundred drill tests: 15.7 million ounces of this in the measured and indicated category and an addition 4.4 million in the inferred category.

The ITH project is currently in a holding pattern as the company works to rescope the development plan. An initial development plan was found to be uneconomic at the costs estimated and the price of gold at the time, and the plan is now being revised to reduce costs. Meanwhile, ITH is looking for partners for the project. If it is developed, Livengood mine operations would require about 425 workers. About 1,020 would be employed in construction for two years. No mention of Interior mining is complete without the Usibelli coal mine at Healy, south of Fairbanks. Usibelli Mine, Inc., owned by the Alaskan Usibelli family, has been mining coal at Healy since 1943 and is Alaska’s longest-operating mining operation. This is a surface mine that produces about 1.6 million tons of coal per year, about 1.1 million tons for Alaska power plants in the Interior and about 500,000 tons per year to export markets through Seward, south of Anchorage. The export volume is down from recent years due to soft coal markets in the Pacific Rim, but Usibelli did ship seven shiploads of coal in 2014 to several destinations in the Pacific. Usibelli has ample undeveloped coal resources, enough to sustain production for several decades, and there are additional undeveloped resources in the area. A new venture for Usibelli is developing a small coal mine at Wishbone Hill in the Matanuska River valley north of Palmer. A state permit for Wishbone Hill was issued in 2014. This is a higher grade of coal than Usibelli mines at Healy.

Northwest Alaska If there is one bright star in the sky for Alaska’s miners it is the Red Dog Mine in northwest Alaska in the DeLong Mountains about ninety miles north of Kotzebue. Red Dog is a surface mine and one of the world’s largest zinc producers, although lead is also mined. Ore is mined and milled at the mine and the concentrates are trucked about sixty miles to a loading port on the Chukchi Sea coast where they are stored and shipped seasonally in summer when ocean ice thaws. The mine owner and operator is Teck Resources and the landowner is NANA Regional Corporation. Teck pays miner-

Alaska Business Monthly | February 2015 www.akbizmag.com

al royalties to NANA, but it is in reality a partnership with the many mine workers hired from villages in the Northwest region and NANA-owned companies and joint-ventures providing services to the mine, such as in trucking. In July 2014, NANA celebrated the 25th year of production at Red Dog. Since 1989 the mine has paid more than $400 million in royalties to NANA and an additional $600 million in payments to other Alaska Native corporations through the “7i” revenue-sharing provision of the Alaska Native Claims Settlement act. (Under this, 70 percent of a regional corporation’s resource earnings are shared with all other regional and village corporations.) Red Dog is unique in one other way, as a partnership with the state of Alaska in the development of the support infrastructure for the mine, the port, and a fifty-seven-mile road. The Alaska Development and Export Authority (AIDEA), the state’s economic development corporation, financed construction of the road and port because Cominco, the mine developer later purchased by Teck, had resources only enough to finance the mine.

Under the agreement, which was approved by the State Legislature, AIDEA owns the road and port and Teck pays a toll for its use and is also the contract operator. AIDEA’s original investment has now been paid back and the operation of the road and port is now a source of profit for the state authority. The money is used to finance other infrastructure projects around the state, including for mines.

Southwest The Donlin Creek gold project, near Crooked Creek village on the Kuskokwim River, could become one of the largest gold mines in North America if it is developed. Donlin Gold is a 5050 joint-venture of Barrick Gold and NovaGold Resources. The project is on land owned by The Kuskokwim Corporation, a consortium of village corporations, with subsurface mineral rights held by Calista Corporation. Exploration has been underway at Donlin Creek for many years and the project is now in its permitting phase, with an Environmental Impact Statement process now underway. If a mine

is developed at Donlin Creek it would be a large employer, creating 600 to 1,400 jobs, and a major economic stimulus in the Yukon-Kuskokwim region. Another large mine in development planning is Pebble, a large deposit of copper, gold, and molybdenum near Iliamna, southwest of Anchorage. Pebble Partnership, a company owned by Northern Dynasty Minerals, has done substantial exploration and development planning at Pebble. If developed, Pebble would create 800 to 1,000 production jobs. There is strong opposition from sports and commercial fisheries groups, however, who fear contamination of salmonbearing streams from the mine. The US Environmental Protection Agency has also initiated an action to preempt largescale mining in the Bristol Bay region, but this is on hold after having been challenged by the Pebble Partnership. The company is now waiting for legal issues to be cleared before proceeding to an application for development permits. R Mike Bradner is publisher of the Alaska Legislative Digest.

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CONSTRUCTION

Gate and fencing along north and west side of property Visual enhancement landscaping Gravel path 16 parking spaces in northern lot Buffer landscaping Snow storage area Playground with direct, safe access to main building entry and plaza

New Building Addition

Visual enhancement landscaping Entry plaza that faces Muldoon Road streetscape with good solar exposure

Stormwater infiltration area Drop off area and entry plaza

20 parking spaces in southern lot

Existing Building

Sidewalks around building perimeter that tie into existing sidewalks along Muldoon Road

Fire truck access turnaround

Existing fence along southern and western property line to be maintained

SAFE HARBOR VILLAGE: RurAL CAP

100FT

Concept Site Plan

2015-01-09

Innovations in Alaska Building Techniques Efficiency and sustainability coming ‘full circle’

By Kirsten Swann

n Alaska, the lines between the natural and man-made world are beginning to blur, and old materials and ideas are resurfacing in leadingedge projects across the state. The concept of reuse and sustainability in building can be found everywhere from architectural design to the materials used in construction. One recently completed project was built with reclaimed wood from a nearby fish cannery: a nod to the region’s history and cultural values. Other new buildings take cues from the natural world around them, incorporating existing resources like wind, light, and thermal energy. A few projects seek sustainability by com82

bining modern architecture with traditional ideas of family and community, while others continue to push the envelope of environmental renewal. Alaskan builders are using time-tested values and resources to reach innovative new milestones in environmental and cultural sustainability.

Net-Positive Building In Anchorage, one architectural firm hopes to take sustainability a step further. McCool Carlson Green’s portfolio already includes the Alaska Airlines Center at the University of Alaska Anchorage, a plethora of Anchorage public schools, various aspects of Ted Stevens Anchorage International Airport, and the Anchorage Federal Building and Nesbett Courthouse, among other projects. Now, the planning and design firm is on track to complete the first building in Alaska certified under the International Living Future Institute’s Living Building Challenge (LBC), a comprehensive set of interna-

tional standards for net-positive building. Architect Jason Gamache, an associate with McCool Carlson Green, described the challenge as the next step in innovative sustainability: a successor to the now-standard LEED certification. “LEED was essentially created to transform the market in terms of how we manufacture and purchase materials for construction,” says Gamache, calling the rating system a prescriptivebased metric that allows builders to pick and choose among specific criteria. It emphasized indoor air quality and recycled materials and other health and sustainability standards that are “now the minimum of what we do,” he says. The innovations of yesterday are becoming the standards of today: Gamache says his firm is now striving to adhere to a new level of efficiency and beauty in architecture. McCool Carlson Green is working with the Rural Alaska Community Action Program, or RurAL CAP, to design

Alaska Business Monthly | February 2015 www.akbizmag.com

Rendering courtesy of McCool Carlson Green

Muldoon Road

Peck Ave Sidewalk connection to Muldoon Road

a new housing facility in Anchorage’s Muldoon neighborhood. The project is the first LBC-registered challenge in Alaska, according to Gamache. “We are really excited that the owner is being very progressive and forwardthinking, but also taking the long view,” he says. The LBC covers nearly every sphere of design and construction: “a much more holistic approach,” Gamache says. Builders are challenged with seven performance categories—place, water, energy, health and happiness, materials, equity, and beauty. Those performance categories are subdivided into a total of twenty imperatives, and Gamache says LBC success is measured over a full year of building occupancy following completion of the project. While the challenge standards are rigorous, they represent one of the latest innovations in building sustainability. “It’s really kind of the forward trajectory for a lot of builders,” Gamache says. “The imperatives stretch quite a bit further than LEED does.” In Seattle, there’s the Bullitt Center; a LBC project opened in 2013 and touted as “The greenest commercial building in the world.” It features net-zero energy, net-zero water, and net-zero carbon, composting toilets, toxic-free materials, high-performance windows that accommodate 80-percent daylighting, and a projected 250-year lifespan. Gamache says details like those are innovations that, ultimately, bring benefit to their environment rather than just doing less harm. Sustainability is simply the outcome of good design, he says. As of December, he says the LBC concept for the RurALCAP residence was still in the very early design phases, but architects are already planning to use some key measures in order to bring the building up to the cutting edge of sustainability and efficiency. The housing facility would incorporate displacement ventilation, Gamache says; a concept that banks on natural rules of heat displacement. Instead of pumping hot air from vents in a room’s ceiling—“fairly inefficient”—displacement ventilation conditions outside air, warms it, and pumps it into a space from a lower level. The hot air then rises, warming the rest of the building and saving valuable energy. www.akbizmag.com

February 2015 | Alaska Business Monthly

In fact, the MCG associate says, the RurALCAP project aims to achieve 110 percent energy production by incorporating solar panels. “The goal is to have more production than we have consumption,” he says. “It’s very ambitious.” While the building would still draw electricity from Anchorage’s power grid, it would also produce solar power that could be resold to a local energy utility. Overcast days and Anchorage’s long, dark winters make that difficult, Gamache says, and one big challenge involves finding a way to harness and use solar energy during the months when light is low and demand for power is high. But careful design and planning can make it possible, he says. The RurALCAP project also abstains from combustion, opting for all-electric boilers and other appliances, and calls for the use of a geothermal heat pump to up efficiency even more. The heating technology, common in other parts of the world, uses some very basic scientific ideas. Simply put, Gamache says, “If you go about twenty feet down below the earth, you get to the tempera-

ture that’s sort of the average annual temperature of the outside.” The heat pumps work by transferring subsurface warmth to the surface or, in warmer months, siphoning heat back into the ground for a cooling effect. According to the Fairbanks-based Cold Climate Housing Research Center, there are currently about fifty geothermal heat pumps found throughout the state, including several residential installations, a Fairbanks elementary school, and a Juneau airport terminal. Gamache says the design would mesh well with the tenets of the LBC and MCG’s ideas for the RurALCAP residential facility. And even though those ideas are helping realize new-generation design developments, they’re actually reiterations of tried-and-true, almost indigenous design. Look at some of Alaska’s first residents, Gamache says. Back then, buildings were sustainable because Arctic survival mandated it. “They built buildings with lots of thermal mass and sod roofs and Arctic entries,” he says. “It’s actually a very, very old technology, and a very, very old thought.”

Today, he says, uncertainty about the future of fossil fuels and an increasing desire to preserve the natural world have led to a return to those old thoughts. Designers seek, more than ever, to mesh the built and natural worlds. In that vein, the latest innovations in Alaska building take cues from ancient ideas of efficiency and sustainability. “We can take a lot of those same principles and integrate them with modern technology,” Gamache says. “It is very much coming full circle.”

Integrated Healthcare One prominent example: The Kenai Peninsula’s Kenaitze Indian Tribe’s Dena’ina Wellness Center, which celebrated its grand opening last summer. The fifty-two thousand-square-foot medical clinic, owned and operated by the Kenaitze Indian Tribe, was designed by Architects Alaska and Klauder and Company Architects of Kenai and built by Neeser Construction. It houses primary care, medical, dental, behavioral health, chemical dependency, wellness, physical therapy, pharmacy support,

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and traditional healing services. But those aren’t the only needs met by the state-of-the-art facility. “It’s unique in that we had a strong focus on cultural envisioning,” says John Crittenden, a principal at Architects Alaska and design manager for the wellness center project. Crittenden says the innovative new building focused on a marriage of sustainable design and traditional values, including a gathering space with a circular theme, a central oculus, an interior and exterior pole structure, and other features reminiscent of Alaska Native building design. Reclaimed wood from a former Kenai-area fish cannery is found throughout the wellness center, according to Architects Alaska. The lumber—pulled from siding, sheathing, and floor decking of the former Libby, McNeil & Libby Cannery—holds a special meaning for the building’s owners. The old cannery had employed members of the Kenaitze Indian Tribe for more than one hundred years, the architects say. Today, that same cannery wood is built into the wellness center’s ceil-

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ings, wall panels, and trim, as well as the glass-railed staircase that curves up from the lobby. The reclaimed wood also lines the surfaces of a room intended for traditional healing: a way to exercise both material regeneration and cultural sustainability. “The whole building itself is thought of as a vehicle for [the Kenaitze Indian Tribe’s] cultural identity,” Crittenden says. It’s not the only time his firm has combined architectural and medical innovation: Architects Alaska has also designed Greenhouse Senior Living projects—totaling more than two hundred resident rooms—in four locations around the state. The model promotes long-term wellness and sustainability by housing residents in smaller, ten to twelve person homes clustered around a larger support building with offices, physical therapy services, and a community gathering space, among other amenities. “The cost for construction and operation of the Greenhouse projects compares with traditional long-term care facilities designs; however, the Greenhouse projects provide increased occupancy rates, improvements in patient health

and engagement, no institutional feel, closer distances for patients to travel for activities, food, and support, and more individual attention to specific needs and concerns of the residents,’” says a spokesman for the architectural firm. The Greenhouse facilities in Seward, Kodiak, Anchorage, and Kotzebue touch on themes of family and community for long-term health and sustainability, according to their designers.

Aquatic Health and Safety Center When it comes to building in Alaska, innovation can mean combining both cultural and environmental sustainability—which, in many cases, means building around permafrost. About a fifth of the earth’s land mass contains permafrost, and a sizeable portion of that frozen turf is found in Alaska, according to the University of Alaska Fairbanks Cooperative Extension Service. Careless construction can result in thawing permafrost, uneven foundations, and “disastrous consequences.” So, when Architects Alaska made plans for the Yukon-Kuskokwim Re-

February 2015 | Alaska Business Monthly

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gional Aquatic Health and Safety Center, they turned to a unique solution. “One of its innovations is that it’s the first above-ground concrete pool tank,” Crittenden says. “That’s a pretty major technical development.” The aquatic center was built with sustainability in mind; designed to meet LEED (Leadership in Energy and Environmental Design) Silver standards, a green building certification process administered by the nonprofit US Green Building Council. It employs a two-system water treatment process that combines sodium hypochlorite tablets and UV treatment. The system cuts back on chloramines, according to the design firm, and improves overall air quality. In the quest for environmental sustainability, the aquatic facility design also harnesses an abundant natural resource. “Bethel has a good wind climate for turbines, so we incorporated a wind turbine in that project,” Crittenden says. A 100 kilowatt turbine was installed by STG Incorporated in March 2014. The Yukon-Kuskokwim Regional Aquatic Health and Safety Center is the architectural firm’s umpteenth pool design. It’s also Bethel’s first facility and the first in the state to be built with eightinch-thick, reinforced, pneumatically placed concrete walls and a reinforced concrete floor slab in a building with a thermopile foundation system, according to Architects Alaska. While the usual stainless steel or aluminum pool tanks last fromt twenty to twenty-five years, the average lifespan for a concrete tank is somewhere around sixty years. “We’ve learned a lot over the years about how to best adapt these facilities to the unique and varied environments of Alaska,” says David Moore, a princi-

pal at Architects Alaska and the design manager on the Bethel pool project. The thermopiles used in the pool project are a decades-old technology subject to continual development and innovation. Erwin Long, founder of Arctic Foundations Incorporated, or AFI, and 1978 Alaska Engineer of the Year, initially developed the Long Thermopile in 1956. The concept involves circulating fluids through the piles to keep the surrounding ground frozen, harnessing natural principles of heat transfer to enable construction on otherwise-unsteady ground. Architects Alaska first utilized the technology at Galena Elementary School in the mid-1970s, according to the design firm, and expanded its application from there. In the 1980s it went on to use thermosyphone and thermoprobe principles at the cold-storage Jim River Maintenance Building. Most recently, the firm applied AFI technology at a fabrication facility for Baker Hughes in Deadhorse and at the Deadhorse Aviation Center, projects led by Architects Alaska Principle Marvin Ungerecht. While the Long Thermopile is more than fifty years old, it continues to pop up in new and surprising places—like a six-lane pool in Bethel. “Even though some of it’s old technology, it’s an evolving technology,” Crittenden says. Technology that continues to do its part to promote environmental sustainability, helping builders preserve permafrost and create long-lasting foundations in cold weather climates. R Kirsten Swann is an independent journalist based in Anchorage.

Alaska Business Monthly | February 2015 www.akbizmag.com

Legal Speak By Renea I. Saade

Things to Consider When Contracting for Professional Services

iven that professional services often involve services that are specialized in some aspect and delivered by individuals, the liability and warranty terms and conditions that usually apply to other contractual arrangements are not always a good fit for a professional services transaction. Therefore, it is often helpful to evaluate and, to the extent necessary, address at least the following issues before entering into a contract to receive or provide professional services:

their own property damage or claims that may be brought by their own employees or contractors, but then agree to allocate liability for all other third-party claims based on each party’s percentage of negligence. In some circumstances, a complete “knock for knock” or an agreement for one party to take on all liability other than liability for gross or willful negligence is more appropriate. The specific allocation terms that are best for the parties depend upon the type of services being provided and the totality of the circumstances.

Parties’ Relationship: Because personal services are involved, the parties’ contract should describe the nature of the parties’ relationship. Usually, this translates to a contract provision that confirms that the party providing the services is an independent contractor or subcontractor and not the other party’s employee. Declaring the party a “contractor,” however, is not enough. The contract should also state that the service provider is in control of his or her own work, insurance, taxes, finances, and risk so that the parties have a framework that meets the IRS’s test for independent contractors. (See IRS Publication 15A for more details on the factors that will be analyzed by the IRS as well as many other governmental agencies that tend to follow the same test: irs.gov/pub/irs-pdf/p15a.pdf.)

Insurance: The kind and level of insurance coverage that is required will depend upon the kind of services provided as well as how the parties have allocated liability risks. Notwithstanding, a services contract usually specifies that the party providing services must have its own general liability and/or professional liability insurance coverage and workers’ compensation insurance. Even if the service provider is a sole proprietor and exempt under the state’s workers’ compensation act, it is best to still include contract language addressing workers’ compensation coverage requirements in the event the party does not meet the exemption test or subsequently hires others to perform the services. Under certain circumstances, automotive, employment practices liability, and/or other specific insurance coverage may also be appropriate.

Allocation of Liability: How the parties will allocate liability for personal injury or property damage claims can be the most difficult term to negotiate since neither party is interested in taking on any unnecessary liability risk. To reconcile this, many contracts will allocate liability based upon the kind of claim at issue so that the parties can deal with certain claims one way and other claims another way. For instance, it is common for parties to agree to a complete “knock for knock,” meaning that they each agree to indemnify, hold harmless, and defend one another for any and all claims for www.akbizmag.com

Intellectual Property: If the parties’ working relationship involves the use or creation of any intellectual property (inventions, patents, copyrights, trademarks, or other improvements or developments), the contract should address the ownership of such property, confirm who has a license or other legal right to use the property, and allocate any liability arising from the property’s use. Warranties: To reduce the chances of a future dispute, it is important to ensure that it is clear what aspect of the

services, if any, will be guaranteed or subject to a warranty. And, if so, how long the warranty will last and what it will entail. In other words, what rework, if any, will be done at no cost to the contracting party and what the contracting party must do to trigger the warranty available. Confidentiality and Non-Compete/Non-Solicitation Terms: As with any working relationship, there must be a level of trust between the contracting party and service provider. Nevertheless, the parties to a service contract should still specify whether they expect certain information shared with one another, the terms of their contractual relationship, or the details of their work together to remain confidential. If either party will be sharing proprietary or trade secret information or if either party operates in a highly competitive industry, the parties may also want to confirm that any information shared or learned will not be used to unfairly compete against each other and that there will be no solicitation of one another’s employees, contractors, or customers. Or, at the very least, set forth the parameters for how the parties will address the situation should such events occur (identify the liquidated or equitable relief that will be available and so forth). R Renea I. Saade is a partner with Stoel Rives LLP. She regularly assists businesses with their employment law and contracting legal needs and may be reached at renea.saade@stoel.com or 907-263-8412. Please note that this article is provided for educational purposes and is not a substitute for legal advice.

February 2015 | Alaska Business Monthly

FINANCIAL SERVICES

Multiple Industries Drive Business Expansion Financing throughout Alaska By Tracy Barbour

astable Ceramics owner Sean Siegel practically grew up with Northrim Bank. So when he wanted to expand the full-service dental lab, he didn’t hesitate to reach out to loan officer Kelly McCormick. He wanted financing to purchase the building next to his Minnesota Drive location in Anchorage. Ultimately, Siegel received a $970,000 loan with a twenty-year term and just 10 percent down—thanks to the guarantee of the Small Business Administration (SBA). Siegel says he feels lucky to have Northrim’s backing for the family business, which has been fabricating crowns, dentures, and other restorations since 1986. “Our responsibility is to facilitate the needs of Alaska dentists, making sure their valued patients have the opportunity to have dental restorations made right here in the state of Alaska,” he says. “Northrim’s assistance for what we do is rather far-reaching.” Currently, Siegel is in the process of renovating the building, which should be completed by May. “Anybody can have a building, but it takes some detail and planning to make it a dental laboratory,” he says. The new location will extend Castable Ceramics’ footprint from 2,400 to 7,400 square feet. The lab will occupy 3,200 square feet of that space and lease the rest to other businesses.

Optimism Fueling Expansion Financing Alaska’s financial institutions say they’re seeing steady loan volumes, including expansion financing similar to Castable Ceramics’ recent pur88

chase. Borrowers are using longer-term funding to acquire new businesses, construct new facilities, refinance/restructure debt, and buy vehicles and equipment. Customers are also capitalizing on credit lines for inventory, payroll, and other short-term expenses. Key areas for expansion financing are in the resource, healthcare, tourism, and professional industries, with loans often being guaranteed by the SBA and the Alaska Industrial Development and Export Authority. KeyBank’s Alaska President Brian Nerland says consumer confidence is up nationwide as well as in Anchorage. At least that’s the conclusion of the Anchorage Consumer Optimism Index recently released by the Anchorage Economic Development Corporation. The report—sponsored by KeyBank and produced by Northern Economics on behalf of the Anchorage Economic Development Corporation—uses data from a random quarterly sample of at least 350 households in the Municipality of Anchorage. “It shows that people feel good about the economy and fairly good about the future,” Nerland says. Wells Fargo’s Anchorage Business Banking Manager Bond Stewart has also noticed a surge in consumer optimism and strong loan volumes. “There’s a pretty stable and vibrant economic environment now,” he says. “The low interest rate environment has been fantastic if you’re a borrower.” Politics have also had a clear impact on the current levels of expansion financing, says Brendyn Shiflea of First National Bank Alaska. Specifically, the resolution of the oil tax repeal motivated

some businesses to move forward with their plans for growth. “I think a lot of folks were holding off on seeking financing until they were clear on the new taxation for oil companies,” Shiflea says.

Financing Activity across Multiple Industries Banks and credit unions are seeing a growth in expansion financing in a variety of industries all across the state. Shiflea, who manages First National’s Kenai Branch, says oil and gas has been a dominant industry, along with all the associated service sectors. The increase in activity with Cook Inlet is causing many businesses to outgrow their facilities on the Kenai Peninsula. Consequently, the bank has provided a significant amount of financing for the purchase and construction of commercial real estate. Newer companies in the area have added to the growth. “With all the new companies coming to town, we’ve had a lot of developers building buildings and leasing them out,” Shiflea says. One First National customer that’s experiencing tremendous growth is Cook Inlet Spill Prevention and Response, Inc. “With the increase in activity, they are increasing their response capability,” Shiflea says. “They’ve added some additional response vessels and barges and built a new testing facility in Nikiski.” Additional development in the area includes the completion of the Dena’ina Wellness Center in Kenai and the expansion of Central Peninsula Hospital in Soldotna. At KeyBank, the tourism industry has also been a significant area of activ-

Alaska Business Monthly | February 2015 www.akbizmag.com

ity for expansion financing, including loans for recreational vehicle rentals and sales. That’s understandable, given that tourism had a very good year. There’s also been expansion among commercial fishing and processing businesses, which have been bolstered by strong salmon runs (except for kings). “We’ve seen companies upgrading their vessel size and adding to their fleet to increase production,” Nerland says. On the processing side, some smaller firms are being bought out by larger ones. And land-based processors are upgrading their equipment to increase their capacity and adding additional cold storage. For Northrim Bank, expansion financing has been most active in the healthcare and resource industries, according to Commercial Lending Manager Larry Cooper. Recently, the bank provided funding for a facility that manufactures the custom fabrication of parts to support the oil industry on the North Slope. “We provided funds to not only expand the building, but to increase the line of credit so they have more working capital,” Cooper says.

Northrim Bank is also increasingly funding deals with Alaska Native Corporations, many of which are in a growth mode. Professional services— especially medical practices—is another sector where the bank is financing business growth. In Fairbanks, for example, Northrim approved a $750,000 loan to help a physician install a new operating theater in his practice. Other recent examples of Northrimfunded expansions include a Southeast flight service that built a new hanger, upgraded aircraft, and purchased additional aircraft, as well as the construction of new camp facilities on the Slope. Financing for generational transfers of ownership is also increasingly common at Northrim. Retiring business owners are selling to the younger generation, which typically require financing to purchase their assets. Once the business is sold, the new owners often need financing to operate the business as it goes forward. “When a generational transfer occurs, the new younger generation is often looking to expand or to find different markets,” Cooper says. “So we find ourselves financing lines

that are growing quickly.” Equipment financing has been a busy area for Wells Fargo, the nation’s top SBA lender in dollar volume. Consequently, Wells Fargo has added a business development officer in Anchorage to focus on equipment loans. “We do loans to help customers grow, expand, and upgrade equipment,” Stewart says. “We’re pretty unique in that our Small Business Administration division will do equipment financing.”

Credit Unions also Funding Expansions Credit unions are also helping businesses enhance their operations. Bob Shake, chief lending officer at Denali Alaskan Federal Credit Union, is seeing its customers—commonly called members—expanding in a number of ways. They’re increasing the size of existing buildings to meet the growth in customer demand, as well as purchasing other businesses. Shake points out that credit unions offer a full range of products and services to help businesses meet their financial goals. “We may be limited based on the size of our

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February 2015 | Alaska Business Monthly

assets on how much member business lending we can do,” he says. “However, the credit union is not limited in the variety of financing that it can offer.” Real estate financing has been a primary focus for Denali Alaskan FCU. Last year, it provided funding for a large commercial warehouse facility that will be home to a major oil company. In east Anchorage, a major project involved financing for the construction of single-family homes and land development financing in east Anchorage. “We have been very successful in providing multi-family financing [for sixplus units],” Shake says. At Alaska USA Federal Credit Union, much of the recent financing for business growth has been in the resource development, construction, retail, and services industries, according to Commercial Lending Manager Dave Bennett. “Our business members are using our financing to construct new buildings, purchase new equipment or businesses, and refinance existing loans to improve their interest rates,” he says. As a recent example of this, Alaska USA FCU worked with a group of in-

vestors that purchased an existing building that is leased to an air freight business. “They not only purchased the building, but they needed to expand the square footage, which included adding construction funds,” Bennett says. Another recent project involved the expansion of a successful health and fitness business. The credit union’s funding allowed the enterprise to grow out of a leased facility and design its own space to best satisfy its clientele.

Qualifying Factors When it comes to expansion financing, lenders examine all the usual qualifying factors: capacity, capital, collateral, conditions, and character. Aside from the official credit analysis, there are some broad attributes that borrowers should have in place to be in the best position to secure funding. For example, Bennett says, there is no substitute for being well prepared with a business plan, knowing and providing your financial statements, and good credit history. Business owners should plan for when and how is the best time to approach a lender to invest in their busi-

ness. “Lenders want and need time to get to know the business and its owners; business owners should want the same from their financing partner,” he says. From Cooper’s perspective, there are essentially 3 Cs of credit that successful borrowers must have: cash flow, cash flow, and cash flow. “That’s what pays the loan,” he explains. Shake says experience is a key factor in any business request. That’s why he preaches the importance of businesses having a team of professionals working on their behalf, including financial services representatives, accountants, attorneys, and insurance brokers. It’s also essential for borrowers to have experience in the proposed area of financing. Shiflea of First National also feels businesses should have an advisory team. His acronym for this is BAIL (banker, accountant, insurance broker, and lawyer). “One or all of these four professionals at some point will be involved with issues that come up,” he says. “These are folks who can help you navigate.” Ideally, Stewart of Wells Fargo would like to see solid fundamentals: a good

Alaska Business Monthly | February 2015 www.akbizmag.com

plan in place, a good repayment history, and a strong balance sheet that shows borrowers can weather a storm. “We want to make sure they have a good cash flow and revenues,” he says. “We’re really trying to predict the future.” It also helps to have a complete financial package with at least three years of tax returns, a current profit and loss statement, and up-to-date accounts receivables. In addition, borrowers must understand their business. They need to be able to articulate what makes them feel good about the expansion they’re proposing. “Having a good story to tell sure makes it easier for us to work with you,” Stewart says. For Nerland, the overall quality of borrowers’ financial statements is also important. Financials that have been reviewed or at least compiled by an accountant create more comfort with lenders, he says. Audited statements, which are more common with larger companies and nonprofits, carry even more weight.

Creative Solutions Regardless of their approach to ana-

lyzing the borrower’s credit, lenders want—and need—to feel comfortable with the borrower’s credit worthiness and the level of risk involved. And the more understanding lenders have about the deal that’s being proposed, the more they can tailor financing to fit borrowers’ situation. For instance, policy may dictate a certain protocol, but Northrim Bank is willing to consider a creative solution if it’s feasible, Cooper says. “We like to look outside the box where it makes sense to assist customers,” he says. “We try to find a way to make something happen.” Often, this requires having a deep understanding of the market and the individual borrower. For instance, when financing ownership changes for dental practices—an area of specialty for Northrim—the borrower’s character, expertise, and earning potential are heavily considered. This allows the bank to consider working with everyone from well-established professionals to doctors who may be fresh out of medical school and laden with debt. Businesses seeking expansion financing should take the time to do their

homework, Bennett advises. They must be well prepared to address questions from the lender about their plan, financial statements, and business growth assumptions. Bennett also encourages borrowers to shop for the best deal and to tap into the Small Business Development Center. “They provide resources, advice, and assistance that help small businesses grow and create measurable economic impact throughout Alaska,” he says. Shake of Denali Alaskan also believes in thinking outside the box and encourages members to do the same. Many borrowers fixate on the idea of business financing, but a home equity loan could also be a viable solution. Borrowers might be able to leverage the equity in their home to qualify for more funding than they could using just the assets of the business. “I can’t make everybody happy all the time,” Shake says, “but there may be other ways to look at the transaction.” R Tracy Barbour is a former Alaskan.

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February 2015 | Alaska Business Monthly

FINANCIAL SERVICES

Volunteer Tax & Loan Program Celebrates 20 Years Alaska Business Development Center helps bring millions back to rural communities By Mannie Boitz

reparing and filing federal income tax returns sounds like a daunting and rather boring chore, but to some this mundane task can be nothing short of a thrill. Just ask the volunteers who participate in the Alaska Business Development Center (ABDC) Volunteer Tax and Loan Program (VTLP). “I am so grateful for the opportunity to participate in such an amazing program. Honestly, the scope and vision of the program is commendable as is the execution of it. Overall, I am thoroughly elated with the entire experience!” This comment was captured in an anonymous volunteer survey conducted at the end of the last tax season. During the past tax season, VTLP teams traveled to eighty rural villages and assisted an additional forty-nine more through the Anchorage Mail-in Site; assisted over 9,100 taxpayers to include more than 1,000 elders aged sixty years or older and over 1,000 commercial fishing captains, crew members, and industry workers; prepared in excess of 4,800 tax returns and delivered nearly 1,400 education presentations; generated over $6.9 million in tax refunds for rural Alaska residents; and captured nearly $2.7 million in the Earned Income Credit.

The Volunteer ABDC operates a unique tax program that brings together a base of volunteers who travel to remote areas of the state to assist residents with tax return preparation and provide education on taxpayer rights and responsibilities. This win-win situation provides a hands-on experience and exciting adventure for the volunteers, while at the same time assisting rural taxpayers with becoming compliant with the IRS, as well as receiving tax education and in many cases scoring a tax refund. When asked if the work and efforts in the communities visited had a positive impact, volunteers responded, “this is the most gratifying part of this volunteer op92

portunity” and “we were able to explain information that resulted in additional refunds for several community members.” Each year more than eighty volunteers are recruited and trained to travel in teams to hard-to-reach villages across the state. During the past season, VTLP volunteers provided more than 4,700 hours of in-kind service to those in need, not including training and travel time. ABDC recruits volunteers from local entities, professional associations, and universities located within and outside the state of Alaska. Program volunteers are outgoing, adventurous, caring individuals eager to assist others in need. Many of the volunteers are students from partner universities from Washington state, Idaho, Montana, and as far away as New York. Volunteers participate as either a team leader/educator or tax preparer. All volunteers complete a level of IRS training as well as additional ABDC designed training, which details program and Alaskaspecific issues. The required training is typically more than forty hours, depending upon the volunteer, which may seem like a lot for a volunteer program. However, when volunteers were asked if they felt adequately trained and provided adequate support throughout the training process, they responded, “Training was excellent and well thought out” and “I found the [ABDC] case studies to be invaluable and the feedback from ABDC to be extremely helpful.” Volunteers travel in teams of one to three tax preparers, depending upon the community need, and one team leader/ educator. Depending upon the duration of the trip, (weekend or weeklong) teams assist one to four villages. The volunteers travel during the harshest months of winter weather in rural Alaska, braving the elements to bring the much needed services directly to remote regions of the state. Most of the communities ABDC reaches out to require multiple flights; after ar-

riving in the hub community (a larger rural community) via jet they transfer to a smaller plane (six to nine passengers) and fly to the destination community. Upon arrival they are greeted by the community contact at the airstrip and shuttled, gear and all, by truck, snow machine, or four-wheeler to the workspace where they set up and begin working. Teams are equipped with laptops, printers, and all items needed to provide a quality service. They are trained to be self-sufficient and to pack lightly, to include food and personal items, and are prepared with sleeping bag and mat as they often sleep on the floor, be it in the village office or school gymnasium. On many of the trips volunteers work extended hours, often late into the night to ensure all taxpayers receive assistance, since this is typically the only service the community receives. When asked about the overall experience a volunteer commented, “I had a great experience! The staff at ABDC was incredible, warm, and welcoming. I loved traveling to the villages and getting such an awesome opportunity to help others.”

The Rural Taxpayer This statewide program is brought directly to hard-to-reach, low income rural residents who do not have direct access to these services. Direct benefits to the residents include IRS tax compliance; knowledge of taxpayer rights and responsibilities; current and prior year tax return preparation often resulting in a tax refund or Earned Income Credit; assistance with IRS disputes; and consultation on tax issues. Rural taxpayers responded favorably to anonymous surveys conducted while the teams were in the communities.  “Very good service and nice helpful volunteers; look forward for next year.”—Anaktuvuk Pass

Alaska Business Monthly | February 2015 www.akbizmag.com

 “Friendly, able to answer questions without difficulty.”—Goodnews Bay  “Very helpful and kind.”—Hoonah  “Thanks for having this available. Thanks for the information. I received answers that I needed.”—Kaltag  “Your presence in the village is very much appreciated; we welcome you back.”—Kipnuk  “Keep up the awesome job! Thank you for the information.”—New Stuyahok  “Good, helpful tax people.”—Nunam Iqua  “Please continue to come out, very helpful and appreciated.”—Scammon Bay  “Thank you for coming to our village and helping. Thank you for this is a greatly needed service.”—Tanana Many rural Alaskans speak English as a second language and their income falls below the federal poverty line. Regardless of their desire to become compliant, rural residents are limited by their inability to afford professional assistance and by a lack of qualified tax practitioners available in their areas. This hinders taxpayers from filing their tax returns and impedes their ability to receive adequate tax counseling. While there are a rising number of individuals gaining access to free tax preparation services online, reliable internet service is still sporadic throughout rural Alaska. Additionally, many taxpayers who have opted to prepare their own tax returns have later requested assistance from ABDC to correct errors they encountered due to being unaware of how the process works and/or finding the process cumbersome. Economic and employment opportunities are generally limited to seasonal work, small businesses, teaching, and positions with Alaska Native Corporations and local governments including tribal and city offices. Commercial fishing, hunting and trapping, and making traditional souvenirs such as baskets and skin masks also provide income. As a result, this population relies on the receipt of tax refunds to provide for their families, including credits such as the Earned Income Credit. These refunds can only be garnered through properly filed federal income tax returns. www.akbizmag.com

Many times the preparation of the federal income tax return results in a refund representing a double digit percentage of the taxpayer’s annual disposable income. Additionally, refunds to taxpayers have a direct impact on the local economies, which in many cases are depressed, and are estimated to have a money multiplier effect of four. This means that each dollar brought back to the community not only helps the individual taxpayer but the community on a whole as the dollar is cycled a minimum of four times within the local economy. VTLP services help to improve the quality of life throughout the rural communities through education and tax compliance as well as through the millions of dollars in refunds which help taxpayers provide for basic family needs. In addition to providing direct benefits to rural taxpayers, VTLP indirectly benefits the urban centers through the refunds generated via completed tax returns. Rural Alaska routinely relies on services and goods only available in the city centers, and therefore with the monies received taxpayers are able to purchase these services and goods. Alaska’s largest communities should not ignore the importance the rural dollar has throughout their urban economies.

The Program VTLP is a unique program that is made possible through numerous program contributors. Services are funded through federal grants, private organizations, financial institutions, and program partnerships with Alaska Native Corporations, community development quota groups, and local village corporations, tribes, and cities. ABDC also partners with local entities to assist with recruiting volunteers, providing cultural training, and securing prizes for volunteer recognition and taxpayer educations. Services are provided to taxpayers residing in partner communities who provide support to the program through monetary and in-kind contributions made directly or indirectly through a regional entity. Services are brought to the villages during the tax season, providing free one-on-one assistance with current year tax return preparation and education on taxpayer rights and responsibilities. Additionally, services are available through ABDC’s Anchorage office on a year-round basis. Staff prepare current year returns for taxpayers who missed

the team while in the community as well as provide assistance with prior year and amended returns. Furthermore, ABDC offers tax consultations on personal tax issues and representation for those taxpayers with an IRS controversy issue. Many times taxpayers receive notices from the IRS that they do not understand and qualified staff is able to work with them to explain and resolve the issue. VTLP services are not designed to interfere with regional tax practitioners, but rather fill a void by providing assistance to low to moderate income individuals who may not otherwise have access to this type of assistance.

VTLP Today ABDC is proud to announce that 2015 will mark VTLP’s twenty-year anniversary of providing assistance to rural Alaskan residents. VTLP originated in 1995 as a solution to resolve the non-compliance tax issue amongst commercial fishermen, which was a problem that inhibited them from expanding their operations. This was the brainchild of Alaska Division of Investments Director Martin Richard and ABDC President Gary Selk. VTLP began its first outreach in 1996 by completing 185 tax returns in seven communities. Today, VTLP has grown to be a multifaceted program spanning across ten regions of the state, offering assistance year-round. For the current tax season ABDC anticipates assisting more than 130 communities, preparing in excess of 5,000 returns, and delivering 1,500 educational presentations. ABDC is grateful to the valued volunteers who will provide more than 5,000 hours of in-kind service assisting those Alaskans in need. ABDC is also thankful to all program contributors that make this program a success through their continued support. Contact ABDC to see if your community is a partner community and eligible to receive assistance or if you are interested in volunteering. R Mannie Boitz is a Program Coordinator for Anchorage-based Alaska Business Development Center, Inc., a 501(c)(3) nonprofit corporation founded in 1978. Contact her at 907-562-0335 or info@abdc.org.

February 2015 | Alaska Business Monthly

HEALTHCARE

Elder Care Facilities in Alaska New models, new buildings, new aging population

ith Alaska’s position as the state with the fastest-growing population of people age sixty-five and older in the nation, the care and housing of seniors is a pressing need now and will continue to be in the foreseeable future. According to a US Department of Health and Human Services, the growth nationwide in the number of people age sixty years and older will continue to be strong for the next fifteen years. After 2030, the growth of this segment of the population will slow, but that is when the oldest boomers will begin to reach age eightyfive, a time when they are at increased risk of having dementia and their need for services is likely to become more intensive. Nursing homes throughout Alaska are stepping up to address this need for the care and housing of the elderly, now and in the years to come. The Eden Alternative, the Green House Project, the Gentlecare System, Native Alaskan-centered care—no matter what name it goes by, a movement is afoot to de-institutionalize long-term care in the state of Alaska. Used in settings as old as the Alaska Pioneer Homes, established at Sitka in 1913, to the Yukon-Kuskokwim Elders Home (YKEH) in Bethel, which opened in 2013, the emphasis in all these programs is on patient-centered care with the goal of increasing the quality of life for the elderly. In the past, seniors needing assisted living or more intensive care often ended up in nursing homes, giving up their independence for life in an impersonal, sometimes poorly staffed institution. All too often, the feeling of “home” in these nursing homes was sadly missing. Residents fall prey to the dangers of institutionalization: boredom, social isolation, and lack of purpose. Newer institutions, such as YKEH and Providence Seward Mountain Haven (PSMH), and retooled programs at

By Louise Freeman older homes put their focus on keeping the residents active and engaged.

Seward “Our thought is not that they are coming here to die, but to live out the rest of their days with a good quality of life,” says Becky Lawson, assistant administrator of PSMH. The Providence facility, which opened in 2009, was built from the ground up with the needs of the residents in mind. The first Green House project in the state, PSMH was designed as four separate lodges, each housing ten residents. The lodges are made as homelike as possible, with private rooms opening off of a central living area, where “elders” (as they are called, as a sign of respect) can lounge in easy chairs by the fire or help make meals in the country kitchen if they are able. Studies done at Duke University Medical School have shown that the smell of home cooking helps stimulate the appetite, which is often a problem with the elderly. The staff at PSMH is made up of Certified Nursing Assistants (CNAs), under the supervision of licensed nurses. “Our CNAs are elevated to a whole different level,” Lawson says. They receive 120 extra hours of training in culinary skills, dementia care, first aid, team building, and communication to become what, in the Green House project, are known as “Shahbazim.” “Shahbaz is a Persian word meaning falcon protector,” explains Lawson. In the Green House philosophy, this means CNAs become universal workers whose role is to always protect, sustain, and nurture the elders. The Shahbazim work closely with the residents, establishing personal ties, often cooking and eating alongside the elders and joining in the “convivium”—a time when residents and staff gather around the table and talk about their day. Part of the Green House philosophy is making the environment conducive

to interaction with family, children, and pets. Each lodge contains a den where elders can Skype with family and friends. Family members can come and spend several nights sleeping on the den’s hide-a-bed if they have come a long way for a visit or if the elder has had a change of condition and family would like to be close to their loved one. PSMH even has a “campus pet”—a dog that is taken around to the different lodges to visit with the elders. Some staff members bring their children to work in the summer and many of the residents enjoy getting to know the young people.

Bethel YKEH in Bethel also emphasizes family connections, which are particularly important for Alaska Native elders, many of whom are away from their families in the villages. The facility has a video teleconference setup so that residents can see and hear friends and family back home. “There are a lot of happy tears,” says Gerald Hodges, administrator of YKEH. Currently there are eighteen elders in residence, with a dozen people on the waiting list. Preference is given to those in the Yukon-Kuskokwim Delta Corporation region. Until the existence of YKEH, many elders in the Bethel area had to go to nursing homes in Anchorage. Often their cultural needs were not met. “The chance to hear and speak their language, Yup’ik, is the number one thing they appreciate at YKEH,” says Hodges. Those with dementia often lose their ability to speak or understand English, so being able to communicate in their native language is very important. The elders also enjoy the traditional foods, such as fish soup and akutaq, prepared by the kitchen staff. Speech, occupational, and physical therapists visit each month. Like many nursing homes throughout Alaska, especially in remote, isolated, rural communities, YKEH

Alaska Business Monthly | February 2015 www.akbizmag.com

struggles to recruit and retain licensed nurses and other staff, such as CNAs. The Yukon-Kuskokwim Delta Corporation has a training program for CNAs. “We are grateful when we get them and do everything we can to keep them. Retention is very important,” says Hodges. The CNAs receive special training in caring for those residents with Alzheimer’s and related dementia disorders. Elders with dementia are not separated from the other residents, but rather are integrated into the regular community.

Ketchikan The Ketchikan Pioneer Home (KPH) is divided into three “neighborhoods,” with all residents with Alzheimer’s housed together in one neighborhood. According to a report by the Alaska Department of Health and Human Services, the eightyfive-and-older cohort in Alaska doubled from 2,634 in 2000 to 5,448 in 2012, for an increase of almost 107 percent. Those over age eighty-five are much more prone to have Alzheimer’s or other dementia disorders. Like many nursing homes throughout the state, the age of residents at Alaska Pioneer Homes averages in the mid-eighties, so dementia care is an important element of the care at KPH. The Alzheimer’s unit is designed to reduce sensory stimulation and to include more one-on-one activities for patients who have trouble participating in group activities. There is also a higher staff-to-patient ratio than in the neighborhoods devoted to residents needing a lower level of care. KPH follows a philosophy known as the Eden Alternative, which emphasizes a homelike atmosphere. “Here at KPH, we were operating under the patientcentered model before we were able to put a name on it,” says KPH administrator Julie Sande. “It gave us a philosophy that all of the Pioneer Homes can subscribe to.” One focus of KPH is to provide purpose to the residents’ days. “Their world has gotten smaller” when they enter a nursing home, Sande recognized. The staff at KPH tries to find ways in which the elders can contribute, both to the home itself and to the local community. One highly successful program is the resident involvement in the on-site preschool, an Indian Education Program administered through the Ketchikan Gateway Borough School District. Residents volunteer at the preschool, often www.akbizmag.com

reading stories to the children. “The interaction is really priceless,” says Sande. There are forty-five beds at KPH, with seventy people on the active waiting list, waiting to move in at a moment’s notice, and hundreds of people on the inactive list, who are essentially holding a spot for when they need it. One additional bed is reserved for respite patients. These short-term residents are allowed to stay anywhere from twenty-four hours to fourteen days. This program—unique among the Alaska Pioneer Homes—provides temporary relief to family caregivers. “It gives them a chance to rest; they go back healthier and are able to be better caregivers,” says Sande.

Chugiak-Eagle River Residents with Alzheimer’s receive special treatment at the Chugiak-Eagle River Senior Center Assisted Living Program (ALP). The staff receives training in the Gentlecare philosophy, which focuses on “going with where they [the patients] are,” says Executive Director Linda Hendrickson. “Our staff is trained to alleviate the fear that often becomes a debilitating issue for people with dementia,” says Hendrickson. “The staff learns to redirect them in a loving manner.” At ALP, residents with dementia are integrated into the regular population as much as possible, with their apartments interspersed among the assisted living apartments, which house elderly who simply need help with the activities of daily living such dressing, bathing, and medication management. ALP is a nonprofit organization associated with the Chugiak-Eagle River Senior Center, which is connected to the assisted living apartment building by a long hallway. Residents have access to all the benefits of the Senior Center; they can take classes, work out at a full gym with personal trainers, and participate in a wide variety of activities. Future plans include the development of a twenty-unit Alzheimer’s unit on the 7.2 acres adjacent to the present facility. “There is a desperate need in this state,” Hendrickson says, for housing for people with dementia. “We definitely would like to see it built.” R Louise Freeman writes from Anchorage. February 2015 | Alaska Business Monthly

HEALTHCARE

Body language can tell you all sorts of things. Like someone is having a stroke.

SPEECH DIFFICULTY

FACE DROOPING

SOURCE: American Stroke Association

ARM WEAKNESS

strokeassociation.org 96

TIME TO CALL 911

Know the sudden signs.

Spot a stroke F.A.S.T.

Alaska Business Monthly | February 2015 www.akbizmag.com

Stroke Treatment Advances Minimizing neurological damage By Gail West

rue story: A few years ago, two executives were sitting in their Anchorage conference room discussing the future of their engineering business. Hopeful discussion, bright future. Then suddenly, one of the two felt dizzy and lightheaded, saw his hands shaking almost uncontrollably. He waited a bit and the symptoms settled slightly. He went to his office and tried to make a phone call only to find he couldn’t control his fingers sufficiently to dial. He waited a bit longer and all the symptoms vanished. Wrong answer! That man was very lucky. He had suffered only a transient ischemic

tered, Osterbauer emphasizes, within three hours of onset of symptoms. Christie Artuso, the director of Neuroscience Services for Providence Alaska Medical Center, says the drug is called Activase and is the only such drug approved by the FDA for use in dissolving blood clots. “If we can administer the drug within ninety minutes, there is a strong possibility for complete reversal,” Artuso says. “Every patient is a little different, and some may have a massive stroke, and the extent of the damage may determine how well we can reverse affects. Generally, though, the drug works well if administered within three

done within those hours and [resulting] disabilities may remain significant.”

Defining Strokes What is a stroke? And what symptoms should you know? Osterbauer says there are two types of stroke, ischemic and hemorrhagic. “An ischemic stroke happens when one of the blood vessels to the brain gets blocked by a clot that has come from somewhere else in the circulatory system,” he says. “The part of the brain that’s deprived of oxygen becomes starved for whatever amount of time the clot exists and begins to die.”

“If we can administer the drug within ninety minutes, there is a strong possibility for complete reversal. Every patient is a little different, and some may have a massive stroke, and the extent of the damage may determine how well we can reverse affects.”

—Christie Artuso Director of Neuroscience Services, Providence Alaska Medical Center

attack (TIA), described by the American Heart and Stroke associations as a warning stroke. He didn’t take it seriously, but it is serious—deadly serious. According to the national Centers for Disease Control and Prevention, stroke is a leading cause of death in the United States, killing nearly 130,000 Americans each year. Alaska’s Department of Health and Social Services said in a 2009 report that the state’s stroke death statistics were higher than the national average.

Minimizing Damage Death and debilitation from strokes, however, can be minimized and in many cases completely eliminated if the victim can get to an emergency room quickly enough. “Even if you’re not sure what’s happening,” says Dr. Peter Osterbauer of the Alaska Neurology Center, “if you can get there within about three hours, you can be given the ‘clot-busting’ drug.” That drug will help loosen the clot but has to be adminiswww.akbizmag.com

to four and a half hours. We’ve seen patients given the drug recover in an hour, literally before our eyes.” Artuso adds that the Activase injection treats only the ischemic, not the hemorrhagic, stroke. “Approximately 87 percent of stroke patients are suffering from an ischemic stroke, so the treatment is focused on the most common type,” Artuso says. “The most important thing to remember is that time is of the essence. The longer the patient is without oxygen to the brain, the more brain cells die. That becomes very, very significant as time goes by.” With either type of stroke, Artuso says, if it’s necessary, surgeons can remove a small piece of the skull temporarily to let the brain swell and heal. “Swelling causes less pressure damage on the neurons,” she says. In both cases, she emphasizes, time is critical. “We can treat within three to four and a half hours—in some cases, up to twentyfour hours, but damage will have been

With a hemorrhagic stroke, a blood vessel bursts in the brain and blood leaks out and destroys surrounding parts of the brain. As brain cells die from a stroke, abilities controlled by that area of the brain, such as memory and muscle control, are lost. Symptoms of a stroke include the sudden numbness or weakness of face, arm, or leg, especially on one side of the body; sudden confusion, trouble speaking, or understanding; sudden trouble seeing in one or both eyes; sudden trouble walking, dizziness, loss of balance, or coordination; or sudden severe headache with no known cause. Diane Lada, nurse practitioner at PEAK Neurology and Sleep Medicine LLC, says symptoms can vary according to the site of the stroke. “Most commonly, it’s weakness of an arm or leg or both,” she says. “Speech can slur; speech comprehension can be affected as well as the ability to form distinct words. Sometimes a stroke may include

February 2015 | Alaska Business Monthly

a facial droop.” Most often a stroke affects one side of the body, but Lada says rare strokes can mean symptoms affect both sides.

High Risks Risk factors for strokes are myriad and vary from high blood pressure, high cholesterol, diabetes, smoking, excessive alcohol use, atrial fibrillation, and genetics to sleep apnea, Lada says. “We’re seeing all those risk factors in younger people now and we believe part of the reason for this is that the younger population is not as healthy as we used to be. There is no age protection from a stroke,” she says. Osterbauer agrees and says genetics and drug use are often factors in youth who have strokes. Sleep apnea is one of the most recently recognized risks for strokes, Osterbauer says, and many people aren’t aware of that. Treatment of sleep apnea can decrease the potential for a stroke and help people recover after one. According to the American Heart Association, up to 91 percent of patients who had a stroke had sleep apnea. Osterbauer’s Alaska Neurology Center offers sleep apnea treatment and, he adds, there are other sleep clinics in the state, as well. Although socioeconomic and racial disparities do exist, heart disease and stroke touch Alaskans of every race, ethnic group, age, occupation, and social class. They are also gender blind. Women suffer stroke on a par with men and symptoms are generally the same. However, according to Lada, “gender differences in stroke are revealed in how symptoms are experienced. Men generally seek medical help when they experience numbness, weakness, and speech difficulties. Women are less likely to report these classic symptoms and experience their first stroke later in life. Women have shown less compliance with blood pressure control and cholesterol—some of the risk factors leading to stroke.” Treatment Advances Lada and Artuso are excited about advances the Center is making on stroke care locally and statewide. In addition to providing stroke education to audiences young and old in urban and rural communities, Artuso says they can 98

“Approximately 60 to 70 percent of all stroke victims will have clinical depression. If a stroke injures the left hemisphere of the brain, a person will have significant depression that can be at least somewhat disabling.”

—Russell Cherry Neuropsychologist, Alaska Neuro Associates LLC

do a great deal through telemedicine. She says if a person comes into a rural clinic with stroke symptoms, there’s almost instant interaction with professional medical help at the stroke center. Likewise, Dr. Robert Lada, director of Providence’s stroke program, can treat a patient from any location through cameras and computers at the hospital. This kind of help is also available through partnerships with several hospitals in the state, such as Bartlett Hospital in Juneau, allowing specialized physicians to provide expertise with a much broader reach. Medical professionals agree that getting treatment immediately is key to getting the best results after a stroke, but there are treatments for those who aren’t so fortunate and sought treatment too late for a full recovery. Neuropsychologist Russell Cherry, who, with his partner Heather Macomber, operates Alaska Neuro Associates LLC in Anchorage, is often part of a multidisciplinary medical team that evaluates and treats stroke victims. A neuropsychologist such as Cherry earns a doctorate in neuropsychology and does three years of post-doctorate and clinical work studying the structure and function of the brain. In this capacity, Cherry helps treat behaviors that are directly related to brain function after a stroke has damaged a section of the brain itself. As Osterbauer says, once the stroke has damaged a part of the brain, the damage is permanent and different types of therapy can help a patient live with his or her new reality. “A patient can still make progress up to a year, maybe two years,” Osterbauer says. “With physical therapy, speech and/

or occupational therapy, a person can strengthen an arm or a leg that has been weakened by a stroke and learn how to adapt to the activities required by day-to-day living.” Cherry’s expertise in neuropsychology helps patients treat such stroke results as depression and cognitive disabilities. “Approximately 60 to 70 percent of all stroke victims will have clinical depression,” Cherry says. “If a stroke injures the left hemisphere of the brain, a person will have significant depression that can be at least somewhat disabling.” Stroke victims are very often unable to do their prior activities, he says, “that could affect employment or daily living. There may be language issues that get in the way of their social life. There may also be some neurochemical changes to the brain. These are very good reasons to become depressed and depression can interfere with their recovery and impair their functioning.” In the Lower 48, Cherry adds, stroke patients are evaluated and treated by a neuropsychologist more frequently than patients in Alaska. “The ones I see here usually have some sort of catastrophic event that could have been prevented if it had been identified and treated earlier,” he says. Cherry and his associates are working to change that dynamic. He says he’s been in contact with a local hospital and is in discussions about better coordination on patients with strokes or traumatic brain injuries. “A database could trigger a case manager to do follow up with a patient—to determine if that person has issues after discharge that may need neuropsychological evaluation,” he says. “Depression, particularly, can interfere with patient treatment. Someone may not follow through with taking medications [or] physical or speech therapy. Depression does, however, respond well to treatment.” The take-away advice to prevent stroke from these medical professionals: Watch your diet and control your weight, blood pressure, cholesterol, diabetes, and alcohol intake. Stop smoking. Seek treatment for sleep apnea. Most importantly, get to a qualified hospital immediately if you notice symptoms. R Gail West writes from Anchorage.

Alaska Business Monthly | February 2015 www.akbizmag.com

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February 2015 | Alaska Business Monthly

RIGHT MOVES UIC

Compiled by Russ Slaten company. In his new role he will continue to support company growth and fulfill his greater responsibilities to contribute to the strategic vision of Coffman Engineers as well as lead its company-wide marketing efforts.

AECOM

Dunkelberger

Torrance

Ukpeaġvik Iñupiat Corporation is joined by Kathleen Zinn Dunkelberger, Dr. Keith Torrance, and Dave Pfeifer. Dunkelberger has joined UIC as the President of Oil & Gas Support and Marine Services. Dunkelberger will oversee UIC’s group of oil and gas and marine companies and departments in Alaska and the Western Pfeifer United States. Torrance joins UIC UMIAQ as an Associate Environmental Geologist within the newly formed Environmental Division. Torrance is a Certified Professional Geologist, a Chartered Geologist, a European Geologist, and an Environmental Professional for environmental site assessment. Pfeifer joins UIC as the President of UIC Design Plan Build Division. He is responsible for UIC’s group of design, engineering, environmental, municipal services, and construction companies focused in Alaska and the Western United States. Pfeifer holds a Master of Science in Construction and Real Estate from the University of Denver and a Master in Healthcare Administration from the University of Minnesota. In addition, he received his Bachelor in Real Estate Business Administration from the University of Alaska Anchorage.

Coffman Engineers

Coffman Engineers promoted Skip Bourgeois to Vice President of Marketing in November. Bourgeois has a total of nine years of marketing experience within the architecture, engineering, and construction industry. He started with Coffman Engineers in 2008 as the marketing coordinator of their Anchorage office. In 2010, Bourgeois was promoted to Anchorage office marketing manager and in 2012 he was promoted to corporate marketing manager, reflecting a new position of corporate marketing oversight within the

Angela Kangas joined AECOM as a Project Administrator. Kangas holds a BS degree in finance from Northern Michigan University and has as twelve years of experience in the administrative, customer service, computer efficiency, and management fields.

nesses, and individuals. Van Gorkom is a graduate of Augustana College in Sioux Falls, South Dakota, and of Valparaiso University School of Law in Valparaiso, Indiana.

Charlie’s Produce

Triple B Corporation named Oliver Evans as the new General Manager of Charlie’s Produce in Anchorage. Evans has been with Charlie’s Produce for more than ten years, primarily in sales and procurement.

R&M Consultants, Inc.

Kangas

Bristol Bay Native Corporation

Bristol Bay Native Corporation announced the promotion of Patrick M. Walsh to President/ C EO o f P e a k O i l f i e l d Service Company LLC, a wholly-owned subsidiary. Walsh is responsible for the company’s support services for some of the world’s leading resource development companies Walsh in Prudhoe Bay, Cook Inlet, Valdez, and North Dakota. Walsh has been instrumental in streamlining Peak’s cost-effectiveness of the construction, maintenance, and transportation services to meet customer needs. He brings with him excellent hands-on experience in many areas of the company from his last sixteen years partnering with both personnel and customers.

Guess & Rudd P.C.

Guess & Rudd P.C. is pleased to announce that Josh Van Gorkom has become a shareholder of the firm. Since joining Guess & Rudd in 2010, Van Gorkom has represented insurance companies, insurance brokers, banks, Alaska Native Corporations, oil and gas companies, mining companies, municipal Van Gorkom governments, small busi-

Porter

McLean

R&M Consultant s, Inc. (R&M) announced the promotion of three employees to Group Managers. Don Porter, PE, has been promoted to Group Manager of Site D evelo p m ent; Kristi McLean, LEED AP BD+C, to Group Manager of Environmental Services; and Van Le, AICP, to Group Le Manager of Planning. Porter has been with R&M for twenty-four years and was formerly a Senior Project Engineer in the firm’s Site Development Group. His experience includes serving as project manager and/or project engineer for a variety of projects for clients throughout Alaska. Porter holds a BS in Civil Engineering from Colorado State University and is a professional civil engineer registered in Alaska. McLean has been an Environmental Specialist with R&M for the past five years and has more than eight years of environmental consulting experience in Alaska. McLean holds a MS in Environmental Science and Regional Planning from Washington State University and a BS in Conservation Biology from the University of Nevada Reno. Le joined R&M in 2013 as a Senior Transportation and Land Use Planner. She has more than eleven years of planning experience and is a former Municipality

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Alaska Business Monthly | February 2015 www.akbizmag.com

RIGHT MOVES of Anchorage Land Use Planner. Le holds a MS in Environmental Sciences from Alaska Pacific University and a BA in Urban Geography from the University of British Columbia.

Resource Data, Inc.

Resource Data, Inc.hired two Senior GIS programmer/ analysts at its Anchorage branch. Kenneth Gaines has more than ten years of oil and gas and marine science GIS experience. Gaines skills include project management, cartography, and Python programming language. Gaines has a BS in Marine Science and Field Biology and a MS in Mariculture from Texas A&M University. Jason Mann has fifteen years of GIS and programming experience with proficiency in project management and computer-aided design, Light Detection and Ranging processing, and .NET technologies. Mann has a BS in Geology from the South Dakota School of Mines and Technology.

McCool Carlson Green

McCool Carlson Green announced Principal Architect John Weir’s move to President and CEO. As the managing partner, Weir has shown infallible dedication throughout his twenty-two year career with the company. A passionate and enthusiastic collaborator, Weir has successfully completed a wide range of Weir projects, including the new Alaska Airlines Center for UAA, the Mat-Su Borough’s new Valley Pathways School, and Anchorage’s first LEED Silver school, Chester Valley Elementary.

Perkins Coie LLP

Wolff

Samuelson

Two associates join Perkins Coie LLP’s Anchorage Office.

Compiled by Russ Slaten Laura Wolff joins as an Associate in Perkins Coie’s Environment and Natural Resources practice. Prior to joining the firm, Wolff clerked for the Honorable Jack Smith of the Anchorage Superior Court. She received her JD from University of Michigan Law School cum laude, where she was contributing editor of the Michigan Law Review, and received her BA in Classical Studies and English Literature from Colgate University. Brian Samuelson joins as an Associate in the firm’s Litigation group, focusing on labor and employment, environmental, natural resources, and general commercial issues. Prior to joining the firm, Samuelson clerked for the Honorable Morgan Christen of the US Court of Appeals for the Ninth Circuit and for the Honorable Dana Fabe of the Alaska Supreme Court. Samuelson received his JD from Harvard Law School, where he was articles editor of the Harvard Environmental Law Review, and received his BS in Mathematics and Economics from the University of Wisconsin.

Denali Alaskan Federal Credit Union

received his Law degree from the Seattle University School of Law. Haydn and Kirkeby will focus on creating and maintaining relationships with credit union business members. Haydn’s prior experience in finance includes work at Wells Fargo and Alaska USA Federal Credit Union. Haydn is a member of the Anchorage Downtown Rotary and serves on the Operating Board for the Foraker Group and is a Coordinator, Fundraising for the Alaska Women’s Summit. Kirkeby brings more than eight years of experience in the hospitality and travel industry in Alaska to the Credit Union and serves on the Anchorage Chamber of Commerce Ambassador Council.

Schilling Commercial Real Estate LLC

Walker Dunford has recently joined Schilling Commercial Real Estate LLC as a Commercial Associate. Dunford brings more than ten years of knowledgeable product sales, marketing, providing excellent customer service, personal banking advice, and in depth local knowledge to the Commercial Business community. Dunford previously worked as an Air Traffic Controller for the FAA and at Alaska USA Federal Credit Union.

KeyBank

Heverling

Haydn

Denali Alaskan Federal Credit Union has named Todd Heverling to the position of AVP, Business Financial Services. Additionally, the credit union has named Stephanie Haydn Business Financial Services Manager and Casey Kirkeby Business Financial Services Officer. Heverling oversees all operational aspects of the Kirkeby Credit Union’s Business Financial Services department, which provides a full range of deposit and accounts services to member businesses. Prior to joining Denali Alaskan, Heverling spent sixteen years as a Business Development Officer at First National Bank Alaska. He has more than twenty years of experience in the financial industry. Heverling

Anthony Rouen has been selected to manage KeyBank’s 5th Avenue branch. Rouen joined Key in 2012 as the manager of the Palmer branch, bringing with him the experience he gained as a personal banker while at Wells Fargo. Rouen is a graduate of the University of South Carolina Honors College and the Anchorage Chamber of Commerce Leadership and Executive Advancement Program.

Anchorage Museum

The Anchorage Museum hired Ann Kjera as Director of Human Resources. She has more than ten years of experience in human resources and executivelevel ma na g em ent . A former executive director for United Way of the Tanana Valley and Hospice of the Tanana Valley in Fairbanks, Kjera also has Kjera held positions in human resources at Everts Air Cargo and Providence Kodiak Island Medical Center. R

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February 2015 | Alaska Business Monthly

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INSIDE ALASKA BUSINESS

Alaska Communications

laska Communications System Group, Inc. and General Communication, Inc. (GCI) have signed definitive agreements for Alaska Communications to sell its wireless subscriber base and its 33 percent interest in its partnership in the Alaska Wireless Network LLC (AWN) to GCI for $300 million. Under the terms of the agreements and upon close GCI will assume Alaska Communications’ wireless subscriber base; services will be uninterrupted and will continue to operate statewide and nationally; GCI will purchase Alaska Communications’ 33 percent interest in AWN and will then own 100 percent of AWN. As of September 30, 2014, Alaska Communications had approximately 109,000 wireless customers. The two companies have agreed upon a service transition plan for Alaska Communications customers. This will ensure a seamless continuation of service as they are transitioned to GCI. Alaska Communications wireless customers will continue to enjoy service on Alaska’s only statewide network. The transaction is targeted to close in the first quarter, 2015, and is subject to certain closing conditions. GCI and Alaska Communications will notify customers with further details regarding this transition and customers do not need to take any action at this time.

Mad Dog Graphx

ad Dog Graphx, an Anchorage graphic design and marketing studio, has opened a second branch in

Compiled by Russ Slaten

Seattle serving Washington state after more than eighteen years of operating solely in Anchorage. The new location will allow Mad Dog Graphx to broaden its client base and provide the Pacific Northwest with convenient, face-to-face access to the same award-winning graphic design team that Alaska has enjoyed since 1996. Senior designer Kris Ryan-Clarke will lead the new studio. Ryan-Clarke has been a designer with the company since 2001, and will now also act as project manager for the Seattle location.

ACUASI

he Alaska Center for Unmanned Aircraft Systems Integration purchased ING Robotic Aviation’s Responder rotary wing unmanned aerial vehicle system. The robotic aircraft will be used for research into systems integration and specific unmanned aerial vehicle applications, as well as to increase the center’s focus on robust Arctic proven technology. ING Robotic Aviation has sold two complete Responder vertical take-off and landing robotic aircraft with sensors, as well as a Ground Control System and ancillary equipment. As well the company is providing a two-week training package. The Alaska Center for Unmanned Aircraft Systems Integration says the Responder was the best solution and actually exceeds its weather, robustness, and payload lift requirements. The Responder, equipped with its stabilized, gimbal mounted camera systems, can provide real time still and video images in both visual and infrared sections of the spectrum. Mosaicking and the pro-

duction of 3D imagery are readily possible. The flexibility of the system allows for future technology advancements such as integration of new sensors.

GeoNorth

eoNorth, headquartered in Anchorage, was awarded a new multiple year contract by the United States Army Corps of Engineers, Army Geospatial Center (AGC) to provide both optical and radar satellite imagery on an as-needed basis for the AGC Imagery Office. The contract itself is called the AGC Data Library/DataDoors contract and consists of two contract components: imagery acquisition and processing. Servicing the satellite imagery needs of the AGC office located in Alexandria, Virginia, GeoNorth will be applying their rapid satellite tasking/imagery acquisition downloading and delivery services based on AGC requirements. GeoNorth has the ability to task the entire Airbus Defense and Space satellite constellations of SPOT, Pleiades, and TerraSAR to any location on the globe for imagery acquisition.

Fairweather LLC

airweather LLC has relocated its Anchorage corporate headquarters to a larger facility at 301 Calista Court. Encompassing twenty-two thousand square feet of office space and a ten thousand-square-foot warehouse, the Calista Court complex accommodates Fairweather’s science, medical, and safety divisions, as well as the company’s executive offices. According to Fairweather General Manager Lori

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INSIDE ALASKA BUSINESS Davey, the decision to relocate to Calista Court was motivated by the recent expansion of the company’s science and remote medical divisions and the need to upgrade technology and consolidate all of its offices in a single location. Housing forty employees, the Calista Court complex features a state-of-the-art Ethernet and teleconferencing system, along with a climate-controlled server room with a dedicated power source, accommodating up to six server racks.

AECOM & URS Corporation

ECOM and URS have officially combined offices on December 15, 2014. AECOM Technologies finalized the acquisition of URS Corporation in mid-October 2014 and took nearly two months to fully integrate the two firms. The sixteen AECOM Anchorage staff members made the move from their Bragaw Street office to the 700 G Street office in downtown Anchorage as the offices merged.

GCI TERRA

CI commercially launched TERRA service in the Northwest Arctic Borough. TERRA is delivering, for the first time, terrestrial broadband service to Kotzebue, thirty-three miles north of the Arctic Circle. This service will dramatically improve online health, education, and government services as well as the broadband data experience for residential and business users. With the launch of TERRA, GCI has also rolled out 3G mobile wireless services for the residents of Kotzebue.

Compiled by Russ Slaten

TERRA is GCI’s terrestrial broadband network serving the rural communities of western Alaska. Terrestrial broadband provides lower latency and allows for streaming of rich media and the ability to leverage video conferencing, a critical tool for healthcare and education. Using video conferencing, communities like Kotzebue have access to specialty doctors and educators that are not readily available in the community. The lower latency enables significantly fewer delays in transferring data, allowing for better real-time communication. The launch of 3G wireless service will allow for substantially higher mobile data speeds, providing customers faster web browsing, audio and video streaming, and more. The launch of 3G services will occur in Nome and Unalakleet later this year. GCI is partnering with organizations, such as STG Incorporated and Ericsson, Inc., to construct the infrastructure needed to deliver terrestrial broadband Internet.

Wells Fargo

ells Fargo has awarded Yuut Elitnaurviat with a $30,000 grant to fund a Wind Technician Assistant training program for Yukon-Kuskokwim Delta residents. Yuut Elitnaurviat is partnering with AVTEC—Alaska’s Institute of Technology and Alaska Village Electric Cooperative—to host a ten-day training program for villagebased Alaska Village Electric Cooperative employees in spring 2015. The grant is a part of Wells Fargo’s $1.8 million Economic Opportunity and Rural Investment for Sustainable Economies programs to support indi-

vidual job seekers, the self-employed, and small business owners in communities along the West Coast, including $160,000 invested in Alaska nonprofits. The programs are expected to create eight thousand jobs and provide small business development and technical assistance for 3,100 entrepreneurs, as reported by grant recipients.

DOWL

OWL, an Alaska-based, full-service planning and engineering firm, announced the addition of Buckhorn Geotech, a twenty-five-person civil, structural, and geotechnical engineering firm, to its portfolio in December 2014. Buckhorn is headquartered in Montrose and Gunnison, Colorado, and has a strong presence on Colorado’s Western Slope that will help solidify DOWL’s position there and the company will merge its Montrose office with Buckhorn’s office. This will result in three DOWL offices in Colorado. DOWL President Stewart G. Osgood, PE, said the acquisition makes strategic sense and is an example of how an Alaska-based firm can grow Outside and bring more services into the firm to help Alaska clients.

The Children’s Hospital at Providence

he Centers for Disease Control & Prevention National Center for Chronic Disease Prevention & Health Promotion has recognized the Children’s Hospital at Providence for its commitment to continuous quality improvement in maternity care.

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INSIDE ALASKA BUSINESS As part of the 2013 survey of Maternity Practices in Infant Nutrition and Care, the Children’s Hospital at Providence earned a 93 out of 100 score. Across Alaska, the average survey score was 82 and the national average score was 75. The Children’s Hospital at Providence was one of 2,666 facilities that participated in the survey, representing 83 percent of facilities nationwide that provide maternity services. The Center for Disease Control calculates scores for each facility based on maternity care practice areas, including labor and delivery care; postpartum feeding of breastfed infants; breastfeeding assistance; postpartum contact between mother and infant; facility discharge care; staff training; and structural and organizational aspects of care delivery. The work to provide the best care to Alaska’s mothers and babies continues as the Children’s Hospital at Providence recently opened its new Labor & Delivery unit as part of a four-year Maternity Center expansion effort.

New Alaska Minimum Wage

laska’s minimum wage will increase to $8.75 an hour on February 24, which is $1 more than the current $7.75. An estimated sixteen thousand Alaska jobs currently pay $8.75 or less. While the voter-approved Ballot Measure 3 called for a January 1 increase, in accordance with the Alaska Constitution the effective date is ninety days after the November 26 certification of election results by the Division of Elections—February 24.

Compiled by Russ Slaten

The measure will also increase the minimum wage to $9.75 per hour on January 1, 2016, and adjust the minimum wage each year thereafter for inflation. The new law also requires evaluation and potential changes whenever the federal minimum wage is adjusted, as Alaska’s minimum wage must remain at least $1 above the federal minimum wage starting with the February 24 effective date. The current federal minimum wage is $7.25. Alaska’s minimum wage was last increased on January 1, 2010 due to June 2009 legislation that called for a wage 50 cents above the federal minimum wage.

Blood Bank of Alaska

n late 2014, the Blood Bank of Alaska received a $1 million dollar gift from ConocoPhillips to help build a new blood bank for Alaskans. The company intends to contribute an additional $1 million each year in 2015 and 2016, subject to future approvals by the company leadership. The new Blood Bank building will allow for the consolidation of operational support staff under one roof, provide space to expand new services statewide, and keep patients closer to home during medical treatment. It is located in Anchorage at the northeast corner of Airport Heights Drive and DeBarr Road. Construction officially began in June of 2014 and completion is currently scheduled for winter of 2015. It is estimated that one out of every three Alaskans, or one of their close family members, will require the services of the Blood Bank of Alaska at one point in their lives. This new facility will ensure that all of the services are

available at any time, under any circumstance, to all Alaskans.

Chugachmiut

ore than 2,200 residents in the Chugach region will have increased access to quality healthcare thanks to Chugachmiut’s leadership and its new technology provider, Alaska Communications, Alaska’s leading broadband solutions provider. Chugachmiut is a tribal consortium serving Alaska Native communities with health and social services, education, and training in Prince William Sound, Lower Cook Inlet, and Resurrection Bay. Under the new three-year agreement, Alaska Communications will provide Chugachmiut’s clinics in Port Graham, Nanwalek, Seward, Chenega Bay, and Tatitlek with wide area network services and faster Internet. With faster, more reliable connectivity and Internet, Chugachmiut can improve access to healthcare by virtually connecting its clinics with its regional mid-level clinic in Seward and the Anchorage-based Alaska Native Medical Center in real time. Chugachmiut healthcare providers will also enjoy faster access to applications such as electronic health records and telemedicine technology. Alaska Communications leveraged existing network initially built to serve the Kenai Peninsula Borough to bring these services to Chugachmiut. Leveraging this same investment, the company can now also provide broadband to homes and businesses in Port Graham and Nanwalek. R

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AGENDA February Alaska Forum on the Environment

Alaska Tribal Transportation Symposium

February 9-13, 2014—Dena’ina Center, Anchorage: The Alaska Forum on the Environment is Alaska’s largest statewide gathering of environmental professionals from government agencies, non-profit and for-profit businesses, community leaders, Alaskan youth, conservationists, biologists, and community elders. akforum.com

Alaska Arctic Business Roundtable—Arctia Shipping

Compiled By Tasha Anderson

February 17—Anchorage: The speaker is Tero Vauraste, President and CEO of Arctia Shipping, responsible for icebreaking in Finland and a member of the Arctic Economic Council. After a brief presentation by Vauraste, participants will have an opportunity for questions, followed by a moderated discussion led by the Institute of the North. institutenorth.org

February 21-24—Hotel Captain Cook, Anchorage: This is the educational technology conference of the Alaska Society for Technology in Education. This year’s theme is “Game On! Games in Education; Game Based Learning; Gamification.” aste.org

March 3-5—Fairbanks: Held every year in Fairbanks, this conference brings together farmers, ranchers, researchers, extension agents, and members of the agriculture support industry to find ways to improve the agriculture industry in Alaska. uaf.edu/ces/ah/sare/conference

Alaska Anthropological Association Annual Meeting

March 4-7—Hilton Anchorage Hotel, Anchorage: The annual meeting includes workshops, an evening reception for information and registration, paper presentations, and an awards banquet, business meeting, and the Belzoni meeting. alaskaanthropology.org

March 6-8—University of Alaska Fairbanks, Fairbanks: This year’s theme is “Troth Yeddha’ Roots: Connecting the Place with the People.” alaskanativestudies.org

Arctic Ambitions IV: Trade | Commerce | Investment

March 10-11—Hilton Anchorage Hotel, Anchorage: This unique international event focuses on trade, commerce, and investment opportunities, and is an excellent networking venue for making contacts and connections to promote business interests in the region. wtcak.org

Governor’s Safety and Health Conference

March 24-26—Anchorage: The Alaska Safety Advisory Council works with organizations to promote safety so that resources can be marshaled and used to reduce the menace of accidental death and injury. labor.alaska.gov/lss/asac.htm

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April 20-24—Anchorage Sheraton Hotel & Spa, Anchorage: Hosted by the Anchorage chapter of the APOA, or Alaska Peace Officers Association. apoaonline.org

Rocky Mountain Mineral Law Institute

AFCCA Annual Child Care Conference

April 24-25—BP Energy Center, Anchorage: The theme of the Alaska Family Child Care Association’s 2015 conference is “For the Love of Kids.” alaskafcca.org

NEA Alaska Spring Conference

April 24-26—NEA Alaska, an affiliate of the National Education Association, is an organization with over twelve thousand members who work in Alaska’s public schools. neaalaska.org

May 4-7—Hotel Captain Cook, Anchorage: The Alaska Water Wastewater Management Association is dedicated to the stewardship of the environment and the protection of public health. awwma.org

APCOM 2015

May 23-27—Westmark Fairbanks Hotel & Conference Center, Fairbanks: This is the international symposium for the Application of Computers and Operations Research in the Mineral Industry. apcom2015.org

ADS Annual Meeting

May 28-30—Land’s End Resort, Homer: The annual meeting of the Alaska Dental Society, which is “Committed to enhancing the dental profession and the health of all Alaskans.” akdental.org

July 23-26—Anchorage: One of the CU Conferences, which educates the Credit Union Community, this conference provides information such as generating loans across all age groups and what types of loans can increase earnings. cuconferences.com

September

Animal Behavior Society Annual Conference

June 10-14—Anchorage: The Animal Behavior Society was founded in 1964 to promote the study of animal behavior in the broadest sense, including studies using descriptive and experimental methods under natural and controlled conditions. animalbehaviorsociety.org

Southcentral Foundation 2015 Nuka System of Care Conference

July 23—Dena’ina Center, Anchorage: A one-day trade show for the snow and ice management industry brought to Alaska by the Snowfighters Institute. This year’s conference will include special educational conferences targeting snow contractors, property managers, and municipalities and “Lunch and Learn,” round table discussions facilitated by sponsors and industry leaders during a buffet lunch. alaskasnowsymposium.com

Annual Strategic Lending Conference

June

July 18-25—Alaska Pacific University, Anchorage: Alaska Business Week is a one-week summer program teaching the basic principles of private sector business to Alaskan high school students. alaskachamber.com

Alaska Snow Symposium

AWWMA Annual Conference

July 16-18—Dena’ina Center, Anchorage: The Rocky Mountain Mineral Law Foundation (RMMLF) is a collaborative educational non-profit organization dedicated to the scholarly and practical study of the law and regulations relating to mining, oil and gas, water, public lands, energy, environmental protection, and other related areas. rmmlf.org

Alaska Business Week

May

Alaska Native Studies Conference

June 21-25—Dena’ina Center, Anchorage: The world’s premiere conference in MEMS sensors, actuators and integrated micro and nano systems. transducers2015.org

July

AOPA Crime Conference

March Sustainable Agriculture Conference

International Conference on Solid-State Sensors, Actuators, and Microsystems

April

ASTE Annual Conference

March 30-April 3—Fairbanks: The annual symposium is designed for tribal leaders, managers, and administrators and transportation staff; transportation and infrastructure professionals; federal and state representatives; and all those seeking to learn more about tribal transportation and transportation challenges in remote Alaska communities. attwg.org

building effective relationships, general workshops and break-out sessions, evening networking, and a cultural reception. southcentralfoundation.com

June 15-19—Anchorage: The conference describes the entire healthcare system created, managed, and owned by Alaska Native people to achieve physical, mental, emotional, and spiritual wellness. It includes a pre-conference workshop for

Chapman Conference on Magnetospheric Dynamics

September 20-25—Fairbanks: Scientific objectives of the proposed CCEMD include magnetic storms, auroral and magnetospheric substorms, dayside and tail magnetic reconnections, and new results of the MMS mission. www.gi.alaska.edu/2015ChapmanConference

Alaska Fire Conference

September 28-October 3—Seward: Includes training, workshops, lectures, and a firefighter competition. The 2015 theme is “Passing the Torch.” alaskafireconference.com

February 2015 | Alaska Business Monthly

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ALASKA THIS MONTH By Tasha Anderson

DINING

Empty Bowl

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Empty Bowl project is in its 21st year.

tarting February 1, tickets go on sale for one of Anchorage’s long-standing charity events, now in its 21st year. Empty Bowl Project raises money for Bean’s Café, a 501(c)(3) nonprofit agency; its mission is to feed the hungry and shelter the homeless, without discrimination, during the day. The actual Empty Bowl Project takes place this year on Saturday, March 14 at the Egan Center in downtown Anchorage from 11 a.m. to 2 p.m. Those with a bowl ticket are able to choose a hand-crafted bowl made by Alaskan locals. According to Lauren Nelson, the marketing/outreach officer for Bean’s Café, in the past all of the bowls were made from clay. Starting this year, “We’re opening the call for bowls to different mediums,” including bowls from glass blowers, papier-mâché bowls from local elementary school students, and yarn bowls. “It’s about reminding people about empty bowls—it’s not about what the bowl is made of, but the message,” Nelson says. Guests can either use their purchased bowl for soup accompanied by cornbread, or can be provided a paper bowl. Recipes for the soups are submitted by the community, and two winners, one meat and one vegetarian, are featured. This year, the idea of “Retro Bowls” is being included in the event. Those who have been attending the event, some every year for the past twenty, are encouraged to donate old bowls that may be just taking up space or collecting dust, allowing attendees this year the opportunity to pick up a bowl with some history. Last year’s event included more than 1,700 bowls and raised $132,000 in funds, Nelson says. She says that new this year is that guests may purchase a bowl ticket for $25, which includes a bowl and soup, or a soup and cornbread ticket for just $10. Tickets are available online or by contacting Nelson at 907433-8603 or emailing her at lnelson@beanscafe.org. beanscafe.org R

Alaska Business Monthly | February 2015 www.akbizmag.com

ALASKA THIS MONTH By Tasha Anderson

TRAVEL

Yukon Quest

Yukon Quest will end in Fairbanks this year.

he Yukon Quest, a one thousand-mile sled dog race between Whitehorse, Yukon, Canada, and Fairbanks, Alaska, begins February 7, this year beginning in Whitehorse and ending in Fairbanks. “From the first race the intent was to alternate the start/finish to provide each community the opportunity to share the different celebrations and excitement of a start or finish,” says Marti Steury, Yukon Quest-Alaska executive director. Yukon Quest is the only one thousand-mile international sled dog race in the world. This year “teams are coming from the United States, Canada, Sweden, Norway, and France,” Steury says. As of December 2014, twenty-eight teams had signed up, which includes three former champions and “almost half the field is rookies,” Steury says. Each year the race starts regardless of weather conditions and lasts from ten to sixteen days, whenever the final dog team arrives. The top fifteen teams all receive awards, while the first place team, in addition to earning “the overwhelming pride of being a part of the greatest sled dog team in the world,” will receive $26,062. “The Yukon Quest is a living example of the history we commemorate. The spirit of the North that provides a sense of community from remote cabins out in the woods to small communities that all feel a sense of ownership in ‘their’ event. Everyone comes out to help, share, and celebrate the joy of our lifestyle—and mostly—the dogs!” The Yukon Quest has pre-race and post-race events in both Whitehorse and Fairbanks and includes a Meet the Musher event and a Finish Banquet in Fairbanks. yukonquest.com R

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Fairbanks Anchorage

Skagway

Kenai Haines Whittier Sitka

Kodiak

Petersburg

Juneau

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ALASKA THIS MONTH By Tasha Anderson

ENTERTAINMENT

Photo by Cheryl Sluka

Iron Dog

Team 27 Tyler Delimont, Larry Jones.

“

n 1984 local snowmachiners said, ‘We can do an Iditarod kind of thing,’” which was the start of Iron Dog, a more than two thousand mile snowmachine race (for perspective, Seattle to Chicago is 2,064 miles, a mere 4 miles more than Iron Dog) that, starting this year, begins in downtown Anchorage on Fourth Avenue and finishes in downtown Fairbanks, according to Iron Dog Executive Director Kevin Kastner. “[A downtown Anchorage start] has been quite a few years in the works,” Kastner says. “Having the facilities that Anchorage offers attracts racers from Alaska and the Lower 48 and around the world, as well as drawing attendance from sponsors who want to come and be part of the event. It’s more likely you’re going to get attendees from Outside, which is already happening this year.” The Iron Dog start, which is Saturday, February 21, is now accompanied by several other events. Flying Iron, an X Games-style show, features Cory Davis, Joe Parsons, Sam Rogers, and Timmy Beckner, and is the kickoff event taking place Friday, February 20. The show repeats with a slightly different, family-oriented style on Saturday. Iron Pup, which is an opportunity for children to demonstrate their own skills on 120cc machines, and the Shine and Show parade, a chance to see vintage snowmachines, both take place on Saturday. These events “make the day more complete and more entertaining—a little something for everyone is the idea,” Kastner says. What many may not be aware of is that Iron Dog has direct ties to the community, not only as an entertaining event but as a charitable one. Iron Dog’s raffle has generated $84,000 of charitable donations in the last three years. Kastner says, “There’s strong potential we may be able to donate as much as $50,000 this year.” irondog.org R

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Alaska Business Monthly | February 2015 www.akbizmag.com

EVENTS CALENDAR 14

Compiled by Tasha Anderson

ANCHORAGE

Multicultural Drumming and Dancing

Inaugurated in 2001, this annual event brings together the importance of the drum and dance of cultures from around the world. This year, this event will be coupled with the Alaskan premier of Peter Buffet’s piece: Spirit- The 7th Fire: A Journey of Drums, Dance and Song. Alaska Native Heritage Center, 10 a.m. to 5 p.m. alaskanative.net

2/27-3/8

Fur Rondy

Come join the seventy-nine-year tradition that includes winter sports, native art and culture, and many other events that celebrate life and the frontier spirit of Alaska in downtown Anchorage. furrondy.net

FAIRBANKS

Biz Bee for the Literacy Council

Limited to twenty-five teams, businesses, corporations, and organizations of all kinds are invited to enter a team of three spellers. Collaboration is allowed and spellers take turns. All proceeds raised go to the Literacy Council of Alaska. There is also a Biz Bee Raffle with cash and Alaska Airlines tickets for prizes, as well as a silent auction. Westmark Fairbanks Hotel & Conference Center, 7 p.m. explorefairbanks.com

27 Winterfest

This outdoor festival celebrates both winter and the Denali National Park year-round community. Events include ice and snow sculpting, dog sled rides, games and other activities, and a s’mores station. Denali National Park & Preserve. denaliborough.govoffice.com

2-8

CORDOVA

Cordova Iceworm Festival

Events at the festival include the variety show/Miss Iceworm coronation, survival suit races, blessing of the f leet, parade, shaving permits, food fair, men’s basketball tournament, arts and crafts show, photo show, iceworm tail hunt, and ice cream feed. cordovachamber.com

6-7

GIRDWOOD

Frostbite Festival

zAKs Boardroom presents a weekend of freestyle skiing and riding plus free after parties at the Sitzmark. All proceeds benefit the Girdwood skate park. Alyeska Resort. girdwoodchamber.com

13-14

HOMER

Winter Carnival

This event is a weekend of outdoor activities and fun for the whole family, including a parade, community dances, an outhouse race, wedding expo, hockey tournament, Mr. Homer pageant, arts and crafts, and lots of food. homeralaska.org

14-15

JUNEAU

Wearable Arts Extravaganza

This annual celebration of wearable works of art includes live performances and a silent auction and raises funds for scholarships, grants, and the Juneau Arts & Culture Center. This year’s theme is “Juxtaposition: A celebration of contrasts.” Centennial Hall, 7 p.m. Saturday and 2 p.m. Sunday. jahc.org

Gospel Choir Celebration

Reverend Bobby Lewis, who began teaching gospel music in his father’s church in Virginia, is the Executive Pastor and Minister of www.akbizmag.com

Music at Central Baptist Church in NYC. His fifty-eight-voice choir has been featured on The Today Show and other TV programs. Eustace Johnson, pianist, is currently the Director of Music at New Song Community Church in Harlem. This concert is offered in collaboration with the Juneau Black Awareness Association. Juneau Arts & Culture Center, 2 p.m. and 5:30 p.m. jahc.org

5-7

KETCHIKAN

Wearable Arts Show

Artists in the Ketchikan community and beyond create original wearable wonders out of duct tape, foam, sequins, trash bags, wood, milk jugs, and LOTS of glue. The artwork comes alive modeled on the runway to music—fashion, sculpture, engineering, theatrics, dance, and music in one magical performance. Ted Ferry Civic Center, 8 p.m. on Thursday, Friday, and Saturday, with an additional all-ages matinee on Saturday at 2 p.m. ketchikanarts.org

13-15

Rainy Day Quilters Show

Local quilters bring in their stunning projects, some of which will be available for sale. The event includes a raffle to win a quilt. Ted Ferry Civic Center. rainydayquilters.com

“VooDoo” Valentine

Teenagers are invited to create finger puppet voodoo dolls, make voodoo cookies, and watch a voodoo themed movie. Ketchikan Public Library, 6:30 p.m. to 9 p.m. ketchikanarts.org

PALMER

Beer Meets Canvas

This is an opportunity to relax and be creative. Purchase of a ticket includes a pint or flight of tasters and all art supplies needed. Guests can paint a theme or bring their own inspiration, and no prior experience is required. Arkose Brewery, 2 p.m. to 4 p.m. arkosebrewery.com

5-7

SITKA

Sitka Jazz Festival

Now in its twentieth year, the Sitka Jazz Festival strives to teach music appreciation, skills, history, artistic expression, and crosscultural understanding through jazz in a supportive environment. Visiting artists and local educators provide clinics in jazz history, jazz theory, and jazz improvisation, as well as a variety of individual instrument and section-specific workshops. Student performances are non-competitive, with an emphasis on cooperation and appreciation. Large ensembles perform for adjudication and for the public. sitkajazzfestival.com

2/13-3/1

WASILLA

Unnecessary Farce

In a cheap motel room, an embezzling mayor is supposed to meet with his female accountant, while in the room next-door, two undercover cops wait to catch the meeting on videotape. But there’s some confusion as to who’s in which room, who’s being videotaped, who’s taken the money, who’s hired a hit man, and why the accountant keeps taking off her clothes. This is a comedy for mature audiences. Valley Performing Arts, Fridays and Saturdays 7 p.m.; Sundays 2 p.m. valleyperformingarts.org

14-16

VALDEZ

Valdez Ice Climbing Festival

This winter festival includes ice climbing in Keystone Canyon while there’s sunlight and music, prizes and slideshows at night. valdezalaska.org February 2015 | Alaska Business Monthly

109

ALASKA TRENDS

By Amy Miller

International Trade Helps Power Alaska’s Economy

rade between Alaska and international trading partners was worth more than $4.5 billion in 2013, supporting thousands of Alaska jobs and diversifying the state’s economy. International trade accounts for 10 percent of the state’s Gross State Product, making international trade a relatively large part of the state’s economy, according to the World Trade Center Anchorage. Not surprisingly, the state’s top export products are related to Alaska’s abundant natural resources—seafood, minerals, and petroleum products, primarily. The state’s top foreign-trade partners in 2013 were China, South Korea, Japan, Canada, and Germany. Alaska’s location as a gateway to the Asia Pacific region enhances its ability to trade with countries like China, Japan, and South Korea, while the rapidly developing Arctic represents future international trade opportunities. Although Alaska ranks 40th in the United States in terms of the value of its exports, on a per capita basis, Alaska is fourth in the nation, according to the World Trade Center Anchorage. This means more people in Alaska are impacted by foreign trade than in most other states.

In its annual statewide economic forecast luncheon in 2013, Center Executive Director Greg Wolf reported that international trade is responsible for some fifteen thousand direct jobs in Alaska and another ten thousand induced positions. Jobs related to international trade pay 13 to 16 percent more than those tied solely to the domestic economy, Wolf added. According to the US Department of Commerce’s International Trade Administration, 603 companies exported from Alaska in 2012. Of those, 73 percent were categorized as Small-Medium Enterprises employing fewer than 500 people. Small-Medium Enterprises generated more than 40 percent of Alaska’s total exports of merchandise in 2012. Alaska’s largest merchandise export category is referred to as Fish & Other Marine Products by the International Trade Administration and was worth $2.3 billion in 2013. Next was Minerals & Ores at $1.5 billion; Petroleum & Coal Products at $309 million; Forestry Products at $163 million; and Transportation Equipment at $58 million. R Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

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ALASKA TRENDS

By Amy Miller

Source: US Department of Commerce, International Trade Data 2013

China (27.3%) South Korea (15.6%) ■ China (27.3%) Japan (15.2%) ■ South Korea (15.6%) ■ Japan (15.2%) Canada (13.3%) ■ Canada (13.3%) Germany■(6.4%) Germany (6.4%) ■ Singapore (4.8%) Singapore (4.8%) ■ Spain (3.1%) ■ Netherlands (2.5%) Spain (3.1%) ■ Belgium (1.4%) Netherlands (2.5%) ■ Australia (1.4%) Belgium (1.4%) Australia (1.4%)

Source: US Department of Commerce, International Trade Data 2013

Source: Office of Trade and Economic Analysis, International Trade Administration, US Department of Commerce

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February 2015 | Alaska Business Monthly

111

ALASKA TRENDS

Indicator

By Amy Miller

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

GENERAL Personal Income—Alaska US $ 2ndQ14 37,941 37,542 35,977 5.46% Personal Income—United States US $ 2ndQ14 14,688,618 14,465,404 13,639,239 7.69% Consumer Prices—Anchorage 1982-1984 = 100 1stH14 214.78 213.91 205.22 4.66% Consumer Prices—United States 1982-1984 = 100 1stH14 236.38 233.55 228.85 3.29% Bankruptcies Alaska Total Number Filed October 50 42 45 10.00% Anchorage Total Number Filed October 21 35 22 -4.76% Fairbanks Total Number Filed October 5 7 6 -20.00% EMPLOYMENT Alaska Thousands October 342.78 346.17 331.80 3.31% Anchorage & Mat-Su Thousands October 190.39 187.78 178.60 6.60% Fairbanks Thousands October 44.30 43.97 39.90 11.03% Southeast Thousands October 35.90 39.63 35.75 0.42% Gulf Coast Thousands October 37.61 38.81 30.30 24.13% Sectorial Distribution—Alaska Total Nonfarm Thousands October 330.5 349.6 329.3 0.36% Goods Producing Thousands October 48.1 55.7 45.4 5.95% Services Providing Thousands October 282.4 293.9 282.0 0.14% Mining and Logging Thousands October 18.5 19.1 18.5 0.00% Mining Thousands October 18.1 18.6 17.9 1.12% Oil & Gas Thousands October 14.9 15.0 14.7 1.36% Construction Thousands October 17.4 18.7 19.3 -9.84% Manufacturing Thousands October 12.2 17.9 7.6 60.53% Seafood Processing Thousands October 8.2 13.3 3.6 127.78% Trade/Transportation/Utilities Thousands October 64.3 68.6 62.3 3.21% Wholesale Trade Thousands October 6.4 6.6 5.7 12.28% Retail Trade Thousands October 37.3 38.4 35.8 4.19% Food & Beverage Stores Thousands October 6.5 6.9 6.3 3.17% General Merchandise Stores Thousands October 10.7 10.6 9.7 10.31% Trans/Warehouse/Utilities Thousands October 20.6 23.6 20.8 -0.96% Air Transportation Thousands October 6.2 6.7 5.7 8.77% Information Thousands October 6.1 6.2 6.1 0.00% Telecommunications Thousands October 4 4.0 3.9 2.56% Financial Activities Thousands October 11.7 12.0 13.5 -13.33% Professional & Business Svcs Thousands October 30.0 31.1 27.8 7.91% Educational & Health Services Thousands October 46.5 46.6 47.2 -1.48% Health Care Thousands October 33.2 33.5 33.7 -1.48% Leisure & Hospitality Thousands October 29.5 35.8 29.6 -0.34% Accommodation Thousands October 6.1 8.6 6.6 -7.58% Food Svcs & Drinking Places Thousands October 19.4 22.4 19.2 1.04% Other Services Thousands October 11.6 11.6 11.7 -0.85% Government Thousands October 82.7 82.0 83.8 -1.31% Federal Government Thousands October 14.5 15.0 14.5 0.00% State Government Thousands October 26.5 26.4 26.4 0.38% State Education Thousands October 8.5 8.2 8.6 -1.16% Local Government Thousands October 41.7 40.6 42.9 -2.80% Local Education Thousands October 23.8 22.9 23.7 0.42% Tribal Government Thousands October 4.0 4.2 3.3 21.21% Labor Force Alaska Thousands October 364.60 367.69 363.77 0.23% Anchorage & Mat-Su Thousands October 200.55 197.99 200.24 0.15% Fairbanks Thousands October 40.26 46.30 46.73 -13.85% Southeast Thousands October 46.78 41.80 38.63 21.10% Gulf Coast Thousands October 38.28 41.36 38.63 -0.91% Unemployment Rate Alaska Percent October 6.0 5.9 6.5 -7.69% Anchorage & Mat-Su Percent October 5.1 5.2 5.1 0.00% Fairbanks Percent October 5.3 5.0 5.1 3.92% 112

Alaska Business Monthly | February 2015 www.akbizmag.com

ALASKA TRENDS

Indicator

Southeast Gulf Coast United States

By Amy Miller

Units

Period

Latest Report Period

Percent Percent Percent

October October October

6.2 6.6 5.8

Previous Report Period (revised)

5.2 6.2 5.9

Year Ago Period

6 7.1 7.3

Year Over Year Change

3.33% -7.04% -20.55%

PETROLEUM/MINING Crude Oil Production—Alaska Millions of Barrels October 15.50 14.32 16.14 -3.97% Natural Gas Field Production—Alaska Billions of Cubic Ft. October 9.09 8.92 7.72 17.75% ANS West Coast Average Spot Price $ per Barrel October 84.91 96.05 104.82 -18.99% Hughes Rig Count Alaska Active Rigs October 8 10 10 -20.00% United States Active Rigs October 1925 1930 1744 10.38% Gold Prices $ Per Troy Oz. October 1223.03 1240.08 1316.18 -7.08% Silver Prices $ Per Troy Oz. October 17.19 18.49 21.92 -21.58% Zinc Prices Per Pound October 2.27 2.29 0.94 141.49% REAL ESTATE Anchorage Building Permit Valuations Total Millions of $ October 37.64 57.7 29.71 26.69% Residential Millions of $ October 16.23 17.5 10.57 53.55% Commercial Millions of $ October 20.65 39.7 19.14 7.89% Deeds of Trust Recorded Anchorage—Recording District Total Deeds October 835 763 871*GeoNorth -4.13% Fairbanks—Recording District Total Deeds October 232 232 150 54.67% VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Thousands October 382.27 446.81 360.58 Total Air Passenger Traffic—Fairbanks Thousands October 76.06 90.7 75.12

6.02% 1.25%

ALASKA PERMANENT FUND Equity Millions of $ October 51110.50 50718.00 48263.00 Assets Millions of $ October 51824.30 51828.10 49163.50 Net Income Millions of $ October 167.60 302.30 125.50 Net Income—Year to Date Millions of $ October 332.70 -1170.20 1162.70 Marketable Debt Securities Millions of $ October 74.80 -175.40 77.10 Real Estate Investments Millions of $ October 102.40 20.00 34.60 Preferred and Common Stock Millions of $ October 135.40 -895.60 852.70

5.90% 5.41% 33.55% -71.39% -2.98% 195.95% -84.12%

BANKING (excludes interstate branches) Total Bank Assets—Alaska Millions of $ 3rdQ14 5,781.68 5,589.78 5,432.28 Cash & Balances Due Millions of $ 3rdQ14 299.37 309.79 478.68 Securities Millions of $ 3rdQ14 146.66 145.27 133.97 Net Loans and Leases Millions of $ 3rdQ14 2,742.89 2,703.46 2,464.96 Other Real Estate Owned Millions of $ 3rdQ14 18.01 18.73 17.23 Total Liabilities Millions of $ 3rdQ14 5,002.29 4,814.61 4,697.44 Total Bank Deposits—Alaska Millions of $ 3rdQ14 4,346.55 4,188.54 4,086.89 Noninterest-bearing deposits Millions of $ 3rdQ14 1,830.26 1,702.65 1,693.48 Interest- bearing deposits Millions of $ 3rdQ14 2,516.30 2,485.89 2,393.41

6.43% -37.46% 9.47% 11.28% 4.53% 6.49% 6.35% 8.08% 5.13%

FOREIGN TRADE Value of the Dollar In Japanese Yen Yen October 107.97 107.18 97.81 10.39% In Canadian Dollars Canadian $ October 1.12 1.10 1.04 7.69% In British Pounds Pounds October 0.62 0.61 0.62 0.00% In European Monetary Unit Euro October 0.79 0.77 0.73 8.22% In Chinese Yuan Yuan October 6.14 6.15 6.13 0.16% Notes: 1. Source of Anchorage Deeds of trust (GeoNorth) is cited in the data field. 2. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska

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February 2015 | Alaska Business Monthly

113

ADVERTISERS INDEX Advanced Physical Therapy of AK...95

Cornerstone Advisors..........................39

AE Solutions Alaska LLC.....................43

Cruz Construction Inc......................... 84

Alaska Communications.......................17

Delta Leasing LLC.................................56

Alaska Native Village CEO Assoc..... 37

Design Alaska.........................................86

Alaska Roof Coatings...........................86

Donlin Gold.............................................81

Alaska Rubber........................................42

Dowland-Bach Corp.............................45

Alaska USA Federal Credit Union.....89

EDC Inc....................................................83

Alaska USA Insurance Brokers.......... 91

EHS-Alaska Inc......................................34

American Marine / Penco.................110

F. Robert Bell & Associates................22

Anchorage Messenger Service..........22

First National Bank Alaska................... 5

Anchorage Opera...............................108

GCI...................................................44, 116

Arctic Foundations................................51

Global Services Inc...............................52

Arctic Office Products......................... 61

Golder Associates Inc.......................... 41

Arctic Technology Conference......... 48

Great Originals Inc................................28

Avis Rent-A-Car.................................. 107

Greer Tank & Welding Inc..................43

Bering Air Inc...................................... 107

Hawk Consultants LLC........................24

Bowhead Transport Company LLC... 55

HDL Hattenburg Dilley & Linnell..... 30

Calista Corp. / STG ..............................27

Homer Marine Trades Assoc.............99

Cardno.....................................................49

Island Air Express...............................106

Carlile Transportation Systems......... 21

JENNMAR...............................................79

Chris Arend Photography................. 114

Judy Patrick Photography................... 76

Construction Machinery Industrial....2

Landye Bennett Blumstein LLP.........25

114

Lynden Inc................................................11 Magtec Energy...................................... 50 MFCP Motion & |Flow Control Products Inc...........86 Michael Baker Jr Inc.............................28 N C Machinery......................................115 Nalco Energy Services.........................45 Nature Conservancy............................29 NCB..........................................................90 Northern Air Cargo.................100, 101 Northern Geotechnical Engineering Inc./Terra Firma...... 30 Northwest Data Solutions..................24 NPC Energy Services........................... 57 Oxford Assaying & Refining Inc.....106 Pacific Pile & Marine..... 102, 103, 104 Paramount Suppy Co...........................99 Parker Smith & Feek............................... 3 PDC Inc. Engineers...............................47 PEN AIR................................................... 77 Personnel Plus....................................108 Plans Room.............................................83 PND Engineers Inc................................52

R & M Consultants Inc.........................36 Ravn Alaska Alaska...............................65 REMAX Properties / Matt Fink.........25 RSA Engineering Inc............................ 30 Scan Office............................................. 35 SGS.............................................................31 Society For Marketing Professional Services - Alaska.....99 Stellar Design Inc..................................99 Stephl Engineering LLC....................... 41 Taiga Ventures...................................... 50 Total Safety............................................. 41 Totem Ocean Trailer Express............. 75 TRIODETIC.............................................85 Truckwell of Alaska.............................. 44 Turnagain Marine Construction........ 41 UMIAQ / UIC.........................................42 Usibelli Coal Mine................................ 30 Washington Crane & Hoist.................13 Waste Management............................. 53 Wealth Strategies of Alaska...............23 Wells Fargo Bank Alaska..................... 19

Alaska Business Monthly | February 2015 www.akbizmag.com