Alaska Business Monthly February 2016 by Alaska Business

OIL & GAS | ARCTIC PORTS | POLAR CODE | LEGISLATIVE PRIORITIES

February 2016

Digital Edition

INTERNATIONAL TRADE Special section begins on page 96

Architects & Engineers Special section begins on page 59

Greg Wolf Executive Director

World Trade Center Anchorage

LEADER In All We Do Oil Field Services Government Contracting Natural Resources Tourism

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The well-being of our shareholdersâ&#x20AC;&#x201D; and a respect for our history in this placeâ&#x20AC;&#x201D;is topmost in mind as we continually enhance our strong financial position.

Februar y 2016 Digital Edition T A B L E DEPARTMENTS From the Editor �� 7 Business Events ��110 Inside Alaska Business �� 111 Right Moves ��114 Accolades ��116 Eat Shop Play Stay ��118 Events Calendar ��123 Alaska Trends ��125 Ad Index ��128

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C O N T E N T S

ABOUT THE COVER World Trade Center Anchorage Executive Director Greg Wolf, who’s been at the helm since 2002, enlightens readers with insight on China and other aspects of International Trade in the annual special section (begins on page 96). Cover Photo: Judy Patrick Photography Cover Design: David Geiger

ARTICLES

Politics

8 | Legislative Priorities Compiled by Susan Harrington

Adam Staley working on a lab project at the Alaska Joint Electrical Apprenticeship Training Trust in Anchorage.

Legal Speak

12 | Does Your Business Need to Scale Back in 2016? Don’t make any moves without considering these issues By Renea I. Saade

Courtesy of AJEATT

Financial Services

14 | Preparing for 2015 Tax Filing and the Ever-Evolving ACA Reporting Requirements By Tracy Barbour

Expanded in Digital Edition

Manufacturing

16 | Airframes Alaska Takes Off Aviation fabricator testing new three- and four-passenger Super Cub fuselage designs By Heather A. Resz

Transportation

24 | Call of the Arctic Ports Nome and Port Clarence emerge as contenders By J. Pennelope Goforth

Sean McLaughlin, Owner and General Manager of Airframes Alaska, pilots an experimental three-place aircraft built on a Super Cub frame.

Workforce Training 30 | Apprenticeships: IBEW Local 1547 Lighting up the state By Rindi White

Telecom & Technology

34 | Website Design, SEO, and Social Media ‘For many people it’s the new business card’ By Russ Slaten

Expanded in Digital Edition

Alaska Native Corporations

16 4

Expanded in Digital Edition

38 | Design and Construction Firms Building for Alaska and the nation By Russ Slaten

Alaska Business Monthly | February 2016 www.akbizmag.com

Februar y 2016 Digital Edition T A B L E

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special section

International Trade

Architects & Engineers

C O N T E N T S

96 | Impact of Slowing China Economy Alaska’s China Era continues By Greg Wolf

60 | Engineer of the Year Nominees By Patrick Coullahan, PE, F.NSPE, F.SAME

76 | Age in Place: Alive and Well in Fairbanks Designing retirement communities By Russ Slaten

98 | Trans-Pacific Partnership Update Stronger economic ties if enacted By Alex Salov

66 | UAF Engineering Building Unfinished masterpiece awaits final funding By Julie Stricker

78 | Thomas Center for Senior Leadership By Russ Slaten

100 | Global Reach of Sovereign Wealth Funds By Greg Wolf

70 | UAA’s New Engineering & Industry Building: Part 1 Educating students and serving Alaska’s industry stakeholders By Tasha Anderson

101 | Arctic Ambitions V Conference Exploring Commercial Opportunities in the Arctic

82 | Alaska Business Monthly’s 2016 Architects & Engineers Directory

ARTICLES Summer fieldworkers in transit at the Bokan-Dotson Ridge project in Southeast Alaska.

102 | Alaska’s Foreign Fish Exports Often Reprocessed Alaska’s seafood harvest is number one in the United States By Will Swagel 104 | Alaskan Student Ambassadors Go to China Inaugural class connects with Chinese executives and students By Paul Johnson and Qiujie “Angie” Zheng

44 Oil & Gas

106 | The Polar Code Legal implications for Alaskan vessel owners and charterers By Isaak Hurst

44 | Alaska LNG Working to Answer Agencies’ Questions Part of the $240 million 2016 work plan By Larry Persily

109 | State Exports from Alaska

46 | Public Submits WideRanging Comments to FERC By Larry Persily

DIGITAL EXCLUSIVES Architects & Engineers 74 | UAA Engineering Helps Entrepreneur on His Warm-House Mission Strong floor in materials testing lab worth the wait for Alaska manufacturer By Kathleen McCoy

Courtesy of Ucore Rare Metals

Expanded in Digital Edition 48 | Engineering New Oilfields Arctic Considerations By Russ Slaten

Mining

54 | Engineering New Mines in Alaska Start to finish, good engineering makes new mines profitable and environmentally conscious By Tasha Anderson

Environmental Services 88 | Statewide Alaska Reclamation By Tasha Anderson

Construction

92 | Developing Our Communities: Mat-Su Keeping up with growth and improving life By Rindi White

Climate Change

124 | Recap of the Paris Climate Agreement The 2015 UN Climate Conference: COP21 By Piper Wilder

Alaska Business Monthly | February 2016 www.akbizmag.com

FROM THE EDITOR Follow us on and

Volume 32, Number 2 Published by Alaska Business Publishing Co. Anchorage, Alaska Jim Martin, Publisher 1989~2014

EDITORIAL STAFF

Managing Editor Associate Editor Associate Editor Art Director Art Production Photo Contributor

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

Billie Martin Jason Martin Charles Bell Anne Tompkins Bill Morris Janis J. Plume Ana Lavagnino

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 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, ©2016, 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/Digital-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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‘Engineers Make a World of Difference’

hat would we do without engineers? It would be impossible without them; with them—anything is possible. In February we commend engineers in Alaska, and in the magazine, coinciding with the much broader celebration of national Engineers Week, better known as E-Week, which takes place the last week of February with events that encourage engineers across the country to help students of all ages to discover engineering and to introduce girls to engineering, especially. In fact, February 25 is “Introduce a Girl to Engineering” day. Engineers Week turns sixty-five this year and the organization has made quite a difference since the first E-Week in 1951. Learn more at DiscoverE.org. The Anchorage E-Week committee has put together several events in February to celebrate engineering. In Anchorage, there’s a neon bowling social to kick off E-Week on Friday, February 19 at Dimond Center Bowling—all engineers welcome. Find particulars for all the planned E-Week events at eweekak.org. One of the larger events planned is going to be held at the new Engineering & Industry Building on the campus of the University of Alaska Anchorage. All students in grades K-12 are welcome and encouraged to participate in the free competitions that demonstrate concepts and principles of engineering. It’s February 20 from 10 a.m. to 3 p.m. Along with the UAA College of Engineering, many Anchorage professional engineering societies are supporting the 2016 Engineers Week Student Competitions at UAA this year, including the society of Women Engineers, American Society of Civil Engineers, American Society of Mechanical Engineers, Institute of Transportation Engineers, Society of American Military Engineers, UAA Department of Geomatics, and National Society of Professional Engineers. Engineering scholarships are also awarded during E-Week, and the Engineer of the Year is named at the annual E-Week banquet. This year’s nominees are profiled in the Architects & Engineers special section that begins on page 50. The theme for 2016 is “Engineers Make a World of Difference.” Something else that makes a world of difference is international trade, and that is the topic of another annual special section we’ve put together this month with a little help from our friends at World Trade Center Anchorage. That special section begins on page 82. We’d like to think the magazine makes a world of difference, too. Enjoy! —Susan Harrington, Managing Editor February 2016 | Alaska Business Monthly

POLITICS

2016 Legislative Priorities Editor’s Note: We’ve compiled Legislative Priorities from organizations across the state that had adopted and formulated them and were able to share with us by press time in early January. Due to space constraints, many are abbreviated versions. We encourage readers to check websites of the various associations and organizations to learn more.

Alaska Airmen Association

Alaska Department of Transportation and Public Facilities funding is our biggest concern and we strongly support the increase in fuel tax versus the other options of the Governor’s Aviation Advisory Board.

Alaska Native Village Corporation Association

Investing and maintaining the Dalton  Highway is essential to build the pipeline  Ensure the integrity of the Yukon River Bridge  Heavy Maintenance

Land Contamination—Proactive  Support the introduction and passage of the “Contaminated Lands Transfer Liability Act of 2015” (CLTLA)

Invest in the National Highway System  Replace low clearance bridges along the National Highway System routes

 Prioritize the cleanup of ANCSA land

 Replace or realign Cooper Landing guardrails

 Ensure the federal government maintains legal liability of federal government caused contamination on Native lands

 Focus Federal dollars on the National Highway System in Alaska. These inter-city connecting routes carry the most traffic and freight of all the highways in Alaska. This is the network that allows for the safe and efficient movement of freight.

 Preference for Native contractors to cleanup ANCSA land Federal 8(a) SBA Program Protection—Proactive

Alaska State Chamber of Commerce

Support DOD and NACA in the defense of the program

State Priorities  Support reduction of spending to sustainable levels

Other Issues That Affect Alaska Native Village Corporation—Reactive

 Support comprehensive workers’ compensation reform

Alaska Power Association

 Support for electric transmission and generation infrastructure

 Oppose a natural gas reserves tax

 Support for the pursuit of a FERC license for the Susitna-Watana Hydro project

Federal Priorities  Support oil and gas exploration and development in Alaska’s federal areas including; the Outer Continental Shelf (OCS), National Petroleum Reserve-Alaska (NPRA), Cook Inlet, and the Arctic National Wildlife Refuge (ANWR)

 Support for continued deployment of renewable energy: Renewable Energy Fund and Emerging Energy Technology Fund

 Support Repeal or Mitigation of the “Cadillac Tax” Provision of the Federal Patient Protection and Affordable Care Act

 Support for electric transmission grid unification with the Railbelt

 Support for using proven utility-State financing models for funding hydro project development  Support for preserving the Power Cost Equalization endowment and funding the PCE program in FY 2017  Support for an Alaska natural gas pipeline

Alaska Trucking Association

Cut State Funding  Cut State funding to non-essential programs

 Reduce State spending to constitutional levels where possible Natural Gas Pipeline  Support the building of the natural gas pipeline. The natural gas pipeline will require substantial infrastructure upgrades to accommodate the high volumes of freight movement in the state. All modes of transportation infrastructure will be pushed to their limits. Anticipating these needs is paramount in the planning process. 8

Anchorage Chamber of Commerce

To strongly encourage the Legislature and governor to work together to find reasonable, sustainable solutions to Alaska’s fiscal challenges in 2016. The Anchorage Chamber requests that the Legislature take action in 2016 so that businesses and constituents can plan accordingly. To actively encourage the Legislature and governor to stay focused on fiscal issues and the Alaska LNG project only. In this time of unprecedented change and uncertainty in our economy, we urge lawmakers and policymakers to commit to solving fiscal challenges first before turning to other priorities. The Anchorage Chamber of Commerce members highly support reducing the state budget significantly in order to work toward sustainability according to a member survey conducted in the fall of 2015. The State of Alaska must consider new and sustainable revenue sources. The same recent membership survey reveals that Anchorage Chamber of Commerce members support:

 Some use of Permanent Fund earnings/percentage of market  Statewide sales tax  Creation of a statewide lottery

Alaska Business Monthly | February 2016 www.akbizmag.com

©Judy Patrick Photography

PDC Inc. Engineers and R&M Engineering Juneau are joining forces Left to right: PDC/R&M Juneau Principals, D. Bogren, M. Emerson, M. Story, and M. Pusich.

DC Inc. Engineers is an awardwinning, full-service planning, engineering, and survey company that has been turning its clients’ challenges into solutions throughout Alaska for over 50 years. The employee-owned PDC currently has offices in Anchorage, Fairbanks, Palmer, and Soldotna. With its recent acquisition of R&M Engineering Juneau, solving statewide challenges will now be easier. R&M Juneau—which offers civil, structural, and geotechnical engineering, along with survey, special inspections, and materials testing—will initially retain its name. R&M Juneau Principals Michael Story and Mark Pusich and its 17-member staff will maintain their same roles. This is an exciting opportunity for both companies, says PDC President Royce Conlon. “Southeast Alaska’s diverse clients, project types, and market sectors fit well with PDC’s multi-discipline engineering capabilities,” she says. “Our clients will benefit from R&M’s experienced staff and geographic location, as well as its capabilities in geotechnical engineering, materials testing, and special inspection services. This new location will help strengthen our existing relationships and support the infrastructure needs of the communities throughout Southeast Alaska.” Additionally, PDC has significant site design and utilities capabilities that will complement R&M’s Southeast experience

in these sectors. “Our staff also brings considerable street and highway experience for many similarly-sized communities as Juneau,” Conlon says. Story says he is looking forward to joining PDC. “R&M Juneau’s clients will benefit from PDC’s additional capabilities with mechanical, electrical, fire protection, and environmental engineering; commissioning; sustainability; and planning/GIS,” he says. “This is in addition to substantially increasing staff capacity in our traditional disciplines of civil and structural engineering, as well as land survey. PDC airport planning and design, along with their urban transportation expertise, will also be an added benefit for our Southeast clients and teaming partners.” Pusich has similar thoughts. “By joining forces with PDC, we’ll continue to maintain our high level of quality services to our clients while expanding capabilities,” he says. Pusich emphasizes that the two firms have a longstanding working relationship. Recent collaborations include the University of Alaska Southeast’s Freshmen Dormitory, the US Forest Service’s Pacific Northwest Research Station, and the LEED Gold certified Walter Soboleff Center. PDC differentiates itself from other consulting firms by offering all engineering and survey disciplines in-house. This allows for better project coordination, which generates greater efficiency. –

PA ID

A DV E R T I SE M E N T

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Additionally, PDC pursues challenging projects involving Arctic conditions, remote logistics, or tough engineering issues that seem insurmountable. “Where other firms may consider these types of projects to have high-risk or low-profit potential, we do them because it stimulates our engineers to create innovative solutions,” Conlon says. “Our clients appreciate this and often seek us out to help them with difficult projects.” However, such strong client relationships would not be possible without the company’s employees, whom Conlon describes as PDC’s greatest asset. Hence, PDC’s core value: “We take care of our people: so they take care of our clients.” With the integration of R&M Juneau and its employees, PDC remains committed to serving its clientele. “We are focused on our clients’ needs and providing sound solutions to their projects, problems and challenges,” Conlon says.

PDC Inc. Engineers Royce Conlon, PE 1028 Aurora Dr. Fairbanks, AK 99709 (907) 743-3200 www.pdceng.com

R&M Engineering Juneau Michael Story, PE Mark Pusich, PE 6205 Glacier Hwy. Juneau, AK 99801 (907) 780-6060 www.rmjuneau.com

Associated General Contractors of Alaska

Our Priority: A Capital Budget

Association of Alaska Housing Authorities

 AAHA strongly supports the FY16 AHFC Board approved Weatherization Program request for $30 million

 AAHA strongly supports the AHFC FY16 Supplemental Housing Development Grant Program request of $7 million  AAHA supports the AHFC FY16 Senior Citizens Housing Development Grant Program (SCHDGP) in the amount $4.5 million to meet the rapidly growing need for senior housing in Alaska.

Fairbanks Chamber of Commerce

 Support a comprehensive, long-term sustainable fiscal plan for the State of Alaska to ensure the effective use of state resources by delivering essential programs as efficiently as possible and to make strategic investments that promote long-term economic growth. Further, the Chamber encourages government leaders to build a fiscally responsible budget that aligns revenues with expenses. While reductions have already been made to the state capital and operating budgets, a consistent and predictable fiscal policy is integral to an overall plan and vision for business development and job growth in Alaska.  Support efforts on both natural gas pipeline projects, the Alaska Gasline Development Corporation’s project for in-state use, and the Alaska LNG project  Advocate for the stated goals of the Interior Energy Project provide affordable energy to Interior Alaska customers as soon as possible; after providing the Interior with natural gas, assure long-term access to natural gas and propane for all Alaskans; use private-sector mechanisms as much as possible  Urge the Alaska State Legislature and the Administration to provide the remaining funding necessary in the FY17 capital budget to complete the UAF engineering facility  Encourage continued reform to the Workers’ Compensation statutes that will improve the balance between providing timely, efficient, and fair compensation to injured workers and reasonable cost to employers  Support Medicaid reform, including dual eligibility, “managed care” versus “fee for service”, split responsibility for funding, federal block grants, long-term care insurance reform, and resolving issues with Alaska’s current Medicaid Administrator provider (Xerox)  Join state leaders in the call for criminal justice reform and support data driven changes that result in a more cost-effective criminal justice system for the State of Alaska

Juneau Chamber of Commerce

Alaska Marine Highway System

The “biggest” issue in Southeast is cutbacks on the Alaska Marine Highway System. It is shockingly apparent that the majority of people up north do not understand that our ferry system “is” our highway and has developed over decades as the economic engine for the smaller communities in terms of access to the larger communities. Freight and people rely daily on that system, and while the proposed cutbacks may seem like a mathematical exercise, they are heart-piercing decisions.

The Juneau Access/Lynn Canal Road is actually a solution to the ferry problems, at least in Northern Southeast; but of course the road can’t be built in time to solve anything in the next couple of years. In terms of transportation within the region, it is an economic necessity. It would be like putting a gate on the Parks Highway and only opening the road threedays a week—inconvenient would be an understatement. We are following closely any decision that will allow the Lynn Canal Road (Juneau Access) to move forward. This is a project that was stalled with the first wave of reaction to the budget crisis, but a project that is already funded and a step away from moving forward after more than two decades of study and debate.

Governor’s Budget

Obviously we’re focused on the Governor’s budget and any direct impact that any cuts will have on state employment in Juneau and the Southeast Region.

Daylight Savings Time

Juneau Chamber has devoted a lot of time on the Daylight Saving Time issue, which is on the House Side after being passed by the Senate last session. We oppose the bill as passed by the Senate but are optimistic that changes being made on the House side will result in a bill that will satisfy businesses and residents of Southeast while still meeting Senate expectations.

REAP (Renewable Energy Alaska Project)

Request the Legislature to encourage the Regulatory Commission of Alaska (RCA) to direct Alaska’s Railbelt electrical utilities to form an Independent or Unified System Operator (ISO or USO) to manage the grid on a regional basis. A neutral, nonprofit ISO would provide much needed regional planning, with an emphasis on the economic dispatch of existing electrical generation assets that would continue to be owned by the six respective Railbelt utilities. An ISO would ensure the development of a universal transmission tariff to facilitate open, non-discriminatory access to the Railbelt grid. REAP believes an ISO is a necessary complement to a for-profit transmission company, or TRANSCO, which the utilities are already in the process of forming (HB 187 and SB 105). Support the establishment of an integrated statewide building code for new residential construction in Alaska. Today Alaska has a patchwork of local codes, as well as Alaska Housing Finance Corporation’s Building Energy Efficiency Standard (BEES) which only apply to homes AHFC finances. REAP, along with many other stakeholders, supports the application of BEES to all new construction. Statewide application of BEES would improve the efficiency of Alaska’s housing stock, saving citizens millions of dollars in utility costs.

Resource Development Council of Alaska

 Advocate to limit Unrestricted General Fund spending to sustainable level

 Advocate for tax policy and incentives that enhance the State of Alaska’s competitiveness for all industries  Support efforts to bring more accountability to the appeals and litigation processes for community and resource development projects  Encourage the state to promote and defend the integrity of Alaska’s permitting process and advocate for predictable, timely, and efficient state and federal permitting processes based on sound science and economic feasibility  Support legislation to encourage new exploration and development of Alaska’s mineral and energy deposits, as well as enhanced production from existing operations R

Juneau Access/Lynn Canal Road 10

Alaska Business Monthly | February 2016 www.akbizmag.com

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Give your employees a benefit upgrade today. Enroll in the Payroll Deduction Option offered by the University of Alaska College Savings Plan. The Payroll Deduction Option is an easy, no-cost employer benefit program that adds value to your benefits package while contributing to the overall financial well-being and college savings goals of your employees.

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I you are not an Alaska resident, you should compare this plan with any 529 college savings plan offered by your home state or your beneficiary's If home state and consider, before investing, any state tax or other benefits that are only available for investments in the home state’s plan. You can also visit our website or call the phone number to request a Plan Disclosure Document, which includes investment objectives, risks, fees, charges and expenses, and other information. You should read the Plan Disclosure Document carefully before investing. 2015-US-12646

Legal Speak

By Renea I. Saade

Does Your Business Need to Scale Back in 2016? Donâ&#x20AC;&#x2122;t make any moves without considering these issues

t comes as no surprise that Alaska businesses are looking for ways to scale back in 2016 given our stateâ&#x20AC;&#x2122;s precarious economic climate. Many businesses are reducing their charitable contributions, abandoning expansion plans, forgoing contract renewals or only renewing on a month-to-month basis, postponing hiring, considering layoffs, converting certain regular positions to temporary or contracting work out, and evaluating other options to reduce their business expenses and risk should our local economy take a more serious turn for the worse. Before your business makes any significant moves, however, you should consider the following issues to avoid creating more harm than good.

What Are Your Contractual Obligations and Options? If you are considering cancelling a contract early or reducing the level of business between you and the other party, or if you want to request a renewal that is shorter than the last contract term, start by reading your contract, statement of work, purchase order, or other policies or terms that govern the relationship. Is there language that allows for the relationship to be modi12

fied by one side? Is there agreement by the parties? Does the document allow for early termination? Is there an early termination penalty that the other side could demand? Is there a section that provides for renewal options? If you are able to terminate or renew, what are the notice requirements? Who must the notice be sent to? How much advance notice must be given? These questions are particularly critical if the document is an employment contract, as the consequences for not complying with it can be significant.

What Are Your Rights?

Irrespective of whether you have a contract or other written document that sets out the terms of your relationship, you have legal rights. And, even if your contract does not provide you with the right to cancel or modify it, you may still have a legal right to do so if the other party to the contract has not fulfilled its end of the bargain. For example, if the other side did not provide the materials or services as promised, the contract may already be breached, thereby giving you the right to terminate or giving you leverage to re-negotiate the terms in a way that is more feasible. Similarly, the

other side may have already violated the covenant of good faith and fair dealing that is implied in every contractual relationship, and, as a result, you are in more control of what happens next.

Consider Risks before Converting Employees to Exempt or Contractor Status In an effort to reduce overhead labor costs, some employers attempt to convert regular non-exempt positions to exempt or independent contractor positions. Many employers mistakenly believe that this can help them avoid overtime costs, keep a cap on payroll obligations, and, in certain circumstances, avoid paying for benefits and paid time off. But, the reality is that workers are often misclassified as exempt or an independent contractor, and local and federal agencies are focusing their enforcement efforts to identify misclassifications. If a misclassification is identified, the consequences to the employer can be expansive and expensive. Even if a position is properly classified as exempt, the minimum salary threshold for such positions (currently $455 per week under federal law and twice the amount of forty hours

Alaska Business Monthly | February 2016 www.akbizmag.com

at minimum wage per week under Alaska law) is expected to substantially increase later this year, so the anticipated “cost savings” may not be there.

Try to Resolve Any Disputes Early If you and the other person or company you are working or doing business with are not seeing eye to eye on how to move forward with your relationship, do not dig your heels in and hope the other side simply backs down and agrees to proceed in accordance with your preferred outcome. Like milk, disputes do not get better over time. Many contracts contain language that sets out a procedure for resolving disputes. Some require a face-to-face meeting or mediation before you can file a claim in court. And, some contracts indicate parties must arbitrate rather than go to court. Review your contract to see whether there are any resolution procedures available to you and consider taking advantage of them. Even if you do not have any procedures set out in writing, do not hesitate to suggest to the other side that you sit down face to face either yourselves or with the assistance with a neutral third-party mediator to try to reach an agreement. Reaching an early agreement to resolve your dispute will save you an extraordinary amount of time, stress, and money. We all remain hopeful that all the worry has been for naught and our 2016 economy will remain strong. In the meantime, it cannot hurt for your business to evaluate its options to plan for what bumps may lie ahead. But, in doing so, be sure to consider the foregoing issues before you take any steps toward changing your current business operations. With some forethought and planning, your business should be able to survive any potential economic downturn and come out the other side more business savvy and fiscally stable. R Renea I. Saade is a Partner with law firm Stoel Rives LLP. She assists companies with their contract disputes and employment law needs. Contact her at renea.saade@stoel.com or 907-277-1900. Please note this article is provided for educational purposes and does not constitute legal advice. www.akbizmag.com

ACHIEVE MORE

Of all the numbers we work with this is the most important 91

Number of Northrim Business Bankers

907

›8,500

Number of small business loans since Northrim opened

Tracy LaBarge Tracy’s Crab Shack Juneau, Alaska Customer since 2009

INVESTING IN ALASKA BUSINESS Like you, we’re here for the long run. We’re here to help you and your business get to the next level. With Northrim’s expert, local advice we can map out a plan so even now, you can Achieve More. Call us and let’s get started. 907-789-4844 | 1-800-478-2265

northrim.com February 2016 | Alaska Business Monthly

FINANCIAL SERVICES

Preparing for 2015 Tax Filing and the Ever-Evolving ACA Reporting Requirements

By Tracy Barbour

s the 2015 tax filing season progresses, there are various measures businesses should take to ensure they are adequately prepared to fulfill their reporting responsibilities, including completing several challenging tax forms related to employer-provided health insurance. By now, much of the preparations for filing 2015 taxes should have already been completed. Prior to the end of 2015, companies should have reviewed their books and talked with their tax advisors to see if there were any tax-planning opportunities they could have implemented. After yearend, their books should have been closed and general account ledgers should have been reconciled. W-2’s and 1099’s should have been sent to recipients by the end of January. Now is a good time for businesses to make sure they have up-to-date accounting records, so they know where they stand from a tax perspective. For S corporations, partnerships, and sole proprietorships— which represent the majority of business entities—a key concern is ensuring that owners’ estimated tax payments were adequate based on the profits for the year, according to Kevin Van Nortwick, CPA/ABV, CVA, tax managing partner of BDO USA, LLP. Otherwise, a penalty could be imposed for underpayment. “One of the number one things to do is to pay in the safe harbor amount for your estimated taxes, which is generally 90 percent of your tax for the current year or 110 percent of what it was the year before,” says Anchorage-based Van Nortwick. During February, a business might take a closer look at making retirement plan contributions, Van Nortwick says. Depending on its legal structure, the company could opt to fund an SEP (Simplified Employee Pension) IRA, SIMPLE (Savings Incentive Match Plan for Employees) IRA, or Keogh Retirement account. Looking further into 2016, a business might consider incorporating. Entities that are already formed, including limited liability companies, could elect to become an S corporation and gain the advantage of not having to pay selfemployment tax (social security and Medi14

care) on profits of the business. Bonus depreciation is another area of consideration that has a significant impact on business taxes. Last year in December the government brought back bonus depreciation for 2014, resulting in substantial tax savings for businesses with qualifying assets. There’s a possibility that bonus depreciation could be extended for 2015, so businesses should watch how this all unfolds, Van Nortwick says. “The speaker of the house, Paul Ryan—who is an accountant by trade—wants to change the tax code, but no one believes that will happen until President Obama is out of office,” he says. “They should just watch and see if there are any changes in this area.”

Intricacies of Forms 1094-C and 1095-C A key concern for larger employers this year will be Form 1094-C and Form 1095C. Form 1095-C reports which full-time employees were offered healthcare insurance coverage, while 1094-C is essentially a transmittal or “cover” sheet for the 1095-C form. Beginning January 2016, the Affordable Care Act healthcare insurance law requires every applicable large employer (ALE) to complete and send out Form 1095-C to every employee who has been full time for one or more months of the calendar year. And ALE members must report this information for all twelve months of the calendar year for each employee. The reporting requirement applies to employers with at least fifty full-time employees, including full-time equivalents, according to Joseph Moore, CPA, principal of Soldotna-based Altman Rogers and Co. (By law, a full-time employee is someone who works at least thirty hours a week.) Most ALE’s in Alaska are aware of this requirement, but the degree to which they were prepared for the reporting requirement has been varied, Moore says. “The reporting requirement is quite onerous, and those businesses that don’t have dedicated human resource/employee benefit departments have found themselves relying on a combination of the benefit plan vendors, third-party ACA compliance vendors, and payroll software vendors to meet this re-

porting obligation,” he explains. Basically, an ALE must determine the kind of insurance offered to its full-time employees and their dependents, Moore says. The ALE must identify who its fulltime employees were for each month and track the health coverage for the same periods. There are also issues of determining affordable coverage, minimum essential coverage, and minimum value coverage. “Since affordable coverage is determined by an employee’s household income—which the employer likely will not know—there are safe harbor provisions for determining affordability,” Moore explains. “The safe harbor provisions allow an employer to use other information that is known to the employer to determine affordability. This other information includes calculations based on state-specific poverty rates, an employee’s W-2, or an employee’s rate of pay.”

Reporting Deadline Extended Although businesses could have elected to file forms 1094-C and 1095-C last year, not many volunteered to do so, says Key Getty, CPA, tax senior director with BDO USA. So these forms are unfamiliar to most employers. “Based on my observation, 2015 sort of blindsided everybody, and not many people knew there would be these reporting requirements,” says Getty, one of BDO’s resident ACA experts. Also, many employers misunderstood the relaxed transitional rules applicable to the “employer shared responsibility” provision for 2015. This provision does not affect the filing responsibility of Forms 1094/1095’s for all ALEs with at least fifty full-time employees and employers with self-insurance to file these forms—even if they were not required to provide insurance, Getty says. Getty says those who are under the filing requirements will have a very tight deadline, but thankfully, the IRS has granted an automatic sixty-day extension for 2015. With the extension, employers must provide payee statements to applicable employees by March 31, 2016 and file 1094-C and 1095-C by March 31, 2016 if filing on paper (or June 30, 2016 if filing electroni-

Alaska Business Monthly | February 2016 www.akbizmag.com

cally). “However, even with the extension, it expected that the majority of ALE’s will find they have not had sufficient time to learn and understand the requirements in this first year to facilitate the necessary data collection ahead of time,” she says. Getty points out one clarification: When completing the forms, employers should be aware that the “lowest-priced, singlecoverage option” mentioned on 1094-C and 1095-C refers to the lowest-cost option that the employer offered—not what the employee chose. She also emphasizes that it’s crucial for employers to submit accurate information within the deadline to avoid potentially huge penalties ($250 per form and up to $3 million for a calendar year). The penalties compound for multiple infractions, such as inaccurate reporting, failure to file, and failing to provide the form to employees. “Let’s say one of your 1095-Cs was inaccurate, the penalty would be $500 [$250 for failure to provide an accurate payee statement and $250 for failure to file an accurate form],” Getty says.

ums only if they offered health insurance through the ACA’s Small Business Health Options Program (SHOP) Marketplace, according to Getty. Also effective in 2016, employers with fifty or more full time workers must offer a qualified healthcare plan with minimum essential coverage that provides minimum value, Getty says. In addition, the percentage of full-time workers that employers need to offer coverage to has increased from 70 percent in 2015 to 95 percent in 2016 and beyond. Another significant change is the increase in penalties for not filing certain information returns for the tax year 2015.

The most common of these forms is the 1099-Misc, due February 1. “The penalty is graduated based on lateness, but quickly reaches $100 per return,” Moore says. “The penalty for not filing the required form at all is $250 per return.” Moore advises employers to stay up to date on the ever-changing requirements of the ACA. “Don’t be hesitant to seek out expertise in this area as mistakes could be costly.” R Freelancer Tracy Barbour is a former Alaskan.

Other ACA-Related Tax Reporting There are a number of other tax forms businesses may have to file due to reporting requirements of the ACA. For example, employers who are not considered to be ALEs, but who sponsor self-insured group health plans, must report information about employees who enroll in the coverage to their employees. “These non-ALEs will use forms 1095-B and 1094-B for this reporting, even though they’re not subject to the employer shared responsibility provisions or information reporting requirements for ALEs,” Moore says. Form 8941 may be filed by eligible small employers to calculate a tax credit for health insurance premiums paid for their employees. The credit, which is a percentage of the premiums with maximum limits on the credit, is available to tax-exempt organizations as well as for-profit entities. Employers that file Form 8941 will also need to submit Form 3800. Form 3800 allows employers to report each of the tax credits that make up their general business credit, which includes the credit for insurance premiums. “Tax liability limitations can come into play, and this form works through those scenarios,” Moore says. Important Changes for 2016 Several important new rules will impact employers filing taxes this year. For instance, qualified small employers can claim the tax credit for health insurance premiwww.akbizmag.com

February 2016 | Alaska Business Monthly

MANUFACTURING

Courtesy of Airframes Alaska

Staff at Airframes Alaska in Chugiak.

AIRFRAMES ALASKA TAKES OFF Aviation fabricator testing new three- and four-passenger Super Cub fuselage designs By Heather A. Resz

t’s rare to find a Piper P18 Super Cub in Alaska these days without some sort of modification—“bush wheels,” a Cavanagh Door, Willow Mountain Ranch Floor, larger wing fuel tanks, extended main landing gear, or strengthened tailwheel springs. To airmen worldwide these are known as “Alaska mods.” Whether flying a Maule, Taylorcraft, Cessna, or Piper, modifications are often aimed at carrying bigger loads or taking off and landing in shorter distances off-airport. Among Alaska’s legendary mod men, no one was more prolific than F. Atlee Dodge 16

who helped to pioneer the industry designing and gaining Federal Aviation Administration (FAA) approval for small plane modifications. A growing number of Alaskans earn a living these days rebuilding, modifying, repairing, or fabricating replacement parts to keep Alaska’s fleet of weathered birds flying to remote airstrips, gravel bars, glaciers, and lakes ferrying people and cargo into the wilderness. Airframes Alaska in Chugiak employs forty people full-time designing, engineering, testing, manufacturing, and selling most of the parts needed to rebuild a Super

Cub from the data tag up, according to Sean McLaughlin, owner and general manager of Airframes Alaska. But Airframes Alaska is more than a “parts dealer.” They manufacture a wide range of custom parts, and in some cases, they also build the machines to make them, he says. Airframes Alaska has created business relationships with some of Alaska’s mod designers that allow the company to build those modifications into its custom Super Cub frames. “That guy sits at home and collects checks from us,” McLaughlin says of the

Alaska Business Monthly | February 2016 www.akbizmag.com

Airframes Alaska employees Jeff Phipps, Chris Minsch, and Derek Zollman add layers of rubber to Alaska Bushwheels during the manufacturing process at Airframes Alaska in Chugiak.

ABOVE: Airframes Alaska employees Josh Langford and Billy Steward cut pieces of rubber that will be used in the manufacture of Alaskan Bushwheels tubeless tires. RIGHT: Airframes Alaska employee Josh Langford measures a length of rubber that will be used along with thirty to forty other pieces to manufacture an Alaskan Bushwheels tubeless tire. www.akbizmag.com

February 2016 | Alaska Business Monthly

One-of-a-kind tire presses that McLaughlin financed and built to unify and cure the thirty to forty separate pieces of rubber used in the manufacture of Alaskan Bushwheels. ÂŠ Heather A. Resz

ABOVE: Rows of finished Alaskan Bushwheels at the manufacturing facility in Chugiak. Each tubeless tire is made of thirty to forty pieces of rubber that are assembled by hand and cured in a series of one-of-a-kind tire presses that McLaughlin financed and built. RIGHT: A row of tail wheels manufactured at the Airframes Alaska facility in Chugiak. Each wheel is made of about fifty parts. Photos ÂŠ Heather A. Resz

Alaska Business Monthly | February 2016 www.akbizmag.com

Colton Bontrager fabricating a Super Cub seat base.

Spools of rubber that will be transformed into Alaskan Bushwheels. The rubber is cut in the Lower 48 and shipped to Alaska where each tubeless tire—about six a day—is assembled by hand at the Chugiak facility. www.akbizmag.com

February 2016 | Alaska Business Monthly

ABOVE: A Super Cub owned by Airframes Alaska sits on the edge of the runway at the Birchwood Airport. RIGHT: A Super Cub tail protrudes from the front of the Airframes Alaska building at the Birchwood Airport in Chugiak. Photos © Heather A. Resz

Willow Mountain Ranch Floor, which was conceived and designed in Alaska. “It’s by far our most popular mod.” The Chugiak-based company was honored as Made In Alaska’s 2015 Manufacturer of the Year and was the only Alaska manufacturer to earn a spot in the Inc. 5000 2015 list of fastest growing companies in the United States, coming in at Number 670 overall. With a three-year growth rate of 674 percent, the company was listed as the eleventh fastest growing manufacturer. 20

Good Ideas, Great Companies

Airframes Alaska was flat on its back in November 2011 when McLaughlin assumed ownership of the company in lieu of several months back rent. “At that point, it was a couple of guys operating a $150,000 a year aviation welding business, which had gone out of business,” he says. “We picked the company up off the floor and restarted it. Customers were owed work, deposits had been spent—it was a mess.” Revenues topped $6 million in 2015, he says.

While McLaughlin is relatively new to Alaska, he’s an experienced hand at nurturing good ideas into multi-million dollar companies. Born in Boston, he moved north with his family after serving a three-year stint as a White House Fellow and later chief operating officer for the National American Red Cross. About ten years ago, a news story prompted McLaughlin to phone his old roommate—a guy so Alaskan he had a bear skin rug on the floor of their dorm room at Harvard University—and ultimately plan a brief, but life-changing trip north with his eldest daughter. Back home, McLaughlin broke the news to his wife, Laura, and their children. “We’re moving to Alaska.” But before they’d finalized that decision, McLaughlin received the offer to join the White House Fellows program. McLaughlin, Laura and their six children—now the family has ten children— moved to Anchorage in 2007 where they purchased a motorhome and traveled

Alaska Business Monthly | February 2016 www.akbizmag.com

around Alaska for several years camping, hunting, and fishing. Finally, Laura broke the news to her husband, “You have to get something to do.”

Seeds of Success

Like many teens, McLaughlin’s entrepreneurial efforts began with a lawn care business. The eldest of ten, young McLaughlin’s business was a success, and soon he was hiring his siblings, too. A soccer injury at fourteen that sidelined him for several weeks resulted in a love of computers when his father, Stephen V. McLaughlin, gave him a Texas Instruments personal computer to occupy his mind. That interest in computers eventually led him to earn a computer science degree from Harvard University in 1991. He was working as a securities trader and analyst when he had an idea to start a business building software and hardware products to automate securities trading. McLaughlin founded his first software business, Eze Castle Software, Inc., in 1995 and served as its CEO until joining the White House Fellows program in 2005. McLaughlin’s resume also includes founding the Camel Needle-Eye Corporation and Hurdle Rate Capital companies, co-founding several other companies, and serving on the

Gabriel Kosachuk prepares a weld on a custom Super Cub frame at the Airframes Alaska shop in Chugiak. © Heather A. Resz

board of directors for other businesses. For now, McLaughlin’s short-term goal is growing Airframes Alaska to $10 million annual sales. “We’re maniacal about growth,” he says. To reach that goal, the company is expanding its products to include several new items, including adding wheels for ultra-light airplanes to its Alaskan Bush Wheels line to

serve the rapidly growing European market. It’s also introducing three- and four-passenger Super Cub frames that McLaughlin also hopes will boost sales and keep his team of forty working. “We make twice as many products as when we started,” he says. About 30 percent of Airframes Alaska’s sales come from international customers

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Sean McLaughlin, Owner and General Manager of Airframes Alaska, pilots an experimental three-place aircraft built on a Super Cub frame. The company also is experimenting with a four-place aircraft built on a Super Cub frame.

in countries like New Zealand, South Africa, Chile, and several countries in South America; 40 percent of sales are to the Lower 48; and Alaskans make up the remaining 30 percent of sales, he says. “We are literally bringing Alaska aviation to the world,” McLaughlin says.

Airframes Alaska is the only company in the world that offers a range of FAA-approved modifications to its custom fuselages, McLaughlin says. Whereas, other companies manufacture standard Super Cub fuselages and airmen make modifications afterward.

The Harley-Davidson of Airplanes Introduced in 1949 by Piper Aircraft, more than fifteen thousand Super Cubs were produced for civilian and military use during the next forty years. Made of fabric stretched over a steel-tube frame and weighing an average of eight hundred to one thousand pounds, the plane’s high-lift wing and powerful engine are an ideal fit for Alaska’s wilderness. For some airmen, McLaughlin says, rebuilding, restoring, and modifying Super Cubs is akin to what others do with custom motorcycles. “We’re almost like the Harley-Davidson of airplanes,” he says. But even the most heavily modified Super Cub—such as Airframes Alaska’s three-person, flat black Super Cub with red letters spelling out “Experimental” on the window flap—still must have a data tag that can be traced back to an original Piper aircraft, McLaughlin says. The three-person test plane is a product of Airframes Alaska’s Skunk Works team, which was tasked this year with producing three- and four-place Super Cub frames. Pending FAA approval, the plan is to sell the fuselages so airmen can expand their twoseat Super Cubs to three- or four-place planes.

In the past, mods were approved by the FAA after someone—often an Alaskan— had a great idea and hard-scrabbled his way through the design and approval process singlehandedly. But Airframes Alaska gives inventors another avenue to bring their mods to market, McLaughlin says. For instance, the company worked with a man in Lake Clark for years developing the Grizzly Claw Ski Drag, which he based on the snow hooks dog sled drivers use. There is also the Trimmer Aviation Kit, designed by Alaskan Eddie Trimmer, that adapts PA18 style landing onto a PA-20 frame. Trimmer has sold the drawings online for years, and now, working with Airframes Alaska, he also sells kits to complete the mod. “It’s a great relationship,” McLaughlin says. Like the Trimmer Aviation Kit, all of Airframes Alaska’s products are designed, tested, and manufactured onsite at its Birchwood Airport facility, including its most popular line Alaskan Bushwheels— sales of which grew by 36 percent this year. The Alaskan Bushwheel company began in Alaska but was sold and its operations moved out of state. McLaughlin was an authorized dealer for the company before purchasing it three years ago and moving the manufacturing operation home to Alaska. “I thought it was really important to

Can-Do Alaska Attitude

build something here,” McLaughlin says. The rubber for the tires is cut in the Lower 48 and shipped to Alaska where each tubeless tire—about six a day—is assembled by hand at the Chugiak facility. Each tire includes thirty to forty pieces of rubber that are twice cured in a series of one-of-a-kind tire presses that McLaughlin financed and built. Shipping costs are substantial—$4,000 to ship a fuselage to the Lower 48—but being an Alaska manufacturing company that designs, builds, and tests its products in Alaska was more important to his business model, McLaughlin says. It seemed crazy that Bush pilots would have to order all their stuff from the Lower 48 when all the modifications and intellectual property were invented up here, he says. “What we are really selling is Alaskans’ problem-solving, can-do attitude.”

‘We have to grow to live’

To help control costs, everything from accounting, sales, shipping, engineering, and research and development is handled in house. Engineers on staff design, build, and test new parts using computer-aided drafting and a 3D printer to produce plastic prototypes before the first metal article is created and submitted to the FAA designated Engineering Representative for approval, McLaughlin says. Every piece in every part must be traceable from the raw materials to the sub assembly to the finished part to receive FAA approval, he says. That’s no small task, considering just a tail wheel has about fifty parts. So McLaughlin deployed his computer expertise to create a piece of software that tracks the parts Airframes Alaska manufactures and tells employees which parts are needed in the assembly. The raw steel is shipped from mills in the Lower 48 and then it is cut, bent, welded, and shaped into wing struts, tail wheels, fuselages, and more, he says. The newest addition to the Airframes Alaska family is Reeve Air Motive, a business with a long history of providing airplane parts and products for models of all types. “We have to grow to live,” McLaughlin says. Chief Operating Officer Heather Montgomery grew up in a dry cabin in Sterling. She was employee number nine when McLaughlin restarted Airframes Alaska almost three years ago. Montgomery says, “We’re very happy with what we’ve done so far, and in a short amount of time.” R Heather A. Resz lives in Wasilla. She’s told Alaska’s stories for nearly twenty years.

Alaska Business Monthly | February 2016 www.akbizmag.com

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TRANSPORTATION

Call of the Arctic Ports

Nome and Port Clarence emerge as contenders By J. Pennelope Goforth

warming climate with a decreasing ice pack and an increasing transit season are making commercial shipping, tourist travel, and resource exploration a reality in the previously frozen Arctic Ocean. A network of Arctic ports across the top of Alaska to support the increasing shipping and commercial activity seems a natural progression resulting from the opening of the Northwest Passage and increased use of the Northern Route. But the region is an unforgiving one with none of the safety nets of modern 24

times, especially in the US and Canadian Arctic where only the Inuit have made themselves at home. Alaska’s Arctic encompasses a coastline over 3,500 miles long—the distance from Key West, Florida, to St. Johns, Newfoundland. According to the US Arctic Research Commission, the Arctic Boundary as defined by the Arctic Research and Policy Act includes all United States and foreign territory north fo the Arctic Circle and all United States territory north and west of the boundary formed by the Porcupine,

Yukon, and Kuskokwim rivers; all contiguous seas, including the Arctic Ocean and the Beaufort, Bering, and Chukchi seas; and the Aleutian chain, which boundary is demarcated by the “Contiguous Zone” limit of twenty-four nautical miles. Geographically, with few exceptions, the Arctic coast of Alaska is a shallow slope extending out to the Arctic Ocean. Bounded by two seas—the Chukchi Sea west of Point Barrow to the Bering Strait and the Beaufort Sea east of Point Barrow and off Alaska’s

Alaska Business Monthly | February 2016 www.akbizmag.com

“Arctic Boundary as defined by the Arctic Research and Policy Act (ARPA)” All United States and foreign territory north of the Arctic Circle and all United States territory north and west of the boundary formed by the Porcupine, Yukon, and Kuskokwim rivers; all contiguous seas, including the Arctic Ocean and the Beaufort, Bering and Chukchi Seas; and the Aleutian chain (The Aleutian chain boundary is demarcated by the ‘Contiguous zone’ limit of 24-nautical miles). Acknowledgement: Funding for the map was provided by the National Science Foundation throught the Arctic Research Mapping Application (armap.org) and Contract #0520837 to CH2M Hill for the Interagency Arctic Research Policy Committee(IARPC). Map author: Allison Gaylord, Nuna Technologies. May 27, 2009. MAP: United States Arctic Research Commission

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North Coast. The low lands bordering the Beaufort Sea are called the Arctic Coastal Plain: a vast flat area of deep permafrost peppered with shallow lakes mostly at, or below, sea level. The prevailing winds from the northwest constantly push the bottom silt and the ice pack back toward the land. This geography is well suited to the three oil developments that dot the offshore shallows on the artificial gravel islands and causeways that support production and operations at Endicott Island, Northstar, and Oooguruk. The conditions along the Beaufort coast across the northern edge of Alaska would require massive dredging and filling to craft a deep-water port. As such, periodic summer sealifts consist of www.akbizmag.com

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tug and barge delivery to shallow docks. The coast from Barrow south offers options with sheltered bays on the Seward Peninsula and deeper waters around the islands in the Bering Sea. But along the Chukchi Sea, ice-free from mid-July through September, the potential for a deep-water sheltered port declines. Point Franklin, Wainwright, Point Lay, and Point Hope, all in close proximity to the Chukchi Sea OCS oil and gas leases that have all been cancelled by the federal government, are capable of shallow to mediumdraft vessels in somewhat sheltered bays that offer potential for logistics support rather than a deep-draft major port facility.

Southeast of Cape Lisburne, and twenty-six miles south of Point Hope, Cape Thompson is under consideration primarily as a potential terminal shipping extraction minerals and gas and potentially as a Coast Guard hub. In 1957, Cape Thompson was selected as the site for an artificial deep-water port to be created by detonating a series of five nuclear bombs, one to create the harbor and four to create a channel connecting the harbor to the deeper ocean. Improbable as that seems today, Project Chariot was the first project conceived for the US Atomic Energy Commission’s Plowshare Program, which was engaged in finding peaceful uses for the power of the atomic

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bomb. In 1959 the Commission was ordered by Congress to conduct bioenvironmental studies and produce an environmental report, now considered the first Environmental Impact Statement. Project Chariot, for which planning began in 1958 and studies were conducted from 1959 through 1962, was scrapped in 1962 due to public outcry. Farther south is a shallow-draft port—part of the DeLong Mountain Transportation System, twelve miles south of Kivalina. The port, ore concentrate conveyor and storage facility, and road system was financed through bonds by the Alaska Industrial Development and Export Authority to encourage development of the Red Dog mine, a partnership between NANA Regional Corporation and Teck. Tolls and fees have repaid the investment over the years with annual dividends from the public-private partnership. As a new era emerges with the opening of the Northwest Passage and the expansion of the Northern Route over Russia, pressure for Alaska Arctic port capacity is on. Defining the key elements needed by a port to serve Arctic maritime transportation and shipping needs has been the topic of several conferences and numerous studies over the past decade.

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The focus on Arctic ports was a part of a larger economic development effort by the state. Building the Arctic Marine Infrastructure was one of the three main themes of the Arctic Marine Shipping Assessment (200509) by Lawson W. Brigham, PhD Professor, University of Alaska Fairbanks. Enhancing Arctic marine safety and protecting Arctic people and the environment are the other two goals of the assessment. The first Alaska Regional Ports Conference was convened in 2008 with local, state, and federal agencies; private transportation businesses; and tribal entities to discuss the issues impacting Alaska’s ports and harbors. The US Army Corps of Engineers and Alaska Department of Transportation and Public Facilities (ADOT&PF) jointly commissioned a study to establish the baseline information needed for a statewide ports and harbors plan. Two years later the second conference further refined the aims and policies, identifying the Arctic as one of eight statewide regions, with Barrow as a hub to provide a focal point for regional investment. In 2010, the Alaska State Legislature established the Alaska Northern Waters Task Force to identify Arctic issues requiring state participation and support. The task force convened a number of town halls and eventually listed eleven sites for consideration as potential deep-draft port sites. It turned out to be vast and complex task spawning further study by the Arctic Policy

Alaska Business Monthly | February 2016 www.akbizmag.com

Commission, set up in 2012. Among the issues this group identified was the need for a northern ports assessment. Recognizing the potential for increased resource exploration and development that would require massive infrastructure investment (among many other attendant issues such as efficient energy generation, construction, maintaining healthy communities, food security, etc.), the commission proposed an Alaska Arctic Policy. That policy called for increased development of mineral and oil and gas resources in the Arctic. In 2013, the joint US Army Corps of Engineers (USACE) and ADOT&PF three-year report, the Alaska Deep-Draft Arctic Port System Study, added three more sites, investigating the potential of a total of fourteen. The possible sites for a deepwater port were St. Paul Island, St. Lawrence Island, Nome, Port Clarence/Teller, Kotzebue/Cape Blossom, Mekoryuk, Cape Thompson, Wainwright, Point Franklin, Barrow, Prudhoe Bay, Mary Sachs Entrance, Bethel, and Cape Darby. Based on evaluation criteria such as natural depth of water and navigational accessibility, proximity to economic development (oil, gas, mining, fishing), and intermodal connections, that list was shortened to four likely candidates: Nome, Port Clarence, Cape Darby, and Barrow. In advance of the US chairmanship of the

Arctic Council, the federal government’s attention was directed to the Arctic through two pieces of legislation introduced by Senator Lisa Murkowski and Congressman Don Young. Neither the Arctic Deep Water Sea Port Act of 2009 nor the one initiated in 2010 got any traction, but they did get the discussion going on the need for US action in the Arctic and especially the need for icebreakers. The Distant Early Warning system, known as the DEW Line, was the last significant activity the federal government sanctioned in the Arctic region, built from 1954 through 1957 during the Cold War. The 2013 National Strategy for the Arctic Region sets forth the US government’s strategic priorities for the Arctic region. This strategy is intended to position the United States to respond effectively to challenges and emerging opportunities arising from significant increases in Arctic activity due to the diminishment of sea ice and the emergence of a new Arctic environment. It defines US national security interests in the Arctic region and identifies prioritized lines of effort, building upon existing initiatives by Federal, state, local, and tribal authorities; the private sector; and international partners and aims to focus efforts where opportunities exist and action is needed. On the federal level, the Depart-

ment of Defense, the National Oceanic and Atmospheric Administration, the US Coast Guard, and the US Arctic Research Commission would all benefit from a deep-draft Arctic port, although none of the agencies individually can fund such a project.

The Ideal Arctic Port

Ports used to grow organically: located at a strategic marine location like a deep water bay or harbor with connections to roads and cities where commerce could be conducted at a profit for transporting people and commodities. It’s a law of physics that marine transportation requires less energy (cost) than any land-based transportation. Nearly every viable city in the world sprang from a port on a body of water. Both of these facts figure heavily into the situation in the Alaska Arctic. In addition to the traditional primary functions of a maritime facility—moving people and commodities in and out of the region—Alaska Arctic ports are expected to provide support for oil spill response, national security, and search and rescue. Challenges of building and operating ports in the Alaska Arctic are formidable. Plus, they must have the capacity to eventually service the full gamut of marine vessels: cruise ships, ferries, tank and cargo barges, fuel and commodity tankers, cargo carriers,

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tugs, fishing boats and factory trawlers, federal research vessels, Coast Guard icebreakers and patrol vessels, Alaska Department of Fish and Game vessels, and oil spill response ships and barges, among others. (It should be noted that one of the huge expenses Shell encountered in their bid for an Arctic oil discovery was the contracting the operation and maintenance of a fleet nearly thirty vessels to support their drilling efforts.) In their port development checklist, the Marine Exchange of Alaska identified the key elements needed to establish a port: sufficiently deep waters; adequately charted waters; aids to navigation; and access to pilots, tugs, and functioning infrastructure on docks such as cranes, staging, and trucking. Arctic Marine Shipping Assessment of 2009 listed similar points on planning for Arctic ports: existence of intermodal transportation (air, rail, and road); emergency, search and rescue, and pollution response access; staging capacity for marine activity (offshore development, fishing, research, traffic); accessibility of civil services (law enforcement, security); and support services such as marine repairs, communications, stores, chandleries, etc. Two years into the Alaska Deep-Draft Arctic Port System Study two sites emerged as the most feasible: Nome and Port Clarence, neither of which is actually in the Arctic.

Currently classified as a medium-draft port, Nome’s vessel traffic has increased tenfold over the past twenty-five years, according to the study, from thirty docked vessels in 1988 to 304 in 2011. Nome is positioned close to various economic development activity (fisheries, mining operations, oil and gas drilling); it is a solid year-round community with an airport, a hospital, and wholesale and retail services. Still there are pros and cons: it is about 130 miles south of the center of the Bering Straits and it does ice up in the winter. But it is closer than search and rescue capacity at Kodiak or Dutch Harbor. Port Clarence, located on a spit in Port Clarence bay just a few miles from the center of the Bering Strait, is the former site of a LORAN-C station administered by the US Coast Guard. Fewer than thirty people now live in the village a few miles from Teller, which is connected by road to Nome and has a small airfield. With a depth of about thirty-five feet and an approach channel that has forty feet of clearance, little to no dredging would be required, which means less cost to develop the port facility. Three major decisions in 2015 affected the likelihood of actually developing an Arctic port in Western Alaska. By 2015 the USACE/ADOT&PF study settled on Nome despite the expense of dredging. That same

year Bering Straits Native Corporation announced they were partnering with Crowley Maritime Corporation on a deep-water port development plan for the Port Clarence site. Royal Dutch Shell announced in late September 2015 that it “ceased further exploration activity in offshore Alaska for the foreseeable future” citing “the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.” In the wake of that announcement the USACE/ADOT&PF study was put on hold for at least twelve months. Despite the seeming setbacks, funding mechanisms for Arctic port development took a giant leap forward as several Alaska Native corporations and private equity firms moved ahead with their plans to finance the needed infrastructure. The “Golden Days” scenario of the USACE/ADOT&PF study of “high demand and active collaboration leading to productive development with a healthy social, cultural, environmental, and economic future” could still materialize.

Investments Fund Dreams

In the summer of 2015 representatives of Arctic Slope Regional Corporation, NANA Regional Corporation, and Bering Straits Native Corporation announced the estab-

Alaska Business Monthly | February 2016 www.akbizmag.com

lishment of the Iñuit Arctic Business Alliance. Its purpose is to ensure that local people have a voice in economic development—infrastructure, transportation, energy—while sustaining cultural stewardship. Iñuit Arctic Business Alliance members own a total of 9.3 million acres of Arctic surface and subsurface real estate and represent more than 31,900 Alaska Native shareholders. “Global interests continue to focus on the Arctic, and we, Iñuit, have always worked together to ensure our collective destiny remains in the hands our people,” said Bering Straits Native Corporation President and CEO Gail Schubert in a press release. “The Iñuit Arctic Business Alliance is the conduit to ensure we lead this effort.” The inclusion of local residents in the planning of Arctic infrastructure and its resultant benefits have been a primary goal. Pt Capital, an Alaska based private equity firm run by former Lieutenant Governor Mead Treadwell, president, and former Bethel Mayor Hugh Short, chairman and CEO, recently announced they had raised $125 million in an Arctic investment fund. In a recent press release the firm stated, “The fund is focused exclusively on the emerging market of the Arctic. The fund intends to invest in and grow companies in Alaska, Canada, Greenland, and Iceland in a broad set of industries.

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A diversified group of global investors and Arctic indigenous-owned businesses have invested in the fund.” Treadwell said there are currently more than $100 million worth of Arctic infrastructure projects seeking funding. These include port facilities requiring massive construction like breakwaters and causeways, docks, wharves, railroads, roads, warehouses, and offices. Upgrades to airports and existing roads and other existing facilities are also part of the great transformation envisioned by proponents. “Pt Capital connects regional stakeholders, indigenous businesses, and global investors. Due to the team’s Arctic investment experience, we believe that we are positioned to provide attractive returns,” said Hugh Short. “We’re proud to have leveraged local and global investment to bring needed capital to this part of the world.” Short envisions a transformation of the Arctic: oil wells and mines, new roads and pipelines, with ports serving commercial vessels transiting the Arctic Ocean rather than using the Panama Canal, shortening by thousands of miles the distance between east and west. Guggenheim, a New York- and Chicagobased firm that manages more than $210 billion in stocks, bonds, real estate, and infrastructure such as pipelines and electrical equipment, sees value in Arctic proj-

ects such as new deep-water ports and toll roads whose fees will rise as trade grows, said Scott Minerd, a managing partner at Guggenheim. At the Alaskan Arctic Summit in Anchorage last summer Minerd said that his company is compiling an inventory of all planned and discussed infrastructure projects for potential investors “representing trillions of dollars in investment opportunities.” He said the firm plans to reveal the database of projects and their respective estimated costs in early 2016. Wild cards still loom on the horizon for the proposed network of Alaska Arctic ports. The warming climate presents opportunities for the growth of existing harbors and potential ports, it also means geographic change. The village of Kivalina and other Arctic and subarctic Alaska villages are being washed away by rising sea levels. Will investors and insurers be assured of a return on their investments in such an unstable climate? Will the state and the federal government be persuaded to step up to provide the necessary civil services? The new frontier of the Arctic promises great wealth along with great risk. R

Alaskan author J. Pennelope Goforth is home ported in Anchorage.

February 2016 | Alaska Business Monthly

WORKFORCE TRAINING

Apprenticeships: IBEW Local 1547

Courtesy of AJEATT

Fifth Year graduating Wireman class with instructors, training director, Wireman rep, and IBEW Business Manager.

Lighting up the state By Rindi White

Lineman training on poles at the Alaska Joint Electrical Apprenticeship Training Trust in Anchorage. Courtesy of AJEATT

rom the wires that snake through the walls of most buildings to the lines glistening with frost between power line poles, International Brotherhood of Electrical Workers (IBEW) members’ hands light up the state. With the largest union organization in Alaska at roughly 4,700 members, IBEW Local 1547 also boasts the largest apprenticeship program. One in five apprentices studying in the state is part of the IBEW Local 1547 apprenticeship program. “The apprenticeship program is an avenue for people in the state of Alaska to learn a trade they can use all their life and work in the industry,” says Dave Reaves, assistant business manager of the Anchorage office of IBEW Local 1547. In cooperation with the National Electrical Contractors Association, or NECA, IBEW Local 1547 runs a statewide apprenticeship program, with training taking place at the union’s training facilities either in Fairbanks or in Anchorage. The union also has offices in Juneau and Ketchikan and apprentices across the state, but ap-

Alaska Business Monthly | February 2016 www.akbizmag.com

prentices travel from the outlying communities to Anchorage or Fairbanks for the seven- or eight-week training sessions. “We took in about one hundred [apprentices] in the last twelve months,” says training director Jon Medaris. “Most of that was during the summer.” Medaris says apprentices are accepted throughout the year. When a union member retires or a new position opens up, an apprentice gets a spot and begins training and working toward his or her journeyman status. “We take them in as fast as we can put them to work,” he says. “If we have an opportunity to put someone in a job, we’ll take someone in.” It’s not an easy program to get into, he says. “We had over four hundred applicants this year. It’s a competitive process. There were a lot of good applicants that didn’t get into the program this year,” Medaris says. He says he encourages the applicants to keep trying. Once in the program, they generally have a thirty-year career ahead of them, he says, so a couple years spent waiting for an apprenticeship slot to open isn’t a big deal in the long run.

IBEW and NECA, Partnership for the Future The training program is jointly coordinated by IBEW Local 1547 and the Alaska Chapter of NECA. The Alaska Joint Electrical Apprenticeship and Training Trust, or AJEATT, administers the program. NECA Alaska chapter executive Larry Bell says NECA represents the companies that employ IBEW members. “NECA is an association of electrical contractors that are union signatory,” Bell says. “IBEW represents the workforce for a NECA contractor, it is where they go to work.” It takes more than $2 million a year to run the training program, which has several, mostly part-time, trainers and a few full-time staff, like Medaris. The program is paid for through employer/member contributions negotiated into the wage and benefit packages, typically at the rage of about 95 cents per hour. It’s a partnership that has been in place since 1941. Bell says it’s beneficial for contractors to participate in the program. “Our contractors have bought into the idea that combining classroom instruction on electrical theory, standards, and safe practices with actual on-the-job training is the best practice for workforce development,” Bell says. One Union, Three Main Branches

IBEW Local 1547 apprentices have an opportunity to narrow their focus on a chosen field right from the start. Apprentices train www.akbizmag.com

to become wiremen, linemen, or telecommunication workers. A handful also trains as tree trimmers who clear power line paths. Apprentices interview with one branch or another. AJEATT interview committees generally have four industry-specific members, half of them made up of employers and half union representatives. Two members from each side represent the three classifications of training. Each discipline has different training requirements. While a wiremen applicant might be selected as an apprentice and sent right into the field, linemen typically go through training first, to learn how to climb poles and work around the high-volt-

age wires they will be dealing with. “The job is so dangerous, we want to make sure they can safely be part of a crew… before they go out there on the job,” Medaris says. Apprentices in each classification spend about 8,000 hours working in the field. Another 1,000 to 1,400 hours, depending on the classification, is spent in the classroom. Linemen go through three eight-week training sessions, he says. Telecommunications workers go through two eight-week sessions and two six-week sessions. Wiremen go through five seven-week sessions. Medaris says it takes apprentices about five years to complete the program—some-

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February 2016 | Alaska Business Monthly

IBEW/NECA AJEATT Apprentices in the classroom. Photos courtesy of AJEATT

Alaska Business Monthly | February 2016 www.akbizmag.com

Building on a History of Electrical Workers Chanique Spires, twenty-nine, is in training to become a wireman. Spires says she’s been interested in electrical work most of her life and is excited to be training for a career in the field. Spires was raised in Alaska but left the state to attend training through the Astoria, Oregon, Job Corps program, where they had an electrical program opening. Following her Job Corps graduation, she went to work for Genie Industries, a manufacturing company that makes work lifts and aerial platforms for job sites. At Genie she wired electrical harnesses and other similar tasks. But she wanted to be more focused on electrical work, so she returned to Alaska and applied to the NECA/IBEW Local 1547 apprenticeship program. She has three uncles who have had careers with the IBEW Local 1547. Spires says she didn’t have to wait too long; she applied in January and interviewed in May for a spot in the apprenticeship program. She started working in August, she says, and will attend her first round of training in February. If she hadn’t gotten into the program, Spires says she may have returned to Washington to work for Genie International or may have waited out a spot in the program while conwww.akbizmag.com

Courtesy of AJEATT

times longer if work isn’t readily available. “Construction is seasonal, so it just depends on what kinds of jobs they get on and whether they get a lot of overtime on the job or not,” he says. While they’re working their way through the program, apprentices earn a fraction of what journeymen IBEW members make. Pay starts out at 50 percent of the wages of a journeyman in whichever classification the apprentice is training for. That’s generally between $20 and $25 per hour plus benefits, Medaris says. After roughly every 1,000 hours of completed work, the apprentice gets a 5 percent pay increase. “By the time they’re done, they’re getting 80 percent of what a journeyman gets paid,” Bell says. The commitment on the part of the employers, he says, is that over the course of the 30 percent increase in pay, the apprentice is going to be tasked with increasingly more complex work, eventually building toward journeyman-level tasks. When the apprentice passes required state licensing exams and meets the hour requirements to attain journeyman status, he or she is eligible for full journeyman wages. “Our contractors realize if they want to replace the guy or gal who’s been with them twenty years and who’s retiring, the best way to get an individual ready to replace them is going through this model,” Bell says.

A Telecommunications student working on a lab.

tinuing to work for Lynden Transport, where she worked when she returned to the state. But she’s very happy an apprenticeship slot opened so quickly and she’s enjoyed the work so far. “I’ve been able to see more of Alaska with this job than I would have normally seen,” Spires says. She recounts that she traveled to Kenai Peninsula for her first assignment, then to Palmer for a project replacing fire alarms at Palmer High School. “I have the potential to go to Bethel or Barrow. I think that’s amazing, that I have the opportunity to travel so much and see the state. And the security, knowing that I’m backed up by the IBEW, it makes it more than a job, it makes it a career,” Spires says. The apprenticeship is more intense than going through the electrical training program at Job Corps or simply working a job. Instead of clocking in and clocking out, apprentices log their hours carefully, outlining the various tasks they completed during each block of time. They’re responsible for turning them in and tracking their progress. “Your progression is up to you, totally. What you do is completely on you,” Spires says. “You feel more like you’re accomplishing something. It’s a different feeling—I’m building America in a way.”

Training the Future

Like other construction trade members, IBEW members would be a vital part of

any liquefied natural gas pipeline project, as well as the Donlin Gold mine and other projects that are on the horizon. Electrical workers will be a vital part of pipeline construction, Medaris says, because only a quarter of the pipeline project is directly related to pipeline construction. Most of the estimated construction costs are related to the gas treatment plant proposed for construction at Prudhoe Bay and for the liquefaction plant at Nikiski. “Any time you’re building a huge industrial project, electricians are going to be a big part of the project. They’re going to be one of the first ones on the job,” he says. Medaris and Reaves say they are ready to expand the apprenticeship program if called on to do so, but another solution seems more practical. “The only reasonable way to do it is to ramp the work up and fund these other projects that will kind of bridge the gap,” Medaris says. “We brought in one hundred apprentices last year, but we’d bring in two hundred if the work was there. We can’t bring them in if the work isn’t there, and you wouldn’t get anyone turned out unless the work was there—they’d just be sitting there and it would take them twice as long to complete their hours.” R Rindi White is a freelance journalist living in Palmer.

February 2016 | Alaska Business Monthly

TELECOM & TECHNOLOGY

Website Design, SEO, and Social Media ‘For many people it’s the new business card’

By Russ Slaten

eb design, search engine optimization (SEO), and social media are three separate ideas and tools, but they all function to bring customers to a business. Engaging customers on social media, making it easier for people to find the website, and providing customer needs through a functional website helps to grow visibility, image, and ultimately sales. “Many of your customers are going to visit your website before they meet you, and they will make assumptions about your organization before you even get a chance to pitch yourself, defend yourself, or communicate,” says Lincoln Garrick, president of Solstice Advertising. “In professional services, decisions about buying happen even before the customer makes a call, so you may not be getting calls based on your web presence. For many people it’s the new business card.” Website Design

Scott Gere, president and CEO of Gere Donovan Creative, has seen the landscape of web design evolve over the years but has kept clients like First National Bank Alaska and CIRI Tourism since 1997. Gere says a well-designed and functional website starts with reaching the right audience. Gere “In the mid ‘90s it was mostly IT people building websites,” Gere says. “I had an English degree and journalism minor, and I knew that you needed to figure out who you were trying to communicate with, so it was an opportunity for us to approach building websites a little bit differently while developing a long-term relationship with the client.” The long-term relationship continues from being able to integrate the website into the fabric of the business and its goals, Gere says. “It used to be that businesses would have a website with words and pictures and that was fine, but now your website has to sell items or provide account access, and it goes beyond just the website,” Gere says. “You have to decide how it integrates with the overall marketing plan and how it integrates with the online banking system, reservation system, or key element or function to the business.” The cost of a website varies deeply from 34

will increase a website’s exposure and bring more organic leads through search engines like Google, Bing, and Yahoo, says Matt Davidson, senior vice president of digital marketing at Strategies 360. “There’s a lot pieces working together. As you build credibility and work on your social media presence it helps elevate your rankings, and people will start to find your site more naturally,” Davidson says. “It’s the modern day word-of-mouth that businesses relied on so heavily twenty years ago. If I want to find a plumber or a landscaper I’m not going to ask my neighbor, I’m going to places like Yelp or Angie’s List.” Before finding ways to increase natural search results through SEO, Davidson says a business must look at the user experience on the website—including the design, layout, call to actions, and overall ensuring a good web presence. the depth and breadth in which “Everything comes down to how your a client needs to overhaul or cre- website is perceived, and it doesn’t make ate a new website, the amount of sense to expend resources on SEO if somecontinued participation from the one comes to your website and is instantly agency, and the customization or turned off or doesn’t find what they’re lookintricacies involved. To get the best ing for,” he says. results, a website should be used as After ensuring a good user experience, a marketing tool to realize a busi- an essential aspect of bettering a business’s goals. ness’s modern day SEO is through great “We’ve reached a point now content, Davidson says. Frequency, freshwith analytics where we can re- ness, consistency, and relevancy all play a ally understand what people are doing on- major role in the way a search engine views line, where they’re coming from, how long a website. Search engines crawl websites by they’re spending on the site, and what their picking up on content and the relevancy of click paths are,” Gere says. “So if you want to content to search—keywords, HTML tags, influence their behavior, you have to decide and even image alt tags make a huge differwhat you want their behavior to be in the first ence in how search engines may prioritize place—and it’s concerning how little time a website for specific searches. and thought is put into what’s really the most “Content is king. Being able to put robust important part of a website these days.” content that draws in users and provides value is beneficial in building SEO yourself as a thought leader in The world has become interconyour space, as well as helping nected through the Internet, and search engines to see you as a every aspect of a business’s web thought leader,” Davidson says. presence—including web deUtilizing HTML tags—such sign, content, social media presas title tags, header tags, meta ence, and outside links to the tags—to tell a search engine what business’s website—are working the webpage is about will increase together to feed SEO. Prioritizrelevancy as it crawls through the ing search engine optimization Davidson page. Google search results pro-

Alaska Business Monthly | February 2016 www.akbizmag.com

vide the user with information on a website’s title and description, and leveraging metadata to impact those results helps users see the need to visit the site, Davidson says. “If a search engine shows a website ten times for a keyword and no one clicks on it, it will be seen as not relevant by the search engines, but with good meta tags it can increase click-through rates,” Davidson says. In today’s online world, businesses must also consider the platform in which their websites are being viewed. Even if customers may not reach a business through a mobile device like a smartphone or tablet, it is still smart to optimize the website with a mobile version, Garrick says. “For certain topics mobile devices are the first screen. You have to look at who is accessing your site, why they are accessing it, and from where they are accessing it. That lets you know if you need to consider mobile first and then adapting it for the computer or vice versa,” Garrick says. “Google has recently changed the formula of its search algorithm to reward sites that are well designed for mobile devices.” Being at the top of the search rankings for a business’s most important terms by Garrick far can be your strongest channel of lead generation, Davidson says. “I have seen multiple companies focus specifically on SEO and who have built their entire businesses off of it,” Davidson says. “Many of them find about 60 to 70 percent of their leads through organic searches.”

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Social Media

Choosing the right social media platform depends on the target audience the business is trying to reach. The sheer size of Facebook makes it a great platform to consider to reach a broad audience. Twitter is a way to carry on a conversation in real time. Pinterest and Instagram are used as popular visual platforms. LinkedIn is utilized for B2B and business-centric endeavors. It is more important to devote adequate time and energy on a few social media platforms than to see inconsistent activity on many platforms. It is also important to keep a consistent voice as a business. “A consistent voice is essential for building a relationship with your audience,” says Hillary Walker, PR manager at Northwest Strategies. “Voice is what makes your content sound uniquely ‘you’ and sends messages about who you are and what you stand for, and developing that takes time. Do you want your social media to be playful, informawww.akbizmag.com

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February 2016 | Alaska Business Monthly

tive, hip, or creative? Companies can look at the way they talk to customers in person and think about their culture and values.” Social media is not only about engaging customers in each platform, but it’s also Walker used to drive traffic to the website, Walker says. Tracking traffic will inform the company of the best social media platforms to utilize, and creating unique web content like blog posts is great for boosting engagement on social media. “Social media should sound human,” Walker says. “Even for the most formal brands, it’s important to connect with your audience and remember that social media is a more personal, casual arena that is constantly evolving.” Be conscious of the platform’s social media norms to achieve the proper content and tone. Sharing images on Instagram may be different from the way images are shared on LinkedIn, Garrick says. “Social media is like a cocktail party. If you go to a dinner party and start yelling random things to people, they will eventually move away from you because that’s now how you act at a dinner party. Social media is a two-way conversation, not a broadcast,” Garrick says. “Listen first and then join in on the conversation, and when you have something relevant to say, use the format of that particular social media channel.” Tom Anderson, managing partner at Optima Public Relations, says Alaska businesses— like the rest of the nation and the world—will use a website and perhaps a certain level of social media to grow the company’s visibility, reputation, and sales. And although online messaging and branding is not new or novel, keeping it relevant to Alaska may be a challenge. “Updated, comprehensive, grammarrich content is still behind the times for many Alaskan businesses and organiza- Anderson tions,” Anderson says. “This doesn’t have to be reality. Outsourcing to agencies that offer creative design, video production, content management, and curation, and then analytics to determine metrics and success in digital messaging, is the next step to the modern business’s success.” R Russ Slaten is an Associate Editor at Alaska Business Monthly. 36

Alaska Business Monthly | February 2016 www.akbizmag.com

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ALASKA NATIVE CORPORATIONS

Design and Construction Firms Building for Alaska and the nation By Russ Slaten

esign and construction firms are the backbone to some of the state’s most important economic and cultural drivers—Alaska Native Corporations (ANCs). ANCs are modeled to provide enduring opportunities and economic benefits to their shareholders by engaging in the full spectrum of business sectors including real estate, tourism, oil and gas, IT, education, government contracting, transportation, and resource development, along with architecture, engineering, and construction. A diversified business portfolio increases an ANC’s chance to continue in perpetuity for its shareholders, but it also brings opportunities for its subsidiary companies to work together.

UIC Design Plan Build

Barrow-based Ukpeaġvik Iñupiat Corporation (UIC) shines a bright example of subsidiaries working together through its UIC Design Plan Build structure. UIC Design Plan Build formed to offer concept to commissioning turnkey solutions for projects in nearly any geographic location. “UIC Design Plan Build is a lot more creative,” says Robert Luis, UIC Design Plan Build division general manager. “We have in-house professionals working together as opposed to separate companies with separate motivations. Our motivation is just to get the project completed. It simplifies it for the customer, releases them from liability, and speeds up the process—and through speeding it up, it may save the client some money as well.” Design Plan Build is formed around five 38

UIC subsidiaries. Anchorage-based UMIAQ is a design firm that provides architecture, engineering, surveying, regulatory planning, environmental consulting, and permitting services, among others. Barrow-based UIC Construction LLC provides general contracting, concept design and es-

timation, pre-construction and planning, and best-value analysis services with an emphasis on Arctic construction. Tempe, Arizona-based Kautaq Construction Services LLC is an 8(a) certified general contractor with commercial and industrial design-build and design bid build capa-

Alaska Business Monthly | February 2016 www.akbizmag.com

UIC Tukkamavik Suites, a new lodging facility in Barrow under construction. Courtesy of UIC Creative Media Department

bilities. Anchorage-based Rockford Corporation specializes in pipe work, utilities, fueling systems, water and wastewater facilities, and site preparation and civil work. “UIC Design Plan Build offers a complete design and construction package,” Luis says. “We can cover all aspects of the www.akbizmag.com

project. We can permit it, purchase land if necessary, design and engineer it, and handle the pre-construction, construction management, the actual construction, and commissioning, all the way through, so the client only needs to talk to one person and we can handle everything—or we can do

components of that.” UIC Design Plan Build has been successful with this structure through the design and construction of its UIC Tukkumavik Suites, a name that translates to “a place to rest” in the Inupiaq language, in Barrow. The 11,834-square-foot, two-story

February 2016 | Alaska Business Monthly

UIC Construction lays the first set of modules for UIC Tukkamavik Suites in Barrow.

facility is owned by parent company UIC, with UIC Construction as general contractor and UMIAQ providing the civil work. Construction of the $6.3 million project began in March 2015 and was completed two months ago in December 2015, with twenty-two workers at peak construction. “The board [of UIC] saw a need in Barrow to increase housing for transient workers coming and going and they came up with the idea for something similar to a hotel but different,” says Cliff Johnson, senior business development officer at UIC Design Plan Build. “[The UIC board] challenged Design Plan Build to put this together, and we came up with the [Tukkumavik facility], and we’re on time and under budget.” UIC Tukkumavik Suites provides fifteen furnished units with fully-equipped kitchens, living areas, bedrooms, and bathrooms to offer all the comforts of home in a centralized location near the Samuel Sim40

monds Memorial Hospital and the US Post Office. UIC Design Plan Build’s working structure resulted with the Tukkumavik Suites project bringing a much stronger sense of continuity and team approach, says Justin Jones, senior project manager at UIC Construction. “In the traditional construction approach it’s easier to fall into the pitfalls of differing opinions and disagreements, which costs the contractor, the owner, and everyone else time and money,” Jones says. “When you’re all under the same roof and you’re all on the same team, your approach to solving problems can more easily lend itself to saving time and money in the long run.”

Brice Companies

Calista Corporation acquired Brice Companies in 2010. Brice Companies is a group of companies formed in 1961 that pro-

vides civil construction, marine services, equipment rentals, and quarry materials for mostly Alaskan clients. Brice, Inc. specializes in complex civil projects in remote Alaska with 90 percent of its work being turnkey, bonded contracts. Brice Marine was established in 1973 to complement the logistical challenges that Brice, Inc. faced in operating in remote sites. It’s fleet now includes articulated tug and barges that can access communities on navigable waters across the state. Brice Equipment was formed in 2007 and hosts a fleet of more than three hundred pieces of Arctic grade construction support equipment used in the oil and gas and construction industries. “The Marine side of Brice gets us—and our clients—where we need to go, and a lot of the time we have the same clients among all three companies,” says Marcus Trivette, construction manager at Brice, Inc. “Brice Marine is nice because it helps with the lo-

Alaska Business Monthly | February 2016 www.akbizmag.com

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gistics of mobilizing Brice, Inc. equipment to do a project; if that project has other components there might be Brice Equipment rentals on that boat at the same time. Much of the equipment Brice Equipment has to offer is used in Brice, Inc. projects, so it gives us the scalability to be able to ramp up quickly if we’re working in an area where our equipment company has assets.” Brice, Inc. was contracted by the Alaska Department of Transportation and Public Facilities for a $26 million project to reconstruct a thirteen mile stretch of the Dalton Highway after the area saw major flooding from the Sag River last May, cutting off the main supply route for Prudhoe Bay, Trivette says. Brice, Inc. continues work to raise the grade, replace all culverts, and resurface the roads from milepost 401 to 414, expected to be complete in August. A Brice Equipment shop located at the end of the Dalton Highway allowed Brice, Inc. to work www.akbizmag.com

February 2016 | Alaska Business Monthly

Courtesy of UIC UIC Construction

UIC Construction flying module into place for UIC Tukkamavik Suites in Barrow.

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out of the shop and rent light-duty pickups, light towers, heaters, and generators from Brice Equipment to service the project. “All of the Brice Companies were well established when Calista bought us in 2010, but they were established specifically for vertical integration,” say Sam Brice, president of Brice Companies. “Our core business was always construction, and construction is very seasonal and from year to year it can vary depending on whether you can attain contracts. So the other businesses were formed to support that and diversify our business across a few bases, so if one was down maybe there’s a few opportunities in the other.”

Across the State and Nation

Many successful ANCs have a design or construction element, or both, to their list of diversified services. Projects range from commercial to government contracts inside or outside Alaska. Alutiiq LLC is the holding company that handles the various business lines of Kodiak-based Afognak Native Corporation. Alutiiq Diversified Services LLC, a wholly owned subsidiary of Alutiiq LLC and Afognak Native Corporation, teamed up with KPB Architects to complete the design-build of the Navy SEALs Cold

Weather Training Facility on Kodiak Island last April, says Jake Garner, director of construction operations at Alutiiq LLC. The multi-story, thirty-eight-thousandsquare-foot facility contains climbing and repelling walls, physical training areas, classrooms, a full kitchen, and is “one of the premier Navy SEALs training facilities in the United States,” Garner says. Bristol Bay Native Corporation aligns its design and construction firms into the Bristol Alliance of Companies with seven operating subsidiaries under the umbrella. Arctic Slope Regional Corporation collects its major general contractors under the ASRC Construction Holding Company. Doyon, Limited organized a Construction Group within its Doyon Government Group division consisting of four subsidiaries. Bering Straits Development Company, the construction division of Nomebased Bering Straits Native Corporation, is a general contractor. NANA Regional Corporation, Inc. operates engineering and construction firms—along with the rest of its family of companies—under NANA Development Corporation. One of its design subsidiaries is WHPacific with offices in Anchorage, Fairbanks and Barrow as well as throughout the Western United States. WHPacific

is a consulting engineering company offering transportation, environmental, facilities engineering, planning, survey, and mapping services with a variety of projects that aim to improve the quality of life in rural Alaska. As a NANA company, WHPacific prioritizes working with sister NANA companies and other ANCs whenever possible. “There’s a synergy amongst NANA companies in that where one company has a need, if another NANA company can provide for that need, we will try to work together—whether it’s for engineering, design-build, or EPC [engineering, procurement, construction],” says Harold Hollis, vice president and Alaska Region manager of WHPacific. “Alaska Native Corporations are a pretty unique aspect of the Alaska business environment and a force in the state,” says Jay Hermanson, WHPacific’s business development manager. “NANA in particular has some resources that we can leverage as a business and we do work with them and other ANCs. So where it makes sense you collaborate, and a lot of times it makes sense.” R Russ Slaten is an Associate Editor at Alaska Business Monthly.

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February 2016 | Alaska Business Monthly

OIL & GAS

Alaska LNG Working to Answer Agencies’ Questions Part of the $240 million 2016 work plan By Larry Persily This update, provided by the Kenai Peninsula Borough mayor’s office, is part of an ongoing effort to help keep the public informed about the Alaska LNG project.

laska LNG project teams are working to answer questions and fulfill requests for more detailed information from over a dozen federal and state agencies that submitted several hundred pages of comments for the teams to consider in their next round of draft “resource reports.” The reports will be used to prepare the project’s environmental impact statement. The project’s 2016 work plan includes gathering the necessary data and answering questions in preparation for submitting final environmental reports with the full application to the Federal Energy Regulatory Commission (FERC) in the fourth quarter of 2016. Preparing the reports for regulators— covering air quality, water, soils, safety, construction plans, community impacts, and multiple other issues—is part of the $230 million 2016 work plan approved December 3, 2015, by Alaska LNG partners, which will include:  Summer field work will continue along the 804-mile pipeline route from Prudhoe Bay to the proposed liquefaction plant at Nikiski on Cook Inlet. This would be the fourth summer in the field. Past work has included stream and wetlands surveys; drilling boreholes to learn about soils, ground stability and subsurface water; and looking for fault lines along the pipeline route. Alaska LNG is still determining where in the field its crews will be in 2016.  Onshore geotechnical and geophysical work in the vicinity of the LNG plant site may include more boreholes, a groundwater hydrology study, and a shallow seismic study — focused on learning more about ground characteristics to select the best layout for plant equipment and construction plans 44

with the least environmental impact.  Offshore work, similar to 2015 efforts, will provide more details about Cook Inlet current and sediment characteristics, to assist with marine terminal design.  Developing the project’s contracting strategy for front-end engineering and design work (FEED), with the FEED decision currently anticipated in the second quarter of 2017. FEED is a billiondollar-plus commitment for final design, blueprints, contracting documents, and permitting, providing sponsors with all the information they would need to make an investment decision on the $45 billion to $65 billion project.  Evaluating a 48-inch-diameter gas pipeline, as requested by Alaska’s governor to accommodate possible future gas production, as an alternative to the 42-inch line the project has studied and engineered during the past couple of years.  Continued community engagement to share project information and answer questions from the public.  Continuing with land acquisition to complete the LNG plant site in Nikiski. Alaska LNG has purchased or holds options on about 600 of the 800 to 900 acres needed for the plant and safety zone. In addition to environmental studies, Alaska LNG project teams continue to look for opportunities to reduce costs in design and construction planning. Particularly in view of low global oil and gas prices, cost reduction is an important part of the work, Fritz Krusen, interim president of the Alaska Gasline Development Corporation, reported to his board December 18, 2015. The corporation represents the state’s interests as a 25 percent owner of Alaska LNG. Separate from its engineering work and completing reports for FERC, Alaska LNG in 2016 will continue evaluating options for relocating a portion of the Kenai Spur

Highway in the vicinity of the plant site and marine terminal to address safety and traffic concerns. Alaska LNG anticipates community meetings in Nikiski in the spring/ summer of 2016 to discuss possible next steps and route options.

Large Volume of Comments Expected A large volume and wide range of regulatory agency questions are common for big projects, so it’s not surprising that a mega-project such as Alaska LNG would draw even more requests for information. The project’s first draft reports to FERC in February 2015 came in at more than 3,600 pages, with the second draft—expected in the first and second quarters of 2016—likely to be significantly thicker, followed by even more pages in the final reports toward the end of the year. Some of the agency comments were sitespecific suggestions, such as the recommendation from FERC staff after a summer driving tour of the pipeline route: “Alaska LNG should provide a visual impact mitigation plan (e.g., maintain a vegetative buffer strip between the Parks Highway and the pipeline) in the areas frequented by tourists and recreational users of the Denali State Park.” Some comments were more regional in nature, with FERC staff instructing that the resource reports address problems from increased recreational and hunting access to the North Slope due to “construction and maintenance of access drives from the Dalton Highway and material/equipment laydown areas near the highway.” Other comments from FERC applied to the entire length of the project, such as, “Air emissions must be included in Resource Report 9 associated with the large volume of [highway] traffic that would be generated by the project.” Those second draft reports, thirteen in all, are expected in the first and second quarters of 2016, according to a November meeting between Alaska LNG and the

Alaska Business Monthly | February 2016 www.akbizmag.com

Federal Energy Regulatory Commission, which will prepare the environmental impact statement that will be used by all federal agencies. The project is a business venture between North Slope producers ExxonMobil, BP, and ConocoPhillips, and the state of Alaska, to move North Slope gas to global markets, loading fifteen to twenty LNG carriers a month at the marine terminal proposed at Nikiski. Federal and state agency comments in 2015 covered water and gravel sources for construction and operations; dredging to deepen shipping channels to bring in equipment barges; community and tourism impacts; additional traffic on roads; detailed river crossing plans; wetlands impacts; greenhouse gas emissions; even questions about how many tugs would be used for LNG carrier mooring and departures. Agencies will file another round of comments after the second round of draft reports. If Alaska LNG stays on schedule, it intends to submit its final environmental and construction planning reports with FERC in the fourth quarter of 2016, along with its application to build and operate the pipeline, North Slope gas treatment plant, and LNG facility. A decision on whether to proceed to construction could come after FERC issues its authorization, which is not

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expected before late 2018. Over the course of the 2015 summer and fall, FERC, other federal regulatory agencies, and state agencies asked Alaska LNG to provide more details on a number of subjects—including the following small sampling from hundreds of pages of comments. The project already has answered many of the questions, with its 2016 work to fill in the remaining gaps. Agencies have asked for:  A list of roads that would be used during construction, including any needed improvements, and an estimate of the number of truck trips required on each highway during construction for delivery of supplies and materials.  A traffic control plan in the area of the LNG plant in Nikiski, with its limited number of access roads.  Whether existing bridges and overpasses would be adequate to accommodate the transportation of materials to work sites.  Information on how the project might affect “cultural cohesion and dynamics” in small communities if villagers leave to work on the project instead of participating in subsistence activities.

 Baseline information on air quality within thirty miles of any operating facilities that would be built for the project.  Specific information on which ports would be used for construction deliveries, including potential impacts on other users of the ports and whether any improvements would be required at the ports.  How construction and operations could affect subsistence resources and activities for any communities within thirty miles of project facilities.  A discussion of the skills available among unemployed workers in each borough affected by the project.  An estimate of what portion of the construction workforce would be current local residents.  Expected impacts on housing prices and availability during construction.  Descriptions of any major tourist attractions the project could potentially impact.  Steps that would be taken to limit the spread of invasive plants during earthmoving along the pipeline corridor.  A list of aquifers the pipeline and other project facilities would cross, and a list of private and public water wells within 150 feet of the project.

February 2016 | Alaska Business Monthly

Public Submits Wide-Ranging Comments to FERC By Larry Persily

bout 60 individuals; citizen councils; nonprofits; Alaska Native tribal organizations; and federal, state, and municipal offices provided federal regulators with their lists of concerns they want to see covered in the environmental impact statement (EIS) for the proposed Alaska LNG project. Public comment on issues to include in the EIS closed December 4, 2015. Most of the comments were suggestions on how to make the project better for the affected communities and the environment, such as protecting wildlife habitat, avoiding damage to wetlands and scenic views, providing affordable energy for Alaskans, and minimizing noise and lighting. Only a few comments—from outside Alaska—were opposed to any construction of a North Slope natural gas project. Alaska comments came from property owners near the proposed liquefaction plant in Nikiski who are concerned about highway traffic, water wells, and home values; and from Cook Inlet commercial, sport, and subsistence fishing interests looking to ensure that construction and operations do not conflict with their access to salmon. The Fairbanks North Star Borough wants the Federal Energy Regulatory Commission to look at why the pipeline isn’t routed closer to serve the community as it runs south from the North Slope; and the City of Valdez said it believes its location on Prince William Sound is a better spot for the LNG plant than Nikiski in Cook Inlet. Residents around Healy, more than halfway from the North Slope start of the pipeline to the LNG plant, are concerned the project could hurt tourism in the area. Federal Energy Regulatory Commission (FERC) staff, along with Alaska LNG project teams, will review the comments  More details on construction plans to avoid risk to the trans-Alaska oil pipeline in areas where the gas pipeline and oil pipeline would be close together.  The expected number and horsepower of tugs that would be used in LNG carrier mooring and departure at the Nikiski marine terminal.

Scoping Comments

In addition to responding to regulatory agencies, the next round of Alaska LNG’s resource reports will address concerns raised during the “scoping” period that closed De46

to ensure they are addressed in the project’s environmental reports. The reports will accompany the Alaska LNG application for FERC approval to build and operate the North Slope gas treatment plant, 804-mile gas pipeline, and liquefaction plant and marine terminal at tidewater.

Next Round of Reports in 2016

As part of its application, Alaska LNG is required to submit thirteen “resource reports” detailing how the project will affect the environment and communities and what the developer proposes to reduce those impacts. Alaska LNG reported to FERC in a November 12, 2015, phone meeting that it was planning to submit its next round of draft reports in the first and second quarters of 2016. The first draft reports were submitted in February 2015. The project sponsors have targeted the fourth quarter of 2016 for their final reports and full application to FERC, triggering the agency’s work to start drafting the EIS, which will be followed by more public and regulatory agency comments before FERC issues its decision on the project. The project developers—a partnership between ExxonMobil, BP, ConocoPhillips, and the state of Alaska—could have their major permits in hand and be ready to make a final investment decision by late 2018 or early 2019 on the $45 billion to $65 billion project to ship gas to overseas buyers. An investment decision will also depend on the partners putting together a project that can deliver LNG at a competitive cost in a tough marketplace, and on global LNG trade improving from its current state of oversupply and low prices. The partners on December 3, 2015, approved a $230 million work plan for 2016, including additional field work, analysis, and cember 4, 2015, in which FERC asked the public what issues they want covered and questions they want answered in the project’s environmental impact statement. In a December 18, 2015, filing with FERC, Alaska LNG responded to the scoping comments, noting that further details would be included in the resource reports in early 2016:  Alaska LNG answered that it selected Nikiski as the preferred site for the liquefaction plant and marine terminal because: “The Nikiski site was found to be

preliminary engineering toward completing the pipeline routing and project design— along with the resource reports for FERC. In addition to accepting written comments, FERC held a dozen public meetings around Alaska in October and November, providing people an opportunity to come to the microphone and talk about issues they want covered in the EIS. The largest turnout was in Nikiski, where the LNG plant and marine terminal would be built near a Tesoro oil refinery, the much smaller ConocoPhillips LNG plant, and Agrium’s nitrogen fertilizer plant, which has been closed since 2008. The almost sixty written comments submitted to FERC’s docket are low compared to such “scoping” periods for other LNG projects covered by a federal EIS. The Jordan Cove LNG project in Coos Bay, Oregon, attracted three times as many written comments, and the Oregon LNG project in Warrenton, Oregon, at the entrance to the Columbia River, drew five times as many comments (excluding form letters). Both projects are still waiting on final regulatory approvals and investment decisions by the developers. Comments submitted to FERC for the Alaska project included:  The Nikiski Community Council listed increased traffic, risks to water well quality and quantity in the area of the LNG plant site, continued access to beaches in the area of the LNG plant, and additional demands on emergency services as among the topics that should be covered in the EIS.  Concerned Citizens of Nikiski, in a letter signed by twenty-three residents, told FERC it is concerned about additional school enrollment, water wells in the area, and beach access for recreation and favorable in terms of level and accessible terrain, air permit considerations, access to existing infrastructure, and fewer potential conflicts with shipping than a Valdez area site.” In addition, “pipeline constructability through the Thompson Pass and Keystone Canyon areas was also identified as a concern” with the pipeline route to Valdez.  The project currently is not proposing to route the pipeline through Denali National Park, though some comments suggested that would be a better choice to avoid conflicts with tourist and local activities

Alaska Business Monthly | February 2016 www.akbizmag.com

fishing. Individual Nikiski residents also cited concerns over lower property values and adequate safety zones around the plant as topics to fully address in the EIS.  The Kenai Peninsula Borough in its comments raised many of the same issues as Nikiski residents, while acknowledging: “The borough realizes that many of the questions it asks will be addressed in the next round of draft resource reports expected from the Alaska LNG project in the first and second quarters of 2016.”  The United Cook Inlet Drift Association (representing 570 salmon drift gillnet holders in Cook Inlet) wants to see a comprehensive plan for safety and cooperation between drift gillnetters fishing for salmon in Cook Inlet and the fifteen to twenty LNG carriers a month expected at the Nikiski terminal. The group also mentioned that an exception to the rule for distance between fishing boats and carriers may be appropriate in the waters during fishing season openings.  The Kenai River Special Management Area Advisory Board is concerned about increased pressure from construction workers and operations personnel on Kenai River fishing.  The North Slope Borough is concerned with the project’s impacts on subsistence harvests and the health of its residents, in addition to the risk that construction work will accelerate permafrost thawing.  The Tanana Chiefs Conference, based in Fairbanks, also raised issues of health impacts on local residents, in addition to concerns over trespass and user conflicts along the pipeline corridor through the Minto Flats.  The City of Valdez, about 170 air miles almost due east of Nikiski, said it is a better site for the liquefaction plant and marine terminal. Cook Inlet has more winter ice than Prince William Sound, presenting a problem for LNG carriers, the city said in its submission to FERC. Routing the gas in the built-up area just outside the park boundary. Alaska LNG said the permitting requirements of the Alaska National Interest Lands Conservation Act are not practical for running the pipeline through the park.  As to why the pipeline route does not veer east, bringing it closer to Fairbanks, where residents want access to the gas, the project told FERC that such a routing would run through additional wetlands and “an increased number of cultural resources,” and would add costs.  The project said it has not proposed www.akbizmag.com

line to Valdez instead of Nikiski would make more use of existing trans-Alaska oil pipeline right of way from the North Slope to a tanker port at Valdez. And the city said federal reviews for proposed LNG projects in the 1980s and 1990s determined Valdez was a better option.  The state Division of Forestry stewardship office in Kenai provided detailed comments on how best to use trees, stumps, slash and waste wood, and other organic material that would be cleared from the LNG plant site and pipeline right of way.  The Fairbanks North Star Borough, citing high energy bills in the community, said the additional cost of building a spur pipeline to bring gas into Fairbanks from the main pipeline, which would run west of the borough, “is troubling” and “should be an integral aspect of any environmental impact assessment of the project.”  The Environmental Protection Agency submitted the longest comment of any regulatory agency, including that the EIS should “disclose both direct and indirect greenhouse gas emissions” from the project; specify the local and overseas markets for Alaska gas so as to substantiate the need for the project; consider a much smaller project as an alternative; and consider Valdez as an alternative site to Nikiski for the LNG plant.  The National Park Service wants the EIS to pay particularly close attention to noise and lighting from compressor stations near park land, and potential impacts to air quality. In addition, the Park Service said, the pipeline route just east of Denali Park could “place a substantial scar and facilities on the landscape which would be visible from the heavily visited front country of Denali National Park,” and should be addressed in the EIS.  Several Denali Park and Healy area residents, including the Denali Citizens Council, told FERC the pipeline could hurt tourism in the region and damage the area’s building an LNG plant on the North Slope to avoid the 804-mile pipeline to Cook Inlet because: “Such an alternative is not operationally or economically viable,” citing extreme weather and ice conditions on the North Slope, shallow nearshore waters, the need for costly and unique LNG carriers to operate year-round, and the significant higher costs of building and operating a plant on the North Slope than at the southern end of the state. In addition, a North Slope LNG plant would eliminate the pipeline that could serve Alaska communities along its route.

recreational and wildlife habitat resources. “It is unlikely that there will be any local benefit, in terms of cheap natural gas or even lasting employment, to residents of the Denali Borough, but the impacts on our communities would be substantial and largely undesired,” a resident wrote. The EIS should consider other pipeline routes, several residents said. “At this time,” the Denali Citizens Council wrote, it cannot support the pipeline route “given the likelihood of severe impacts to the local quality of life, the quality of the seasonal tourism experience, the quality of regional wildlife habitat.” The council said rerouting the pipeline toward an LNG plant at Valdez, along the trans-Alaska oil pipeline right of way, would be a better answer.  The Chickaloon Village Traditional Council, representing the community of about 270 people roughly 60 miles east of the gas pipeline route and 60 miles south of Denali Park, said the EIS should look at the option of building a gas-fired power plant on the North Slope with high-voltage transmission lines to distribute electricity statewide.  The Center for Biological Diversity, based in Arizona and with offices in Alaska and nine other states, told FERC the Alaska LNG project would increase greenhouse gas emissions and global warming; diminish air and water quality; harm wildlife habitat; and, along with multiple LNG export plants in the Lower 48 states, promote increased US natural gas production and hydraulic fracturing of gas wells. Environmental organizations have repeatedly asked FERC and the Department of Energy to consider the entire production and consumption chain of natural gas—from the producing well to the consuming power plant or utility customer—in measuring an LNG project’s environmental impact. To date, the federal agencies have rejected those arguments. R  As to take-off points to provide in-state access to gas along the pipeline, including Fairbanks, Alaska LNG responded that the Alaska Gasline Development Corporation “is working to identify the location of technically and commercially feasible interconnection/access points.” State law directs the agency to work toward bringing natural gas to Alaskans. R Larry Persily is the Oil and Gas Special Assistant to the Kenai Peninsula Borough Mayor’s Office.

February 2016 | Alaska Business Monthly

OIL & GAS

Engineering New Oilfields Arctic Considerations By Russ Slaten

A well and the drilling rig on ConocoPhillips Alaskaâ&#x20AC;&#x2122;s new Drill Site 2S pad in the southwestern section of the Kuparuk field. Photo courtesy of ConocoPhillips Alaska

Alaska Business Monthly | February 2016 www.akbizmag.com

Photo courtesy of ConocoPhillips Alaska

The multi-phase flow meter is new technology installed for the Drill Site 2S project to measure oil production from the pad.

ilfield engineers work and design projects in some of the harshest climates, from the deserts of Africa and the Middle East to the stifling jungles of Brazil and in the bitter cold of the North Slope. ConocoPhillips Alaska, Inc. operates the Kuparuk oilfield on the North Slope, the second largest oilfield in North America after Prudhoe Bay. Although production began at Kuparuk in 1981, ConocoPhillips is still establishing new drill sites on the expansive Kuparuk field.

ConocoPhillips Drill Site 2S

Drill Site 2S began when ConocoPhillips drilled an appraisal well near the southwest section of the Kuparuk field in winter 2012. The results led to the development of Drill Site 2S, an undeveloped section of the Kuparuk formation. The gravel pad was laid in first quarter 2014, with facilities construction in 2015, followed by drilling and first oil in October 2015. The $475 million project saw 250 workers at peak construction and is estimated to produce eight thousand barrels per day at peak production. To understand the process of engineering this field, first look at the teams that www.akbizmag.com

make up a project of this magnitude. ConocoPhillips works with four major teams involving engineers: subsurface group, drilling group, facilities group, and finally the operations group, says Scott Pessetto, capital projects manager at ConocoPhillips Alaska. The subsurface group is made up of petrophysicists, geologists, and reservoir engineers, who identify where the oil and gas wealth may be under the surface. The drilling group appraises the size of the reservoir, and then depending on the results, the facilities group helps to design and build infrastructure like pipelines, processing facilities, pads, airports, and roadways. The operations group takes over after construction to operate and maintain the facilities for the life of the field, Pessetto says. “On a new project like this engineering has to work closely with operations and subsurface,” says Curtis Johnson, senior project lead and engineer at ConocoPhillips Alaska for the Drill Site 2S development. “We [the facilities team] build it, then we hand it over to operations, and they actually have to work the field for the next twenty to forty years, so they have a lot of input in

engineering early on.” ConocoPhillips has been producing oil on the Kuparuk field for decades, but upon appraisal of Drill Site 2S the company realized the lateral extension of the Kuparuk formation, says Javier Pardo, Drill Site 2S Integration Manager at ConocoPhillips Alaska. Due to the distance from existing facilities, Drill Site 2S is a greenfield development, with a new gravel road and pad and new power lines, pipelines, and other surface facilities. The brownfield element to engineering is the tie-in through the existing Kuparuk facilities. As a new development, Drill Site 2S was one of ConocoPhillips’ first North Slope drill sites using all horizontal drilling. “Initially the development plan of Drill Site 2S was with vertical wells, and eventually as technology improved we started drilling horizontally,” Pardo says. “Vertical drilling used to reach three square miles of the subsurface reservoir, but horizontal drilling changes the game significantly. Drill sites began as sixty-five acre spaces on the North Slope; this drill site is nine acres—reducing the ecological footprint.”

February 2016 | Alaska Business Monthly

ConocoPhillips Alaskaâ&#x20AC;&#x2122;s Drill Site 2S facility pad on in the southwestern section of the Kuparuk field. Photo courtesy of ConocoPhillips Alaska.

Alaska Business Monthly | February 2016 www.akbizmag.com

Along with subsurface innovations, the ConocoPhillips facilities group utilized new technologies to turn a $500 million project into a $475 million project. One breakthrough in increasing efficiency was through the use of inline metering. Instead of using a separator tank to measure the amount of produced oil, an inline metering system sits on top of the pipes and measures the amount of oil as it flows through, eliminating the need for emulsion breaker, the chemical that helps in the separation process. “Through this improvement in engineering we were able to save $10 million on the project,” Johnson says. “It was a first for the North Slope, and we’re going through tests right now to help it be even more efficient in the future.”

costs, minimize schedule durations, and improve efficiency.”

Arctic Conditions

The North Slope, located in the Arctic Circle, sees a list of design considerations when engineering oilfield facilities. Seismic considerations must be made to engineer infrastructure able to withstand the seismic forces of earthquakes, adding complexity to the project. Since oil and gas are hydrocarbons which are explosive by nature, engineers must look at process safety. “We need to keep the hydrocarbons under control, so the design and engineering

need to take that into consideration as we move the crude oil from the well tree down to the loading arm,” says Mike Haynes, VP of Alaska Professional Services at CH2M. Infrastructure on the North Slope is made of heavy industrial materials to contain the hydrocarbons in a harsh cold environment, he says. “Designing for minus fifty-five degree conditions, materials like steel act differently and certain materials don’t hold up so well, so we need to make sure the material selection could withstand those cold temperatures for a long period of time—decades of service,” Haynes says.

Brooks Range Petroleum

Anchorage-based Brooks Range Petroleum began their development drilling program in 2015 at the Mustang Field in the Southern Miluveach Unit, an area adjacent to the west and southwest boundary of the Kuparuk River Unit. Current plans are to build and install a standalone crude production facility along with necessary support infrastructure. Additionally, field development will necessitate the drilling of thirteen horizontal producers and up to twenty-one injection wells. Although the development, both wells and facility, has slowed dramatically due to financial difficulties stemming from the dramatic fall in oil prices, in the first quarter of 2016 Brooks Range Petroleum anticipates resuming activities to support a first oil by fall 2017, says Mark Wiggin, engineering and development manager at Brooks Range Petroleum. Conceptual engineering for the Mustang development was initiated in 2012, with full field reservoir modeling and well planning and field development optimization occurring in 2013 and 2014. Detailed engineering and design started in January 2015 with the engineering and design workforce in Alaska peaking at approximately 120 technical staff working in a number of Alaska firms. These staff represented expertise in all disciplines including “electrical, mechanical, civil/structural, instrumentation and controls, heating and ventilation, and architecture,” Wiggin says. As an independent oil and gas company, Brooks Range is working to implement a more economical field development strategy for North Slope developments. Wiggin commented that Brooks Range and its contracted engineering staff will “utilize standard industry specifications for parts and equipment—where possible—to lower www.akbizmag.com

February 2016 | Alaska Business Monthly

The remote nature of the North Slope requires engineers to make schedule considerations and skillfully incorporate truckable modules into design taking into account road limitations and the limitations of the equipment moving materials. “In some cases job sites are only accessible in the winter via ice roads, and you take that into consideration during the design and scheduling of the project to make sure lead times are set for materials to get to the fabricator and then ready to get on the road and out to the site to be installed,” Haynes says.

Technology in Engineering

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Oilfield engineering is one of the most precise fields of design, and advances in technology have helped create cost-effective and more accurate means of engineering a project. Engineers at AECOM, a fully integrated professional services firm, uses 3D laser scanning, ground penetrating radar, and 3D modeling to assist in the design and reworking of many of its projects. The 3D laser surveys are integrated with the 3D models of the facility in a project and allow engineers to review plans with clients, which makes it easier to work around the remoteness of the location, the use of modules in construction, and compact space of the project. “We conduct our reviews with the client and teams of engineers from seven different offices, and we all work in one 3D model to make changes,” says Jackie Schirmer, operations director at AECOM’s Anchorage office. “We check to see if we have the right clearances, reroute piping, or remove some equipment to have better maintenance access—sometimes you don’t think about that. It’s necessary for the engineering work that we do, so it minimizes the impact on construction by producing a better design upfront.” After designing a project in the 3D model space, the model is used to order the materials into work packages for the project, Schirmer says. “If a totaled installed cost of a project is $100 million, typically only about 10 percent of that is engineering completed upfront to save on the final 90 percent which is actual construction,” says Joe Hegna, vice president of Alaska Operations at AECOM. “You can make your engineering processes better and make the 10 percent more efficient, but the true purpose of having front-end engineering is to leverage it and save construction costs.” R Russ Slaten is an Associate Editor at Alaska Business Monthly.

Alaska Business Monthly | February 2016 www.akbizmag.com

Photo courtesy of ConocoPhillips Alaska.

The crew at ConocoPhillips Alaskaâ&#x20AC;&#x2122;s Drill Site 2S at first oil on October 18, 2015.

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February 2016 | Alaska Business Monthly

MINING

Engineering New Mines in Alaska Photo courtesy of Ucore Rare Metals

Start to finish, good engineering makes new mines profitable and environmentally conscious By Tasha Anderson

ngineering is a simple word that encompasses a world of complexities. Engineering a new mine doesn’t simply mean determining the necessary support structures for an underground mine or determining blasting best practices for an open pit mine. In fact, thinking that engineering a new mine is all about the mine is a misunderstanding. Especially in Alaska, where rich deposits are discovered in remote areas, engineering a mine involves looking at how to power mining operations; how to transport personnel and equipment; how to transport commodities; and engineering tailings and milling, and in many cases, housing facilities.

Social License to Operate

“The big challenge for all [mines] is what I call the social license to operate,” says Rajive Ganguli, Director of the Mineral Industry Research Laboratory at the University of Alaska Fairbanks’ Institute of Northern Engineering. “When you look at most modern mines, technically they’re all feasible, and many are economically feasible; it’s really the permission to do it,” he continues. Ganguli makes an interesting point, that “except for gravel pits in a city, most of the public never sees a mine. “We as a society have become disconnected from the fact that we need resources,” Ganguli says. “It’s seen as unnecessary.” Similarly to how there’s a lack of real knowledge about where food comes from, 54

Backhoe operator at the Bokan-Dotson Ridge site.

there’s a lack of awareness about what kind of metals are necessary to build a smart phone or tablet and how those metals are gathered—they’re dug out of the ground. “Mining is a risky business, and there will always be risk,” Ganguli says. “[But] it’s like driving; you have a choice to make.”

Mine Engineers

And that’s exactly what engineers are for: identifying risks and then designing solutions to mitigate or minimize them. Engineering is a wide field, and various types of engineers may be utilized to design a mining project. When it comes to the core aspects of mining, Ganguli says that there are approximately thirteen mining engineering programs in the country, with the program at the University of Alaska Fairbanks being one of them. However, the volume of mining engineers graduating from the programs doesn’t meet the needs of the mining industry, particularly in Alaska. “The industry survives by hiring civil or mechanical engineers to do a mining engineers job,” he says, but doing so requires time and money to train the engineer. According to the Society for Mining, Metallurgy and Exploration, Inc., retraining a civil engineer to do a mining engineer’s job

costs 600 percent more than hiring a mining engineer.

Alaska Mine Challenges

With or without a mining engineer, Ganguli says, Alaska presents some unique obstacles when pulling together a mine. “The biggest is logistics and energy,” he says, specifically having the infrastructure to address those problems. Every remote Alaska project has to look at the issue of energy: what’s available, what’s feasible, what’s economical. Closely related, what infrastructure is already in place and what needs to be built to support eventual energy solutions. Ganguli says the cold is difficult and has an impact on a variety of aspects, from mineral recovery to underground mine ventilation. Additionally, water is always an issue. The source of water for a mine’s needs, or the destination for its discharge, will always generate passion. Then there is also spring, when large amounts of snowfall can melt all at once, flooding a worksite. “If you underestimate the amount of water, you can then encounter violations when discharging the water,” he says. One other thing that Ganguli says people should be aware of in terms of how mines operate is that not all natural resource ex-

Alaska Business Monthly | February 2016 www.akbizmag.com

traction is the same. “For perspective, if one hundred barrels of mass comes out of the ground at an oil field, the oil company may process and sell fifty to eighty barrels of oil, while at a gold mine, considering the same amount of mass, the company is only able to sell a third of a teaspoon.” All of these challenges, plus regulatory issues, can result in a rich deposit not making business sense. Ganguli states a statistic that, for every five thousand “reasonably good” deposits, only one will eventually become a mine.

Bokan-Doston Ridge

One promising prospective mine is the Bokan-Dotson Ridge project, 100 percent owned by Ucore Rare Metals and located on the southern end of Prince of Wales Island. According to Ucore, the deposit is the largest heavy rare earth deposit in the United States and includes elements Dysprosium, Terbium, and Yttrium. The mine plan has been engineered to reduce the mine’s environmental footprint in several ways. “There’s a huge benefit to the type of ore that we have at the Bokan-Dotson project,” says Randy MacGillivray, director of Environment and Community Relations for Ucore. “It’s amenable to X-ray sorting: 1,500 tons per day comes up to the surface, it’s sorted, and then 50 percent of the unmineralized material goes into a stock pile, so we only mill and process 50 percent, or about 750 tons per day.” Removing half the material as waste before milling ever begins will reduce power demand, lowers diesel consumption by 264,172 gallons per year, and will reduce greenhouse gas emissions. That 750 tons of material is cut in half again through magnetic separation, which means that of all the material extracted, only 25 percent goes through the leach circuit. For material that is treated, “we picked nitric acid as the preferable leaching agent [instead of

Helicopter pilot approaches Bokan-Dotson Ridge. Photo courtesy of Ucore Rare Metals

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industry-standard sulfuric acid],” MacGillivray says. “It’s operated at lower temperatures, which is less energy consuming. As well, it’s simpler to recycle, so we’ll be reprocessing or recycling the acid onsite, which limits the amount of new material that needs to be brought in.” The mine will be powered through generators running on both diesel (20 percent) and natural gas (80 percent). The natural gas will be supplied in the form of LNG (liquefied natural gas), barged in by a gas technology company. The addition of LNG will reduce diesel consumption by approximately 1.7 million gallons of diesel per year and further reduces greenhouse gas emissions. As an additional power saving measure, waste heat energy from the power plant will be recovered to heat the nitric acid and for some building heat. All told, it’s estimated these measures will reduce greenhouse gas emissions over the anticipated ten- to eleven-year life of the mine by 284,000 tonnes of CO2. One exciting aspects of this project is that, if the mine is constructed, it will be the first documented mining project that incurs no tailings management facility on the surface upon closing. This is possible because milled waste material will be used in the cemented paste backfill as an ongoing process. When the mine closes, typical

underground mine reclamation will take place, such as sealing the portals and openings, but there will be no tailings facility at all. “The tailings facility is the long-term concern for environmentalists; for us not to have one is a huge advantage,” in time and cost savings, MacGillivray says. In terms of the mine’s commodity, MacGillivray says the plan is to produce the metals onsite. “We’ve invested a large amount of time and money to develop rare earth ligands for use in molecular recognition technology, or MRT for short.” He explains that typically rare earth element concentrate would be shipped to China, which would use solvent extraction techniques. “We didn’t want to ship to China, we wanted to produce the metal at home in Southeast in an environmentally friendly manner; we knew we couldn’t use solvents for many reasons.” Therefore Ucore worked with Utah-based IBC Advanced Technologies, Inc. to produce ligands for the final step of processing to separate the rare earth elements from each other. “No concentrate will have to be shipped from the site; we’ll be producing metal products locally,” says MacGillivray. Ucore has already done several years of exploration at the mine area to gather data for their mine plan. MacGillivray says that

Invested in responsible development for Alaska’s future. For over 20 years Donlin Gold has been carefully preparing to ensure responsible development in Alaska. With our thoughtful planning and industry-leading technology, we are committed to a mining project that will contribute to a thriving Alaska economy. DonlinGold.com

engineering services to-date have been provided by Tetra Tech, an engineering company headquartered in California. For future work Ucore put out a bid for services, and has selected, though not fully engaged, Ausenco, an Australian engineering firm. MacGillivray says that bringing a new engineering company into the process can be beneficial: “The second company wants to do better, or improve, the project, while the first company may opt to defend their initial designs.” The Bokan-Dotson Ridge project is currently in the permitting process, working on a plan of operations, and waiting for appropriate market conditions to initiate the EIS (Environmental Impact Statement) process.

Donlin Gold

“Most of the deposits in Alaska, people have known about them, they’ve drilled them,” Ganguli says. “It takes a long time for the deposits to become a mine.” In support of his claim, Calista Corporation identified mineral potential at the Dolin Gold site in 1975, conducting limited exploration from 1984 through 1987. Kurt Parkan, Donlin Gold’s external affairs manager, says that it was in July of 2012 that Donlin submitted their Section 404 Clean Water Act permit application to the US Army Corps of Engineers, triggering the NEPA (National Environmental Policy Act) process that includes development of an EIS. If all goes according to plan, a final EIS will be produced in 2017. “Then we will need additional permits,” Parkan says. “The EIS is not a permit, it’s just a document that informs the agencies that will be responsible for permitting.” Once all the permits are acquired, then the US Army Corps of Engineers will issue a Record of Decision. All in all, Parkan says they estimate they’ll need more than one hundred permits. “We’re going to wait until we get those permits and then a decision to construct will be considered,” he continues. In fact, at this stage, he says the mine itself hasn’t been fully engineered: “We’ve done feasibility studies and initial studies that identify the type of mine, the type of mill, the type of power plant, the type of pipeline; but the engineering for the development of them will come later.” If the decision is made to move forward at that point, Donlin Gold estimates construction would take about four years. The mine will be an open pit gold mine. Milling will be done onsite, producing gold doré bars. “Power was one of our bigger challenges,” Parkan says, since the mine site is remote, located 285 miles west of Anchorage, approximately 10 miles north of Crooked Creek. Donlin Gold also decided to go the

Alaska Business Monthly | February 2016 www.akbizmag.com

and vegetation. “That’s an extra measure we’re taking because it’s considered best practice,” he says. Donlin Gold anticipates the potential mine has resources of almost 34 million ounces of gold; construction of the mine would create about 3,000 jobs. He says that operations would ramp up over time, so initially the mine would employ about 600, but at peak production that number may climb to 1,200. The Donlin Gold mine is located on lands owned by Calista Corporation (surface) and The Kuskokwim Corporation (subsurface). “This land was selected as part of the Alaska Native Claims Settlement Act because they knew it had resource potential,” Parkan says. “They invited us to partner with them to develop it.” A result of that partnership is that the mine, if built, would prioritize shareholder hire.

Upper Kobuk Mineral Project

The Ucore mine plan minimizes environmental impacts at BokanDotson Ridge. Photo courtesy of Ucore Rare Metals

environmentally friendly route of using natural gas to power operations, though instead of barging the gas in, they plan to construct a 215-mile pipeline. “Donlin Gold looked at various energy options,” Parkan says. “From electrical power lines to coal to burning peat to wind farms and even nuclear; you name it and we look at it as an option.” In fact, the original plan was to use diesel transported by barge up the Kuskokwim River. “We talked to people in the region, and there was some concern about the amount of fuel that would be barged up the river. We took another look at possible options and came to the conclusion that natural gas would be the best alternative.” He says that one of the choices they’ve already made also concerns their tailings facility. While it’s not required, Donlin Gold has elected to install a sixty millimeter textured synthetic liner, “similar to what is used for landfills and sewage lagoons,” in their tailings facility, Parkan says. “It just improves the integrity of the tailings storage facility; it adds one more layer of protection to reduce the risk of seepage.” Additionally, as part of the mine’s reclamation plan, Donlin Gold plans to do a “dry closure,” where water that has built up in the tailings facility will be removed before the tailings are covered with rock, soil, 58

The Upper Kobuk Mineral Project is another collaboration between a Native Regional Corporation and private business. NovaCopper US is an Alaska-based company, says President and CEO Rick Van Nieuwenhuyse, which has partnered with NANA Regional Corporation to explore and potentially develop several deposits at the Ambler mining district located in northwestern Alaska. “We’re currently working to complete a pre-feasibility/feasibility study for an open pit mine at the Arctic Deposit,” he says. The Arctic deposit is poly-metallic, containing copper, zinc, gold, and silver. “We’ll produce copper concentrate, zinc concentrate, and a lead concentrate that will recover the gold and silver in it,” he says. Plans for the mine call for it to be a drill and blast operation, similar to how Fort Knox is mined, Van Nieuwenhuyse says, only on a much smaller scale. “This is a very high grade deposit, so it’s somewhat unique in that context. Fort Knox is a big, low grade project; this is a relatively small but very high grade project.” The road to the Ambler mining district is one of the Roads to Resources; Van Nieuwenhuyse says it’s “an absolute precursor to developing a mine here. We’ve been working with AIDEA and NANA for the past five years toward the objective of getting a road permitted and constructed into the mining district.” He says AIDEA has submitted permitting documentation to advance the EIS portion of the NEPA process. He says that the road will be operated similarly to the access road to Red Dog Mine: AIDEA permits, constructs, and operates the road and then charges the mine a toll for the road’s use. The road into the Ambler mining district

would connect to the Dalton Highway near Pump Station 5 of the Trans Alaska Pipeline System; from there, concentrate would travel by truck to Fairbanks, where it would be transferred to the Alaska Railroad, moving by rail to Port MacKenzie for export out of Alaska. “We’d be using existing infrastructure as much as possible,” Van Nieuwenhuyse says, “and that’s the advantage of connecting to the Dalton Highway.” Power generation at the Arctic deposit would be done onsite, though Van Nieuwenhuyse says that NovaCopper hasn’t yet determined if the generators will be run on diesel or natural gas. “A lot of new work is being done with LNG, and that’s something we’re very keen to look at.” Because of its remote location, Van Nieuwenhuyse says it would be a fly-in, fly-out type of operation. “We’d hire locally and train locally—that is one of our commitments to NANA in our partnership.” The two land-owners of the Ambler mining district are NANA and the state of Alaska, approximately half and half, Van Nieuwenhuyse says, with NovaCopper having secured mining claims on the state portions of land. Van Nieuwenhuyse says it’s important to note that when it comes to new mine operations, there isn’t anything that isn’t engineered. “Today, when you permit a mine, you’re really looking at how to construct, operate, and close the mine—all with a minimal impact to the environment. For a modern mine to be permitted, a complete plan from start-up through to closure must be designed, including a reclamation plan and ongoing monitoring to ensure no issues arise.” He says that it’s a completely different process from thirty or forty years ago, and that it’s this meticulous planning that makes opening a new mine such a lengthy process. “We are currently gathering environmental and engineering baseline information now—hydrology, water chemistry, geotechnical, wildlife, wetlands information—all of which will be incorporated into a mine design plan that will minimize potential impacts to the environment and make sure all materials are handled in a way that won’t affect water quality, which is the utmost concern when permitting any modern mine. Making sure water won’t cause any long-term issues is our top priority,” Van Nieuwenhuyse says. “In fact, many mines have now cleaned up water from what it has been naturally: Fort Knox, Red Dog, and Greens Creek are all good examples of that.” R

Tasha Anderson is an Associate Editor at Alaska Business Monthly.

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Members of the DiscoverE Steering Committee: American Institute of Aeronautics and Astronautics, Chair  SAE International, Chair  American Council of Engineering Companies  American Institute of Chemical Engineers  American Society of Agricultural and Biological Engineers  American Society of Civil Engineers  ASHRAE  ASME  DiscoverE Diversity Council  IEEE-USA  Institute of Industrial Engineers  National Society of Professional Engineers  NCEES  SME Education Foundation  Society of Petroleum Engineers  With Support From: National Science Foundation  DiscoverE / 1420 King Street / Alexandria, Virginia 22314 / www.DiscoverE.org

DiscoverE programs are made possible by the Leadership Council and Corporate Affiliates, in addition to other supporters. The Boeing Company, American Institute of Aeronautics and Astronautics and SAE International, 2016 DiscoverE Co-Chairs  Leadership Council: Bechtel  Bentley Systems, Inc.  The Boeing Company, Chair  Exxonmobil Corporation  Lockheed Martin Corporation  NCEES (National Council of Examiners for Engineering and Surveying)  Northrop Grumman Foundation  Project Management Institute Education Foundation  S. D. Bechtel, Jr. Foundation/Stephen Bechtel Fund  Shell Oil Company  TE Connectivity Foundation  Corporate Affiliates: 3M Foundation  Fluor Corporation  Motorola Solutions Foundation  Rockwell Collins  United Engineering Foundation

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special section

Architects & Engineers

Engineer of the Year Nominees By Patrick Coullahan, PE, F.NSPE, F.SAME

very year nominees from local engineering professional societies are recognized and considered for the Alaska Engineer of the Year Award. These nominees are judged by representatives from each of the respective societies based on five main areas of consideration:  Significant engineering contributions and experience  Publications and professional presentations  Active participation in professional organizations  Other service to the professional community  Service to the wider community These areas highlight the values of the engineering profession to underscore the promotion of health, safety, and welfare of the general public through good design, by sharing knowledge, and by service to the profession and the community. Alaskan engineers make a world of difference. As last year’s Alaska Engineer of the Year, it gives me great pleasure to introduce you to these nominees and have you join us in the celebration of the 2015 Alaska Engineer of the Year nominees and the professional societies they represent! Patrick J Kemp, PE American Society of Civil Engineers (ASCE) Alaska Section The Alaska Section of the American Society of Civil Engineers nominated Patrick “Pat” J. Kemp, PE, M.ASCE, for the 2015 Engineer of the Year. Kemp began his enKemp gineering career as a college student in the 1970s and became an engineer with the Alaska Department of Transportation and Public Facilities (ADOT&PF) where he served in a succession of increasingly responsible engineering positions in construction and design. In 1993, Kemp was promoted to the Southeast Region Preconstruction Engineer position and served in that role until his retirement in 2007. Following retirement from the ADOT&PF, Kemp worked as an engineer for FHWA Alaska Region and also operated his own engineering consulting business in Southeast Alaska. Kemp is the first executive in ADOT&PF history that had risen through the ranks to become Commissioner. From the time of his appointment to Deputy Commissioner, Kemp molded the three Regions, the International Airports, the Alaska Marine Highway, and the Headquarters units of ADOT&PF into one highly functional and complementary organization. Kemp’s mantra, imprinted on all ADOT&PF employees, was that we are all “one DOT.” In 2012, Kemp was appointed Commissioner and led ADOT&PF to obligate over $1.5 billion in federally funded high-

way, aviation, and marine construction projects to improve transportation throughout the State of Alaska, complemented by over $100 million in state funded transportation improvements. ASCE represents more than 150,000 members of the civil engineering profession in 177 countries. Founded in 1852, ASCE is the nation’s oldest engineering society. Mark Langberg, PE, LEED AP Alaska Society of Professional Engineers (ASPE) Anchorage Chapter Mark Langberg, PE, LEED AP, is a principal mechanical engineer with AMC Engineers and has thirty years of Alaska engineering, project management, construction manageLangberg ment, and commissioning experience. He earned his bachelor’s degree in mechanical engineering from Oregon State University in 1985. Prior to joining AMC Engineers, Langberg spent more than four years working at the US Army Corps of Engineers Richardson Resident Office, overseeing construction of a wide range of Army and Air Force projects. He also worked for an Anchorage based multi-discipline design firm for four years. Langberg has served as a Project Manager and Mechanical Engineer of Record for AMC Engineers for many challenging projects over his twenty-one years with the firm. Some notable projects include: University of Alaska Anchorage Alaska Airlines Center Sports Arena, Dimond High School replacement, Gateway Aquatic Center in Ketchikan, Bethel Aquatic Training and Health Center, University of Alaska Anchorage Health Science Building, and multi-phase Service High School renovation. Langberg volunteers his time to teach Judo to children and adults at Anchorage Dojo and enjoys the outdoors with his wife and two dogs. He is a member of ASPE, ASHRAE, and A4LE (formerly CEFPI). ASPE, as part of the larger National Society of Professional Engineers (NSPE), stands today as the only national organization committed to addressing the professional concerns of licensed PEs across all disciplines. Jacquelyn Schirmer, PE The Society of Women Engineers (SWE) Greatland Section

Schirmer

Bringing values from her Colorado mountain hometown of two thousand, Jacquelyn Schirmer’s accomplishments in engineering are a visible reflection of community

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spirit and teamwork. From her first engineering endeavors in rocket launch facility design to helping make our world a safer place through chemical nerve agent-destruction projects, she is currently the Operations Director for AECOM in Alaska and the Program Director for an Engineering, Procurement, and Construction Services Program for ConocoPhillips. Schirmer has eighteen years of professional experience in the engineering, project management, and construction industries and received her bachelors of science in Mechanical Engineering, a Masters in Management and Organizational Leadership, and her professional engineering license in multiple states. Schirmer has two daughters, Kylee (fourteen) and Jaidee (eight). Both have interest, like mom, in mechanical engineering and being a pilot. Schirmer has an extreme passion for engaging young women and men into the engineering industry and has led numerous activities including an annual Girls Exploring Science, Engineering, & Technology Event; the SWE Mentor in Industry Program; and Girl Scout events. She is actively involved in motivational speaking and is on the University of Denver’s Advisory Board. She is proof that the strength from a small town community can build the strength to impact our world. Founded in 1950, the SWE is a nonprofit educational service organization dedicated to the advancement of women in the engineering profession. SWE aims to encourage women into engineering and leadership, expand the image of engineering as a positive force in improving the quality of life, and demonstrate the value of diversity. The Greatland section is the only professional section in Alaska, so members are spread across our great state. SWE Greatland is passionate about service and is active in engineering outreach events and partnering opportunities and continues to expand scholarship offerings each year.

Craig Fredeen, PE Alaska Chapter of the American Society of Heating and Refrigeration and AirConditioning Engineers (ASHRAE) Craig Fredeen, PE, is Senior Mechanical Engineer with PDC, Inc. Engineers. Fredeen’s specialized design experience includes Fredeen HVAC, plumbing, power generation, and fuel system designs. With nearly twenty years of experience, Fredeen has designed everything from single family homes in remote Alaska to the $120M Anchorage Airport renovation, in locations throughout Alaska and Antarctica. He is known for providing his clients dependable, innovative design solutions with a hyper-focus on reducing long-term operational costs through energy conservation, simplified design, and system maintainability. Fredeen actively encourages students to embrace math and science through classroom presentations, career fairs, and helping to establish and grow the now statewide FIRST robotics programs. As a member of the Anchorage Downtown Rotary club, Fredeen is a regular math tutor at Central Middle School as part of the club’s 90% by 2020 program. On the civic side, he is currently the Vice Chair of the Anchorage Building Board and a past eight year member of the Alaska State Licensing Board for Architects, Engineers and Land Surveyors. Fredeen splits his off-work time between family, home improvements, and restoring his 1946 Chevy truck. ASHRAE, founded in 1894, is a global society advancing human well-being through sustainable technology for the built environment. The Society and its members focus on building systems, en-

Alaska Business Monthly | February 2016 www.akbizmag.com

Michael Baker International

Innovative Solutions for Alaskan Challenges Since 1942

he challenges Alaska businesses face are unique unto themselves, rarely found in the Lower 48. Particularly from an engineering and construction perspective, severe climate conditions and remote logistics require specialized knowledge to make a difference for our clients. Michael Baker International, a global leader in engineering, consulting, planning, and technical and professional services, has been an Alaska fixture since 1942. The company has offices in Anchorage and Fairbanks, employing 75 people, including 24 registered professional engineers and a registered professional architect. “We live and work in Alaska and understand the importance that our state plays in the global economy and the challenges we face to develop infrastructure,” says Jeff Baker, regional director of Michael Baker’s Northwest operations. “However, it goes beyond just our work because this is where we live. We make a difference in the lives of our neighbors through ongoing leadership and volunteer activities to better the communities here.” More Than Just Pipeline Engineering “While pipeline engineering is certainly what our Alaska offices are most known

for, it is far from our only capability,” explains Shawn Snisarenko, operations manager for Michael Baker’s Anchorage office. “We have been diversifying our portfolio for the past decade, building on the strengths of our larger, global company.” Michael Baker’s Alaska offices have grown to offer services in transportation, environmental, regulatory and permitting, civil infrastructure, geographic information system (GIS) and mapping, architecture, and construction management. Recently, Michael Baker was awarded a design contract by the Alaska Department of Transportation and Public Facilities (ADOT&PF) to reconstruct a portion of the Parks Highway. Additionally, Michael Baker is supporting the Donlin Gold mine project with wetlands services and regulatory consulting expertise. Earlier in 2015 the firm provided construction management oversight for a telecommunications project on the North Slope. The company’s service offerings also include centralized GIS and geodatabases for permitting applications, with aerial and mobile LiDAR acquisition and processing for transportation and industrial clients. Local Focus with Global Reach Globally, Michael Baker has more than 6,000 employees in more than 90 locations

across the United States and internationally. The company is a leading provider of engineering consulting services, which includes planning, architectural, environmental, construction, and program management, as well as information technology and communication services. Leveraging national capabilities and expertise has helped Michael Baker to diversify locally. For example, Michael Baker was awarded a contract to help ADOT&PF deliver a project using the construction manager/general contractor (CMGC) delivery method, which company experts already assisted other state departments of transportation to develop. Michael Baker is also leading the use of unmanned aviation vehicles for mapping and has plans to use this technology for clients in Alaska this year. “By tapping into the support of our global enterprise while remaining grounded through our extensive local know-how, our clients understand they are receiving unmatched service, which ensures their projects are safe, on time, and incorporate best practices,” states Baker. Michael Baker International 3900 C St. Anchorage, AK 99503 3605 Cartwright Court, Fairbanks, AK 99701 (907) 273-1600 www.mbakerintl.com

www.akbizmag.com 63 Alaska Business Monthly | February 2016 www.akbizmag.com 2016 | Alaska Business Monthly 63 – P A I D A D V E R T I S E M E N T February –

ergy efficiency, indoor air quality, refrigeration, and sustainability within the industry. Lindsey Hunter The Society of Petroleum Engineers (SPE) Alaska Chapter Lindsey Hunter currently serves as Well Delivery Lead for ConocoPhillips in Anchorage where she leads a cross functional effort to improve efficiency in bringing wells on line Hunter after drilling operations. A lifelong Alaskan, she earned a BS in Civil Engineering from the University of Alaska Fairbanks prior to joining ConocoPhillips in 2006 where she started in the Western North Slope (Alpine) as a Drillsite Facility Engineer. Hunter has held engineering roles in several petroleum disciplines throughout her career including reservoir, production, facilities, and drilling. Leveraging her broad engineering experience, strong personal networks, and tenacity have been keys to her success in her Well Delivery position. Hunter is involved in university recruiting at the University of Alaska Fairbanks and enjoys spending time at her family cabin in Big Lake with her husband, soon to be two sons, and two dogs. Hunter is passionate about the importance of women in engineering, especially the energy sector; she supports this mission by recruiting new engineers at the University of Alaska Fairbanks, mentoring interns, and speaking to young women in the community about careers in STEM. Hunter helps coordinate the “Trick or Treat in the Heat” fundraiser for Ronald McDonald House, Make a Wish Foundation, and Hospice of Anchorage. Her family has been

involved in Salvation Army’s Adopt a Family Christmas program for the last twenty years. SPE is the largest individual member organization serving managers, engineers, scientists, and other professionals worldwide in the upstream segment of the oil and gas industry. SPE Alaska chapter has the mission to collect, disseminate, and exchange technical knowledge concerning the exploration, development, and production of oil and gas resources, and related technologies for the public benefit; and to provide opportunities for professionals to enhance their technical and professional competence. Julie Mages, PE Society of American Military Engineers (SAME), Anchorage Post Julie Mages is Chief, Engineering Flight for the 611th Civil Engineer Squadron, Joint Base Elmendorf-Richardson. As Chief since April 2015, Mages she has been responsible for providing engineer support to twenty-one remote installations across the Pacific theater. Mages was a General Engineer and Project Manager at Cape Canaveral Air Force Station from 2013 to 2015, directing engineering design and investigations on facilities and property for substantial multi-phase new construction, renovation, and improvement projects. From 2010 to 2013, she was a Construction Management Engineer for NAVFAC Marianas in Santa Rita, Guam. Mages honorably separated from the United States Air Force in 2010 after four years of service. She has earned several military

Alaska Business Monthly | February 2016 www.akbizmag.com

awards including two Air Force Commendations Medals, an Air Force Achievement Medal, and selections as the Company Grade officer of the Year and the Air Mobility Command’s National Society of Professional Engineers “Federal Engineer of the Year Award” in 2008. Her civilian recognition includes the NAVFAC MARIANAS Engineer of the Year 2012 and the Pacific Air Forces’ Federal Engineer of the Year Award in 2015. Mages is an active member of the National Society of Professional Engineers and SAME. She holds a Bachelor of Science in Civil Engineering from Colorado State University with a minor in Aerospace Studies and is a Professional Engineer (Colorado). SAME grew from our nation’s experiences in World War I, when more than eleven thousand civilian engineers were called to duty as the United States entered “The War to End All Wars.” Upon their return, many feared the collective knowledge and the cooperation between the public and private sectors that proved vital to combat success would be lost. Industry and military leaders vowed to capitalize on the technical lessons and camaraderie shared during their battlefield experiences. The Anchorage Post of SAME was established in 1943. Robert Eugene Kniefel Institute of Transportation Engineers (ITE)

Kniefel

Bob Kniefel is a semi-retired forty-four year resident of Anchorage. He and his family all live in Anchorage: wife Claudia; son Scott and his wife Kathryn; and his daughter Darcy; along with eight grandchildren. Kniefel has been involved in civil engineering with a

transportation focus for the entire time working in both the public government and private consulting sectors. His background includes traffic engineering work in operations, design and safety, transit efforts serving as the Public Transportation Director for ten years, and transportation planning work serving as the Anchorage Metropolitan Area Transportation System Manager. When not working part-time for Kittelson and Associates, Inc. as a senior project engineer, Kniefel has enjoyed volunteering his famous cooking prowess providing the catering for the ITE Scholarship Wine and Beer Tasting and the Grandfamilies monthly respite brunch, along with lunch and dinner meals for the Anchorage Habitat for Humanity housing construction crews. At the request of the Municipality of Anchorage, Kniefel came out of semi-retirement for a six month period in 2015 to handle the Acting Anchorage Building Official duties. He worked to proceed with the implementation of the online building permit process improving communications and reducing permitting review times. When not involved in the above activities, Kniefel plays at creating fused glass items and enjoys world travel with Claudia and spoiling his eight grandchildren. ITE is a professional society of more than fifteen thousand transportation engineers, planners, and other professionals in some eighty countries. The Institute facilitates the application of technology and scientific principles to research, planning, functional design, implementation, operation, policy development and management for all modes of transportation. R Patrick Coullahan, PE, F.NSPE, F. SAME is the 2014 Alaska Engineer of the Year. He is retired from the US Army Corps of Engineers-Alaska District.

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special section

Architects & Engineers

The $121 million engineering building at the University of Alaska Fairbanks needs more than $34 million in final appropriations to be completed. It was designed with a core and shell concept so construction could be started before all the funding was appropriated.

UAF Engineering Building Unfinished masterpiece awaits final funding By Julie Stricker

very semester, incoming engineering students crowd into Room 252 of the Duckering Building on the University of Alaska Fairbanks (UAF) campus to take their first required engineering class, ES101. The classroom seats eighty, but with more than two hundred incoming engineering students every year it can get cozy, even with multiple class sessions scheduled. Enrollment at the UAF College of Engineering and Mines has doubled in the past decade to just under a thousand students, says Marmian Grimes, UAF senior public information officer. “The interest in the degree program among students is there,” Grimes says. 66

“And we know, from Department of Labor statistics, that the demand from business and industry is strong as well.” The Duckering Building, which houses the program, is “bursting at the seams,” she says, and its facilities are dated. “You can imagine with a building designed in the ‘50s, just the demands of modern engineering, the types of lab facilities and things like that, we need to train engineers to work in today’s industries. The bar’s a lot higher.”

2013 Ground Breaking

In 2013, the university broke ground on a $121 million state-of-the-art engineer-

ing facility designed by ECI/Hyer Architecture and Interiors of Anchorage. Davis Constructors & Engineers, Inc. is the general contractor. The gleaming six-story, 119,000-square-foot structure has a commanding view of the Tanana Valley and the Alaska Range to the south. Nested between the Duckering and Bunnell buildings on the east side of campus, the Engineering Learning and Innovation Facility has a distinctive curved glass and steel exterior and is designed to provide forty laboratories, a forty-eight -foot high-bay facility, offices, and classrooms, including one large enough to seat the entire incoming freshman class in one ES101

Alaska Business Monthly | February 2016 www.akbizmag.com

session, according to Cameron Wohlford, UAF Department of Design and Construction senior project manager. However, only $70 million of the total funding needed for construction has been received and construction was halted in August 2015. The $34.8 million requested for fiscal year 2017 was not included in the governor’s budget and Grimes does not know if, when, or from where the final amount will come. Every year of delay adds about $3 million to the total cost, in addition to the current $500,000 or so annual maintenance costs. If the project had been fully funded from the start, it would have been completed in July 2015 and hosted classes during the fall semester, Wohlford says. Instead, “we’ve got about 6,000 square feet that is open to the public, including the lobby and a couple of hallways, and that’s it.”

Core and Shell Concept

The facility was built using a core and shell concept by design, Wohlford says. The shell was built first. The mechanical and electrical systems are in and the building is heated and pressurized, “but there is not a square foot of assignable space in the finished building,” Wohlford says. “The next dollar spent in

the building gets you assignable square footage.” He gave a tour of the unfinished building on a sunny December day. While outside temperatures were hovering about ten degrees below zero, the inside of the facility was warm. Wohlford says the temperature set point is pretty low. “It’s a testament to how energy efficient the building is that it stays pretty darn warm just from a couple of unit heaters in the basement,” he says. “We want to keep it warm because there are so many important systems that need to stay warm, for instance, the foam fireproof insulation on interior beams and surfaces,” he says. “If that material gets cold and dry, it starts to fall off. It’s very expensive and you don’t want it to fall off. The building starts to shrink in the cold and you don’t want your building to shrink.” The adjacent Bunnell Building houses the UAF School of Management and the engineering facility’s location is part of the university’s desire to improve connectivity between the related fields, Wohlford says. Most of the campus buildings were constructed in the 1960s and each was a selfcontained “silo” for each discipline. “This group was in this building and this group was in that building and how dare you walk into another building,” Wohlford

describes the mindset then. “There’s no student space for gathering. No common areas. As soon as you walk in the building, boom, it’s office and lab. It doesn’t quite work in today’s world where collaborative learning is more prevalent.” The same is true in research, Grimes says. “If you talk to researchers, they’re all doing interdisciplinary work,” she says. “That’s the way research is done now, so having a setup that encourages that is invaluable.”

Four Distinct Areas

The new engineering building is made up of four distinct areas: a curved area with large windows wraps the eastern side of the building and will be used mainly for offices. Classes are held in the middle of the building and labs and research take up the rectangular portion. The fourth part is a glass-walled high-bay area. In addition to engineering classes and a couple of classrooms open to general enrollment, the building includes a machine shop and two student machine shops. The SpaceGrant Program and chemical engineering department also have space in the building. The entire fourth floor will become the new home of the Alaska Center for Energy and Power.

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In December, the piping and ductwork was clearly visible in many areas, not unexpected in a construction zone, but Wohlford notes that in many of the finished areas, the mechanical structures would continue to be visible, by design. The building itself is a learning tool. “One of the things we wanted to do in the building is to leave stuff exposed,” he says. “That’s just to help engineering students understand what really goes into a building. A lot of times, we find they’re so focused on the design theory of a structure that they don’t actually see what that means.” The whole structure, including the floor and windows, contain sensors so students will have reams of data they can play with and learn from, Wohlford says. “We’re also trying to get this building to be the first in Fairbanks to have seismic sensors to measure in all three directions of the building’s movement during an earthquake,” he says. “Currently, there’s no data coming from Fairbanks in terms of earthquakes moving a building.” A professor is seeking a grant to pay for the equipment. The high-bay test lab is designed to test large structural elements. The floor, which is four feet thick, has metal plates embedded in it that will allow students to bolt

down large beams and columns and test the effects of stress on them. “That’s one of our primo spaces,” Wohlford says. “We can build a thirty-foot-tall wall and we can push on it, we can pull on it. It will help us estimate the stresses and strains on a column, such as during an earthquake.” It also will allow the state to test bridge girders, he says. “The state is just starting to build their own bridge girders, but they don’t have any place to test them. In the high-bay lab, they can bring those girders in and bolt them to the floor and see if they can break them.”

Checking the readouts, he notes one bank had tallied $6 worth of energy, the other $4, so far that day. On all floors, piping sticks out of the wall and blue tape marks the hangers for all future ductwork and piping. “That was all pre-planned,” Wohlford says. “So when I say it’s plug and play, you can see the ends of the pipe there. We had to decide where to stop and how to cap it off. It couldn’t be done until the last minute. We kept going under the preface that we were going to get funding. Finally, last year, we started planning for phasing.”

Room with a View Huge ducts wind through the fifth-floor, which includes what Wohlford says is the first penthouse mechanical room with a window. “The architect said, ‘Look, we have this opportunity. It would look odd if we didn’t have a window on the fifth floor.’” The window offers a breathtaking view of Denali and the Alaska Range. A couple of feet away, two side-by-side meters show the output from a wall of solar panels. Students funded the solar panels, Wohlford says. Asked for the cost of the panels, he says, “Let’s just say the payback is probably somewhere in the fifty-year range.”

Large piles of drywall and studs were scattered throughout the fourth floor, the planned future home of the Alaska Center for Energy and Power. Grimes says the floor was initially included in the project as a TBD. “We know engineering is a high-demand field in Alaska for both research and education and we wanted the capacity to grow,” she says. Several programs and organizations were considered as tenants for the floor before the Alaska Center for Energy and Power stepped up, Wohlford says. The total cost to finish the floor is about $6.5 mil-

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Solar panels adorn the towering outside rectangular area of the UAF engineering building, while large windows form a checkered pattern on the curved office area. © Ken Graham Photography.com

lion, and the center and the university are turning to private donors to raise it. So far, they’ve been promised about $1 million, but Wohlford says they’re hoping for more commitments soon. “It’s not as optimistic—it was very optimistic last fall when oil was still $80 per barrel, but as oil prices went down, it was interesting that less and less oil executives were showing up here for the tour,” he says. “It’s

getting harder and harder for Emily [Drygas, UAF Director of Development] to get people in the door to come experience the space and want to be part of it. But they’re still working hard and I think they’re optimistic.” With the funding shortfall, and oil prices still in freefall, the building is likely to remain unfinished for at least a couple of years. “The worst-case scenario is if the building is vacant for a few years until new fund-

ing comes in; the building is still safe. It won’t deteriorate,” Wohlford says. In the meantime, “the state isn’t getting any return on that $70 million investment,” Grimes adds. “We’re not getting the benefit of more engineers.” R Julie Stricker is a journalist living near Fairbanks.

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Architects & Engineers

R40 building modules manufactured by Alaska Insulated Panels using plywood instead of particle board go through the rigors of testing at the University of Alaska testing lab in the new engineering building. Photos courtesy of Scott Hamel

UAA’s New Engineering & Industry Building: Part 1 Educating students and serving Alaska’s industry stakeholders By Tasha Anderson

s I walk into the strong-floor room located on the ground floor of the new University of Alaska Anchorage (UAA) Engineering and Industry building, it is bustling; workers are installing caution markings on either side of a safety door, one of two that divides an enormous twostory engineering lab into three spaces: a student activities area, a Civil Engineering materials lab, and the strong-floor lab.

“There’s already been a flurry of activity because there’s such a demand for testing large specimens.”

—Dr. Andrew Metzger Associate Professor and Lab Manager, UAA

Dr. Andrew Metzger, UAA associate professor and lab manager, tells me that the new approximately $50 million building was first occupied July 2015. “There’s already been a flurry of activity because there’s such a demand for testing large specimens,” Metzger explains. The space is certainly busy: Dr. Scott Hamel, UAA assistant professor, and UAA alumnus Nathaniel Cox are working on wiring issues on a 20,000 pound jack to be 70

Alaska Business Monthly | February 2016 www.akbizmag.com

utilized in a test as finishing touches are still being put on the lab itself. The sense of urgency actually precluded the building opening. Hamel echoes Metzger’s sentiment: “The building opened in July and the first tests were in August, so there’s a real pent-up demand. The contractors were still here, and they occupied [the lab’s office], and so we were fighting for space with the people building the building around us,” he laughs.

Alaska First

This demand stems in part from the fact that this facility is the first of its kind constructed in Alaska. Framing the strongfloor are steel columns that form a support frame manufactured by Anchorage steel manufacturer STEELFAB. Metzger says that the floor (three feet thick and steel-reinforced on top and bottom) and frame can support a downward, or compressive, force of up to 1.2 million pounds and an upward, or tension, force of about 770,000 pounds. The steel columns are about 17.5 feet tall, allowing testing of specimens 15 feet tall by 20 feet long “without doing anything extraordinary.” Metzger says, “Prior to this building opening, companies that wanted to do this kind of testing had to send it out of state. One example is an oil industry company that wanted to test a steel assembly that weighed about 8,000 pounds, and they had to ship it all the way to Ohio to test it.” In another instance, a company had to send a steel rod to Seattle to test its capacity. Aside from saving the time and monetary costs of shipping, testing at UAA allows manufacturers to observe the tests themselves, if they choose. “There’s something to be said for when they can come watch the tests themselves,” Metzger says. “[Hamel and Cox] were testing a panel yesterday and the manufacturer just drove over from Wasilla, watched the test, and went home. I see it as a great asset for industry in this state.”

First Tests

The panel being tested is a structural insulated panel, generally used in residential or small scale commercial projects, manufactured by Alaska Insulated Panels, Hamel says. This particular panel has an insulated value of R40, a high value making it particularly useful in northern Alaska regions. “It’s a variation of an old product,” Hamel says. In this new panel, Alaska Insulated Panels has replaced OSB (oriented strand board), a typical material, with plywood. In addition, the company is using polyurethane foam instead of white foam or polystyrene. “No one has really done any tests on polywww.akbizmag.com

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urethane combined with plywood,” Hamel says. “Alaska Insulated Panels prefers that construction because in the really wet areas of villages, they’ve found that, using OSB, it just kinds of turns to mush.” Using plywood to improve the durability of the product actually makes the panels stronger, but plywood is more expensive than OSB. “They would like to be able to use the increased strength [further justifying additional cost], but nobody knows what that strength is.” Hence Alaska’s new, shiny, strong-floor lab comes into play. Hamel says that Alaska Insulated Panels contacted him at the urging of a company engineer. “There wasn’t really anywhere they knew of to turn, so they contacted the college and ended up with me… I put them off for a year; I said we’re building a facility that will make this a lot easier and cheaper. We have some other facilities that could have sort of done it, but it would’ve taken a lot more time and cost a lot more.” The August test on the panels was to bend them. Other tests include what kind of pressure the panel can withstand from end to end and standing two panels together and pushing on the side to see what it takes to topple them over, a sort of simulation of how they would perform in an earthquake. Finding the limit of the panel means knowing at what point it fails, so the tests can result in what’s known as “catastrophic failure;” in the bending test, the panel snapped nearly in half. Fortunately, while unsuitable for building a home, even a snapped in half panel doesn’t necessarily need to go to waste. “Our machinist wanted to take [the pieces] to build a doghouse. He has the only R40 doghouse in the city, probably,” Hamel laughs.

Potential Projects through Spring 2016 Metzger says a potential upcoming project for the lab is particularly interesting to him, as he hasn’t run across a similar test throughout his career. Essentially, it’s testing to see how prone a certain coating is in terms of causing bolted steel connections to slip. “You have to apply a load for a thousand hours; that’s almost forty-two days,” Metzger says. “We’re going to hang a weight of about 4,000 pounds on a lever that creates about 35,000 pounds of force and let it sit there, monitoring it the entire time.” As of press time, potential jobs were lined up in the lab through April, and that schedule could easily have been extended. This, too, is a testament of Alaska demand for these types of services, especially considering that the lab was originally planned to be used for undergraduate instruction, and hasn’t been extensively marketed to Alaska industry. Students can design a beam or wall

Alaska Business Monthly | February 2016 www.akbizmag.com

as a homework assignment, build it, and then test it in the lab, comparing how they anticipated their product would perform to its actual capacity. “It’s a great teaching tool. But what we found is as soon as this lab came open and industry stakeholders found out about it, we’ve had a great demand for testing services,” Metzger says, adding that the facility will be used for teaching and instruction during class hours and for industry testing during the summer and other times that won’t interfere with student education.

Work in Progress

The lab is still a work-in-progress. Different types of tests require different apparatuses, and with the lab being new, those are being designed and manufactured as projects come up. One test now could take a month as various parts and pieces are designed, ordered, and installed, but moving forward that timeline could be cut in half or more. “Right now we have some preliminary equipment just to kind of get us started; we have these mechanical screw jacks that apply the load,” Metzger says; however, the lab is equipped with a hydraulic pump room, which was unfortunately sitting empty at press time. While the floor and frame are capable of withstanding massive pressures, the lab lacks ability to apply such levels of force. Metzger says a laboratory grade hydraulic system will cost about half a million dollars, a figure outside of the original budget. At press time, UAA testers had been making do with a 20,000 pound jack, which was already insufficient. It was used for one of the tests on the panels, but it failed to break the panel. Fortunately, a 60,000 pound jack was already in the lab, awaiting an electrician to wire it up to perform tests, though of course even that jack falls well short of the 1.2 million pounds of force the floor can support. Cox completed his BS in Civil Engineering in May 2014, but current students at the undergraduate and graduate level also have the opportunity to apply to work on these projects when there’s an opening, with all applicants going through a standard application and interview process. “It allows [students] to earn extra money, but they still get to do engineering work, and they earn a reference when they go look for a job,” Metzger says. A facility that opens up new services to key industry players while simultaneously training Alaska’s up-andcoming workforce? As Metzger says, it’s a good experience for everybody. R

Tasha Anderson is an Associate Editor for Alaska Business Monthly. www.akbizmag.com

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Architects & Engineers

UAA Engineering Helps Entrepreneur on His Warm-House Mission

Photo by Philip Hall / University of Alaska Anchorage

Strong floor in materials testing lab worth the wait for Alaska manufacturer By Kathleen McCoy

on Burkhardsmeier is a one-man economic engine rarely found in Alaska: he’s a manufacturer. From his Wasilla facility, he and five to nine employees are busy manufacturing warm walls for houses in extreme climates. He started out buying walls for his house kits from Canada. After NAFTA limited him to domestic sources, he found some in the Lower 48. But travel damage and quality issues turned this 76-year-old into a self-taught manufacturer. 74

Ron Burkhardsmeier, a manufacturer of foam panels in Wasilla, watches his design undergo testing at the Engineering and Industry Building at UAA. He waited almost two years for UAA to open the lab so he could get testing done in the state.

“If I’m going to have control over the quality of this product, I have to make it,” he says. It helps to know he grew up on a North Dakota ranch, son of a man who had to fix or invent every tool he used. Faced with a similar challenge, Burkhardsmeier sold off his assets so he could buy a foam machine and a press, and learn to build the walls he knew would work for Alaska. These walls are called foam core panels, SIPs for short (structural insulated panels). Think of a sandwich as tall and wide as your living room wall. The filling is a fat slab of polyurethane foam heat-fused between two plywood slices. His walls end up in custom home designs (bring a floor plan and his team customizes walls to fit), or more simply, buy a house kit and put it together yourself. With siding added, you can’t tell a SIP house from a stick-frame house, except for

the cost. Burkhardsmeier’s house will be 5 to 10 percent pricier. The upfront cost is recovered with heating savings, he says “If you’re burning 800 gallons of fuel oil to warm a 1,000-square-foot home, at $5 a gallon, that’s $4,000,” Burkhardsmeier says. “What if it was just 100 gallons, or $500?” Another way to say it: He builds a house you can afford to live in later. Energy-efficiency, with five- and sixstar ratings, is his standard. Rural Alaska’s 10,000-unit housing shortage is his primary market. But he also has his eye on Anchorage. He lives in one of his own houses in Wasilla, 1,800-square-feet with three bedrooms. His wife claims the house is so tight she can go a month without dusting. He’s personally built 26 of them in Wasilla and about 20 more in rural villages. Altogether,

Alaska Business Monthly | February 2016 www.akbizmag.com

Undergraduate Stephanie Petersen works with an insulated panel during a materials test in the new engineering building. Photos by Phillip Hall / University of Alaska Anchorage

he’s sold or customized 350 statewide. So why did Burkhardsmeier wait almost two years for UAA to open its new engineering building? Because it has a strong floor, and professors and students, who could help him test the strength and capacity of his manufactured walls. His design is original in that he replaced the typical outer skin with plywood. Plenty of manufacturers create these walls using “oriented strand board,” or OSB. You’ve seen it—wood particleboard formed by compressing adhesive and wood strands or flakes. “I call it ‘overnight saturation board,’” Burkhardsmeier says ruefully. In wet regions, or in transit aboard shipping barges, the OSB “absorbs water and swells up.” High quality plywood solved that problem, but Burkhardsmeier needs testing data to demonstrate strength. Scott Hamel, a structural engineering professor who teaches steel design, concrete design, and structural loads, plus a handful of undergrad and grad students, signed on to tackle bending, compression, and racking tests on Burkhardsmeier’s walls. By www.akbizmag.com

having his tests done in Anchorage, he’s saving about $20,000 in shipping and Outside testing costs, Burkhardsmeier says. It’s a happy relationship. Hamel and his students get to work on a real-world problem, including designing and building the giant fixtures that perform the tests. Burkhardsmeier gets data to show building inspectors and architects the true quality and reliability of his product. “I am a made-in-Alaska product,” he says. “When I heard they were building that science lab, I waited for it.” But there’s more. While Burkhardsmeier retains the intellectual property on his walls, Hamel gets to write about them for engineering journals; and Hamel has a few modification ideas of his own. SIP panels come in only certain lengths, like eight, nine and ten feet. Hamel would like to build a tall wall, say sixteen-eighteen-twenty feet, by splicing walls together.

He’s already imagining how to model the design on a computer, and if that works, build and test it on the strong floor. Hamel says Burkhardsmeier is not the first manufacturer or engineering entrepreneur to approach the engineering college for some testing; more are lining up. That’s encouraging. Diversifying Alaska’s economy will be a huge task. But stories like this give nod to that old saying: How do you eat an elephant… one bite at a time. How do you remake an economy? One idea at a time. It’s a start. R Kathleen McCoy is the Editorial Director of University Advancement at the University of Alaska Anchorage. Contact her at 907-7861490 or kmccoy5@uaa.alaska.edu. This article provided courtesy of UAA.

February 2016 | Alaska Business Monthly

special section

Architects & Engineers

Photo courtesy of Bettisworth North, © Kevin G. Smith

Raven Landing in Fairbanks is an Age in Place housing development for seniors.

Age in Place: Alive and Well in Fairbanks Designing retirement communities By Russ Slaten

ging in place is the idea of living in a place that allows retirement age adults to continue living a full life beyond retirement years. It focuses on living in a desired residence that isn’t about growing old, but about independence and building a community. Seniors are prepared for changes in their lives, including their health, family, and environment, as they grow older. “If you settle down in your seventies to a home at Raven Landing, it really becomes home,” says Susan Motter, general manager of Raven Landing Senior Community. “If you become disabled you will not have to move away because anyone with a disability can access every place on campus. And since there’s room for wheelchairs in every 76

room, that means they are fairly spacious and airy, which is very attractive.” The entirety of Raven Landing is ADAaccessible (American with Disabilities Act), allowing anyone to live anywhere in Raven Landing, Motter says. Designed by Bettisworth North Architects and Planners, Inc., Raven Landing was also designed to naturally form a community for retired, active seniors in the Fairbanks community. Located at 1222 Cowles Street, Raven Landing is centrally placed near Downtown Fairbanks at the corner of Airport Way and Cowles Street. This area of town is a core community district—near hospitals and clinics, across the street from the library, near several schools, on the trail system, and a major road corridor, along the transit route, and near several retail centers.

Launching Raven Landing

The Raven Landing Senior Community is one of the first projects in Alaska to address the needs of active senior housing with an aging in place concept, Motter says. The Retirement Community of Fairbanks was formed in 2004 by Karen Parr, president of the organization, and a group of her friends to answer the need for a continuous-care retirement community in the Fairbanks North Star Borough. The organization formed with the goal of building an independent multi-unit housing complex, along with an assisted living facility. CB Bettisworth, principal architect and founder of Fairbanks-based Bettisworth North, was asked to assist the Retirement Community of Fairbanks in finding and designing a location for their project. The Retirement Community of Fairbanks and Bettisworth North worked with Weeks Field Development Group, a developer spe-

Alaska Business Monthly | February 2016 www.akbizmag.com

cifically formed for this project, successfully submitting a proposal to the City of Fairbanks to develop and finance the first phases of the Raven Landing Senior Community along with an unrelated more than 150-unit affordable housing complex on the same thirteen-acre land that replaced the dilapidated multi-family housing complex known as Fairview Manor. The first $5.1 million apartment building of the Raven Landing retirement community opened to Fairbanks seniors fifty-five years and older in 2010 with twenty units ranging in size from 720 to 910 square feet, Parr says. In four construction phases, Raven Landing to date has seen the completion of sixty senior independent living units in three buildings—$7 million for the second building and nearly $6 million for the third building. The 13,000-squarefoot senior community center cost about $4.2 million. Fairbanks-based G2 Construction, Inc. was the design-build contractor for the last three buildings, with Hay Zietlow & Associates providing mechanical and electrical engineering, Stutzmann Engineering Associates, Inc. providing civil and surveying work, and BBFM Engineers, Inc. providing structural engineering services. The fourth and final nearly $8 million active senior housing structure is currently under construction with thirty-five additional units, bringing the total count to ninety-five independent senior housing units on its six-plus acres of land, bringing total construction costs for the community to about $31 million, Parr says. “While many on the waiting list will now be able to move into [Raven Landing 4], the list is still at more than 170 people because still more people are signing up every week,” Parr says. “There’s just not enough housing—and particularly this type of safe housing. This is a unique property, like no retirement home you’ve seen before, and that’s why it’s really called a senior community— because it really exemplifies ‘community.’” G2 Construction expects the fourth, fourstory building, Raven Landing 4, to be completed and ready for occupancy in March. “The fourth building will make the business plan complete—like the keystone of the arch,” Parr says. “With the fourth apartment building we will have enough income to support all five buildings.” Twenty-two of the thirty-five new apartments from the fourth building were already committed in December, Parr says.

Community-Minded Design

Raven Landing is marketed as a middleclass independent senior retirement community with no income restrictions but www.akbizmag.com

Raven Landing in Fairbanks while under construction.

provides a few subsidized housing units for low-income seniors, Motter says. The community center is the pulse of activity on the Raven Landing campus and provides space for meals, meetings, exercise, performances, and support services for residents and non-residents alike. Raven Landing Center is equipped with a commercial-grade kitchen, a large dining room with a stage, multipurpose classrooms, a small library with a lounge, a salon and wellness spa,

and conference rooms available to rent. The catering staff can serve up to 350 people for all types of resident or non-resident events. “You walk into [Raven Landing] Center and there’s always someone in there playing bocce ball, playing cards, or singing songs. They have a piano and a choir. It’s an active place and it’s just wonderful,” Bettisworth says. Beyond the community center building, Raven Landing provides layers of oppor-

February 2016 | Alaska Business Monthly

Thomas Center for Senior Leadership By Russ Slaten

Thomas Center at night.

onstruction of the new Thomas Center for Senior Leadership, located near the intersection of Lake Otis Parkway and Tudor Road on the St. Mary’s Episcopal Church campus in Anchorage, was completed in November 2015. The faith-based, supported housing center for active seniors is designed to encourage social engagement while providing privacy in each apartment. “Just because you’ve retired, and you were a doctor or a pilot, or you were very active socially, doesn’t mean you get put on the shelf,” says Mike McCormack, president of the Thomas Center. “A lot of times what happens is you’re living in a house, you’re aging out, and you don’t have any social contact. The Thomas Center is a congregate living community so we can afford opportunities for people to continue to contribute through both their social network here at the Thomas Center, as well as within the greater community of Anchorage.” The center was envisioned by the late Tay Thomas and Carol Phillips fourteen years ago. The two women believed Anchorage needed a living community that provided support for elders to maintain an active and vibrant lifestyle; acquired land and construction funding was donated by Tay and her husband Lowell Thomas. Lowell will be one of the Thomas Center’s first residents. Designed by Olberding White Architects, the independent living community offers fourteen all-inclusive units with six one-bedroom, six two-bedroom, and two studio apartments for Alaskans ages sixty-two and older. Monthly rent ranges from $2,500 for a studio to $4,210 for a two-bedroom. There is an additional fee for an additional occupant. Along with the ADA-accessible apartment, rent includes tunities for residents to interact with one another. “Every building is connected one to the other with a vestibule all coming into the community center,” Motter says. “People can live on one side of this five-acre campus and then stroll right on through the buildings, stopping and visiting, sitting by the fireplace or going to the library, and then they end up on the far side of the campus to visit a friend.” The events and activities at Raven Landing Center promote a healthy, active, and independent lifestyle for the aging community living at Raven Landing, while 78

©Frank P. Flavin

all utilities, Internet, basic cable, weekly housekeeping services, two meals per day five days a week, interior and exterior maintenance, snow plowing and lawn service, carport parking and gardening space, educational and social activities, a daytime on-site general manager and live-in resident assistant, available exercise and crafts rooms and storage unit, and the option to pay a $150 fee for heated garage use. “This is not an assisted-care facility, but it is Americans with Disabilities Act compliant to accommodate residents who may use a walker or a cane or who may need to sit down to prepare food—enabling aging in place. We also envision residents contracting, as needed, with Anchorage area in-home services to administer meds, prepare meals, or bathing,” McCormack says. “These are things that we can build around, so they can focus on their strengths as infirmities build up.” Owned by St. Mary’s Episcopal Church Housing Company LLC, a nonprofit subsidiary of St. Mary’s Episcopal Church, the center was built by The Petersen Group through a $5 million grant from Lowell and Tay Thomas for construction; an earlier grant enabled site acquisition. Additionally, a $180,000 grant from the Rasmuson Foundation helped pay for furniture, fixtures, and equipment in the common areas at Thomas Center. Begun in benefiting the whole Fairbanks community by keeping families connected and in the same town, Parr says. “It’s great for families to have grandma right here in town,” Parr says. “They might not have room for her in their family home, or it might not be suitable, but grandma is comfortable, safe, well-fed, and the kids stop by or pick her up all the time to see her.”

Safe and Comfortable Living

In support of the project, Fairbanks business owner Karla Zervos donated her services through her business Lifespan Home Modifications specializing in providing the

July 2014, construction took less than a year and a half to be completed. Every apartment unit is designed to accommodate wheelchair access, and an elevator allows residents to move to and from their rooms. The crafts room provides plenty of communal storage, a work sink, and lots of natural lighting. The open design, commercial-grade kitchen is available for limited resident use on special occasions. The center is designed with multiple opportunities for residents to interact. The common area has movable furniture to make room for any type of activity including a cooking class, a dance performance, or even just relaxing and enjoying company. Doors to every unit are inside the building with an alcove near each entryway to provide a shared space with the neighbors. “As you walk down the hall you would notice that all of the apartment units have windows over the sinks overlooking the hallway. It seems like a crazy thing to do, but the whole point is to encourage people to be able to interact—as they wish—with their neighbors,” McCormack says. “Someone may be washing the dishes, looks out and sees someone walking down the hall and invites them in for a cup of coffee or joins them for a game of cards. It really supports people in encouraging them to get out.” R best age-appropriate housing design and specifications to allow seniors to live safely and comfortably in a home of their choice over their lifetime. “Karla took into consideration the products that best fit senior housing,” Motter says. “She helped find the best lighting, flooring, kitchen specifications, what to avoid, and everything that must be considered.” Additionally, Motter says the buildings’ automated systems provide another level of safety and security. “It’s an astonishing build. Technologically we’ve come a long way in the way in which we check the utilities, lights, and

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E NGINEERS, I NC.

motion sensors, and the call systems are ideal for this environment,” Motter says. Raven Landing apartment monthly rates are $1,705 for a studio apartment, $2,120 for a one-bedroom, and $2,555 for a twobedroom, and $420 monthly for an additional occupant fee. Beyond rent, monthly rates cover all utilities, all maintenance and repairs, six meals a week, light housekeeping, an emergency call system, telephone service, wireless Internet, basic cable, and snow removal and grounds care. The one and two-bedroom apartments have large living rooms and full kitchens, baths with roll-in showers, and a patio or balcony. Each apartment building features an elevator, laundry room, large common area, secured and monitored entryways, audio/ video identification for visitors, and meets a six-star energy rating from the Alaska Housing Finance Corporation. “There had been a demand for studio apartments, so in the fourth new building we now have four five-hundred-square-foot studio apartments—one on each floor,” Bettisworth says. “By increasing the height of the building from three stories to four stories, it allowed us to make thirty-five units as opposed to twenty units per building— making it more efficient and economical.” The next step for the Retirement Community of Fairbanks and Bettisworth North is finding a way to incorporate an assisted living facility in order to become a full-functioning continuous care retirement community. “Without a grant to help pay for the capital costs, it would be very tough make an assisted living facility work financially,” Bettisworth says. “We are working at it and we think we may have some pathways forward, but there are things to be considered. Given the projects completed over the past five years and projects just finishing up, it is still in the future.” Bettisworth North’s design philosophy is to be community builders by making improvements for the people who live in Alaska’s communities. The Raven Landing project has demonstrated that mission, and Bettisworth says it’s been one of the firm’s most rewarding projects. “After years in the business people may ask me which project I am most proud of,” he says. “I would say it’s the Raven Landing retirement community project simply because of what it provides for the people in the Fairbanks community.” R

Russ Slaten is an Associate Editor at Alaska Business Monthly.

Alaska Business Monthly | February 2016 www.akbizmag.com

ALASKA BUSINESS MONTHLY’S

ARCHITECTS & ENGINEERS

2016 ARCHITECTS & ENGINEERS DIRECTORY

Company COMPANY

Top Executive TOP EXECUTIVE

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

Pat Cusick, Pres.

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

Roe Sturgulewski, AK Ops Leader

Architects Alaska 900 W. 5th Ave., Suite 403 Anchorage, AK 99501 Phone: 907-272-3567 Fax: 907-277-1732

Mark Kneedler, Pres.

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.

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.

Bezek Durst Seiser 3330 C St., Suite 200 Anchorage, AK 99503 Phone: 907-562-6076 Fax: 907-562-6635

Daniel Seiser, Pres.

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

Catherine Call, Owner

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

Travis Woods, Pres./CEO

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

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

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

cynthia.oistad@arcadis.com arcadis.com

marketing@architectsalaska.com architectsalaska.com

info@asrcenergy.com asrcenergy.com

cmaynard@bbfm.com bbfm.com

info@bettisworthnorth.com bettisworthnorth.com

bds@bdsak.com bdsak.com

catherine@callbluesky.com callbluesky.com

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

bristol-companies.com

Terry.Bailey@ch2m.com ch2m.com/alaska

AK Estab. Empls. WORLDWIDE\AK EMPLOYEES

FOUNDED/ESTAB. AK

1981 1981

1888 1994

1950 1950

1985 1985

~10 ~10

Services SERVICES

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

28,000 ARCADIS is the leading global natural and built asset design & consultancy firm working 20 in partnership with our clients to deliver exceptional and sustainable outcomes through design, consultancy, engineering, project and management services. 25 25

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

3,833 ASRC Energy Services is AlaskaÕs largest provider of comprehensive oil and gas 3,368 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

11 11

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

1976 1976

37 37

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.

1981 1981

14 14

Architecture, interior design, and roof technology.

2002 2002

2 2

Architecture with a focus on residential and food service projects.

1985 1985

20 11

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

300+ Civil engineering, permitting and planning; total project management encompassing 70 planning, design and construction. facebook.com/ BristolAllianceOfCompaniesfacebook.com/BristolAllianceOfCompanies

1946 1962

25,380 Premier Alaskan oil & gas contractor with planning, siting, engineering, procurement, 2,403 logistics, sealift/truckable modules fabrication, piping, construction, program & construction management, operations & maintenance, supporting oil, gas, transportation, environmental, water, mining & government. February 2016 | www.akbizmag.com

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, Mng. Principal

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

COMPANY

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1973 1973

6-25 Please check out our Statement of Qualifications at chemtrack.net/about_us.htm. 6-25

1979 1979

350 100

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.

DAT/EM Systems International 2014 Merrill Field Dr. Anchorage, AK 99501 Phone: 907-522-3681 Fax: 907-522-3688

Jeff Yates, GM

1987 1987

13 11

DAT/EM Systems International develops solutions for the photogrammetric, engineering & GIS industries. The DAT/EM Photogrammetric Suite includes Summit Evolution 3D stereo mapping software, LandScape point cloud viewing and editing toolkit, Summit UAS for analyzing 3D UAS data, and more.

Del Norte Surveying, Inc. PO Box 110553 Anchorage, AK 99511 Phone: 907-345-8003 Fax: 907-345-8002

Lisa Greer, Owner

1986 1986

12 12

Professional land survey firm providing survey services to both the public and private sectors. We recently completed the PT Thomson and CD5 Pipeline Projects with Exxon Mobile, ConocoPhillips and Doyon Associated. DNS provides survey services all over the State of Alaska.

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

Chris Miller, Pres.

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.

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

Stewart Osgood, Pres./CEO

1962 1962

470 185

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.

ECI 3909 Arctic Blvd., Suite 100A Anchorage, AK 99503 Phone: 907-561-5543

Brian Meissner, Principal

1981 1981

14 14

ECI is a community minded architectural design strategy firm, who focuses on planning and design that strengthens the missions of our clients. We are based in Anchorage, Alaska and for 35 years have been creating people places throughout the state.

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

John Faschan, Pres.

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.

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

Robert French, PE, PIC

1986 1986

6 6

Our staff of engineers and Project Managers are skilled in hazmat design for building remodel and demolition projects. Asbestos, lead, PCB & other hazardous building materials identification. IAQ, Welding Fume, Ventilation studies. MOA 3rd Party Plan Review and ICC & IFC Code Consulting.

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

David Burlingame , Pres.

1996 1996

200 150

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.

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

Larry Helgeson, Principal Eng.

1988 1988

20 20

Environmental & civil engineering, Phase I & Phase II ESAs, wetland delineations & permitting, asbestos mgmt. & design, HUD lead paint activities, UST removals, SWPPPs, SPCCs, GIS mapping, & training. A team of dedicated professionals working to make Alaska cleaner & safer.

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

1974 1974

68 68

Engineering services, land surveying services, and 3D Laser Scanning Services.

Fluor Alaska, Inc. 4300 B St., Suite 210 Anchorage, AK 99503 Phone: 907-865-2000 Fax: 907-865-2023

Wyche Ford, GM/Project Dir.

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

Rada Khadjinova, AK Div. Mgr.

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

Mitchells Richard, Mgr. AK Ops

Great Northern Engineering LLC 137 E. Arctic Ave. Palmer, AK 99645-6255 Phone: 907-745-6988 Fax: 907-745-0591

Gawain Brumfield, CEO

www.akbizmag.com | February 2016

info@chemtrack.net chemtrack.net

anchorageinfo@coffman.com coffman.com

info@crweng.com crweng.com

sales@datem.com datem.com

lgreer@dnsalaska.com

mail@designalaska.com designalaska.com

jpayne@dowl.com dowl.com

contact@ecialaska.com ecialaska.com

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

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

jaxley@epsinc.com esgrp.net

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

facebook.com/BELL.CMH frobertbell.com

fluor.alaska@fluor.com fluor.com

searl@fugro.com fugro.com

golder.com

gne@mtaonline.net greatnorthernengineering.com

Civil,Commissioning,Corrosion Control,Electrical,Forensic,Fire Protection Engineering,Industrial Design,Instrumentation & Controls,Land Surveying,Lighting,Mechanical,Pipeline Integrity Management,Pipeline & Process Facility Design,Project Management,Structural,Seismic,Sustainable Design,Energy Audit

1913 1954

40,000 Fluor is one of the worldﾃ不 largest publicly traded engineering, procurement, construction 80 (EPC), maintenance, and project management companies. Fluor works with governments and Clients in diverse industries around the world to design, construct, and maintain complex and challenging capital projects

1962 2003

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.

1960 1980

7,500 Arctic and geotechnical engineering, groundwater resource development, environmental 40 sciences and remedial investigation.

1982 1982

9 9

ARCHITECTS & ENGINEERS

Top Executive

ALASKA BUSINESS MONTHLY | 2016 ARCHITECTS & ENGINEERS DIRECTORY

Company

Established electrical, mechanical and civil/structural engineering consulting services and Hubzone certified. Economical solutions for petrochemical, telecommunications, commercial and industrial clients.

ARCHITECTS & ENGINEERS

ALASKA BUSINESS MONTHLY | 2016 ARCHITECTS & ENGINEERS DIRECTORY 84

Company

Top Executive

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

Benjamin Haight, Pres./CEO

Hanson Alaska LLC 801 B St., Suite 400 Anchorage, AK 99501 Phone: 907-279-1282 Fax: 907-279-12836

COMPANY

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1980 1980

6 6

Sergio Pecori, PE, Pres./CEO

1954 2008

400 6

Hanson is a national, award-winning consulting firm that offers services for engineering, commissioning and energy, planning and management, land acquisition, environmental and construction and project delivery.

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

Mike Schlegel, Office Mgr./Principal

1974 1985

115 1

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.

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

John Hasz, Pres.

1993 1998

6 5

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.

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

Scott Hattenburg, Principal/Pres.

2000 2000

90 87

HDL provides civil, geotechnical, and transportation engineering, environmental services, planning, surveying and mapping, construction administration, material testing, and Right-of-Way services throughout Alaska; focusing on quality, and sustainable projects.

HDR 2525 C St., Suite 500 Anchorage, AK 99503 Phone: 907-644-2000 Fax: 907-644-2022

Tim Gallagher, AK Area Mgr.

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

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

Terry Heikkila, Dir. AK Ops

Jensen Yorba Lott, Inc. 522 W. Tenth St. Juneau, AK 99801 Phone: 907-586-1070 Fax: 907-586-3959

Wayne Jensen, AIA/Pres.

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

Charles Banister, Owner/Pres./Pncpl

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

mike.schlegel@hartcrowser.com hartcrowser.com

jrhasz@haszconsulting.com haszconsulting.com

info@hdlalaska.com hdlalaska.com

info@hdrinc.com hdrinc.com

bonnie.ivy@ivyandco.com ivyandco.com

jacobs.com

1979 1979

1984 1984

1947 1993

Consulting electrical engineers serving Southeast Alaska since 1980.

9,500 Engineering services cover civil and structural engineering for transportation, water/ 130 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. 5 5

Innovative residential and commercial designs for the Alaska environment.

66,000 Our Alaska operation has the capability of leveraging our vast global resources to 65 provide a wide range of services; including environmental permitting, compliance, investigation & remediation; energy conservation; logistics; upstream design; feasibility analysis & construction management.

1935 1935

10 10

Planning, programming, design and construction administration for architecture, interior design, space planning and construction management.

1987 1987

1 1

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

1981 1981

20 20

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

12 12

Kumin provides professional architecture, planning and interior design services for a wide range of project types. Known for our business integrity and advocacy on behalf of our clients, we balance creative and elegant design with careful respect of clients' budgets and schedules.

Langdon Engineering & Scientific Services Albert Swank Jr., PE/Owner 318 W. Tenth Ave. Anchorage, AK 99501 le-m@ak.net Phone: 360-620-7046

1980 1980

1-3 1-3

Engineering, civil, structural, mechanical, engineering physics, cryogenic, process, machine design, military systems, industrial processes, manufacturing engineering, design build, nuclear physics research, accelerators, isotope production, medical systems. Shops and offices Alaska and Washington.

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

LCG Lantech, Inc. (formerly 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.

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

Bob Tsigonis, Pres.,PE

1998 1998

8 8

Manufacturing sewage treatment plants for man camps, homes, and lodges in the most extreme environments and remote places. Manufacturing high performance plastic jet boats and rugged work boats. Custom plastic fabrication.

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

Dominic Lee, Owner

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

Tom Livingston, Principal

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

Jim Sawhill, Pres.

jyl_info@jensenyorbalott.com jensenyorbalott.com

kemell@alaskan.com

info@kpbarchitects.com kpbarchitects.com

kai@kuminalaska.com kuminalaska.com

holly@lcgak.com lcgak.com

Bob@LifewaterEngineering.com LifewaterEngineering.com

littlesu@ak.net littlesu.com

lsi@livingstonslone.com livingstonslone.com

k.ayers@lounsburyinc.com lounsburyinc.com

1980 1980

5-20 A general, mechanical and electrical contractor. Architects, civil, mechanical and 5-20 electrical engineers, licensed in twelve states. Construction project management. Importer, exporter and global project consultation.

1975 1975

17 17

Architecture services for new construction & renovations, including building condition surveys & energy assessments/upgrades. interior design, master planning, space programming & design standards. Project types: labs, healthcare, K12 & higher ed, cultural,social services, military, & industrial.

1949 1949

80+ 80+

Civil engineering, land surveying, planning, construction management. Servicing local and state government, oil and gas industry and private development. Offices in Anchorage, Wasilla, Kuparuk and Billings, Montana. February 2016 | www.akbizmag.com

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

Dennis Bolz, Owner

Martha Hanlon Architects, Inc. PO Box 72292 Fairbanks, AK 99707 Phone: 907-458-7225

Martha Hanlon, AIA/Pres.

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

Bradley Sordahl, Principal/CME

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

John Weir, Pres./CEO

Merrick Alaska 3201 C St., Suite 105 Anchorage, AK 99503 Phone: 907-341-4725

David Huelskamp, CEO

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

Jeffrey Baker, Reg. Dir.

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, AK Mgr.

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

Mark Morris, Principal

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

Chris Brown, AK Reg. Mgr.

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

Rock Hengen, Pres./GM

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

John Hargesheimer, Pres.

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

Burr Neely, GM

Nvision Architecture, Inc. 1231 Gambell St., Suite 400 Anchorage, AK 99501 Phone: 907-349-1425 Fax: 907-349-1325

Bill Tatom, CEO

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

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

John Pickering, Pres.

COMPANY

www.akbizmag.com | February 2016

TOP EXECUTIVE

FOUNDED/ESTAB. AK

mebeng@acsalaska.net

info@mh-architects.com mh-architects.com

mbaconsulting@alaska.com mba-consulting.net

jweir@mcgalaska.com mcgalaska.com

charlie.barnwell@merrick.com merrick.com

mbakerintl.com

hlm@mlfaalaska.com mlfalaaska.com

smcfarlane@moffattnichol.com moffattnichol.com

info@morrisengineeringgroup.com morrisengineeringgroup.com

chris.brown@mwhglobal.com mwhglobal.com

info@nanaworleyparsons.com nanaworleyparsons.com

hargy@nortechengr.com nortechengr.com

nlur@northernlanduse.com northernlanduse.com

admin@nvisionarch.com nvisionarchitecture.com

oneillengr@ak.net

pdceng.com

dstella@gci.net

imartin@pndengineers.com pndengineers.com

AK Estab. Empls.

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1989 1989

1 1

Engineering services.

1998 1998

2 2

Architectural design and project planning.

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.

1983 1983

20 20

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.

1955 2014

550 40

Engineering, surveying, energy systems, geospatial, (LiDAR, GIS, aerial imagery).

1940 1942

5,000 Engineering: transportation, pipeline, geotechnical, mechanical, civil; GIS & LiDAR; ~80 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

623 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 2004

8 8

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

1977 1982

7,000 Water, wastewater, environmental remediation, permitting and power. 30

1997 1997

350+ A project delivery company focused on multi-discipline engineering and design, 350+ 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.

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.

1997 1997

8 8

Full-service architectural firm.

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

85 85

PDC is a 100% employee-owned multi-disciplined firm with 85+ employees in four office locations. We specialize in designing for the ever changing Arctic environment with expertise in civil, electrical, mechanical, and structural engineering, as well as land survey and 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.

1979 1979

128 87

ARCHITECTS & ENGINEERS

Top Executive

ALASKA BUSINESS MONTHLY | 2016 ARCHITECTS & ENGINEERS DIRECTORY

Company

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

ARCHITECTS & ENGINEERS

ALASKA BUSINESS MONTHLY | 2016 ARCHITECTS & ENGINEERS DIRECTORY 86

Company

Top Executive

Quantum Spatial 2014 Merrill Field Dr. Anchorage, AK 99501 Phone: 907-272-4495 Fax: 907-274-3265

Robert Hickey, Cf. Bus. Dev. Officer

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

Len Story, CEO

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

Steve Nigg, Branch Mgr.

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

Larry Cash, Pres./CEO

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

Timothy Hall, Pres.

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

Daniel Folmar, Principal

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

Christopher Darrah, 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.

Simpson Associates, Inc. PO Box 240125 Anchorage, AK 99524 Phone: 907-562-0944 Fax: 907-562-3944

COMPANY

TOP EXECUTIVE

AK Estab. Empls.

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1960 1960

513 39

Quantum Spatial's comprehensive capabilities encompass the acquisition, analysis, integration, and management of geospatial data. We offer a diverse portfolio of advanced imaging and remote sensing technologies, backed by powerful modeling, visualization, and GIS tools.

1969 1969

133 133

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

10 10

Mechanical & electrical engineering services statewide inclusive of enhanced commissioning, especially for military construction. In 2015, the firm has embarked upon its 38th year with projects for US Fish & Wildlife, Clear AFS, FTW & JBER, private developments, and Merrill Field Paint Hangar.

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.

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

14 14

Engineering services.

1954 1974

310 33

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

300 60

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.

Mark Simpson, Pres./Architect

1975 1975

2 2

Stantec 725 E. Fireweed Ln., Suite 200 Anchorage, AK 99503 Phone: 907-276-4245 Fax: 907-258-4653

Bob Gomes, CEO

1954 1972

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

Taku Engineering LLC 205 E. Benson Blvd. Anchorage, AK 99503 Phone: 907-562-1248

William Mott, GM/PE

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

Mike Tauriainen, Principal Engineer

Thompson Engineering, Inc. 721 Sesame St., Suite 2B Anchorage, AK 99503-6632 Phone: 907-562-1552 Fax: 907-562-1530

Craig Thompson, Pres.

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

Bill Schnabel, Interim Dir.

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

Richard S. Reich, PE/GM

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.

contact@quantumspatial.com quantumspatial.com

email@rmconsult.com rmconsult.com

steve@RBAengineers.com RBAEngineers.com

info@rim-ak.com rimarchitects.com

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

harrybuchea@takuengineering.com takuengineering.com

engineeringalaska@gci.net

teco@gci.net

ncripley@alaska.edu ine.uaf.edu

info@uicumiaq.com uicumiaq.com

info@whpacific.com whpacific.com

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

15,000 Stantec unites more than 15,000 employees from over 250 locations. Our 72 workÑconsulting in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project managementÑbegins at the intersection of community, creativity, and client relationships.

1996 1996

6 6

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.

2001 2001

20 20

An Alaskan owned & operated engineering firm dedicated to providing innovative Project Engineering, Management & Corrosion Control design solutions for the Oil & Gas Industry.

1978 1978

9 9

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

1989 1989

2 2

Electrical Power Engineering.

1982 1982

100 90

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

200 200

UMIAQ services include resource development, regulatory planning, stakeholder relations, surveying, logistics, onshore/offshore spill response, Arctic science support, etc.

1981 1981

300 28

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

February 2016 | www.akbizmag.com

INTRODUCE A

Girl TO Engineering Day

Major support provided by: Bechtel • ExxonMobil Corporation • Motorola Solutions Foundation • Northrop Grumman Foundation • Raytheon Company • Rockwell Collins • TE Connectivity Foundation Additional support provided by members of the DiscoverE Leadership Council: Bechtel • Bentley Systems, Inc. • The Boeing Company • ExxonMobil Corporation • Lockheed Martin Corporation • NCEES (National Council of Examiners for Engineering and Surveying) • Project Management Institute Education Foundation • S. D. Bechtel, Jr. Foundation/Stephen Bechtel Fund • Shell Oil Company 2015 Engineers Week Co-Chairs: Shell Oil Company • American Society of Agricultural and Biological Engineers

www.akbizmag.com

February 2016 | Alaska Business Monthly

ENVIRONMENTAL SERVICES

e d i w e t Sta Alaska Reclamati on

By Tasha Anderson

n December 2015, US Senator Lisa Murkowski released a statement chastising the federal government for its double standard regarding abandoned well cleanup. “Even as federal regulators put forward more stringent regulations for well cleanup on National Wildlife Refuge System lands, the federal government continues to long-neglect its obligation to remediate the wells it drilled, and then abandoned, in what is now the National Petroleum Reserve-Alaska,” was stated in the release. The US Navy and US Geological Survey drilled more than 130 exploration wells on Alaska’s North Slope between 1944 and 1982, remediating only a handful and abandoning the rest, according to the release. “The federal government may see new regulations as part of the solution, but has conveniently ignored the fact that it actually created much of the problem in Alaska. We still have more than one hundred abandoned exploration wells, drilled decades ago by the federal government, in desperate need of being cleaned up and capped. We would never tolerate this type of willful refusal from a private company,” Murkowski said. Abandoned federal government exploration wells are just one part of Alaska’s reclamation and remediation picture. Natural resource extraction was a serious interest in Alaska before it even became a state, 88

from gold rushes to timber to drilling for oil. Now, when an oilfield is developed or a mine is proposed, reclamation is accounted for before construction begins, but that absolutely has not been the case for most of the state’s history. Alaska is dotted with a dizzying known number of abandoned mines and wells, and it’s almost certain that there are undocumented contaminated and/or hazardous sites statewide as well. What is being done to resolve this problem, and who’s taking care of it?

Contaminated Site Program

One significant player is the Contaminated Site Program, part of the Division of Spill Prevention and Response of the Alaska Department of Environmental Conservation. Program Manager Jennifer Roberts explains that her program is separate from the Emergency Response program. Emergency Response, she says, responds to new situations, cleaning up and closing the site out, generally with timelines of a year or less; any historic issues or spills that need a longer cleanup or monitoring period get transferred to the Contaminated Site Program. “My program handles historic, longterm, groundwater contaminations, etc.,” Roberts says. “Currently we have sites like Flint Hills Refinery; all of the military bases that are on the Superfund [a federal program to clean up contaminated sites]— Eielson, Fort Wainwright, Elmendorf,

Richardson, Adak— and other superfund sites like Salt Chuk Mine. Red Devil isn’t on the list, but is a Superfund-caliber site. We also have the North Slope legacy wells.” The purpose of the Contaminated Site Program is to monitor and ensure that these sites are remediated, and Roberts says the program’s goal is usually to find an appropriate responsible entity to perform the clean-up. “If we can find who was the owner/operator/releaser, that’s the first entity that we turn to to do the clean-up. In some cases it gets complicated quickly,” she says. In Alaska, it’s quite possible for a business to be working in partnership with two or three landowners with various surface or subsurface rights, often including state or federal governments. For instance, as part of Alaska Native Claims Settlement Act, Alaska Native village and regional organizations were given lands on which contamination has since been discovered. “BLM [Bureau of Land Management] is actually leading an initiative to work with the tribal entities to figure out which lands were transferred that might be contaminated. They’ve been working closely with us and other federal agencies trying to put together a comprehensive report on that,” Roberts says. One point that Roberts emphasizes is that the extent of statewide contamination isn’t fully known or documented.

Alaska Business Monthly | February 2016 www.akbizmag.com

“Nobody’s got a really good handle on these [sites],” she says. “You’d think after all this time that we’d have a good list, but things always come up.” She references the vast amount of activity that the federal government has had instate throughout Alaska’s history, saying: “World War II was huge. The Department of Defense has its own program, and we work with them really well, but even now, after working with them for almost twentyfive years, something will pop up and we’ll all say: who knew about that site?” Some of the sites that program is responsible for are on lands the state owns, but were leased by another entity, like an airport. “The Department of Transportation has contaminated sites that they own, the Department of Natural Resources has some that they own; they’re the big ones.” She says the program does a lot of work with petroleum, “It’s a big one; there’s just a lot of it around, including above ground tanks, little tank farms in the villages, or home heating tanks.” Roberts says that the Contaminated Site Program does whatever it can to cost recover. “Alaska has what’s called joint and several liability, and part of that says that we bill everyone. It’s a mix. We have several funding agreements with the Department of Defense and the Federal Aviation Administration where they pay us back their costs; we’ll bill oil and gas companies for any of that contamination; we will bill homeowners, businesses, whoever the responsible party is.” When it comes to getting the funds, Roberts says, “We’re persistent, and we have been successful.” Roberts says one of the largest challenges her program faces is dealing with responsible parties that simply do not have the money to perform a cleanup, often homeowners, small villages, or rural communities with medium-sized tank farms. “The key to this is really prevention as much as anything else. We’re trying to put together [informational] tools for small businesses and homeowners and perhaps implement a program for them so they can replace a tank that’s going to fail before it fails: make that an economical incentive for them rather than having fuel that leaks for years and gets into their groundwater.” According to the FY 2015 Spill Prevention and Response Annual Report, more than 7,400 contaminated sites have been documented in Alaska since the program’s inception. Of those, 70 percent have been closed over the last thirty-five years, with a tipping point in 2005 when closed contamination cases outnumbered open ones. The division had a goal of 150 total site closures for 2015, which it met, closing 156. As of June 2015, www.akbizmag.com

there were 2,231 open sites listed on the statewide contaminated sites database.

Abandoned Mine Lands Program

The Abandoned Mine Lands Program is part of the Alaska Department of Natural Resources Division of Mining, Land & Water. Abandoned Mine Lands Program Manager Justin Ireys says that the program’s main task is to clean up historic abandoned coal mines, although it does also do some hard rock mine remediation. Such a specific scope of work is primarily due to how this program is funded, which is through a nationwide coal fee.

“Every active coal mine [in the United States] pays a fee, twenty-eight cents per ton for surface mines and twelve cents per ton for underground mines, and those monies are collected by the US Department of the Interior, Office of Surface Mining Reclamation and Enforcement,” Ireys says. Once those funds are collected, they are allocated to states with Abandoned Mine Lands programs. “Because the funding is generated from coal mining, we’re mandated to focus our reclamation work on abandoned coal mines, but a smaller portion of our budget can be used to reclaim non-coal mines if they fall under certain

February 2016 | Alaska Business Monthly

criteria, generally eminent threat to public health and safety,” he says. An example would be if an abandoned hard rock mine entrance were located in an area that has heavy recreation, such as Ester Dome near Fairbanks, an area where gold was produced from the turn of the last century until World War II. “There’s a lot of recreation out there; so we focus on noncoal stuff that’s near communities or publicly accessed land,” Ireys says. He says there are quite a few criteria for a project to be eligible to be reclaimed under the Abandoned Mine Lands program. Number one is that the mine site had to have been abandoned prior to 1977. “Beginning in 1977 mining companies were required to start to do their own reclamation, and they are required to post a bond with the regulatory authority, in our case the state of Alaska. That bond protects the state from companies going bankrupt or out of business and abandoning operations,” leaving the burden of reclamation on the state, he says. Prior to 1977, coal companies that shut down mine operations and just walked away were not acting illegally, therefore those mine operators are not responsible for paying for the reclamation now. “If there is a company that’s liable, that we can find and track down, efforts are

made to go after those companies, but generally that’s not the case. Most of the historic coal mining in Alaska occurred way pre-law, starting around 1915 or 1920 and finishing up in the late 1960s,” Ireys says. The federal Surface Mining Control Act was signed into law in 1977, but the Alaska Surface Coal Mining Control and Reclamation Act was approved in May 1983, when the state’s coal and non-coal historic mines were broadly inventoried, resulting in 340 sites identified. According to the Abandoned Mine Lands website, “Coal mining in Alaska has been well documented and every mine of significance has been identified; [however,] the non-coal inventory remains incomplete for state, private, and Native lands,” after a compilation of non-coal mines was made in 1991, with 432 sites identified. The Abandoned Mine Lands Portal at abandonedmines.gov was launched in 2008 and states that “approximately 6,830 abandoned hardrock mines exist in Alaska according to the Bureau of Land Management and Forest Service estimates.” To date, the program has spent nearly $24 million in reclamation efforts, remediating issues such as vertical openings, dangerous high walls, hazardous water bodies, hazardous equipment and facilities,

SOLUTIONS

surface burning, and dangerous piles and embankments at forty-seven sites around the state. One current project is the Hydraulic Pit, which “had high walls that were three hundred vertical feet, just straight up from the ground,” Ireys says. Remediation involves sloping the sheer walls so that a person could walk down them, he says. “It’s one of the biggest projects our program has embarked on,” Ireys says, and he estimates that when the project is complete it will have taken approximately eight hundred thousand cubic yards of material to make the wall safe. Once the slope has been added, the last phase of a project like this is revegetation, “so erosion is minimized from snow melt or rainstorms. Erosion coming out of a site like that puts sediment right into water bodies, which is not desirable, so getting vegetation is a key component.” Ireys says that the program is currently set to expire in 2022. With current funding levels and project timelines, all of the remaining sites will not have been reclaimed by then. Ireys says it’s likely the program will be reauthorized. While Alaska has approximately ten more years of work to do, we have relatively few sites compared to some other parts of the country, such as “the East Coast, where a lot of the historical mining occurred. They have decades and decades of work to do, and they have big Abandoned Mine Lands programs; we’re basically two people in Alaska—the state of Pennsylvania has 165 people in their program.” Ireys says that there currently is not a program specifically for non-coal hardrock mines: “We wish there was, and there’s been talk about establishing a similar type of program for hardrock mines.” But, what work is happening is positive. “It’s great what’s happened. It’s made it much better for the environment, much better for people living near mines and those who are using public lands,” says Ireys.

USACE-Alaska District

Providing solutions for Alaska’s environmental, engineering, construction, health & safety, and training needs since 1988.

206 East Fireweed Lane, Suite 201 I Anchorage, AK 99503 I (907) 272-8852 I emi-alaska.com 90

Wells and mines are not the only types of sites that may be in need of remediation. According to the US Army Corps of Engineers (USACE) website, nationwide more than ten thousand properties have been identified for inclusion in the Formerly Used Defense Sites, or FUDS, program. These are sites that were “formerly owned by, leased to, or otherwise possessed by the United States and under the jurisdiction of the Secretary of Defense.” The Department of Defense is responsible for restoration of these sites. During World War II and the Cold War, several branches of the US military had large presence spanning the state of Alas-

Alaska Business Monthly | February 2016 www.akbizmag.com

ka, which was strategically significant. USACE-Alaska District says that in Alaska 642 properties have been reviewed for eligibility into the FUDS program, of which 532 were found eligible; however, of those only 137 properties were found to have “potential impacts that required investigation and potential environmental remediation. More than half of those have now been remediated and recorded as completed.” The USACE-Alaska District FUDS program budget for FY15 (October 1, 2014 through September 30, 2015) was $37.5 million, and its FY16 budget is currently $39.3 million, the department says. One of the projects that USACE-Alaska District is currently engaged in is Attu Island, located about 1,500 miles southwest of Anchorage, the westernmost and largest island in the Near Islands group of the Aleutians. “It served as an Army air base and naval station during World War II. After WWII, it was operated as an Air Force auxiliary airfield and naval station until it was deactivated in 1969. In 2015, USACEAlaska District awarded a contract to Bristol Environmental Remedial Services, Inc., to conduct a removal action at this FUDS,” according to USACE-Alaska District. The project is anticipated to take place between May and September. “Up to fifty-

two above-ground fuel storage tanks will be demolished and shipped off-island for disposal. Lead batteries and associated contaminated soil will be removed, along with up to ten tons of fifty-five-gallon drums. Up to eight tons of petroleum contaminated soil also will be removed and disposed of properly. The primary goals of this removal action are to eliminate the entrapment hazard for area wildlife and to decrease risk to human health and the environment.”

Contamination Spectrum

In the event of a spill or contamination, how much can be done to remediate the site varies significantly from case to case. For example, the Spill Prevention and Response FY 2015 Annual Report describes an incident at Pogo Mine where paste backfill had been released from two locations; Pogo estimated that between 80,000 and 135,000 gallons were lost. But, “due to the high viscosity of the paste, as well as its automatic solidifying mechanism, the released product remained on gravel pad; soil and water sample results confirmed that off-pad migration through naturally occurring processes had not occurred.” After the paste finished solidifying, Pogo personnel removed the product using heavy equipment, hand tools, and high pressure wash-

ers. That was the extent of the necessary remediation. On the other end of the spectrum was the Exxon Valdez oil spill where approximately 11 million gallons, or 257,000 barrels of oil, impacted approximately 1,300 miles of Arctic shoreline, with 200 miles heavily or moderately oiled. The Exxon Valdez Oil Spill Trustee Council was formed to oversee restoration of the affected area, funded by the $900 million civil settlement, and the Exxon Valdez Oil Spill Trustee Council Public Advisory Committee continues to this day to release funds as appropriate for restoration and monitoring actives. The general idea of resource extraction has evolved with incredible leaps and bounds in the last one hundred years. The idea of leaving a pile of oil and metal scrap for someone else to deal with is abhorrent and illegal rather than acceptable and sadly common. While better practices now don’t fix the bad practices of yesterday, time, money, and determination can certainly make a difference. R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

BEFORE

CORROSION PREVENTION Protective Coatings | Marine Coatings Blasting Abrasives | Pavement Markings Petroleum Tapes

Civil www.akbizmag.com

AFTER

300 E 54th Ave., Anchorage, AK 99518 Phone: 907-646-4732 Construction and Maintenance Products www.polarsupply.com

February 2016 | Alaska Business Monthly

CONSTRUCTION

The $52 million Joe Redington Sr. Jr/Sr High School built by Collins Construction on Knik Goose Bay Road in the Valley opened to capacity in fall 2015—without any seniors.

Developing Our Communities: Mat-Su Keeping up with growth and improving life By Rindi White

n a growing community, change can be a breath of fresh air. The MatanuskaSusitna Borough hovers on the edge of a population of one hundred thousand, a brisk population rise that has overloaded roads, schools, and even common community services like libraries. With help from the state and, in some cases, from granting organizations, Mat-Su is fighting to keep up with that growth and improve life for its residents. A new family fun center—the first of its kind in Alaska— is on track to open in the first quarter of the year. A larger library with public meeting space will open in Wasilla in the fall, and classrooms will be filled in two new schools when the new school year begins. Meanwhile, traffic is flowing on three important new road projects that were built to ease congestion on the Palmer-Wasilla 92

Highway connecting the borough’s two largest cities and to allow Knik-Goose Bay Road drivers an alternative route north instead of driving through downtown Wasilla.

Growing Community Needs Indoor Fun Spot The range of options for fun activities to do out of the weather in the Mat-Su Valley isn’t large. There’s bowling, a few gyms that offer open gym time or children’s play areas, three ice rinks, and an indoor turf court. Three swimming pools, a bounce house where children can bounce on inflatable structures, and a few churches offer play time. That’s pretty much it, outside of organized sports like gymnastics or karate. This month or next, the Extreme Fun Center will join that mix, offering indoor racing carts, laser tag, mini-bowling, an arcade, and a shooting gallery. John Schweiger, owner of Ashland, Oregon-based Coming Attractions Theatres, the chain that runs The Valley Cinema, is building the fun center with financing help from the Alaska Industrial Development and Export Authority (AIDEA). Al Lane, president and chief operating officer of Coming Attractions Theatres,

says Wasilla’s is the largest fun center his company has undertaken. A fun center in Aberdeen, Washington, was set to open in January in a mall Coming Attractions purchased. The fun center in Wasilla is all new construction, being built adjacent to the Valley Cinema. “People have been coming out of that theater looking for something to do,” Lane says. “The entire facility, including the racing carts, will be great for all ages from grandkids to grandparents and everyone in-between.” The facility will be about seventy thousand square feet, with about ten thousand square feet of that space designated for a sky box for corporate events. In addition, there will be five birthday party rooms available for other parties or gatherings. “This industry lives and dies off birthday parties,” Lane says. He adds that the company will be making pizzas and other party food for sale at the center. Lane says the building cost is roughly $6 million, and the company has more set aside for the games and equipment inside. AIDEA, through Northrim Bank, loaned Schweiger $5.4 million for the building construction.

Alaska Business Monthly | February 2016 www.akbizmag.com

“AIDEA does not originate loans, but is able to purchase up to 90 percent of a commercial loan, to a maximum of $20 million, that is sponsored and originated by an eligible financial institution,” AIDEA officials state in a press release about the project. “This is a great project, consistent with our mission, and it makes good business sense for AIDEA,” says Karsten Rodvik, external affairs officer for AIDEA, in an email. AIDEA has participated on similar privately owned ventures such as H2Oasis in Anchorage.

More Space for Reading and Learning The City of Wasilla plans to open its new public library in the fall. It’s a project that has been in the works for more than twenty years and, like a few of the novels that line the existing library’s shelves, the story has had its share of plot twists. The Wasilla Public Library is just over eight thousand square feet. It’s in the same location it’s been in since 1978: a two-story building with a children’s library in the basement and the adults’ section upstairs. Story time is held between the aisles. Author readings and other library activities are held elsewhere—sometimes at city hall, just down the street.

For years, Friends of Wasilla Public Library have been raising funds and drumming up support for a new library with a public meeting space. The issue came to a head in 2009, when Harold and June DeArmoun, owners of Meta Rose Square, a shopping center a block away from the library, offered to sell their twenty-thousand-squarefoot shopping center to the city for a new library. The city bought the shopping center for $1.5 million, a discount of $500,000 off its market value, and agreed to have the name “Meta Rose” as part of the new library at the request of the DeArmouns. But a new library was not meant to be there—an engineering report found significant structural work would have been needed to support thousands of heavy books in the shopping center, and it would have been costly to get the building up to current codes for accessibility. The city decided to keep using the building as retail space, act as a landlord, and sell the building when possible. Meanwhile, city voters in 2013 agreed to a one-percent jump in sales tax, with the proceeds going to pay for a new library. The project also received grant funding from the Rasmuson Foundation, the state of Alaska, and Mat-Su Health Foundation. The Friends of Wasilla Public Library con-

tributed nearly $80,000, city Public Works Director Archie Giddings says, and the city is continuing to seek local contributions. Giddings says construction is on schedule. In December, metal wall frames were up and unitized curtain wall panels were being shipped up for installation in the winter. The wall panels are super-insulated and have a concrete material on the outside that never needs to be painted. “They’re one-hundred-year walls,” he says. Although costly on the front end, the unitized wall will be more energy efficient and need less maintenance over the life of the building, Giddings says. The new, one-story building will be about twenty-four thousand square feet, with a ninety-two-space parking area outside. It’s on a four-acre site at the intersection of Crusey Street and Swanson Avenue, adjacent to Wasilla Middle School and Wasilla High School. The semi-circle layout of the building will allow the city to keep existing staffing levels, as librarians will be able to see to the end of numerous aisles while at the central desk. The building will include three study rooms and a large meeting area, Giddings says. A large offering of computers and laptops is planned, as well as expanded children’s programming and reading areas for adults. Keeping the city’s promise to the

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February 2016 | Alaska Business Monthly

DeArmouns, Giddings says the children’s library will be named Meta Rose. Cornerstone General Contractors is the general contractor on the project, assisted by architect ECI/Hyer. The construction budget is $12 million, with an additional $3 million for the architect and furnishings. Meanwhile, Giddings says the city planned by January to issue a request for proposals for a realtor to sell the Meta Rose Square shopping center, after an earlier attempt to sell it through a sealed-bid sale was not effective. And by 2018, the city plans to move its museum, now located in a historic log building that once served as a community center, into the old library. The log museum building will then be renovated back to its community center state, Giddings says. The city is in the process of setting aside funding for the move and renovations.

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New Schools Open with Full Classrooms A healthy community needs vibrant schools. Mat-Su is continually battling crowded classrooms, however. Valley voters in 2011 passed a $214 million bond package aimed at addressing school crowding by building five new schools and adding on to more. Mat-Su officials say the new schools are opening with full classrooms. Joe Redington Sr. Jr/Sr High School opened on Knik Goose Bay Road in fall 2015. The $52 million school construction project included ball fields, bleachers, and other typical high-school campus offerings. The school opened without any high school seniors attending class, Mat-Su Borough Engineering Manager Brad Sworts says. But a week after opening, the school was already at full capacity. Collins Construction was the contractor for that project. Dena’ina Elementary School, located adjacent to Redington Sr. Jr/Sr High, will open this fall. The $15.6 million, 44,200-squarefoot elementary school is being built by F&E Contracting. The school will serve the booming Knik-Goose Bay community, one of the fastest growing communities in the state. Iditarod Elementary School will also open in the fall. The $17.3 million, 50,600-square-foot facility will replace an outdated school in Wasilla that was one of the Valley’s first elementary schools. Collins Construction is building the replacement school. A third school, not funded under the $214 million bond package, will also open in the fall. Fronteras Spanish Immersion School secured a US Department of Agriculture loan for a $7.2 million, 31,300-square-foot school facility. Howdy Construction is the general contractor on that project. Sworts

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says the project will allow the K-8 charter school to move out of leased space.

Roads to Schools

The Mat-Su Borough this fall opened two new sections of road, bookends on a project to provide an alternative route between Palmer and Wasilla and decrease congestion on the Palmer-Wasilla Highway. “What prompted this was the traffic on the Palmer-Wasilla Highway was increasing at a steady rate and congestion was getting pretty significant,” Sworts says. However, expanding that route is prohibitively costly. Hundreds of homes and businesses line the route, and just purchasing right-of-way for an expansion was a multi-million dollar effort. Instead, thenSenator Lyda Green and former Governor Frank Murkowski set aside funding to lengthen Bogard and Seldon roads to reach the two cities. “It also provided the benefit of linking Palmer High, Colony Middle and High, Teeland Middle School, the Career and Technical High School, Larson Elementary, [and others],” Sworts says. “It makes it easier for school bus operators to function.” The Bogard East project, designed by DOWL and built by Scarsella Brothers, was $20.4 million. It ran from Arctic Avenue

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in Palmer to 49th State Street near Colony High School, paving a 3.6-mile new road through former fields and woodland. A second, $7.8 million phase rebuilt the road between Colony High and Colony Middle schools, making two roundabouts and adding a multi-use pathway under the road for students from nearby subdivisions to use to reach the schools without having to cross the road. DOWL and Ahtna Construction were the designer and contractor on that section of the project. On the other end of Bogard Road, Sullivan Extension West was also completed this year. It’s called Seldon Road Extension and continues Seldon Road from its former end at Church Road to Beverly Lakes Road, a 2.25-mile route. A second phase of the project, realigning the project between Beverly Lakes Road and Pittman Road, is awaiting funding. The borough secured $7.5 million for the project so far; the first phase cost nearly $4 million.

A Route North Bypassing Wasilla

For many years local and state politicians and transportation officials have discussed a road north through the Valley bypassing Wasilla. City business leaders once feared such a route would cripple businesses that depend on tourist traffic, but as the area has grown,

the idea of a bypass has gained more appeal. Unfortunately, development and higher property values made a bypass a costly project. The city of Wasilla struck upon a bypass of sorts that allows determined drivers a way north while avoiding the city’s downtown. The Clapp Road project connects Knik-Goose Bay Road with the Parks Highway near the city’s airport, about 1.5 miles south of the city. The project was completed in December 2015, and Bristol Environmental was the contractor on the $7 million project, Giddings says. The project allows a lot of new traffic movement, Giddings says. Drivers on Knik-Goose Bay Road can currently only head north toward Houston and beyond by turning on Vine Road or driving through downtown Wasilla to reach the Parks Highway. “People don’t have to funnel into town and go back out,” Giddings says of the new connection. The project also provides greater access to the city airport and the Menard Sports Center, which Giddings says can get congested during large events, with all the traffic previously funneling onto the Parks Highway. R

Rindi White is a freelance journalist living in Palmer.

February 2016 | Alaska Business Monthly

International Trade

special section

Impact of Slowing China Economy Alaska’s China Era continues By Greg Wolf

or the past fifteen years, the driving narrative for Alaska’s export industries has been the rise of China as the primary destination for Alaska’s vast natural resources. Following a steady, upward trajectory the Middle Kingdom became Alaska’s largest export market in 2011, displacing Japan which had held that position for many decades. Beyond exports, during this same period, China has also become an increasingly important factor in other sectors of the Alaska economy, including air cargo, tourism, and investment. The question being asked now by many is: What impact the economic slowdown currently being experienced by China will have on Alaska? If, and to what extent, will Alaska’s exports and other commercial interests with the country be affected?

Obviously, what is always good for Alaska is when its major customers are experiencing a growing economy and a strong currency. This ideal scenario beneficially impacts the demand picture—they need more of what we are selling, and the purchasing power picture—exports priced in dollars, such as ours, are cheaper for them, so they can more readily afford what we are selling. China’s economy is still very much on a growth trajectory, just at a somewhat slower pace. Current estimates are for China’s GDP to grow at a 6 to 7 percent rate, down from the customary 8 to 9 percent rate that was becoming increasingly unsustainable as China’s economy grew to be the second largest economy in the world, second only to the United States. Its currency also remains strong, even after recent steps by the

Chinese government to devalue the Yuan in an effort to keep their exports competitive with other exporting nations.

Transitioning Economy

China is taking steps to transition its economy from one driven by exports to one driven by consumption. For Alaska, this may result in something of a mixed-bag for the state’s exporters. Some may suffer while others benefit. Demand for minerals, for example may decline, but seafood exports could increase as more affluent consumers have greater discretionary income to purchase it. Some Alaska service-sector companies might also benefit from growing affluence and consumerism in China. For example, one Anchorage-based architectural firm is already active in the China market designing

Alaska’s China Era Continues Alaska’s China Era Continues (2000-2015 Comparison, USD Millions) (2000-2015 Comparison, USD Millions) $1,462 $1,477

$1,477

$1,500

$1,353 $1,236

$1,200

$1,200 $900

$900

e Th

“

$600

$300

$600

$103

$241

$1,314 (Est.)

$921

$921 $586

$716 $733 $586

$474

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$337

$241 $103 $102

e” d ca$716 $733 e D $474

$1,353 $1,236

e” ad c De

on g a Dr $337

e h T $148 $154 $102“

$300

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$1,462

$1,314 (Est.)

$148 $154

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Alaska Business Monthly | February 2016 www.akbizmag.com

Source: US Census Bureau

$1,500

hotels and resorts to cater to Chinese vacationers. Another Alaska company is successfully selling air traffic management systems to serve the country’s rapidly expanding aviation sector. Alaska companies engaged in providing those products and services that respond to China’s transitioning economy could see their business expand. At present, shipments to China account for nearly 25 percent of Alaska’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 (see graph). Since the 2011 peak, exports to China slipped somewhat, but in 2014 rebounded again to the $1.4 billion level. During the first nine months of 2015, exports to the country totaled $984 million. When the final numbers for the year are tallied, 2015 will likely register as the fourth best year on record, at approximately $1.3 billion, enabling it to maintain its number one ranking for Alaska exports. Seafood is far and away Alaska’s largest export commodity to China, and China is the state’s largest export market for seafood. Seafood currently accounts for 62 percent of exports. There are, in effect, two markets in China for Alaska seafood. One is for the seafood which is sent to China for processing and subsequently re-exported to other countries, including the United States. The other market is for the seafood that stays in the country for local consumption. Mineral ore, primarily lead and zinc as well as precious metals, at 28 percent are the second largest Alaska export commodity to China. Forest products, mainly consisting of whole round logs, followed by fish meal, are the other two primary export categories at 4 and 3 percent, respectively.

Further Growth Ahead

As large and important of a customer as China is today for Alaska, there are ample reasons to believe that further growth lies ahead, despite a Chinese economy that may be growing at “only” 6 or 7 percent. For example, as new mineral and metal mining projects come on line, or as existing mines expand, China will likely be there as a major buyer. These developments, and other such opportunities that may arise, portend continuing growth for the Alaska-China trade relationship, albeit at perhaps slower growth rates than enjoyed during the Dragon Decade. Should the Alaska LNG (liquefied natural gas) project come to fruition, China could emerge as a significant customer. In that case, of course, Alaska’s export numbers to China would rise dramatically. China’s massive trade with the United States is generating considerable air cargo www.akbizmag.com

Alaska’s Top 10 Trading Partners Total: $3.96 Billion (January - September 2015) Spain 4%

China 25% Japan 20%

Netherlands 3%

South Korea 16% Taiwan 3% Others 10% Malaysia 2%

Canada 9%

Australia 2%

Germany 6%

Source: US Census Bureau

traffic through the Ted Stevens Anchorage International Airport. As an important stop for refueling, crew changes, and cargo transfers, three Chinese cargo airlines and one Hong Kong carrier utilize Anchorage as they transit back and forth across the Pacific. In addition to the Chinese carriers, several US cargo airlines also operate their China routes through Anchorage. It’s not just 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. The commencement of direct flights and the establishment of local, China-focused inbound tour operators will serve to hasten this growth opportunity.

Chinese Investors

Alaska is increasingly garnering the attention of Chinese investors in the natural resource space. This is only natural as China’s ongoing economic growth and modernization makes necessary ever growing supplies of vital resource commodities. It makes sense then for the Chinese to remain not just a customer of these resources but to invest in their production, processing, and delivery as a partner-owner in the projects that generate them. Chinese investment dollars are beginning to find their way to companies and projects in Alaska. Take the mining sector: in 2009, China Investment Corporation, one of the country’s sovereign wealth funds, invested $1.5 billion for a 17 percent stake in Vancouver-based Teck Resources, the operator of the Red Dog Mine outside of Kotzebue. In 2010, a state-owned Chinese company agreed to purchase 50 percent of the output from the newly opened Kensington gold mine near Juneau in Southeast Alaska. This landmark agreement, involving Coeur d’Alene Mines

Corporation and China National Gold Corporation, was the first of its kind between an American precious metals company and a state-owned Chinese enterprise. 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 these examples are not technically considered direct investments in Alaska, they are clear signals that China has put Alaska— and her resources—on its radar screen.

Natural Partners

Alaska and China are natural trading partners. Understanding that China’s economy, like our own or any other, will experience both periods of growth and contraction, it behooves Alaskans to stay focused and engaged in further developing commercial ties with China. The groundwork is being laid now for broadening and deepening this important relationship. For the first fifty years of statehood, Alaska profited greatly from Japan’s remarkable post-war economic expansion. The next fifty years will be Alaska’s China Era as trade and investment bring the Last Frontier and the Middle Kingdom closer together as partners for mutual prosperity. R Greg Wolf has been the Executive Director of the 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 2016 | Alaska Business Monthly

International Trade

special section

Trans-Pacific Partnership Update

Stronger economic ties if enacted By Alex Salov

Overlap of the Major Economic Relations Asia Pacific—2015

S. KOREA

RCEP

AUSTRALIA BRUNEI NEW US THAILAND MALAYSIA ZEALAND PERU JAPAN SINGAPORE CHILE

INDONESIA

ASEAN LAOS

VIETNAM

MYANMAR CAMBODIA

MEXICO

TAIWAN RUSSIA PAPUA NEW GUINEA HONG KONG

CANADA

APEC: Asia Pacific Economic Cooperation | ASEAN: Association of Southeast Asian Economic Nations RCEP: Regional Comprehensive Economic Partnership | TPP: Trans-Pacific Partnership

uring 2015, the Trans-Pacific Partnership (TPP) was widely discussed in the public media. In many cases the discussions were affected by the political views of the participants rather than their knowledge of what the TPP actually is. This was due in part to the fact that until recently most of the details of the Partnership were kept secret and the negotiations were conducted behind the closed doors. 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 by reduc98

APEC

TPP

PHILIPPINES

INDIA

CHINA

ing the existing barriers in the region. The twelve negotiating countries account for nearly 40 percent of the world’s GDP. It is the largest trade agreement since NAFTA and covers a wide array of aspects stretching from car manufacturing and intellectual property rights to e-commerce and tariffs on rice and dairy products.

TPP Negotiations

The TTP negotiations started in 2005 between Brunei, Chile, New Zealand, and Singapore. The United States joined the negotiations in 2008 together with Australia, Peru, and Vietnam. During the following

five years, Malaysia, Canada, Mexico, and Japan also entered the negotiations. Since joining the TPP talks, the idea of leading such a trade agreement became a part of the US “Pivot to Asia” strategy. This strategy is based on the reorientation of American foreign and trade policies to the Asia Pacific region, where the twenty-first century political and economic activities will be the most prolific. It is also widely seen as a tool to counterbalance and restrain further economic expansion of China in the region. Therefore, from the US perspective, the TPP is more of a geopolitical than economic significance. One of the facts that

Alaska Business Monthly | February 2016 www.akbizmag.com

support this belief is that the bilateral FTAs between the United States and Australia, Canada, Chile, South Korea (not a part of TPP), Mexico, Peru, and Singapore already exist and serve many of the same purposes that the TPP is designed to address. In June 2015, the Senate passed the bill that granted Trade Promotion Authority to President Barack Obama. The bill passed 60-38 and the Alaska delegation voted in favor of it. Using Trade Promotion Authority, the president is able to complete trade deals and utilize the so-called “fast-track” when dealing with Congress. “Fast-track” means that Congress can only vote yes or no on trade agreements in question, using a simple majority vote and without the ability to offer amendments. The final draft of the agreement was released to the public October 5, 2015 and made available on the US Trade Representative’s website.

Ratification

The TPP will be put in front of the Congress for a ratification vote during the first part of 2016. In his official statement, the US Trade Representative Michael Froman notes three significant aspects of the TPP for American firms:  It is the first trade agreement that focuses on American small businesses and their exporting efforts  It is the first trade agreement that levels the playing field for private firms to compete with state-owned enterprises by putting certain restrictions on them  It is the first trade agreement that takes into account the digital economy and helps expand the opportunities for international e-commerce When will the TPP come into effect? The best-case scenario is when all of the twelve parties domestically ratify the agreement. The TPP comes into effect in sixty days after the last member completes their domestic ratification. Another scenario that seems to be a bit more realistic is also more complicated. If some of the partners face domestic opposition that prevents them from ratifying the TPP for two years, the following conditions must be satisfied in order for the TPP to come into effect: at least six original signatories must domestically ratify the agreement and their combined GDPs must account for 85 percent of all the parties’ GDPs. In other words if either the United States or Japan (the two largest GDPs) fail to ratwww.akbizmag.com

ify the TPP domestically, then, almost certainly, the agreement is doomed to failure. However, if both the United States and Japan manage to ratify it, it is almost guaranteed that the agreement will come into effect. Most likely, 2017 will be the year when the final decision will be known.

‘Asian Noodle Bowl’

The free-trade agreements in the Asia Pacific region are sometimes referred to as the “Asian noodle bowl.” This term references the fact that the number of these agreements grew significantly since the mid-2000s. According to the Asian Development Bank, while in 2005 there were 63 existing and 61 developing bilateral and multilateral FTAs, by 2015, 134 agreements were in effect and 81 were in various stages of development. The effect of FTAs on the region is not very clear. Economists argue that in some cases FTAs “cause” strong trade for the partners of the agreement and in some cases they “result from” already existing strong economic and political relations between the partners. Also, preferential trade agreements and regional trade blocks potentially harm the excluded countries, due to the interconnectivity of the global economy. Several years ago, the Peterson Institute for International Economics (Washington, DC) published a paper that indicated that the trade cooperation in Asia is divided into two tracks: “Trans-Pacific track” (TPP) and “Asian track” (ASEAN + China, Japan, Korea, and other local players). The United States dominates the former track, while China dominates the latter. The development of one track would stimulate the development of the other one and in some point in the future both tracks could merge into a larger regional FTA. Developing countries in the region will benefit from preferential access to the United States and China markets and some of the smaller players will join both tracks. In the final stages, the United States and China will stand alone without each other’s markets’ preferential access, while the rest of the players will enjoy the benefits of both tracks. Asian economies have to overcome many existing trade barriers between each other and, therefore, it is estimated that the Asian track would yield more in income gains to the global economy than the Trans-Pacific track: $500 billion versus $295 billion by 2025.

RCEP Stimulated

The conclusion of the TPP negotiations in October 2015 stimulated the process of the Asian track regional FTA that has been in negotiations since 2012 and is led by China.

It is called the Regional Comprehensive Economic Partnership (RCEP). The RCEP consists of the ten ASEAN nations, plus six nations that have existing FTAs with ASEAN: Australia, China, India, Japan, South Korea, and New Zealand. All together the parties account for 30 percent of the world’s GDP. “When [RCEP] is in place, it will be the largest free trade pact in the world,” Le Luong Minh, secretary-general of ASEAN said, repeating word-for-word what US officials have been saying about the TPP. An interesting fact is that all the Asia Pacific parties to the TPP (Australia, New Zealand, Japan, Brunei, Malaysia, Singapore, and Vietnam) are also parties to the RCEP. Some analysts see the RCEP not simply as a Chinese effort to create a trade pact to counterbalance the US “Pivot to Asia,” but also as recognition of China’s leadership role in the region, the central position of ASEAN, and an effort to maintain stability in the Asia Pacific region.

Stronger Economic Ties

The TPP enactment will result in stronger economic ties in the region, increased access to new markets, new opportunities for commodities and goods to be used in mutual manufacturing and production processes, and increased opportunities for small and medium sized enterprises in the participating markets. The TPP will provide Alaska businesses with an opportunity to open new markets and will remove some of the steep tariffs on certain exports to the existing markets. The TPP can also strengthen investment ties between Alaska and other parties to the agreement. Japan, for example, is one of Alaska’s major trading partners and with the TPP coming into effect the ties can only grow. Environmental provisions of the TPP agreement address issues like “illegal, unreported, or unregulated fishing” which can be beneficial to the Alaska seafood industry. The TPP can also create opportunities for the much-discussed Alaska LNG Project and Alaska LNG exports to Asia. 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 he also teaches Japanese Language at University of Alaska Anchorage as an adjunct instructor.

February 2016 | Alaska Business Monthly

special section

International Trade

Global Reach of Sovereign Wealth Funds

By Greg Wolf

he global reach of the world’s sovereign wealth funds continues to expand as more funds come into existence and the assets they hold grow apace. These government controlled investment vehicles vary considerably in size and scope, as well as by their particular investment strategies and policies, but they are, without question, a significant force in the markets and their impact can be felt in all corners of the world, including Alaska. The source of the capital for these funds typically originates from excess foreign currency reserves earned through exports or from income derived from commodities such as oil and gas. China’s sovereign funds would be an example of the former, while Norway’s would be an example of the latter. By and large, Asian funds arose from

Country Norway UAE-Abu Dhabi China Saudi Arabia Kuwait China China-Hong Kong Singapore Qatar China Singapore UAE-Dubai UAE-Abu Dhabi Australia Kazakhstan South Korea Kazakhstan Russia UAE-Abu Dhabi UAE-Abu Dhabi Libya Russia Iran US-Alaska Algeria Malaysia Brunei

100

export earnings, while Middle Eastern, European, and American funds arose from commodity earnings. Most of these funds invest globally. Some funds dedicate a certain percentage of their portfolio for investment in their own countries.

Valuable Holdings

Current estimates value the holdings of the sovereign wealth funds at just over $7 trillion. These holdings encompass a wide variety of financial assets including stocks, bonds, real estate, precious metals, and other investable instruments. They also include so-called “alternative” investments managed by hedge funds, private equity, and venture capital funds. The number of sovereign wealth funds, and their assets under management, continues to grow: indeed, since 2005 forty new funds have been established, and be-

Sovereign Wealth Fund Name Government Pension Fund -Global Abu Dhabi Investment Authority China Investment Corporation SAMA Foreign Holdings Kuwait Investment Authority SAFE Investment Company Hong Kong Monetary Authority Investment Portfolio Government of Singapore Investment Corporation Qatar Investment Authority National Social Security Fund Temasek Holdings Investment Corporation of Dubai Abu Dhabi Investment Council Australian Future Fund Samruk-Kazyna JSC Korea Investment Corporation Kazakhstan National Fund National Welfare Fund International Petroleum Investment Company Mubadala Development Company Libyan Investment Authority Reserve Fund National Develoement Fund of Iran Alaska Permanent Fund Revenue Regulation Fund Khazanah Nasional Brunei Investment Agency

Assets USDBillions 824.9 773 746.7 668.6 592 547** 417.9 344 256 236 193.6 183 110 95 85.1 84.7 77 73.5 66.3 66.3 66 65.7 62 53.9 50 41.6 40

Oil & Gas Related subtotal Other subtotal Total

$4,057.7 $3,135.5 $7,193.2

tween 2007 and 2014 the assets of the sovereign wealth funds has more than doubled from $3.4 trillion to $7.2 trillion. While Alaska was not the first American state to establish a sovereign wealth fund—that distinction belongs to Texas— it is home to the largest sovereign fund in the United States; with assets of some $54 billion, the Alaska Permanent Fund ranks 24th among the world’s funds. To put this in perspective, at $825 billion, Norway’s Government Pension Fund Global is the world’s largest fund. Norway’s fund is widely expected to become the first trillion dollar fund, perhaps as early as 2020 (although this date may have to be pushed back due to the significant slump in oil revenues). The Norwegian fund has holdings in nine thousand companies spread across seventyfive countries. In Europe alone, it has a 2.4 percent average stake in all publically listed

Inception 1990 1976 2007 n/a 1953 1997 1993 1981 2005 2000 1974 2006 2007 2006 2008 2005 2000 2008 1984 2002 2006 2008 2011 1976 2000 1993 1983

Origin Oil Oil Non-Commodity Oil Oil Non-Commodity Non-Commodity Non-Commodity Oil & Gas Non-Commodity Non-Commodity Non-Commodity Oil Non-Commodity Non-Commodity Non-Commodity Oil Oil Oil Oil Oil Oil Oil & Gas Oil Oil &Gas Non-Commodity Oil

LinaburgMaduel Transparency Index 10 6 8 4 6 4 8 6 5 5 10 5 n/a 10 n/a 9 2 5 9 10 5 5 10 9

Alaska Business Monthly | February 2016 www.akbizmag.com

companies. Globally, the funds own 1.3 percent of all publically listed equities. The fund derives its capital via the profits, taxes, and fees it receives from Norway’s offshore oil and gas sector. It targets a 4 percent annual rate of return on its investments. In addition to Norway, other countries with very large funds include Saudi Arabia, United Arab Emirates, Kuwait, China, Singapore, and Russia. As noted, Alaska has America’s largest single fund at $54 billion. However, Texas has two sizable funds—the Texas Permanent School Fund ($37 billion) and the Permanent University Fund ($17 billion). Taken together, the assets of these funds essentially equals Alaska’s total. Other American states that have sovereign funds, established for one purpose or another, are New Mexico, Wyoming, North Dakota, Alabama, Louisiana, and West Virginia. Alaska’s fund is unique among all sovereign wealth funds with its annual cash dividends paid to each eligible citizen from fund earnings. Since the fund was established in 1976, the Alaska Permanent Fund has distributed $23 billion in dividend payments to its citizens.

Differing Policies

Investment policies governing the sovereign funds differ significantly. Most, of course, seek to obtain a reasonable annual return by managing to outperform the index of the asset classes invested in, while others seek not only to accomplish this, but to also attain “strategic” objectives to benefit the country. For example, a country that is energy poor might choose to invest in companies, regions, and projects that are involved with energy production. A country that is trying to attract a particular industry to its shores may make investments in companies engaged in that industry or in the infrastructure to make their country more enticing to that industry. The investment horizon for the funds varies according to the fund’s goals and policies. For example, several years ago, China Investment Corporation, one of China’s three sovereign wealth funds, moved to extend investment horizons from five to ten years. Creating a longer term portfolio allows China Investment Corporation to participate in non-public investment vehicles such as direct investments, hedge funds, private equity, and real estate. Over time, the fund, which at its beginning invested significantly in the US financial sector, has moved into other sectors including energy, natural resources, and infrastructure. As a number of sovereign funds invest in the natural resources sector, through both stock holdings of the major companies in www.akbizmag.com

this space as well as through direct investments in projects and related infrastructure, it would not come as a surprise for them to participate as in investor in Alaska development projects. Indirectly, we have already seen examples of this type of interest by the sovereigns in Alaska resources, primarily, to date, in the mining sector. In 2009, for example, Vancouver-based Teck Resources, the operator of the Red Dog Mine in northwest Alaska outside of Kotzebue, announced that it had sold a 17.5 percent interest in their company to China Investment Corporation for $1.5 billion. The transaction was described as a long-term, passive portfolio investment for China Investment Corporation. Red Dog Mine is one of the world’s largest zinc producers and China is the world’s largest zinc consumer, accounting for more than 30 percent of global zinc consumption. Another instance of Chinese interest in Alaska’s mining industry was in 2010 when Coeur d’Alene Mines Corporation of Idaho and its Alaska subsidiary Coeur Alaska, Inc. announced a landmark agreement for a Chinese company to purchase and process gold concentrates produced at the Kensington Mine, located outside of Juneau. China National Gold Corporation agreed to purchase approximately half of the gold concentrates produced at the mine. China National Gold, a state-owned enterprise headquartered in Beijing, is China’s largest gold producer and operates nearly sixty mines throughout China. In addition to operating mines, the company also owns and operates a number of smelters and refineries. While not a sovereign fund, many consider state-owned enterprises, such as China National Gold, to be something akin to cousins of the sovereign wealth funds in that they, too, make investments on behalf of their country. Indeed, a number of sovereign wealth funds were established, at least initially, to invest in state-owned enterprises. China Investment Corporation and Singapore’s Temasek Holding are examples, though both have expanded their scope to include significant investments outside of their respective countries.

Ideal Partners

As the number of sovereign wealth funds grows, and their assets under management continue to expand, their presence will increasingly be felt around the world. Alaska, with its abundance of natural resources so very much in demand by both developed and emerging economies, is an attractive destination for investment by these funds. It’s a win-win combination as many Alaska

Arctic Ambitions V Conference Exploring Commercial Opportunities in the Arctic

he Arctic Ambitions V Conference builds upon the success of the previous four editions of the event. At the upcoming Arctic Ambitions V Conference to be held in April in Anchorage, WTC Anchorage will outline its concept for positioning Alaska as an Arctic center for international business. This year’s agenda includes a full day of presentations, two keynote presentations, and an evening networking reception. The following day will feature panel discussions and an optional site-visit. Visit wtcak.org for date, location, speakers, agenda, and to register. R projects need to be large-scale in scope in order to be economically viable. These projects require correspondingly large-scale investments by investors with long-term horizons. In addition, as Alaska positions itself as a focal point for Arctic trade, commerce, and investment, the sovereign funds may find benefit in participating with Alaska-based investment vehicles as a means to give them exposure to investable opportunities in the Arctic region. Sovereign wealth funds, and their stateowned enterprise cousins, could be ideal partners as Alaska seeks to grow its natural resource economy and its role in Arctic development. R Greg Wolf has been the Executive Director of the 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.

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special section

International Trade

Alaska’s Foreign Fish Exports Often Reprocessed

Alaska Seafood Marketing Institute Executive Director Alexa Tonkovich with a baited pot.

Alaska’s seafood harvest is number one in the United States By Will Swagel

ore than 3 billion pounds of fish were harvested in Alaska waters in 2015—a record year—and that’s only counting pollock and salmon. These billions of pounds are exported domestically and to customers throughout the world. In 2014, Alaska ranked number one in the United States for seafood landings with a harvest of 5.7 billion pounds worth $1.7 billion. To keep those exports flowing, a small legion of Alaskans analyzes the demand for Alaska products and works to stoke it hotter. Each overseas market presents specific demands and opportunities. In China, for instance—which suffers from contaminated food scandals—Alaska fisheries enjoy an image of wholesome purity. But markets in the European Union can be more skeptical about both safety and sustainability of Alaska seafood. One export expert is Alexa Tonkovich, executive director of the Alaska Seafood Marketing Institute (ASMI). Tonkovich worked 102

in ASMI’s International Program for six years and still oversees the program. Tonkovich was named executive director in October 2015. ASMI describes itself as a “public-private partnership between the state of Alaska and the Alaska seafood industry [that was] established to foster economic development of seafood, a renewable natural resource.”

Japan and China

In Asia, Japan has long been the number one market for Alaska seafood, Tonkovich says, but recently China has moved ahead in the amount of Alaska seafood the country imports. China is a growing market, but the high figures have a caveat—China is also a major country in reprocessing Alaska fish. Millions of pounds of salmon and pollock, for example, are headed, gutted, and blast frozen in Alaska, then shipped to China to be fileted and portioned. Individuallypackaged meal-sized portions are growing in popularity among restaurants and food services and even with home cooks. Much of the re-processed fish is then shipped back to the United States and other countries. “If you just look at export figures, China comes out on top, but it may not be the largest end user of Alaska seafood, [since] some of that is re-exported,” Tonkovich says. “Japan is probably still the largest end user.” ASMI’s figures for 2014 show China importing nearly $960 million (29.2 percent of Alaska’s foreign seafood exports). Alaska ex-

ported $672 million to Japan (20.5 percent of the total). South Korea imported about $366 million (11.2 percent of the total). But as with China, not all of South Korea’s imports are destined to be consumed by South Koreans. ASMI reported that a large portion is held in cold storage facilities before being shipped to Europe and Japan. “Japan is a great seafood-consuming country,” Tonkovich says. “Japanese consumers buy a lot of popular Alaska seafood products, but they also buy a lot of underutilized species and products that have limited other markets.” Japanese people eat a lot of salmon, black cod, pollock, and herring roe. They eat cod, flatfish, shellfish, and a variety of other invertebrates. “There are very few products that we harvest in Alaska that don’t go to Japan in some volume,” Tonkovich says. China is a different story. There, says Tonkovich, “A fair amount of shellfish and flatfish are sold to consumers, but salmon and pollock haven’t really penetrated the Chinese market.” Tonkovich says ASMI’s efforts to raise awareness have included working with Chinese chefs and using the Internet to reach Chinese consumers. Those marketing efforts have been helped along by the increasing popularity of Japanese restaurants in China [and in Europe], Tonkovich says.

Alaska Business Monthly | February 2016 www.akbizmag.com

United States Seafood Imports United States Seafood Exports Alaska Seafood (Foreign) Exports Alaska - Percent of U.S. Exports

Value ($000s) 20,635,557 5,887,381 3,276,806 56%

Volume (MT) 2,633,945 1,780,047 1,118,212 63%

Notes: Includes edible and inedible products If Alaska were a country, it would have been the 6th largest seafood exporter in 2013, among primary producing nations. Alaska exports a significant value of seafood, but it is relatively small compared to the value of United States seafood imports. However, about a third of United States imports are shrimp - a relatively low volume species in wild Alaska fisheries.

Top 10 Alaska Seafood Export Markets, by Value (2014) Rank 1 2 3 4 5 6 7 8 9 10

Country China Japan South Korea Germany Canada Netherlands United Kingdom France Thailand Australia Total Value ($000S) Total Percent Of Value

Value ($000s) $956,435 $671,642 $366,135 $321,447 $302,287 $131,644 $98,195 $66,666 $51,369 $31,003 $2,996,822

% of Total 29.2% 20.5% 11.2% 9.8% 9.2% 4.0% 3.0% 2.0% 1.6% 0.9% 91.5%

Notes: China is the largest trading partner, but the vast majority of seafood exported to China is reprocessed for European, United States, and Japanese markets. Some product enters the Korean market, but a large portion is held in cold storage facilities before being shipped to Europe and Japan. Some of the canned salmon exported to Canada winds up in the UK, Australia, or the United States.

“A lot of our products are relatively unfamiliar in the China market, so we’re educating the trade on what’s available, when it’s available, product form, proper handling, and sustainability,” says Tonkovich. “We’re working a lot with chefs, chef schools, and chef’s associations. Let’s get herring roe in front of a group of chefs and see what they do to it [for example]—if they can adapt if for Chinese tastes or if there is a market in Japanese restaurants in China.”

Brazil and the European Union

Japanese restaurants are also helping to introduce Alaska products into large, populous Brazil. Tonkovich notes that Brazil has the largest Japanese population in the world, outside of Japan. The city of Sao Paolo boasts many, many Japanese eateries. Tonkovich says ASMI started initially paying attention to Brazil because of the large market for cod. Alaska cod was being sent to Norway, Portugal, and China for processing and salting to make bacala. The dried, salted cod is popular in Brazil because of their close cultural ties with Portugal, Brazil’s former colonizer. Tonkovich says ASMI is working to introduce Alaska salmon and pollock in the wider Brazilian market, an effort that has been www.akbizmag.com

Top 10+ Alaska Seafood Export Products, by Value (2014) Rank 1 2 3 4 5 6 7 8 9 10 11 12 13

Product Alaska Pollock Fillets Alaska Pollock Surimi & Mince Pacific Cod (Mostly H&G) Frozen Pink & Chum Canned Salmon Sole/Flounder/NSPF Flatfish H&G Fish meal & Other Ancillary Products Frozen H&G Alaska Pollock Salmon Roe Frozen Sockeye Alaska Pollock Roe Crab (Mostly frozent sections) NSPF Groundfish & Flatfish Total Value ($000s) Total Percent of Value

Value ($000s) $379,873 $371,682 $302,470 $279,866 $197,352 $191,975

% of Total 11.6% 11.3% 9.2% 8.5% 6.0% 5.9%

$191,635

5.8%

$178,977 $172,605 $159,985 $152,634 $141,475 $134,620 $2,426,419

5.5% 5.3% 4.9% 4.7% 4.3% 4.1% 74.0%

Note: NSPF = (Species) Not Specifically Provided For

Top 5 Alaska Seafood Export Species, by Value (2014) Rank 1 2 3 4 5

Country Alaska Pollock Salmon Pacific Cod Sole/Flounder/NSPF Flatfish Crab

Value ($000s) $1,083,166 $920,821 $302,470 $191,975 $141,475

% of Total 33.1% 28.1% 9.2% 5.9% 4.3%

(Note: These data do not include inedible products, such as fish meal).

under way for the past four years. The slowgoing is due partially to Brazil’s lengthy registration process for both new plants and new products entering the country. Another impediment is the strong US dollar. “We have seen good growth [in Brazil],” Tonkovich says. “Unfortunately, the currency values are not working in our favor this year. [But] in terms of long-term planning, I think Brazil is going to pay dividends in the future.” Europe is a big market for Alaska seafood. In fact, taken as a whole, the European Union would be Alaska’s biggest customer. “Europe has a different viewpoint about certain harvesting or agricultural policies and they can sometimes be a bit selective or particular as to what kind of products they will accept,” Tonkovich says. EU members occupy spots four and six through eight in the list of biggest customers for Alaska seafood. Germany is number four, importing $321 million of Alaska seafood. Tonkovich noted that Germany is the world’s biggest market for Alaska pollock, if surimi is not taken into account. Canada, number five, buys about $302 million in Alaska seafood (9.2 percent of total exports). The Netherlands, at number six, imports about $132 million (4 percent). Number seven, the United Kingdom, buys

about $98 million (3 percent), mostly salmon, cod, and pollock; France is number eight, with $67 million (2 percent). Thailand occupies the number nine spot, with $51 million in imported Alaska seafood (1.6 percent of Alaska’s export total). Australia fills the number ten position, with $31 million in imports (0.9 percent). Tonkovich says more attention is being given to Thailand and other Southeast Asian countries. In July, ASMI received a $50,000 grant from the US Food and Drug Administration’s Emerging Market Program. ASMI is planning to send a trade mission to Southeast Asia in February, whose itinerary will include visits to Thailand, Vietnam, and Indonesia. The region covered by the grant also includes Malaysia and the Philippines. “The agenda [of the trade mission] is very exploratory, but we think Southeast Asia could be an emerging market for Alaska,” says Tonkovich. “Certainly, we have seen some processing moving in that direction from China, but also there could be some growth in that region for an enduser market.” R Alaskan author and journalist Will Swagel writes from Sitka.

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Data sources: NMFS Trade Data, compiled by McDowell Group for the Alaska Seafood Marketing Institute.

Total United States & Alaska Seafood Trade (2014)

special section

International Trade

Alaskan Student Ambassadors Go to China Inaugural class connects with Chinese executives and students By Paul Johnson and Qiujie “Angie” Zheng “The trip to China has been the most exciting, enlightening, and memorable experience of my life. China is a diverse country with an enormous amount of history. The Chinese economy is an amalgam of historical and modern philosophies.” —Jacob Haworth, UAA 2015 Study Abroad Course Student

ast summer nine highly motivated and adventurous University of Alaska Anchorage (UAA) students ventured into China as the inaugural class for a pioneering new Economics course: “Globalization and China Economy and Business.” They travelled by overnight trains, buses, and planes for two weeks to Beijing, Xi’an, Chongqing, Wuhan, and Shanghai to visit firms, markets, export agencies, and universities and also to communicate and connect with business executives and college students. The course travel was fully funded through the students’ tuition and fees ($4,600/person), including the costs of the two supervising faculty from the UAA College of Business and Public Policy, Dr. Qiujie “Angie” Zheng and Dr. Paul Johnson. Along the way each student had to investigate a business or economics research topic and present a report on their findings within two weeks of return to Anchorage.

Intrepid Travelers All but one of the students had never been to Asia before, much less China, but by the last night in Shanghai they had graduated from being China neophytes to capable independent travelers ready to work and thrive in any China city should future employment take them there. Of course the intrepid travelers were prepared beforehand with an overview of China’s economy and business environment and training in everything from Chinese culture, customs, and social relations to practical questions like visas, cellphone service, and how to handle money. Thrown into an unfamiliar environment, the students—few of whom knew each other before—soon became a cohesive cooperative team. They ranged across 104

disciplines, from twenty-two-year-old fulltime students to adults with thirty years of industry work experience. The common denominator was their adventurous Alaska spirit and passion to explore the world of international business. China is Alaska’s number one export market. Growing Chinese demand offers huge potential for economic growth through expanded trade. The design of the itinerary aimed to provide students with opportunities to learn and build their international human and social capital. The itinerary had an Alaska emphasis, with a briefing from the Alaska Seafood and Marketing Institute’s representative office in Shanghai and meetings with Chinese college students who had expressed an interest in study abroad in Alaska—a huge potential education export market. Culture and history were also on the agenda, with visits to the Great Wall and the Forbidden City in Beijing, the ancient capital of Xi’an, the modern financial district in Shanghai, the Three Gorges Dam on the Yangtze River, and university museums, including one in the lesser known mega-city of Wuhan in inland China. Etiquette training for all formal business meetings and dinners mandated the students wear proper business attire. A lunch with training on proper mao-tai toasting (courtesy of a hosting hedge fund in Shanghai) was a special (and popular) event.

Positive Experience

How did students view their course experience? Their formal evaluations and comments were overwhelmingly positive. “I liked talking to business professionals, especially ones who ran their own business, because it allowed me to directly compare similar positions in the United States. Talking to students was a great way to know what a person close to our age has gone through and also what their goals would be. The food is always so good and if you thought you knew Chinese food you will be surprised. Seeing the sights that I have read about in countless magazines and seen on TV, it really was an amazing moment when I got to the top of the Great

Wall and looked out and realized I was actually there. How planned out it is. Everything was arranged for us. During my time in China I didn’t find myself getting anxious or stressed, and I believe it was because everything was handled for me.” —Zachary Layton, UAA 2015 Study Abroad Course Student

Future

What about the future? UAA currently has multiple China economic and business initiatives underway, including agreements for student exchanges, reciprocal faculty visits, and formal joint academic research. In the last year alone seven College of Business and Public Policy faculty visited China for professional academic and institutional relationship building purposes, with much of this travel funded privately or by the Chinese universities who designated several of our faculty “foreign experts,” making them eligible for funding through nationally competitive official Chinese government grants. Planning for another China group in 2017 is already underway. And beyond bringing students to China, the College of Business and Public Policy is looking to create more tailored self-funded international programs in the future. There is no end of possibilities. R Paul Johnson is a Professor in the Department of Economics and Public Policy, College of Business and Public Policy at the University of Alaska Anchorage. Contact him at prjohnson@uaa.alaska.edu. Qiujie “Angie” Zheng is an Assistant Professor in the Department of Economics and Public Policy, College of Business and Public Policy at the University of Alaska Anchorage. Contact her at qzheng3@uaa.alaska.edu.

Alaska Business Monthly | February 2016 www.akbizmag.com

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special section

International Trade

The Polar Code Legal implications for Alaskan vessel owners and charterers By Isaak Hurst

Muskoxen outnumber people on Nunivak Island, situated at the southern boundary of the Polar Code’s Arctic reaches—latitude 60 degrees North. Nunivak Island is in the Bering Sea, about 135 miles west of Bethel. © Gary Schultz / AlaskaStock.com

This article is intended to provide a general introductory overview of the issues discussed and is not intended to provide a complete analysis of such issues. This article is not intended to provide legal advice or to establish an attorney-client relationship and readers should not act upon the information contained in it without professional counsel.

n May 15, 2015, the United Nations International Maritime Organization, better known as the IMO, released the final draft of the Polar Code-a significant piece of international legislation intended to cover the full range of shippingrelated safety and environmental matters relevant to the Arctic and Antarctic waters. The Polar Code is tremendously important because it establishes new safety and environmental guidelines for vessels operating in polar waters. These new regulations include, inter alia, new ship design, construction, and equipment requirements; new operational and training obligations; new search and rescue prerequisites; and, equally important, new environmental standards regarding oil, noxious liquids, sewage, and garbage. The Polar Code is historic in that, for the first time, there is a mandatory set of rules and regulations for vessel owners who operate in polar waters. However, while everyone can agree there needs to be a higher degree of care when 106

navigating polar waters, the consequential impacts of these regulations (particularly on vessel owners in Western Alaska), may serve as a legal deterrent to operators (or investors) looking to do business in that part of the state. Indeed, from a vessel owner’s perspective (or a charterers), the Polar Code may be doing more harm than good by subjecting these owners and charterers to a new class of regulatory liability.

General Background: The Polar Code The increase in traffic to the Arctic has led to an international consensus that shipping in these regions needs to be better regulated. A mandatory code for all ships operating in polar waters, known as the International Code of Safety for Ships Operating in Polar Waters (Polar Code), was therefore introduced by the IMO and utilizes existing legal instruments in the form of amendments to existing international laws and treaties. The Polar Code derives its authority from two significant international treaties: the International Convention for the Safety of Life at Sea (SOLAS) and the International Convention for the Prevention of Pollution from Ships (MARPOL). With respect to the former, SOLAS is a famous shipping treaty

that focuses on vessel safety and requires minimum standards for the construction of vessels, the equipment on vessels, and the daily operations of vessels. Regarding the latter, MARPOL is an international convention covering the prevention of pollution of the marine environment by ships from an operational or accidental cause. Indeed, the Polar Code’s authority, via amendments to SOLAS and MARPOL, is significant since 98 percent of the world’s merchant shipping tonnage falls under the purview of these two international shipping treaties.

Part I (SOLAS)

Part I of the Polar Code follows the applicability of the International Convention for SOLAS, which has detailed requirements relating to safety, design, construction, operations, training, and search and rescue procedures for vessels operating in polar waters. For example, the Polar Code now requires that all ships transiting polar waters must have a Polar Ship Certificate, which classifies the vessel into specific categories (Category A, B, or C) based on their operational capabilities in the ice. In addition, the Polar Code requires the vessel’s master (and other crewmembers) operating in polar waters have completed and passed certain polar training exercises. Fur-

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thermore, vessel owners operating in these areas must keep a “Polar Water Operational Manual” on the vessel at all times, and each crewmember must be familiar with the provisions in the Polar Water Operation Manual relevant to his or her assigned duties. The intent of the Polar Ship Certificate, the mandatory training, and the Operational Manual is to provide the owner, operator, master, and crew with sufficient information regarding the ship’s operational capabilities in order to support their decision making process. Simply put, Part I of the Polar Code has very specific safety provisions in order for the crew and the vessel to function in the extreme conditions of the polar regions.

Part II (MARPOL)

Part II of the Polar Code primarily deals with the vessel’s environmental impact. For example, the Polar Code requires that oil fuel tanks of Category A and Category B ships be separated from the outer hull, which would prevent an oil spill should an iceberg penetrate the vessel’s outer hull. In addition, the Polar Code prohibits the discharge of oil/oily mixtures from any ship into Arctic waters. This includes any noxious liquid substances or any mixture containing such substances as well as sewage and garbage unless discharged in accordance with MARPOL Annex IV and V.

This prohibition, however, does not apply to clean or segregated ballast. Yet, despite these strong environmental provisions, the Polar Code has faced significant criticism for failing to phase out the use of heavy fuel oil, which has been identified as one of the highest risk issues in the Arctic due to the remote and environmentally sensitive areas these vessels operate in. That being said, a great deal of investment will need to be made by operators in this region if they are to bring their vessels into compliance with the Polar Code. Moreover, a failure to meet the standard of performance described in the Polar Code will no longer be just a matter of ordinary negligence; rather, it will amount to a violation of law.

Legal Implications

The Polar Code is expected to enter into force on January 1, 2017, and seeks to bring regulatory law and order to an area that historically been anything but-the icy waters of the Arctic and Antarctic. Despite the Polar Code’s ostensible intent, vessel owners and charterers are now subject to a new class of regulatory requirements, which, in turn, has broadened the scope of statutory violations vessel owners are exposed to under Jones Act and OPA 90.

Jones Act and Negligence per se

Under the Jones Act, a vessel owner is li-

able for injuries caused by a violation of any safety statute that is intended for the safety of seamen-irrespective of negligence and without regard to whether the injury flowing from the statutory violation was the type against which the statute sought to guard. This legal principal was memorialized in the famous Supreme Court case: Kernan v. American Dredging Co., 355 U.S. 426 (1958). In this case, a seaman lost his life on the tug Arthur N. Herron while towing a scow on the Schuylkill River in Philadelphia. The tug caught fire when an open-flame kerosene lamp on the deck of the scow ignited highly inflammable vapors lying above an extensive accumulation of petroleum products spread over the surface of the river. Several oil refineries and facilities for oil storage, and for loading and unloading petroleum products, were located along the banks of the Schuylkill River. The trial court found that the lamp was not more than three feet above the water. Maintaining the lamp at a height of less than eight feet violated a navigation rule promulgated by the Commandant of the United States Coast Guard, and the Court found that the vapor would not have been ignited if the lamp had been carried at the required height. As a result, the Supreme Court held that under the Jones Act, a seaman’s employer was liable, without

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MAP: Arctic Portal | arcticportal.org

The area shaded in dark teal marks the Polar Code delimitation in the Arctic, according to the International Maritime Organization’s “Guidelines for ships operating in Polar waters.”

showing of negligence, for his death resulting from a violation of the US Coast Guard’s regulations pertaining to navigation. Over the years, however, the Kernan legal principal has been tested and expanded under US law and no longer just applies to navigation violations. See for example, Elms v. Crowley Marine Services, Inc., 1997 AMC 835 (W.D. Wa. 1996) (finding fault in a vessel operator who routinely allowed masters and mates of its tugs to voluntarily work more than twelve hours in a twenty-four hour period even though the injured crewman voluntarily worked the excess hours and contributed to his own injury); see also, Wuestewald v. Foss Maritime Co. 2004 AMC 2478 (N.D. Ca. 2004) (finding the owner 100 percent liable for the tankerman’s damages who fell between the barge and the dock while using a ladder despite the vessel owner’s proof that the ladder was satisfactory); see also, Fuszek v. Royal King Fisheries, 1997 AMC 92 (9th Cir. Wash. 1996) (reversing a District court decision to reduce a seaman’s damage award by 25 percent which occurred after the seaman stuck his hand in a fish-cutting machine to clear a jam despite training and warnings to the contrary). Simply put, an employer’s breach of an applicable safety statue, which even slightly contributes to a seaman’s injury, is liable for 100 percent of the seaman’s damages. Now, with the implementation of the Polar Code and its safety regulations, vessel owners and charterers will have a new class of legal liability to face. For example, Part I of the Polar Code has specific provisions relating to the 108

safety of crews on vessels operating in polar waters, and pursuant to the broadening scope of Kernan decision, if a maritime employer inadvertently violates one of these regulations which then contributes to a crewmember’s injury, US courts will likely impose Jones Act liability upon the ship owner—regardless of fault. Naturally, vessel owners and charterers need to familiarize themselves with these safety provisions-should the worst happen.

Pollution Liability

In addition to having an increased amount of Jones Act liability under the Polar Code, vessel owners and charterers will now face more environmental liability as well. Pursuant to Oil Pollution Act of 1990 (OPA 90), a responsible party, i.e., vessel owners or charterers, are legally liable for the full cost of clean-up, the cost of removing the spilled oil, plus any damages incurred. OPA 90, however, does have a cap on the amount a responsible party can be charged. By way of example, a double-hall tank vessel greater than three thousand gross tons is entitled to a liability cap of $2,200 per gross ton, or $18,796,800. For non-tank vessels and oil spill response vessels, the new limits are the greater of $1,100 per gross ton or $939,800. That being said, the above limitation cap may be broken if the incident was proximately caused by a violation of a federal safety statute. Put another way, a vessel owner may be strictly liable under OPA 90 for the actions of his crewmembers if such actions constitute a violation of a federal safety or operating regulation. Under 33 U.S.C. §2704(c)(1)(B), the per ton

limitations on OPA 90 may not be invoked if the incident was proximately caused by a “violation of an applicable Federal safety, construction, or operating regulation by the responsible party, an agent of the responsible party, or a person acting pursuant to a contractual relationship with the responsible party.” Many vessel owners and charterers have expressed concern that in a maritime casualty it would be relatively easy to show that there has been a violation of some regulation, particularly in view of the sheer number of regulations applicable to ship operations. Indeed, in view of the broad extent and application of Coast Guard regulations, including rules of the road, the Navigation Safety Regulations, vessel inspection regulations governing construction and maintenance, watchstanding and working-hour regulations, and all other regulations, all of which would be within this exclusion, a vessel owner’s right to invoke the per ton limitations is speculative at best. However, this right to limit one’s liability now has become even smaller under the Polar Code. Indeed, not only will the Polar Code make vessel owners strictly liable for cleanup costs and damages, but may also preclude vessel owners from accessing the liability cap provided by OPA.

Historic New Legal Regime

The Polar Code is a historic new legal regime that will establish binding and enhanced international standards for new and existing commercial ships operating in Arctic and Antarctic waters. As with the development of most safety and environmental regulations, the Polar Code has taken existing “best practices” of the polar shipping industry and codified them into regulations so as to require all vessel owners operating in polar waters meet a baseline standard of prudent and safe operation and management. These new rules, however, are of special concern in the context of Jones Act liability, statutory fault, and liability limitations under OPA 90. With that, it is important that vessel owners and charterers familiarize themselves with the Polar Code in order to prevent any strict liability legal actions from occurring. As Benjamin Franklin once said, an ounce of prevention is worth a pound of cure. R

Isaak Hurst is an attorney with the International Maritime Group, PLLC-a boutique law firm that provides legal services to the maritime, oil and gas, mining, and international business communities of the Pacific Northwest. Contact him at www. InternationalMaritime.net.

Alaska Business Monthly | February 2016 www.akbizmag.com

International Trade special section

State Exports from Alaska Alaska Top U.S. Exports (Origin of Movement)

Top 25 6-digit HS Commodities Based on 2014 Dollar Value

US Exports by Origin State (Origin of Movement Series). Values in millions of dollars. Percent Change is from 2013 - 2014.

Rank Abbreviation World Top 25 1 Zinc Ores And Concentrates 2 Lead Ores And Concentrates 3 Fish Meat, Frozen, Nesoi 4 Alaska Pollock Fillets, Frozen 5 Fish, Frozen, Nesoi 6 Cod, Frozen 7 Fish Livers And Roes, Frozen 8 Natural Gas, Liquefied 9 Pacific Salmon, Frozen, Nesoi 10 Copper Ores And Concentrates 11 Petrol Oil Bitum Mineral (Nt Crud) Etc Nt Bio 12 Flat Fish Nesoi Except Fillets, Livers, Roes 13 Precious Metal Ores & Concentrates, Except Si 14 Alaska Pollock, Frozen 15 Coniferous Wood In The Rough, Not Treated 16 Civilian Aircraft, Engines, And Parts 17 Floating Or Submersible Drilling Or Prodctn, P 18 Flour Meal & Pellet Of Fish Crustaceans Etc I 19 Crabs, Including In Shell, Frozen 20 Sockeye Salmon, Frozen 21 Crude Oil From Petroleum And Bituminous Miner 22 Herrings, Frozen 23 Pacific Salmon, Fresh Or Chilled 24 Coal Nesoi, Not Agglomerated 25 Lt Oils, Preps Gt=70% Petroleum/Bitum Nt Biod

Val 2011 5258.94 3065.03 972.36 494.84 319.09 0 0 0 0 210.19 0 199.28 125.37 74.28 142.12 0 118.14 33.03 0 62.23 113.39 131.81 0.02 38.03 0 30.86 0

Val 2012 4543.42 4138.01 795.97 428.07 369.28 206.8 377.88 249.68 214.54 144.92 147.04 169.49 177.96 85.10 107.99 105.49 150.96 72.54 0 43.97 125.77 89.10 0 22.93 19.93 30.63 1.99

Val 2013 4527.82 4275.45 813.80 389.33 341.21 283.59 251.23 231.44 245.68 0 257.67 150.20 285.03 161.41 140.29 111.68 162.55 46.16 0 77.18 99.25 60.57 50.44 45.17 21.15 26.71 23.68

Val 2014 Share 11 Share 12 Share 13 Share 14 5110.73 0.36 0.29 0.29 0.32 4851.55 58.28 91.08 94.43 94.93 1067.97 18.49 17.52 17.97 20.90 367.49 9.41 9.42 8.60 7.19 347.22 6.07 8.13 7.54 6.79 319.01 0 4.55 6.26 6.24 269.84 0 8.32 5.55 5.28 252.61 0 5.50 5.11 4.94 224.69 0 4.72 5.43 4.40 216.98 4.00 3.19 0 4.25 208.27 0 3.24 5.69 4.08 186.47 3.79 3.73 3.32 3.65 176.15 2.38 3.92 6.30 3.45 163.67 1.41 1.87 3.57 3.20 139.94 2.70 2.38 3.10 2.74 131.54 0 2.32 2.47 2.57 122.53 2.25 3.32 3.59 2.40 103.88 0.63 1.60 1.02 2.03 100 0 0 0 1.96 99.96 1.18 0.97 1.71 1.96 97.34 2.16 2.77 2.19 1.91 93.85 2.51 1.96 1.34 1.84 73.90 0.00 0 1.11 1.45 38.39 0.72 0.51 1 0.75 19.09 0 0.44 0.47 0.37 17.08 0.59 0.67 0.59 0.33 13.70 0 0.04 0.52 0.27

Change 12.87 13.48 31.23 -5.61 1.76 12.49 7.41 9.15 -8.55 -19.18 24.15 -38.20 1.40 -0.25 17.78 -24.62 125.05 29.52 -1.93 54.96 46.50 -15.01 -9.75 -36.06 -42.15

Top U.S. Exports (Origin of Movement) from Alaska Top 25 Countries Based on 2014 Dollar Value

Rank Country World Top 25 1 China 2 Japan 3 South Korea 4 Canada 5 Germany 6 Spain 7 Australia 8 Netherlands 9 South Africa 10 Singapore 11 Italy 12 Finland 13 Belgium 14 France 15 Thailand 16 United Kingdom 17 Ukraine 18 Hong Kong 19 Lithuania 20 Taiwan 21 Portugal 22 Denmark 23 Russia 24 Chile 25 Mexico www.akbizmag.com

Val2011 5258.94 4901.91 1477.19 1085.63 642.25 586.39 261.44 205.12 96.10 172.71 0.87 11.27 10.31 59.87 31.43 47.71 35.16 17.86 17.61 12.99 11.24 20.44 30.69 18.87 15.50 21.01 12.23

Val2012 4543.42 4381.89 1353.51 780.39 663.18 466.71 274.47 151.38 107.89 121.29 0.26 123.99 13.69 44.85 59.13 36.84 11.58 24.2 20.75 13.08 13.44 17.09 32.25 13.38 9.44 20.51 8.61

Val2013 4527.82 4474.5 1236.23 688.03 705.25 604.30 289.08 141.43 62.05 111.85 2.94 217.05 8.37 42.57 64.86 49.64 41.13 27.96 39.04 23.91 32.83 16.43 14.67 17.32 13.36 16.82 7.38

Val2014 5110.73 5052.84 1466.86 1014.54 672.74 517.20 322.85 182.49 111.16 104.26 100.06 100.01 69.01 64.64 63.44 50.84 41.46 40.34 19.48 17.99 15.34 15.31 14.86 14.04 13.73 10.44 9.75

Share11 0.36 93.21 28.09 20.64 12.21 11.15 4.97 3.90 1.83 3.28 0.02 0.21 0.20 1.14 0.60 0.91 0.67 0.34 0.34 0.25 0.21 0.39 0.58 0.36 0.30 0.40 0.23

Share12 0.29 96.45 29.79 17.18 14.60 10.27 6.04 3.33 2.38 2.67 0.01 2.73 0.30 0.99 1.30 0.81 0.26 0.53 0.46 0.29 0.30 0.38 0.71 0.30 0.21 0.45 0.19

Share13 0.29 98.82 27.30 15.20 15.58 13.35 6.39 3.12 1.37 2.47 0.07 4.79 0.19 0.94 1.43 1.10 0.91 0.62 0.86 0.53 0.73 0.36 0.32 0.38 0.30 0.37 0.16

Share14 0.32 98.87 28.70 19.85 13.16 10.12 6.32 3.57 2.18 2.04 1.96 1.96 1.35 1.27 1.24 1.00 0.81 0.79 0.38 0.35 0.30 0.30 0.29 0.28 0.27 0.20 0.19

February 2016 | Alaska Business Monthly

Change 12.87 12.93 18.66 47.46 -4.61 -14.41 11.68 29.04 79.14 -6.79 3303.87 -53.92 724.45 51.86 -2.20 2.42 0.79 44.31 -50.1 -24.79 -53.28 -6.84 1.28 -18.95 2.73 -37.9 32.12 109

https://www.census.gov/foreign-trade/statistics/state/data/ak.html

US Exports by Origin State (Origin of Movement Series). Values in millions of dollars. Percent Change is from 2013 - 2014.

Business Events FEBRUARY 2016

FEB

Health Summit

Hotel Captain Cook, Anchorage: The 2016 summit tracks will be policy and advocacy, social and economic determinants of health, interdisciplinary and partnerships, research and evaluation, and health promotion/ communication/education. alaskapublichealth.org

2-4

FEB

6-12

Alaska Statewide Special Education Conference

Hilton Anchorage: The Alaska Statewide Special Education Conference (ASSEC) is committed to providing high quality professional development relevant to the cultural, rural, and remote characteristics of our great state. assec.org

FEB

Alaska Forum on the Environment

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

8-12

FEB

15-19 FEB

Alaska Surveying & Mapping Conference

Hilton Anchorage: This is the 50th annual conference. aksmc.org

ADS Annual Meeting

Sheraton Anchorage Hotel: The annual meeting of the Alaska Dental Society, which is “Committed to enhancing the dental profession and the health of all Alaskans.” akdental.org

19-20 FEB

ASTE Annual Conference

Hotel Captain Cook, Anchorage: This is the educational technology conference of the Alaska Society for Technology in Education. This years’ theme is “What if: It is Possible.” aste.org

20-23 FEB

Sustainable Agriculture Conference

The Lakefront Anchorage: This conference is held every year and brings together farmers, ranchers, researchers, Extension agents, and members of the agriculture support industry to learn from one another and to find ways to improve the agriculture industry in Alaska. uaf.edu/ces/ah/sare/conference

23-25

MARCH

MAR

2-6

Alaska Anthropological Association Annual Meeting

Sitka Fine Arts Camp, Sitka: 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 110

Compiled by Tasha Anderson MAR

9-12

Western Alaska Interdisciplinary Science Conference and Forum

UAF Bristol Bay Campus, Dillingham: The theme of the 2016 Conference is “Adaptation: Tides of Change.”

MAR

10-13

Alaska Library Association Annual Conference

Westmark Fairbanks Hotel: AkLA is a nonprofit professional organization for the employees, volunteers, and advocates at academic, public, school, and special libraries of all sizes in Alaska, as well as library products and services vendors. akla.org/fairbanks2016

MAR

Arctic Science Summit Week

University of Alaska Fairbanks: Arctic Science Summit Week is the annual gathering of international organizations involved in Arctic research. assw2016.org

12-18 MAR

AFCCA Annual Child Care Conference

BP Energy Center, Anchorage: The conference includes seven hours of training, and lunch is provided. alaskafcca.org

APRIL

APR

8-9

ASRT Annual Meeting and Educational Conference

Westmark Fairbanks Hotel: This annual event offers a single location for companies as well as Imaging Specialists from all modalities to network with the largest captive audience in Alaska. aksrt.com

APR

AKMGMA Annual Conference

This is the 30th anniversary of the Medical Group Management Association Alaska conference, and the theme for 2016 is “Rock Stars of Practice Management.” akmgma.org

14-16 APR

Alaska Native Studies Conference

University of Alaska Anchorage: This year’s theme is “Wellness & Healing: Indigenous Innovations & Alaska Native Research.” alaskanativestudies.org

15-16 APR

18-21

AWWMA Annual Statewide Conference

Anchorage: This is a venue for to bring information, technology, expertise, curiosity, hunger, and thirst (for refreshment and knowledge) to the Water and Wastewater Industry Professionals in Alaska. awwma.org

APR

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

25-27

APR

AWRA Spring Specialty Conference: Water-Energy-Environment

Sheraton Anchorage Hotel: Topics include energy-oil and gas, energy-coal,

Alaska Rural Energy Conference

Westmark Fairbanks Hotel: The Alaska Rural Energy Conference is a three day event offering a large variety of technical sessions covering new and ongoing energy projects in Alaska, as well as new technologies and needs for Alaska’s remote communities. alaskarenewableenergy.org

26-28

MAY

Alaska Bar Convention

MAY

ACUL Annual Meeting

Dena’ina Center, Anchorage: This conference provides opportunities to complete CLE requirements as well as an opening reception, several luncheons, and an awards reception and Dinner for 25, 50, and 60 year recognition. alaskabar.org

11-13

Westmark Fairbanks Hotel: The Alaska Credit Union League’s annual meeting is an opportunity to gather, network, and learn. alaskacreditunions.org/events

19-21

JUNE

JUN

2-5

Alaska Optometric Association Summer CE Conference

Land’s End Resort, Homer: The mission of the AKOA is to influence the future of eye care by ensuring the welfare of Alaskans and promoting the continued development of the profession of optometry. akoa.org

JUN

CSTE Annual Conference

Anchorage: The conference connects more than 1,400 public health epidemiologists from across the country and will include workshops, plenary sessions with leaders in the field of public health, oral breakout sessions, roundtable discussions, and poster presentations. csteconference.org/2016/

19-23

JUN

20-24

Southcentral Foundation Alaska Conference

Anchorage: Southcentral Foundation’s mission is to work with the Native Community to achieve wellness through health and related services. southcentralfoundation.com

JULY

NEA Alaska Spring Conference

22-24 APR

energy-hydropower, water supply and energy management, environment, and communications. awra.org/meetings/Anchorage2016

JUL

Alaska Business Week

July 16-23—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 R

16-23

Alaska Business Monthly | February 2016 www.akbizmag.com

Inside

Alaska Business JANUARY 2016 QUINTILLION HOLDINGS LLC ASRC has made a significant investment in Quintillion Holdings LLC and now holds a minority interest in the Anchorage-based telecommunications company. Quintillion and its affiliates are currently involved in building terrestrial as well as subsea fiber optic networks to serve the North Slope. Quintillion has begun construction of its Subsea Cable System, which will extend from Prudhoe Bay to Nome with landings in the communities of Barrow, Wainwright, Point Hope, and Kotzebue. The system is planned to eventually link Europe and Asia with a fiber-optic broadband cable running along the floor of the Arctic Ocean. asrc.com FUTARIS, INC. Futaris, Inc., a subsidiary of Calista Corporation, invested in a new C-Band antenna for its Anchorage teleport to provide services in Alaska using Eutelsat Communications’ new-generation EUTELSAT 115 West B satellite. This investment complements Futaris’s Colorado-based antennas connected to EUTELSAT 115 West B, supporting Internet, broadcast, VoIP, and disaster recovery/business continuity solutions from Anchorage. Futaris’ full coverage of Alaska now includes the Aleutian chain, Southeast Alaska, and north of Barrow’s

Compiled by Russ Slaten offshore. The EUTELSAT 115 West B satellite can provide direct or mesh connectivity in a single hop between Alaska and South America. futaris.com

broad set of industries. A diversified group of global investors and Arctic indigenousowned businesses have invested in the fund. ptcapital.com

ALASKA CLIMATE CHANGE PORTAL The Division of Community and Regional Affairs—under the Alaska Department of Commerce, Community and Economic Development—launched a portal that will serve as a one-stop shop for Alaska climate change-related information. The Alaska climate change portal includes an abundance of information from a variety of sources, compiled to assist people interested in exploring the topic, and includes information on governmental and non-governmental initiatives that are attempting to address climate change challenges. commerce. alaska.gov/web/dcra/ClimateChange

ARCTIC SLOPE REGIONAL CORPORATION Reston, Virginia-based ASRC Federal, a wholly-owned subsidiary of Arctic Slope Regional Corporation, has acquired Data Networks Corporation. The company has been providing a broad range of information technology and program management services to federal government customers for over thirty years and will become a subsidiary of ASRC Federal. asrc.com

PT CAPITAL LLC Pt Capital LLC, a private equity firm concentrating on investment opportunities in the Arctic, achieved initial close of its inaugural private equity fund Pt Arctic Fund I LP, with commitments at initial close totaling more than $125 million. The fund intends to invest in and grow companies in Alaska, Canada, Greenland, and Iceland in a

YOUNG’S TIMBER, INC. Young’s Timber, Inc. in Tok received a $48,150 working capital grant award from US Department of Agriculture-Rural Development. The dollar-per-dollar match funding will help Young’s with marketing, wood chip production, and delivery in rural Alaska Interior areas and comes from USDA-Rural Development’s Value-Added Producer Grant program. ALASKA LNG PROJECT The state of Alaska acquired TransCanada’s share of the Alaska LNG project. Alaska

Your Project, Our Responsibility. 24/7 Service Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

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

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501 February 2016 | Alaska Business Monthly

111

INSIDE ALASKA BUSINESS Department of Natural Resources Commissioner Mark Myers finalized the termination of the formal agreement that established and guided the participation of TransCanada Alaska Midstream LP in the AKLNG project. Terminating the relationship with TransCanada would increase state revenue from the project by up to $400 million annually when gas starts flowing, based on the Department of Revenue’s expectation that the state can finance its share of AKLNG’s midstream costs at a lower cost than TransCanada. The Department of Natural Resources paid the termination amount of $64,590,000 and TransCanada has transferred its participation interests to the Alaska Gasline Development Corporation. ak-lng.com USDA-RURAL DEVELOPMENT Six rural Alaska recipients have been awarded a total of $2,338,241 in grants through USDA-Rural Development’s Distance Learning and Telemedicine program. The North Slope Borough received a $420,027 grant to purchase video equipment to link six village clinics, four end-user sites, and the Samuel Simmonds Memorial Hospital in Barrow. The Yukon Koyukuk School District received a $496,701 grant to purchase video conferencing equipment for nine schools in the Interior. Eastern Aleutian Tribes, Inc. received a $279,106 grant to build an interactive tele-psychiatry network that delivers mental and behavioral health services to six schools and one children’s home. Bering Strait School District received a $497,572 grant to purchase video conferencing equipment to increase access between Bering Strait School District offices and fifteen public schools. Alaska Children’s Services, Inc. received a $290,188 grant to build an interactive tele-psychiatry

network delivering mental and behavioral health services to schools in Kalskag, Bethel, Chuathbaluk, Crooked Creek, and Stoney River. Kenai Peninsula Borough School District received a $354,647 grant to install video conferencing equipment in thirteen schools. rd.usda.gov TESORO CORPORATION Tesoro Corporation, through its affiliate Tesoro Alaska Company LLC, has agreed to acquire Flint Hills Resources’ wholesale marketing and logistics assets in Anchorage and Fairbanks. The transaction includes all Flint Hills wholesale fuel marketing contracts in Alaska; an Anchorage terminal with 580,000 barrels of total inservice storage capacity, a truck rack, and rail loading capability; a Fairbanks airport terminal that includes 22,500 barrels of inservice jet fuel storage and truck rack; and a multi-year agreement at Flint Hill’s North Pole terminal, which will provide efficient rail offload capabilities and provide Tesoro access to Alaska’s Interior. The former Flint Hills North Pole refinery is not part of this acquisition. tsocorp.com MATANUSKA TELEPHONE ASSOCIATION Matanuska Telephone Association launched 1 GIG high-speed Internet, the most advanced Internet service available, for its customers in select neighborhoods in Eagle River and the Mat-Su Valley. Customers can access up to one thousand times faster upload and download speeds to stream highdefinition video or audio on multiple devices at once. mta-telco.com SOLATUBE INTERNATIONAL, INC. Solatube International, Inc., manufacturer and marketer of Tubular Daylighting De-

vices, named Chugiak-based Alaska Skylights as its new certified residential and commercial distributor in Alaska. Steve and Beth Bergh have been doing business in Alaska since 2000 as Door Systems of Alaska. With the addition of the Solatube International line of tubular daylighting devices to their family of product offerings, the company has formed of Alaska Skylights. Alaska Skylights is the exclusive authorized provider and installer of Solatube Daylighting Systems throughout Alaska. alaskaskylights.com ALUTIIQ MUSEUM & ARCHAEOLOGICAL REPOSITORY The Alutiiq Museum replaced its familiar website for a new platform updating both the look and functionality to access museum programs and Alutiiq traditions. The new website reflects almost a year of planning, design, and content development. To address the demand for cultural information, the site includes a section called “Learn” where visitors can explore extensive resources on the Alutiiq world. With financial support from the City of Kodiak, a professional website designer helped the museum create the website. The museum plans to add a virtual tour this year that will allow people to see details of the museum’s displays. alutiiqmuseum.org UPPER TANANA ENERGY LLC Upper Tanana Energy LLC (a partnership between Tanacross, Inc., the Native Village of Tanacross, and Alaska Power & Telephone Company) received a new $500,000 grant from the USDA Rural Development’s Rural Energy for America Program to be applied towards construction of the Yerrick Creek hydropower project near Tanacross. Nearly $1 million in expenditures to date

Your Project, Our Responsibility. 24/7 Service

Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

www.pacificpile.com I (907) 276-3878 276-3873 112

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501

Alaska Business Monthly | February 2016 www.akbizmag.com

Compiled by Russ Slaten have brought the project to constructionready status through grants provided by the Alaska Energy Authority, USDA Rural Development, and private investment supplied by Alaska Power & Telephone. Upper Tanana Energy constructed five miles of new transmission line for the project during the summer of 2015. aptalaska.com U-HAUL COMPANY OF ALASKA Backpacker Inn at 409 Eagle Street in Downtown Anchorage has signed on as a U-Haul neighborhood dealer to serve the Anchorage community. Backpacker Inn will offer U-Haul trucks, trailers, and towing equipment through the U-Haul Company of Alaska. uhaul.com DONLIN GOLD LLC The US Army Corps of Engineers published the Donlin Gold Draft Environmental Impact Statement (EIS), allowing Donlin Gold LLC (a partnership between Barrick Gold Corporation and NovaGold Resources, Inc.) to reach a significant permitting milestone for the mining project located in the Yukon-Kuskokwim region. Following the filing of the Draft EIS, the Army Corps of Engineers is expected to schedule public meetings on the Donlin Gold Draft EIS in the Yukon-Kuskokwim region and Anchorage; accept written comments on the Draft EIS until the close of the five-month comment period at the end of April 2016; and review and respond to all comments on the Draft EIS in a Final EIS, which the Corps’ schedule anticipates will be published in 2017. donlingoldeis.com THE WILSON AGENCY The Wilson Agency, based in Anchorage, and Albers & Company, based in Tacoma, Washington, announced their merger. The

long-planned merger of the two growing independent regional benefits, human resource, and financial service companies was completed last August. The Wilson Agency President and CEO Lon Wilson and Albers & Company founder Steve Albers envisioned the merger before Steve passed away in 2012. Albers & Company continued the merger planning after Steve’s passing with the goal of giving Albers’ employees additional growth opportunities. thewilsonagency.com PDC AND R&M PDC Inc. Engineers announces it has joined forces with R&M Engineering Inc. located in Juneau. R&M Juneau is a seventeenperson firm that offers civil, structural, and geotechnical engineering; as well as survey, special inspections, and materials testing (soils, concrete, and asphalt pavement). Michael Story and Mark Pusich will maintain their leadership positions as Principals and all other staff will continue in their same capacity. PDC is a ninety-person multi-disciplined engineering, planning, and survey firm with office locations in Anchorage, Fairbanks, Palmer, and Soldotna. Combined, the total staff will now reach 107 professionals. By joining forces, R&M Juneau’s client’s will have the benefit of PDC’s additional capabilities with mechanical, electrical, fire protection, and environmental engineering; commissioning; sustainability; and planning/GIS. This is in addition to substantially increasing staff capacity in their traditional disciplines of civil and structural engineering, as well as land survey. PDC airport planning and design, along with its urban transportation expertise will also be an added benefit for Southeast clients and teaming partners. PDC’s clients will benefit

by R&M’s experienced staff, geographic location, as well as adding R&M Juneau’s capabilities in geotechnical engineering, materials testing (soils, concrete, and asphalt pavement), and special inspection services. GCI GCI completed the Municipality of Anchorage portion of the 1 GIG project and introduced plans to bring the lightning fast Internet service to more residents of the Mat-Su Valley. The 1 GIG red project finished the citywide build-out on November 27, 2015, with service available from Eagle River to Anchorage to Girdwood. The launch of 1 GIG service in Wasilla and Palmer was expected to be complete in January. Upcoming 1 GIG launches in Juneau and Fairbanks are planned before the end of summer 2016. gci.com SMASHBURGER FRANCHISING LLC Smashburger, the better burger restaurant concept, has added Alaska to its growing family of better burger franchisees. Alaska SB LLC has agreed to open the brand’s first Alaska-based Smashburger restaurants in Anchorage and the Mat-Su Valley. The new group will be building three Smashburger restaurants over the next three years and consists of Sandi and Mark Larson and their operating partner Gretchen Kenny. smashburger.com R

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113

RIGHT MOVES Northrim Bank

Northrim Bank hires and promotes three new officers.

Sakumoto

Angulo

Gaines

Anne Sakumoto joins Northrim as VP HR Talent Manager. She has more than thirty years of experience in the human resources field and eleven years in the financial industry. Sakumoto earned a BBA from the University of Hawaii, an MBA from the University of Alaska Anchorage, and has a Professional in Human Resources certification and Certified Professional designation. Jose Angulo joins Northrim as AVP Branch Manager Float. Angulo was an assistant store manager at Wells Fargo, with more than ten years in the financial industry. Sarah Gaines was promoted to HR Operations Manager. She has been with Northrim for thirteen years and has worked in the human resources department for more than eight years.

Alaska Permanent Fund Corporation

Attorney General Craig Richards was appointed to the Alaska Permanent Fund Corporation Board of Trustees by Governor Bill Walker. Richards earned his JD from the School of Law at Washington and Lee University, an MBA from Duke University, and a BS in Finance from the University of Virginia.

Hattenburg Dilley & Linnell

Founding principal Lorie M. Dilley, PhD, PE, CPG, has shifted priorities to focus on geothermal projects with the Geotechnical Department. She earned her Doctorate in Geology with her thesis on Fluid Inclusion Strategraphy, A New Method of Geothermal Reservoir Assessment. David S. Crotsley joined HDL as a Professional Geologist. Crotsley brings eight years of geological experience and holds a bachelor’s in geology. Jeremy Dvorak, EIT, joined HDL as an Engineering Assistant. Dvorak brings a background in geotechnical engineering and geology and has earned a bachelor’s in geological engineering.

Britt Coon also joins Business Insurance Associates as Assistant Account Manager. She has more than ten years of experience in commercial insurance, working on both sides as a broker and a company underwriter. Coon

Credit Union 1

Credit Union 1 promotes two new VPs and four new managers.

R&M Engineering, Inc.

Jason Langen, PLS, joins R&M Engineering, Inc. as the Land Survey Manager. He has more than thirteen years of experience as a Professional Land Surveyor working on various projects throughout Alaska. Langen is a Langen graduate of Huntington College.

SEARHC

General surgeon Dr. John Lang joins the SouthEast Alaska Regional Health Consortium Mt. Edgecumbe Hospital. He has fifteen years of experience in general surgery. Lang earned his MD from the Pennsylvania Lang State Universit y School of Medicine. He completed a residency in General Surgery at PinnacleHealth Hospital in Harrisburg, Pennsylvania, and then completed a Colon and Rectal Surgery Fellowship at the William Beaumont Hospital in Royal Oak, Michigan.

Wileman

Bell

Kemp

James Wileman was promoted to Senior Vice President of Operations for Credit Union 1. He was the vice president of member and administrative services. Wileman was CEO of Alps Federal Credit Union in Sitka for four years. He graduated from Western Credit Union National Association Management School. Chrissy Bell was promoted to Senior Vice President of Communications and Culture for Credit Union 1. Originally hired as community engagement director in 2010, Bell has more than ten years of experience in the nonprofit sector. She earned a BA in English from the University of Alaska Anchorage. Erica Kemp was promoted to Employee Education Manager. Kemp began working at Credit Union 1 at its Soldotna branch. Prior to her promotion she was a teller, member service officer, assistant branch manager, branch manager, and lastly service and culture manager.

Business Insurance Associates, Inc.

Dilley

Dvorak

Crotsley

Hattenburg Dilley & Linnell’s Geotechnical Department continues to broaden its geotechnical and geological expertise.

Business Insurance Associates, Inc. announced two new hires to its commercial insurance department. Sheba Su’esu’e joins Business Insurance Associates as Assistant Account Manager. She is a graduate of Alaska Career College and has eight years of experience in customer service and client relations. Su’esu’e

Worley

Gustin

Heckert

Victoria Worley was promoted to Senior Member Assistance Manager in Credit Union 1’s Member Assistance Department. Originally hired

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Client/Project:#: NAC_15_0529_Delivered_snowmachine

Compiled by Russ Slaten in 2004, Worley began as a teller and was most recently account recovery manager. Shane Gustin was promoted to Branch Service Manager in its Branch Operations Department. Gustin has been with the credit union for over twenty years and was regional branch manager prior to promotion. Benjamin Heckert was promoted to Branch Manager at its Eagle River Branch. Heckert was the credit union’s member assistance manager prior to promotion.

Wells Fargo

Adam Anderson joins Wells Fargo as a Business Relationship Manager in Juneau. He brings ten years of title industry experience in Alaska. Anderson earned a bachelor’s in speech communication Anderson from Colorado State University. Leslie Dahl also joins Wells Fargo as a Business Relationship Manager in Juneau. Dahl has thirtyfour years of experience working in the financial services industry in Juneau and was chief lending Dahl officer for Alaska Pacific Bank.

SOA DOT&PF

Jeff Roach was appointed Airport Manager of Fairbanks International Airport for the Alaska Department of Transportation and Public Facilities. He has more than thirty years of aviation experience in Alaska. Roach was Roach the ADOT&PF Northern Region Planning Manager, Aviation and Highways.

KeyBank Alaska

Brian Nerland retired from KeyBank in December and Commercial Banking Executive Lori McCaffrey was expected to succeed him as Alaska Market President. With his retirement, Nerland will complete a thirty- Nerland year career at KeyBank in Alaska. McCaffrey has worked at KeyBank for twenty

years, beginning as a commercial lender. She started her career in 1979 at Mellon Bank in Pittsburgh, Pennsylvania. Over the years she became a senior lender and in 2010 assumed leadership of the commercial banking team. McCaffrey Morgan Vann was selected to manage KeyBank’s Kenai branch. Vann has more than three years of financial service and sales management experience. She has been a personal banker at the Kenai branch since joining Vann KeyBank in 2014.

Gere Donovan Creative

Ashley Taborsky assumed the role of Digital Strategist at Gere Donovan Creative. Taborsky was a project manager with a Canadian-based digital agency building websites and practicing SEO, content migration, Taborsky and information architecture for automotive companies across North America.

First National Bank Alaska

Mike Bridges joins First National Bank Alaska as the new Property Manager. Bridges has spent the last thirty-five years in the US National Guard, retiring as a brigadier general. He earned numerous service awards during Bridges his military career, including the Army Bronze Star Medal and the Alaska Legion of Merit. Alyeska Pipeline Service Company President Tom Barrett joins First National Bank Alaska’s Board of Directors. He was the Deputy Secretary of the US Department of Transportation and the first Administrator of the Barrett US Pipeline Hazardous Material Safety Administration and has served thirty-five years in the US Coast Guard. Barrett earned a BS in Biology from LeMoyne College and a JD from the George Washington University.

Crowley Maritime Corporation

Craig Tornga assumed the role of Vice President of Stakeholder Relations for Alaska at Crowley Maritime Corporation. Over the years Tornga held supervisory and managerial roles for Crowley in marine dispatch and customer Tornga service since 1977. Tornga led Crowley’s new marine solutions group in Houston in 2011 and was appointed vice president of business development in Alaska early in 2015.

Personnel Plus Employment Agency, Inc.

Christine Watkins of Fairbanks was promoted to General Manager of all Personnel Plus Employment Agenc y, Inc. branches. Watkins began as manager of the Fairbanks branch in July 2012 and will be respon- Watkins sible for all sales operations for Personnel Plus Employment Agency.

Sullivan’s Steakhouse Anchorage

Joe Romanosk y was promoted from front of house manager to General Manager of Sullivan’s Steakhouse Anchorage. Romanosky has more than two decades of hospitality experience, and before joining Romanosky Sullivan’s Steakhouse Anchorage in 2011, he was general manager of the Spaghetti Factory.

Municipality of Anchorage

Jillanne Inglis was appointed as ADA Coordinator for the Municipality of Anchorage by Mayor Ethan Berkowitz. Inglis will facilitate the full implementation of the Americans with Disabilities Act within the Municipality as well Inglis as monitor compliance with the laws in the areas of physical accessibility and municipal services. R

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Accolades

Compiled by Tasha Anderson

International Excellence

overnor Bill Walker announced the winners of the 2015 Governor’s North Star Awards for International Excellence on December 15, 2015. The winners are Korean Air for transportation, Fugro for scientific exchange, Alaska Skylar Travel for foreign investment, and Northern Alaska Tour Company for tourism. Korean Air initiated air cargo service to Anchorage in 1971 with its first cargo flight. It is the longest continuously serving international carrier at the Ted Stevens Anchorage International Airport. The airline is also one of the first carriers to take advantage of the cargo transfer rights available in Alaska, prompting other carriers to engage in cargo transfer. In August 2015, 178 Korean Airlines widebody freighters landed at the Anchorage airport. Air cargo activity accounts for approximately 55 percent of the Alaska International Airport System’s total revenue; Korean Air comprises almost 10 percent of the cargo revenue. Fugro has developed an offshore ice management capability that enables mapping, characterization, and monitoring of ice structures over large geographic areas. The ice management capability originated in Alaska to reduce risk in the offshore environment for activities associated with oil and gas exploration and development. It has since

NEW!

been deployed to Canada for further research and development and is now expected to be running in 2016. Alaska Skylar Travel caters to Chinese-speaking visitors to Alaska. The company is among the first land-based tour operators catering specifically to a growing number of Chinese nationals visiting the state. Skylar Jiang, a former China-based tourism expert at CYTS— one of China’s largest travel service providers—was invited by Visit Anchorage to participate in a 2006 familiarization tour to Alaska. Years of preparations followed that first visit, and in September of 2014, Alaska Skylar Travel began operations in Alaska and now employs seven full-time and three part-time Anchorage-based staff, along with five Alaska-based contractors. All tour guides are longtime Alaskans who speak Mandarin. Northern Alaska Tour Company (NATC) began in 1986, when a group of recent high school graduates, friends since grade school, bought a van and started offering day tours to the Arctic Circle each summer before returning to college. Nearly thirty years later, these same friends have grown NATC to a year-round business employing fifty full-time Alaskans. NATC caters to the 2 percent of visitors to Alaska who travel to the Arctic. gov.alaska.gov

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At its 6th annual awards celebration, Anchorage’s Alaska Bed & Breakfast Association member B&B owners recognized local businesses for helping make tourists’ trips memorable by presenting the following awards: Best Alaska Experience: Alaska Native Heritage Center; Best Tour Experience: Phillips Cruises and Tours, Kenai Fjords Tours, Talkeetna Air Taxi, and Salmon Berry Tours; Best Dining Experience: Glacier Brewhouse, Haute Quarter Grill, and Orso Restaurant; Best Customer Service: Anchorage City Trolley Tours, Alaska Wildlife Conservation Center, Major Marine Tours, Phillips Cruises and Tours; Innovative Approach to Making Guests Feel Special: Kenai Fjord Tours, Orso Restaurant; Best Business to Business Service in Support of Tourism: The Alaska App, Sam Wasson Photography; Rookie of the Year, New Member: South Restaurant & Coffeehouse; and Advocacy for Bed & Breakfasts in Tourism: Visit Anchorage. alaskabba.com Kiera O’Brien of Ketchikan was awarded a $3,000 college scholarship at the 2015 National Foundation for Women Legislators Annual Conference. O’Brien was selected as one of six national winners of the 18th Annual Bill of Rights Essay Scholarship Contest. womenlegislators.org Kirsten and Mandy Dixon, the mother-daughter chef duo from Within The Wild Alaskan Adventure Lodges, represented Alaska and the United States at the USA Pavilion at Expo Milan 2015 at the World’s Fair in Milan, Italy. The Dixons created a five-course prix-fixe dinner, showcasing Alaska seafood and Alaska grown ingredients. They conceptualized a menu to feature the five regions of Alaska by using foods representative of each area. withinthewild.com The Anchorage Chamber of Commerce celebrated the accomplishments of local businesses, individuals, and organizations at its 58th annual Gold Pan Awards gala and announced the following winners: Distinguished Community Service by an Individual, Organization, or Small Business—Ryan Cropper (Able Body Shop); Distinguished Community Service by a Large Business or Organization—CRW Engineering; Business Excellence—DOWL; Entrepreneurial Excellence—Katie Inman (Anchorage Yoga); and Volunteer of the Year—Lennel White. anchoragechamber.org Walsh Sheppard and the Alaska Department of Natural Resources Office of Boating Safety were named a two-time Bronze winner in the 36th Annual Telly Awards for two television public service announcements: “Pledge to Live” and “Hypothermia.” Both spots were developed and directed by Walsh Sheppard with the help of the Alaska Channel, photographer Judy Patrick, and various volunteers. walshsheppard.com | alaskaboatingsafety.org

The Alaska USA Foundation donated $7,500 to the American Diabetes Association of Alaska. The donation will help to expand services to children in Alaska living with Type 1 and Type 2 diabetes. The Foundation also awarded $5,000 to Camp Fire of Alaska to help support their Youth Development Programs, which serve more than five thousand youth annually. alaskausafoundation.org A team of Stantec’s Anchorage architects, engineers, and design industry professionals pitched in to help improve safety at the Hampstead Heath affordable housing complex. Teaming with NeighborWorks Alaska, thirty Stantec employees helped prepare the grounds for winter. Hampstead Heath is home to nearly 90 families, including more than 150 children. stantec.com | nwalaska.org In a demonstration of its continued investment in the knowledge and skill of its bankers, First National Bank Alaska announced vice presidents Luke Fanning and Stacy Tomuro as two of the mostrecent graduates of the Pacific Coast Banking School. Fanning is based in Juneau as First National’s Southeast Regional Manager. Tomuro works at Anchorage’s Dimond Branch. He’s a team leader in the bank’s Corporate Lending Division. fnbalaska.com As part of the five-year anniversary of the Summer of Heroes program, which supports programs that help Alaska youth reach their full potential, Alaska Communications donated $15,000 to Boys & Girls Clubs–Alaska during the organization’s 33rd Annual Auction Gala. alaskacommunications.com The W3 Awards, an international competition for online creative and marketing, awarded Gere Donovan Creative two Silver W3 awards for their design of the Anchorage Concert Association and Alaska Physical Therapy Specialists websites. Both websites also received Aurora Awards for Best Website Design by the Alaska Chapter of PRSA. geredonovan.com Bear Valley Elementary was recognized as a 2015 National Blue Ribbon School by US Secretary of Education Arne Duncan at a November ceremony in Washington, DC. It is among 335 schools selected last year based on overall academic excellence or progress in closing achievement gaps among student subgroups. asdk12.org/ schools/bearvalley/pages/Bear_Valley_Website/Welcome.html Visit Anchorage was awarded the 2015 Gold Service Award by Meetings & Conventions magazine subscribers for excelling in professionalism and dedication in service to meeting planner professionals. This is the 22nd time that Visit Anchorage has won the award. Winners were featured in Meetings & Conventions’ Gold Awards issue published in November. anchorage.net R

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SUPPORTING THE ARTS

EAT

SHOP ď&#x192;§

By Tasha Anderson

PLAY

STAY

he goal of the Silver Hand program is to help Alaska Native artists promote their work in the marketplace while simultaneously enabling consumers to identify whether or not a piece is original, authentic, and Alaskan made. Only original and contemporary pieces of art can be marketed with the Silver Hand seal, which means no reproductions or manufactured works. Additionally, the work must be produced in Alaska. The Silver Hand image is trademarked, and only artists who have applied and received a permit are authorized to use it. To be eligible for the Silver hand program, an Alaska Native artist must be a full-time resident of Alaska, be at least eighteen years old, and provide documentation of membership in a federally recognized Alaska Native Tribe. R Alaska Native Artist: Palmer Olrun of Nunivak Island Photo ÂŠ Chris Arend | AlaskaStock.com

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FROZEN FUN

EAT

SHOP

PLAY 

STAY

By Tasha Anderson

laska is a fantastic location for ice skating. The state has approximately 3 million lakes that are twenty acres big or bigger. Of those, approximately 3,200 are officially named natural lakes. Many lakes located around the state, particularly in well-populated areas, are public access lakes, meaning they’re free game for ice skaters during the winter. Additionally, around the state there are ice rinks at parks, malls, schools, and other locations. There are even a few indoor rinks available for ice skaters year-round. R

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SHOP

PLAY

STAY 

By Tasha Anderson

uneau is Alaska’s state capital; but the city has much more to offer than politics. The city sits at the base of Mount Roberts in Alaska’s panhandle. It’s a popular stop for cruise ships traveling up the Alaska coastline. Once in Juneau, there’s an endless list of activities: glacier, wildlife, and wilderness sightseeing by foot, boat, plane, or helicopter; kayaking, hiking, dog-sledding, skiing, snowboarding, riding the tram, or fishing; or an evening on the town dining on locally caught seafood, shopping for Alaska Native Art, or catching a show produced by Juneau’s fine arts community. R

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OUR CAPITAL

EAT

PIZZA

EAT 

by Tasha Anderson

SHOP

PLAY

STAY

veryone knows pizza. What’s great about the Italian treat of crust, sauce, and meat and vegetable toppings is how much possibility there is. Pizza is made into hand-held pockets and massive slices made to fold; super thin or canyon deep crusts; sauces ranging from traditional tomato to garlic and alfredo; and every topping on earth— in Alaska alone we’ve seen the range from smoked salmon to duck. R © alaska.org

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PLAY 

SHOP

Anchorage

Fairbanks

Young People’s Concert – Symphony Under Construction

FEB

Young People’s Concert explores elements of musical composition through performances of Tchaikovsky, Strauss, and other masters, including a finale surprisingly written by the audience during the concert. Creative, humorous, and educational, Symphony Under Construction will delight and inspire students with multi-media technologies and audience participation to bringing the students’ new work to life. Alaska Center for the Performing Arts. 10 a.m. anchoragesymphony.org FEB-MAR

Good Men Wanted

FEB-MAR

Fur Rondy

Come join the iconic Alaska tradition that includes winter sports, native art and culture, and many other events that celebrate life and the frontier spirit of Alaska. Downtown Anchorage. furrondy.net

26-6

Juneau

FEB

JUMP Society

The JUMP Society Winter Film Festival features locally made short films. Admission is free, but tickets available at the Alaska Robotics gallery guarantee attendees a seat. UAS Egan Room. jumpsociety.org

Motown Cabaret

This is a fundraiser for the Fairbanks Summer Arts Festival and is an evening of dance and Motown music. Pioneer Park Exhibit Hall, 8 p.m. fsaf.org

Fairbanks FEB

Almost, Maine

On a cold, clear moonless night in the middle of winter, all is not quite what it seems in the remote, mythical town of Almost, Maine. As the northern lights hover in the star-filled sky above, Almost’s residents find themselves falling in and out of love in unexpected and often hilarious ways. Knees are bruised. Hearts are broken. But the bruises heal and the hearts mend—almost—in this delightful mid-winter night’s dream. Fairbanks Drama Association Theatre. Fridays and Saturdays, 7:30 p.m.; Sunday 2 p.m. fairbanksdrama.org

5-21

FEB

BP World Ice Art Championship

This is an international ice sculpting competition with 180-plus sculptures plus a kids’ park made entirely of ice. 3030 Phillips Field Road. icealaska.com

Juneau Anchorage

STAY

Film 12-27 Winter Festival

during the American Civil 25-20 Set War, Good Men Wanted is based on hundreds of true stories, says playwright Kevin Armento. Five women leave their identities and the safety of their feminine domain behind to join the war efforts—as men. It is a tale of warriors, woven from the lives of women, divided from their true selves as mothers, wives, sisters, and lovers, to become men—to become soldiers. This is not a tale of North vs. South, but a tale of gender divided. Directed by Carrie Yanagawa and starring several of Anchorage’s best actors, Good Men Wanted will be the TossPots’ second fully staged production. Cyrano’s. Thursdays, Fridays, and Saturdays 7 p.m.; Sundays 3 p.m. cyranos.org

Compiled by Tasha Anderson

FEB

Wearable Arts Extravaganza

13-14 The Juneau Arts & Humanities Council presents the 14th Annual Wearable Arts: Reflections. Included in the evening are the fabulous silent auction and performances to raise funds for

scholarships, grants, and the Juneau Arts & Culture Center. Centennial Hall Convention Center, Saturday 7 p.m. to 10 p.m. and Sunday 2 p.m. to 5:30 p.m. traveljuneau.com

ensembles perform for adjudication and for the public. sitkajazzfestival.com

Wasilla FEB

Ketchikan FEB

“The Black Panthers: Vanguard of the Revolution” is the first feature length documentary to explore the Black Panther Party, its significance to the broader American culture, its cultural and political awakening for black people, and the painful lessons wrought when a movement derails. Featuring Kathleen Cleaver, Jamal Joseph, and many others, master documentarian Stanley Nelson presents a vibrant chronicle of this pivotal movement that birthed a new revolutionary culture in America. Free admission. Glenn Massay Theater, 2 p.m. glennmassaytheater.com

Wearable Art 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. ketchikanarts.org

4-6

Sitka FEB

The Black Panthers

Sitka Jazz Festival

FEB

The Sitka Jazz Festival strives to teach music appreciation, skills, history, artistic expression, and cross-cultural 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 noncompetitive, with an emphasis on cooperation and appreciation. Large

4-6

MDA Ice Fishing Derby for a Cure

13 MDA Alaska will be hosting their second annual Ice Fishing Derby for a Cure on Lake Lucille. There will be great raffle prizes, fishing prizes for adults and youth divisions, and multiple activities for the kids when they need a break from fishing. The funds raised at this event will support more than 140 local Alaskan families fighting muscle disease. Best Western at Lake Lucille, 9:30 a.m. alaskavisit.com R

Fairbanks FEB

Iron Dog

Dog is the 20-21 Iron longest, toughest snowmobile race in the world, running from Big Lake to Nome and finishing on the Chena River in Downtown Fairbanks. February 20 is the official start of the Iron Dog, and events include the Flying Iron freestyle show in Downtown Anchorage. The Pro Class restart is February 21 in Big Lake. irondog.org www.akbizmag.com

FEB

Denali Winterfest

in its 16th year, Denali 26-28 Now Winterfest offers loads of outdoor fun and educational events such as dog sledding, a 5K race, snowshoeing, hiking, park ranger programs, and more. This engaging, community-oriented festival starts off with a potluck and ends with a chili feed and cake walk—small town charm in the heart of Denali National Park. Mile 237 Parks Highway. nps.gov/dena/planyourvisit/winterfest

February 2016 | Alaska Business Monthly

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EVENTS CALENDAR FEBRUARY 2016

EAT

“WE ARE COUNTING ON YOU!”

CLIMATE CHANGE

cop21.gouv.fr/en

30 NOV › 11 DEC 2015

The 2015 UN Climate Conference: COP21 By Piper Wilder

eep global temperature rise below 2 degrees Celsius (3.6 degrees Fahrenheit), demand transparency in emissions, and hold all nations to some degree of legal accountability—were at the top of the list of 2015 United Nations Climate Conference: Conference Of Parties 21, or COP21, held in Paris and attended by representatives of more than 190 nations, including the United States. The summit concluded December 12 in Paris, but not without a heart-pounding race to the finish that included a daylong extension to the fourteen-day effort. The world now has its “first truly international plan to address climate change.” The Paris Agreement will certainly impact, and positively shape, Alaska’s clean energy economy in the years to come. The carbon reduction goals demanded will stoke investments that create jobs and opportunity. Here are the highlights of the agreement, according to US Special Envoy for Climate Change Todd Stern:  The architecture has fundamentally changed from previous Conference Of Parties (COP) summits. Now, standards apply to both developing and developed nations. This matters, since 124

previous protocols were hampered by disagreement on the premise that developed and developing economies should have different standards. Now, the standards are equal for all.  The ambitious goal to keep global mean temperature change below 2 degrees Celsius (3.6 degrees Fahrenheit)—if not striving for 1.5 degrees Celsius (2.7 degrees Fahrenheit)—was adopted.  All 195 signatory nations will revisit these targets every five years, making adjustments to it as necessary.  Nations committed to tracking carbon emissions transparently. This is the primary clause that legally binds countries. Nations are not however bound to achieve the emissions targets established. Countries shall perform carbon inventories subject to expert and peer review on the progress toward their targets.  Enhanced focus on adaptation.  Secretary John Kerry has so far committed the United States to provide $800 million for the adaptation fund.

Signing the Paris Agreement

ollowing the adoption of the Paris Agreement by the COP (Conference of the Parties), it will be deposited at the United Nations in New York and be opened for one year for signature on April 22, 2016— Mother Earth Day. The agreement will enter into force after fifty-five countries that account for at least 55 percent of global emissions have deposited their instruments of ratification. R

 A “path of high ambition” toward carbon neutrality in the course of this century.

Historic Accord

Whether critics think that the agreement goes too far, or that elements are insufficient, one inarguable point is that the accord is historic: this is the single most unified and legally binding global agreement on climate the world has ever seen. R Piper Foster Wilder is the Deputy Director of REAP. Contact her at pfwilder@realaska.org or 907-929-7770

Alaska Business Monthly | February 2016 www.akbizmag.com

Source: United Nations Framework Convention on Climate Change

Recap of the Paris Climate Agreement

ALASKA TRENDS

By Iuliia Chepurko

Alaska’s ‘Leaking’ Economy O

ne way to develop an economy is to increase the amount of locallymade products that can replace items that would otherwise be shipped in. This is known as import substitution, a time honored and somewhat controversial tool for developing economies, dating back at least to Alexander Hamilton’s tariff to protect small US manufacturers from cheaper British goods. Import substitution helps create a self-sufficient economy and decreases “leakages” that occur when paying for imported goods. The concept suggests strategies to develop industries within a region that could replace imports and reduce dependency on goods produced elsewhere.

Local Demand

In Alaska, 36 percent of local demand is met by imports from the Lower 48 (referred to as domestic imports) or from other countries. The top three products imported to Alaska from other countries are oil or petroleum derivatives (54 percent of imports), and the top three export products are zinc ores (21 percent of total), lead ores (7 percent of total), and frozen fish (7 percent of total).

Looking at different economic regions within the state, Southwest Alaska has the highest share of local demand met by imported products at about 75 percent. Next is the Gulf Coast region (55 percent) and Northern region (53 percent). Anchorage and the Matanuska-Susitna Valley, with more developed infrastructure and a larger industrial base, has the lowest dependence on imported products—only 33 percent of local demand is covered by goods from the Lower 48 and other countries.

High Dependency

In general, the more remote a location, the higher the import coverage of local demand. What is noticeable is that the same regions that have high dependency on imports also export most of the goods produced locally. For example, the Southwest region exports 74 percent of local supply, with “seafood” commodity group being the main exported product. The Northern region exports 82 percent of the local supply, with “natural gas and crude petroleum” commodity group as a key export product; in the Gulf Coast region—59 percent of the local supply, “refined petroleum products” commodity group is leading the export group. These

findings are consistent with the notion of Alaska as an underdeveloped, resource-extraction economy; raw commodities leave the state, and finished goods enter it.

Import Substitution

In principle, an import substitution policy could involve more refinement of petroleum products, increased local food production, or even the manufacture of marine vessels or other products used in-state. Weak economies of scale mean that many consumer items, from TVs to furniture, are poor candidates for in-state production, but the state has comparative advantages in other areas. Alaska has an export base and several key industries, generating income for state residents. At the same time, focus on these industries forces the state to import goods to cover about 36 percent of the local demand. Developing industries that would substitute imports could help to diversify economy and decrease dependence on outside suppliers. R Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

Source: IMPLAN Group LLC, IMPLAN System (data and software), 16905 Northcross Dr., Suite 120, Huntersville, NC 28078 www.IMPLAN.com

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125

ALASKA TRENDS

Indicator

GENERAL Per Capita Personal Income—Alaska Per Capita Personal Income—US Consumer Prices—Anchorage Consumer Prices—US Bankruptcies Alaska Total Anchorage Total Fairbanks Total Labor Force in Alaska Unemployment Rate Alaska US Employment Alaska Anchorage/Mat-Su Region Anchorage, Municipality Interior Region Fairbanks North Star Borough Southeast Juneau, City and Borough Northern Region Gulf Coast Southwest Region Sectorial Distribution—Alaska Total Nonfarm Goods-Producing Mining and Logging Mining Oil & Gas Construction Manufacturing Seafood Processing Service-Providing Trade, Transportation, Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information Telecommunications Financial Activities Professional & Business Svcs Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Svcs & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government

126

By Iuliia Chepurko Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

US $ US $ 1982-1984 = 100 1982-1984 = 100

2ndQ15 2ndQ15 1stH15 1stH15

56,155.0 47,369.0 217.1 236.3

56,905.0 47,005.0 216.8 237.1

53,926.0 45,844.0 214.8 236.4

4.1% 3.3% 1.1% -0.0%

Number Filed Number Filed Number Filed

November November November

37.0 27.0 7.0

69.0 64.0 4.0

26.0 9.0 7.0

42.3% 200.0% 0.0%

Thousands

November

359.0

360.6

363.2

-1.2%

Percent Percent

November November

6.4 5.0

6.1 5.0

6.4 5.8

0.0% -13.8%

Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands

November November November November November November November November November November

336.0 193.8 152.9 49.3 44.3 32.6 15.9 10.2 34.6 15.6

338.8 192.8 152.0 50.0 44.5 33.4 15.9 10.1 35.8 16.8

339.9 194.9 153.7 50.0 44.8 33.3 16.1 10.7 35.2 15.7

-1.1% -0.6% -0.5% -1.3% -1.1% -2.2% -0.9% -5.1% -1.8% -0.9%

Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands

November November November November November November November November November November November November November November November November November November November November November November November November November November November November November November November November November

325.8 42.3 16.8 16.6 13.9 17.2 8.3 4.5 283.5 66.0 6.4 38.9 6.4 10.4 20.7 5.6 6.2 4.4 12.0 27.0 47.8 34.2 30.8 7.5 19.1 12.3 81.4 14.1 25.3 8.2 42.0 23.8 3.7

333.1 46.5 17.4 17.1 14.4 18.9 10.2 6.3 286.6 67.2 6.5 38.3 6.3 10.4 22.4 5.9 6.3 4.5 12.1 28.6 47.5 34.1 31.1 8.1 18.6 12.2 81.6 14.3 25.3 8.1 42.0 23.6 3.7

325.4 42.8 17.7 17.5 14.8 16.7 8.4 4.6 282.6 63.5 6.3 36.9 6.1 10.2 20.3 5.7 6.2 4.2 12.1 28.5 46.8 33.7 30.4 7.9 18.6 11.8 83.3 14.4 27.0 8.7 41.9 23.9 3.5

0.1% -1.2% -5.1% -5.1% -6.1% 3.0% -1.2% -2.2% 0.3% 3.9% 1.6% 5.4% 4.9% 2.0% 2.0% -1.8% 0.0% 4.8% -0.8% -5.3% 2.1% 1.5% 1.3% -5.1% 2.7% 4.2% -2.3% -2.1% -6.3% -5.7% 0.2% -0.4% 5.7%

Alaska Business Monthly | February 2016 www.akbizmag.com

ALASKA TRENDS

Indicator

PETROLEUM/MINING Crude Oil Production—Alaska Natural Gas Field Production—Alaska ANS West Coast Average Spot Price Hughes Rig Count Alaska US Gold Prices Silver Prices Zinc Prices

By Iuliia Chepurko

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Millions of Barrels Billions of Cubic Ft. $ per Barrel

October October October

15.4 8.0 48.2

14.2 8.3 48.8

15.5 9.1 84.9

-0.6% -11.5% -43.2%

Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. $ Per tonn

November November November November November

13.0 760.0 1,087.0 14.5 1,582.0

12.0 791.0 1,158.2 15.7 1,727.7

8.0 1,925.0 1,176.4 16.0 2,280.0

62.5% -60.5% -7.6% -9.2% -30.6%

Millions of $ Millions of $ Millions of $ Millions of $

2ndQ15 2ndQ15 2ndQ15 2ndQ15

36.6 17.2 18.8 0.6

53.2 15.7 36.6 0.9

37.6 16.2 20.6 0.8

-2.7% 5.8% -8.9%

Dollars Dollars Dollars

2ndQ15 2ndQ15 2ndQ15

287,989.0 184,829.0 481,798.0

281,494.0 180,214.0 442,343.0

279,020.0 188,530.0 424,776.0

3.2% -2.0% 13.4%

Dollars Dollars

2ndQ15 2ndQ15

233,422.0 163,474.0

241,092.0 167,354.0

220,665.0 145,699.0

5.8% 12.2%

Units Units Units

2ndQ15 2ndQ15 2ndQ15

228.0 67.0 120.0

105.0 1.0 192.0

232.0 87.0 274.0

-1.7% -23.0% -56.2%

VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Total Air Passenger Traffic—Fairbanks

Thousands Thousands

October October

389.7 78.4

382.3 76.1

1.9% 3.1%

ALASKA PERMANENT FUND Equity Assets Net Income Net Income—Year to Date Marketable Debt Securities Real Estate Investments Preferred and Common Stock

Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

October October October October October October October

52,544.0 53,701.3 113.4 1,973.7 23.7 236.1 1,382.0

50,546.2 51,373.9 95.7 -600.2 2.7 -671.3 -758.4

51,110.5 51,824.3 167.6 332.7 74.8 102.4 135.4

2.8% 3.6% -32.3% 493.2% -68.3% 130.6% 920.7%

BANKING (excludes interstate branches) Total Bank Assets—Alaska Cash & Balances Due Securities Net Loans and Leases Other Real Estate Owned Total Liabilities Total Bank Deposits—Alaska Noninterest-bearing deposits Interest- bearing deposits

Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15 3rdQ15

6,340.2 378.4 148.2 2,970.6 20.4 5,515.1 4,717.2 2,097.1 2,620.1

5,973.9 275.4 147.7 2,965.2 18.0 5,166.5 4,448.1 1,893.4 2,554.8

5,781.7 299.4 146.7 2,742.9 18.0 5,002.3 4,346.6 1,830.3 2,516.3

9.7% 26.4% 1.0% 8.3% 13.5% 10.3% 8.5% 14.6% 4.1%

FOREIGN TRADE Value of the Dollar In Japanese Yen In Canadian Dollars In British Pounds In European Monetary Unit In Chinese Yuan

Yen Canadian $ Pounds Euro Yuan

November November November November November

122.5 1.3 0.7 0.9 6.4

120.1 1.3 0.7 0.9 6.4

115.86 1.13 0.63 0.80 6.14

5.7% 17.4% 4.4% 16.3% 3.7%

REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Government Average Loan in Housing Market Statewide Single-Family Condominium Multi-Family Refinance Average Loan Statewide Single-Family Condominium New Housing Built Statewide Single-Family Mobile Home Multi-Family

Notes: Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska. 2. Information on housing is retrieved from AHFC website.

www.akbizmag.com

February 2016 | Alaska Business Monthly

127

ADVERTISERS INDEX Alaska Logistics...................................55 Alaska Mergers & Acquisitions LLC...........................42

Construction Machinery Industrial...........................................2

Hawk Consultants LLC.................... 62

R & M Consultants Inc.....................64

Cornerstone Advisors.......................37

Judy Patrick Photography............. 128

Ravn Alaska..........................................35

Livingstone Slone LLC.......................71 Lynden Inc.........................................105

Restoration Science & Engineering.................................31

Alaska USA Federal Credit Union...27

Craig Taylor Equipment....................95

Alaska USA Insurance Brokers....107

CRW Engineering Group..................65

American Association of Petroleum Geologists..................61

Delta Leasing LLC..............................53

MFCP Motion & Flow Control Products Inc................... 94

Society For Marketing Professional Services – Alaska..........................72

Diamond Airport Parking.................36

Michael Baker International............63

American Marine / Penco..............125

Span Alaska Transportation Inc......21

Donlin Gold..........................................56

N C Machinery....................................57

Anchorage Messenger Service.......43

Stellar Design Inc.............................120

DOWL.................................................. 69

Arctic Office Products.....................28

Dowland-Bach Corp..........................71

Nortech Environmental & Engineering.................................73

T. Rowe Price....................................... 11

Arctic Spine........................................ 26

Doyon Limited.......................................3

Avis Rent-A-Car................................121

EDC Inc.................................................73

C & R Pipe and Steel Inc...................43

Environmental Management Inc... 90

Northrim Bank.................................... 13

California Coast University.............41

Pacific Pile & Marine.......111, 112, 113

Calista Corp.........................................25

Everts Air Cargo Tatonduk Outfitters..................... 51

Parker Smith & Feek..........................79

Capitol Glass/ Northerm Windows.....................67

F. Robert Bell & Associates........... 80

PDC Inc. Engineers..............................9

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

PenAir................................................... 29

Washington Crane & Hoist..............45

Carlile Transportation Systems... 129

GCI...............................................52, 130

Personnel Plus...................................121

Waste Management.........................89

Ch2m.....................................................81

Great Originals Inc............................ 62

PND Engineers Inc........................... 80

Watterson Construction..................93

Coffman Engineers............................72

Greer Tank...........................................36

Polar Supply Company......................91

Wells Fargo Bank Alaska..................23

North Star Behavioral Health........42 Northern Air Cargo..................114, 115

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128

Alaska Business Monthly | February 2016 www.akbizmag.com