Alaska Business Monthly February 2017 by Alaska Business

COOK INLET TAX CREDITS | ALASKA LNG & FERC | INTERNATIONAL AIR CARGO | 8(A) GRADUATES

February 2017

DREAM Engineering & Architecture Special Section page 8 International Trade Special Section page 56

Craig Fredeen, PE, LEED-AP 2015 Alaska Engineer of the Year

Digital Edition

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Februar y 2017 Digit al Edition TA BLE OF CONTENTS

DEPARTMENTS

FROM THE EDITOR RIGHT MOVES INSIDE ALASKA BUSINESS BUSINESS EVENTS EAT, SHOP, PLAY, STAY EVENTS CALENDAR ALASKA TRENDS AD INDEX

ABOUT THE COVER: Dream Big is the theme for this year’s national Engineers Week, February 19 through 25. Craig Fredeen, the 2015 Alaska Engineer of the Year, stands in front of one of his recent projects: Iditarod Elementary School in Wasilla. Meet the nominees for the 2016 Alaska Engineer of the Year (page 8) and read how Fredeen dreams big in a special Q&A (page 14). Both articles are part of the annual Architecture & Engineering special section.

7 80 82 85 86 87 88 90

Cover Photo: Judy Patrick Photography Cover Design: David Geiger, Art Director

Engineering & Architecture Special Section 8 | Engineer of the Year Nominees

By Craig Fredeen

14 | Engineering Spotlight: Craig Fredeen

Q&A with Alaska Business Monthly

20 | Engineering Alaska: The Colville River Nigliq Channel Bridge

Short timeframe, difficult conditions, excellent design By Tasha Anderson

22 | Post Pipeline Engineering A future chapter for TAPS By Darryl Jordan

26 | ANSEP Is Driving Education Forward

2016 inaugural year of ANSEP’s Acceleration High School By Tasha Anderson

28 | Culturally Inspired Landscape Design

Ed Leonetti creates balanced human habitats By Gina Cameron

In Palmer, an ANSEP Acceleration High School student works on the design of a helicopter to be made of balsa wood and other basic materials. Photo courtesy of ANSEP

ARTICLES OIL & GAS

31 | Tanana Chiefs

Conference Chief Andrew Isaac Health Center An award-winning culturally inspired landscape and facility design SOURCE: Bettisworth North Architects and Planners, Inc.

42 | Cook Inlet without Tax Credits

Set to roll back this year, end next year By Julie Stricker

FINANCIAL SERVICES 44 | Alaska’s Business

Banking Trends Affected by Economy and Customers Growing deposits fuel desire for diversification and financial relationships By Tracy Barbour

Courtesy of the University of Alaska Fairbanks

Construction crews are busy finishing the UAF Engineering Building.

32 | Construction Resumes on UAF Engineering Building Facility will help meet demand for engineers in Alaska By Julie Stricker

International Trade Special Section 56 | Arctic Commerce

An emerging new economic opportunity By Greg Wolf

58 | Sovereign Wealth Funds Expansion

34 | ABM’s 2017 Engineering & Architecture Directory

Global investments include Alaska assets By Greg Wolf

60 | Trans-Pacific

Partnership Update

By Alex Salov

62 | Minerals Markets: Coal is still ‘King’

Alaska coal deposits are second largest globally By Greg Wolf

64 | Manufactured Exports from Alaska

Expanding success with international sales By Anneliese Trainer

66 | Asia Now, Asia

the Future for Alaska’s International Trade By Greg Wolf & Alex Salov

67 | Alaska Exports

Total U.S. Exports (Origin of Movement) from Alaska Compiled by ABM Staff

Alaska Business Monthly | February 2017 www.akbizmag.com

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Fe b r u a r y 2 017 TA B L E O F C O N T E N T S

ARTICLES

VOLUME 33, NUMBER 2 Published by Alaska Business Publishing Co. Anchorage, Alaska

ECONOMY

48 | Time-Value of Money

EDITORIAL STAFF Managing Editor Susan Harrington 257-2907 editor@akbizmag.com

A brief lesson in economics By Darryl Jordan

OIL & GAS

50 | Alaska LNG’s FERC Application

Next steps for the AGDC project By Julie Stricker

ALASKA NATIVE CORPORATIONS 52 | Alaska Native Corporation 8(a) Graduates

Competing successfully in open markets nationwide By Tasha Anderson

TRANSPORTATION

68 | International Connections: ANC Air Freight Gateway

Opening the door to future business for Alaska By Rob Stapleton

FISHERIES

74 | Alaska’s Commercial Seafood Making smiles at dinner tables around the world By Tom Anderson

79 | The Joy of Wild Caught Alaskan Seafood

By Susie Von Willer Linford

BUSINESS STAFF President Billie Martin VP & General Manager Jason Martin 257-2905 jason@akbizmag.com VP Sales & Marketing Charles Bell 257-2909 cbell@akbizmag.com Advertising Account Manager Janis J. Plume 257-2917 janis@akbizmag.com Advertising Account Manager Holly Parsons 257-2910 hparsons@akbizmag.com Advertising Account Manager Christine Merki 257-2911 cmerki@akbizmag.com Accountant Ana Lavagnino 257-2901 accounts@akbizmag.com Customer Service Representative Emily Olsen 257-2914 emily@akbizmag.com 501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 | Toll Free: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com ALASKA BUSINESS PUBLISHING CO., INC.

CORRECTION On page 32 of the January issue, the wrong community was named in the headline. We’ve corrected it below.

Ice Road to Tanana Unique method to transport cargo

Associate Editor Tasha Anderson 257-2902 tanderson@akbizmag.com Art Director David Geiger 257-2916 design@akbizmag.com Art Production Linda Shogren 257-2912 production@akbizmag.com Photo Contributor Judy Patrick

By Sam Friedman

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: Email query letter to editor@akbizmag.com. 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. Email specific requests to editor@ akbizmag.com. 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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Tyrell Seavey mushes on the Yukon River near Tanana, where a village-built ice road now connects Tanana to the Alaska road system.

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Alaska Business Monthly | February 2017 www.akbizmag.com

FROM THE EDITOR

DREAM BIG ALASKA F

ebruary is a great month in Alaska, the days start getting longer, the session in Juneau gets into full swing, and Engineers Week encourages students to consider engineering as a profession. Engineers across the state, the nation, and the world deliver the DiscoverE message to Dream Big during Engineers Week, Girl Day, Global Day, and in its Future City competition. The organization proclaims that it is “a catalyst for growth in volunteer engagement and networks across the globe.” DiscoverE is the “most popular source for engineering workforce outreach. And growing.” Results from 2016 show a 10 percent increase in page views on DiscoverE.org from FY-14-15 to FY 15-16 with more than 2 million views, plus more than 1.3 million users sought career related content—a 13 percent increase. On twitter, #eweek2016 was used in more than 24,000 tweets by more than 6,500 contributors, an increase of 280 percent in tweets and 44 percent in contributors. Even more impressive is the work the organization is doing to get girls interested in engineering. “DiscoverE is driving conversation and connecting engineering voices to amplify the critical messages,” they say. The numbers are telling: 1.39 billion impressions in media engagement in 2016—that’s 160 million more than in 2015. If you’re an engineer get involved if you aren’t already. Volunteer at a school, the organization found that 94 percent of DiscoverE educators believe having an engineer in the room is a good use of class time. Speaking of engineering, it’s a lot about solving problems. Take the state’s fiscal plan, it needs some serious engineering. So much so that a sustainable fiscal plan and the budget are overwhelmingly named as the top legislative priorities for the 30th Legislature, which was days away from gaveling in at press time for the February issue of Alaska Business Monthly. Here are a few legislative priorities we found:

 Alaska Chamber of Commerce Support reduction of spending to sustainable levels  Anchorage Chamber of Commerce Develop and implement a sustainable fiscal plan  Fairbanks Chamber of Commerce Support a comprehensive, long-term sustainable fiscal plan  Alaska Conference of Mayors Legislative Adoption of a Sustainable Budget Plan  Alaska Power Association The 2017 Legislature must address Alaska’s fiscal shortfall  Resource Development Council Advocate to limit unrestricted general fund (UGF)* spending to sustainable level of $4.1 billion or less. *UGF includes: Operating budget, capital budget, statewide obligations, but does not include deferral of liabilities. February will be a telling month for action by the Legislature on state finances. Let’s hope the entire session doesn’t become another Groundhog Day when it comes to solving the state’s financial problems. These legislators need to be architects of success by engineering sustainable spending—they need to Dream Big. We’ve shared some big dreams in the February issue of Alaska Business Monthly. Enjoy!

—Susan Harrington Managing Editor www.akbizmag.com February 2017 | Alaska Business Monthly

Courtesy of DiscoverE Leadership Council/ See the full 2017 Engineers Poster at DiscoverE.org

SPECIAL SECTION

Engineering & Architecture

Duane Anderson, PE | ASCE, Alaska Section

Engineer of the Year Nominees

Mak Kampen, PE | ASHRAE

Joseph Taylor, PE | ASPE, Anchorage Chapter

Robert J. DeVassie, PE, STP | ITE

Capt. Ted J. Labedz | SAME, Anchorage Post

Kelly Kilpatrick, PE | SWE, Greatland Section

Daniel B. Robertson, PE | SPE, Alaska Chapter

Alaska Business Monthly | February 2017 www.akbizmag.com

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

active member of the Structural Engineers Association of Alaska and the American Institute of Steel Construction. He was recognized in 2016 as a Fellow by the American Society of Civil Engineers. Anderson is the Structural Group manager for R&M Consultants in their Anchorage office. He sits on R&M’s Board of Directors. Anderson is an avid skier who volunteers his time teaching people with disabilities how to ski with Challenge Alaska Adaptive Ski and Snowboard School, this being his 22nd season. 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.

Mak Kampen, PE Alaska Chapter of the American Society of Heating and Refrigeration and Air-Conditioning Engineers (ASHRAE) Matthew “Mak” Kampen, PE, is a senior mechanical engineer with ConocoPhillips in Anchorage. Kampen’s current focus as the Greater Kuparuk Area Infrastructure Facility engineer is to lead multi-discipline engineering efforts to ensure that the existing life safety systems in-place are appropriate for each existing facility’s operation. He also leads engineering efforts for new facilities being developed to support future developments including a new wastewater treatment plant and a new oil laboratory. Kampen is

 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. The pioneering spirit of Alaska is alive and well in our engineering community! Our engineering community is internationally known as cold-climate experts, with their innovative design solutions used throughout the world. This year’s nominees are no exception. As last year’s Alaska Engineer of the Year, it gives me great pleasure to introduce you to the 2016 Alaska Engineer of the Year nominees and the professional societies they represent!

Duane Anderson, PE American Society of Civil Engineers (ASCE) Alaska Section Duane Anderson is a civil engineer who has been working in Alaska since first graduating from the University of Alaska Fairbanks in 1975. Anderson received an MBA from the University of Alaska Anchorage in 1993. His experience is varied and diverse, but has largely been focused on structural engineering aspects of waterfront, bridge, military, utility, and school projects throughout Alaska. Recent marine related projects include structural design of 4,000 lineal feet of sheet pile shore protection for the Kotzebue Shore Avenue project and the Kodiak Ferry Terminal Pier featuring a design to the new ASCE 61-14 Seismic Design for Piers and Wharves. Anderson is currently working on a design build Request for Proposal package for replacement of a pier at Palmer Station Antarctica and design of the Biorka Island Pier Replacement southeast of Sitka. Anderson has managed a competitive term contract for the Port of Anchorage Engineering Services “As-Needed” for twenty years. He is also supporting other R&M design groups for design of the new small boat harbor in Valdez. Recent significant building projects include Fire Station No. 9 in Anchorage. Anderson is an www.akbizmag.com

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ENGINEERING & ARCHITECTURE SPECIAL SECTION

By Craig Fredeen

ENGINEERING & ARCHITECTURE SPECIAL SECTION

the HVAC technical authority for the ConocoPhillips Alaska Business Unit and supports its larger project portfolio including the new CD5 Drill Site, the new DS2S Drill Site, and the upcoming GMT1 Drill Site throughout the HVAC design efforts. A lifelong Alaskan, Kampen earned a BS in Mechanical Engineering from the University of Alaska Fairbanks in 2006. Prior to joining ConocoPhillips, he spent five years working at H&K Sheetmetal Fabricators managing the mechanical portion of designbuild projects. This role included providing mechanical HVAC and plumbing designs, providing scheduling and procurement activities, and providing commissioning/startup activities. A few projects of note from this experience are the Embassy Suites Anchorage Hotel, APU Glenn A. Olds Hall Office and Laboratory Facility, and the MGM Medical Building. Kampen stays very active within the community. He is currently the President of the ASHRAE Alaska Chapter and prior to this position held the student activities position for a few years where he could promote Science, Technology, Engineering, and Math (STEM) in elementary student classrooms. He was able to take two University of Alaska Anchorage students to the ASHRAE Winter Conference in 2014 and helped one of those students secure a $10,000 scholarship through ASHRAE. This past year Kampen utilized his Ironman Lake Placid triathlon as a platform to raise more than $5,000 for a nonprofit organization called Pencils of Promise. This money will be used to build schools in less fortunate Third World countries. Kampen’s work with ConocoPhillips also provides opportunity for community service. He has led teams of ConocoPhillips employees at the Alaska Zoo for the United Way Day of Caring over the past two years. These teams have assisted in setting up the Zoo Lights display and have also painted the Polar Bear exhibit. Most importantly, Kampen has recently coached his two older boys’ soccer team. He and his wife are raising four young children, so it’s likely to see them volunteering time to help our younger generation grow. 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, energy efficiency, indoor air quality, refrigeration, and sustainability within the industry.

Joseph Taylor, PE Alaska Society of Professional Engineers (ASPE) Anchorage Chapter Joe Taylor, PE, is a professional civil engineer with CH2M Hill’s Transportation Business Group in Anchorage. He has more than twelve years of experience working on civil engineering projects across Alaska. His experience includes working on projects ranging from small, rural roadways and environmental remediation projects to large scale, urban infrastructure projects. He earned 10

his Bachelor of Science in Civil Engineering from Portland State University and his Master’s in Civil Engineering from the University of Alaska Anchorage. Taylor has served as design manager and civil engineer of record for many challenging projects over his career with CH2M Hill. In addition to numerous projects in Southcentral, Taylor’s project work has taken him all across Alaska including the Aleutian Islands, the North Slope, the Yukon-Kuskokwim Delta, and Southeast Alaska. His cold weather design experience includes work in Greenland and Antarctica. Taylor’s expertise is in site civil development and roadway design, with an emphasis in high speed, controlled access interchange projects. Notable projects that Taylor has been involved with include the Kulis Air National Guard Relocation Program, the recent Seward Highway Reconstruction from Dowling Road to Tudor Road, the Anchorage Port Modernization Program, and the design of Seward Highway Reconstruction projects from O’Malley Road to Dimond Boulevard. Taylor is an active member of ASPE and the Alaska Engineering Education Foundation, serving as a Board Member for both organizations. He volunteers annually with Anchorage Engineer’s Week, an organization that distributes tens of thousands of dollars in scholarship monies to local area students pursuing engineering educations. He is passionate about promoting engineering education at the local level, believing that local engineering students are one of Alaska’s most valuable resources. A lifelong Alaskan, Taylor spends his free time in the outdoors fishing, hunting, and boating the North Gulf Coast with his wife and Labrador retriever. 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.

highway with frontage roads, complete streets, signalized intersections, separated multiuse pathways, wildlife crossings, vegetative swales and rain gardens, noise walls, and bridges. DeVassie significantly contributed to West Dowling Road Phase II that became Alaska’s first Greenroads Pilot Project. This project is now paving the way for other projects to use Greenroads, a sustainability rating system. DeVassie is very passionate in helping and benefiting the community. He volunteers for many different youth programs; a few of these include supporting Alaska Youth Soccer special needs program as TOPSoccer Chair, coaching in the Arctic Winter Games, and running an All Pro Dad’s chapter at his kids’ school. He mentors at the University of Alaska Anchorage in the senior design class, elementary schools, and at DOT&PF. He is actively involved with the Anchorage Trails Initiative, one of the seven areas of focus for Live.Work.Play. He sits on the AMATS Air Quality Advisory Committee and on the Greenroads International Advisory Council. He served on the ITE Alaska Section Board of Directors for five years and continues to be an active member with ITE and other professional societies. DeVassie has been a public servant to the State of Alaska for more than eighteen years. He has spent his years designing and constructing projects that benefit the public through service and infrastructure, while giving back to the community in multiple ways so that his children’s children can appreciate the many resources Alaska has to offer. 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.

Robert J. DeVassie, PE, STP Institute of Transportation Engineers (ITE) Rob DeVassie earned his Bachelor of Science in Civil Engineering from the University of Alaska Anchorage and a Graduate Certificate in Design and Construction Management from the University of Alaska Fairbanks. He is also a Greenroads® Sustainable Transportation Professional. DeVassie began his engineering career as a college intern in the 1990s where he started working in a succession of increasingly responsible engineering positions in design and construction. In 2000 he was hired by the State of Alaska and is currently serving at the Department of Transportation & Public Faculties (DOT&PF) as a highway design project engineer. DeVassie has been instrumental in the successful completion of more than sixty projects at DOT&PF. Some substantial projects under his responsibility range from $50 million to $70 million in construction costs. These projects included design features of upgrading two-lanes to four-lane divided

Capt. Ted J. Labedz Society of American Military Engineers (SAME), Anchorage Post Captain Theodore Joseph Labedz is the executive officer, 673d Air Base Wing, Joint Base Elmendorf-Richardson (JBER), Alaska. He is the principal advisor to the Joint Base Commander, executes command decisions and policy, and oversees programs impacting fifteen thousand Airmen and Soldiers. Additionally he is the primary liaison for the commander to 11th Air Force, two Wings, four group commanders, US Army Alaska, and Alaska NORAD Command Region Staff. Labedz was born in Omaha, Nebraska, entered the US Air Force in May 2007, and has been privileged to serve as an officer for the past five years. He has held a myriad of positions including two times as an Emergency Management Flight Commander, deputy, operation support officer, and project engineer. Most recently he commanded the eighty-four member bi-national construction of a school in Central Luzon, Philippines, for more than 2,300 children. The project was

Alaska Business Monthly | February 2017 www.akbizmag.com

Kelly Kilpatrick, PE The Society of Women Engineers (SWE) Greatland Section Kelly Kilpatrick is a civil engineer and project manager, specializing in transportation engineering at DOWL. She graduated from the University of Alaska Anchorage with her Bachelor of Science in Civil Engineering in 2001. Throughout her undergraduate career, Kilpatrick was active in numerous student organizations, often holding officer roles, and participated in the yearly steel bridge competitions. She received her PE in 2005 and the majority of her engineering career has been with DOWL, just passing her seventeenth year with the firm. Kilpatrick grew up moving around the world, in a military household, but fell in love with Alaska and decided to stay to attend college. After a short “college try” in computer science, Kilpatrick, with the urging of her father, pursued an engineering degree while also joining the Alaska Air National Guard. In the Alaska Air National Guard,Kilpatrick trained as a radio operator and later crosstrained into engineering, as it paralleled her schooling. Kilpatrick’s desire to learn, travel, and experience different challenges helped her narrow in on her passion of engineering, problem solving, managing change, and promoting teamwork. Kilpatrick’s experience ranges from design engineer, value engineer, project engineer, and project manager to mentorship roles, all of which have helped her accomplish a variety of high profile projects in Alaska. Her most recent success is Alaska’s first Diverging Diamond Interchange, a $45 million project which is under construction and replacing the existing interchange at Glenn Highway and Muldoon Road in Anchorage. Kilpatrick led and mentored a team from preliminary design through final design in just ten months. Other notable projects include Elmore Road Extension (Abbott Loop Extension), West Dowling Road Phase I, and the Glenn/Bragaw Interchange. www.akbizmag.com

ENGINEERING & ARCHITECTURE SPECIAL SECTION

completed two days early and $125,000 under budget. Labedz is an avid outdoorsman and alpinist. He speaks fluent Spanish and is an active member of the Language Enabled Airman Program. He has a Bachelor of Science in Civil Engineering degree from the United States Air Force Academy (2011) and has been selected to complete his master’s degree in residence at the Air Force Institute of Technology beginning in fall 2017. 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.

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Kilpatrick believes passion is extremely important and a key ingredient to becoming successful. However, simply being passionate is not enough. Itâ&#x20AC;&#x2122;s the collective effort of trusted teammates, each with their own strengths. This synergy of collective learning, various strengths, and teamwork affects every individual by enhancing their ability to grow, develop, and become future leaders in our engineering community. Kilpatrick enjoys spending time with her familyâ&#x20AC;&#x201D;husband Brice, son Tyler, and their pets. She is passionate about cooking, family time, and helping animals in need. Her family is involved with fostering animals with special needs. Working with local rescue groups, Kilpatrick and her family give

the rescued animals the TLC they need and deserve until they find a loving home. Founded in 1950, 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 our 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.

Daniel B. Robertson, PE The Society of Petroleum Engineers (SPE) Alaska Chapter Dan Robertson currently serves as a petroleum engineering advisor within BP, advising on petroleum engineering related issues both locally within Alaska and globally. He grew up in Alaska and attended the University of Alaska Fairbanks, where he earned BS degrees in Petroleum and Mechanical Engineering. Robertson has held roles in several petroleum engineering disciplines throughout his twenty-nine-year career with BP, including reservoir, production, facilities, and drilling. Much of the first thirteen years of his career were spent in a variety of North Slope field engineering based positions in the Prudhoe Bay, Milne Point, and Endicott Fields. In more recent years he has been based primarily in Anchorage, with consulting roles on projects in Azerbaijan, Russia, India, the Middle East, North Sea, Trinidad, and Angola. He has been a licensed petroleum engineer in Alaska since the mid-1990s. He has authored or co-authored a number of technical publications in various technical journals. Robertson has been involved with university recruiting for the past twenty years, both at Alaska and Lower 48 universities. One of the more rewarding aspects of his career has been recommending many dozens of students for hire over the years and later mentoring them to develop successful careers in the industry. He is also involved in delivering technical training for BP. Robertson has been an active member of SPE since the early 1980s. He is also a member of the American Association of Drilling Engineers and a past member of the American Society of Mechanical Engineers. In 2015 he volunteered to serve as the technical program chairman for the Alaska-based 2016 SPE Western Regional meeting. Despite the challenging oil price climate, the technology exchange event was well attended and successful. He has also been involved with several volunteer activities such as United Way, Day of Caring, Habitat for Humanity, and the Boy Scouts of America. Robertson spends his off work time with his wife and two teenage children and on hobbies such as remodeling, fishing, racquetball, and skijoring. 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. The 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. R

Craig Fredeen, PE, LEED-AP, is a Mechanical Engineer. He is the 2015 Alaska Engineer of the Year. 12

Alaska Business Monthly | February 2017 www.akbizmag.com

SPECIAL SECTION

Engineering & Architecture

Engineering Spotlight:

Craig Fredeen Q&A with Alaska Business Monthly

echanical Engineer Craig Fredeen, PE, LEED-AP, was named last February as the 2015 Alaska Engineer of the Year after being nominated by the Alaska Chapter of ASHRAE (American Society of Heating and Refrigeration and AirConditioning Engineers). With nearly twenty years of experience, Fredeen has designed everything from single family homes in remote Alaska to the $120 million 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 the mechanical engineer on 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. A resident of Alaska for more than thirty years, Fredeen received his Bachelor of Science in Mechanical Engineering from Oregon State University in 1996. He has extensive design and construction experience in HVAC, plumbing, power generation, controls, fuel systems, and fire protection systems on an eclectic mix of projects including commercial, institutional, utility, residential, and industrial facilities. In 2011, Fredeen was nominated and won two separate “Top Forty Under 40” awards, one through the Anchorage Chamber of Commerce and

the second through the Consulting Specifying Engineer national magazine. Craig’s projects have allowed him to experience most of Alaska first hand in Arctic, sub-Arctic, and marine climates. This brings him a better understanding of how projects impact the community and the end user. Alaska Business Monthly asked him about his work, dreaming big, and being an engineer. ABM: What attracted you to engineering? Fredeen: I really liked making things better. With engineering, you’re improving people’s lives through tangible objects whether that is a safer car or a more energy efficient building. We directly impact the community. ABM: What projects did you work on over the last couple of years? Fredeen: I just finished two elementary schools for the Mat-Su Borough

14 Alaska Business Monthly | February 2017 www.akbizmag.com

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ENGINEERING & ARCHITECTURE SPECIAL SECTION

2015 Alaska Engineer of the Year Craig Fredeen at the Iditarod Elementary School in the Mat-Su Valley, a project he recently completed.

ENGINEERING & ARCHITECTURE SPECIAL SECTION

School District, Iditarod Elementary and Dena’ina Elementary, that just opened this fall. Those were great projects with a very proactive owner who worked closely with us during the design and great architects and contractors who worked collaboratively with us throughout the project. Great teams make great projects. And we did some awesome things with the mechanical design in those buildings that will not only save energy but reduce the annual maintenance costs and reduce student and staff sickness in the building—all the while keeping the systems simple and not introducing any equipment that the School District didn’t already have in other buildings they were maintaining. I also have the new Search and Rescue Hangar in Utqiagvik (Barrow) which is now in construction. I love working in the Arctic and I love projects that help a community. Schools, power plants, healthcare: they improve a community. And the SAR group up there does amazing things for the communities of the North Slope Borough. It’s just an honor to be part of that project. And of course we did some pretty cool innovative things in that building too; I can’t wait to see how its energy and maintenance costs compares to other hangars. There are a lot of other projects that I have worked on over the last couple of years, and all of them are worth mentioning, I just don’t think February’s issue is big enough for me to fully geekout on them all. ABM: What kinds of problems did you solve on recent projects? Fredeen: Well, no project is perfect. You do the best you can with the time and funding you have available to you. But that’s why it is so important to communicate, collaborate, and build those relationships during the design process to make sure you’ve got as much covered as you can during the design. And then always, always being professional and respectful with contractors during construction. I’ve always viewed construction as a team effort. And so when issues do pop up during construction, the group can quickly collaborate on a solution and move forward. ABM: What projects are you planning to work on in 2017?

Mechanical Engineer Craig Fredeen in the mechanical area of the Iditarod Elementary School in the Mat-Su Valley.

Fredeen: One of my favorite projects right now is a data center we’re designing for the National Science Foundation at McMurdo Station in Antarctica. It’s Arctic, remote, complicated, and supports all of the science being completed at McMurdo and the South Pole Station. Because of the high cost of energy, and the extreme remoteness, we get to especially geek-out on the design. For instance, in normal data centers, you’re trying to get rid of the heat. In our facility, we’re capturing

Alaska Business Monthly | February 2017 www.akbizmag.com

ENGINEERING & ARCHITECTURE SPECIAL SECTION

the low-grade heat, boosting it, and using it to heat the rest of the facility. There’s also a micro-turbine in the project which provides power and heat to the facility and is a great emerging technology for the Arctic. And we have layer upon layer of redundancy, all the while keeping the mechanical systems simple to understand and reliable. It also has a great collaborative user group and architect to work with so that also makes it fun. It’s got all the aspects of a complicated cold-climate project. And I love it! ABM: What do you look forward to discovering next in the work you do? Fredeen: We are at a tipping point in the state of Alaska and the Arctic in general. Sustainability and energy efficiency, though promoted for decades, are becoming a higher priority for owners. This allows us, the designers, to push the envelope on improving our designs and integrating in new technology and new approaches in building design. We still have a long way to go in Alaska regarding energy conservation and applying solutions that are unique to cold climates. A lot of those solutions have already been discovered and successfully implemented. We just need to share and learn from each other, across the international Arctic community, on what works and doesn’t work. We’ve all taken it individually pretty far, but together we can make a significant impact. So, in summary, an international collaboration among Arctic design communities in the development and application of engineering solutions unique to cold climates. ABM: Dream Big is the theme for the 2017 Engineers Week; what are some instances where you’ve Dreamed Big? Fredeen: I was fortunate to be one of the co-authors of the new Cold-Climate Buildings Design Guide that ASHRAE (American Society for Heating, Refrigerating, and Air-Conditioning Engineers) just published. It was an outstanding international collaboration among cold climate designers and industry experts on best practices for designing mechanical systems in cold climates. And we’re about to start on the next edition of the book. My dream is to create a web-based version of this process to better share and distribute these best practices among engineers world-wide in real-time. It would be a central information source that not only allowed users to share their best-practices but also be a depository for cold-climate academic research papers and project case studies. That will also accelerate the gap between theoretical solutions and practical field implementation. After unsuccessfully pitching the concept to a couple agencies, ASHRAE grabbed on to the idea and promised to host the site. We started to develop the website and content, but it has unfortunately stalled. I just need a lot more time and/or fellow disciples-of-the-cold to finish populating the information and help get it launched. www.akbizmag.com

February 2017 | Alaska Business Monthly

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ABM: What is your dream project? Fredeen: My dream project would be to travel across the state and to other Arctic nations and learn from facility managers and engineers about their best cold climate design practices to learn what works, what doesnâ&#x20AC;&#x2122;t work, and what they would like their design engineers to keep in mind when designing their facilities. Then taking that information and document it for use as a design guide for the owner for their projects as well as integrate it into an engineering best practice manual for other designers and owners to learn from. There is so much information and knowledge out there, particularly from the seasoned facility managers, that, if documented and shared, could make a significant impact on improving life in Arctic communities. It is an Arctic tradition to share and hand down knowledge to better future generations, and Iâ&#x20AC;&#x2122;d love to be that facilitator. ABM: What qualities does a good engineer have? Fredeen: To have an open, flexible mind. To look at situations from different points of view and always be looking to improve on what has been done before. We need to be able to listen and collaborate with all parties involved in a project including the owner, the design team, and the contractors. An engineer needs to understand that their way is not always the best or only way to accomplish something. I heard one contractor say that construction is a team sport. I think that is true for design as well. ABM: How do you encourage young people to consider careers in engineering?

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Fredeen: I tell students that if you want to change the world, become an engineer. Whenever I give a classroom presentation about engineering, I first ask the students to list all the calamities of the world they can think of such as starvation, cancer, and natural disasters. We then talk about how engineering is involved in every part of their lives from the water they drink to the chairs theyâ&#x20AC;&#x2122;re sitting on to their smart phones. And then at the end, we go through each of the calamities they listed and I note how engineering can either solve or reduce the impact of each of them. And going forward, engineering is going to have an even bigger impact on humanity. Low cost energy is the key to economic development. Breakthroughs in science and healthcare depend heavily on breakthroughs in engineering. Look at nanotechnology or what they are doing with DNA and genetics. Those are all being developed in the engineering buildings at universities. You want to save thousands of lives each year? Develop a low-cost water filtration system. I also tell them that the best qualities for an engineer to have are not that they get good grades in science and math class, but are instead that they have imagination, creativity, and curiosity. Those are the individuals that will lead us into the future. R

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Engineering & Architecture

Colville River Nigliq Channel Bridge providing access to ConocoPhillips’s CD5 site in NPR-A. Photo by Judy Patrick / Courtesy of ConocoPhillips Alaska

Engineering Alaska: The Colville River Nigliq Channel Bridge Short timeframe, difficult conditions, excellent design By Tasha Anderson

very year Roads & Bridges magazine publishes the Top 10 Bridge awards, recognizing top projects taking place in North America. According to Roads & Bridges, the Top 10 list is based on “project challenges, impact to region, and scope of work.” In 2016 the No. 2 slot was filled by the Colville River Nigliq Channel Bridge, which provides access to ConocoPhillips’ CD5 site in NPR-A. All of the bridges in the Top 10 had challenges: for example, the 2.5-mile, $118.5 million Choctawhatchee Bay Bridge in Florida was unable to drive piles for several months during the year because of restrictions to accommodate an endangered fish species; the Manayunk Bridge in Pennsylvania ($5.7 million, 1,900 feet) is listed on the National Register of Historic Places, so special care was necessary to comply with preservation design requirements; and the 3,600-foot Kentucky Lake Bridge, which cost $132 million, had to use a floating template to guide 6-foot diameter, 199-foot long piles into place, a complicated process that resulted in an average of three (of fifty-one total) piles being placed per week. Other bridges had seasonal limitations, 20

took place in remote areas, or had special environmental or cultural restrictions.

Nigliq Channel Bridge Alaska’s own $100 million Colville River Nigliq Channel Bridge had to accommodate seasonal restrictions, a remote site, a lack of infrastructure, a limited timeframe, and the subsistence needs of local residents. The Nigliq Channel Bridge was new construction, so there wasn’t a National Register to contend with, but the bridge is located on lands owned by Kuukpik Corporation, the Alaska Native village corporation for Nuiqsut. ConocoPhillips’ original location for the bridge was opposed by local leaders when it was proposed in 2005. Due to this opposition, ConocoPhillips withdrew the application. “Over time we worked closely with [the Village of Nuiqsut] to determine a new location for the bridge that they felt was a better fit for their needs,” says ConocoPhillips Alaska Communications Specialist Amy Jennings Burnett. Permits applications were submitted in 2009, including the updated bridge location, with the support of the Kuukpik Corporation, the state of Alaska, the Alaska congressional delegation, the North Slope Borough, and Arctic Slope Regional Corporation, owner of the CD5 site subsurface rights. PCL Civil Constructers provided construction management services for the Nigliq Channel Bridge, which was designed by PND Engineers, Inc. Kenton Braun, PE, principal engineer and VP for PND, says the company

was involved early in the design and planning process, “from concept development all the way back in the early 2000s, through various stages, and ultimately until it went to the final design. The final design effort basically started about 2008.” He says much of the design effort went into the capacity of the bridge. It supports two-way traffic and “was designed for 175-ton oil-field vehicle capacity,” much heavier than normal highway vehicles. The 1,420-foot bridge can be utilized year-round. The Colville River freezes and thaws each year, which means PND had to design with massive chunks of river ice in mind. The bridge features angled pipes on the upstream side of the bridge, which were “specifically put in as ice-breakers,” Braun says. “The idea is the ice hits those upstream piers, breaking and bending as it passes underneath the bridge. It was designed for ice up to 7-foot thick, and we’ve seen ice flow around 200-foot or so diameter. It’s pretty significant.” Braun says such conditions occur once a year during spring break-up.

Challenging Weather and Location Alaska’s challenging weather and the remote location were addressed during the design of the bridge in terms of how it would be constructed. “The bridge construction’s success was a huge team effort of all parties involved,” Braun says. CD5 is located in ConocoPhillips’ Alpine field in NPR-A where there is no permanent road access from the Dalton Highway. “It only has ice road access for about three months out of the year, and

Alaska Business Monthly | February 2017 www.akbizmag.com

Photo by Judy Patrick/ Courtesy of ConocoPhillips Alaska

we had to get this bridge built in a two-year time frame,” Braun says. The two-year time frame meant that construction had to utilize the availability of ice roads as efficiently as possible. “We constructed the foundation the first winter when we had ice-road access.” The foundation system is comprised of adfreeze piles, driven piles, and tremie grout piles to accommodate different soil and loading conditions. He continues, “We also brought all the bridge superstructure material up that winter and staged it on a multiyear ice pad so that, when we came back again in September and October, we were able to go out to the site and push the bridge from one side of the channel to the other side of the channel when we didn’t have the ice road access.” Braun says the Alpine field has a series of internal roads, and during the first year of construction a gravel road was built that connected the bridge site back to the rest of Alpine field infrastructure, allowing access from the man camps at Alpine to the bridge site even when ice roads were unavailable.

Deliberate and Innovative Construction The manner of constructing the bridge was also deliberate and innovative: “The method that came up between all parties—ConocoPhillips, PCL, and ourselves—was to launch the bridge across the river,” Braun says. All of the bridge components were pre-fabricated in the Pacific Northwest and then trucked north, “again sequenced throughout the whole time period to get the maximum efficiency there,” he says. For instance, most of the material was trucked up to Deadhorse before the ice roads opened, so once the roads were available they had the entire season to do the final shuttle from Deadhorse to the multi-year ice pad. The bridge girders came up by truck in upto-100-foot units, and the pre-cast concrete www.akbizmag.com

deck came in approximate 5-foot units that spanned the full width of the bridge. Braun says, “Pre-fabrication is key for speed and minimizing field labor, because it’s expensive to build stuff up on the North Slope. It’s essential to get as much done as you can off site and minimize that field time.” Once on site the bridge girders were assembled on one side of the river and then “launched” over the installed pier foundation. The pre-cast concrete deck was then installed over the girders. This process of launching the bridge was innovative in terms of safety and the environment. Burnett says, “We eliminated refueling and other operations that would’ve had to happen directly on the ice shelf if we’d use more cranes for the project.” She continues, “Additionally, we eliminated about fifty thousand hours of people having to work at heights because of the launch process.”

Long-Term, Sustainable Bridge The bridge provides transportation access to the CD5 site, but it also carries all of the pipelines coming from CD5. “Basically all of the lines heading into NPR-A now are supported off of this bridge, so any development there basically has to go across this bridge,” Braun says.

Burnett says that ConocoPhillips is continuing to move west in their development, beginning construction this winter on their GMT1 project and pursuing permitting for GMT2 as well, and “this bridge will service those areas as well.” Braun says it’s typical on the North Slope for pipelines to be elevated due to the fact that they’re filled with warm oil. “If you put the warm oil on the permafrost and melt it, it’s not stable and it will sink further and you destroy the permafrost.” He says using the bridge to support the pipelines across the Colville River is another example of sustainability: “Rather than building a separate crossing, we incorporated the pipelines into the bridge structure” on the downriver side of the bridge to protect them from ice. In the end, it’s a long-term, sustainable, productive bridge everyone is happy with, which speaks to excellent design. “It’s been an incredible project—great to be involved in it—and couldn’t have been done without the hard efforts of all parties involved,” Braun says. R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

February 2017 | Alaska Business Monthly

ENGINEERING & ARCHITECTURE SPECIAL SECTION

Colville River Nigliq Channel Bridge during construction phase.

SPECIAL SECTION

Engineering & Architecture

A future chapter for TAPS

Post Pipeline Engineering

By Darryl Jordan

The slope failure adjacent to the critical Yukon River Bridge is but one example of changing permafrost conditions along the TAPS route. State of Alaska and Alyeska Pipeline Service Company engineers are both working to protect this structure. Courtesy of Alyeska Pipeline Service Company

wenty years ago the Smithsonian Museum unveiled their newest exhibit, Oil from the Arctic: Building the Trans-Alaska Pipeline. At the time, the exhibit was highlighting the twentieth anniversary of operation and marking the pipeline’s place in engineering history. The exhibit prominently displayed a section of the 48inch pipe, insulated work gear, route maps, and a red lantern awarded to the poorest performing team during construction. Tucked below the massive pipe were photographs of many of the engineering challenges that required new solutions to make it an engineering marvel. It makes sense that many engineers were involved to create the pipeline as it was a massive project—and there was that Alaska factor of earthquakes, permafrost, very low temperatures, remote wilderness, and absolutely no infrastructure. Infrastructure is more than a road or airfield, but everything that a worker in a remote location needs such as housing, water, sewer, heat, power, trash, transportation, communication, entertainment, safety, and even emergency care. That was more than forty years ago, and one would think that the engineer’s job was done decades ago. The fact is that there are more than one hundred engineers at Alyeska Pipeline Service Company today and a comparable number of engineers working as contractors. This number is more than 10 percent of the Alyeska inhouse workforce and underscores that there are more engineering challenges to be met.

Science and Common Sense T. William Lambe, a faculty member for the engineering school at MIT for thirtysix years, described engineers as those that could combine science with some common sense. Betsy Haines, the senior director of engineering at Alyeska Pipeline Service Company, agrees with Lambe’s sentiment. She points out that it is not enough to come forward with a solution—the solution must make economic reality. In her role she is responsible for engineering design, standards, technical studies, and facility engineering. The team is an interesting mix of a core of twenty to thirty experienced engineers, international experts loaned from the owner companies, local consultants, and fresh engineers straight out of the University of Alaska Anchorage Alaska Native Science and Engineering Program. The result is an energetic workforce, adept at problem solving, with a deep love of Alaska. So, for someone that’s the head of engineering at a major oil project, worthy of an exhibit at the Smithsonian, looking forward to the future problems requiring solutions, what kind of people or consultants would they need on their team? Haines has a plan that says, “You have still got to fly the plane, so you will always need the core engineers of civil, mechanical, and electrical. My list will have

Alaska Business Monthly | February 2017 www.akbizmag.com

Throughput Changes Forty years of operation later, the list now includes more chemical, process, and geotechnical engineers. The expanded list is indicative of the change occurring in Alaska and the need for new solutions and engineering expertise. Throughput, the amount of crude oil passing through the Trans Alaska Pipeline System (TAPS), is changing; on an annual basis the throughput requirements could be steady state, decline, or increase from the year before. Global climate change is also changing Alaska. Alyeska is actually planning and engineering for different throughput events. Should new oil discoveries come online or technology breakthrough somehow increase production out of

www.akbizmag.com

Courtesy of Alyeska Pipeline Service Co.

Courtesy of Alyeska Pipeline Service Company

more chemical engineers, process engineers, and specialty engineers such as geotechnical.”

bacteria to attack the iron in the steel of TAPS. The bacteria finds a place under the precipitated waxy protective layer and, if untreated, can release corrosion inducing compounds adjacent to the pipe and valves. HAPP (Hydraulically Actuated Power Pig) is a technology employed to help Alyeska understand pipe integrity, part of the company’s annual integrity management plan. HAPP uses the hydraulic pressure difference behind the pig being pushed in the pipeline and the lower pressure in front of the pig to spray a jet at the pipe interior surface to both remove the wax and re-suspend the paraffin. An engineer did that using science and common sense. There are many types of pigs used for maintaining and modulating fluid flow. In general, pigs are limited in their use by changing pipe diameters, pipeline turns that are tighter than

Alyeska Pipeline Service Company’s Pipeline Integrity Crew launching a robotic crawler designed to inspect hard to reach locations in the TAPS system.

February 2017 | Alaska Business Monthly

ENGINEERING & ARCHITECTURE SPECIAL SECTION

Betsy Haines, Senior Director of Engineering at Alyeska Pipeline Service Company.

old oilfields, Alyeska must be prepared to move more product to market. The historical production has throughput declining 5 to 6 percent per year and Alyeska must be ready to work in a lower flow environment, although in recent years throughput decline has slowed. Should the economic limit be reached, as defined by the Department of Energy in 2012 as the point where expenses to operate exceed revenue of the oil, Alyeska must be positioned to figure out what that means and execute accordingly. Contrary to the long history of decline, Alyeska expects there will be an increase in throughput from 2015 to 2016. Whether flow must be maintained, decreased, or increased, Alyeska is employing technology through their engineers such as RODIS (Remotely Operated Diagnostic Inspection System) crawler technology, which has the mobility to take instrumentation into areas unreachable and provide real-time data about the pipeline integrity or conversion of TAPS from a simple conduit to a smart pipeline. These techniques are being employed to reduce risk and, where possible, increase efficiency while maintaining a high level of pipeline integrity. In low flow and consequently lower pipeline fluid temperatures, crude oil wax constituents will begin to change from liquid to solid at approximately 85°F, the wax appearance temperature. That will change with different pressures, presence of other chemicals, turbidities, and other physical properties. It is a major engineering concern as the precipitating solids not only inhibit flow patterns but allow water and

ENGINEERING & ARCHITECTURE SPECIAL SECTION

the length of the pig will allow, types of welds used, valves, tees, and fittings, or other intrusions placed inside the pipeline. For these reasons, there are areas in TAPS where a standard pig could not transition and perform critical assessment and operation functions. Alyeska is now employing a crawler to survey and thereby increase the pipeline integrity. The crawler looks very much like the robots used to explore unexploded ordinance or suspicious packages except that it has extra arms or legs to brace itself inside the pipeline.

Technology Retrofit Saving millions of dollars in future operation and maintenance costs, Alyeska has engineered and retrofitted the pipeline through a program called Electrification and Automation (E&A). The program has its share of controversy due to cost and schedule overruns as examined by the Federal Energy and Regulatory Commission, which denied a tariff increase in July 2017 for the purpose of recovering the cost; but the fact remains that Alyeska can operate the four remaining pump stations (1, 3, 4, and 9) from the Operation Control Center (OCC) in Anchorage instead of solely using remote field crews. The E&A project developed by Alyeska engineers used smart devices in the new equipment, allowing for remote monitoring on many system variables that Alyeska did not have before. This has allowed them to improve their operation and maintenance capabilities. Another project built by Alyeska engineers is the EDRC, an equipment diagnostic center for

Courtesy of Alyeska Pipeline Service Company

The Alyeska Pipeline Service Company’s Operation Control Center in Anchorage. The Electrification and Automation Project allows operators to monitor and control many system variables on the TAPS pipeline remotely instead of solely using remote field crews.

monitoring maintenance data. The equipment diagnostic system monitors vibration, leak detection, and power usage, as well as the normal pipeline activities such as pressure, temperature, flow, levels, and status of valve position. Computer technology aside, the E&A improvements changed the power source for the

remaining pump stations from petroleum fueled generators to electricity. The difference is that the old power systems delivered a fixed amount of pumping power, which required a minimum amount of oil on the upstream side of the pump. Allow the pump stations to operate at a variable speed and the pumps

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Solving Low Flow To illustrate the point, there are many solutions to solve the low flow issues. One is a smaller pipeline designed to ship smaller throughput volumes. This is not economical for the same reason a small “bullet line” for shipping gas was not built. The capital costs to build the smaller line still have to share that cost between smaller a number of barrels of product being shipped. Another possible solution is to shift from continuous operations to “intermittent flow.” This regime brings technical challenges and storage limitations for engineers to resolve. Dismantlement While no one is predicting a date when oil stops flowing in TAPS, the economic or technical limits appear to be closer then farther away. When the oil stops flowing for good, the Alyeska risk assessment matrix must also be prepared for this possible outcome. This task also falls to the engineers. Most people have an image of the US Navy sinking an old battleship in target practice or the implosion of an old building to get rid of the obsolete plant or equipment. The reality is the United States has a big problem disposing of obsolete equipment in today’s environment. An old battleship, for example, has lead based paint and asbestos and was designed to burn a residual oil which contained the heavier metals left over from oil refining. Sinking the ship is no longer an option. If one thinks about the implosion of a building, the building has already been gutted of all hazardous material and usually only the inert concrete and steel skeleton remains. The problem for dismantlement is heightened for the oil industry as they will have both volume and regulatory problems. The volume piece is easy to envision as it took decades to transport all the materials to the oilfield and pipelines. There are not enough landfills in the entire state for this eventuality. One regulatory problem is generated by toxic substances in crude oil like benzene, ethylbenzene, toluene, xylene (BTEX), and many heavy metals that may have fallen out of the crude oil during transportation. Simply capping the underground portions and abandoning the www.akbizmag.com

pipeline is not an option. The engineer would need to determine the nature of the hazardous material, the amount, various disposal options, and mix that with an array of transportation options. And those problems are only from the one problem created by transporting crude oil—there are a whole host of other materials that contain other toxic substances. There are no hazardous waste landfills in Alaska. Alyeska planning has already begun on the strategic level. One course of action in the matrix of possible outcomes is the use of “turnkey” companies that specialize in brownfield clean-up and making use of that expertise. The EPA uses the term brownfield to describe properties that may have hazardous substances, pollutants, or contami-

nants present. Alyeska has taken great care to ensure their property never meets that standard, and in this case simply means to demolish or remodel existing structures. A lot of engineering will need to occur to solve the problems associated with dismantlement and restoration activity. In another twenty years, perhaps the Smithsonian will update their exhibit with new photographs of all the engineering feats that flowed across the decades detailing “science plus common sense” and the engineers that continue to make it all work. R Darryl Jordan is an engineer and writes from Anchorage.

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can handle a wider range of fluid rates. This vastly lowered the technical limits to moving crude oil at the lower than originally designed rates now faced by the TAPS. With the E&A modifications nearing completion can Alyeska take low flow problems off the list? In planning for the multitude of impacts to the amount of oil, price of oil, environmental constraints, and increasing maintenance challenges, the answer is no. Engineers at Alyeska use a “risk based” assessment to hopefully identify possible impacts to many of the factors such as oil flow, pipeline integrity, increased maintenance, environmental changes, regulatory changes, safety of operation, and many other nonpipeline functions (community involvement, awareness, or access). The possible impacts are then scored upon likelihood of occurrence, and a plan is created to address the multitude of possibilities, starting with the most likely and progressing down the matrix.

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Engineering & Architecture

Photo courtesy of ANSEP

In Palmer, ANSEP Acceleration High School students are assigned a project each Friday to apply learned knowledge in a real-world scenario. (Far right) Tommi Crist works with her instructor Esther Heck (far left) and a peer to design a helicopter.

ANSEP Is Driving Education Forward 2016 inaugural year of ANSEP’s Acceleration High School

By Tasha Anderson

NSEP stands for the Alaska Native Science and Engineering Program, and it was initially a program for university students envisioned by Dr. Herb Schroeder to encourage Alaska Native students to pursue STEM (science, technology, engineering, and math) education and professions. That may have been the goal in 1995, but since then ANSEP has grown in the number of students, the programs offered, and the scope of their goal.

Acceleration High School ANSEP’s most recent step forward is the ANSEP Acceleration High School, located at the Valley Pathways School in Palmer. In August of 2016, twenty-three students formed the high school’s first cohort. On a snowy Friday afternoon in December, the ANSEP classroom is full of energy and controlled commotion as students are tasked with creating functional helicopters. Matthew Gho, an assistant professor of mathematics for ANSEP and an adjunct for the Department 26

of Mathematics & Statistics at the University of Alaska Anchorage (UAA), says that every Friday afternoon students are given a project to work on, ranging from egg drops and catapults to towers made of marshmallows and toothpicks. “They’re not given any diagrams or instruction,” Gho says. “They have to problem solve and work together as teams and figure it out.” In this case, students in small teams of two or three were provided rubber bands, balsa wood, and other similar materials and instructed to make helicopters. ANSEP Regional Director Michael Ulroan, who directs the Acceleration High School, says, “We want these hands-on projects to give students an opportunity to solve problems as a team.” Students are then required to present on their project: “Even if they might not succeed with their project, then they at least know what works and what doesn’t work, and they have to present that,” he says. This combination of exploration and explanation allows students to apply information learned during the week in various courses. Ulroan continues, “Not only are they applying, let’s

say, math to their hands-on project, in English they learn how to do presentations, and they put that into use on these hands-on projects.”

College Credit Opportunities ANSEP’s Acceleration High School is a partnership between the Matanuska-Susitna Borough School District, ANSEP, and UAA. Students attend the high school in Palmer every day just like any other high school, but their coursework is a combination of high school and college curricula. “Students are registered for university credit, and university professors [such as Gho] teach courses. That’s math, science, English, and social sciences courses they take for university credit,” Ulroan says. Schroeder explains that if students attend the Acceleration school for four years, they can rack up fifty-five university credits, an equivalent of three or four semesters, to apply to their higher education degree. “It saves families all that money for college tuition, and it saves the state two years in the general fund, depending on how you look at it: two years of high school or, because they’re

Alaska Business Monthly | February 2017 www.akbizmag.com

Photo courtesy of ANSEP

Shania Sommer designing her version of a helicopter made of balsa wood and other basic materials at the ANSEP Acceleration High School in Palmer.

already getting college credit, two years of college,” Schroeder says. Schroeder and Ulroan are both passionate about the need to prepare students for a college education. Schroeder says that trying to help students who aren’t prepared for college while they are in college is like pulling drowning kids out of a river: they’re already in trouble and even when “saved” the trauma of the experience doesn’t go away. “We decided to ‘run upstream’—now we stop them from getting thrown in in the first place,” he says. “None of our kids come to college needing developmental coursework or remediation.”

College Preparedness Ulroan himself is an ANSEP student, though he didn’t encounter the program until college. He grew up in Chevak and in high school took advanced math and English courses, graduated near the top of his class as salutatorian, and was granted various scholarships to go to college. “I felt like I was college ready. And then I show up to the university the summer before my first semester, took the college placement test, and I placed into elementary algebra, despite the fact that I took pre-calculus in high school. But I thought it was normal for a student to take pre-calc in high school and place in university algebra—I thought that was ok.” It was through conversations with his college peers that Ulroan realized that he was not, in fact, appropriately prepared. First generation college students or students from rural or remote areas may not have access to information on academic standards and benchmarks or a cultural or common understanding of what a college education will entail. “This isn’t just something that happened to me, I’ve heard it too many time from other students,” Ulroan explains. “We don’t want to see any students showing up to the university not prepared for college, not prepared for success. That’s why these students, they’re really on that path to be successful and ready for college, and even if they decide not to go to college, they still have www.akbizmag.com

all the tools they need to be successful.” One aspect of ANSEP that does prepare students for college and the workplace is that they must apply to the various ANSEP programs, which can include essays, placement exams, or other applicable paperwork.

Success and Growth As ANSEP has grown, its students have found success. Schroeder says ANSEP developed half a dozen PhD students—two are faculty at UAA in the College of Engineering, one is faculty at the University of Hawaii in their Biology department, and many others are working in Alaska and nationwide, including a physician currently working at the Alaska Native Medical Center. In February 2015, ANSEP announced an initiative called ANSEP STEM Teacher, which “has a mission to help train, recruit, and retain Alaskan students for careers in K-12 education across the state, especially in rural areas and villages.” The initiative’s goal was to have an ANSEP STEM teacher in every village in Alaska by 2025. Schroeder says this Acceleration High School is a huge step in achieving that goal. “This is the next step. We’re making progress.” The high school’s first cohort was twenty-three, but Ulroan says he has already received more applications, and both Ulroan and Schroeder want the Acceleration high school in Palmer to grow: Schroeder would like to graduate one hundred students a year. Additionally, an Acceleration high school will begin on the UAA campus in the fall of 2017, Schroeder says. “We’re locating a space on the campus now.” Also looking forward, Schroeder says ANSEP is in the early stages of exploring an opportunity in Wrangell. “The City of Wrangell has offered us a piece of waterfront real estate down there to build a school, and we’re working to get that done now.” He says the plans for that school are still in the “political phase,” as the idea was proposed approximately six months ago. He says that, unlike the high schools in Palmer or Anchorage, if built the Wrangell high school would

Tommi Crist Tommi Crist is a sophomore at the ANSEP Acceleration High School; she has plans to be an aeronautical engineer or perhaps go into mechanical engineering. She’s participated in ANSEP since the fifth grade. “I knew I had an interest in math and science, and I had already taken a college class with ANSEP before the [high] school opened, so I knew I wanted to further that track.” She’s considering a range of college options, from attending UAA to joining the US Air Force Academy to MIT (Massachusetts Institute of Technology) and other engineering colleges. Crist says that ANSEP is one of the factors of her decision making process: “I want to stick with them because I like the family and the studying partners.” Shania Sommer Shania Sommer is in the eighth grade at the Acceleration High School and has also been involved with ANSEP since the fifth grade, including attending the Middle School Academy. “I really wanted to try it because it was a big opportunity for me, and me and my mom had talked about it and done some research. … I tried it and I really liked it.” She envisions her future as biologist for the Alaska State Troopers and says that she will most likely attend UAA but is also looking at college options in Hawaii. “I like that ANSEP gives you a lot of opportunities and they encourage you to do your best and try different things.” R provide boarding, so students from around the state would be able to attend. “It could be a huge economic boost for Wrangell, and it’s a good, safe place for us to have the students. We hope to get support from other groups and can build some momentum and generate the money we need to make it a reality,” Schroeder says.

Business Builds Education The business community, Schroeder says, has been a vital part of ANSEP’s progress. Alaska Airlines donated flights for the students attending the Middle School Academy, a $1 million donation. Other large donors include Alyeska Pipeline Service Company, ExxonMobil, the Rasmuson Foundation, and he says BP has been an ANSEP partner since 1998. “There are seventy different organizations that are partners to us, and about half the money we need for our budget is philanthropic,” Schroeder says. ANSEP’s focus is no longer just on the STEM sciences. Schroeder says they’re preparing students to be anything from teachers and biologists to business or liberal arts majors. “We’re into education transformation for everybody.” R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

February 2017 | Alaska Business Monthly

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Meet ANSEP Students

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Engineering & Architecture

The courtyard at the Alaska Native Tribal Health Consortium in Anchorage designed by Landscape Architect Ed Leonetti.

Culturally Inspired Landscape Design Ed Leonetti creates balanced human habitats

By Gina Cameron

laska resident Ed Leonetti, PLA, is the landscape architect for Coffman Engineers in Anchorage and 2017 President of the Alaska Chapter of the American Society of Landscape Architects. This landscape architect is taking the lead in making Alaskan landscape designs truly Alaskan. Landscape architects impact their communities and shape quality of life by creating environments that encourage exercise, organic hands-on interaction, and energetic play. They analyze, plan, design, manage, and foster outdoor environments like parks, streetscapes, site designs, entry plazas, courtyards, playgrounds, and other unique settings which define communities and engage people. Landscape architecture is more than a climate hardy planting plan; it encompasses collaboration with clients and user groups to create a cohesive solution fitting the needs of each stakeholder while preserving the maximum amount of natural resources possible. 28

Leonetti, who chairs the Municipality of Anchorage’s Urban Design Commission (UDC), is one of 16,500 licensed landscape architects nationwide, 49 of which are active in the 49th state. “As one of nine design professionals on UDC, I respond to projects from the landscape Architects perspective. The UDC develops and guides Anchorage Leonetti by evaluating public and private development projects to ensure the site design and infrastructure [roads] elements are in compliance with the local land use code. We consider features like building orientation, pedestrian circulation, vehicular circulation, parking, trail connections, roadways, parks, plantings, etc. to gauge their functionality, aesthetics, flow, and compliance.” Leonetti serves his clients through an artistic expression of his discipline. For the last sixteen years, he has actively participated in the planning, design, and construction of

outdoor spaces in rural and urban locations across Alaska. He designs a facility landscape to mix with the elements and blend with its immediate surroundings, creating a balanced human habitat. Culturally inspired design is another dimension of landscape architecture; it is the practice of thoughtfully incorporating local heritage, indigenous elements, vegetation, artwork, and stories into a community project. It takes a landscape architect with talent, desire, and an aptitude for special design to motivate the process and gain buy-in. Creating cultural relevance for no added cost, time, or labor, helps to create the inspiration for buy-in. Living and working in Alaska—and preserving indigenous heritage for his Yup’ik wife and children—fuels Leonetti’s dedication to incorporating his love of Alaska Native art into architecture. His passion is to create nurturing environments featuring

Alaska Business Monthly | February 2017 www.akbizmag.com

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elements of community origin. By incorporating appropriate artistic expression into the landscape, Leonetti transforms outdoor spaces and invites people to engage with their surroundings.

Lower Yukon School District Ignatius Beans Playground In Alaska, landscape architecture for new facilities is often designed to meet code requirements but lacks verve. Typical methodology results in squares, symmetrical lines, muted colors, and standard fixtures. Leonetti changes this cookie-cutter approach by injecting appropriately playful energy into a culturally customized space. For example, instead of assembling a run-of-the-mill playground set for the children of the Lower Yukon School District attending Ignatius Beans Memorial School in Mountain Village, Leonetti set out to inject some soul and energy into an otherwise uninspiring playground. His final design featured big, bold, and colorful indigenous Yup’ik elements. “I am motivated by the indigenous peoples’ connection to the land,” Leonetti says. “How they incorporate it into their everyday lives. Because my family has Yu’pik heritage, I am driven to further their culture through design to educate the next generation and visitors to Alaska.” Before joining Coffman, Leonetti worked for KPB Architects, the Landscape Architect of Record for this project. After coordinating with the owner, they set to work infusing local indigenous art into the playground. He collaborated with the owner to select locally created masks and use them as inspiration for the cultural playground. “Masks are a direct link to indigenous culture. Each is a work of art, a text, and an instrument with which to communicate a story. A mask tells its own story based upon the artist’s past, present, and future, containing a lesson based on lived experiences. Mask making is a way of transmitting information, and for some, a way of making prayer. I love to incorporate Native masks into people’s visual landscapes.” Mask making was restricted and ultimately eliminated after the first contact with explorers. Now, this ancient art form is experiencing a renaissance. “Each mask is individually beautiful, unique, and purposeful, because each part of the mask represents a portion of the artist’s story. Using masks as a landscape feature helps people relate to the culture visually. What’s important is the historical parallel it creates to indigenous cultures,” Leonetti says. Artists James Hoelscher and Eugene Stevens worked with the team to incorporate their masks into the playground. Leonetti then contacted the Pacific Northwest playground equipment representative, Sitelines, with sketches and photos of selected masks. An out-of-the-box structure was the framework for the playground, and the artwork was incorporated as play elements. The standard climbing structure was removed and a custom eight-foot mask formed the climbing wall—a standard panel and slide transwww.akbizmag.com

February 2017 | Alaska Business Monthly

ENGINEERING & ARCHITECTURE SPECIAL SECTION

Landscape design sketches for the courtyard at the Alaska Native Tribal Health Consortium in Anchorage. Sketches by Ed Leonetti / Courtesy of KPB Architects

formed into a face with a tongue. Gametime, a play equipment manufacturer, enthusiastically and easily modified the existing modular components to create the interactive structure. In this case, Leonetti, the Lower Yukon School District, and local imagery combined to create a large, safe playground structure. The village children and elders now have a fun and vibrant new medium with which to absorb and assimilate ancestral images every day. The village elders are pleased to see indigenous art incorporated into on display at the school facility because it integrates and incorporates local culture into the educational environment for generations to come. The playground was completed in 2012.

Alaska Native Tribal Health Consortium Leonetti served as the project landscape architect and site designer for a multiphase healthcare project to develop a multimodal facility for the Alaska Native Tribal Health Consortium in Anchorage. Leonetti served in this role while working at KPB Architects, a former employer. The client needed a threephase site design encompassing one building phased for two purposes; parking for five hundred-plus vehicles and patient housing with two hundred rooms. The inspiration for the courtyard grew from Leonetti’s collabo30

ration with the owner. He understood the programs they offer and incorporated those elements into his sketches. Leonetti used the courtyard area to design a “store outside the door” concept, growing edible and medicinal plants to promote wellness and illness prevention using knowledge of indigenous nutrition and traditional ways. The traditional mask, a cultural element recognized across all regions in Alaska, became the “form” to the courtyard. The courtyard is infused with indigenous plants and is in direct view from the cafeteria area inside the building. The view shed into the courtyard is intended to focus on the art plinths from each region and will be framed by vegetation from each region. The pedestrian pathway creates the outline of the face, jaw, and forehead of the mask, while five raised planters forms the “hair,” and a seat wall shapes the eyebrows and chin. The raised planters symbolically represent the five indigenous cultural regions (Inupiaq; Yu’pik and Cu’pik; Athabascan, Aleut, and Alutiiq; and Eyak, Tlingit, Haida, and Tsimshian) and will house plants from the respective region. Specific vegetation will be selected in the next project phase. An open lawn area serves as the main portion of the face. The courtyard includes secure fencing, covered learning area, traditional fish drying rack, plinths for regional art, a sitting area with pergola and

tables, and a pathway with accent lighting. KPB Architects is the Landscape Architect of Record for this project, which is currently under construction.

Diverse Project Palette Leonetti joined Coffman in 2015. As a landscape architect and site designer, he has worked on a diverse palette of projects ranging from master planning for public facilities to private development of retail establishments. Leonetti is currently working on several projects that are not yet out for bid, to include military projects such as F-35A Aircraft Hangars and Infrastructure development at Eielson AFB, multi-family housing and commercial facility development in Anchorage, and oil and gas projects. Leonetti continues to find inspiration not only from the cultural heritage of indigenous people but from his exploratory trail running throughout the state. “My intent is to provide energy and spirit to visitors and the next generation of Alaskans through cultural design.” R Gina Cameron is a Proposal Manager at Coffman Engineers. A tech writer and editor by day, she enjoys bringing unique topics to Alaskan readers.

Alaska Business Monthly | February 2017 www.akbizmag.com

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Photo courtesy of Bettisworth North / © Kevin G. Smith

Tanana Chiefs Conference Chief Andrew Isaac Health Center An award-winning culturally inspired landscape and facility design

SOURCE: Bettisworth North Architects and Planners, Inc.

“

ake them comfortable.” A doctor at the Tanana Chief’s Conference (TCC) Chief Andrew Isaac Health Center in Fairbanks gave this directive to the design team. Native Alaska patients travel sometimes thousands of miles to receive medical care, and the team worked closely to create a comforting, healing space, inside and out. A Cultural Advisory Committee comprised of Native elders and village tribal members gathered during collaborative planning workshops, and Interior Native Alaska identity and culture drove every aspect of design. Because Native peoples are very connected to their lands, the team connected the interior spaces with the natural surroundings to create a welcoming, familiar, comfortable setting. Key gathering and waiting spaces were placed along the exterior south-facing walls to harvest and balance natural light and offer a visual connection to the landscape. Patients and visitors can also meander through the site, which is filled with native plants courtesy of nearly one acre of “tundra mat” blocks harvested near Fairbanks and set around the clinic. It is common during autumn to see elders picking blueberries in the clinic’s

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The TCC Chief Andrew Isaac Health Center Team  Landscape Architects: Bettisworth North Architects and Planners, Inc. with Jones and Jones  Fairbanks, Alaska (Bettisworth); Seattle, Washington (Jones & Jones)  Jacoline Bergstrom, TCC Health Director  Mark Kimerer, ASLA, PLA, Principal (Bettisworth North Architects and Planners, Inc.—Prime Architects and Landscape Architects); Colleen Thorpe and Johnpaul Jones, FAIA (Jones & Jones— Cultural Design Advisors and Landscape Architects) with NBBJ (Medical Planners, Design Architects, and LEED Consultants) gardens. The design also includes a medicinal garden, featuring traditional native healing plants, and a “welcome wall” with “welcome” written in Alaska Native languages. The Cultural Advisory Committee also asked the design team to retain as many of the existing trees from the site as possible. In total, fortythree birch and aspen trees were saved and remain in groves onsite. A dry streambed is a functional and aesthetic focal point. Interior Alaska villages are typically located along the many braided rivers that crisscross the land; interpretations of braided rivers are found throughout the site and building de-

sign. Runoff from the building’s roof is directed into the streambed as well as other parts of the site. Sod roofs are often found on traditional Native Alaska homes, holding in warmth during the long winters, so a small portion of the building roof is a green roof, reflecting this tradition, reducing roof runoff volume and increasing runoff water quality. The sustainable site features also helped earn the clinic LEED Gold certification and an award for healing landscapes. R

February 2017 | Alaska Business Monthly

Construction Resumes on UAF Engineering Building Facility will help meet demand for engineers in Alaska By Julie Stricker

ust more than a year after the Engineering Learning and Innovation Facility was mothballed due to lack of funding, workers are back at work on the state-of-the-art building on the east side of the University of Alaska Fairbanks campus. About fifty to fifty-five people are working on the construction, says Cameron Wohlford, UAF Department of Design and Construction senior project manager. “More are coming online,” he says. It’s a belated, but very welcome step for the project, and it’s only happening because the UA Board of Regents in September 2016 approved $37.5 million in bonds to complete the construction after the Alaska Legislature again failed to fund it. The facility, UA President Jim Johnsen told regents, is “an opportunity waiting for investment.” “We’ve got $70 million in that building and are spending money every year to maintain it and nothing is coming back to the university. No teaching is happening in that building, no research is happening in that building,” he said at a Regents meeting in June 2016. “It’s a huge cost.”

Funding Stalled by Legislature The Fairbanks building was designed as the larger of a pair of engineering facilities under the UA Statewide Engineering Expansion Initiative spurred by the Legislature to help meet growing demand for engineers in Alaska. The second facility, in Anchorage, was funded, designed, and completed as planned. Meanwhile, legislative appropriations for the Fairbanks facility came only sporadically, and finally not all, despite a well-documented need for engineers in Alaska. According to UAF, Alaska business and industry require nearly two hundred engineers and engineering technicians annually, and those businesses prefer to hire Alaskatrained workers. The university estimates seventy percent of its bachelor’s degree level engineering graduates find jobs within the state, with average salaries of $100,000. While the University of Alaska Anchorage campus offers related engineering degrees, options for students to specialize in mining, geological, and petroleum engineering are only available on the Fairbanks campus. 32

Courtesy of the University of Alaska Fairbanks

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Engineering & Architecture

A multi-floor skylight adds natural light to the upper portion of the new engineering building at UAF.

Engineering enrollment has doubled in the last decade. In Fairbanks, the engineering programs are crammed into the Duckering Building, which was constructed in the 1950s and lacks the space and technology needed for today’s engineers, according to UAF spokeswoman Marmian Grimes. The Alaska Legislature decided new, updated facilities were needed on both campuses.

Designed for Alaska Engineering Needs In Fairbanks, the building, designed by ECI/ Hyer Architecture, has a distinctive six-story curved glass and steel exterior. It hugs the southeast corner of the campus, connecting the Duckering and Bunnell buildings. The major contractor on the project is Davis Constructors and Engineers Inc. The Engineering Learning and Innovation Facility measures 119,000 square feet and has classrooms, open-plan labs, and offices to support engineering students. A facility highlight is the 48-foot-high-bay lab, which will allow workers to test large components such as bridge girders and trusses, which contractors are currently unable to do in Alaska. The new building will serve an additional 300 to 350 students each year. The

facility is designed with Alaska engineering needs in mind, with applied research programs in energy and power, transportation, oil, gas, and mining, as well as environmental and water resources. The building offers sweeping views of the Tanana Valley and the Alaska Range and overlooks another major campus project, the construction of a new heat and power plant. Costs associated with the estimated $300 million dollar power plant were also given as a reason to withhold funding for the engineering building. The Engineering and Industry Building on the Anchorage campus is four stories high, containing 81,000 square feet. It was combined with the existing engineering facility, which was extensively refurbished, and a new parking garage for a total price tag of $123.2 million dollars. Construction on both facilities started in 2013.

UAF Facility Mothballed While the Legislature fully funded the Anchorage project and it was completed and opened on schedule in 2015, lawmakers only appropriated about $70 million for the larger Fairbanks facility. The total projected cost of the Fairbanks building is $121.6 million.

Alaska Business Monthly | February 2017 www.akbizmag.com

Expedited Bonding In June, however, the university Board of Regents met to approve its budget. During that meeting, Regent John Davies suggested a special committee look into UA taking out a bond measure to pay for the completion of the facility. Johnsen agreed, noting the bond measure needed to be completed “in a fairly expedited manner.” In September, the Regents approved the $37.5 million dollar bond measure. Payments will be made over a thirty-year term for a total cost of nearly $70 million. Despite the cost, it will be less expensive for the university to approve the funding at one time rather than trying to piecemeal it floor by floor, Johnsen told the Regents. The Regents have already backed a bond measure to complete the UAF Combined Heat and Power Plant, construction of which the state only partially backed. The plant is replacing the aged Atkinson Heat and Power Plant, which was designed in the 1930s. The current boilers were installed in 1964. “Both maintenance costs and the risk of catastrophic failure,” were increasing, according to the university. The Legislature passed a bill in 2014 that provided the university system with $157.5 million in revenue bond issuance authority. The 17-megawatt plant is scheduled to be completed in 2018. Wohlford, project director for the engineering building, had mixed feelings about the bond measure. “We were pleased with the funding but concerned that UA had to take on the debt to finish the project,” Wohlford says. However, the “plug and play” design means workers are able to quickly frame the interior spaces, connect the piping and ductwork, and install drywall. Construction will be complete in fall 2017. Classes will start in January 2018. www.akbizmag.com

Courtesy of the University of Alaska Fairbanks

Workers cover the windows on the third floor of the UAF engineering building in preparation for installing drywall.

Courtesy of the University of Alaska Fairbanks

Workers prepare to add walls and flooring to the interior of the third-floor of the UAF engineering building.

The funding will allow completion of the entire project, including the fourth floor, which will house the Alaska Center for Energy and Power. The Center studies and develops alternative energy sources and has been seeking a permanent facility since 2008. When funding for the engineering building stalled, the university solicited corporate funding to help fill a $6.5 million gap to complete that floor. BP donated $1 million toward the project. ConocoPhillips and Usibelli Coal

Mine each donated $500,000. Those funds are giving the fourth floor a head start on completion. “The entire building gets to be built,” Wohlford says. “We are very excited about that.” R Julie Stricker is a journalist living near Fairbanks.

February 2017 | Alaska Business Monthly

ENGINEERING & ARCHITECTURE SPECIAL SECTION

As of September 2015, $74.8 million had been invested in the project, which was enough to complete the shell of the building and major mechanical and electrical systems. If the project had been fully funded from the start, as was the UAA building, classes would have started in 2015, Grimes says. Instead, with no further money in sight, it was mothballed. Only about 6,000 square feet was usable: a hallway linking the facility with the Duckering and Bunnell buildings and a small lobby. The interior was kept warm and ductwork and pipe extended from the walls and ceiling of the open floors. Electrical and mechanical components were designed to be “plug and play” so that when funding was approved, construction could resume swiftly. UAF estimated operating expenses for the shell tallied $500,000 annually. Every year of delay raised the cost of completing the building about $3 million. In spring 2016, the university’s capital request for $34.8 million to complete the construction, as well as $6.5 million for backfill work on the Duckering Building, were turned down by the Alaska Legislature, already grappling with huge revenue declines due to low oil prices.

SOURCE: DiscoverE Girl Day February 23, 2017 Poster “Introduce a Girl to Engineering Day!”

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Engineering & Architecture

Alaska Business Monthly’s Introduce a GIrl to enGIneerInG day!

2017 Engineering & Architecture Directory Support provided by 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) • Northrop Grumman Foundation • S. D. Bechtel, Jr. Foundation/Stephen Bechtel Fund • Shell Oil Company YEAR FOUNDED / WORLDWIDE/ Co-Chairs: COMPANY TOP EXECUTIVE 2017 DiscoverE ESTABLISHED IN ALASKA ALASKA EMPLOYEES BUSINESS DESCRIPTION The DiscoverE Leadership Council aeSolutions Chris Hickling,American AK Bus. Dev. Mgr. 1998 150 aeSolutions is a complete system integrator specializing in safety instrumented systems, Society of Civil Engineers

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Arcadis 880 H St., Suite 101 Anchorage, AK 99501 Phone: 907-276-8095 Fax: 907-276-8609 Architects Alaska 900 W. Fifth Ave., Suite 403 Anchorage, AK 99501 Phone: 907-272-3567 Fax: 907-277-1732 ASRC Energy Services LLC 3900 C St., Suite 701 Anchorage, AK 99503 Phone: 907-339-6200 Fax: 907-339-6219 BBFM Engineers, Inc. 510 L St., Suite 200 Anchorage, AK 99501-1949 Phone: 907-274-2236 Fax: 907-274-2520 BDS Architects 3330 C St., Suite 200 Anchorage, AK 99503 Phone: 907-562-6076 Fax: 907-562-6635 Bettisworth North Architects & Planners 212 Front St., Suite 200 Fairbanks, AK 99701 Phone: 907-456-5780 Fax: 907-451-8522 Blue Sky Studio 6771 Lauden Cir. Anchorage, AK 99502 Phone: 907-677-9078 Fax: 907-677-9079 Bratslavsky Consulting Engineers, Inc. 500 W. 27th Ave., Suite A Anchorage, AK 99503 Phone: 907-272-5264 Fax: 907-272-5214 Bristol Engineering Services Corporation 111 W. 16th Ave., Third Floor Anchorage, AK 99501 Phone: 800-563-0013 Fax: 907-563-6713 CH2M 949 E. 36th Ave., Suite 500 Anchorage, AK 99508 Phone: 907-762-1500 Fax: 907-762-1600

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Tony Salazar, AK Ops Leader cynthia.oistad@arcadis.com arcadis.com Mark Kneedler, Pres. marketing@architectsalaska.com architectsalaska.com Doug Smith, Pres./CEO info@asrcenergy.com asrcenergy.com Dennis Berry, Pres. cmaynard@bbfm.com bbfm.com Daniel Seiser, Pres. contact@bdsak.com bdsak.com Roy Rountree, Pres./Principal Arch. info@bettisworthnorth.com bettisworthnorth.com Catherine Call, Owner catherine@callbluesky.com callbluesky.com Tanya Bratslavsky, Pres. mail@bce-ak.com bce-ak.com Travis Woods, Pres./CEO bristol-companies.com Terry Bailey, Sr. VP/AK Reg. Mgr. Terry.Bailey@ch2m.com ch2m.com/alaska

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BUSINESS DESCRIPTION

1888 28,000 Arcadis is Alaska’s leading provider of construction and program management services 1994 22 and a leading global design, project management and consultancy firm.

1950 1950

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150 45

Anchorage Office: 2600 Denali Street, Suite 710, Architecture, landscape architecture, interior design, planning & energy services for healthcare, education, military, housing, libraries, museums, public safety, civic buildings, senior care, commercial development and recreational facilities. Architecture with a focus on residential and food service projects.

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

1946 20,515 Premier Alaskan oil & gas contractor with planning, engineering, procurement, logistics, 1962 1,626 sealift/truckable modules fabrication, piping, construction, program & construction management, operations & maintenance, supporting oil, gas, LNG, transportation, environmental, water, mining & government.

February 2017 | Alaska Business Monthly

2017 ENGINEERING & ARCHITECTURE DIRECTORY

COMPANY TOP EXECUTIVE

ENGINEERING & ARCHITECTURE SPECIAL SECTION

COMPANY TOP EXECUTIVE

ChemTrack Alaska, Inc. 11711 S. Gambell St. Anchorage, AK 99515 Phone: 907-349-2511 Fax: 907-522-3150 Coffman Engineers 800 F St. Anchorage, AK 99501 Phone: 907-276-6664 Fax: 907-276-5042 Combs Engineering 503 Charteris St. Sitka, AK 99835-7042 Phone: 907-747-5725 CRW Engineering Group LLC 3940 Arctic Blvd., Suite 300 Anchorage, AK 99503 Phone: 907-562-3252 Fax: 907-561-2273 DAT/EM Systems International 2014 Merrill Field Dr. Anchorage, AK 99501 Phone: 907-522-3681 Fax: 907-522-3688 Del Norte Surveying, Inc. PO Box 110553 Anchorage, AK 99511 Phone: 907-345-8003 Fax: 907-345-8002 Design Alaska, Inc. 601 College Rd. Fairbanks, AK 99701 Phone: 907-452-1241 Fax: 907-456-6883 DOWL 4041 B St. Anchorage, AK 99503 Phone: 907-562-2000 Fax: 907-563-3953 EDC, Inc. 213 W. Fireweed Ln. Anchorage, AK 99503 Phone: 907-276-7933 Fax: 907-276-4763 EEIS Consulting Engineers 624 W. International Airport Rd., Suite 104 Anchorage, AK 99518 Phone: 907-258-3231 Fax: 907-272-1288 EHS-Alaska, Inc. 11901 Business Blvd., Suite 208 Eagle River, AK 99577 Phone: 907-694-1383 Fax: 907-694-1382 Electric Power Systems 3305 Arctic Blvd., Suite 201 Anchorage, AK 99503 Phone: 907-522-1953 Fax: 907-522-1182 Enterprise Engineering, Inc. 2525 Gambell St., Suite 200 Anchorage, AK 99503 Phone: 907-563-3835 Environmental Management, Inc. 206 E. Fireweed Ln., Suite 201 Anchorage, AK 99503 Phone: 907-272-9336 Fax: 907-272-4159 F. Robert Bell & Associates 801 W. Fireweed Ln., Suite 201 Anchorage, AK 99503-1801 Phone: 907-274-5257 Fax: 907-743-3480 Fluor Alaska, Inc. 4300 B St., Suite 210 Anchorage, AK 99503 Phone: 907-865-2000 Fax: 907-865-2023 Franklin & Associates 225 E. Fireweed Ln., Suite 202 Anchorage, AK 99503-2080 Phone: 907-277-1631 Fax: 907-277-2939 Fred Walatka & Associates 3107 W. 29th Ave. Anchorage, AK 99517-1704 Phone: 907-248-1666 Fax: 907-243-2081 Fugro 5761 Silverado Way, Suite O Anchorage, AK 99518 Phone: 907-561-3478 Fax: 907-561-5123 Golder Associates, Inc. 2121 Abbott Rd., Suite 100 Anchorage, AK 99507 Phone: 907-344-6001 Fax: 907-344-6011 Great Northern Engineering LLC 137 E. Arctic Ave. Palmer, AK 99645-6255 Phone: 907-745-6988 Fax: 907-745-0591

YEAR FOUNDED / ESTABLISHED IN ALASKA

Carrie Lindow, Pres. info@chemtrack.net chemtrack.net Dave Gardner, CEO anchorageinfo@coffman.com coffman.com Chris Combs, PE

D. Michael Rabe, Mng. Principal info@crweng.com crweng.com Jeff Yates, GM sales@datem.com datem.com Lisa Greer, Owner

1973 1973

WORLDWIDE/ ALASKA EMPLOYEES

1979 1979

400 100

1994 1994

1 1

1981 1981

63 63

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

1987 1987

11 8

1986 1986

2-12 2-12

1957 1957

50 50

1962 1962

450 138

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. Professional land survey firm providing survey services to both the public and private sectors. DNS has completed the following pipeline projects; CD5, PT Thomson, Alpine, North Star, & Badami Pipelines. DNS services includes; design, ALTA & environmental surveys, Pipeline ROW Plats, subdivisions. 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 is a full-service professional services firm providing environmental and land use development, civil, transportation, water, and geo-construction services.

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.

1989 1989

11 11

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

1986 1986

5 5

1996 1996

89 68

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. 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.

1972 1992

47 33

1988 1988

18 18

1974 1974

51 51

lgreer@dnsalaska.com Chris Miller, Pres. mail@designalaska.com designalaska.com Stewart Osgood, Pres./CEO jpayne@dowl.com dowl.com John Faschan, Pres. info@edc-alaska.com edc-alaska.com Rick Button, Pres./Principal Engineer eeis@alaska.net eeis.net Robert French, PE, PIC rfrench@ehs-alaska.com ehs-alaska.com David Burlingame , Pres. eps@epsinc.com esgrp.net Kevin Murphy, Pres. info@eeiteam.com eeiteam.com Larry Helgeson, Principal Eng. lhelgeson@emi-alaska.com emi-alaska.com Bob Bell, PE/LS/CEO facebook.com/BELL.CMH bellalaska.com Wyche Ford, GM/Sr. Project Dir. fluor.alaska@fluor.com fluor.com Nelson Franklin, PE/Owner

Fred Walatka, Owner walatkas@aol.com Fred Walatka on Facebook Rada Khadjinova, AK Div. Mgr. AKProjects@fugro.com fugro.com Mitchells Richard, Mgr. AK Ops

BUSINESS DESCRIPTION

10-25 Please check out our Statement of Qualifications at chemtrack.net/about_us.htm. 10-25

Civil,Commissioning,Corrosion Control,Electrical,Forensic,Fire Protection,Industrial Design,Instrumentation & Controls,Land Surveying, Landscape, Lighting,Mechanical,Pipeline Integrity Management,Pipeline & Process Facility Design,Project Management,Structural,Seismic,Sustainable Design,Energy Audit Mechanical engineer providing HVAC and plumbing design services.

EEI provides multidiscipline engineering and specialty services throughout Alaska and worldwide. As experts in fuel systems and civil site design, the Anchorage office is home to a thriving team of 38 professionals who are excited to solve complex problems and meet the specific needs of each client. 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. Engineering services, land surveying services, and 3D Laser Scanning Services.

1912 60,000 Fluor provides integrated engineering, procurement, fabrication, construction, main1954 4 tenance & project management solutions to Clients globally. Our integrated solutions approach spans the entire project life cycleâ&#x20AC;&#x201C;helping to reduce costs & schedules, improve certainty of delivery & increase safety. 1990 1 Engineering services, structural engineering. 1990 1

1967 1967

5 5

We do plot plans, as builts, ALTAâ&#x20AC;&#x2122;s, and lot staking.

1962 11,500 Fugro collects data on topography, soil composition, and environmental conditions, both 2003 5 onshore and offshore. We organize the acquired data and add value through processing, interpretation and visualization. In addition, we provide geo-related design, asset inspection, and integrity advice. 1960 6,400 Arctic and geotechnical engineering, groundwater resource development, environmental 1980 31 sciences and remedial investigation.

golder.com Gawain Brumfield, CEO gne@mtaonline.net greatnorthernengineering.com

1982 1982

26 25

Established Alaska design firm providing mechanical, process, electrical, architectural, and civil/structural engineering consulting services. Although diverse in all areas of arctic engineering, our firm specializes in fueling systems, tank farms, code analysis, port work, buildings, & telecom.

Alaska Business Monthly | February 2017 www.akbizmag.com

Hart Crowser 310 K St., Suite 243 Anchorage, AK 99501 Phone: 907-276-7475 Fax: 425-778-9417 Hasz Consulting, LLC 950 Westside Lp. Delta Junction, AK 99737-1229 Phone: 907-803-3784 Fax: 907-895-4346 HDL Engineering Consultants 3335 Arctic Blvd., Suite 100 Anchorage, AK 99503 Phone: 907-564-2120 HDR 2525 C St., Suite 500 Anchorage, AK 99503 Phone: 907-644-2000 Fax: 907-644-2022 Ivy & Co. Architects/Mark A. Ivy Corp. 3835 Spenard Rd. Anchorage, AK 99517 Phone: 907-563-5656 Fax: 907-563-5657 Jensen Yorba Lott, Inc. 522 W. Tenth St. Juneau, AK 99801 Phone: 907-586-1070 Fax: 907-586-3959 KAE Inc. PO Box 91970 Anchorage, AK 99509 Phone: 907-276-2176 Fax: 907-276-2184 Ke Mell Architects PO Box 21898 Juneau, AK 99802 Phone: 907-463-3942 Kinney Engineering LLC 3909 Arctic Blvd., Suit 400 Anchorage, AK 99503 Phone: 907-346-2373 Fax: 907-349-7496 KPB Architects 500 L St., Suite 400 Anchorage, AK 99501 Phone: 907-274-7443 Fax: 907-274-7407

www.akbizmag.com

YEAR FOUNDED / ESTABLISHED IN ALASKA

Mike Schlegel, Office Mgr./Principal mike.schlegel@hartcrowser.com hartcrowser.com John Hasz, Pres. jrhasz.haszconsulting@gmail.com haszconsulting.com David Lundin, Principal/Pres. info@hdlalaska.com hdlalaska.com Tim Gallagher, AK Area Mgr. info@hdrinc.com hdrinc.com Mark Ivy, Principal Architect bonnie.ivy@ivyandco.com ivyandco.com Wayne Jensen, AIA/Pres. jyl_info@jensenyorbalott.com jensenyorbalott.com Cyrus Randelia, Project Mgr./Sr. Eng. maia@kuskoae.com kaeinalaska.com Ke Mell, Owner

WORLDWIDE/ ALASKA EMPLOYEES

1974 1985

107 2

1993 1998

6 6

2000 2000

80 80

BUSINESS DESCRIPTION

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. 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. HDL provides civil, geotechnical, and transportation engineering; environmental services; planning; surveying and mapping; construction administration; material testing; and Rightof-Way services throughout Alaskaâ&#x20AC;&#x201D;focusing on quality, and sustainable projects.

1979 10,000 Engineering services cover civil and structural engineering for transportation, water/ 1979 120 wastewater, solid waste, power, federal, and oil & gas infrastructure. Specialty services in design-build. Engineering supported by a full suite of environmental/planning services, and 10,000+ employees nationwide. 1984 5 Innovative residential and commercial designs for the Alaska environment. 1984 5

1935 1935

10 10

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

1997 1997

4 4

Engineering firm providing civil designs and construction management services for boardroads, boardwalks, roads, sanitation systems, and water distribution systems.

1987 1987

1 1

Architecture, planning, and consulting.

2007 2007

35 35

1981 1981

16 16

Kinney Engineering is a multi-disciplined firm that provides a wide range of services. Areas of expertise include: traffic planning, analysis, and engineering; transportation engineering; civil engineering; structural engineering; electrical engineering; project management; and GIS services. 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.

kemell@alaskan.com Randy Kinney, PE kinneyeng.com Mike Prozeralik, Pres. info@kpbarchitects.com kpbarchitects.com

February 2017 | Alaska Business Monthly

2017 ENGINEERING & ARCHITECTURE DIRECTORY

COMPANY TOP EXECUTIVE

ENGINEERING & ARCHITECTURE SPECIAL SECTION

COMPANY TOP EXECUTIVE

Kumin 808 E St., Suite 200 Anchorage, AK 99501 Phone: 907-272-8833 Fax: 907-272-7733 Langdon Engineering & Scientific Services 318 W. Tenth Ave. Anchorage, AK 99501 Phone: 360-620-7046 LCG Lantech, Inc. 250 H St. Anchorage, AK 99501 Phone: 907-243-8985 Fax: 907-243-5629 Lifewater Engineering Company 1936 Donald Ave. Fairbanks, AK 99701 Phone: 907-458-7024 Fax: 907-458-7025 Little Susitna Construction Co. 821 N St., Suite 207 Anchorage, AK 99501 Phone: 907-274-7571 Fax: 907-277-3300 Livingston Slone Architects 3900 Arctic Blvd., Suite 301 Anchorage, AK 99503 Phone: 907-550-7400 Fax: 907-561-4528 Lounsbury & Associates 5300 A St. Anchorage, AK 99518 Phone: 907-272-5451 Fax: 907-272-9065 Martha Hanlon Architects, Inc. PO Box 72292 Fairbanks, AK 99707 Phone: 907-458-7225 MBA Consulting Engineers, Inc. 3812 Spenard Rd., Suite 200 Anchorage, AK 99517 Phone: 907-274-2622 Fax: 907-274-0914 McCool Carlson Green 421 W. First Ave., Suite 300 Anchorage, AK 99501 Phone: 907-563-8474 Fax: 907-563-4572

YEAR FOUNDED / ESTABLISHED IN ALASKA

Charles Banister, Owner/Pres./Pncpl marketing@kuminalaska.com kuminalaska.com Albert Swank Jr., PE/Owner

WORLDWIDE/ ALASKA EMPLOYEES

11 11

1980 1980

5 1

1993 1993

20 20

LCG Lantech, Inc. (formerly Larsen Consulting Group) is a multi-disciplined firm providing architecture, structural, civil engineering, land surveying, mapping services and landscape architecture to our rural and urban client-base.

1998 1998

10 10

Design and Manufacture of sewage treatment plants for man camps, homes, and lodges in the most extreme environments and remote places. Manufacturing high performance Rough Duty plastic jet boats and rugged work boats. Alaska’s leading plastic fabricator.

1980 1980

8 8

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

1975 1975

13 13

1949 1949

55 55

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

1998 1998

2 2

Architectural design and project planning.

1989 1989

13 13

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

22 22

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

le-m@ak.net Wallace Swanson, Pres./CEO holly@lcgak.com lcgak.com Bob Tsigonis, Pres., PE Bob@LifewaterEngineering.com LifewaterEngineering.com Dominic Lee, Owner littlesu@ak.net littlesu.com Tom Livingston, Principal lsi@livingstonslone.com livingstonslone.com Ken Ayers, Pres. k.ayers@lounsburyinc.com lounsburyinc.com Martha Hanlon, AIA/Pres. info@mh-architects.com mh-architects.com Bradley Sordahl, Principal/CME mba-consulting.net John Weir, Pres./CEO jweir@mcgalaska.com mcgalaska.com

BUSINESS DESCRIPTION

1977 1977

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. Engineering, civil, structural, mechanical, machine design, manufacturing engineering, engineering physics, nuclear engineering, accelerators, nuclear, istopes, army & navy DOD systems. Shops and offices Alaska and Washington.

DIRECT LOADING:

Alaska’s Premier Freight Provider 38

√

For a rate quote, contact us at rate@spanalaska.com • 1.800.257.7726 www.spanalaska.com

Alaska Business Monthly | February 2017 www.akbizmag.com

Merrick Alaska 3201 C St., Suite 105 Anchorage, AK 99503 Phone: 907-341-4725 Michael Baker International 3900 C St., Suite 900 Anchorage, AK 99503 Phone: 907-273-1600 Fax: 907-273-1699 Michael L. Foster & Associates, Inc. 13135 Old Glenn Hwy., Suite 200 Eagle River, AK 99577 Phone: 907-696-6200 Fax: 907-696-6202 Moffatt & Nichol 880 H St., Suite 208 Anchorage, AK 99501-3450 Phone: 907-677-7500 Fax: 907-677-7577 Monrean Engineering & Associates PO Box 9343 Ketchikan, AK 99901-4343 Phone: 907-247-5920 Fax: 907-247-5918 Morris Engineering Group LLC PO Box 210049 Auke Bay, AK 99821 Phone: 907-789-3350 NANA WorleyParsons PO Box 111100 Anchorage, AK 99511 Phone: 907-273-3900 Fax: 907-273-3990 New Horizons Telecom, Inc. 901 Cope Industrial Way Palmer, AK 99645 Phone: 907-761-6000 Fax: 907-761-6001 NORTECH, Inc. 2400 College Rd. Fairbanks, AK 99709-3754 Phone: 907-452-5688 Fax: 907-452-5694 Northern Land Use Research Alaska LLC 234 Front St. Fairbanks, AK 99701 Phone: 907-474-9684 Fax: 907-474-8370

www.akbizmag.com

YEAR FOUNDED / ESTABLISHED IN ALASKA

David Huelskamp, CEO torin.haskell@merrick.com merrick.com Jeff Baker, Reg. Dir.

1955 2014

1940 1942

WORLDWIDE/ ALASKA EMPLOYEES

600 54

BUSINESS DESCRIPTION

AE firm that provides professional Engineering and Geomatics (survey, LiDAR, GIS, aerial imagery) services.

6,000 Engineering: transportation, pipeline, geotechnical, mechanical, civil; GIS & LiDAR; 70 Environmental/Permitting/NEPA; public involvement.

mbakerintl.com Michael Foster, PE/Owner hlm@mlfaalaska.com mlfalaaska.com Shaun McFarlane, VP smcfarlane@moffattnichol.com moffattnichol.com Fred Monrean, PE

1998 1998

30 30

1945 2012

638 4

1997 1997

1 1

1997 2004

5 5

1997 1997

300 300

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

1978 1978

75+ 75+

1979 1979

25 25

General, Electrical and Engineering Contractor with emphasis in Telecommunications. In-house engineering, installation and project management services for urban and remote communications facilities, OSP and ISP cabling as well as electrical and communications equipment installation and integration. A multidisciplined consulting firm with registered engineers and certified industrial hygienists on staff providing environmental, engineering, energy, industrial hygiene, and health and safety professional services throughout Alaska.

1991 1991

14 14

fmonrean@kpunet.net Mark Morris, Principal info@morrisengineeringgroup.com morrisengineeringgroup.com Rock Hengen, Pres./GM info@nanaworleyparsons.com nanaworleyparsons.com Leighton Lee, CEO info@nhtiusa.com nhtiusa.com Peter Beardsley, Pres. marketing@nortechengr.com nortechengr.com Burr Neely, GM nlur@northernlanduse.com northernlanduse.com

Full service architectural/engineering firm providing planning, investigation, design, permitting, oil spill cleanup, environmental remediation, construction, and expert witness/ litigation support services. Experts in civil, geotechnical, and environmental design, and cold regions construction. 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. Civil engineering, surveying, wastewater design, subdivisions, structural engineering, storm drainage design, foundation engineering, inspections, engineering reports, marine structures, permitting, etc. Electrical consulting; engineering; design; inspection; construction administration.

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.

February 2017 | Alaska Business Monthly

2017 ENGINEERING & ARCHITECTURE DIRECTORY

COMPANY TOP EXECUTIVE

ENGINEERING & ARCHITECTURE SPECIAL SECTION

COMPANY TOP EXECUTIVE

Northern Mechanical Engineering PO Box 113076 Anchorage, AK 99511-3076 Phone: 907-243-7254 PDC Inc. Engineers 1028 Aurora Dr. Fairbanks, AK 99709 Phone: 907-452-1414 Fax: 907-456-2707 PM&E Services LLC 123 E. 24th Ave., #11 Anchorage, AK 99503 Phone: 907-222-5059 Fax: 907-222-5489 PND Engineers, Inc. 1506 W. 36th Ave. Anchorage, AK 99503 Phone: 907-561-1011 Fax: 907-563-4220 Quest Engineering, Inc. PO Box 210863 Anchorage, AK 99521 Phone: 907-561-6530 Fax: 907-770-5511 R&M Consultants, Inc. 9101 Vanguard Dr. Anchorage, AK 99507-4447 Phone: 907-522-1707 Fax: 907-522-3403 R&M Engineering-Ketchikan Inc. 355 Carlanna Lake Rd. Ketchikan, AK 99901 Phone: 907-225-7917 Fax: 907-225-3441 Reid Middleton, Inc. 4300 B St., Suite 302 Anchorage, AK 99503 Phone: 907-562-3439 Fax: 907-561-5319 RIM Architects, LLC 645 G St., Suite 400 Anchorage, AK 99501 Phone: 907-258-7777 Fax: 907-279-8195 RIM First People LLC 645 G St., Suite 400 Anchorage, AK 99501 Phone: 907-644-7877 Fax: 907-279-8195 RSA Engineering, Inc. 670 W. Fireweed Ln., Suite 200 Anchorage, AK 99503 Phone: 907-276-0521 Fax: 907-276-1751 Shannon & Wilson, Inc. 2355 Hill Rd. Fairbanks, AK 99709-5326 Phone: 907-479-0600 Fax: 907-479-5691 Simpson Associates, Inc. PO Box 240125 Anchorage, AK 99524 Phone: 907-562-0944 Fax: 907-562-3499 Stantec 725 E. Fireweed Ln., Suite 200 Anchorage, AK 99503 Phone: 907-276-4245 Fax: 907-258-4653 Stephl Engineering LLC 3900 Arctic Blvd., Suite 204 Anchorage, AK 99503 Phone: 907-562-1468 Taku Engineering LLC 205 E. Benson Blvd. Anchorage, AK 99503 Phone: 907-562-1248 Tauriainen Engineering & Testing 35186 Kenai Spur Hwy. Soldotna, AK 99669-7620 Phone: 907-262-4624 Fax: 907-262-5777 UAF Institute of Northern Engineering PO Box 755910 Fairbanks, AK 99775 Phone: 907-474-5457 Fax: 907-474-7041 WHPacific, Inc. 3111 C St., Suite 300 Anchorage, AK 99503 Phone: 907-339-6500 Fax: 907-339-5327 Wince Corthell Bryson 609 Marine Ave., Suite 250 Kenai, AK 99611 Phone: 907-283-4672 Fax: 907-283-4676

YEAR FOUNDED / ESTABLISHED IN ALASKA

Jay Smith, PE/Pres.

WORLDWIDE/ ALASKA EMPLOYEES

BUSINESS DESCRIPTION

1991 1991

1 1

Automotive engineering, accident reconstruction, failure analysis, machine design, stress analysis. Safety evaluation and education.

1975 1975

105 104

1999 1999

1 1

PDC is an all-Alaskan multi-disciplined firm with 110+ employees with five office locations. We specialize in designing for the ever changing Arctic environment with expertise in civil, geotechnical, electrical, environmental, mechanical, fire protection, & structural engineering; as well as land. Project management and civil engineering support to a broad range of clients from municipal utilities to commercial and light industrial facilities.

1979 1979

110 70

1996 1996

3 3

1969 1969

105 105

1989 1989

12 12

1953 1991

87 8

1986 1986

65 18

2002 2002

1 1

1983 1983

46 46

1954 1974

301 61

1975 1975

2 2

nmeinc@earthlink.net Royce Conlon, Pres./Principal pdceng.com Damien Stella, Principal dstella@gci.net Jim Campbell, Pres. pndengineers.com Marc Cottini, Pres./Owner

General civil, structural, geotechnical, arctic, marine, and coastal engineering; survey; permitting; hydrology; metocean; quality assurance; inspection. linkedin.com/company/ pnd-engineers-inc. Civil engineering, environmental compliance, and construction management services.

engineers@questengineers.com Len Story, CEO email@rmconsult.com rmconsult.com Trevor Sande, Pres. trevorsande@rmketchikan.com rmketchikan.com Bob Galteland, Pres. dstierwalt@reidmiddleton.com reidmiddleton.com Larry Cash, Pres./CEO info@rim-ak.com rimarchitects.com Michael Fredericks, Owner mfredericks@rimfirstpeople.com rimfirstpeople.com Timothy Hall, Pres. thall@rsa-ak.com rsa-ak.com Chris Darrah, FBX Ofc. Mgr. info-fairbanks@shanwil.com shannonwilson.com Mark Simpson, Pres./Architect

Bob Gomes, CEO twitter.com/Stantec stantec.com Matt Stephl, PE mstephl@stephleng.com stephlengineering.com William Mott, GM/PE harrybuchea@takuengineering.com takuengineering.com Mike Tauriainen, Principal Engineer

We offer engineering, planning, and surveying through the disciplines of structural, civil, aviation, waterfront, and transportation to public and private sector clients throughout the Pacific Northwest and Alaska. Our Anchorage office is one of the most service oriented structural firms in Alaska. 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. Alaska Native-owned and operated company providing architectural and project management services. In addition the firm offers its specialization in participatory design, adding value to the client’s project. Committed to incorporating the significance of the user in the design process. 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. 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. Architectural services and construction management. Consultant based company to manage design teams for specific projects throughout Alaska.

1954 22,000 The Stantec community unites approximately 22,000 employees working in over 400 1972 88 locations across six continents. Our work includes engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics. 1996 6 Engineering firm specializing in trenchless technology engineering including horizontal 1996 6 directional drilling, cured in place pipe lining water sewer, closed circuit television inspection (CCTV), pipe condition assessment, sliplining, auger boring and structure rehabilitation. 2001 19 An Alaskan owned & operated engineering firm dedicated to providing innovative Project 2001 19 Engineering, Management & Corrosion Control design solutions.

1978 1978

9 9

1982 1982

135 135

engineeringalaska@gci.net Bill Schnabel, Dir.

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. R&M Engineering-Ketchikan is a civil and soils engineering and surveying company serving southern Southeast Alaska from offices in Ketchikan, Wrangell and Craig. We also specialize in materials testing and inspection and have an ADEC certified microbiology lab.

ncripley@alaska.edu ine.uaf.edu Harold L. Hollis, PE, Ops Mgr. AK Region 1981 1981 info@whpacific.com whpacific.com Mark Blanning, Principal 1971 1971 Wince Corthell Bryson/Civil Engineers

212 31

6 6

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Alaska Business Monthly | February 2017 www.akbizmag.com

OIL & GAS

Gas flare tower on offshore oil rig in Cook Inlet.

Cook Inlet without Tax Credits Set to roll back this year, end next year

By Julie Stricker

n 2009, an energy crisis threatened Southcentral Alaska. For decades, communities in the region between Homer and Talkeetna were fueled by oil and gas from Cook Inlet. According to the Alaska Oil and Gas Association (AOGA), 80 percent of the electricity in the region was generated by natural gas. But by the early 2000s, production declined. Agrium closed its fertilizer plant in Nikiski and industrial users also scaled back. Utilities had trouble securing long-term supply contracts and Anchorage residents were threatened with brownouts during a period of extreme cold in 2008-2009. In response, the Alaska Legislature passed the “Cook Inlet Recovery Act,” HB280, which expanded capital credits for Cook Inlet producers. It also spurred the construction of a large natural gas storage facility. The credits also attracted smaller, independent oil companies to Cook Inlet. Over the next four years, independents such as Hilcorp Alaska, BlueCrest Energy Inc., Furie Operating Alaska, and Glacier Oil & Gas 42

Corporation moved into Cook Inlet, drilling dozens of new oil and gas wells and upgrading the infrastructure in the region. They discovered new gas fields and, in a period of a few years, revitalized the petroleum industry in Cook Inlet, accounting for 25 percent of jobs in the Kenai Peninsula Borough, according to a 2014 study by the McDowell Group.

Significant Changes The state’s tax incentives were lauded for sparking much of the new production. Faced with a multi-billion-dollar budget shortage due to low oil prices, Alaska Governor Bill Walker proposed major changes to the tax credits. In February last year, AOGA issued a statement against Walker’s proposed changes, saying, “Companies are already cutting back at these low prices and this proposed legislation [SB130 and HB247] will chill future investments.” HB247 made significant changes to the tax structure, rolling back credits in 2017 and ending them in 2018. Then, in June 2016, Walker vetoed $430 million in tax credits to oil companies already in the budget. The veto

doesn’t stop the payments, but defers them indefinitely. Walker said the credits are at odds with the state’s need to generate revenue from oil and gas. Kara Moriarty, president of the Alaska Oil and Gas Association, said in a statement the veto was short-sighted. “The state is obligated to make good on its commitments,” Moriarty’s statement says. “A misguided move like this sends chills through the investment community, as well as an industry already battered by low oil prices. “Today’s veto tells investors Alaska is closed for business and will go back on its own policy whenever the price of oil fluctuates. For investors looking to make billiondollar decisions, this makes an already risky investment that much riskier.”

Financial Limbo Larry Persily, oil and gas advisor for the Kenai Peninsula Borough, says the abrupt changes in the tax structure signal instability that will affect future financing. “In good faith, whether you like credits or not, they [oil companies] approved a capital

Alaska Business Monthly | February 2017 www.akbizmag.com

plan for the company. They went out and borrowed the money. They did the work, and now they’re not getting paid. That certainly has messed up their checkbook,” he says. “It’s frozen the financing, which then stifles the development if you can’t get the money,” he says. “These are not big companies that do the work out of their own cash flow. Exxon did Point Thomson out of their own cash flow. BlueCrest has to raise money. Furie has to raise money.” The tax credit changes and Walker’s veto are being felt in Cook Inlet. The tax credits were key to making exploration and development in Cook Inlet feasible, the oil companies say. Furie and BlueCrest have been the biggest recipients of tax credits in the region. Hilcorp is looking at long-term fallout. Hilcorp, which has made significant investments in Cook Inlet, is the largest supplier of natural gas in the area. “Hilcorp remains committed to making the investments necessary to support Alaskans’ energy needs,” the company says in a statement in early January. “The changes made last session to the Cook Inlet tax structure and the potential for additional changes do negatively affect us and are a factor in determining our planned level of investment in Alaska for 2017 and beyond.”

on hold, pending confidence of tax credit continuation or reasonable alternative.” Bruce Webb, Furie senior vice president, says the company certainly took advantage of tax credits to develop its $700 million Kitchen Lights Unit. Furie drilled the first offshore well in the unit in 2011 using a jack-up rig. By 2015, an offshore platform and onshore processing facility in Nikiski went online. Furie started producing gas in late 2015 and has a long-term contract with Homer Electric Association. It is looking at drilling for oil in 2018 and 2019.

Market Demand Persily says it’s important to separate the oil and gas projects in Cook Inlet. The real prob-

lem isn’t necessarily tax credits, but market demand. “If you can find oil in Cook Inlet, there’s always a market for it,” he says. “Gas, long-term, the market is more the issue. Right now, the utilities don’t need gas. They’re pretty much covered with contracts for the next several years. “If you’re looking for gas, which Furie is, or have found gas and you’re looking at production, losing tax credits is certainly going to affect your financial decisions. But if you don’t have anyone who wants to buy the gas, tax credits don’t matter.” R Julie Stricker is a journalist living near Fairbanks.

Furie and Bluecrest Both Furie’s Kitchen Lights Unit and BlueCrest’s Cosmopolitan project have started production. Benji Johnson, president of Texas-based BlueCrest, says while the veto merely defers the payments the state owes the oil company, it’s money they were basing their investments on. He’s hoping to see some sort of accommodation made to the smaller independents who are at a particular disadvantage because they have invested in projects that aren’t yet producing. BlueCrest says its funding plan for initial development of its Cosmopolitan development totals $525 million. Some of the funding came from the Alaska Industrial Development and Export Authority, a $30 million line of credit to buy a drilling rig. After Walker’s veto, BlueCrest asked AIDEA to modify the terms of the loan. In early December 2016, AIDEA agreed to the changes. In March 2016, before the legislation was passed and Walker issued his veto, Johnson testified before the House Resources Committee about the Cosmopolitan Project. BlueCrest has received about $24 million in tax credits and was owed about $121 million for spending in 2015 and 2016. The company drilled a vertical well from offshore in 2013, confirming zones previously identified by ConocoPhillips and Pioneer. It also found at least six new productive gas zones and four new productive oil zones. The reservoirs are about three miles offshore. The oil can be reached from onshore sites, and development began in 2014, “relying on the existing tax structure.” The gas reservoirs are shallower and can only be reached with offshore wells and platforms. Johnson’s report notes “gas development is now www.akbizmag.com

February 2017 | Alaska Business Monthly

FINANCIAL SERVICES

Alaska’s Business Banking Trends Affected by Economy and Customers Growing deposits fuel desire for diversification and financial relationships

By Tracy Barbour

urrent business banking trends in Alaska are being influenced by a tenuous economic climate, a persistent penchant for technology, and customer preferences. Overall, Alaska’s commercial bankers say they are seeing growing deposits, a change in loan activity, greater desire for diversification, and increased interest from companies outside the state. Many customers are continuing to capitalize on technology to enhance their operations and value having a flexible, relationship-focused partnership with their financial institution.

Economy Having an Impact As low oil prices fuel Alaska’s massive budget deficit, many members of the business community are feeling less confident and more anxious about the economy. That economic uncertainty is playing out in various ways, with business banking customers adjusting their habits to match their attitudes.

“Generally, with our customers, everybody is concerned about the direction of the economy, and it doesn’t look rosy. Each of our customer’s No. 1 concern is continuing to be successful.”

—Jay Page Vice President and Loan Officer First National Bank Alaska

“Generally, with our customers, everybody is concerned about the direction of the economy, and it doesn’t look rosy,” says Jay Page, a vice president and loan officer with First National Bank Alaska. “Each of our customer’s No. 1 concern is continuing to be successful.” But many companies that are in the oil service industry anticipated the drop in oil prices, Page says. The smart ones have accumulated large savings account balances and kept their lines of credit in place to weather the storm. However, Page, who has spent thirty-seven years in the banking industry, is overall opti44

“We’re seeing deposit balances go up, and people are sitting on cash. They don’t know what’s going to happen. And when you don’t know what’s going to happen, you can’t plan either way.”

—Adam Baxter AVP, Commercial Loan Officer, Northrim Bank

mistic about Alaska’s economy. “We’ve seen it be a roller coaster, but we always get through it—and we always will,” he says. “Alaskans pull together, and we ultimately pull through.” Commercial customers are also maintaining more cash at Northrim Bank, according to AVP, Commercial Loan Officer Adam Baxter. “We’re seeing deposit balances go up, and people are sitting on cash,” he says. But customers aren’t necessarily less confident about the economy. Instead, he says, they know the state has some economic headwinds coming down the pike and have a sense of hesitancy. “They don’t know what’s going to happen,” he explains. “And when you don’t know what’s going to happen, you can’t plan either way.” The situation is leaving some businesses in a state of virtual limbo. “With oil prices being low, I think you have a lot of larger companies holding tight and waiting to see what happens,” he says. “Downstream, that effects the smaller businesses, our customers.” However, Baxter says, he is anticipating a shift in this trend with the recent agreement by the Organization of the Petroleum Exporting Countries (OPEC) to cut oil production. In Fairbanks, business banking customers at Denali State Bank are “cautiously optimistic” about the economy, says President and CEO Steve Lundgren. The cautious part emanates from what’s been happening with oil prices and the state budget. “Until our state Legislature and governor figure that out, we have reason to be cautious about how they plan to fund the government,” he says. However, there are a number of reasons for optimism among Fairbanks businesses, Lundgren says. A key cause for optimism is that Fairbanks is getting closer to bringing affordable, clean-burning natural gas to town. Currently, heating oil—which is subject to the price of gas and oil—is the primary method of heating in Fairbanks. And it’s one of the biggest expenses for many businesses, but that will change once the natural gas lines are installed. But for Lundgren, an even greater reason for optimism is the anticipated buildup

at Eielson Air Force Base. Eielson has been selected to receive two squadrons of F-35 fighter jets in 2020. The move will bring fiftyfour new aircraft and nearly three thousand additional residents to the Interior, as well as generate thousands of construction jobs. “In Fairbanks, the military represents about 30 percent of our economy,” Lundgren says. As a broad but negative business banking trend, Lundgren says banks have a lot of deposits and money to lend. But they have been challenged when lending money, in large part, due to regulatory pressure. “Too much regulation has had a negative impact on community banking,” he says. “It’s taking away some of our flexibility to provide lending solutions to our customers.” KeyBank has also noticed a certain level of caution with its commercial banking customers. Yet surprisingly, there is stability in the borrowing market, says KeyBank Alaska Market President Lori McCaffrey. She is seeing clients exercise a “disciplined management” of their balance sheet. “During a downtime, it’s always great to have a strong balance sheet,” McCaffrey says.

“Too much regulation has had a negative impact on community banking. It’s taking away some of our flexibility to provide lending solutions to our customers.”

—Steve Lundgren President and CEO, Denali State Bank

Alaska Business Monthly | February 2017 www.akbizmag.com

Managing the balance sheet—having cash on hand, liquidity, and access to strong working capital—are traits many businesses may have honed from watching the last recession. “Those down times were learning moments for everybody—for the banks and clients,” she says. “I think those learning moments would apply to managing balance sheets and having diversified revenue streams.” In fact, McCaffrey says, more Alaska businesses are focusing on having diversified revenue streams, which is ideal in a down economy. As part of their diversification strategy, some Alaska businesses are using their available cash to invest in businesses out of state. Wells Fargo is seeing more businesses seeking opportunities in the Lower 48, particularly Alaska Native corporations. “They are looking to enhance and stabilize their companies in this downturn,” says Alaska Regional Business Banking Manager Darren Franz. The shift toward diversification is also happening with private contractors, many of whom are also looking for projects outside Alaska. “When the price of oil started slipping, we started seeing contractors on the North Slope going to North Dakota,” says Page. “The contractors who were able to adapt tend to be doing alright. The key to survival is diversification and adapting to change.”

Loan Activity Growing Overall In terms of loan activity, trends vary among the different banks in Alaska. The majority of the new business Page is seeing at First

National is commercial real estate-oriented transactions. In particular, there is a significant amount of buy-sell transactions, primarily from small business people who were leasing space and want to buy the building. “The interesting perspective there is: How do you determine the purchase price in a market that is fluctuating and tends to be trending downward? We’re seeing a lot of offers, counter offers, and counters to those offers,” he says. These transactions typically involve smaller retailers with eight or ten leases, and much of the activity is happening around Anchorage’s Northern Lights Boulevard and Muldoon Road. Page has also noticed an influx of refinance transactions involving commercial real estate loans made by other institutions. Many of the loan terms carry a twenty-year amortization and ten-year call. Now borrowers are coming up on their ten-year balloon payment and need to refinance the debt. But some of the refinances are being complicated by the fact that the state is dropping and/or not renewing many of its leases, leaving building owners with significant vacancies. This, in turn, causes their debt service to increase and makes it more difficult for them to refinance. The medical field is also another area of significant loan activity for First National. The bank is dealing with physicians who are constructing and buying buildings for their practices, Page says. Doctors are also opening up personal lines of credit. Wells Fargo has also noticed an increase in loans to the medical field, as Alaska’s in-

creasingly-aging population drives the need for more healthcare services. “We’re seeing doctors getting together to build their own facilities to bring healthcare closer to where people live, so they don’t just have to go to the big hospitals to get treatment,” Franz says. Alaska’s economic downturn is also creating some unique opportunities for businesses that have cash to spend, Franz says. They are able to buy businesses they likely would not have been able to afford if the economy were doing better. Some have been able to purchase retail or office space at a reduced value. Others have acquired properties from retiring nonAlaskan owners who were motivated to sell. In a recurring scenario, small business owners who have been leasing are using the Small Business Administration loan guaranty program to purchase buildings. “The more property we have owned by Alaskans, the more money stays in the state, and that helps stabilize the economy,” he says. At KeyBank, commercial customers are requesting loans for acquisitions, equipment purchases, and other transactions. “Our clients are certainly mindful of the soft economy,” McCaffrey says. “They are taking advantage of the low interest rates to borrow.” But the opposite seems to be happening with Northrim’s commercial customers. There are many people who have strong balance sheets, but they are waiting for opportunities, Baxter says. “People are reserving their cash,” he says. “Loan growth is slowing. That’s indicative of the economy and budget issues. I

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February 2017 | Alaska Business Monthly

“In the past year, we’ve responded to more opportunities than we ever have before. There are good things happening in Alaska, and they have noticed.”

—Lori McCaffrey Alaska Market President, KeyBank

think everyone’s a little apprehensive.” In Fairbanks, there’s been a slowdown in private-sector commercial real estate construction. So Denali State Bank is also seeing a slump in loan activity in this area. “The only significant private-sector commercial activity was the construction of a hotel,” Lundgren says. Like other bankers, Lundgren attributes the dearth of commercial real estate transactions to what’s happening with the slumping price of oil and state budget. However, Lundgren says he is seeing some transactions related to baby boomers who are transferring business ownerships to the next generation. And in some cases, they are selling to or merging with other organizations. Despite what is happening with Alaska’s economy, many Outside companies are interested in Alaska. With some of the attractive attributes of Alaska, more Outside private equity firms are looking for business opportunities in the state. “In the past year, we’ve responded to more opportunities than we ever have before,” McCaffrey says. “There are good things happening in Alaska, and they have noticed.” The private equity firms are interested in all size businesses, and these firms could represent a viable option for companies wanting to sell or acquire Outside investors. “Some of the private equity firms are targeting companies that might be looking for some kind of succession in their business… maybe baby boomers wanting to sell,” McCaffrey says.

Using Technology to Enhance Business A proclivity for technology is also continuing to shape trends with business banking customers. Business of all sizes can improve their operations with various technologyenabled banking products and services. The purchase card is a prime example. This popular product is helping KeyBank’s commercial customers enhance efficiency for employees as well as company owners. “The more effectively a business owner can manage cash that can translate into the bottom line and efficiency with human capital,” McCaffrey says. The use of technology is not a new development in and of itself. But it’s the way business customers employ technology that is evolving. As technology continues to develop, it 46

makes it easier for customers to bank off the grid, Baxter says. Northrim’s customers are taking advantage of remote capture deposit to deposit checks without having to make a trip to the bank, and they’re using Square to make payments via cell phone. Technology is also in high demand at Denali State Bank. Mobile banking allows business customers to do everything from deposit checks remotely to complete loan applications from their cell phone or computer. “You could continue to be a customer of my small hometown bank whether you live in Fairbanks or anywhere outside of Alaska,” Lundgren says. “I’ve seen a lot of my customers maintain their accounts when they move out of state.” At Wells Fargo, customers are increasingly using technology to take advantage of a range of solutions. Treasury management services, which include services for payables, receivables, invoicing, and reporting, are a popular option. In fact, the bank has undergone a rapid expansion in its Alaska-based treasury management staff. Currently, Wells Fargo has eight employees dedicated to treasury management, compared to the one or two people it employed seven years ago. Technology is also helping companies change the way they manage their business. For instance, the Image Positive Pay service allows Wells Fargo customers to receive protection for the checks they write by automatically verifying their information, including the payee line.

Franz agrees, saying that maintaining a strong relationship and partnership with business customers (and all customers) is essential. “Paramount to our business plan is our bankers building relationships with human beings,” he says. In this ever-increasingly complex world, Franz says, it’s important for bankers—and managers—to talk to customers regularly to ensure all of their needs are met. The bank also uses email surveys to poll customers and react to their responses. “We need to make sure we’re doing everything we can to communicate customers’ needs and put them with the right people who represent the products we have that can help them be successful,” he says. At KeyBank, the relationship manager is the “quarterback” of the relationship, McCaffrey says. And that manager works very collaboratively with business clients. “If the client has a capital market, treasury, or leasing need, they’ve got one person managing that relationship who will bring those partners in,” she says. “This creates efficiency for our client.” Like most institutions, KeyBank reaches out to its business customers on a regular basis and conducts client satisfaction surveys. “The bank’s customers don’t want a transaction-focused relationship; they want attentiveness and flexibility,” McCaffrey says. KeyBank strives to provide flexibility to customers however they need it. The bank recognizes that its clients work beyond Monday

“We need to make sure we’re doing everything we can to communicate customers’ needs and put them with the right people who represent the products we have that can help them be successful.”

—Darren Franz Alaska Regional Business Banking Manager, Wells Fargo

A new option, the electronic pay card, is making it easier for Wells Fargo customers to pay workers who don’t have a checking account. They can deposit employees’ pay onto the card, which can be accessed like a debit card. “It’s a lot safer than running down to use a check cashing service and carrying around a big wad of cash,” Franz says. The bank also has ACH fraud filters to protect customers’ electronic transactions. The extra layer of protection is important because fraud is one of the biggest trends relating to technology, Franz says.

Flexibility and Attentiveness Are Essential Customer attitudes and preferences are also having an effect on the way financial institutions serve their commercial customers. The 2016 CFO Commercial Banking Survey reports that corporate clients want a commercial bank that is flexible, attentive, and service-oriented. The national survey also indicates that customers value having a strategic partnership and strong relationship with their bank.

through Friday and conduct business in multiple time zones across the world. “If our clients are acquiring a business in the Lower 48, my team gets on a plane to meet with them,” she says. “We’re not a business just providing a service. We’re a partner to their business.” Relationship management is equally important at First National. Each branch of the bank has a relationship manager who calls on customers of all sizes to ensure their needs are being addressed. First National also nurtures customer relationships by providing continuity with its services. Customers like the stability of having lenders with a long-term history, Page says. “They want to be able to pick up the phone and call you—not someone else who doesn’t know them. They want to know you are interested in their situation and what they are trying to do. Nobody wants to be a number and be pushed from desk to desk.” R Freelance writer Tracy Barbour is a former Alaskan.

Alaska Business Monthly | February 2017 www.akbizmag.com

ECONOMY

Time-Value of Money A brief lesson in economics

William H. Seward was commemorated in celebration of the Alaska-Yukon-Pacific Exposition of 1909. There may be some humor in that the value of the stamp is roughly the amount paid per acre for Alaska in 1867. First Day Issue and Stamp: © Siegel Auction Galleries US Treasury Check: ourdocuments.gov

“

By Darryl Jordan

fear that we must confess to a failure of ice as an element of territorial wealth, as least as far as this immediate region is concerned. I find that the Russian-American Company, whose monopoly was abolished by the treaty of acquisition, depended for ice exclusively upon the small lake or natural pond which furnishes power for your saw-mill in this town, and that this dependence has now failed by reason of increasing mildness of winter,” said William Seward, Secretary of State, at Sitka August 12, 1869. For many years, Alaska salmon was packed in ice and sawdust at Sitka for its sale in California.

about the per acre cost of Alaska in 1867. The fact that a first class stamp costs twenty-four times more today is significant to all Alaska businesses—as is the fact that one would be lucky to find land at two cents an acre.

Relative Terms The harsh reality is that the dollar of 2017 cannot buy as many goods and services as it could in 1867. Using historical inflation rates of 3.5 percent per year as the discount factor, Alaska’s cost of $7.2 million in constant dollars (1867) becomes more than $1.25 billion in inflated 2017 dollars. Increase the discount rate to 7 percent and it becomes more than $184 billion. Still a great deal, but it is im-

ply, and infrastructure is non-existent outside of a very small envelope. The net effect is that Alaska projects are vastly more expensive and take that much more project time to develop. A representative example is the completion time for a North Dakota fractured oil well. Time to drill the well, fracture the formation to produce oil, and complete the well is averaging six weeks. In Alaska, three years for planning and permitting and three years to build the infrastructure (such as roads, pads, airstrips, camps, power, water, and waste systems) will finally allow operations to begin. In North Dakota, the erosion of buying power is not a factor; however, Alaska businesses must heavily invest over a number of years before a

The longer an investor has to put money into the project will increase both the risk of return and the value of the money returned from the investment. While some will laugh at “ice” being a territorial wealth, others will see the irony of “Seward’s Icebox” running out of ice. Yet, others will not believe that global warming had already begun before the industrial age. The real story is that most people will remember Seward for the Alaska purchase price of $7.2 million dollars and forget the real cost was much higher. In 1867, $7.2 million could buy a lot of goods and services in the “Lower 37 states.” By 1909 the cost to mail a one-ounce letter dropped to two cents, 48

portant to talk about money in relative terms such as time and discount rates. Time erodes the buying power and in Alaska, the projects developed here must not forget about the erosion of buying power. On projects where all the materials and services can be bought in a relatively short period of time, prices probably will not change substantially and the reduction in buying power can be safely ignored. What is different about Alaska is that we are collectively at the end of the supply chain, the available labor is in short sup-

return on investment is even possible.

Compounded Impact Two factors evolve as a result. Alaska projects must be huge in order to pay for the more expensive project and more time that will be required. As a result, Alaska businesses must factor in the Time-Value of Money (TVM). The longer an investor has to put money into the project will increase both the risk of return and the value of the money returned from the investment. If an investor wants just

Alaska Business Monthly | February 2017 www.akbizmag.com

Dollar Terms

e should all be familiar with the numerous terms associated with attempting to describe the effects of the erosion of time. Some authors use the terms constant dollars, inflated dollars, real dollars, actual dollars, as-spent dollars, and nominal dollars. If this helps, Alaska was bought in actual or nominal dollars for $7.2 million. When using the term constant dollars, one should state the date upon which those dollars were “locked” into place. For example, Alaska was bought for $7.2 million constant dollars (1867). If adjusted for inflation, it is possible to state Alaska was purchased for $184 billion constant dollars (2017 assuming a 7 percent discount rate). As-spent dollars look like actual or nominal dollars if spent in the same time frame, but if the project spending spans multiple years, it should represent the total actual dollars spent over time. Real dollars and inflated dollars should take into account that the value of the dollar spent or received has changed over time. When using the term real or inflated dollars, the audience needs to know how the author adjusted the dollar to take into account the Time-Value of Money effect. R

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a 10 percent return from their investment and the money doesn’t start coming back for three years, the investor has to count the lack of revenue from the money invested for those three years. At 10 percent compounded annually, the investment is now a third larger (due to the fact that that money could have been returning interest if not invested in this project). Make it a seven-year project before revenue comes back and the expected value of the investor’s investment is an additional 100 percent over the original investment cost. If one invests $3 billion in a gold mine expecting a 10 percent return and the project expands from three years to seven years, the expected value of the investment just went from $4 billion to $6 billion. Now add that the revenue returned in the future is worth a lot less in TVM terms and the impact is compounded. To avoid being an Alaska business involved with “Seward’s Folly,” we all need to be conversant in TVM. When we talk about costs or expenses, we should state the year the costs are expended. Alaska was purchased for $7.2 million in actual 1867 dollars. Today, 2 billion barrels of oil appears recoverable on the North Slope and at $45 a barrel that would be worth $90 billion in nominal dollars. However, that assumes it could be sold instantly, and reality is it may take twenty years, reducing the value to $25 billion in real dollars discounted at 10 percent annually. “Time is Money” and in Alaska, the effects are compounded. Pun intended! R

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Darryl Jordan is an engineer and writes from Anchorage. www.akbizmag.com

February 2017 | Alaska Business Monthly

OIL & GAS

Alaska LNG’s FERC Application Next steps for the AGDC project By Julie Stricker

fter decades of talk but no real progress to commercialize abundant natural gas deposits on Alaska’s North Slope, the state has decided to take matters into its own hands, but it won’t be cheap. Various entities, including the oil companies who would supply the gas, have formally pursued the project over the years. In late 2015, the state bought out its contract with TransCanada for $64 million. In 2016, after the North Slope gas producers Exxon Mobil Corporation, BP, and ConocoPhillips expressed reservations about the commercial feasibility of the project and sought to slow the project, the state, through the Alaska Gasoline Development Corporation (AGDC), moved to take the lead. It is negotiating with the producers while looking for buyers, tax, and funding options for the project, estimated to cost a minimum of $45 billion.

as-yet unnamed markets in Asia. Estimates put it between $45 billion and $65 billion. It is designed to export up to 20 million metric tons of LNG annually by 2025.

details for open-cut crossings of streams, rivers, and other waterways along the pipeline route. The requests also ask for a listing of temporary bridges needed during construction.

A Stack of Questions Many questions remain about the cost to the project, but before that is even estimated, AGDC is facing a stack of questions FERC has compiled from federal agencies reviewing the project, according to Larry Persily, oil and gas advisor to the Kenai Peninsula Borough.

 “Specific time lines or limits of disturbances” to describe the project’s mitigation measures to protect the ecology and wildlife, rather than the draft report’s less specific terms “to the extent practicable” and “as soon as practical.”

How big of a stack? In October, FERC sent the AGDC 266 pages of questions. In November, FERC added another 96 pages of questions, topping it off with an additional 58 pages in December. Those 420 pages of questions are in response to a dozen preliminary environmental, engi-

 A complete mitigation plan “for unavoidable wetland losses” in pipeline construction. The questions are extraordinarily detailed, but Persily says that isn’t unexpected for a project of this scope. “These are coming from FERC, the Environmental Protection Agency, Fish and Wildlife Service, the Parks Service—all of

“I think the state will apply to FERC, but as I told someone, just because you apply to Harvard doesn’t mean you get in to Harvard. So, applying to FERC is one thing; having an application that FERC determines is so complete as to start drafting the environmental impact statement … they’re two separate things.”

— Larry Persily Oil and Gas Advisor, Kenai Peninsula Borough

Mountain of Paperwork In the meantime, long before the first shovelful of dirt is moved, the state has a mountain of paperwork to move. The producers, in conjunction with AGDC, have already spent an estimated $600 million on pre-frontend engineering design and draft environmental and socioeconomic resource reports. Those reports are part of the Federal Energy Regulatory Commission (FERC) pre-filing process. As part of the process, FERC has sent the state and the producers a detailed list of questions on those dozen reports so the agency can gather the information it needs to approve Alaska’s LNG (liquefied natural gas) export project. The Alaska LNG Project itself is huge. It includes a gas treatment plant on the North Slope, as well as transmission lines from the gas deposits at Prudhoe Bay and Point Thomson to the plant; a large-diameter, eight-hundredmile-long pipeline from the North Slope to the Kenai Peninsula with at least five points for local communities to access the LNG; up to eight compression stations; and a liquefaction facility near Nikiski to super chill the gas into a liquid so it can be loaded onto tankers and shipped to 50

neering, design, and operations reports compiled by Alaska LNG LLC and sent to FERC last summer. Persily says FERC’s question cover such topics as how the state will deal with heavy traffic during construction; how will workers who want to hunt and fish along the project route affect subsistence resources in those areas; impacts on wetlands; and aid to municipalities during construction. “These comments ask for clarifications of discrepancies and additional information that we believe necessary to begin substantive preparation of a draft environmental impact statement for the project,” FERC states in its October letter to Alaska LNG.

A Sample of Questions In his weekly oil and gas newsletter, Persily cites a few of the specific questions:  Site-specific traffic management plans to assist FERC in reviewing traffic impacts from the tens of thousands of truck trips on Alaska highways during the five or six years of construction.  Site-specific construction drawings along with site-specific wetland crossing plans and similar

whom are familiar with environmental impact statements; all of whom are familiar with litigation,” Persily says. “You can answer the questions up front or you can deal with them in court challenges. I’m not saying someone is planning to sue, but I think all these agencies are aware and have past experience on these kind of things. You’ve got to be thorough, you’ve got to be exhaustive, because if you don’t do it up front you’re going to have do it later on and that’s just going to be a bigger problem.”

Answering the Questions As far as who is going to be answering these questions, as well as what it will cost, AGDC President Keith Meyer says the agency’s current staff, supplemented by contractors, will respond to FERC. Meyer hasn’t spoken publicly about estimated costs, Persily says. “You look at that list and you think, well, two dozen people working six months, to me it’s got to be in the millions [of dollars], not hundreds of thousands,” Persily says. “Ballpark, I don’t think it’s hundreds of millions, I don’t think it’s necessarily tens of millions, but I can’t conceive how you could do this for

Alaska Business Monthly | February 2017 www.akbizmag.com

fewer work hours than several million dollars and answering them all to the complete satisfaction of all the agencies.” Alaska LNG did the bulk of the fieldwork and compiled and forwarded the information they had to AGDC, Persily says. Answering FERC’s questions will likely be mostly deskwork. “It’s not so much field work as it is someone is going to have to sit down and put more oomph into what is called the wildlife avoidance and interaction plan,” he says. Answering the questions adequately is crucial to project acceptance. In its October letter to Alaska LNG, FERC cautions that all the questions must be answered adequately. “Any omission of content relevant to these comments could result in a determination that your formal application is not fully ready for processing,” the letter states. If all the questions can’t be answered immediately, AGDC can also include a timeline for when they will be addressed. “A risk, I guess, is if you don’t do an adequate job of responding, they don’t have to accept your application,” Persily says. “They could say well, we got it and dealt with the punch list. Here’s what’s still missing; we’ll hold your paperwork until we hear back from you.”

Application to Build The final reports will accompany AGDC’s application for federal authorization to build and construct the pipeline and LNG plants. Meyer has said he wants to submit the formal application to FERC in the first part of 2017, but acknowledged in December that negotiations with the producers were running behind. Just before year’s end, the state reached an agreement with the producers for the rights to about $600 million in project data. The producers also agreed to withdraw an application for the project from FERC, so the AGDC is the only applicant. Meyer said two other agreements should be ready in early 2017. There is no time limit, except one imposed by the AGDC, for the application. Nor is there any guarantee FERC will accept the application when it’s filed, Persily says. “I think the state will apply to FERC, but as I told someone, just because you apply to Harvard doesn’t mean you get in to Harvard,” he says. “So, applying to FERC is one thing; having an application that FERC determines is so complete as to start drafting the environmental impact statement … they’re two separate things.” Just applying for the permit will be expensive, at least several million dollars, Persily estimates. “If you apply to FERC and they say OK, we’re going to start, then the checkbook starts with the third-party contractor that FERC hires to draft the work on the EIS,” Persily says. “That runs into millions. So if you apply and it’s accepted, then you’ve got to be prepared to pay the bill.” R Julie Stricker is a journalist living near Fairbanks. www.akbizmag.com

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ALASKA NATIVE CORPORATIONS

Alaska Native Corporation 8(a) Graduates Competing successfully in open markets nationwide By Tasha Anderson

he US Small Business Administration exists to assist small business growth and development through loan guarantees, contracts, counseling sessions, and other initiatives. One of those is the 8(a) Business Development Program, which helps “small, disadvantaged businesses compete in the marketplace,” in large part through solesource contracts. According to the US Small Business Administration, the overall goal of the 8(a) Business Development Program “is to graduate 8(a) firms that will go on to thrive in a competitive business environment.” The 8(a) program is divided into two stages: a four yeardevelopmental stage and a five-year transition stage, after which a company “graduates” with the expectation that it can compete in an open market for private and government contracts. Many of the state’s Alaska Native owned companies have participated and graduated from the 8(a) program and are meeting the program’s goal with flying colors.

Eklutna Eklutna, Inc. CEO Curtis J. McQueen says, “The 8(a) program has been huge and instrumental for a lot of corporations in the early days.” He explains that Eklutna was in a unique position compared to many of the other Alaska Native corporations: “We had opportunities on our own land and to build 52

Interior shot of the JBER Emergency Operations Center; Eklutna Services LLC was contracted to “demolish, reconstruct, reconfigure, and remodel 8,500 square feet of several adjacent spaces into a sophisticated Emergency Operations Center,” according to the company. Photo courtesy of Eklutna, Inc.

in Anchorage… opportunities that were not related to sole-source government contracting.” Eklutna has only one subsidiary that is an 8(a) program graduate, Eklutna Services LLC (ESL), which graduated in July 2015. “We’re very proud of the fact that almost 80 to 90 percent of the work that ESL did while it was under the 8(a) program was not solesource contracts,” McQueen says. “It was a small business and it was minority-owned, and to have a procurement avenue like the 8(a) was wonderful… but we stayed pretty busy on public projects and some of our own projects.” ESL is a general contractor and has performed a variety of projects around Alaska, ranging from residential developments to industrial shop spaces to renovating the JBER Emergency Operations Center. In 2012 ESL finished the last two phases of the Powder Ridge project, a residential development in Eagle River comprised of approximately four hundred single-family homes. The company is currently working on Powder View, a residential project in Eagle River that includes fifteen acres purchased by the Anchorage School District for a new Elementary school as development progresses. “They’ve become Eklutna’s main contractor, so if we want to build something ourselves, we have that option,” McQueen says. To date all of ESL’s projects have been in Alaska, “and that’s the other thing that’s made us unique.” One of ESL’s current projects is construction of a new bridge (replacing the current bridge) for the Alaska Department of Transportation at Banner Creek (MP 295 Richardson Highway) with an expected completion date of 2017. “We feel proud that, while ESL has graduated, it’s still going strong and it really stood on its own from the very beginning and it continues to stand on its own now,” McQeen says.

Ahtna, Incorporated Ahtna, Incorporated currently has five subsidiaries enrolled in the 8(a) program, and the company has six active subsidiaries that have graduated from 8(a): Ahtna Construction & Primary Products Corporation graduated in 2009; Ahtna Development Corporation graduated in 2002; Ahtna Engineering Services LLC graduated in 2016; Ahtna Government Services Corporation (AGSC) graduated in 2008; Ahtna Support and Training Services LLC graduated in 2016; and Ahtna Technical Services, Inc. graduated in 2008. Ahtna’s subsidiaries provide services in Alaska and the Lower 48. According to Ahtna, their first subsidiary formed was Ahtna Construction & Primary Products Corporation in 1974. It specializes in civil construction, pipeline maintenance, emergency preparedness, and oil spill response. Ahtna Development Corporation provides real property management and site-development opportunities—including commercial, retail, and tourism development— throughout the Ahtna region and California. Ahtna’s two most recent 8(a) graduates provide very different services: Ahtna Support and Training Services is focused on simulations and training support, instruction, logistics, detention services, and warehouse operations and maintenance, while Ahtna Engineering Services provides tailored design-build, construction, demolition, renovation, environmental, oil and gas, and professional and technical products and services. AGSC is heavily focused on providing prime and subcontract environmental and construction services for utility companies and federal contractors in California, according to Ahtna. In June 2015, AGSC provided construction services to the tune of approximately $3 million to Parsons Envi-

Alaska Business Monthly | February 2017 www.akbizmag.com

The scope of work of the JBER Emergency Operations Center included asbestos abatement, the renovation and construction of restrooms; and bulletproof glass and blast proof systems, among other installation and construction work.

ronment and Infrastructure Group, Inc. for a soil remediation and site improvements project for Pacific Gas & Electric in California. According to Ahtna, “The scope of work included removing and disposing of impacted soil, backfilling with soil and base rock, constructing a concrete retaining wall, installing a stormwater control system and subsurface infiltration gallery, installing new site light fixtures with underground conduit, removing and replacing asphalt paving and chip seal, installing new high-security chain link fence and gates with gate operators, applying a slurry coat to existing asphalt paving, and installing signage and pavement markings. All work was completed to allow existing operations at the facility to proceed uninterrupted.” Another recent AGSC project took place in September 2015, when the Ahtna subsidiary performed extensive site remediation services at a former US Navy facility site in California in the San Francisco Bay area. The site had been used historically for the disposal of waste, petroleum, aircraft parts, and other materials. Ahtna assisted with excavation and relocation of waste materials within the site, demolition and removal of site infrastructure, and construction of a soil and vegetative cover on site. “In addition to the remedial action activities, Ahtna was also responsible for establishing the site facilities for the project, including site trailer, utilities, storm water controls, parking, and laydown areas,” the company states.

Koniag According to Koniag Government Services Sector CEO Ed O’Hare, “Koniag Technology Solutions [KTS] and Koniag Services, Inc. [KSI] both predominantly sell information technology and professional services to the federal government.” These companies are successful graduates of the SBA 8(a) program with KTS graduating three years ago and KSI graduating five years ago. They comprise a significant portion of Koniag’s Government Services Sector business, which includes a mix of current and graduated 8(a) companies. “KTS supports our federal customers all over the world,” O’Hare continues. “Our team provides environmental security support for over twenty worldwide secure US Government facilities—making sure the water and air they breathe isn’t harmful. The Federal Government has offices all over the country which need to be managed,” O’Hare says. KTS also provides services to the Department of Justice, the Social Security Administration, and the General Services Administration. “We’re working with agencies to manage their core financial systems and to manage their real property.” KTS’s largest client is Social Security, for which they provide ITSM (information technology service management). “We provide IT support for the employees of the Social Security Administration all over the country. So if you’re a social security employee and your email isn’t working, we get that call.” KSI works in different industries, establishing itself in the health IT and cyber security fields, he says. KSI is also a CMMI 3 assessed organization and holds an ISO 9001 Quality Management certification. These certificawww.akbizmag.com

Photo courtesy of Eklutna, Inc.

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Eklutna Services LLC won a competitivelybid contract in 2014 to construct the Pyramid Water Treatment Plant for the City of Unalaska; the project scope included installing a premanufactured metal building, associated piping and appurtenances, site work and grading, a discharge system, and other general construction work. Eklutna Services was the general contractor and LCG Lantech was the engineer and architect. Other contractors on the project, which was completed June 15, 2016, were Superior Plumbing & Heating, Sumner Electric, Pinnacle Mechanical Inc., and Bering Shai Rock & Gravel. Photos courtesy of Eklutna, Inc.

tions support KSI’s capabilities for full life cycle IT software development, geospatial services, and application infrastructure operations for the US Government—primarily in Maryland, where the Social Security Administration and the US Centers for Medicare & Medicaid Services are headquartered. KSI also provides cyber-security services for varies agencies in the Federal Government. Both companies are headquartered in Virginia, which brings additional revenue back to the state of Alaska and Koniag Inc. shareholders. Koniag CEO Elizabeth Perry says, “We own 100 percent of our government sector companies, and those companies return earnings to our parent company, Koniag Inc. They are one of our largest sectors, and their contribution allows Koniag to provide benefits to our shareholders, including scholarships, internships, and job training.” Koniag also pays dividends to its shareholders, and Perry says their ability to do so is directly related to the success of their subsidiaries. “The fact that we have the ability to use the 8(a) program as it was intended gives us a leg up to allow us to grow and then bring those profits back to our shareholders in Alaska and all over the country,” she says. 54

No matter the location of the subsidiary, they seek to provide opportunities for Koniag shareholders. “We want to be able to support our shareholders wherever they want to live. We’re trying to align our business goals with growing successful businesses in the West because this is where most of our shareholders are located,” Perry says. KSI and KTS employ approximately 150 people between them, and the KTS also has about 100 subcontractors. O’Hare says the 8(a) program is a benefit for growing a company. “The program is working because businesses have an opportunity to grow in an industry,” he says. However, once a subsidiary approaches graduation, it’s vital to become more strategic when developing the business. “You have to decide what it is you’re going to do, because now you’re competing with [other companies]. That’s what we’ve done with these companies. We picked two domains for KSI to be experts in: one was healthcare IT and the other cybersecurity, and we’re doing very well.” Perry says that the fields KSI and KTS have entered weren’t accidental, they were deliberate. Among Koniag’s goals is to have subsid-

iaries that provide expert professional services, which ideally would coincide with fields of interest to shareholders. “We’re finding, through the work of our education foundation, that our shareholders are interested in getting an education in fields such as science and technology,” Perry says. The fields the companies work in also match Koniag’s goal to provide financial and other benefits to their shareholders while contributing to cultural preservation and perpetuation. “Because of that dual mission, the kind of services we provide to the government is important to us,” Perry says. “One of the reasons why it’s so critical to us that the 8(a) program exists, and remains, is that on a very high level it is an honor for us to be able to serve our country while also providing services to government agencies. The 8A program gives us the opportunity to be able to jump into what would otherwise be a highly competitive field.” R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

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SPECIAL SECTION

International Trade

Arctic Commerce An emerging new economic opportunity By Greg Wolf

laska’s unique geographic position on the globe may once again prove to be an advantage. For decades Alaska’s vast store of natural resources, combined with its strategic location on the Pacific Rim, has resulted in significant export opportunities, primarily to major Asian markets, that now amount to some $5 billion annually. Likewise, situated as it is nearly equidistance between Asia, Europe, and the United States, Alaska has become a key player in the international air cargo industry with dozens of airlines making use of the Ted Stevens Anchorage International Airport as a stop to refuel, change crews, and pick-up or transfer cargo. The airport is among the top five in the world for cargo throughput. Now, it is the state’s location in the Arctic that portends an emerging new economic opportunity.

Best Positioned More so than any other American state, Alaska is best positioned to take a leading role and prosper from economic activity that will flow from commercial development in the Arctic region. And it’s not just the blessing of geography that presents Alaska with this opportunity. Alaska is home to a wide range of companies with world class capabilities in conducting business and carrying out projects in the Far North. In addition to the business experience and expertise present in the state, Alaska is also home to a number of important Arctic policy agencies and organizations, as well as scientific research centers and cultural institutions. One further advantage for Alaska is the state’s Native peoples who have lived in the Arctic for thousands of years. They possess traditional knowledge of the lands, waters, and wildlife, passed down through the generations. When joined with modern technologies and methodologies, this local expertise can help to ensure the success of projects. Companies operating in Alaska, whether they are local, national, or multi-national, have demonstrated their abilities to do business in a very challenging part of the world. They’ve learned to deal with extreme weather conditions, isolated job sites, extended supply chains, and a host of other conditions that require high levels of technical expertise and management. They’ve accomplished this under what are arguably some of the most rigorous environmental standards. Particularly in natural resource development, such as oil, gas, and mining, compa56

nies operating in Alaska have the credentials to seek out and win business in other parts of the world, including other areas of the Arctic, and are doing so. At the same time, there are opportunities for American and foreign companies to come to Alaska and establish partnerships and joint ventures with Alaska companies for projects both in Alaska and elsewhere.

Arctic Investments Beyond expertise in resource development related industries, Alaska is also attracting other types of businesses that are focused on the Arctic. For example, Anchorage is home to Pt Capital, the first Arctic focused private equity firm. The company, founded in 2013, announced in the fall of 2015 that they had raised more than $125 million for their first Arctic fund. Last year, they reported their first major investment with the buy-out of an Icelandic telecommunications company. The firm plans to put money to work in Arctic markets including Alaska, Iceland, Greenland, and Northern Canada. Another Alaska company making itself known in the Arctic is Quintillion, an Anchorage-based, privately funded company developing an undersea fiber optic project. In the project’s first phase, he company will bring high-speed bandwidth to Alaska Arctic coastal communities. Phases two and three will ultimately see the cable extended to points in Europe and Asia. Besides business enterprises focused on the Arctic, a number of government agencies and non-governmental organizations involved with Arctic policy are based in Alaska. These include the US Arctic Research Commission and the Institute of the North, both headquartered in Anchorage. There are scientific research centers in Alaska with an Arctic focus, including the International Arctic Research Center and the Cold Climate Housing Research Center. Both of these entities are located in Fairbanks. In the area of education, the University of Alaska Fairbanks is a member of the University of the Arctic, an international network of universities, colleges, and research institutes involved with education and research in the North. Alaska’s Role To better understand the opportunities posed by development of the Arctic, and the role Alaska can play, for the past five years World Trade Center Anchorage has conducted Arctic Ambitions, an annual international conference and trade show focused on trade, commerce, and investment in the Arctic. In

a nutshell, the event concerns itself with “the business of the Arctic.” The event highlights business opportunities associated with commercial development in the Arctic, including natural resource extraction (oil, gas, and mining), engineering, design, construction, environmental services, mapping, charting, energy, emergency response, tourism, telecommunications, maritime shipping, and others. From these gatherings of business executives and government officials, a set of questions has emerged that serve to put into focus some of the fundamental issues related to commercial development in the region:  Which projects need to be developed?  What are the priorities? In other words, which projects come first?  What do these projects cost and who do they serve?  Who pays? Government? Private sector? Both?  What are the economic triggers to justify project development?  When? What is the timeline? The answers to these questions, of course, are a work in progress and don’t always flow in a straight line. But, with time, the answers will come and Alaska, as America’s Arctic state, can play a key role. The opportunity for the state is simply too big to ignore. In a recent report by Lloyd’s of London, they estimated the investment needed in the Arctic in the next ten years to be in the range of $100 billion in such infrastructure projects as ports, pipelines, roads, and power generation. With its strategic geographic location and considerable inventory of Arctic-related assets, Alaska is poised to serve as the commercial gateway to the American Arctic. And, as the world increasingly looks north for opportunities and solutions, Alaska is uniquely situated and prepared to play a leading role. R Greg Wolf has been the Executive Director of the World Trade Center in 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.

Alaska Business Monthly | February 2017 www.akbizmag.com

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SPECIAL SECTION

International Trade

Sovereign Wealth Funds Expansion Global investments include Alaska assets By Greg Wolf

he rise of the world’s sovereign wealth funds continues as more funds come into existence and the assets they hold grow as well. While these government-controlled investment vehicles vary considerably in size and scope, as well as by their particular investment strategies and policies, they are a significant force in the financial markets, and their impact can be felt in all corners of the world, including Alaska. Typically, the source of the capital for these funds 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 export earnings while Middle Eastern, European, and American funds arose from commodity earnings. Most of the funds invest globally. Some funds dedicate a certain percentage of their portfolio for investment in their own countries.

$7.4 Trillion Value According to the Sovereign Wealth Institute, there are now seventy-six sovereign funds. The value of their holdings is estimated to be $7.4 trillion as of June 2016. 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. Of the established funds, 20 percent of them are quite new, coming into existence between 2010 and 2015. The latest wave of entrants into the sovereign wealth arena include a number of funds from African nations, including Senegal, Nigeria, Angola, and Ghana. An American state also is among the new entrants: the West Virginia Future Fund was established in 2014 as a vehicle to invest a portion of the state’s oil and gas severance tax revenue. 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 fund in the Unites States. With assets of approximately $54 billion, the Alaska Permanent Fund currently ranks 58

25th among the world’s funds, ranking just below Iran ($62 billion) and just above Algeria ($50 billion). By contrast, at $885 billion, Norway’s Government Pension Fund Global is the world’s largest fund and is widely expected to become the world’s first trillion dollar fund. In addition to Norway, other nations with very large funds include China, Saudi Arabia, United Arab Emirates, Singapore, Kuwait, and Russia.

American Funds 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 the Texas funds equal that of Alaska. The Texas funds date back to the 1800s. The Permanent School Fund was established in 1854 to benefit primary and secondary schools while the Permanent University Fund was founded in 1876 to provide funding for University of Texas System and the Texas A&M University System. Other American states who, for various purposes, have established a sovereign fund include Wyoming, New Mexico, North Dakota, Montana, Louisiana, and Alabama. The Alaska Permanent 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, more than $24 billion has been distributed in dividend payments to its citizens. Policy Variations Investment policies governing the sovereign funds vary considerably. Most, of course, seek to achieve a reasonable rate of return measured against an index of the particular asset class invested in, while others seek not only to accomplish this, but also to attain “strategic” objectives to benefit their country. For example, a country that is energy poor might choose to invest in companies, regions, or 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 in-

dustry or in the infrastructure to make their country more attractive to that industry. Some countries are more aggressive than others in terms of the types of investments they are willing to make to achieve a particular goal. A good example is Singapore and its fund, Temasek Holdings. This fund was established in 1974 and currently has assets under management totaling $193 billion. In pursuing economic development objectives, Singapore has a history of being proactive in their attainment. A recent example is Pavilion Energy. Already a major player in oil storage, refining, distribution, and trading, Singapore is now seeking to do the same with the Asian LNG (liquefied natural gas) market. To do so, the Singapore government, through Temasek, established Pavilion Energy. The company, launched in 2013, aims to help Singapore become an important player in Asia’s LNG market. It will do so through investments in key LNG assets and related LNG businesses. The company is 100 percent owned by Temasek. The company will make investments in upstream assets and, through its subsidiary Pavilion Gas, will manage downstream gas operations in Singapore. The company will be involved with storage, distribution, and trading of LNG in the Asia region. So, in this case, Singapore created a new company, through an investment by one of its sovereign wealth funds, to help achieve a national goal.

Investment Horizon The investment horizon for the funds varies according to each fund’s goals and policies. Several years ago, for example, China Investment Corporation, one of China’s three sovereign wealth funds, moved to extend investment horizons from five to ten years. By creating a longer term portfolio, this allows the fund to participate in non-public investment vehicles including direct investments, hedge funds, private equity, and real estate. Over time, this fund, which at its beginning invested significantly in the US financial sector, has moved into other sectors such as energy, natural resources, and infrastructure. At least one foreign sovereign wealth fund has become involved with Alaska, albeit in an indirect fashion. In 2009, Vancouver-based

Alaska Business Monthly | February 2017 www.akbizmag.com

INTERNATIONAL TRADE SPECIAL SECTION

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 the fund. Red Dog Mine is one of the world’s largest zinc producers and China is the world largest zinc consumer. In another instance of Chinese involvement in Alaska’s mining sector, in 2010, China National Gold Corporation, Coeur d’Alene Mines, and its Alaska subsidiary Coeur Alaska Inc. announced a landmark agreement for a state-owned Chinese company to purchase and process gold concentrates from the newly opened Kensington Mine outside of Juneau. The Chinese company agreed to purchase approximately half of the gold concentrates produced at the mine. While not a sovereign fund, many consider state-owned enterprises, such as China National Gold, to be something akin to cousins of sovereign wealth funds because they, too, make investments on behalf of their countries. Indeed, a number of sovereign wealth funds were established, at least initially, to invest in state-owned enterprises. China Investment Corporation and Temasek Holding are examples, though both have expanded their scope to include significant investments outside of their respective countries.

Alaska Assets Looking forward, 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 much in demand by both developed and emerging economies, is an attractive destination for investments by these funds. It’s a win-win combination as many Alaska projects need to be large scale in scope to be economically viable. These projects require correspondingly large-scale investments by investors, such as the sovereigns, 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 in Alaska-based investment vehicles in order 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 in 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. www.akbizmag.com

February 2017 | Alaska Business Monthly

Trans-Pacific Partnership Update T

By Alex Salov

he Trans-Pacific Partnership (TPP) is a proposed 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 reducing 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 range of aspects stretching from car manufacturing and intellectual property rights to e-commerce and tariffs on rice and dairy products.

TPP Timeline The TPP 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 also of a significant geopolitical importance. Doomed to Fail? During the recent presidential elections, the TPP one of the topics of which both candidates had similar views. They both considered it necessary to at least revisit the TPP if not to walk away from it. In an early postelection public statement, the President-elect was clear on the fact that the United States should withdraw from the TPP as it can be “a potential disaster for our country.” As originally anticipated, if either the United States or Japan (the two largest GDPs of the TPP participants) fail to ratify the TPP domestically, then, almost certainly, the agreement is doomed to failure. Japanese Diet [The National Diet is Japan’s bicameral legislature] actually ratified the TPP in November 2016 (being the first coun60

TPP & RCEP—Participating Countries RCEP

TPP

China India South Korea

Australia Japan New Zealand

ASEAN Laos Myanmar Indonesia Philippines Thailand Cambodia

United States Canada Chile Peru Mexico

Brunei Malaysia Singapore Vietnam

try to do so), but it was rather a symbolic action given the current position of the new US government. Prime Minister Shinzo Abe stated that, without the participation by the United States, the TPP would be “meaningless,” but still expressed a hope that the ratification would prompt the President-elect to change his mind. Later in November, several leaders of the TPP-negotiating countries responded quickly by announcing suspending submissions of the TPP proposals to their parliaments for ratifications (Vietnam, Malaysia). The Prime Minister of Singapore bitterly stated that the failure to ratify the TPP in the United States will be “a setback for America” and that the agreement “will be a casualty if it is not settled by January [2017].” As a matter of fact, it took several years of hard work by US diplomats and negotiators to convince and bring to the table the current TPP parties to discuss a wide array of trade issues with them. In Japan, for example, difficult domestic arrangements in areas like agriculture and manufacturing had to be made in order to achieve the ratification by the Diet. As it currently stands, the TPP has not been yet declared dead, but, as one Alaskan

leader described it, it is “on thin ice.”

Asian Free Trade Bilateral trade agreements with the current parties to the TPP are seen as a possible alternative to an all-inclusive, multi-party trade pact. The free-trade agreements in the Asia Pacific region are sometimes referred to as the “Asian noodle bowl.” This term references the fact that there is large number of such agreements and this number 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 2016, 147 agreements were in effect and 67 were in various stages of development. The United States currently has bilateral FTAs with six out of eleven parties to the TPP: Australia, Canada, Chile, Mexico, Peru, and Singapore. Some analysts predict that a bilateral FTA with Japan can emerge from the suspended TPP negotiations and strengthen current US-Japan economic relations. Such negotiation are yet to begin, therefore their future is unknown at this point. Another important factor to consider is that the President-elect inherits Trade Pro-

Alaska Business Monthly | February 2017 www.akbizmag.com

Source: The Asia Foundation | www.truewealthpublishing.asia

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International Trade

Alaska Trade For Alaska, the TPP didn’t appear to bring immediate important economic or trade effects. Most of the issues discussed during the negotiations were of low relevance to the state’s economy. However, as a part of the Pacific Rim, the TPP enactment would result in more opportunities for Alaska companies to explore new markets and strengthen the current ties with the existing partners such as Japan, Canada, and Singapore. The TPP could also open a window for potential investments to the state. Currently, the future of the US trade negotiations in the Asia Pacific region is not clear, but WTC Anchorage will continue working on exploring opportunities for trade and commerce on behalf of its member companies. R Alex Salov is the Business Operations Manager of World Trade Center Anchorage and has been working at the Center since 2004. He has an MS 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. www.akbizmag.com

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RCEP Pact With the all the above-mentioned concerns, does it mean that a mega-trade pact will not be created in Asia-Pacific region? The answer is no, because such a pact is currently being negotiated. Originally drafted in 2012 as a Chinese effort to create a counterbalance to the US “Pivot to Asia,” the pact 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. Interestingly, all the Asia Pacific parties to the TPP (Australia, New Zealand, Japan, Brunei, Malaysia, Singapore, and Vietnam) are also parties to the RCEP. If ratified, the RCEP will account for 30 percent of the world’s GDP and almost half of the world’s population among its members. Even though very comprehensive in its nature, it is argued by some analysts that the RCEP is lacking certain dimensions that the TPP was designed to have. For example, state-owned enterprises, environmental regulations, and digital economy issues are not being focused upon too closely. Therefore, it is unlikely that the United States will consider being a part of the RCEP as this agreement is not defined by the same standards as the TPP.

INTERNATIONAL TRADE SPECIAL SECTION

motion Authority, which was granted to the current President by Congress in 2015. Using Trade Promotion Authority, he will be 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.

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February 2017 | Alaska Business Monthly

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International Trade

Minerals Markets: Coal is still ‘King’ Alaska coal deposits are second largest globally By Greg Wolf

eports of coal’s demise have been greatly exaggerated. Coal is still the reigning “king” of power production. Regardless of one’s personal views on coal usage, the fact remains that coal is the predominant fuel for producing electricity in the United States and around the world. Currently, coal is used to generate approximately 40 percent of the world’s electricity and heat generation. Another fact is that Alaska has a lot of coal. Indeed, it is estimated that 17 percent of the world’s supply of coal resides here in Alaska, beneath our feet. If Alaska were a country, we would rank as the second largest coal deposit in the world. When I mention this to people not familiar with our state, they typically respond about how lucky we are, and that there must be a lot of coal mines and coal mining jobs in Alaska. Sounds reasonable. Only makes sense, right? But how many operating coal mines do we have in Alaska? The answer is one: The Usibelli mine in Healy, outside Fairbanks. This suggests that there is room for that company to grow and that there is room for other new entrants into the field. Coal is found in many parts of the state, some closer to tide water and shipping than others. While Usibelli is the only active mine in Alaska at this time, producing coal for the Alaska and overseas markets for more than seventy years, several other projects elsewhere in the state are at various stages of potential development, including the Chuitna Coal Project in the Beluga coal fields about forty-five miles southwest of Anchorage near Tyonek.

Strong Demand in Asia While demand for coal has been declining in the Unites States and Europe in response to government policies and regulations, as well increased competition from natural gas and renewables, demand is strong and actually increasing in other parts of the world, especially Asia. For many lesser developed and emerging markets, coal is the fuel of choice for power generation, at least for the foreseeable future. While efforts are underway to reduce coal consumption in countries like China and India, the world’s two largest importers, they currently both utilize coal for some 70 percent of their power production. In a report issued late last year by the International Energy Agency, Keisuke Sadamori, the agency’s Director of Energy Markets and Security Directorate noted: “Because of the implications for air quality and carbon emissions, coal has come under fire in recent years, 62

but it is too early to say that this is the end for coal. Coal demand is moving to Asia, where emerging economies with growing populations are seeking affordable and secure energy sources to power their economies.”

Alaska Coal Is Clean Coal It is important to note that Alaska coal is relatively clean vis-a-vis coal produced in other parts of the world. Alaska coal is considered to be ultra-low sulfur at 0.1 percent versus Powder River Basin coal at 0.5 percent and bituminous grade coals with sulfur up to 6 percent. Alaska coal also contains less mercury, as much as 60 percent less that other coals in the Pacific Rim coal market. Indeed, some buyers of Alaska coal blend the Alaska coal with other coals to lower the overall emissions output. Meanwhile technological advances enable existing plants to be retrofitted and new plants come with greatly improved emission control systems. Other steps being taken to reduce emissions include enhanced coal cleaning procedures and the aforementioned blending techniques. As consuming markets for coal shift away from the United States and Europe towards Asia and other parts of the world, Alaska is well positioned to supply coal to these markets based on its vast reserves and comparatively close proximity to these markets. As with all Alaska exports, there is strong competition to sell into these markets. In the case of coal, major competing exporters include countries like Australia, Indonesia, and Russia, as well from other states in America. Coal as a source of power generation is far from dead and claims that it is from detractors is often based more on wishful thinking rather than facts. As part of a vibrant mining industry in the state, coal has an important role to play—one that can bring jobs and economic prosperity to rural communities while providing vital power to both developed and developing countries around the globe. R Greg Wolf has been the Executive Director of the World Trade Center in 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.

Alaska Business Monthly | February 2017 www.akbizmag.com

Top 10 reasons to fix Port of Anchorage 10 9 8 7 6 5

Not everybody owns a boat Volume – handles half of Alaska’s inbound, marine freight – half of which is delivered outside of Anchorage Connected – to Alaska’s marine, road, rail, pipeline and air transport systems Designated National Strategic Seaport – about 20 percent of all Port cargo is military related Critical infrastructure – vital to Alaska’s economy and regional natural disaster response Location – adjacent to key markets and hundreds of millions of dollars of freight-related infrastructure

4 3 2 1

Corrosion – aging wharf piles have lost up to three-quarters of their original thickness and are unlikely to survive another significant earthquake Most Alaskans don’t want to leave the state to live with Lower-48 relatives Anchorage budgets $3 million annually to install pile jackets that extend docks’ operational capacity – but do little to enhance operation efficiency or earthquake resilience Time is running out – pile jackets are a temporary fix and docks will lose load ratings and/or close starting in about 10 years, regardless of seismic activity or anything else

“Alaska deliveries were a lot easier when Anchorage had a dock.”

THE FIX: Anchorage Port Modernization Program Improve operational safety and efficiency Accommodate modern shipping operations Improve resiliency – enable facilities to survive extreme seismic events and Cook Inlet’s harsh marine environment for at least 75 years ● Project construction will take at least seven years and employ 300 Alaska workers during peak construction phases (scheduled to begin in 2017) ● ● ●

Port modernization will benefit all Alaskans. Anchorage asked the Legislature to support a $298 million statewide general obligation bond referendum or other funding mechanism in 2017 to help replace its main cargo terminals. All remaining project funds are in hand or will come from other sources, including Port revenues. Visit www.portofanc.com to learn more.

GOODS FOR ALASKA • SINCE 1961 PA I D A D V E R T I S E M E N T

Manufactured Exports from Alaska Expanding success with international sales

By Anneliese Trainer

ll developed economies include a value-added sector; Alaska’s small but nationally competitive manufacturing is strong but narrow, with room to grow. Alaska’s notoriously high energy costs and remote location present unique operational challenges for any business owner, let alone those aspiring to export products overseas. However, data show that the manufacturing sector is thriving in unique ways. International exports are certainly an important piece of that puzzle, and an examination of those trends offers interesting insights into both established and growing industries operating in Alaska. It is true that compared to other states, Alaska’s manufacturing sector is relatively small. According to the US Census’ State Trade Data, Alaska exported $276.1 million worth of manufactured goods for the year as of October 2016. Included in this figure is October’s total export value of $27.3 million. In 2014, there were approximately 570 manufacturing companies operating within the state. A 2014 planning study for the Manufacturing Extension Partnership reports that 63 percent of 67 surveyed manufacturers explained that they sold products outside of the Alaska market, while 39 percent had tried to access international markets. In 2015, manufactured products made up 7.64 percent of all Alaska exports, with $353 million worth of products shipped out of state. “Food, beverage, tobacco, and clothing” (manufacturing, part 1) is the smallest industry subset, with a total of approximately $38 million worth of goods (0.83 percent of total exports) exported outside of the state. “Primary metal, machinery, metal works, computer and electronics, appliance, vehicle and furniture,” (manufacturing, part 2) is notably larger, with a total of $138 million in exports (3 percent). The largest manufacturing sector by export value is made up of “wood, paper, petroleum and coal, chemical, pharmaceutical, paint, toilet, non-metallic minerals, and cement” (manufacturing, part 3) at 3.81 percent of total exports, with a dollar value of $176 million.

Manufacturing Parts 1, 2, and 3 The vast majority of “manufacturing, part 1” exports are “food manufactures” due to Alaska’s large fish processing sector. In 2015, $31 million worth of manufactured food products were shipped outside of the state. It is perhaps surprising that this number is not higher. This is because the North American Industry Classification System is very specific about what constitutes a manufactured seafood product. Producers of minimally processed seafood, such as fish that are merely headed and gutted (H&G), are not considered manufacturers. 64

Table 1. Dollar Value of Manufactured Exports by NAICS Code Item 311—Food Manufactures 312—Beverages & Tobacco Products 313—Textiles & Fabrics 314—Textile Mills Products 315—Apparel Manufacturing Products 316—Leather & Allied Products 321—Wood Products 322—Paper 323—Printed Matter And Related Products, Nesoi 324—Petroleum & Coal Products 325—Chemicals 326—Plastics & Rubber Products 327—Nonmetallic Mineral Products 331—Primary Metal Mfg 332—Fabricated Metal Products, Nesoi 333—Machinery, Except Electrical 334—Computer And Electronic Products 335—Electrical Equipment, Appliances & Components 336—Transportation Equipment 337—Furniture & Fixtures 339—Miscellaneous Manufactured Commodities

2013 $21,110,029 $138,994 $90,343 $688,652 $191,194 $74,300 $2,251,456 $374,660 $45,797 $308,714,629 $2,322,966 $1,246,540 $214,477 $32,709,068 $3,235,434 $27,708,604 $25,442,922 $5,638,013 $52,672,161 $44,270 $973,496

2014 2015 $29,424,484 $30,833,190 $161,160 $42,317 $173,945 $268,567 $516,184 $6,771,144 $237,378 $132,686 $79,774 $189,134 $2,312,853 $3,090,711 $301,429 $549,509 $37,531 $26,746 $189,855,754 $163,227,881 $3,325,496 $1,531,519 $1,332,267 $1,699,924 $173,604 $6,042,441 $9,229,569 $3,684,956 $12,065,396 $4,712,664 $31,034,257 $27,208,958 $29,693,531 $36,036,334 $8,274,382 $6,484,591 $217,923,731 $55,012,077 $66,410 $85,007 $4,540,198 $5,253,098

Table Note: NAICS Code 311–316: Manufacturing Part 1, NAICS Code 321–327: Manufacturing Part 2, NAICS Code 331–339: Manufacturing Part 3

Even filleted fish do not make the cut. These products are classified under NAICS code 1141, “fishing,” and therefore contribute to Alaska’s largest export industry, with a whopping dollar value of $2.5 billion. As for “manufacturing, part 2,” petroleum and coal product exports were by far 2015’s largest industry subsector with a dollar value of $163 million. While there are relatively few operational value-added petroleum and coal operations in the state, the cost of goods sold accounts for the high value. In a distant second place come “non-metallic” mineral products, with an estimated dollar value of $6 million. This is a massive increase from the previous year when exports were only $173,604. Transportation equipment currently comprises the largest subsector of “manufacturing, part 3.” In 2015, $55 million worth of transportation equipment was exported out of Alaska. Although still a significant portion of the state’s international exports, this value has dropped significantly since 2014 when exports were over $218 million.

Smaller, Innovative Companies Outside of Alaska’s major manufacturing export industries, there are many smaller, innovative companies breaking into international markets. While Alaska’s “other manufacturers” offer extremely diverse products, those companies that succeed in securing sustained

international sales tend to have a few things in common. Focusing on building repeat sales from the tourism industry after visitors have returned home and creating products especially suited for places similar to Alaska tend to impact the success of international sales. Homer-based company Alaska Tough Yurts, for instance, manufactures durable canvas shelters specifically designed to weather Alaska’s harsh climate. Because of this specificity, their high quality, specialty products have broken into markets in both the Lower 48 and internationally. Another prime example can be found in Dowland-Bach, and an Anchorage based company designing and producing control systems, process modules, and stainless steel fabrication. Founded in 1975, and originally fabricating wellhead shutdown systems for the North Slope, the company’s products are now used in several foreign countries, including the remote jungle oil fields in Cambodia and harsh desert climates in the United Arab Emirates.

Improving Alaska Manufacturing Targeted efforts are being made to improve competitiveness and improve the economic impact of manufacturing in Alaska. Alaska’s designee to the NIST MEP (National Institute of Standards and Technology Manufacturing Extension Partnership) began operations in January of 2016. The Manufacturing Alaska Extension (MAKE)

Alaska Business Monthly | February 2017 www.akbizmag.com

Data Source: US Commerce Department, International Trade Administration, Trade Stats Express http://tse.export.gov/TSE/

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International Trade

Expanding Capacity In order to maximize economic impact, the MAKE program currently focuses its efforts on value-added seafood and marine products operations, though is slowly building the Partnership to expand capacity both geographically and technically by bringing on external subject matter experts. Another

www.akbizmag.com

crucial player in these efforts is the Alaska Sea Grant program, a partnership between the National Oceanic and Atmospheric Administration and the universities in our state. Dr. Paula Cullenburg, director of Alaska Sea Grant, explains that “faculty based at the Kodiak Seafood and Marine Science Center do workforce development training for seafood processors including a leadership institute, training in smoking seafood and processing roe, required HACCP [Hazard Analysis Critical Control Point] training, training for thermal processing [i.e. canning], specialty food processing, quality control plant training, and several other classes. In FY16, over 250 people from seafood companies across the state were training primarily in Kodiak as well as a few other coastal communities.” She also notes that “the Alaska Sea Grant Marine Advisory faculty in Kodiak provide technical assistance to companies, municipalities, and individuals trying to process their fish—over seventy different groups consulted with us in the last year on a wide variety of food safety and product development questions.” A wide variety of producers take advantage of the manufacturing support services available through programs such as the Alaska Sea Grant and the MAKE Partnership. Cullenberg explains, “there is a lot of interest and questions by these plants and others looking to start up an operation and/or increase value from their fisheries. … We have over 250 plants in our state that really range from very

large plants operated by large companies to small mom and pop operations and many in between. … In terms of processing salmon, vacuum packed fillets and smoked salmon seems to be the dominant product forms that are relatively new in our state, other than the traditional canned product and the frozen H&G salmon. And there is, with the growing food movement, there is a growing interest in selling fish locally.” All in all, while there are certain challenges facing manufacturing operations in Alaska, the sector is undoubtedly contributing to a gradually diversified economy. With new industries emerging, old industries remaining relevant, and a strong network of individuals and organizations dedicated to technical assistance and support, manufacturing is primed to keep a foothold in the 49th State. R Anneliese Trainer is an AmeriCorps VISTA currently serving at the University of Alaska Center for Economic Development. Her project is a microfinance initiative, and she has spent the year working to build a variety of tools for micro-entrepreneurs and researching how both existent and potential microfinance services could aid low-income areas of the state. Before moving to Alaska, Trainer worked for a tech/music startup in New York City for several years.

February 2017 | Alaska Business Monthly

INTERNATIONAL TRADE SPECIAL SECTION

Partnership is hosted by the Southwest Alaska Municipal Conference. MAKE Director Erik O’Brien shares that the program’s goal is simple: to create economic growth. Hope Broecker, MAKE’s client services manager states, “In the first year, the MAKE Program engaged Debbie Franklin, [Director of Alaska’s US Export Assistance Center under the US Department of Commerce and International Trade Administration] in our first Maker-Manufacturing Forum during Anchorage’s Start-Up Week.” Additionally, Broecker notes, “MAKE has a newly established relationship with Patrick Muelman from the Northwest Trade Adjustment Assistance Center ... services in the past include export and domestic market development, implementing lean manufacturing training, designing new marketing materials, market studies, testing new products, and operations training.” Importantly for Alaska export firms, Northwest Trade Adjustment Assistance Center funds can be matched with MAKE funds to fund nearly all of the training needs of companies that fit the required criteria.

Asia Now, Asia the Future for Alaska’s International Trade By Greg Wolf & Alex Salov

hat happens across the Pacific Ocean has always been important to Alaska’s export industries. For many decades, Alaska’s main international trade partners have been the major markets in Asia. As the late Alaska Governor Walter Hickel put it, “our political ties are with the United States, but our economic ties are with Asia.” Last year was no exception. In 2016, total exports from Alaska to Asian nations amounted to almost $2.7 billion (January–October data). This accounts for nearly 70 percent of the state’s total worldwide exports. The state’s top trading partners have remained consistent for the past ten years: China, Japan, and South Korea, in that order. Alaska has trade relations with other Asian countries, of course, but at present they are considerably smaller markets for the state’s exports and they are not typically ranked in the top ten of Alaska export markets. In the future, these now smaller markets may play a larger role as their economies continue an upward trajectory and their demand for natural resources grows accordingly.

Asia Factors There are several factors that account for Alaska’s concentration of exports to Asia. First, Alaska enjoys geographic proximity to Asia Pacific. There are well-established transportation lanes both by sea and air connecting Alaska to its Pacific Rim neighbors. Often, shipping distances from Alaska to Asian destinations are shorter and, thus, less expensive than those shipments originating from alternative suppliers elsewhere in the world. Second, Alaska is resource-rich while many Asian countries are resource-poor. In some cases, these countries may lack certain vital resources altogether or may not have them in sufficient quantities to meet their needs. Indeed, Alaska, if looked at as a nation unto itself, would rank in the in the top ten worldwide for its reserves of coal, copper, zinc, lead, gold, and silver. Third, as a part of the United States, Alaska offers political stability and minimal security risks for conducting business or making financial investments. This is an important consideration for countries relying on imports of vital natural resources. Some of Alaska’s competitors are arguably less stable. Alaska Factors In Asia, Alaska pioneered the concept, later adopted by dozens of other states, to establish trade offices in key markets to promote trade and investment. Alaska has the distinction of 66

Alaska Exports to the World January-October 2016 (USD Millions) China $1,088.87 Japan $752.07 Korea $689.34

Asia Total

$2,700.51

Canada $451.10 Germany $245.85 Other Countries (Asia) $170.23 Other Contries (Non-Asia) $633.35

World Total $4,030.81

being the first American state to open a trade office in Tokyo, Japan, having done so in 1969. Alaska was also the first American state to open a trade office in Seoul, South Korea, in 1985. Several years later, in 1989, the state established a trade presence in Taipei, Taiwan. In 2002, Alaska opened a trade office in Beijing, China. While not the first state to open such an office in China, Alaska was among the first dozen to do so, recognizing the growing importance of China as a market for Alaska natural resources and seafood.

Trading Partners Since statehood, Japan had been Alaska’s number one trading partner. That changed, however, in 2011 when China surpassed Japan to claim the top spot. Exports to the Middle Kingdom currently represent 25 to 30 percent of Alaska’s total overseas exports. The growth of these exports has been unprecedented in the state’s history. During the period between 2000 and 2011, what we have dubbed “The Dragon Decade,” Alaska trade with China increased from approximately $100 million to almost $1.5 billion annually. Reflecting the recent slowdown of China’s economy, it is anticipated that by the end of 2016 exports to China will have totalled approximately $1.3 billion and will continue to stay in this range for the near future. Japan is currently the state’s second largest export market. In 2016, exports from the

state reached $752 million (January-October data) followed by Korea, ranked third, at $689 million (January-October data). Other significant markets in Asia for Alaska include Thailand, Taiwan, Hong Kong, and Singapore. In addition to being important export markets for Alaska’s natural resources and seafood, companies from Asian countries have made significant investments in Alaska over the years in a variety of different sectors, including tourism, seafood, and mining. There are more opportunities for these win-win partnerships, especially in the areas of an LNG (liquefied natural gas) project, infrastructure projects, and major tourism resort development, among others. As Alaska looks to the future, building upon a strong foundation of mutually beneficial commercial ties with its Pacific Rim neighbors and fostering its “old friend” status with the leading economies in the region will help sustain and grow a more diversified and resilient Alaska economy. R Greg Wolf has been the Executive Director of the World Trade Center in 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.

Alaska Business Monthly | February 2017 www.akbizmag.com

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

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International Trade

Total U.S. Exports (Origin of Movement) from Alaska Top 25 6-digit HS Commodities Based on 2015 Dollar Value

Source: United States Census Bureau, Foreign Trade, Origin of Movement Series

U.S. Exports by Origin State (Origin of Movement Series). Values in millions of dollars. Percent Change is from 2014 - 2015

Rank Description Total Alaska Exports and % Share of U.S. Total Total, Top 25 Commodities and % Share of State Total 1 Zinc Ores And Concentrates 2 Fish Meat, Frozen, Nesoi 3 Lead Ores And Concentrates 4 Alaska Pollock Fillets, Frozen 5 Pacific Salmon, Frozen, Nesoi 6 Cod, Frozen 7 Fish Livers And Roes, Frozen 8 Fish, Frozen, Nesoi 9 Natural Gas, Liquefied 10 Petrol Oil Bitum Mineral (Nt Crud) Etc Nt Bio 11 Precious Metal Ores & Concentrates, Except Si 12 Flat Fish Nesoi Except Fillets, Livers, Roes 13 Sockeye Salmon, Frozen 14 Crabs, Incuding In Shell, Frozen 15 Flour Meal & Pellet Of Fish Crustaceans Etc I 16 Copper Ores And Concentrates 17 Alaska Pollock, Frozen 18 Coniferous Wood In The Rough, Not Treated 19 Crude Oil From Petroleum And Bituminous Miner 20 Civilian Aircraft, Engines And Parts 21 Herrings, Frozen 22 Pacific Salmon, Fresh Or Chilled 23 Halibut/Greenland Turbot Ex Fillet, Lvr, Roe 24 Wrist Watches, Battery, W Other Disply Base 25 Alaska Pollock, Frozen, Except Fillets

2012 Value $4,543.42 $4,136.97 $795.97 $369.28 $428.07 $206.80 $147.04 $249.68 $214.54 $377.88 $144.92 $177.96 $107.99 $85.10 $89.10 $125.77 $43.97 $169.49 $105.49 $150.96 $$72.54 $22.93 $19.93 $18.94 $$12.63

2013 Value $4,527.82 $4,252.62 $813.80 $341.21 $389.33 $283.59 $257.67 $231.44 $245.68 $251.23 $$285.03 $140.29 $161.41 $60.57 $99.25 $77.18 $150.20 $111.68 $162.55 $50.44 $46.16 $45.17 $21.15 $18.25 $$9.31

2014 Value $5,110.66 $4,744.43 $1,067.97 $347.22 $367.49 $319.01 $208.27 $252.61 $224.69 $269.84 $216.98 $176.15 $139.94 $163.67 $93.85 $97.34 $99.96 $186.47 $131.54 $122.53 $73.90 $103.81 $38.39 $19.09 $11.68 $0.93 $11.11

2015 2012 % 2013 % 2014 % 2015 % % Change, Value Share Share Share Share 2014 - 2015 $4,619.44 0.294 0.287 0.315 0.307 -9.61 $4,392.60 91.05 93.92 92.83 95.09 -7.42 $897.60 17.52 17.97 20.90 19.43 -15.95 $374.36 8.13 7.54 6.79 8.10 7.82 $317.09 9.42 8.60 7.19 6.86 -13.71 $298.85 4.55 6.26 6.24 6.47 -6.32 $281.44 3.24 5.69 4.08 6.09 35.13 $267.49 5.50 5.11 4.94 5.79 5.89 $255.61 4.72 5.43 4.40 5.53 13.76 $246.01 8.32 5.55 5.28 5.33 -8.83 $187.99 3.19 0.00 4.25 4.07 -13.36 $162.51 3.92 6.30 3.45 3.52 -7.74 $154.12 2.38 3.10 2.74 3.34 10.14 $139.07 1.87 3.56 3.20 3.01 -15.03 $134.94 1.96 1.34 1.84 2.92 43.78 $101.53 2.77 2.19 1.90 2.20 4.3 $100.30 0.97 1.70 1.96 2.17 0.34 $98.97 3.73 3.32 3.65 2.14 -46.92 $98.67 2.32 2.47 2.57 2.14 -24.98 $89.92 3.32 3.59 2.40 1.95 -26.61 $58.18 0.00 1.11 1.45 1.26 -21.26 $46.81 1.60 1.02 2.03 1.01 -54.91 $24.43 0.50 1.00 0.75 0.53 -36.37 $17.07 0.44 0.47 0.37 0.37 -10.61 $14.48 0.42 0.40 0.23 0.31 23.96 $12.91 0.00 0.00 0.02 0.28 1,281.53 $12.24 0.28 0.21 0.22 0.27 10.18 ‘(Z)’ indicates a percent change greater than 500.

Top 25 Countries Based on 2015 Dollar Value

Source: United States Census Bureau, Foreign Trade, Origin of Movement Series

U.S. Exports by Origin State (Origin of Movement Series). Values in millions of dollars. Percent Change is from 2014 - 2015

Rank Country Total Alaska Exports and % Share of U.S. Total Total, Top 25 Countries and % Share of State Total 1 China 2 Japan 3 South Korea 4 Canada 5 Germany 6 Spain 7 Netherlands 8 Malaysia 9 Taiwan 10 Australia 11 Finland 12 Italy 13 Belgium 14 Thailand 15 France 16 United Kingdom 17 Singapore 18 Lithuania 19 Portugal 20 Denmark 21 Philippines 22 Hong Kong 23 Indonesia 24 Mexico 25 United Arab Emirates

2012 Value $4,543.42 $4,360.20 $1,353.51 $780.39 $663.18 $466.71 $274.47 $151.38 $121.29 $4.15 $17.09 $107.89 $44.85 $13.69 $59.13 $11.58 $36.84 $24.20 $123.99 $13.44 $32.25 $13.38 $12.40 $13.08 $10.90 $8.61 $1.81

2013 2014 2015 2012 % 2013 % 2014 % 2015 % % Change, Value Value Value Share Share Share Share 2014 - 2015 $4,527.82 $5,110.66 $4,619.44 0.29 0.29 0.32 0.31 -9.61 $4,420.01 $4,922.17 $4,573.29 95.97 97.62 96.31 99.00 -7.09 $1,236.23 $1,466.86 $1,203.20 29.79 27.30 28.70 26.05 -17.97 $688.03 $1,014.54 $964.12 17.18 15.20 19.85 20.87 -4.97 $705.25 $672.74 $733.02 14.60 15.58 13.16 15.87 8.96 $604.30 $517.13 $419.21 10.27 13.35 10.12 9.07 -18.94 $289.08 $322.85 $279.16 6.04 6.38 6.32 6.04 -13.53 $141.43 $182.49 $150.36 3.33 3.12 3.57 3.25 -17.61 $111.85 $104.26 $119.05 2.67 2.47 2.04 2.58 14.19 $2.48 $2.18 $105.95 0.09 0.05 0.04 2.29 4,756.24 $16.43 $15.31 $104.46 0.38 0.36 0.30 2.26 582.29 $62.05 $111.16 $85.80 2.37 1.37 2.18 1.86 -22.82 $42.57 $64.64 $56.80 0.99 0.94 1.26 1.23 -12.13 $8.37 $69.01 $56.65 0.30 0.18 1.35 1.23 -17.91 $64.86 $63.44 $49.36 1.30 1.43 1.24 1.07 -22.19 $41.13 $41.46 $48.79 0.25 0.91 0.81 1.06 17.69 $49.64 $50.84 $46.31 0.81 1.10 0.99 1.00 -8.92 $27.96 $40.34 $40.68 0.53 0.62 0.79 0.88 0.83 $217.05 $100.01 $21.30 2.73 4.79 1.96 0.46 -78.7 $32.83 $15.34 $14.15 0.30 0.73 0.30 0.31 -7.71 $14.67 $14.86 $13.75 0.71 0.32 0.29 0.30 -7.44 $17.32 $14.04 $13.68 0.29 0.38 0.27 0.30 -2.52 $5.35 $0.59 $12.46 0.27 0.12 0.01 0.27 2,027.11 $23.91 $17.99 $11.29 0.29 0.53 0.35 0.24 -37.26 $9.22 $9.65 $8.38 0.24 0.20 0.19 0.18 -13.19 $7.38 $9.75 $7.70 0.19 0.16 0.19 0.17 -21 $0.62 $0.70 $7.68 0.04 0.01 0.01 0.17 1,002.19 ‘(Z)’ indicates a percent change greater than 500.

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February 2017 | Alaska Business Monthly

INTERNATIONAL TRADE SPECIAL SECTION

Alaska Exports

TRANSPORTATION

Alaska Airlines is the dominant airline using the South Terminal at Ted Stevens Anchorage International Airport, most recently garnering 56.26 percent of the airportâ&#x20AC;&#x2122;s passenger traffic. ÂŠ Rob Stapleton

Alaska Business Monthly | February 2017 www.akbizmag.com

International Connections: ANC Air Freight Gateway Opening the door to future business for Alaska Story and Photos by Rob Stapleton

t’s not an unusual day to see seventy or more cargo aircraft transiting Ted Stevens Anchorage International Airport destined for international hubs. Despite Alaska’s waning economy Ted Stevens Anchorage International Airport (ANC) is a predictable economic engine and a solid International transportation player with a future. Recent conversations with Airport Manager John Parrott point to the possibility of attracting other types of value-added business to the airport’s equation. This would inevitably include aviation related businesses adding additional services such as aviation maintenance and repair facilities. Already attracting more than 15,577 airport-related jobs means that 1 in every 10 jobs in Anchorage is somehow related to ANC, proving that the engine is revving.

A FedEx cargo freighter landing at Ted Stevens Anchorage International Airport.

Money-Saving Stop-Over Internationally known for its location some 9.5 hours from 90 percent of industrialized centers in the world, ANC offers a fuel “tech” stop allowing aircraft to trade fuel weight for precious paying cargo. Airport officials are proud of the ANC-based service companies

that “turn” aircraft routinely in under twohours. “This allows each aircraft a quick turnaround near or at its halfway point to distant destinations,” says airport manager John Parrott. “This saves carriers between $100,000 and $125,000 dollars per flight.”

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Sales@Alaska-Logistics.com February 2017 | Alaska Business Monthly

FedEx is the major carrier at Anchorage by tonnage for US carriers for imports and exports. © Rob Stapleton

Some call it a pit stop for fuel at what was once the “Air Crossroad of the World,” now referred to as the “Air Cargo Crossroad of the World.” Airport officials recently coined the term “AeroNexus” to describe ANC’s unique position in the air cargo industry. The advantage provided by Alaska’s central location will continue to be an essential locus of connectivity in air cargo. ANC boasts of five hundred wide-body cargo aircraft flights a week which requires 70

timing and efficient turnaround times between landings and takeoffs. Other international airports use time slots for takeoffs and landings, creating a need for time-sensitive tech stops here in Alaska. ANC has no slot (scheduled takeoff and landing time) restrictions or curfews and remains operational twenty-four hours a day— snow or no snow it has never been closed. ANC is a five-time winner of the Balchen Post Award for Large Airport Snow Removal Programs.

Boasting thirty-seven thousand wide and narrow body cargo landings and more than fifty thousand passenger aircraft landings yearly requires teamwork and timing. Serving forty-nine cargo destinations from Anchorage by twenty international carriers and fifteen domestic airlines keeps ANC’s three runways busy year-round. Get ready for more carriers that will add to the mix for the airport, fuelers, and ground handlers in 2017.

Alaska Business Monthly | February 2017 www.akbizmag.com

“We have two more cargo carriers coming in the spring,” according to Trudy Wassel, divisions operations manager at ANC. “We are getting cargo carriers from Vietnam and another from Azerbaijan who will be using the airport as a tech-stop. We also have contact from an Ethiopian cargo carrier planning on making Anchorage its stop on the way to the Lower 48.” While there are no major capital improvements projects ongoing at the airport currently, ANC recently added additional www.akbizmag.com

hardstand parking areas south of the FedEx facility along Runway 15/33. Additional centerline to wingtip widening space along the western-most taxiway Y&K that parallels the North/South Runway to the west has been completed. But Parrott stresses that, just like at every growing airport, there are always new possibilities on the horizon. “With relationships that we continue to keep, and have added, we are always looking at infrastructure or value-

added airport improvements for the future,” says Parrott.

FedEx and UPS at ANC Citing location as the airport’s main attraction for cargo carriers brought FedEx and UPS to the airport in the late 1980s. Both UPS and FedEx have sorting facilities and are the major carriers at Anchorage by tonnage for US carriers for imports and exports of freight. Both predict larger growth in the Pacific Rim as trade with China

February 2017 | Alaska Business Monthly

increases and traffic increases among other Far East countries as they thrive. FedEx Express is the largest of the cargo facilities at ANC and can sort as many as 13,400 packages per hour. UPSâ&#x20AC;&#x2122;s hub handles parcels at a rate of 5,000 per hour.

Larger Cargo Aircraft: Fewer Airport Operations, Faster Fueling While the number of landings is down from previous years, the airport holds the fourth spot for cargo throughput and is the second largest

US airport by landed cargo weight. But there is no need for alarm says Parrott, who is optimistic about increased cargo traffic in the coming years. â&#x20AC;&#x153;The reason for fewer landings is that the cargo carriers are flying much bigger air-

Alaska Business Monthly | February 2017 www.akbizmag.com

ANC’s International Carriers

Korean Air, FedEx, and UPS freighters lined up on the tarmac at Ted Stevens Anchorage International Airport. © Rob Stapleton

craft,” Parrott explains. “The Boeing 747-800 F and the 777 cargo freighters are capable of carrying 308,000 pounds [140 tons] and 224,900 pounds [102 tons] correspondingly.” By comparison, the older Boeing 747-400F cargo freighters had a much smaller useful load of 274,100 pounds, or 124 tons. The newer generation of cargo aircraft is more fuel efficient using fan jet engines, winglets, and carbon fiber construction. For what the airport lacks in terms of throughput weight it makes up for in fuel flowage. Pumping 1.7 million gallons daily into wide-body jets makes the Anchorage Fueling and Service Company a profitable venture for its nineteen air carrier owners, as well as for the privately-owned businesses fueling and offering ground support that service the thirty-one cargo carriers at ANC. Anchorage Fueling and Service Company has nine 4 million gallon fuel tanks in a tank farm located west of Runway 15/33 near the south end of Runway 33. Unlike other airports that fuel from tanker trucks, ANC has an underground pipe system that runs under the ramp. Once the aircraft is parked at the hardstands a pump truck connects to the underground pipeline and to the aircraft, drawing the jet fuel into the aircraft’s fuel tank by pumping it out of the pipeline, making for faster fuel delivery.

Special USDOT Exemption for Transfer Rights ANC also offers something special for US domestic and international cargo carriers. Called the Expanded Air Services at Alaska International Airports, the US Department of Transportation (USDOT) allows ANC an exemption from the Jones Act allowing trans-loading transfers of cargo from www.akbizmag.com

 Air Canada—(Seasonal) South Terminal Passenger Operations  Air China*—Cargo Operations  Asiana Airlines—Cargo Operations  Cargolux Airlines Int’l SA—Cargo Operations  Cathay Pacific Airways*—Cargo Operations  China Airlines—Cargo Operations  China Cargo Airlines LTD.—Cargo Operations  China Southern Airlines—Cargo Operations  Condor—(Seasonal) North & South Terminal Passenger Charter Operations  Eva Air—Cargo Operations  Great Wall Airlines—Cargo Operations  Icelandair—North & South Terminal Passenger Operations  Jade Cargo—Cargo Operations  Japan Air Charter—Charter Operations  Japan Airlines—North Terminal Passenger Charter Operations  Korean Air—North Terminal Passenger & Cargo Operations  Nippon Cargo Airlines—Cargo Operations  Shanghai Airlines Cargo Int’l—Cargo Operations  Singapore Airlines—Cargo Operations  Yangtze River Express—Cargo Operations  Yakutia Airlines—(Seasonal) North Terminal Passenger Operations

US and foreign carriers. “This allows two carriers to meet in Anchorage from different directions, transfer cargo destined for a location in the US from a foreign carrier to the domestic carrier, who can transfer its outbound cargo from the US loaded to a foreign carrier,” explains Trudy Wassel, Air Service Development Director. “They can then proceed to their destinations.” Wassel spends much of her time traveling to air cargo conferences worldwide explaining the exemption. “It was slow to get it going but it’s happening now,” says Wassel. Using this special exemption 747s can be seen parked wing tip to wing tip at the Lynx Cargo Port on the North Ramp at the airport several times weekly. Trans-loading between Polar Air Cargo, Atlas/DHL, Kalitta Air, and Southern Air by Swissport International, Pegasus Aviation Services, and FEAM ground crews has tugs and igloos swapping cargo from one jet to the other. The USDOT exemption championed by the late Senator Ted Stevens while in office is not widely believed or fully understood by international carriers who doubt that they would be exempt from charges of “cabotage” for enplaning another aircraft’s cargo. Wassel and the staff at ANC have held three Anchorage Air Cargo Summits to educate and attract carriers to use the exemption at ANC. Consultants and officials from USDOT, the State of Alaska, freight forwarders, and officials from US Customs and the Transportation Security Administration have all made presentations to explain and to attract use of the exemption.

but share common goals of meeting the expectations of the system. Created in 1961, the Alaska International Airport System has the two airports using the International Airport Revenue Fund that shares expenses, is financially self-sufficient, and uses no state general funds. The system is managed by the Alaska Department of Transportation & Public Facilities and sets system rates, fees, and policies for the signatory airlines by leases and agreements. For concessions ANC is ranked third in the United States for dollars spent per enplaned passenger. Additionally, the airport ranked Number 8 in the United States in the JD Power customer satisfaction survey. With 361 employees who work around the clock, it is obvious that this airport is well-liked and maintained by its employees. To that point, the Ted Stevens Anchorage International Police and Fire Department was awarded a special recognition from the Anchorage Fire Department in November 2016 for quickly saving the life of a passenger in the South Terminal who was having a heart attack. “We are blessed that in every department at the airport we have an infrastructure that is well maintained—the terminal, the field, police and fire, leasing—everyone is moving toward the common goal of making our airport a pleasant and safe experience,” Parrott reflects. R

The Alaska International Airport System Both the Anchorage and Fairbanks airports are included in the Alaska International Airport System. The airports have separate managers

Rob Stapleton is an Anchorage-based journalist and professional photographer. He owns Alaska Foto.

*Transit Only

Source: Alaska DOT&PF

February 2017 | Alaska Business Monthly

FISHERIES

Alaska’s Commercial Seafood

Street lined with crab pots at Unalaska. In 2015, Dutch Harbor was the top US port for commercial fishery landings and the second leading port in value.

Making smiles at dinner tables around the world By Tom Anderson

hen you think of Alaska and its robust industries, commercial fishing and seafood marketing are synonymous with our economic culture. The size and scope of commercial fishing interests in the Last Frontier are truly eyeopening compared to other states. Alaska again produced more commercial seafood than all other states combined in 2015, accounting for 62 percent of the total US harvest volume. Alaska fishermen harvested 6 billion pounds of seafood in 2015, which is sold into more than one hundred countries around the world. Further, responsible fishery management is the fundamental goal of state and federal regulators and Alaska’s commitment to sustainability is regarded as the gold standard. According to the McDowell Group, in its October 25, 2016 “Alaska Seafood Industry Update” prepared for the Alaska Seafood Marketing Institute (ASMI), seafood’s first wholesale value of $4.3 billion placed second only to oil flowing through the Trans Alaska Pipeline System in 2015 among basic industry sector production value. Seafood is the state’s largest foreign export, totaling $3.3 billion in 2015. 74

ASMI is a marketing organization that maintains a public-private partnership with the State of Alaska to foster economic development of seafood. Led by Alexa Tonkovich, the nonprofit is an invaluable resource of print and online species, regional, and culinary information. ASMI is a loyal messenger to the world that Alaska is open for business, with plenty of fresh, quality seafood to sell. The organization has a global reach, with staff or contractors in the United States, Europe, Japan, China, and Brazil. A quick glance at the advocacy’s website and the answer to why one should choose to purchase and consume Alaska seafood is obvious. ASMI reports Alaska’s ocean pride stems from the healthy, wild, versatile family of sea life. Sustainability, nutrition, and environmental responsibility also play roles in Alaska’s symphony of seafood. The benefits from commercial fishing are not only employment and revenue. The science, ecosystems, and scrumptious culinary rewards are inextricably linked to the affinity of those around the world who savor Alaska seafood. The size and comprehensiveness of seafood in the state tell it all. Alaska’s seafood industry routinely produces harvests over 5 billion pounds and it has a diverse portfolio of spe-

cies; twenty Alaska species had a first wholesale value greater than $10 million in 2015 and ten greater than $90 million. Other US states would be elated if blessed with even one or two such species. Indeed, the industry burgeons because of stellar management, abundant natural resources, and continued investment.

The Mighty Crab— Popular and Abundant Southeast Kelli Wood is an assistant crab biologist for Southeast Alaska with ADF&G. She explains that the US federal government, through the North Pacific Fishery Management Council and the State of Alaska, jointly manage the Bering Sea and Aleutian Islands crab stocks, whereas the State of Alaska solely manages the Gulf of Alaska crab stocks. Wood and her fellow biologists manage four main crab species in Southeast: Dungeness crab, red king crab, golden king crab, and tanner crab (bairdi). Dungeness Dungeness crab reach maturity within three years. Large males can exceed 10 inches in shell width, but the average is 6.5 inches in carapace

Alaska Business Monthly | February 2017 www.akbizmag.com

A commercial crab fisherman works on the deck of the F/V Erla-N in bad weather during the opilio crab season in the Bering Sea in Southwest Alaska.

(shoulder width) and two to three pounds in weight. The estimated life span is from eight to thirteen years. AFD&G has found uniquely that “although Dungeness crabs are annual spawners throughout most of their range, females produce eggs biennially in Southeast Alaska.” 2016 season preliminary data comes from crabbing schedules of June 15th to August 15, October 1 to November 30, and October 1 into February 29, 2017. Through December 15, 2016, the harvest was 2,351,793 pounds and the number of permits participating in the fishery at 208. The fishery value based on mid-December 2016 was at $7,149,833.69 and $3.04 per pound.

Golden King Crab AFD&G states there are approximately forty known species of king crabs. In Alaska, there are only three commercially harvested species: the red king crab, the blue king crab, and the golden king crab. The golden is smaller in size, at only five to eight pounds. “Golden king crab are caught in the waters surrounding the Aleutian Islands. Significant populations occur in pockets off the Pribilof and Shumagin Islands, Shelikof Strait, Prince William Sound, and at least as far south as lower Chatham Strait in Southeast Alaska, where an annual commercial fishery exists,” notes AFD&G. The 2015/2016 Southeast season preliminary data comes from a small tidal range opener in February 2016, but was closed prematurely by emergency order which is dependent on if the www.akbizmag.com

harvest reaches the Guideline Harvest Level or if there is a concern for stock health. Wood explains that there are seven even separate management areas in Southeast, each with different guideline harvest levels. The total harvest was 79,923 pounds, and the number of permits participating in the fishery was forty-two. The fishery value as of mid-December 2016 was $1,570,403.25 and $12.10 per pound.

Tanner Crab (Bairdi and Opilio) AFD&G states the tanner crab is one of the most specialized and biologically sophisticated of the crustaceans. The males of commercial size usually live between seven to eleven years of age, weighing from one to two pounds for the opilio and two to four pounds for bairdi crab. Tanner crab are also labeled under the name “snow crab.” The Alaska tanner crab fishery began in 1961 and remains one of the most popular and prominent in commercial fishing. The 2015/2016 Southeast season started concurrently with that for golden king crab. The season starts on the smallest tidal range from February 10 to 17 and opened February 17, 2016, this last season. Wood notes AFD&G has a tanner crab harvest strategy in place that is based on estimated mature male biomass from the fall stock assessment surveys and the number of pots registered for the fishery. Wood states, “Typically the fishery is open about five to seven days in the core areas and ten to twelve days in the

non-core areas but can vary by one or two days either direction.” Last season’s harvest was 1,306,416 pounds. The number of permits that participated in the fishery totaled seventy-four (fourteen ring net permits and sixty pot permits). The fishery value was $2,919,670.50, at $2.24 per pound.

Red King Crab This Southeast fishery has been closed because of stock concerns since its last commercial fishery in 2011. This species is the heavy-weight, with females weighing as much as 10.5 pounds and males as large as 24 pounds with a leg span of five feet, per AFD&G. The Tanner’s lifespan ranges from twenty to thirty years. Bering Sea/Aleutian Islands Miranda Westphal is the area management biologist over shellfish and groundfish in the BSAI region, headquartered in Dutch Harbor. This harvest region is the kingpin for crab intake and sales, compared to other regions like Southeast, and the numbers support its top tier status. Just like in Southeast Alaska, BSAI crabmeat value isn’t just measured in price, but also in demand throughout the nation and worldwide hospitality market. Even the shells, made of calcium carbonate, are used for garden supplements and fertilizer commercially and are often returned to ocean to renew the ecosystem. The list of culinary applications and interested buyers is never ending.

February 2017 | Alaska Business Monthly

Commercial purse seine fishermen hauling in a full net of pink and chum salmon in Chatham Strait near Admiralty Island in Southeast Alaska.

The largest crab fisheries in this region are as follows:

Bristol Bay Red King Crab The Bristol Bay red king crab fishery opened October 15, 2016 and ended January 15, 2017. The harvest number for 2015-2016 was 9,969,964 pounds and a total of 1,497,783 crabs. The price per pound was $7.03. Aleutian Islands Golden King Crab The golden king crab had two fisheries, split between the Eastern Aleutian Island and Western Aleutian Island regions. For the Eastern, the season goes from August 1 to April 30. In 2015-2016 the total harvest was 3,504,649 pounds and 717,864 crab. The price per pound was $2.52. In the Western region, the season is the same and the 2015-2016 harvest was 2,511,699 pounds, 615,355 crab, and a price per pound of $3.34. Bering Sea Tanner King Crab Like the golden king, the tanner crab, or “bairdi,” also has two fisheries in the Eastern and Western Bering Sea. In the Eastern, the 76

season runs from October 15 to March 31. In 2015-2016 the total harvest was 11,263,562 pounds and 6,000,262 crab, at a price per pound of $2.17. The Western region, with the same season dates, yielded a harvest of 8,378,816 pounds, 4,856,156 crab, and price per pound of $2.19.

Bering Sea Snow Crab The Bering Sea snow crab, or “opilio,” has a season from October 15 to May 31. In 20152016 a total of 40,611,446 pounds of crab were harvested, totaling 29,614,529 crab at a price of $2 per pound. The opilio was by far the biggest and most comprehensive crab harvest in the state. The Mighty Pacific Salmon: Alaska’s Signature Species Everyone has a preference when it comes to seafood. Considering the size and magnitude of the waters surrounding Alaska, the choices are abundant in the deep blue sea, from fish to crustaceans. If it came to a popularity contest or at least what Alaska is notable for on restaurant

menus, backyard barbecues, and as a target for angler tourism, salmon is the star of the show. The Alaska Department of Fish & Game (ADF&G) indicates there are five managed Pacific Ocean salmon species that spawn in Alaska waters: king (chinook), pink, keta (chum), silver (coho), and red (sockeye). Three types of commercial fishing vessels catch the salmon: Purse seiners, gillnetters, and trollers.

King (Chinook) Salmon King Salmon is the largest of the salmon species, and most coveted by consumers for its rich flavor. Kings are anadromous, which means they migrate up rivers to spawn, or release eggs. The life cycle begins through hatching in fresh water, rearing in mainchannel river areas, growing into smolt (another word for young salmon) over their first year of life, and then migrating to the ocean where they will feed and grow over a one to five year period. The female king salmon deposits between three thousand to fourteen thousand eggs in the gravel basin of its freshwater birthplace.

Alaska Business Monthly | February 2017 www.akbizmag.com

ADF&G compiles annual data on Alaska commercial salmon harvests and ex-vessel value, defined as “the post-season adjusted price per pound for the first purchase of commercial harvest” which is “established by determining the average price for an individual species, harvested by a specific gear, in a specific area.” The delivery condition will also be part of the price evaluation for any salmon. Preliminary 2016 statistics for Alaska king salmon’s average weight, price per pound, number of fish caught, and total value is dependent on where the fish are caught. ADF&G separates its findings into eleven Alaskan regions: Southeast, Prince William Sound, Cook Inlet, Bristol Bay Kodiak, Chignik, Alaska Peninsula and Aleutian Islands, Kuskokwim, Yukon, Norton Sound, and Kotzebue. The main yield came in Southeast, representing 90 percent of Alaska’s king intake of 3,132,000 pounds and an estimated value of almost $16.4 million compared to the total statewide ex-vessel value of $18.8 million. Also evident is a unique differential in the price per pound based on region for the king salmon. Whereas Prince William Sound showed an average price of $6.06 per pound and Southeast at $5.23, Cook Inlet only yielded $2.52 and the lowest region was Bristol Bay at just $0.67 per pound. King salmon prices vary widely due to differences in harvest gear, market access, flesh quality (related to fish maturity at the time of harvest), and other factors.

Pink Salmon On the opposite side of the size spectrum, pinks are the smallest of all Pacific salmon species, typically weighing between three to five pounds and measuring only twenty to twenty-five inches long. Despite their diminutive size, pinks often comprise the largest commercial harvest volume of any Alaska salmon species. The pink swims from its freshwater birthplace to the ocean immediately, and it has the shortest life cycle of the Pacific salmon at just two years. The commercial fishing fleet has about eighteen months to catch the pink salmon before it returns to its water of origin, between June and mid-October, to spawn and die. ADF&G reports pinks were also primarily caught in Southeast Alaska in 2016, with a yield of 78.1 million pounds and an ex-vessel value of approximately $18 million. Prince William Sound came in second with 51.5 million pounds and an estimated value of $14.3 million. The highest price per pound came from Prince William Sound at $0.28 and the lowest on the Alaska Peninsula and Aleutians at $0.14. The number of pinks commercially caught in state was just under 39.4 million fish, totaling over 160.2 million pounds and valued at just under $38 million. Pink harvests were among the lowest witnessed in the past thirty-five years in 2016; however, 2013 and 2015 produced the largest harvests. Pink salmon harvests tend to be much higher in odd years. Chum Salmon Chum, or “keta,” salmon are the most widely distributed of all Pacific salmon, scarce only north of Kotzebue Sound. While urban popuwww.akbizmag.com

Bristol Bay gillnetters wait to deliver their fish to tenders in the Ugashik fishing district.

lations may not prefer the taste, ADF&G notes “in Arctic, Northwestern, and Interior Alaska, chum salmon are highly prized as a traditional source of dried winter food. Since the 1980s, commercial chum salmon harvests in Alaska have more than doubled as a result of the Alaska hatchery program and increased foreign sales.” This species spends a few weeks in fresh water after hatching, stays near the shoreline during maturation, and then heads for the open ocean. The Southeast region maintains bragging rights with the highest numbers at 69.9 million pounds harvest based on preliminary 2016 ADF&G figures. The value for the region’s chum bounty was just under $42 million, with the average price per pound $0.60. Prince William Sound saw 23.7 million pounds, $0.57 per pound and a value of $13.6 million. For the Yukon Region, chum is the largest harvest of all salmon caught, at 6.5 million pounds, $0.63 per pound and a value of just over $4 million. Chum have the most valuable roe of any Alaska salmon species, and roe comprises a larger share of the fish’s value than any other salmon species.

Silver Salmon At eight to twelve pounds in weight and twenty-four to thirty-one inches in length, the silver, or “coho,” salmon is the Alaska sports fisherman’s dream, sure to put up a fight on the reel and plentiful in accessible rivers across the state. Conversely, on the commercial side, the species generates the second lowest yield and total value after the king salmon. However, coho are a critical “money fish” for more than one thousand commercial troll fishermen. From their hatching stream source to ponds and lakes over the winter months, juvenile silvers often migrate back and forth in these freshwater bodies until their final trek as smolt into the ocean. Mature males (jacks) return to fresh water from the ocean within six to eighteen months. ADF&G statistics reveal a similar pattern in regional yield for 2016. Southeast, Prince William Sound, and Yukon regions are at the top. Southeast took in 15.9 million pounds at $1.41 per pound, at a preliminary ex-vessel

value of $22.5 million. Prince William Sound scored $1.45 per pound but only 4.3 million pounds and $6.2 million in value. The Yukon saw $0.92 per pound, 1.3 million pounds, and $1.16 million in value.

Red Salmon The most savored and signature salmon in Alaska, coveted by commercial fishermen and global consumers alike, is the regal red, or “sockeye,” salmon. From smoked to kippered to lox, the sockeye is a favorite among seafood lovers and a treasure trove for the Alaska commercial fishing industry. Sockeyes are on the smaller size of the scale, measuring eighteen to thirty-one inches and weighing from four to fifteen pounds (although commercially harvested sockeye average five to six pounds). Sockeye spend as many as four years in fresh water and one to three in the ocean. Spawning primarily occurs in rivers and streams, with as many as five thousand eggs deposited. The orca’s share of sockeye salmon harvesting occurs in the pristine Bristol Bay region. In fact, the ADF&G October 2016 totals for salmon species, weight, cost per pound, and ex-vessel value reveal that at $251.5 million from Bristol Bay alone, juxtaposed to the $406.4 million statewide salmon total, this celebrity species represents nearly 62 percent of the Alaska commercial salmon fishery income over the last year. Dwarfing all other regions combined, Bristol Bay harvested 37.3 million salmon at 201.5 million pounds and a $153.2 million value. The Alaska Peninsula and Aleutian region came in second at 33.9 million salmon and 6 million pounds. The Cook Inlet yielded 2.6 million salmon at 15 million pounds. In fourth for yield was Kodiak at just over 2 million salmon at 10.7 million pounds. The star of the show for price-point remains Copper River Reds in Prince William Sound, at $2.24 per pound. Because of the multitude of available sockeye, Bristol Bay’s price was $0.76.Prince William Sound ranked fifth in sockeye harvest 1.9 million salmon and 10.3 million pounds.

February 2017 | Alaska Business Monthly

Halibut anyone? And don’t forget Black Cod! If there was ever an appropriate application of the adage “Don’t judge a book [or fish] by its cover,” the awkward, eyes-on-the-same-side of its body, seabed dwelling halibut comes to mind. To the same degree salmon is salivated over, and possibly more sought after because of its remarkable taste and multitude of recipe options, the mighty halibut is a prized fish to be sure. From delectable “chicken” halibut weighing less than 30 pounds to the “barn doors” that surpass 150 pounds, this white meat fish is one of the highest priced Alaska seafood species. The National Oceanic and Atmospheric Administration (NOAA) Fisheries Service in Juneau oversees the restricted access management of halibut and sablefish Individual Fishing Quota (IFQ) allocations and landings. Halibut fishing regions are as follows: Southeast (2C), the Gulf of Alaska (3A/B), Bering Sea and Aleutian Islands (4 A/B/C/D and the Community Development Quota). Black cod (also known as sablefish) areas are categorized by Southeast (SE), Gulf of Alaska (WY, WG, and CG), and Bering Sea and Aleutian Islands (BS/AI). Halibut ADF&G describes the Pacific halibut as the largest of the flatfish. They swim sideways, with one side down and one side up. All halibut are right-eyed and eyes are on the upper side of their body. Halibut spawn deep in the ocean, from 300 to 1,500 feet, and live at depths of 100 feet to 3,000 feet. The amount of eggs released range from several thousand to millions of eggs, depending on the size of the female. Males mature within eight years, while females take twelve years. Some halibut have grown longer than eight feet and heavier than five hundred pounds. The halibut lifespan is to the ripe old age of fifty-five years. The Gulf of Alaska gets the bragging rights for highest catch per pounds in the state. In the Area 3A (the central Gulf Coast’s fishing meccas including Valdez, Cordova, Whittier, Kenai, Homer, Whittier, Seward, and Kodiak), 2016’s vessel landings totaled 1,472 offloads at 7.26 million pounds caught. When a longliner catches the halibut, its haul delivered, whether one halibut or hundreds, is the “offload.” NOAA reports halibut weights in net (headed and gutted) pounds. The second largest landing and catch amount come from the Southeast, in Area 2C, with 1,309 offloads and 3.81 million pounds harvested. A distant third is Area 3B, also in the Gulf of Alaska but further west in the Sand Point and King Cove vicinity, with 372 vessel offloads and 2.63 million pounds of halibut caught. Kodiak also receives deliveries from 3B harvests. Sablefish Sablefish are a groundfish species also known as black cod. The fish matures from five to seven years old, laying 110 eggs per gram of body weight, with the average female laying approximately 407,000 eggs, spawning in water between one thousand and two thousand feet deep. The sablefish is similar to the halibut in lifespan, often surpassing forty years 78

Deckhands attempting to bait halibut longline hooks with pink salmon on a stormy day near King Cove off the Alaska Peninsula in Southwest Alaska. © Scott Dickerson / AlaskaStock.com

of life. AFD&G states, “Federally managed sablefish found in the Bering Sea and in the Gulf of Alaska are considered one population with migration occurring between these regions. In the Gulf of Alaska, small sablefish move westward and large sablefish move eastward.” Sablefish are managed by both state and federal agencies in Alaska. The densest location for catch-percentage for Sablefish is comparable to halibut, in the Central Gulf vicinity. This is one of the reasons communities like Homer, Kodiak, Seward, and Cordova thrive in halibut/sablefish sport and commercial fishing. There were 652 vessel offloads and 6.95 million pounds of the fish caught in 2016 in this area. Close behind was Southeast Alaska at 531 vessel offloads and 5.01 million pounds caught. A distant third is in the WY (Western Yakutat) Area where 222 offloads occurred and 2.8 million pounds were caught.

Herring and Pollock—Small but Never Forgotten Herring Pacific Herring are mature between three and four years of age. Spawning occurs in the

spring in both intertidal and subtidal zones, with males releasing milt and females eggs. On average, the female lays twenty thousand eggs per year. The fish occupies water from the surface to as deep as 1,300 feet. ADF&G notes that herring stocks are well managed, with abundance in Southeast Alaska continually trending upwards for thirty-five years, whereas a collapse has occurred in Prince William Sound since 1993 because of overfishing. Herring is a great source of vitamin D, which also comes from sunlight, which during Alaska winters can be few and far between. Herring is also loaded with EPA and DHA, which are fatty acids that can help prevent heart disease and maintain brain functioning. Herring roe, or “poor man’s caviar,” is a popular dish, particularly in Asia and Europe. Poached, kippered, pickled, pan fried, and baked are other welcomed methods to prepare this omega-3-rich large school traveling fish. Of course, because of its diminutive size, it can also be used for bait. In the primary catch zones, 2016’s Southeast (Sitka) harvest was 19.5 million pounds, 2 million more than 2015. In Bristol Bay (Togiak), 30.34 million pounds were caught in

Alaska Business Monthly | February 2017 www.akbizmag.com

2016, compared to 43.2 million pounds in 2015.

Pollock The Walleye pollock is a semi-bottom or semi-demersal fish that stays between 1,500 feet below the ocean to near surface habitat, with a lifespan as high as fifteen years. There’s a high likelihood there’s pollock in any fish sandwich at a fast food restaurant or in the fish sticks served at schools nationwide. Per SeafoodHealthFacts.org, Alaska pollock “is a mild-flavored white fish with a delicate and flaky texture. Because of its adaptability, pollock is consumed in a variety of forms that include fresh and frozen fillets, fish sticks and other breaded and battered fish products, and ‘surimi’ products. Surimi is a stable frozen intermediate ingredient that is used to produce traditional Japanese ‘kamaboko’ products that are formulated to imitate crab, shrimp, and scallop meat.” In Alaska, the fish is widely distributed from the Bering Sea to the Gulf of Alaska. The three management areas are the Eastern Bering Sea shelf, Aleutian Islands Region, and Central Bering Sea—Bogoslof Island area. Smaller aggregations of the fish travel from the entrance of Prince William Sound to Kodiak Island. Krista Milani, the federal manager for Bering Sea/Aleutian Islands (BSAI) in Dutch Harbor with NOAA Fisheries, notes that in the BSAI region, the cap for all federally managed groundfish species cannot exceed two million metric tons in a year. These include pollock, Pacific cod sablefish, flat fish and rockfish, octopus, and shark. In that region, the most recent data on pollock in the Bering Sea indicates 1,353,245 metric tons was the total harvest, exclusive to the BSAI region. Per the McDowell Group, using NMFS and ADF&G statistics, in the 2015 season, pollock accounted for 54 percent of the Alaska average harvest volume. The average exvessel value was 26 percent of the total commercial fishing haul, at $477 million. Species and Seafood to Celebrate Alaska’s myriad species of salmon, shellfish, and whitefish are testament to the potential of a continued and thriving commercial seafood economy. Cod, clams, scallops, shrimp, geoducks, sea urchins, and sea cumbers are also abundant, and delectable, but not covered in this article. The enormity of Alaska commercial fisheries, from sea to ship to service (on a dinner plate) is remarkable. In total, the magnitude of commercial fishing species diversity and ecosystems blanketing Alaska’s thirty-four-thousand-mile coastline makes for a prosperous, impactful commercial fishing economy that transcends from local dinner plates to restaurants around the globe. It’s a healthy, growing industry that we should all be proud of—and not just for its monetary boost, but also because of the thoughtful, professional management at federal, state, and local levels that keep it safe and healthy for the consumer. R Tom Anderson writes from across Alaska. www.akbizmag.com

By Susie Von Willer Linford

hhhhLaska! There is a reason why so many of us moved here, and those born here have remained. Our seafood is the best in the world, and it is right outside our door. The world knows about wild Alaskan seafood. Dr. Art Tilgner has successfully introduced many New York City restaurants to the amazing flavors of his Tilgner’s Ruby Red Salmon products. Red Salmon caught in the pristine waters of Cook Inlet, off the Kenai Peninsula. Ask any remote Alaskan lodge owner who their clients are during the busy Alaska summers. Most will say the majority of their clients are from Germany—and they are here to sport fish for those glorious king salmon. For an even more adventurous life than catching King Salmon, try fishing for the all

Smoked Alaskan Seafood Chowder Makes 16+ Quarts ~ 50 Servings  2 lbs Raw Bacon  1 ½ cups Diced Yellow Onions  2 TBS Minced Garlic  4 Cups Diced Red Potatoes – Skin On  1 Cup Vermouth or Dry White Wine or Dry Sherry or Vodka  ½ Gallon Heavy Cream  ½ Gallon Chicken Stock  2 TBS Fresh Dill  1 Cup Diced Celery  1 Cup Diced Carrots  1 Cup Sliced Mushrooms  2 Cups Frozen Corn (not on the cob)  3 Diced Red, Yellow, Orange, and/or Green Bell Peppers  8 oz. Sun Dried Tomatoes  2 Cans Smoked Baby Oysters  2 lbs Fresh or Frozen “Cocktail” Shrimp – Tails Off  2 lbs Fresh or Frozen King Crab Meat – Remove all cartilage and shell  2 lbs Raw Halibut or Salmon or Other Firm Fish – cut into 1” pieces, skin and bones off

mighty Alaskan halibut. Alaska tends to grow them big. The largest halibut ever caught off Alaska had an estimated weight of 533 pounds. It was landed near St. Paul Island in the Bering Sea in 2003 by a Seattle-based longliner. Alaska halibut is almost more precious than gold—golden crab that is. Currently, the price per pound for halibut is $39.00 vs $35.00 per pound for golden king crab from local suppliers, 10th & M Seafood, New Sagay, and Favco, located in Anchorage. And do not forget about Alaska side stripe shrimp, oysters, and rock fish—all fresh and wild caught in Alaska waters. What does one do with a fresh seafood catch? Very little. The less is more principle applies here. Grill it or bake it with simple seasonings and butter; smoke it for special treats; make a chowder! One of our client favorites is our Smoked Alaskan Seafood Chowder. Enjoy!  As Needed for Thickening – Use Instant Mashed Potatoes Instead of Flour or Cornstarch

In a 16 Quart (or larger) Stock Pot, Over Medium High Heat:  Cut up 2 lbs of raw bacon into 1”-2” strips. Fry bacon until crisp. Keep bacon and grease in pot. Add onions, garlic, and potatoes and sauté until onions are soft and the potatoes appear brown and crisp. Continue to stir with a long wooden spoon.  Turn heat down to low and add all of the other ingredients—except the seafood—and continue to stir with a long wooden spoon. Cover pot to keep the heat in. Stir the pot every 15 minutes or as needed. Be careful of not burning the bottom with the heavy cream.  After 2 hours of cooking, if the chowder does not appear thick enough, add instant mashed potatoes—½ cup at a time—to thicken.  Chowder should be ready in 3-4 hours (longer the better). Approximately 30 minutes prior to serving, add the seafood.  TIP: Great when served with warm, honey cornbread! R

Susie Von Willer Linford is Corporate Chef and Managing Member of Alaska Coastal Catering LLC. She’s been catering for more than forty years and brings to her Alaska corporate clients the organizational skills to create a stress free event for up to 500 guests that is not only elegant but deliciously served. AlaskaCoastalCatering.com February 2017 | Alaska Business Monthly

RIGHT MOVES MSI Communications

MSI Communications is pleased to announce that Dani Myren and Kerry Youngren have joined the firm and Account Coordinator Michelle Jenkins has been promoted to Account Executive. Myren Myren joins MSI as Account Manager after seventeen years as public affairs specialist with the Anchorage Police Department and APD Employees Association. Youngren takes over MSI’s digital marketing. Youngren is a digital-media specialist who spent several years in Youngren Seattle working on branding for national companies. Jenkins began her career as MSI’s front desk receptionist, but was quickly given more responsibility and moved up the ladder. Her most recent promotion puts her into a position of decision-making for client communications and project management. Jenkins

Great Alaskan Holidays

Great Alaskan Holidays announced the appointment of Bob Johnson as company’s new Director of Marketing. Johnson is a seasoned marketing and business development professional coming to Great Alaskan Holidays with more than thirty years of direct, hands-on experience in the sales, marketing, and purchasing management professions. Johnson will be responsible for the development and execution of all corporate marketing plans and activities, as well as the creation, development, implementation, and management of multi-faceted advertising, marketing, and customer satisfaction campaigns.

R&M Consultants

Will Rhodes, CPG, recently earned his Certified Professional Geologist (CPG) certification and is now a CPG in Alaska. Rhodes is a Senior Geologist in R&M’s Fairbanks Office with eight years of experience in geology and environmental engineering. He is responsible Rhodes for supporting ongoing engineering geology and environmental work for a variety of civil and environmental projects, including subsurface investiga-

tions, site characterization, material site assessments, geologic mapping, engineering geology, geotechnical/ environmental site investigations, technical report writing, and data analysis. Rhodes has a BS in Geology and a MS in Environmental Engineering from the University of Alaska Fairbanks.

Donlin Gold

Barrick Gold Corporation and NOVAGOLD, the owners of Donlin Gold LLC, are pleased to announce the appointment of Andy Cole as General Manager of the Donlin Gold project in Alaska. Cole has more than twenty years of experience in permitting, building, and operating major gold mines in North America. He comes to Donlin Gold from Barrick where he was most recently executive director, USA, responsible for permitting, energy, communications, community relations, and corporate social responsibility. As general manager of Donlin Gold, Cole will be relocating to Anchorage and will report directly to the Board of Donlin Gold LLC.

RurAL CAP

The Rural Alaska Community Action Program, Inc. (RurAL CAP) named Dr. Gary Ferguson as the new CEO. During the past fifteen years, Ferguson has served the Alaska Tribal Health System, most recently as the Alaska Native Tribal Health Consortium’s Ferguson senior director of Community Health Services. He completed his Doctorate in Naturopathic Medicine at the National College of Natural Medicine in 2001. Ferguson is the co-producer of the ANTHC Store Outside Your Door Initiative, addressing food and nutrition security for the First People of Alaska.

Denali Real Estate

Denali Real Estate is pleased to announce its newest addition to the Anchorage office, Salesperson Stacey Klukluk. Klukluk is originally from Oregon but has lived in Anchorage for several years. Her background is primarily in the travel industry and works with the Yukon Kuskokwim Health Corporation travel management office. Klukluk will be focusing on residential real estate with an emphasis on providing excellent customer service to home buyers and sellers.

BBNC

Bristol Bay Native Corporation (BBNC) announced that tourism veteran John Kreilkamp will be joining the

BBNC team to oversee its growing tourism business line. Kreilkamp will serve as the President and CEO of Bristol Bay Alaska Tourism, LLC, a holding company created to provide strategic leadership to BBNC’s subsidiaries operating in the tourism industry, including Mission Lodge, Kulik Lodge, Grosvernor Lodge, Brooks Camp, Katmai Air, and concession operations at Katmai National Park. Kreilkamp has more than thirty years of experience working in the tourism industry around Alaska and the Pacific Northwest.

CCTHITA

Central Council of the Tlingit and Haida Indian Tribes of Alaska is pleased to announce the hire of Ken Truitt as Deputy Chief Operating Officer. In this new role, Truitt will manage tribal assets, facilities, and operations to ensure an efficient and productive Truitt work environment for the Tribe through technologies, policy, and program support. He will also serve as the liaison to department managers and Compact tribes. Truitt graduated from Arizona State University’s Sandra Day O’Connor College of Law with emphasis in Federal Indian Law and is a member of the Alaska Bar Association. Central Council also hired Justin Facey as the Tribe’s Child Support Attorney. Facey will represent the Tribe in paternity and child support cases, including establishing, modifying, and enforcing child support orders. Facey received his Bachelor’s degree Facey in Journalism from the University of Colorado Boulder and his Juris Doctor from the University of Idaho, College of Law where he received the Service with Distinction designation for his work defending indigent clients.

Alaska USA Mortgage Company

Alaska USA Mortgage Company has selected Andy Rosales to fill the position of Director, Mortgage Sales. Rosales brings a wide range of mortgage experience to the position, having previously worked as a loan officer, sales manager, regional sales manager, and Rosales multi-state sales manager. Rosales is a graduate of the Mortgage Bankers Association Future Leaders Program and is an active member of the Builders

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Compiled by Tasha Anderson Industry Association and the National Association of Hispanic Real Estate Professionals.

Stantec

Nick Straka, PE, has joined Stantec’s Anchorage office as a Civil Engineer, working in the firm’s aviation group. He has more than a dozen years of industry experience designing airports, roadways, and utilities. Straka has most recently worked in Hawaii, but is Straka returning to Alaska, where he worked for a decade all across the state including important projects in Akutan, Anatuvuk Pass, Bethel, Homer, and Skagway. Straka earned his bachelor’s and master’s degrees in Civil Engineering from the University of Alaska Anchorage. He is a registered professional engineer in Alaska and Hawaii.

Bering Straits Native Corporation

Bering Straits Native Corporation announced that it has hired attorney Craig Richards as its Vice President and General Counsel. Richards will report to BSNC President and CEO Gail R. Schubert. Richards will offer counsel on legal matters and ensure legal compliance and oversee risk management. Richards has more than sixteen years of legal experience. Richards holds a Master of Business Administration degree from Duke University’s Fuqua School of Business and a Juris Doctor degree from Washington & Lee University. He earned a Bachelor of Science degree from the University of Virginia.

Alaska USA Federal Credit Union

Alaska USA Federal Credit Union is pleased to announce that Rochelle Marshall has been selected for the position of Senior Vice President, Marketing. Marshall has more than twenty years of sales and marketing experience, with the last eleven Marshall years leading the Business Marketing department at General Communication, Inc. (GCI).

SEARHC

The SouthEast Alaska Regional Health Consortium (SEARHC) is pleased to welcome three new providers to the Ethel Lund Medical Center. Kathy Wollner, MD, Vanessa Herring, DO, and Alyssa Condon, PA-C, each recently joined the staff at the Consortium’s Juneau primary care clinic.

Wollner received her Bachelor of Arts from George Washington University in Washington, DC, graduating Magna Cum Laude. She earned her medical degree at Rush Medical College in Chicago where she graduated with honors. Wollner did her Family Medicine Wollner Residency at Swedish Medical Center’s Cherry Hill campus in Seattle. A doctor of osteopathic medicine, Herring received a Bachelor of Arts in Neuroscience from Agnes Scott College in Georgia. She then earned her Doctor of Osteopathy from Lake Erie College of Osteopathic Medicine in Florida and did her residency at the Central Washington Family Residency Herring Program in Yakima, Washington. Condon, a Physician Assistant, comes to SEARHC after spending several years working for the YukonKuskokwim Health Corporation in Bethel. She graduated from Austin College in Sherman, Texas, with a Bachelor of Arts and earned her Masters Condon of Physician Assistant Studies from A.T. Still University–Arizona School of Health Sciences in Mesa, Arizona.

Anchorage NAACP

The Anchorage NAACP has elected Kevin McGee as its Branch President, following McGee’s long history of activism on civil rights, public safety, and other public policy issues.

State of Alaska

Governor Bill Walker appointed Karen Linnell of Glennallen to serve on the Alaska Board of Game. Linnell has more than a decade of experience working on fish and game management issues in her region. She is a current board member of Ahtna, Incorporated, the Executive Linnell Director of the Copper River-Ahtna Inter-Tribal Resource Conservation District, and Chair of the Wrangell-St. Elias Subsistence Resource Commission. Additionally, Linnell has served on the Copper River Basin Fish and Game Advisory Committee for more than eight years. Walker also announced the appointment of Jim Whitaker as Senior Advisor on Major Projects and Scott Kendall as Chief of Staff.

Whitaker will continue to work on the Interior Energy Project; the efforts to find efficiencies within the Alaska Energy Authority, Alaska Housing Finance Corporation and the Alaska Industrial Development and Export Authority; and other initiatives. Kendall has worked for members of Alaska’s congressional delegation, including Senator Ted Stevens. Kendall earned his juris doctorate from University of Washington School of Law. Kendall has practiced law in Alaska for more than ten years. He also Kendall worked as a law clerk for Alaska Court of Appeals Chief Judge Robert Coats. Alaska Department of Labor and Workforce Development Commissioner Heidi Drygas appointed Cathy LeCompte to serve as the Director of AVTEC, the department’s post-secondary vocational education school located in Seward. She is the first woman to serve as director of the school which was founded in 1969. LeCompte was most recently employed as the associate dean of Academic Affairs for the University of Alaska Anchorage’s Community and Technical College. LeCompte earned a bachelor’s degree in business management at City University and a master’s degree in leadership at Seattle University. Natural Resources Commissioner Andy Mack announced that Chantal Walsh joined the Department of Natural Resources as Director of the Division of Oil and Gas. Walsh has thirty years of private-sector experience in Alaska’s petroleum industry on matters including strategic planning, commercial analysis, litigation, well work operations, production optimization, completions, and drilling design and coordination. Walsh has a Bachelor of Science degree in Petroleum Engineering from the University of Alaska Fairbanks and is a licensed Professional Engineer in Alaska.

AEDC

The Anchorage Economic Development Corporation hired Sean Carpenter to fill its Communications Director position. Carpenter will lead AEDC’s efforts and overall strategy in developing and implementing external communications including marketing, public relations, and social media, as well as managing the organization’s online presence. Carpenter received his degree in Journalism and Public Communications from the University of Alaska Anchorage. He brings experience as marketing manager at Alaska Public Media to his position at AEDC. R

Ship up to 30 lbs back to Anchorage for only $25. 800.727.2141 www.nac.aero NACPAC Bag is limited to 30 pounds. Drawstring bag dimensions are 30 x 28 x 3 (roughly 2 cu. ft.). Drawstring must completely close at the top of the bag. Shipment must arrive at NAC at least two hours before the scheduled departure time. COD, Hazardous Materials and freight requiring special handling are not available for NACPAC shipment. NACPAC Backhaul service is available between Anchorage and the following destinations: Aniak, Barrow, Bethel, Deadhorse, Dillingham, Fairbanks, King Salmon, Kotzebue, McGrath, Nome, St. Mary’s and Unalakleet.

NACPAC Bag is limited to 30 pounds. Drawstring bag dimensions are 30 x 28 x 3 (roughly 2 cu. ft.). Drawstring must completely close at the top of the bag. Shipment must arrive at NAC at least two hours before the scheduled departure time. COD, Hazardous Materials and freight requiring special handling are not available for NACPAC shipment. NACPAC Backhaul service is available between Anchorage and the following destinations: Aniak, Barrow, Bethel, Deadhorse, Dillingham, Fairbanks, King Salmon, Kotzebue, McGrath, Nome, St. Mary’s and Unalakleet.

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February 2017 | Alaska Business Monthly

Inside

Alaska Business February 2017 EXPLORE FAIRBANKS

xplore Fairbanks launched its new responsive website explorefairbanks.com. The website includes Fairbanks, North Pole, Denali, and Alaska’s Interior and Arctic. The aurora borealis and midnight sun, natural wonders that are fundamental to Fairbanks and the region, are predominately featured throughout the new site. The contemporary site is responsive across all platforms and devices including mobile, tablet, and desktop. In addition to the new website, the Explore Fairbanks 2017 Official Visitors Guide, a 78page, full-color booklet that describes Fairbanks year-round opportunities, is now available for free. The annual publication is designed to capture the features and attractions specific to life in the region. Fairbanks is defined by the midnight sun, the aurora borealis, the centrally located Chena and Yukon rivers and many miles of wilderness. For a free copy of the 2017 Fairbanks Visitors Guide and the companion piece, the 2016-2017 Fairbanks Winter Guide, contact Explore Fairbanks at 1-800-327-5774 or 907-4565774 or write to Explore Fairbanks, 101 Dunkel St, Suite 111, Fairbanks, AK 99701-4806. View the guide online at explorefairbanks.com.

CHILDREN’S HOSPITAL AT PROVIDENCE

he Children’s Hospital at Providence has partnered with the Anchorage Public Library to provide parents of babies in the Newborn Intensive Care Unit easy access to books, songs, movies, and television programs in the library’s online database. During a special event each month, parents are provided information on how to complete easy registration for a free library card or

Compiled by ABM Staff visitor card. Otherwise, people would need to go to the library to receive a library card. The program currently is only available to parents with children in the Newborn Intensive Care Unit, but there is hope to expand the opportunity to parents and children throughout the children’s hospital. The Anchorage Public Library has thousands of books and songs that are available for free download, along with more than 600 movies and 140 television programs. alaska.providence.org

MUNICIPALITY OF ANCHORAGE

he Municipality of Anchorage joined the White House TechHire initiative in an effort to recruit and train local tech talent. The initiative is a multi-sector approach to sharpen the tech skills of Anchorage residents while filling the tech needs of local employers. The Municipality of Anchorage and its partners, including the Anchorage Economic Development Corporation, University of Alaska Anchorage, and Code for Anchorage, have set a goal to place six hundred individuals in tech jobs by 2020. muni.org

AIDEA

he Alaska Industrial Development and Export Authority (AIDEA) Board approved a loan participation for an office facility located in Juneau. The loan, to Juneau I LLC, is for $5,040,000 (90 percent) of a $5,600,000 loan brought to AIDEA by Northrim Bank. Northrim originated the loan and is participating with $560,000. The purpose of this loan is to provide long-term financing for improvements made to a three story, 54,000-square-foot office building utilized by the Department of Transportation & Public Facilities in Juneau.

The AIDEA Board also approved a dividend of $12,883,000 to the state general fund for Fiscal Year 2018. Since the dividend program’s inception, AIDEA has declared more than $392 million to the state, including the $12.883 million approved for FY2018. aidea.org

ALASKA USA INSURANCE BROKERS

o better serve the needs of commercial insurance clients, Alaska USA Insurance Brokers (AUIB) has finalized an agreement to sell its commercial insurance and employee benefits books of business to ACRISURE, LLC. AUIB selected ACRISURE based on its proven capabilities, large agency network, and because its business model provides for a smooth transition for both clients and the employees of the agency. Commercial insurance account executives, managers, and support staff will remain the same and operate from the same locations. ACRISURE is the 13th largest insurance brokerage in the United States, operating one hundred agencies in twenty-seven states (acrisure.com). The transaction closed in mid-December 2016. Alaska USA Insurance Brokers will continue to operate as a personal lines insurance agency. alaskausa.org/insurance

ADOL&WD

he Alaska minimum wage increased from $9.75 to $9.80 January 1. Alaska voters approved a ballot initiative in 2014 that increased the minimum wage from $8.75 to $9.75 in 2016 and requires the Alaska minimum wage to be adjusted annually for inflation. Alaska Statute 23.10.065(a) requires the Alaska minimum wage to be adjusted using the Con-

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sumer Price Index for urban consumers in the Anchorage metropolitan area (Anchorage CPI-U) for the preceding calendar year. The Anchorage CPI-U increased 0.5 percent in 2015, rising from 215.805 to 216.909. The Alaska minimum wage applies to all hours worked in a pay period regardless of how the employee is paid: whether by time, piece, commission, or otherwise. All actual hours worked in a pay period multiplied by the Alaska minimum wage is the very least an employee can be compensated by an employer. Tips do not count toward the minimum wage. labor.alaska.gov

BLOOD BANK OF ALASKA

lood Bank of Alaska has finalized the sale of their previous headquarters located at 4000 Laurel Street in Anchorage. The building was put on the market in 2014 and was sold to South Central Foundation. The sale of this property, originally constructed in 1981, completes the transition of Blood Bank of Alaska’s headquarters into a new facility, located at 1215 Airport Heights, which it finished constructing this year. bloodbankofalaska.org

IRS

he Internal Revenue Service issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning on January 1, 2017, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be: 53.5 cents per mile for business miles driven, down from 54 cents for 2016; 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016; and 14 cents per mile driven in service of charitable organizations, which remains unchanged. These and other requirements are described in Rev. Proc. 2010-51. Notice 2016-79, posted on IRS.gov, contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan. irs.gov

MT. EDGECUMBE HOSPITAL

s a way to further improve clinical and operational quality and increase patient safety by reducing the radiation dose in CT imaging, Mt. Edgecumbe Hospital has upgraded its existing

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CT system to a state-of-the-art, 64 row, 128 slice Toshiba CT scanner. Using Toshiba’s newest technology (AIDR 3D and VELO CT software) means patients now have access to the lowest radiation exposure capabilities in Sitka. The new system reduces the radiation in an adult scan by more than 50 percent, pediatric scans by up to 80 percent, and decreases the time it takes to perform the exam by 65 percent or more. It is important to note that the VeloCT with AIDR 3D not only allows Mt. Edgecumbe Hospital staff to manage the radiation exposure to patients, but it does so without compromising diagnostic image quality which is critical to expedient and accurate diagnoses. search.org

SITNASUAK NATIVE CORPORATION

he Board of Directors of Sitnasuak Native Corporation announced a special Elders dividend of $500 and regular shareholder dividend of $6 per share (or $600 for those with one hundred shares) to all shareholders of record as of December 7, 2016. Shareholders who are sixtyfive or older as of December 7, 2016, will receive a special Elders dividend of $500. Distribution was to begin December 13, 2016. The corporation dividend amount is based on a review of Sitnasuak’s dividend policy and both historical and projected financial performance. This is the fifth year that SNC has distributed an extra benefit to Elders. Other shareholder benefits include camp and home sites, bereavement assistance, and scholarships. snc.org

ALASKA AIRLINES

laska Air Group Inc. announced it has closed its acquisition of Virgin America. The definitive merger agreement, which was signed in April and approved by Virgin America shareholders in July, brings together two of the country’s favorite airlines into a unified force that will provide an attractive alternative to the “Big 4” airlines that currently control 84 percent of the domestic market. Alaska Airlines and Virgin America will spend the next year working to secure Federal Aviation Administration (FAA) certification to allow the two airlines to operate as a single carrier (with regional sister carrier Horizon Air remaining on its own separate operating certificate). The combination expands service and provides more frequent connections to international airline partners in thriving technology markets in the Bay

Area, Los Angeles, and Seattle. Together, the airlines offer 289 daily flights to 52 destinations from California, including 113 daily nonstop flights to 32 destinations from three Bay Area airports and 105 daily nonstop flights to 37 destinations from four Los Angeles area airports. alaskaair.com

US HUD

S Housing and Urban Development (HUD) Secretary Julián Castro on November 30 announced that public housing developments in the United States will now be required to provide a smoke-free environment for their residents. HUD’s new rule will provide resources and support to more than 3,100 Public Housing Agencies to implement required smoke-free policies over the next eighteen months. The final rule prohibits lit tobacco products (cigarettes, cigars, or pipes) in all living units, indoor common areas, administrative offices, and all outdoor areas within twenty-five feet of housing and administrative office buildings. hud.gov

ALASKA REGIONAL HOSPITAL

laska Regional Hospital has opened its newest clinic in Mountain View. Named the Alaska Regional Community Health Clinic, it provides easily accessible primary care services for people who live and work in the area. In 2013, the Department of Health and Human Services released a study that showed the Mountain View area had a disproportionate number of Medicaid recipients using local emergency rooms for non-emergent health needs. In fact, many area residents have sought primary care services in Alaska Regional Hospital’s emergency department. The new clinic, which is open Tuesday through Friday from 8 a.m. to 5 p.m., offers services ranging from newborn exams to well-child visits to geriatric care and treats routine illnesses as well as providing preventive care. hcahealthcare.com

GCI

CI announced in December 2016 that residents in Mountain Village, Quinhagak, St. Mary’s, and Tununak have access to faster speeds and improved mobile internet service because of recent 3G service upgrades in their communities. GCI completed installation of the 3G software and equipment in November 2016. In midDecember, the company finalized system optimization—the fine-tuning GCI does to ensure

February 2017 | Alaska Business Monthly

INSIDE ALASKA BUSINESS network traffic is moving efficiently. The network upgrades provide residents access to faster mobile data speeds and offer customers increased video, web-browsing and streaming capabilities. In 2016, as part of this twenty-five-community project, GCI has begun offering 3G service in Alakanuk, Aniak, Chefornak, Eek, Emmonak, Goodnews Bay, Hooper Bay, Kipnuk, Kongiganak, Kwigillingok, Marshall, Mountain Village, Newtok, Nightmute, Nunam Iqua, Pilot Station, Quinhagak, Russian Mission, Shaktoolik, St. Mary’s, Togiak, Toksook Bay, Twin Hills, Tununak, and Tuntutuliak. GCI completed upgrades to Mekoryuk, Scammon Bay, and Chevak in 2015. gci.com

STG INCORPORATED

nchorage construction firm STG Incorporated was awarded a $5.34 million contract by the National Park Service for the construction of a permanent bridge and boardwalk over the Brooks River in Katmai National Park and Preserve. The project includes construction of a permanent bridge to replace an aging, seasonal floating bridge over the Brooks River. A boardwalk will link the bridge to high ground adjacent to Brooks Lodge and neighboring facilities at the Brooks Camp visitor area. The new bridge also will allow for safer disposal of septic sludge and more efficient utility connections. Construction staging will begin in August. The pile driving and other construction work will begin after Brooks Camp is closed in the fall and continue through the winter, with completion slated by June 1, 2018. STG Incorporated, a subsidiary of the Calista Corporation, has experience in similar remote construction work, having built facilities at the Alaska Wildlife Conservation Center at Portage and an elevated boardwalk at Tuntutuliak in Southwest Alaska. stgincorporated.com | nps.gov

ALASKA DIVISION OF OIL & GAS

he Division of Oil and Gas received 410 bids from companies and investors seeking oil and gas leases on state lands during the division’s annual North Slope, Beaufort Sea, and North Slope Foothills areawide oil and gas lease sales in December 2016. Winning bids totaled nearly $17.8 million. By acreage, the North Slope sale is the second largest of its kind since 1998, when areawide oil and gas leasing began. By dollar amount, it is the third largest since 1998. The

Compiled by ABM Staff division received 402 bids on 384 tracts for a total of 599,880 acres, with winning bids totaling $16,900,490. In the Beaufort Sea sale, the division received 8 bids on 7 tracts totaling 33,460 acres, with winning bids totaling $870,431. The division did not receive any bids for lease tracts in the North Slope Foothills. dog.dnr.alaska.gov

ALYESKA PIPELINE SERVICE COMPANY

he volume of oil moved through the Trans Alaska Pipeline System increased in 2016, the first calendar year-over-year increase since 2002. This is welcomed news for Alyeska Pipeline Service Company, TAPS’ operator. In 2015, the pipeline moved 185,582,715 barrels and averaged 508,446 barrels per day. The predicted total amount moved in 2016 is around 517,500 barrels a day—a 1.8 percent increase. Entering its 40th year of operations, the pipeline has mostly reported annual throughput declines since its peak flow of 2 million barrels a day in 1988. The only exceptions were slight year-toyear increases noted in 1991 and 2002. Alyeska employees for years have worked to anticipate and respond to escalating challenges brought on by declining flow. Lower flow means slowermoving oil, which allows more potential for cooling temperatures, ice formation in the line, and for water and wax to drop out of the flow stream and accumulate. While Alyeska has worked to adjust to lower flows, including adding heat to the pipeline and continually modifying pipeline pigging operations, the best-case scenario is bringing more oil to TAPS, Alyeska Pipeline Service Company President Tom Barrett said. alyeska-pipe.com

UNIVERSITY OF ALASKA

he University of Alaska Board of Regents approved unanimously in an 11-0 vote to establish a single University of Alaska College of Education and to locate the administrative center for the College at the University of Alaska Southeast (UAS). The board first voted on consolidating the three education schools into one and then voted on the location recommendation. In doing so, the board directed Johnsen to take the necessary steps to establish a single College of Education for the University of Alaska, including seeking approval from the Northwest Commission on Colleges and Universities and assembling a

planning team. Although UAS will serve as the lead campus, faculty and courses will still be delivered from UAF and UAA. alaska.edu

OPTIMA PUBLIC RELATIONS

laska-based Optima Public Relations launched Trump Global News, a website, Facebook page, eNewsletter, and morning radio minute (actually 90 seconds) with breaking and up-to-the-hour news on President Trump. The radio segment is with national news correspondent Bob Souer. Trump Global News is not affiliated with Donald J. Trump, the Trump Organization, or the Office of the President of the United States. The website is managed by Optima Public Relations, which owns and facilitates the Tom Anderson Show, a morning radio and online program that airs 6 a.m. to 9 a.m. in Alaska. trumpglobalnews.com | optimapublicrelations.com

ALASKA AEROSPACE CORPORATION

he Eisenhower Center for Space and Defense Studies held the tenth annual Space Forum at the United State Air Force Academy on December 6, 2016. The Space Forum facilitated discussions by federal, state, and commercial companies to advance US space capabilities. A special focus of this year’s forum centered on public-private partnerships, private spaceflight, and state government and industry partnerships. Alaska Aerospace Corporation (AAC) was invited to participate on the Spaceports panel to highlight the capabilities offered to both government and commercial customers at the Pacific Spaceport Complex - Alaska (PSCA). “Our participation, as the only non-federal vertical launch complex on the panel, was confirmation that the current transition to a lower cost commercial launch site has attracted the attention of the government and has increased our potential for expanded operations in future years,” said Craig Campbell, AAC President and CEO. Headquartered in Anchorage, AAC is a state owned corporation and operates the PSCA, which provides launch services on Kodiak Island. AAC also has an office in Huntsville, Alabama. In 2016 AAC completed the reconstruction of damaged facilities at PSCA and signed a multi-year launch services contract with the Missile Defense Agency. akaerospace.com R

Alaska Business Monthly | February 2017 www.akbizmag.com

Business Events FEBRUARY

FEB

4-10

Alaska Statewide Special Education Conference

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

6-10

FEB

13-17

Alaska Surveying & Mapping Conference

Hilton Anchorage Hotel, Anchorage: This is the 51st annual conference. The theme for this year is “Centuries Charting Change,” celebrating the sesquicentennial purchase of Alaska from Russia in 1867 and one hundred years of the Alaska Railroad. aksmc.org

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 “Explore, Capture, Connect, Reflect.” aste.org

18-21 FEB

AML Winter Legislative Meeting

Juneau: The Alaska Municipal League is a voluntary, nonprofit, nonpartisan, statewide organization of 162 cities, boroughs, and unified municipalities, representing over 97 percent of Alaska’s residents. akml.org

21-23 FEB

Sustainable Agriculture Conference

Fairbanks: 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

22-24

Compiled by Tasha Anderson improve the agriculture industry in Alaska. uaf. edu/ces/ah/sare/conference

FEB

23-26

Alaska Library Association Annual Conference

Ted Ferry Civic Center and Cap Fox Lodge: 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/ketchikan2017

Anthropological Association FEB-MAR Alaska Annual Meeting

27-2

Westmark Fairbanks Hotel and Conference Center: The annual meeting includes workshops, an evening reception for information and registration, paper presentations, and an awards banquet, business meeting, and the Belzoni meeting. alaskaanthropology.org

MARCH

MAR

2-3

SWAMC Summit & Membership Meeting

Hotel Captain Cook, Anchorage: This year’s conference theme, “Turning Challenge into Opportunity,” speaks to their ability to work with challenging economic times. swamc.org

MAR

8-10

Alaska Forest Association Spring Meeting

Baranof Hotel, Juneau: The Alaska Forest Association can be characterized as a high profile industry trade association. Its members hold in common general business interests in the timber industry of Alaska. akforest.org

MAR

10-12

Alaska Academy of Family Physicians Winter Update

Hotel Alyeska, Girdwood: This is the 19th annual Winter Update with an opportunity for fifteen CME credits. alaskaafp.org/ Winter_Update.htm

MAR

19-23

American Fisheries Society Annual Chapter Meeting

Westmark Hotel, Fairbanks: The American Fisheries Society – Alaska

Chapter and the American Water Resources Association are co-hosting the 2017 annual chapter meeting. This year’s theme is “Alaskan Fisheries and Waters: Success, limitation, and innovation in the face of data scarcity and uncertainty.” afsalaska.org

MAR

Anchorage ATHENA Society

Dena’ina Center, Anchorage: Sponsored by the Anchorage Chamber of Commerce, this annual luncheon begins at Noon and honors the contributions of women in the Anchorage Business Community. athenaanchorage.org

MAR

23-25

Career and Technical Student Organization Conference

Downtown Anchorage Hilton Hotel: CTSO is the connection to Career and Technical Student Organization, the Performance Based Assessment Conference where students participate in leadership training, conduct organizational business, and showcase themselves in competitive events. ctsoalaska.org

MAR

AKANA Annual Meeting

MAR

AKMGMA Annual Conference

Alyeska Resort, Girdwood: The annual meeting of the Alaska Association of Nurse Anesthetists is an opportunity for networking and education, with a focus on Sunday on ultrasound for anesthesia and related topics, including a hands-on ultrasound scanning workshop. alaskacrna.com

25-26

29-31

Dena’ina Center, Anchorage: Annual conference of the Alaska Medical Group Management Association. akmgma.org

APRIL

APR

TBD

Governor’s Safety and Health Conference

The Alaska Safety Advisory Council works with organizations to promote safety so that resources can be marshaled and used to reduce the menace of accidental death and injury. akgshc.com R

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February 2017 | Alaska Business Monthly

CORPORATE RETREATS

EAT

SHOP

PLAY

STAY 

Compiled by Tasha Anderson

Stay: Corporate Retreats I

t’s vital to build healthy relationships within an office environment, and one way to build those relationships is through a corporate retreat. Here are a few examples of Alaska lodging to consider when planning for an in-state corporate retreat experience.

bath and three standard cabins with a bathhouse close by are available. Northwoods Lodge is located at Fish Lakes Creek, three miles from Lake Creek, and their dining room is a perfect location for meetings and five-course, gourmet dinners that make every guest feel special. northwoodslodge.net

Jumping Salmon Lodge Jumping Salmon Lodge is located on Evans Island in Prince William Sound, and its facilities are fantastic for corporate gatherings. The fully appointed cabins have the amenities of a five star hotel. Professionally guided fishing trips and fish processing services are available and enhance every visit. alaskajumpingsalmonlodge.com

Stonewood Fishing Lodge Stonewood Fishing Lodge is located on the shores of Lake Clark and provides luxury fishing opportunities in the Alaska wilderness. Their several remote camps allow guests access to all five salmon species as well as rainbow trout, northern pike, halibut, cod, and shark. Stonewood Fishing Lodge also provides bear viewing tours in Lake Clark and Katmai National Parks. stonewoodexpeditions.com

Glacier Bay Country Inn Located in Gustavus, Glacier Bay Country Inn is an ideal location to have a corporate retreat, entertain prospective clients, or simply reward employees for a job well done. Glacier Bay makes sure that every trip itinerary includes the needed time for meetings and discussions—and of course the even more needed time for Alaska adventuring and/ or fishing. The property provides a few locations, including a conference room, in which companies

can have any business meetings or discussions if desired. glacierbayalaska.com

Still Point Lodge Still Point Lodge is located in Halibut Cove and is accessible only by boat or plane. Still Point Lodge can be booked exclusively for one group and boasts ten cabins that can comfortably accommodate up to fourteen guests in private rooms or twenty-four guests with double occupancy. Still Point Lodge staff set a warm and welcoming tone and can assist with creating a custom itinerary to suit every member of the group. stillpointlodge.com Northwoods Lodge Whether a company needs a corporate retreat, incentive reward trips, to entertain clients or any other event, Northwoods Lodge does their best to make every trip a success. Three deluxe cabins with full

Boardwalk Lodge Boardwalk Lodge has accommodations for up to nineteen guests and is located on Prince of Wales Island, approximately thirty-five minutes from Ketchikan. While the lodge offers world-class fishing opportunities, anyone can enjoy the lodge’s relaxing atmosphere as well as nearby Alaska adventures, including canoeing and sea kayaking, whale watching, spelunking, and a totem village created by the Alaska Native people at Kasaan. boardwalklodge.com R

REHABILITATION AND PHYSICAL THERAPY BACK PAIN? NECK PAIN? HEADACHES? WE CAN HELP!

1-800-PAIN FREE www.arcticchiropractic.com Life is Good When You’re Pain FREE! ALASKAN OWNED & OPERATED

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Alaska Business Monthly | February 2017 www.akbizmag.com

SHOP

Anchorage FEB

Academic Student WorldQuest Competition

Academic WorldQuest is a team competition testing students’ knowledge of global issues including current events, great decisions, combating infectious disease, the European Union, countering violent extremism, China, global megacities, etc. More than 120 high school students participate, and the winning team from every local competition is invited to participate at the National Competition hosted in Washington, DC. This year WorldQuest Alaska is being held at the Dena’ina Civic and Cultural Center. alaskaworldaffairs.org/events/ worldquest-2017/ FEB

Alaska Marine Gala

Each February the Alaska SeaLife Center hosts the annual Alaska Marine Gala at the Dena’ina Center. This black tie affair with an ocean blue flair promises a night of food, fun, and fundraising. Cocktails and a silent auction kick off the night, followed by dinner, the Alaska Ocean Leadership Awards, a live auction, and live music. alaskasealife.org FEB

Iron Dog

in the world, running from Big Lake to Nome and finishing on the Chena River in downtown Fairbanks. February 18 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 19 in Big Lake. irondog.org 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, all in Downtown Anchorage. furrondy.net

24-5

FEB

The Write Stuff—A Young People’s Concert

The creative process can spring from many influences and directions. The Write Stuff is a concert program written by Heidi Joyce and Randall Fleischer that explores composers’ creative influences and inspirations and draws parallels between the structure of great stories and the structure of great music; it’s appropriate for 4th, 5th, and 6th graders. The concert begins at 10 a.m. at the Alaska Center for the Performing Arts. anchoragesymphony.org

Cordova FEB

1-5

Cordova Iceworm Festival

Events at the festival, which takes place in Downtown Cordova, includes the Vareity Show/Miss Iceworm Coronation, survival suit races, a parade, blessing of the fleet, a men’s basketball tournament, arts www.akbizmag.com

Compiled by Tasha Anderson

and crafts show, Iceworm Tail hunt, ice cream feed, and the food fair. cordovachamber.com

Fairbanks FEB

Yukon Quest

Taking place every February, the Yukon Quest is a one thousand mile international sled dog race between Whitehorse, Yukon, and Fairbanks. It takes from ten to sixteen days and has been run every year since 1984. yukonquest.com

FEB-MAR

BP World Ice Art Championships

21-26 This is an international ice sculpting competition with 180-plus sculptures plus a kids’ park made entirely of ice. The park is located at 3030 Phillips Field Road. icealaska.com/en

Dog is the longest, 18-25 Iron toughest snowmobile race

PLAY 

Girdwood FEB

North Face Vertical Challenge

Skiers and snowboarders test their endurance during the North Face Vertical Challenge, a day-long race in which fifty competitors vie to see who can get the most accumulated vertical on the North Face from 9 a.m. until 5 p.m. alyeskaresort.com FEB

Telepalooza

Jeff Nissman Memorial 24-26 The Telemark Festival is a

STAY

Denali FEB

Denali Winterfest

Winterfest offers 26-28 Denali 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 at Mile 237 Parks Highway. nps.gov/ dena/planyourvisit/winterfest.htm 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 performance. ketchikanarts.org

Sitka FEB

Sitka Jazz Festival

Sitka Jazz Festival 2-4 The teaches music appreciation, skills, history, artistic expression, and cross-cultural understanding through jazz in a supportive environment. Visiting artists and local educators provide clinics history, jazz theory,

jazz improvisation, as well as a variety of individual instrument and section-specific workshops. Student performances are non-competitive, with an emphasis on cooperation and appreciation. sitkajazzfestival.com

Valdez FEB

Valdez Ice Climbing Festival

17-20 This winter festival this year will include a silent auction followed by dance party with The Unfaithful Lovers, the Sunday Bonfire Feast, and beer all weekend provided by Broken Tooth Brewing, in addition to open climbing in Keystone Canyon. levitation49.org/ ice-fest R

celebration of the telemark community that includes clinics, fun races, demos, live music, and tons of fun. All events are free and all raffle proceeds will benefit SheJumps, a non-profit organization whose mission is to increase the participation of women and girls in outdoor activities. alyeskaresort.com

Homer FEB

Homer Winter Carnival

is a weekend event of 11-12 This outdoor activities and fun for

the whole family, including a parade, community dances, an outhouse race, wedding expo, hockey tournament, Mr. Homer pageant, arts and crafts, and lots of food. homeralaska.org

Juneau FEB

Wearable Arts Extravaganza

11 This annual celebration of wearable works of art includes live performances and a silent auction and raises funds for scholarships, grants, and the Juneau Arts & Culture Center. This year’s theme is “Renaissance,” and the extravaganza takes place at Centennial Hall starting at 8 p.m. jahc.org Ketchikan FEB

(Con)Fusion

This is the 31st annual Wearable Art Show in Ketchikan, taking place at the Ted Ferry Civic Center. Artists in the Ketchikan

2-4

February 2017 | Alaska Business Monthly

EVENTS CALENDAR FEBRUARY 2017

EAT

ALASKA TRENDS

Alaska Job Forecast by Industry

ANS Crude Oil Production 01/01/2017

Wage and Salary Employment 2015-20171, 2

05/01/2015 07/01/2013

Natural Resources & Mining (except Oil & Gas) 2017: 3,100 | 2016: 3,200 | 2015: 3,200

09/01/2011 11/01/2009 01/01/2008

Oil and Gas

03/01/2006

ANS Production per barrel per day 550,149 Jan. 4, 2017

05/01/2004 07/01/2002

2017: 10,000 | 2016: 11,400 | 2015: 14,200

Construction

2016-2015 Historical Monthly Average 2017 Monthly Average

2017: 15,000 | 2016: 16,200 | 2015: 17,700

09/01/2000 0

400,000

800,000

1,200,000

Manufacturing

2017: 14,000 | 2016: 13,800 | 2015: 14,100

Source: Alaska Department of Revenue Tax Division

ANS West Coast Crude Oil Prices

Retail Trade

2017: 35,900 | 2016: 36,900 | 2015: 37,500

01/01/2017 05/01/2015

Wholesale Trade

2017: 6,200 | 2016: 6,400 | 2015: 6,500

07/01/2013

Transportation, Warehousing & Utilities 2017: 21,400 | 2016: 21,900 | 2015: 21,800

09/01/2011 11/01/2009 01/01/2008

Information

2017: 6,100 | 2016: 6,300 | 2015: 6,300

03/01/2006

ANS West Coast $ per barrel $54.50 Jan. 4, 2017

05/01/2004 07/01/2002 09/01/2000

Financial Activities

$20 $40 $60 $80 $100 $120 $140 $160

Source: Alaska Department of Revenue Tax Division

Education3

(private education only)

Statewide Employment Figures 10/1976—11/2016 Seasonally Adjusted 01/01/2016

Labor Force Employment Unemployment 6.8% Nov. 2016

01/01/2012 01/01/2010 01/01/2008

2017: 11,800 | 2016: 12,100 | 2015: 12,100

Professional and Business Services 2017: 27,900 | 2016: 28,400 | 2015: 30,000 2017: 12,800 | 2016: 12,800 | 2015: 12,800

Healthcare

2017: 35,900 | 2016: 35,400 | 2015: 34,500

Leisure and Hospitality

2017: 34,200 | 2016: 35,000 | 2015: 35,000

Other Services

2017: 11,200 | 2016: 11,600 | 2015: 11,700

01/01/2000 01/01/1996

Federal Government4

01/01/1992

2017: 15,200 | 2016: 15,200 | 2015: 14,900

01/01/1988

State Government5

01/01/1984

2017: 23,100 | 2016: 24,500 | 2015: 25,800

01/01/1980 01/01/1976

100,000

200,000

300,000

400,000

Source: Alaska Department of Labor and Workforce Development, Research and Analysis Section; and U.S. BLS

Local Government6

2017: 41,300 | 2016: 41,500 | 2015: 41,300

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

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Alaska Business Monthly | February 2017 www.akbizmag.com

By ABM Staff

Employment Forecast

Fairbanks Area Highest Gains  Educational and Health Services—Social Services 4.3%  Educational and Health Services3 0.9%

Wage and Salary Employment 2017

Fairbanks Area Biggest Losses  Construction -6.70%  Other Services -4.80%

Anchorage Area Highest Gains  Educational and Health Services—Healthcare 2.9%  Educational and Health Services3 1.9%

Anchorage Area Biggest Losses  Oil & Gas -11.10%  Construction -7.20%

Southeast Area Highest Gains  Manufacturing 2.3%  Educational and Health Services3 1.3%

Southeast Area Biggest Losses  Construction -7.1%  State Government6 -6.1%

Statewide Biggest Industry Losses

Oil & gas

Construction

State Government

-12.3%

-7.4%

-5.7%

Preliminary and adjusted estimates. 2Excludes self-employed workers, fishermen, domestic workers, and unpaid family workers. 3Private education only. 4Excludes uniformed military. Includes the University of Alaska. 6Includes public school systems. Data source: Alaska Department of Labor and Workforce Development, Research and Analysis Section, January 2017 “Alaska Economic Trends.”

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February 2017 | Alaska Business Monthly

ADVERTISERS INDEX ABR Inc.......................................................................................51 AK USA Federal Credit Union..........................................45 Alaska Logistics.....................................................................69 Alaska Marine Transport and Salvage.........................49 Alaska Mergers & Acquisitions LLC...............................24 Alaska Rubber........................................................................49 ALSCO.........................................................................................37 American Marine / Penco.......................................88, 89 Anchorage Messenger Service........................................61 Arctic Chiropractic...............................................................86 Arctic Office Products........................................................65 C & R Pipe and Steel Inc.....................................................51 Calista Corp.............................................................................25 Carlile Transportation Systems.......................................91 CIRI..............................................................................................85 Coffman Engineers...............................................................11 Conrad-Houston Insurance Agency.............................51 Construction Machinery Industrial..................................2 Cornerstone Advisors.............................................................3

Dale Carnegie..........................................................................61 Design Alaska..........................................................................17 Doyon Limited........................................................................ 53 EDC Inc.......................................................................................12 First National Bank Alaska....................................................5 GCI...............................................................................................92 Great Originals Inc...............................................................59 HDL-Engineering Consultants.........................................12 Judy Patrick Photography................................................90 Lynden Inc................................................................................57 Mechanical Contractors of Fairbanks.......................... 35 Michael Baker International..............................................11 N C Machinery........................................................................13 New Horizons Telecom Inc...............................................17 Nortech Environmental & Engineering.......................................................................9 Northern Air Cargo.....................................................80, 81 Pacific Pile & Marine........................................82, 83, 84 Parker Smith & Feek............................................................. 47

PDC Inc. Engineers...............................................................15 PenAir......................................................................................... 72 Personnel Plus....................................................................... 87 PND Engineers Inc...............................................................24 Port of Anchorage................................................................63 R & M Consultants Inc........................................................23 Ravn Alaska.............................................................................29 Seawolf Sports Properties.................................................41 Society for Marketing Professional Services - Alaska..............................................................18 Span Alaska Transportation Inc.....................................38 Stantec...........................................................................................9 Stellar Designs Inc................................................................86 T. Rowe Price.......................................................................... 55 The Plans Room....................................................................59 Washington Crane & Hoist...............................................39 Waste Management.............................................................43 Wells Fargo Bank Alaska.....................................................19 Yukon Equipment Inc..........................................................18

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