Alaska Business Monthly-June 2014 by Alaska Business

SPECIAL SECTIONS: BUILDING ALASKA & TRANSPORTATION OIL & GAS | FISHERIES | MARINE TELECOM | VISITORS INDUSTRY

June 2014

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June 2014 TAB LE

CONTENTS ABOUT THE COVER The Arctic Prowler was built at the Ketchikan Shipyard by Vigor Industrial for Alaska Longline LLC out of Petersburg and is the largest commercial fishing vessel constructed in Alaska. It is one ship in a new wave to modernize Alaska’s commercial fishing fleet (page 50).

DEPARTMENTS From the Editor. . . . . . . . . . . . . . . . . . . . . . . 7 Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Right Moves. . . . . . . . . . . . . . . . . . . . . . . . 94 Inside Alaska Business . . . . . . . . . . . . . . 96 Alaska This Month . . . . . . . . . . . . . . . . . 108 Events Calendar . . . . . . . . . . . . . . . . . . . 109 What’s Next . . . . . . . . . . . . . . . . . . . . . . 110 Market Squares. . . . . . . . . . . . . . . . . . . . 110 Alaska Trends . . . . . . . . . . . . . . . . . . . . . 111 Ad Index . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Photo courtesy of Vigor Industrial

ARTICLES

VIEW FROM THE TOP

8 | Doris Coy, Owner Northern Dame Construction Compiled by Russ Slaten

Alaska meeting planners combine elegance with the outdoors.

104

FINANCIAL SERVICES

10 | Nonconventional Financing: AIDEA Working with lenders to support business endeavors By Tracy Barbour

REAL ESTATE

14 | Buying and Selling Commercial Real Estate in Alaska A range of options for investors By Laurie Evans-Dinneen

ENVIRONMENTAL SERVICES

18 | Building Remediation Common hazards and safety issues in old properties By Julie Stricker

40 | Weather Factors: StormGeo Forecasts Providing ‘mission critical’ Arctic data By Julie Stricker

LEGAL SPEAK

26 | Alaska Tax Credits Promote Financing Opportunities By Jonathan E. Iversen

OIL & GAS

TELECOM & TECHNOLOGY Iversen

28 | Contingency Planning Requires Service Providers Alaska private oil spill response companies show capabilities By Tom Anderson

22 Cruise ships heading south out of Juneau in Gastineau Channel.

22 | Urban Water & Wastewater: Juneau By Rindi White 4

Alaska Business Monthly | June 2014

32 | Cook Inlet Overview Powerful and positive effects on the region By Mike Bradner 36 | David Hall and Cook Inlet Energy Relishing fifth year as oil and gas operator By Wesley Loy

43 | Remote Marine Telecom Boat-based communications By Will Swagel

FISHERIES

46 | Alaska Salmon Keep Boats and Businesses Afloat Sustainability and commercial fishing By Dustin Solberg

VISITORS INDUSTRY

99 | Alaska’s Scenic Byways Routes to cultural riches and recreational resources By Susan Sommer

104 | Planning Meetings in Alaska Counting on experience pays off By Vanessa Orr

www.akbizmag.com

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J une 2 014 TABLE OF CONTENTS Follow us on

special section

and

Building Alaska

Ketchikan Shipyard christening ceremony for the Arctic Prowler longliner. © Vigor Industrial

50 | Shipyards for Alaska: Modernizing the Fleet Alaskans, as builders and owners, help launch powerful new class of fishing vessels By Wesley Loy

54 | Road Construction Across Alaska What’s on the STIP this summer—new roads, rehabs, and industrial ideas By Rindi White

special section Transportation 62 | Shipping News: There’s an uptick in Alaska SB21 and the transportation industry By Julie Stricker

Control tower at Ted Stevens Anchorage International Airport. © Russ Slaten

Alaska Business Monthly | June 2014

EDITORIAL STAFF

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

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

BUSINESS STAFF

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

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

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com Advertising email: materials@akbizmag.com

ALASKA BUSINESS PUBLISHING CO., INC.

74 | Rural Cargo Challenges Enhancing supply chains to lower delivery costs By Julie Stricker

Jim Martin, Publisher 1989~2014

Pacific Northwest Advertising Sales 1-800-770-4373

66 | Air Cargo Ranks High Busy state-owned international airports in Anchorage and Fairbanks By Russ Slaten

80 | Alaska Business Monthly’s 2014 Transportation Directory

Volume 30, Number 6 Published by Alaska Business Publishing Co. Anchorage, Alaska

ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2014, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www. akbizmag.com/archives, www.thefreelibrary.com/ Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfi lm: Alaska Business Monthly is available on microfi lm from University Microfi lms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

www.akbizmag.com

FROM THE EDITOR

ames C. Martin, 68, passed away at Providence Alaska Medical Center in Anchorage on April 11, 2014. A celebration of life was held at Sourdough Mining Company in Anchorage on May 2. The family plans to scatter his ashes at Waldron Pond Community Cemetery in Willow, Alaska. James was born on June 6, 1945 in Rapid City, South Dakota, to Jay and Willadell Martin. He attended the University of Wyoming and joined the US Air Force in 1965. He would later also serve in Alaska Air National Guard, Alaska Navy Reserve, and Alaska Civil Air Patrol. James married Billie Martin in 1966. Soon after his career in the US Air Force, James began working as a photographer, first at the News Review in Roseburg, Oregon. In 1970 he moved to Anchorage, Alaska, and was chief photographer for the Anchorage Times. He would become a founding partner of Alaska Journal of Commerce, an owner and publisher of the Alaska View, and President of Alaska Business Monthly. James would use his experience to contribute to his community; he sat on the UAA Department of Journalism Advisory Committee and was a volunteer at KAKM, KSKA, and Junior Achievement Alaska. His interests included photography, books, computers, books, astronomy, books, world religions, geology, and history, and he was an avid supporter of Title Wave Books. His family wrote: “Jim had an insatiable curiosity and was a life-long learner who never James ‘Jim’ Martin met a book he didn’t like!! He was a loving and dedicated family man whose greatest joy June 6, 1945 ~ April 11, 2014 was his grandchildren.” He is survived by his wife, Billie Martin; his daughter, Lori (James) Efird; son, Jason (Michelle) Martin; granddaughter, Gabriella Efird; grandsons, Aidan Efird and Sebastian Martin; his mother, L. Willadell Radcliffe; his sister, Nancy Ruehle; and many nieces and nephews in Alaska, Colorado, Washington, Oregon, and California. James is preceded in death by his father, Jay Arthur Martin. In lieu of flowers the family asks donations be made to Junior Achievement of Alaska, 639 W International Airport Road #38, Anchorage, AK 99518.

veryone at Alaska Business Publishing Company, Inc. is deeply saddened by the sudden and unexpected passing of James “Jim” Martin. We have been comforted by the outpouring of support and caring from clients and colleagues alike. I am sharing sentiments gathered at press time in late April as a tribute to our leader as we push forward and continue to publish Alaska Business Monthly. Everyone should be so lucky to have the gift of a boss like Jim. His passing is a great loss, and I am suddenly feeling cast adrift to be without his ongoing guidance, wealth of knowledge, and great sense of humor. I am thankful to have known him. He took such wonderful care of us all and did a fantastic job keeping this crew of creatives focused on the task at hand—producing a really great magazine. This one’s for you, Jim!

—Susan Harrington Managing Editor

“He was the best boss I ever had and I’ve always been grateful he hired me.”

a bit earlier than 5:00 on Fridays when Jim asked us to shut our computers off.”

“Jim always treated the employees with much respect and generosity. He will be greatly missed!”

“Jim was one of the best bosses I’ve ever had. Not only did he care about the business, but he also cared about his employees. He always had a story no matter what we were discussing and is deeply missed.”

“As the newest staff member of Alaska Business Monthly, I appreciate the potential Jim saw in me, and I’d just like to do everything I can in continuing his legacy in providing Alaska with a publication that showcases business around the state. And on a personal level, I’d like to continue to spread the type of positive attitude and dedication he had for his employees and family.”

“Jim was a generous man who cared deeply for the happiness and welfare of his employees. He worked to make sure that our office was not just a workplace, but that we all built relationships beyond our work with him and with each other. Jim hired me right out of college, giving me an opportunity that I’ll appreciate for the rest of my life. As I got to know him better, I realized that Jim was always the man who was happy to give someone a chance.”

“I’m happy to have had the opportunity to work for and know Jim. He was truly a great man and the best boss I could ever ask for, his concern for all of us here personally, as well as professionally, was genuine and truly touching. Bestowed with the gift of gab, his diverse knowledge, life experiences, and a truly winning personality, it was always such a pleasure to take a moment when the opportunity came up to chat. He will be sorely missed, kindly remembered, and never forgotten.”

—Anne Campbell Senior Account Manager

—Bill Morris Account Manager

“Jim was incredibly generous to the employees at Alaska Business Monthly. I am very thankful for the opportunities he provided and for his guidance and support over the years. He will be missed by all... and we will carry on the strong traditions of the magazine in his memory.”

—Charles Bell Vice President of Sales & Marketing

“It was a pleasure working for a boss that looked out for his employees—little things mattered; like letting us go early during winter storms so we would all get home safe, extra time to spend with family during holidays, and looking forward to weekends starting www.akbizmag.com

—Linda Shogren Production Artist

—Melinda Schwab Accountant & Circulation Manager

—Tasha Anderson Editorial Assistant & Survey Administrator

—Russ Slaten Associate Editor

— David Geiger Art Director

June 2014 | Alaska Business Monthly

View from the Top

Compiled by Russ Slaten

Doris Coy, Owner Northern Dame Construction

STARTING THE BUSINESS: Northern Dame Construction has been in business since 1992. I was working as a flagger and expediter on a construction job up North near Fairbanks, and I thought I could start my own company. It turned out to be quite the challenge, and so I worked as hard as I could with little capital and learned all the ropes. EXPANDING REACH: We travel all over the state of Alaska doing work for different contractors, more so than other contractors, and we will take on small projects that similar companies may not. Typically, we handle traffic control during weigh station maintenance across Alaska’s highway system and with projects on the North Slope. Due to changes in the woman-owned business regulations in Alaska, some traffic control contracts were taken over by the companies that hired us, so we have incorporated other types of jobs. We cover traffic control for electrical companies during wire crossings and for geotechnical engineers and consultants, usually before a project goes out to bid. We have helped with bicycling and running events like the Mayor’s Marathon in Anchorage. And we go all across the state, including Nome, Dillingham, the North Slope, Whittier, and Cordova, just to name a few. 8

Alaska Business Monthly | June 2014

riginally from Idaho, Doris Coy has lived in Alaska since 1982. She always wanted to come to Alaska because of her passion to hunt and ﬁsh. Her husband was in construction, and she had worked for construction companies as an expediter for parts. She conducted equipment counts and load counts on a mine project in Colorado and, at one point, worked as an oﬃce manager for a construction company. Going to school in Oregon, Idaho, and Colorado, she learned to accept each new place as she moved around.

TEAM PLAYERS: I was lucky enough to hire good, honest, dependable workers that help keep my company moving forward. I tried to teach them to have pride in the job they were doing, and that a job well done meant we would be working for those clients again. My sister, (field supervisor) Dorothy Senescu, and longtime employee, (field supervisor) Amy, have been key to the business. They take over in some of my duties when necessary, like creating traffic control plans and managing different sites. And each season we usually have about twelve to fifteen employees that we keep really busy. OPPORTUNITY KNOCKS: My parents taught me to never give up no matter how difficult, and you will succeed. They were both deaf mutes, and they raised six girls that all turned out to be hard workers. Three of us had our own companies, and the other three had successful careers. The advice that I would give others is to work hard, be honest, have integrity, learn your business from the ground up, and treat your employees as you would like to be treated. Alaska is still the land of opportunity and you can do it.  www.akbizmag.com

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FINANCIAL SERVICES

Nonconventional Financing:

AIDEA

Working with lenders to support business endeavors By Tracy Barbour

s a state-owned corporation, the Alaska Industrial Development and Export Authority (AIDEA) is in a unique position to finance business endeavors throughout the state. AIDEA’s purpose is to promote, develop, and advance the general prosperity and economic welfare of the people of Alaska. The Authority accomplishes this, in part, through commercial finance programs that give businesses access to long-term capital for financing new-construction and expansion projects. Its most broad-based and popular option with businesses is the Loan Participation Program. Other less wellknown and less utilized AIDEA finance programs include the Conduit Revenue Bonds, Rural Development Initiative Fund, Small Business Economic Development, and Business and Export Assistance Loan Guarantee programs. Although AIDEA is in the business of financing commercial projects, it strives to work collaboratively with other lending institutions. Or as External Affairs Officer Karsten Rodvik

“We do not compete with the private sector; we work in partnership with Alaska’s lending community.”

—Karsten Rodvik External Affairs Officer, AIDEA

Alaska Business Monthly | June 2014

“I think AIDEA pyramids a bank’s effectiveness in being able to finance their commercial real estate lending customer by mitigating risk and amplifying their legal lending limit.”

—Chris Anderson Deputy Director-Commercial Finance AIDEA

sums it up: “We do not compete with the private sector; we work in partnership with Alaska’s lending community.” As of fiscal year end, June 30, 2013, AIDEA had $352,494 million in unrestricted cash and investments in a Revolving Fund. AIDEA was originally capitalized by the state of Alaska with approximately $333 million in cash and loans. AIDEA pays an annual dividend to the state. Since the program’s inception, AIDEA has provided Alaska and its citizens with more than $345 million in dividends to support much-needed programs, services, and projects at the state level, Rodvik says. AIDEA gets money to lend through investment returns on its liquidity, income from projects, and interest and fees from the Loan Participation Program. However, generally speaking, income is generated from the business operations of AIDEA.

Loan Participation Program Guidelines AIDEA’s Loan Participation Program provides permanent financing, both taxable and tax-exempt, to borrowers through a qualified originator for the purpose of developing, acquiring, or

enhancing Alaska business enterprises or for a qualified energy development project. AIDEA doesn’t originate or create loans. Instead, it can purchase up to 90 percent of a commercial loan to a maximum of $20 million. The loan request must be originated by a financial institution—which must provide the remaining 10 percent—that is eligible to participate in AIDEA’s credit programs. And the project being financed must be in Alaska. The Loan Participation Program is primarily used to finance commercial (income-producing) real estate and equipment. AIDEA provides participation loans for a wide range of projects, from car washes, warehouses, and aircraft to lodges, restaurants, and retail establishments. Unlike typical commercial financing that goes five to ten years for a fixed interest rate, the Loan Participation Program provides the benefit of longterm fixed- or variable-rate financing on the portion of the loan purchased by AIDEA. Terms can be up to fifteen years for personal property or go up to twenty-five years for real property, at a maximum loan-to-value of 75 percent. www.akbizmag.com

Also, the term of the AIDEA portion of the loan can extend beyond the bank’s term, resulting in lower scheduled payments for the borrower. AIDEA has more “patient capital,” which makes it possible for the Loan Participation Program to offer long-term fixed rates to business enterprises, says Deputy Director-Commercial Finance Chris Anderson. “Our Loan Participation Program is an actual revolving loan fund,” she says. “It’s self-sustaining.” Anderson says having a long-term, fixed payment is a key benefit to borrowers, as it provides a measure of predictability. Knowing what the debt service (principal and interest payments) will be can make it easier for them to manage their business. As another advantage, the program offers an attractive interest rate to borrowers. The fixed rate is at least on par or somewhat under par with banks. “We don’t want to make it so low that we are competing with banks,” Anderson says. AIDEA’s quoted fixed rate for loans up to twenty-five years was 5.65 percent during the week of April 7. The variable rate for loans termed three months to

five years was 5 percent that week. AIDEA’s low rate is due, in part, to the fact that it has fewer and different regulations to deal with than traditional lenders, Anderson says. These institutions have layering for federal and state regulatory responsibilities, which can add to their cost of doing business and result in interest rates that are higher than AIDEA’s. However, Anderson emphasizes that having less regulation doesn’t mean AIDEA has loose processes or is lacking in accountability. AIDEA is audited annually and rated by outside companies such as A.M. Best, Standard & Poor’s, and Moody’s Investors Services.

Benefits to Lenders For financial institutions, the Loan Participation Program is attractive primarily because of the risk factor. All banks have their policies of what they want to lend against, Anderson says. If loans are risky (such as those involving a non-owner-occupied property or a remote location in Alaska), lenders will often try to participate on that loan, so that the risk of going into that credit is parceled out. And AIDEA doesn’t mind

taking that risk, Anderson says. “We don’t go off the deep end in risk, but we can help them, and it helps economic development,” she says. Anderson adds, “I think AIDEA pyramids a bank’s effectiveness in being able to finance their commercial real estate lending customer by mitigating risk and amplifying their legal lending limit.” As a side benefit, participating institutions get to keep the relationship with the borrower. They also can retain all of the balances the borrower places into their institutions. AIDEA purchases loan participations from a number of financial institutions inside and outside of Alaska. Most of these loans are originated by a handful of institutions: First National Bank Alaska, Wells Fargo, and Northrim Bank. Other institutions that are eligible to participate in AIDEA’s credit programs include Alaska USA Federal Credit Union, Commercial Fishing and Agriculture Bank, Matanuska Valley Federal Credit Union, Denali Alaskan Federal Credit Union, Mt. McKinley Bank, Denali State Bank, Native American Bank, First Bank, and National Cooperative Bank.

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June 2014 | Alaska Business Monthly

Businesses that want to capitalize on the Loan Participation Program can start with one of AIDEA’s eligible financial institutions. After the loan is approved, the lender will present the loan for AIDEA’s consideration and approval. The potential borrower must pay a $1,000, non-refundable application fee at the time the financial institution submits the loan package to AIDEA. The application fee is credited toward the one-percent commitment fee if the borrower accepts a written commitment issued by AIDEA.

Loan Participation Trends AIDEA’s loan programs are an integral part of the fulfillment of its mission. As of February 28, 2014, the outstanding loan portfolio consisted of 262 loans that had an outstanding principal balance of $403.9 million, according to Anderson. Most of these were internally-funded and purchased loans. Since its inception, AIDEA has purchased more than $991.9 million in loan participations. In terms of the diversification of AIDEA’s loan portfolio, the bulk of the Loan Participation Program’s outstanding

“It’s the only program in Alaska [and in the Lower 48] that provides that type of long-term financing.”

—Bill Inscho, Senior Vice President First National Bank Alaska

is a popular destination for many people, tourism can be somewhat volatile. Traditional lenders may have avoided making these types of loans—leaving them to AIDEA’s domain—as a way to mitigate their risk. “We have commissioned studies in the tourism industry to make sure AIDEA wasn’t taking too much risk,” Anderson says. AIDEA recently participated on a $1,312,500 loan with First National to provide permanent financing for a new multi-tenant retail condominium building called City Center Wasilla. First National originated the loan and

Chad Powelson, president of Western Enterprises, Inc.—the managing member and partial owner of City Center Wasilla—appreciates the uniqueness of AIDEA’s Loan Participation Program. Powelson was able to receive a fixedrate, twenty-five-year loan from AIDEA, as well as a variable-rate, fifteen-year loan from First National to finance the latest phase of City Center Wasilla. So far, Powelson has been able to work with First National and AIDEA to finance six buildings of the project, which is located on South Knik-Goosebay Road. “Knowing that AIDEA is out there plays a big part in making a decision to move forward with the loan,” Powelson says. “When you’re looking at that, it makes the return on investment more acceptable with the stretched-out term and greater cash flow.” Powelson, who is partial to fixed rates and longer terms, says financing City Center Wasilla simply would not be possible without the support of AIDEA. “First National is a great lending institution,” he says. “We’ve had a long, happy marriage with them, but they have finite resources. By doing AIDEA, it allows

“Knowing that AIDEA is out there plays a big part in making a decision to move forward with the loan. When you’re looking at that, it makes the return on investment more acceptable with the stretched-out term and greater cash flow.”

—Chad Powelson President, Western Enterprises, Inc.

principal balance is with Anchorage and Southeast Alaska. Industry wise, the office/warehouse, tourism, retail, and aircraft categories comprise the majority of the program’s outstanding principal balance. Regarding the types of loan transactions being done, many borrowers are seeking permanent financing for existing loans. “Most borrowers are either terming out a construction loan, terming out a buy-sell transaction, or refinancing,” she says. Anderson adds that financing for hotels represents a fair amount of AIDEA’s loan portfolio. In fact, AIDEA experienced one period in which it was providing a significant amount of financing for hotels. The reason, Anderson says, could be related to the uncertainty of the tourism industry. Although Alaska 12

Alaska Business Monthly | June 2014

is participating with $131,250, while AIDEA is supplying the remaining 90 percent, $1,181,250. AIDEA’s participation loan will provide long-term financing for one unit in the 10,368-square-foot building being constructed in several phases. First National had provided the construction financing for each stage of the multiphase project, according to Senior Vice President Bill Inscho. By working with AIDEA, the bank has been able to provide permanent financing for the units as they are completed. Inscho says AIDEA’s Loan Participation Program provides a good option for borrowers. It takes the interest-rate risk out of the equation. “It’s the only program in Alaska [and in the Lower 48] that provides that type of long-term financing,” he says.

them to put their hands out further and access more development opportunity.”

Latest Program Development The Loan Participation Program recently experienced a major development that will affect the entire state. The capacity of the program was augmented to include financing qualified energy development projects. The expansion is part of the new programs and powers AIDEA received as part of the ASSETS Act that was signed into law by Governor Parnell on June 14, 2012. Energy is a hot topic these days, and AIDEA is expecting the expanded program to have a positive impact on the state. “It enhances our ability to develop additional energy infrastructure in Alaska,” Rodvik says. AIDEA has already funded its first energy project under the extended prowww.akbizmag.com

“I don’t think we would have been able to do our construction lending and have them help with the take-out [permanent financing] without AIDEA. No one bank wants to take all of this on in one bite. It’s nice to have other local banks participate. It shows their support for the project.”

—Jim Culley Commercial Loan Unit Manager, Northrim Bank

gram—a liquefied natural gas storage and distribution facility belonging to Fairbanks Natural Gas LLC and its subsidiary Cassini LNG Storage LLC. The loan participation was for $20 million of a $35-million loan brought to AIDEA by Northrim Bank. Northrim originated the loan and is participating with $15 million. The loan will provide for the long-term financing of a 5 million gallon capacity liquefied natural gas storage and distribution facility in Fairbanks. Ultimately, the project will help reduce heating costs in the area by increasing the storage and availability of low-cost natural gas.

“I don’t think we would have been able to do our construction lending and have them help with the take-out [permanent financing] without AIDEA,” says Northrim Commercial Loan Unit Manager Jim Culley. Although Northrim is leading the construction loan, three other banks are participating on the $35 million—First National Bank Alaska, Mt. McKinley Bank, and Denali State Bank. “No one bank wants to take all of this on in one bite,” Culley says. “It’s nice to have other local banks participate. It shows their support for the project.”

Once the construction is done, AIDEA’s permanent loan will provide longterm financing at a fixed rate, which will help the borrowers control their costs. Taking the loan for the largescale project to AIDEA also minimizes risk for Northrim. “AIDEA was very helpful in giving us a commitment long enough to help us get through the construction. This is a two-year construction timeline,” Culley says. The project is expected to be completed by the end of 2015, with construction slated to begin this fall. Meanwhile, Anderson is looking forward to AIDEA participating with lenders on more energy development projects, as well as other business endeavors. Banks are very liquid now, she says, and they are trying to book as many transactions as they can—and AIDEA is ready to oblige them. “We are open for business,” Anderson says. “We are here and willing to participate with transactions that come their direction.”  Writer Tracy Barbour is a former Alaskan.

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alaskausa.org/biz Better for business. www.akbizmag.com

June 2014 | Alaska Business Monthly

REAL ESTATE

Buying and Selling Commercial Real Estate in Alaska A range of options for investors By Laurie Evans-Dinneen

his June, the forecast calls for a hot time in Anchorage, a chilling effect in Fairbanks, and calm seas in the Southeast. The commercial real estate forecast, that is. While the recession has made its mark on the Lower 48, Alaska had a bit of a dip about a year ago, but that glanced off the seemingly untouchable commercial market, particularly in Southcentral.

Alaska Business Monthly | June 2014

For investors of any level, commercial properties can give diversity to a portfolio, especially in volatile market times because commercial property values respond to different market conditions than those that affect stocks and bonds, and like these asset classes, there is a range of options to considerâ&#x20AC;&#x201D;retail, warehouse, land, office buildings, or multi-family housing.

Anchorage The Anchorage commercial market reflects the general economy of Anchorage, which has seen good, steady growth for the last twenty years, according to Jeff Thon, CPM, Senior Commercial Associate

Broker, Jack White Commercial. There is good disposable income and steady economic growth in town. Investors in-state and out are looking at Anchorage. BurgerFi and Krispy Kreme are coming to town. Anchorage Outlets is going up across from the new Cabelaâ&#x20AC;&#x2122;s in South Anchorage. Southcentral Foundation and Alaska Native Tribal Health Consortium are adding another building to the Alaska Native Medical Center campus in the U-Med District. Construction on the Blood Bank of Alaska building off DeBarr should start this summer. Warehouse space is at a premium. Available visible corners are nearly non-existent. www.akbizmag.com

“Lots of old industrial is being bought up, and they are tearing down old buildings to put up new. Look at Walgreens. They tore down an Arby’s; they tore down Johnson’s Tire. They wanted prime real estate and they bought out someone else to get it.”

—Jeff Thon CPM, Senior Commercial Associate Broker Jack White Commercial

Anchorage is so hot investors are beating down the doors. Chad Graham, Broker, Graham Commercial Real Estate Consultants, Inc., says that part of what makes Anchorage look so good is its cap rates—capitalization rates, used to determine the investor’s potential return on his or her investment (divide the income the property will generate, after fixed costs and variable costs, by the total value of the property). Graham says that local cap rates are 7 to 9 percent, while Outside rates hover around 6 percent. Graham began his career in the Anchorage market and says a major medical supplier just paid $1.15/square foot “triple net”—meaning they pay for everything, utilities, etc., which makes it really about $2/square foot. The ware-

house market, in particular, is in an interesting place. “The number one product is warehouse,” according to Graham. “There is a steady increase because there is only a 2.3 percent vacancy rate in the Anchorage Bowl. If you want to build a warehouse, it will be tough to get financing and rent to make it work.” What often happens is that a business owner has been leasing space for so long, and, when profit turns, the owner decides to buy a building—usually the building housing the business. Then, after owning the building and the business, the owner decides to invest in another building. And then another. “They get a feel for it and want to keep doing it,” Graham says. Thon and Graham both suggest that investors are looking at Anchorage all

the time because it is so steady. “People have money to spend,” Thon notes, “and they want to spend it here versus Outside because our economy is so good.” Low vacancy rates, no more land on which to build—when buildings come on the market, Thon says, they get scooped up. “Lots of old industrial is being bought up, and they are tearing down old buildings to put up new. Look at Walgreens,” he says. “They tore down an Arby’s; they tore down Johnson’s Tire. They wanted prime real estate and they bought out someone else to get it.” With warehouse space at just above 2 percent vacancy, apartment at 3.2 percent, office at 5 to 6 percent, and retail at 5 to 6 percent, Anchorage is a seller’s market, and investors are waiting in the shadows to pounce, paying agents like Graham and

Our People Our Community Sometimes good things happen for the right reasons. Fifteen years ago Mike traded his Army helmet for a hard hat, and since then he’s worn lots of “hats” at Fort Knox. Mike’s Alaskan odyssey began after he returned from a grueling tour in Somalia as an Army infantryman. Poised to leave the service, he was offered a posting at Fort Wainwright, and jumped at the chance to fulfill a boyhood dream to live in Alaska. Leaving the Army in 1998, he landed a temporary job as a lab tech at Fort Knox that turned into “a great opportunity to move his career forward,” he says. Today Mike serves as Ore Processing Superintendent, overseeing more than 100 employees. Mike says Fort Knox “offers workers the chance to grow and develop new skills and recognizes hard work with good pay and benefits.” He and his family enjoy living in Fairbanks and he appreciates the community’s strong historic ties to mining and its continuing support for the industry. At Fort Knox, we’re glad that fate and the U.S. Army conspired to bring Mike here.

kinross.com www.akbizmag.com

June 2014 | Alaska Business Monthly

“We have three brand new buildings that have never been occupied. Two just sold for half the price of construction. The third has no offers and sits vacant. The cost of utilities in Fairbanks is a huge expense, and it is keeping people from coming in, and it is causing people to leave. Heating and electric are up 200 to 400 percent in less than a decade. We are on the verge of depopulating if something doesn’t break soon.”

—Pamela Throop Broker and President, Alaska Commercial Properties

Thon to be at the ready. In some cases, agents are being sent out to find a space that owners want to sell. Graham points to a recent apartment building sale he made that broke a record in price per unit. “A usual price is $75,000/unit sale, and this went for $103,000/unit based on a desirable location and rental rates.” Again, he notes, vacancy rates are extremely low, so tenants are paying premium rental rates. Nationwide vacancy rates are at 5 to 6 percent, and Anchorage is at barely 3 percent. “The cap rates are going down on apartments, and it is the number one investment in the nation,” he says. “With the recession, less

people are buying homes, it is hard to get financing, so there are a lot of renters. In Anchorage’s Mountain View neighborhood, rents are at $1,200 for two-bedroom apartments.” “We have a problem,” Thon says. “We have more buyers than properties available.”

Fairbanks On the other hand, the commercial market in Fairbanks has cooled to the point of being hypothermic. Pamela Throop, broker and president of Alaska Commercial Properties and a Fairbanks broker since 1983, paints a some-

what bleak but realistic picture, and Anchorage brokers are quick to agree with her assessment. “We have three brand new buildings that have never been occupied,” Throop says. “Two just sold for half the price of construction. The third has no offers and sits vacant.” It should be a buyer’s market, but no one is buying. Investors aren’t even sniffing around the edges— local or national. “The cost of utilities in Fairbanks is a huge expense, and it is keeping people from coming in, and it is causing people to leave,” Throop emphasizes. “Heating and electric are up 200 to 400 percent in less than a decade. We are on the verge of depopulating if something doesn’t break soon.” When the cost of oil skyrocketed in the mid-2000s, it took a toll on Fairbanks. Often Alaskans think of the price of heating oil and gas at the pumps affecting rural Alaska, but Fairbanks was not immune. With no natural gas line, they are dependent on oil for heating their homes and running their electric. Throop says that in 2007 it cost nearly $15,000 to heat her own home. “Oil was

Alaska Business Monthly | June 2014 www.akbizmag.com

$1/gallon nine years ago, and it is $4/ gallon now. Electric costs—generated by oil—have also doubled.” Throop says there is a lot on the market in Fairbanks because everyone is moving out. Alyeska closed its warehouse. United Rentals closed up and took everyone and everything to Anchorage. Fairbanks cannot compete with the strong economy in Anchorage nor can it shed the cloak of doom presented by the high cost of utilities, she adds. “We are in a holding pattern,” she emphasizes. “We and investors here and out of state are waiting to see how the LNG [liquefied natural gas] situation turns out.” For all her reality checks, Throop still believes in selling commercial real estate. “People are buying distressed properties built in 2005, which are really well built but no one has touched them until [the price is] under $100/ square foot.” Throop is at the ready when the change comes for disposable income to go toward investing in business rather than toward the fuel bill.

Southeast In the Southeast panhandle, the steady calm of the economy keeps brokers busy, and Nancy Davis of Davis Realty in Sitka is no exception. She’s been working seven days a week. “The commercial real estate market in Sitka is stable,” she says. “We have a different situation here than in a lot of Alaska because we are so small and there is not a lot of new land available.” There is not a lot of new commercial being built, but there are two buildings on the market for $699,000 and $1 million. That’s about average, with one or two commercial properties changing hands each year. “The downtown area has had owners that have had property handed down from generation to generation,” Davis notes. “Owners have updated the building, but, basically, Lincoln Street in downtown Sitka looks very much like it did years ago. There is just no additional commercial land available in the Lincoln Street area.” But Sitka, a town of nine thousand, has the surrounding islands that have lodges and sport commercial listings that come and go as dreams are lived and dashed. Islands themselves are

sometimes listed as available land. “There’s the Baranof Warm Springs and Port Alexander,” Davis says. “Sitka is a wonderful small city,” Davis says, “with all the [same] shopping and recreational opportunities as anywhere else. Our air transportation with Alaska Airlines is very good for a small island community.” A trend indicator for Sitka is that retail sales are dipping, which, according to the Sitka Trends Economic Newsletter (March 2014), means less retail shops. The newsletter also noted that cruise ship passenger volume dropped 61.79 percent between 2008 and 2012, causing several retail stores to close. That being said, in 2010, Baranof Island Brewery Co. opened about a mile from downtown Sitka. All of Southeast is seeing some movement. Commercial real estate offerings include undeveloped lots and land, retail and office buildings and units, warehouses, multi-family housing investments, historic buildings, and shopping centers.  Laurie Evans-Dinneen writes from Anchorage.

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June 2014 | Alaska Business Monthly

ENVIRONMENTAL SERVICES

Building Remediation Common hazards and safety issues in old properties By Julie Stricker

Top Left: Damaged asbestos pipe insulation and other debris. Clockwise from top right to bottom left: Popcorn ceiling texture, fireproofing, and floor tile pictured all contain asbestos. Photos courtesy EHS-Alaska

ven your dream home can house nightmares. That 1940s bungalow with the charming period touches may have asbestos in the insulation around the boiler, in the attic insulation, around the electrical outlets, in the walls, in roofing tiles, or even the vinyl flooring. The soft ocean green trim in the smallest bedroom of your 1950s ranch home could contain lead. And even if you can’t see it, black mold may be thriving in the laundry room wall or behind the avocado-green appliances in your groovy 1970s kitchen. Even the light bulbs could contain mercury, and the ground under the backyard swing set may be laced with PCBs.

Alaska Business Monthly | June 2014

Commercial buildings aren’t immune either. In fact, nearly any structure built before the 1980s could contain lead and asbestos, which were widely used in paint and building materials before being banned or restricted in the 1970s and 1980s. Before starting on a remodeling project to turn that groovy kitchen into something less likely to host the Brady Bunch, it’s a good idea to hire a professional to assess the risk of dangerous materials. If working on a commercial building, Environmental Protection Agency and OSHA regulations require a survey before construction. Bob French, principal in charge of EHS-Alaska, Inc., an Eagle River-based

firm that specializes in identifying hazardous materials and remediation planning, says asbestos can be found in a wide variety of materials. “It runs the whole gamut,” he says. “Anything that wasn’t metal, glass, or wood contained asbestos at one time or another. There are thousands and thousands of possible materials.”

Do Not Disturb Asbestos is a mineral that is resistant to heat and fire and does not conduct electricity. Because of these properties, it was widely used in construction, automotive, and other industries. It is also a known carcinogen. When disturbed, the microscopic mineral fibers can be inhaled and become www.akbizmag.com

lodged in the lungs where they may cause scarring, mesothelioma, or cancer. French notes that asbestos is still legal and is still used in construction, although it’s less common than it once was. The mineral’s ability to resist high temperatures and fire makes it ideal for steam pipe gaskets, as well as automotive brake pads and clutches. So while removing asbestos takes special precautions, sometimes it’s better left in place. Figuring out the best approach is where EHS-Alaska comes in. “We will do a building survey,” French says. “That involves taking a lot of samples and sending them off for testing. Once we get the sample results back, we will create a report and a specification to tell a contractor where the materials are and what they need to do with it and whether it needs to be removed or left in place.” EHS-Alaska is a small employeeowned company that was started in 1986. It has worked on projects as small as homeowner remodels to very large projects for the US Army Corps of Engineers and the remodeling of Concourse B at Ted Stevens Anchorage International Airport, a project that took three

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years. They are currently working on the renovation of the Juneau-Douglas Museum and the Legislative Information Office in downtown Anchorage. “We don’t do the removal,” French notes. “We will work on some of the construction monitoring. We’re often working with the owner. We’ll do some things like visual inspection and air testing to show that that the removal was done properly.” The company also works with the contractors to ensure safe working conditions, which means following stacks of local, state, and federal regulations. “Those are long and kind of multifaceted,” French says. “You’ve got the different regulation for lead, asbestos for disposal and handling, and you’ve got the OSHA recommendations for worker protection and HUD regulations. There are a lot of pieces there. It’s not something your run-of-the-mill contractor is aware of, so that’s why most of your removal is done by hazardous materials companies.”

Federally Regulated The removal of asbestos is federally regulated and should be conducted by certified asbestos abatement professionals.

Not following regulations can be a considerable risk for owners and contractors—and not just health risks. Considerable fines can be levied if workers or the public are exposed to hazardous materials. Over the years, EHS-Alaska has found some pretty interesting things while surveying buildings, French says. “The oddest thing was the peephole into the ladies dressing room in the Fourth Avenue Theater,” he says. “There’s a little octagonal powder room, and back behind it there was a little ladder going down into a little tiny hole there, and a peephole was scratched into mirror.” While finding odd spaces is just part of the job, French says one of the best tools owners can provide are accurate building records. “We need something to be able to show when the different renovations have occurred,” he says, “if there’s different additions, if there’s tenant improvements. It could be most important for Sheetrock . If Sheetrock is done right, you can’t tell the difference between a wall that was installed in 1965 or one installed in 1985.”

June 2014 | Alaska Business Monthly

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Alaska Business Monthly | June 2014

Spackle or joint compound in Sheetrock walls in older buildings commonly contain asbestos, he adds.

Get the Lead Out Lead-based paint is also commonly found in older buildings, although it became less common in the 1960s as titanium was used more widely as a paint base. Lead exposure can cause developmental delay or other disabilities in young children. Concerns about its toxicity led the federal government to ban it in most uses in 1977. Lead isn’t just a problem in homes. The trademark red color of the historic buildings at Kennecott Mine comes from lead-based paint. When the National Park Service took over management of the mine site in 1998, it worked with the Alaska Department of Environmental Conservation to come up with an agreement to mitigate hazardous materials at the mine site—specifically the 144,000 square feet of building surfaces covered with lead-based paint. The plan recommends a combination of the removal and disposal of the leadbased paint, sealing painted surfaces, or repainting with non-lead paint. Because much of the paint had flaked off over the decades, the Park Service also agreed to cap soils around the buildings. Signs still warn visitors of the danger, however. One of the most common hazards found in Alaska buildings is mold, and it can be found everywhere, from village housing to historic Fairbanks log cabins to Anchorage luxury homes. “Mold can be a problem in any house, whether it was built properly or not,” says Jack Hebert, president/CEO and founding chair of the Fairbanks-based Cold Climate Housing Research Center. “We see it all over the place.” Mold requires only two things to grow: warmth and moisture. Once water gets into the wall and is exposed to the warmth inside the house, mold can begin to grow. “In the wetter areas of the state, the typical problem has to do with water intrusion from the exterior,” Hebert says. “In places like Southeast or the Aleutians, water can get in through poorly installed flashing or around the window, or in some cases right through the siding.” In colder parts of the state, condensation is often the culprit, Hebert says. “Once you get warm, moist air and it hits a cold area, it condenses,” he says. www.akbizmag.com

Frequently, residents with high humidity in their homes will notice water fogging up the windows. That is easily cleaned up. “When you can see it and it starts to alarm you, you do something about it,” Hebert says. “But when it happens inside a wall, it’s out of sight. “Mold loves Sheetrock,” he adds. “It’s the yummiest thing ever.” Many types of mold will grow inside a home and can cause problems, particularly with people who have mold allergies. Mold can irritate the eyes, lungs, skin, nose, and throat, and some people can develop respiratory problems. Mold exposure can affect a person’s immune system; some are toxic. “It’s not something you want to mess with,” Hebert says. The first step is to find the source of the moisture. “You need to get it dry,” Hebert says. “You need to stop the source that creates the environment for the mold to grow, then you need to address it very carefully. You don’t want to stir it up and you don’t want to breathe the spores.” Small patches of mold can be treated with a mild bleach and water solution if

www.akbizmag.com

Not all lead-based paint hazards are this obvious. Photo courtesy EHS-Alaska

the area is well-ventilated. Wear gloves and goggles and make sure there is proper ventilation, including the use of a respirator if necessary. Areas larger than ten square feet should be treated according to EPA guidelines. Porous materials such as drywall, insulation, carpet, and ceiling tiles should be disposed of. Upholstery, curtains, and carpet should also be disposed of if they cannot be cleaned. Harder surfaces such as wood, plastic, or glass can usually be

cleaned and disinfected. So if the path to your dream kitchen does happen to include a side trip through household hazards, a thorough remediation plan and professional abatement, if necessary, can clear things up. Hold the avocado, please.  Julie Stricker is a journalist living near Fairbanks.

June 2014 | Alaska Business Monthly

ENVIRONMENTAL SERVICES

Juneau allows cruise ships to take on water when they dock.

Urban Water & Wastewater: Juneau

ater and wastewater are some of the most expensive utilities to provide and also the most vital to keeping a community healthy. The American Council for an Energy-Efficient Economy says municipal water and wastewater treatment systems “are among the most energyintensive facilities owned and operated by local governments, accounting for about 35 percent of energy used by municipalities.” In Alaska, costs can be even higher than the national average, especially in rural and remote communities where groundwater is brackish or soils unsuitable for building wastewater treatment facilities. But what’s happening with water and wastewater in Alaska’s urban areas? Are water utilities much different in Anchorage, Fairbanks, Juneau, and Mat-Su than Outside? What are the issues facing these utility providers? Over the course of several months, Alaska Business Monthly readers are learning about utilities in Alaska’s major population centers—and utilities provided to industrial users—and finding out how each community is preparing for the future.

ging water wells, a system that shuts one-third of the municipality’s water source off when work is done at the local electrical utility, and, 22

Alaska Business Monthly | June 2014

By Rindi White on top of it, rates that have seen little increase over the past decade have left the City and Borough of Juneau in a tough spot when it comes to water utilities. The wastewater utility is in a similar state—treatment plants that are aging with forty-year-old roofs in disrepair and a waste product—the cakes of biosolids, or the thickened version of the sludge left after wastewater has been treated—that no one has known quite what to do with. Right now, shipments of bio-solids are barged south and then trucked to a landfill in Arlington, Oregon, for final disposal, at a significant cost to the municipality. Juneau Utilities serves roughly 33,000 people via 8,500 water and 7,100 wastewater connections. With the issues outlined above, the municipality says it needs about $72 million to make improvements and solve problems. While the municipality always seeks grant funding first, utility

customers will ultimately be paying some of the cost for upgrades and improvements. How much, municipal officials say, has not yet been determined. Municipal Public Works Director Kirk Duncan says the municipality will ask the Juneau Assembly for a 9.5 percent increase in rates each year for the next five years, with a 5 percent yearly increase the following five years. The municipality will also be asking for half of 1 percent of the 5 percent Juneau sales tax and $1 million from the marine passenger fees, or head tax charged per cruise ship passenger.

Periodic Interruptions The Municipality of Juneau gets water from two main sources—a surface water source at Salmon Creek and a handful of wells in Last Chance Basin. Both water sources have problems. Salmon Creek, where the municipality gets about a third of its water, is a shared www.akbizmag.com

water source. Alaska Electric Light and Power, or AEL&P, uses the creek to generate electricity, and fish hatchery Douglas Island Pink & Chum uses the creek to rear salmon. Juneau Water Utility Superintendent Dave Crabtree says the problem is that it’s an interruptible power source. AEL&P has to close the pipe to perform annual maintenance, he says. At other times, like when a major meltoff happens or if the lake is stirred by cool water suddenly rising to the top of the lake, the water becomes too turbid, or filled with silt and soil, for use. “We currently have a bid on the street to install a bypass,” Crabtree says. The bypass project is being expedited in hopes of having it installed before AEL&P begins a major maintenance project this year, he says. If not, the municipality could be reliant on well water for 3.5 weeks. Crabtree says the municipality is bracing for water restrictions, just in case. “But it looks like we’ll get it,” he said in April. “It’s eighty feet of pipe that needs to be run. We’re very hopeful that this can be awarded—the contractor can get on site and get it done before [AEL&P] shut it down.” Water from Salmon Creek sees minimal treatment—right now it’s only chlorinated. Crabtree says current federal Environmental Protection Agency regulations require a secondary disinfection method to address cryptosporidium, which the municipality is looking into. In 2013, the utility was granted a two-year extension to have a secondary form of disinfection in place. It must be installed by October 2015, he says. Membrane technology, or microfiltration, which Crabtree is leaning toward, would provide the necessary secondary water treatment and also deal with seasonal turbidity issues. Installing membranes to treat the flow would likely run between $3 million and $4 million.

Old Wells and Mine Shafts The municipality’s primary source of water is the group of five wells above downtown Juneau in the Last Chance Basin. From Last Chance Basin, the water travels through pipes that run through two mine shafts: one is the Jualpa tunnel, a century-old mine shaft that follows Gold Creek; the other is the Mill tunnel, which goes through Mount Roberts. The borough is permitted to take up www.akbizmag.com

to 5 million gallons of water daily from those wells, although the aging condition of the wells doesn’t allow for that much production. Two of the wells are more than fifty years old and three wells are more than thirty years old. Crabtree says the municipality has rehabilitated its wells within the last five years, by hydro-pulsing, cross-jetting, and surging and bailing them to clean out particulates that filter their way into the well site “cone of influence” over the years. “Within a year after the initial rehab, the wells’ production rates dropped down to the previous levels,” he says. “The aquifer is fine but the wells’ life expectance has depleted significantly.” A recent well report in the area shows that drilling a new well ten to twenty feet away from the existing wells could solve the problem. The municipality hopes to rehabilitate some of the higher-producing wells and drill a new well to replace the lowest producer. That project might run around $4 million, Crabtree says.

Sharing Water with Cruise Ships One factor Juneau faces that many Alaska communities do not, when it comes to water service, is that it allows cruise ships to take on water when they dock. The municipality averages around 3.5 million to 3.6 million gallons a day for residents, but when the ships dock, the number can increase by more than 1.5 million gallons a day. “You could have four tied up at once and all taking on water,” Crabtree says. “That’s when you’d see a 5.5 million to 6 million gallon day. That happens in July and August when they’re really just cranking out the water and ships are at full capacity.” The standard customer usage goes up during those months as well, Crabtree says. People go out to recreate, wash cars and boats, and generally use more of the public facilities, shops, and restaurants. Duncan says the cruise ship industry wants more water than the municipality can currently provide. The decline in production in Last Chance Basin means only about 300,000 gallons per day are available for cruise ships, but they’re asking for about 1.5 million gallons. Rates would go up for the cruise industry as well as for other customers if the rate increase passes. Just how much,

Crabtree says, will be up to Assembly members.

Three Aging Plants On the wastewater side, three treatment plants and forty-five sewer lift stations serve the municipality’s nearly 33,000 citizens. “We service everything from Douglas Island and all of Juneau, past Auke Bay and Thane,” says Wastewater Utility Superintendent Samantha Stoughtenger. The municipality’s original plant is located just south of Juneau and serves all of downtown Juneau and Douglas Island. A second plant was built in the Mendenhall Valley to service the growing residential and commercial uses of the area. A third plant, the smallest of the trio, serves the Auke Bay vicinity. The series of lift stations is necessary to carry wastewater over Juneau’s hilly topography, Stoughtenger says. “The collection system for sewer in Juneau is very linear. It’s very likely that someone’s wastewater goes through at least one lift station,” she says. It’s an issue, she says, because those lift stations eventually have to be repaired, replaced, or upgraded. “A portion of that [$72 million] will be used to continue upgrading the system lift stations,” she says. Another portion of the $72 million will go to rebuilding the collection system where it can be coordinated with other planned road or water system improvement projects. “We still have original wood stave wastewater lines in the ground,” Stoughtenger says, adding that most of those are located in Juneau’s downtown area. On the treatment side, Stoughtenger says the municipality’s three treatment plants are badly in need of repair. “The Juneau-Douglas treatment plant has four buildings that are at least forty years old, with roofs that are in poor condition. Repairs of these buildings are estimated to cost roughly $8 million to ensure continued operation of the facility,” she says. While the plant is a highly performing system, it needs a variety of other improvements because it currently operates with most of its original parts. “You can clearly see the plant needs some TLC to keep it operational,” she says. June 2014 | Alaska Business Monthly

But a forty-year-old facility is not the same as a forty-year-old house. The plant equipment runs twenty-four hours a day, seven days a week and operates in a wet, humid, and poorly ventilated environment. In Mendenhall, the plant’s headworks, or pretreatment area, is inadequate, Stoughtenger says. But expanding or making changes isn’t easy. The site is in a residential area, which means the municipality must contain odors and abate noises when possible. A portion of the $72 million is earmarked to upgrade the treatment plant’s headworks. The municipality is currently working with a consultant from CH2MHill to optimize the way the plant currently operates and to increase performance efficiency while containing costs.

Sludge Hauled by Barge, Rail, and Truck What to do with the solids left after wastewater has been treated and discharged has been a problem for the municipality since the 1970s, Stoughtenger says. Until recently the municipality was incinerating the caked solids, but

the incinerator “exceeded its useful life,” Duncan says, and the municipality looked to other solutions. Although many municipalities in the state truck the bio-solids to a landfill, that option isn’t available in Juneau because its landfill doesn’t have a liner. So the caked bio-solid is put into totes for shipping then barged to Oregon. It goes by rail and then truck to the Columbia Ridge Landfill in Arlington, Oregon. Owned by waste services company Waste Management, the landfill accepts industrial and other special wastes. The temporary solution is costly. Duncan says the municipality pays about $1.6 million each year for its waste to be disposed of there. But finding a solution has not been easy. “It’s a much-debated public issue, and the Assembly’s number-one issue right now. It has kind of hit a critical mass, where we have to do something,” Stoughtenger says. But everyone involved in the solid waste disposal discussion has a different opinion about where the bio-solids should go, Duncan says. Of the $72 million requested for wastewater and water

projects, Duncan says $20 million has been earmarked for a bio-solid solution. Stoughtenger says she hopes to solve the issue locally. There are several options, she and Duncan say, from installing a new incinerator to composting the caked bio-solids and using as landfill cover or even compost. “I think it’s really important to solve a Juneau problem with a Juneau solution,” Stoughtenger says. Duncan says the municipality awaits a report from CH2MHill that should indicate which solution makes the most sense for the municipality. Ultimately, the municipality will have to wait for the Assembly’s action on the rate increase to make any changes to how bio-solids are handled. Duncan said he’s hopeful the Assembly will pass a plan that allows the municipality to move forward, adding: “Nobody likes to pay for services, but my main goal right now is to make sure we can deliver the needed water and wastewater treatment.”  Rindi White is a freelance journalist living in Palmer.

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AGENDA

Compiled By Tasha Anderson

June

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National Congress of American Indians (NCAI) Mid-Year Conference

June 8-11—Dena’ina Center, Anchorage: The National Congress of American Indians, founded in 1944, is an American Indian and Alaska Native organization serving the broad interests of tribal governments and communities. ncai.org

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Alaska Gathering for Ferrets

June 27—BP Energy Center, Anchorage: This educational event is designed to enhance the expertise of veterinarians in caring for ferrets, including sessions for vet techs, shelter operators, and owners.

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July

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US National Conference of Earthquake Engineering

July 20-26—Dena’ina Center, Anchorage: This conference is comprised of the 2014 EERI (Earthquake Engineering Research Institute) Annual Meeting and the NEES (Network for Earthquake Engineering Simulation) Quake Summit, as well as the 10th Anniversary of NEES, the 50th Anniversary of the 1964 Alaska Earthquake and Tsunami, and an undergraduate seismic design competition. The conference, on the 50th Anniversary of the Great Alaska Earthquake and Tsunami, will provide an opportunity for researchers and practitioners to share the latest knowledge and techniques to mitigate the damaging effects of earthquakes and tsunamis. 10ncee.org | eeri.org

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August

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CSG West & CSG National Joint Annual Conference

August 9-13—Various venues, Anchorage: The annual conference for the Council of State Governments National and West. The conference is an opportunity to work across borders to enhance knowledge and exchange ideas through policy forums on high priority public policy issues; network; and discover Alaska’s innovations through policy tours. csg.org

IEA World Congress of Epidemiology

August 17-21—Dena’ina Center, Anchorage: The theme for this year’s congress is “Global Epidemiology in a Changing Environment: The Circumpolar Perspective.” The congress is an opportunity to visit with and listen to prominent researchers in epidemiology and public health. ieaweb.org

September

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Alaska Oil & Gas Congress

September 15-18—Anchorage: This comprehensive four day conference is the

www.akbizmag.com

place to meet the players, forge new relationships, and get the information you need to capitalize on changes taking place in Alaska. This year is the 10th anniversary event and planning is already underway to make it a memorable and valuable experience. alaskaoilandgascongress.com

Rural Energy Conference

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September 23-25—Westmark Hotel, Fairbanks: A three day event offering a large variety of technical sessions covering new and ongoing energy projects in Alaska, as well as new technologies and needs for Alaska’s remote communities. akruralenergy.org

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September 30-October 2—Anchorage: Events include keynote speakers and training sessions. alaskahousing-homeless.org/conference

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Alaska Coalition on Housing and Homelessness Conference

Alaska Community Transit/ Department of Transportation Conference

September 30-October 2—Millennium Alaskan Hotel, Anchorage: This annual conference address transportation information and issues around the state. act-dot.com

Arctic/Cold Regions Oil Pipeline Conference

Alaska Fire Conference

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October

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Alaska Business Monthly’s Top 49ers Luncheon

October 1—Dena’ina Center, Anchorage: Come honor the top Alaskan-owned companies ranked by gross revenue at our annual luncheon. Contact: Melinda Schwab, 907-276-4373, accounts@akbizmag.com, akbizmag.com

Alaska Travel Industry Association Convention

October 6-10—Westmark Fairbanks Hotel & Conference Center: The 2014 “Good as Gold” ATIA convention is for Alaska’s tourism industry leaders with delegates from tour operators, wholesalers, Alaska vendors, destination marketing organizations and elected officials. alaskatia.org

All-Alaska Medical Conference

October 9-11—Sheraton Anchorage Hotel and Spa, Anchorage: A continuing medical education conference put on by the Alaska Academy of Physicians Assistants, providing up to 25 CMEs. akapa.org

Alaska Chapter of the American Fisheries Society Annual Meeting

October 20-24—Centennial Hall, Juneau: This year’s theme is TBD. afs-alaska.org

Alaska Chamber Annual Fall Conference & Policy Forum

October 20-22—Girdwood: The state’s premier business conference. This year’s topics include healthcare reform and implementation, workers’ comp reform, grass roots advocacy, small business workshops, etc. alaskachamber.com

Alaska Federation of Natives Annual Convention

October 23-25—Anchorage: Annual gathering of Alaska Native peoples to discuss current news and events on a state, national, and international level. nativefederation.org

November

September—Dena’ina Center, Anchorage: This conference will consist of presentations addressing the unique challenges associated with the construction and operation of pipelines in the Alaskan Arctic/Cold Regions. September 21-26—Kenai: Includes training, workshops, lectures, and a firefighter competition. alaskafireconference.com

AAHPA Annual Conference

October 13-17—Ketchikan: This is the annual conference of the Alaska Association of Harbormasters & Port Administrators. alaskaharbors.org

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Associated General Contractors of Alaska Annual Conference

November 12-15—Anchorage: AGC of Alaska is a nonprofit construction trade association dedicated to improving the professional standards of the construction industry. agcak.org

Transcending Adversity: 2014 Alaska Child Maltreatment Conference

November 17—Hilton Hotel, Anchorage: The annual conference of the Alaska Children’s Alliance, a not-for-profit 501(c)3 dedicated to improving community responses to child maltreatment. alaska.nationalchildrensalliance.org

AMMA Annual Business Meeting

November 17-18—Anchorage: The Alaska Municipal Management Association (AMMA) is a professional organization of municipal managers and administrators in Alaska; its purpose is to increase the proficiency of municipal managers and aid in the improvement of municipal administration in Alaska. alaskamanagers.org

Annual Local Government Conference

November 17-20—Anchorage: Joint conference of the Alaska Municipal League and the Alaska Conference of Mayors. akml.org

RDC Annual Conference: Alaska Resources

November 19-20—The conference provides timely updates on projects and prospects, addresses key issues and challenges and considers the implications of state and federal policies on Alaska oil and gas, mining and other resource development sectors. akrdc.org

June 2014 | Alaska Business Monthly

Legal Speak

By Jonathan E. Iversen

Alaska Tax Credits Promote Financing Opportunities

e Alaskans are blessed with bountiful natural resources and an iconic landscape. To promote economic growth and create financing opportunities made possible by these resources, the state of Alaska provides businesses with a series of tax incentives. Two of the most widely known incentives are the film production tax credit and the oil and gas production tax credits.

Film Tax Credit Alaska’s majestic landscape and its adventurous people are a strong draw for documentary and commercial moviemakers. The film production tax credit provides an additional economic incentive. The credit has a base rate of 30 percent for eligible expenditures with an additional 20 percent for local hire, an additional 6 percent for filming in rural areas, and an additional 2 percent for off-season filming. The maximum possible credit is 58 percent. Eligible projects are films, documentaries, and commercial and video productions with a minimum of $75,000 in qualified expenditures in Alaska. To qualify their project for the film tax credit, applicants must submit to the Alaska Film Office an application that includes estimated Alaska expenditures, a budget, a distribution plan, and a description of the project, as well as evidence of an Alaska business license. The Alaska Film Incentive Review Commission must approve the application. The applicant must have its expenditures reviewed by a CPA that has Alaska CPA and business licenses and is located in Alaska. Once production is complete, the applicant can file the application for tax credit. The Alaska Film Incentive Review Commission must approve the application before the credit certificate is awarded. Once awarded, the applicant may transfer the certificate to an entity that can apply the certificate against its tax liability under eight tax types, including corporate income tax, oil and gas production tax, oil and gas exploration tax, production and pipeline transportation property tax, and mining license 26

Alaska Business Monthly | June 2014

tax. The Alaska Department of Revenue (DOR) may purchase the certificate for 75 percent of the amount of credit.

Oil and Gas Tax Credits Alaska’s oil and gas production tax credits are a very hot commodity, with recent program changes having helped incentivize exploration and production companies to invest in the state. Several types of production tax credits are available. Certificates for these credits can be obtained from DOR and can be transferred to another entity or purchased by the state of Alaska. The credits vary depending on the area of operations in the state. Companies with operations on the North Slope may be eligible for a 45 percent carried-forward annual loss credit and 30 percent or 40 percent exploration credits for exploration drilling and seismic exploration. For areas other than the North Slope, the credits include: 30 percent or 40 percent exploration credits; 20 percent credits for capital expenditures; 40 percent credits for intangible drilling costs, as defined by the federal tax rules, and seismic projects within the boundaries of a production or an exploration unit; and a 25 percent carried-forward annual loss credit. There are also “frontier basin” credits specific to particular areas of the state for the lesser of $25 million or 80 percent of eligible drilling expenditures and for the lesser of $7.5 million or 75 percent of eligible seismic exploration expenditures. Cook Inlet also has the unique “jack-up rig” credit for up to $25 million for exploration drilling with a jack-up drilling rig. The same expenditure can, in many instances, serve as the basis for more than one credit. Typically, each entity with an interest in the project that incurs expenditures applies for its own credits. However, for the 30 percent or 40 percent exploration credits, a designated joint applicant files the application when more than one entity has an interest and incurs expenditures. Depending on the credit, DOR will review or fully audit the application for credit before issuing the certificate. Some

credit certificates are often issued within 120 days of the application, but timing can vary based on a number of factors and issuance can take much longer— sometimes well over a year. There are statutory deadlines that require DOR to grant or deny an application within a certain period of time for some credits, whereas no such deadlines exist for other credits. Once the applicant receives a credit certificate, it may either: (1) transfer the certificate to an entity that can apply the certificate against its production tax liability; or (2) if the applicant does not have any production tax liability or delinquent state taxes and produces a daily average of not more than 50,000 BTU equivalent barrels, apply to DOR for cash purchase of the credit certificate at 100 percent of the certificate’s value. The tax credit certificate resides on DOR’s database, and DOR issues a notification to that effect. The applicant may appeal any adjustments to the credit application and can transfer the credit certificate or apply for cash purchase of it regardless of any appeal.

Tax Credit Finance Alaska tax credit certificates can be used as a financing mechanism. The transactions may be as simple as a purchase and sale of a tax credit certificate to allow the seller to obtain cash from a third party immediately rather than wait for DOR’s review or audit. The credits may also serve as collateral and a source of repayment for revolving and term loan transactions, as well as project financing transactions that may involve multiple investors and debt and equity financing. A lender willing to loan against the credits typically requires a security agreement granting the lender a security interest in the credit application, the credit certificate, and the proceeds. Lenders often look to other assets as security, including fixtures and as-extracted collateral (i.e., oil and gas production). Should a lender wish to take a mortgage on all or some of the applicant’s oil and gas leases in Alaska, a deed of trust will be necessary. This deed of trust will give www.akbizmag.com

the lender a security interest in and lien on the applicant’s interests in the relevant leases, and also, if desired, a security interest in all fixtures on, in, or under said leases and a security interest in all future oil and gas production and the proceeds therefrom. For oil and gas production tax credits, there is also an assignment mechanism that was passed by the legislature last year as Senate Bill 83. The statute allows the applicant to make a present assignment of the production tax credit certificate expected to be issued. The notice of assignment must be filed with DOR when the application for credit is filed or no later than thirty days thereafter. Once a notice of assignment is filed with DOR, the assignment is irrevocable and cannot be modified absent written consent of the assignee. If a tax credit certificate is issued to the applicant, the notice of assignment remains effective and must be filed with DOR with the application for cash purchase of the certificate. The assignment of an oil and gas production tax credit certificate does not need DOR consent to be effective, but the statute sets forth the basic criteria for a valid assignment. For instance, the assignment must state “the interest in the production tax credit being assigned, expressed as either an amount in dollars, which may not exceed 90 percent of the credit applied for, or a percentage of the credit to be issued” (up to 100 percent) by DOR. The assignment must also specify an account with a bank located in Alaska, with information for an electronic transfer of funds to receive proceeds from the purchase of the certificate by the state of Alaska. Once DOR approves the cash purchase, the state will send the funds to an account designated by the applicant. The account may be a lender’s account or the applicant’s account that is controlled by the lender under an account control agreement. An assignment of an oil and gas production tax credit certificate that complies with the statute creates a property interest owned by the assignee in the credit application, the credit certificate issued by DOR, and future proceeds. The statute also provides that a valid and enforceable security interest in that property may be created as otherwise provided by law. The statute also provides that to the extent permitted under federal law, an aswww.akbizmag.com

signment that complies with the statutory requirements for a valid assignment gives the assignee a first priority claim that is not dischargeable in bankruptcy, against the proceeds received by the applicant (including its estate, trustee, or representative) from the tax credit application that is the subject of the assignment if the assignee has taken the steps needed under state and federal law to perfect a security interest in the assignment. 

Jonathan E. Iversen is a partner with Stoel Rives LLP whose practice focuses on state and local tax law, including transactional and tax controversy matters. He regularly advises clients regarding Alaska state and local tax incentives, legislative projects, and ﬁnancing associated with Alaska’s oil and gas production tax credits. You can reach him at jeiversen@stoel.com.

IRS Circular 230 notice: Any tax advice contained herein was not intended or written to be used, and cannot be used, by you or any other person (i) in promoting, marketing or recommending any transaction, plan or arrangement or (ii) for the purpose of avoiding penalties that may be imposed under federal tax law.

June 2014 | Alaska Business Monthly

OIL & GAS

Contingency Planning Requires Service Providers

Photo courtesy of CCI Industrial Services LLC

CCI Industrial Services LLC spill responders lay out containment boom to isolate the spill and use pumps to remove the oil sheen off the water surface.

Alaska private oil spill response companies show capabilities By Tom Anderson

he narrative to the evolution of private oil spill response begins with the contingency plan. Before a company’s response team and equipment are deployed to counter a spill, the instrumental playbook on how to handle such a complex undertaking comes in the form of a contingency plan. “Disasters always seem to get the headlines, but why aren’t the billions of barrels of oil processed and handled safely, efficiently, and without incident making headlines?” wonders ARCTOS LLC’s Kirsten Ballard. “It’s far more costeffective from the standpoint of safety, environmental protection, and public image to ‘keep the oil in the container.’ If this made headlines, then budgets would reflect proactive prevention instead of reactive emergency response.” ARCTOS specializes in spill prevention and response planning. The com-

Alaska Business Monthly | June 2014

pany focuses on helping clients avoid any kind of emergency spill response by providing services for emergency response planning such as the preparation of Oil Discharge Prevention and Contingency Plans, or “spill drills” (discharge exercises), along with Incident Management Team Training and Support to help clients maintain compliance with the preparedness aspects of state and federal requirements. Ballard and husband Randy Pysher founded ARCTOS in 2007 and have a full staff to complement their expertise. The company specializes in staying current to changes in regulation to ensure that clients are aware of the stringent standards. Contingency plans are voluminous, complicated, technically challenging documents to compile and write but facilitate an oil spill being remediated expeditiously and with

Photo courtesy of ARCTOS LLC

A bookshelf of ARCTOS LLC contingency plans.

success. ARCTOS and a few other firms specialize in this niche market. Their clients include companies like Brooks Range Petroleum Corporation, Cook Inlet Energy LLC, Bluecrest Alaska Operating LLC, NordAq, CardnoEntrix, www.akbizmag.com

MagTec, Peak Alaska Oilfield Services, and Weatherford. Everybody in the industry needs contingency plans, and when policymakers, administrations, and regulators rotate, the interpretation of the rules becomes an arduous task in contingency plan compliance, according to Ballard. She says Alaska’s statutes and regulations are the most stringent in the world when it comes to spill prevention and response preparedness.

The Worst-Case Scenario Responsibility and caution are integral in preventing oil spills or leaks, yet sometimes spills and unplanned oil loss occurs. Human error, technical failure, and equipment flaws are but a few of the culprits. Private companies in Alaska are ready and waiting to be the first responder to resolve the problem. When it comes to private oil spill response businesses with a long history in Alaska, Bristol Bay Native Corporation subsidiary CCI Industrial Services LLC is a seasoned veteran with nearly twentyfive years in the industry. CCI has ten to fifty of its employees engaged in this activity on any given day. It provides a full suite of oil spill response, clean-up, and decontamination services, including an Incident Command System-trained contractor workforce that responds to incidents at facilities or near infrastructure. The company’s core oil spill response and mitigation capabilities include shortnotice response teams (both land-based and marine); on-scene coordination; safety specialists with hazardous materials focus; decontamination of tanks and marine vessels; equipment and marine operators with full crew support; response curriculum development; training and response drills; and logistical support and contingency plan assessments. “I am proud of our company’s long history in helping to protect not only the environment, but the people at CCI Industrial, our customers and their employees, and the residents of the communities where we work,” says Ben Schoffman, president and CEO. “Safety is our top priority.” CCI not only assists with clean-up operations once a spill occurs, but the company also works closely with its customers to make sure potential oil spills and releases are prevented. Averting such problems comes from providing personnel to assist in ongoing conwww.akbizmag.com

struction, drilling, and other projects in the oil fields, ensuring safe, clean operations on a day-to-day basis. CCI is currently contracted with four of the state’s five Oil Spill Response Organizations to provide contract labor for daily operations and/or short notice emergency response services in the event of a spill or release. The company provides experienced and qualified HAZWOPER personnel to handle environmental issues small and great— from ounces of fluids to the largest spills of hydrocarbons and other mate-

rials—across Alaska. Schoffman notes that the company’s largest response was in 2006 with the Selandang Ayu cargo vessel in the Aleutian Islands, where the company had as many as eighty responders deployed on-site.

Behind Every Spill Response Envision the “war zone” of a spill cleanup site. Whether it’s in water or forest, on snowy tundra or beaches, gravel and dirt or asphalt, the list of equipment, tools, and technology necessary for a response team to be successful is diverse.

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Spill Shield has been in the business of oil spill and discard response and prevention for more than twenty years and under its current owners for over four years. Ken Bauer has managed the company for the past three years and has twenty years of experience in facility management, including disaster oil spill response preparation. Bauer admits the trite phrase “an ounce of prevention is worth a pound of cure” is still extremely relevant in the spill prevention arena. He notes that “being prepared and having the necessary spill products on-hand can help prevent spills from spreading and becoming huge problems costing many, many times more to clean up. Spill response and preparedness is everyone’s responsibility.” Even with the best contingency plan and stellar response team, equipment and product resources are integral. Bauer notes that Spill Shield offers myriad kits and packages, as well as single items for oil spill response companies. The company recently relocated to increase warehouse space and now stocks a wide array of absorbent pads, rolls, boom, socks, duck ponds, and spill kits. These kinds of absorbents, in the oil garage, under a pipeline, or in a harbor or marine highway, make a positive impact and huge difference in stopping, isolating, and ultimately cleaning an oil spill.

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Alaska Business Monthly | June 2014

‘One-Stop’ Source Pacific Environmental Corporation (PENCO) has been in business since 1985 and is an oil field services company specializing in spill response and recovery, tank cleaning, and environmental support. PENCO brands itself as a cost-effective “one-stop” source for environmental response and remediation, with equipment, supplies, and staff expertise in the company’s Hawaii headquarters office and Alaska regional office, which opened in 1994. “When supporting our clients we cover the state, and while we have a presence on the North Slope, we may also be called out to other rural Alaskan communities to respond to an incident at any moment,” says PENCO Alaska Regional Manager Brent Porter. “Last summer we supported our clients on a number of vessel responses in Bristol Bay, Prince Williams Sound, and Valdez.” www.akbizmag.com

Photo courtesy of PENCO

Workers practice deploying spill boom on the North Slope of Alaska.

For successful companies like PENCO, it comes down to the ability to receive an emergency call and respond promptly and to have the necessary equipment and experienced technicians and staff. The company is diverse in clientele, serving

oil service and production companies large and small, in addition to state and federal agencies. The menu of services is comprehensive, including oil spill response, containment and clean-up, hazardous material emergency response, fil-

tering, bilge pumping, oil tank cleaning and disposal, and preventative marine containment booming. From sub-surface oil recovery to trenching and excavating, PENCO provides twenty-fourhour emergency response. Porter takes pride in the fact the company has a staff with substantive knowledge in all aspects of oil spill response and recovery. He urges companies looking for spill response assistance to consider the team to be used and experience as primary criteria, as well as actual availability and how fast they can assist. “I remember we had a call-out on a late Saturday evening December 2013. I was concerned that our crews wouldn’t be available, but they all answered the call, arrived at the shop immediately preparing plans and equipment to deploy, and then successfully worked all night long supporting our client,” says Porter. “That level of dedication and competence speaks volumes for our team and what they stand for. We wouldn’t be successful without them.”  Tom Anderson writes from Alaska.

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OIL & GAS

Cook Inlet Overview Powerful and positive eﬀects on the region

By Mike Bradner

ook Inlet’s “oil patch” is a busy place these days. Hilcorp Energy, a Houston-based independent company, has boosted oil and gas production in several of the aged oil fields the company purchased from Chevron and Marathon Oil in 2012 and 2013. In December, 2013, Hilcorp was producing almost 11,000 barrels per day of oil, almost double what the fields it now owns were producing in 2012 when Hilcorp assumed ownership. Total Cook Inlet oil production has increased 50 percent from 2010 to about 15,000 barrels per day today. At its peak in the 1970s, Cook Inlet produced 225,000 barrels per day. In another development, Furie Alaska Operating, another independent also based in Houston, plans to install a new gas production platform and to lay undersea gas pipelines this summer. Furie is privately-owned and doesn’t divulge much about its operations. Meanwhile, Tesoro Petroleum Corporation is working on its plan to build a new cross-Inlet oil pipeline, although its construction has been pushed back to next year. This project was initiated by Cook Inlet Energy, another independent redeveloping the small Redoubt Shoal field on the Inlet’s west side, and subsequently taken over by Tesoro. Finally, ConocoPhillips has reopened its liquefied natural gas (LNG) plant at Nikiski, near Kenai, and will send its first shipload of LNG to Japan in May. It is the first of six shipments planned for this year, ConocoPhillips spokeswoman Amy Burnett says. On the downside, another independent company, Buccaneer Energy, has been hit with financial problems and has had to downsize its plan to aggressively explore several offshore Cook Inlet prospects. The company still hopes to drill one important target this year, however. It is a potential deep oil prospect in ConocoPhillips’ North Cook Inlet Unit. ConocoPhillips now produces natural gas from

Alaska Business Monthly | June 2014

a gas field, but Buccaneer believes there is oil in deeper formations and hopes to test those in a “farm-out” arrangement with ConocoPhillips. Buccaneer still has some gas production from its small onshore Kenai Loop field, however. BlueCrest Energy, another Texasbased independent, has plans to drill further tests at the Cosmopolitan oil and gas offshore prospect near Anchor Point. BlueCrest and Buccaneer made a gas discovery at Cosmopolitan, which also holds oil in a deeper reservoir, but the gas deposit must be further tested before it will be known whether it can be produced. Armstrong Oil and Gas, another independent based in Denver, is also further developing its small North Fork field northeast of Homer. North Fork is now producing gas that is being transported through a small pipeline to connect with an ENSTAR Natural Gas Co. pipeline at Anchor Point. That pipeline has now been extended to Homer to bring natural gas to that community for the first time.

LNG Plant Reopens The reopening of ConcoPhillips’ LNG plant is hugely important to the independents exploring in Cook Inlet. That is because the company will accept gas from other producers for the first time, making the gas into LNG and assisting those firms is selling the LNG. Previously ConocoPhillips had only processed its own gas and gas owned by Marathon Oil Co. when that company owned a share of the LNG plant (ConocoPhillips bought out Marathon’s share). State Natural Resources Commissioner Joe Balash had urged ConocoPhillips to reopen the plant last fall so as to provide a market for independents that are discovering gas, and in previous years the Division of Oil and Gas had urged the company to accept gas from other producers. That ConocoPhillips will now make capacity in the plant available for indepen-

dents is a breakthrough. As long as the LNG plant was shut down or would not accept gas from others, the independents had no one to sell gas to except the Southcentral regional electric utilities and ENSTAR Natural Gas Co., the regional gas utility. Hilcorp Energy has recently signed contracts to supply all the utilities through early 2018 and is in discussions for supplying gas beyond 2018. Until ConocoPhillips announced its plan to reopen the LNG plant, the independents had no one to whom they could sell gas, at least in the near-term, and the serious problem that this presented was that, without a market, some of the independents would have a tough time raising money for exploration. With ConocoPhillips now accepting gas at its LNG plant, this problem will be eased. While the independents exploring in the Inlet are really after oil prospects because the value of crude oil is so much higher than gas, the very good prospect that gas will be found provides an opportunity for early revenues, but that depends on a market being available. ConocoPhillips’ road to the reopening of the LNG plant has been a long and bumpy one. The plant was first built and opened in 1969, along with the urea fertilizer and ammonia plant now owned by Agrium Corporation, to provide a market for large supplies of natural gas that were surplus to the regional utility needs. Both became casualties of shortages of gas from Cook Inlet as reserves in gas field declined. Agrium’s plant was closed in 2007 and the LNG plant was put into suspended status in 2013. In 1969 the undertaking by Phillips Petroleum Co. (now ConocoPhillips) and Marathon Oil to build the LNG plant was a daring one because there had previously not been transport of LNG by sea over long distances, and the import of LNG was also a first for Japan. Since then a vast industry of international, long-distance LNG shipments has developed and Japan and other Asian nations have seen their imports of LNG multiply. Through all those years, from 1969 to 2012, the Kenai plant continued sending its LNG to Japan, never missing a shipment. That record of reliability puts www.akbizmag.com

Alaska in good stead as the state and North Slope producers try to develop a much larger LNG project, also at Nikiski. Meanwhile, it was encouraging that the US Department of Energy (DOE) gave approval for resumed exports of LNG and allowed ConocoPhillips’ application to export to jump ahead in a long line of Lower 48 LNG projects seeking approval for exports. The Lower 48 projects have sparked serious opposition from the chemical industry and others who are benefitting from low domestic gas prices, and there were fears that the application to resume exports from Nikiski would get caught up in that. DOE’s approval has shown that it has separated Alaska’s projects from the Lower 48 applications. That has allowed ConocoPhillips to resume shipments beginning in May, and it bodes well for DOE approval of a much larger Alaska LNG project if it occurs.

Dry Holes and Delays The sagas of Furie and Buccaneer illustrate what can happen when small independents, and more particularly their CEOs, come to Alaska and things go

wrong even, in Furie’s case, temporarily. Both companies were essentially formed around industry veterans who, acting as entrepreneurs, gathered geologists and technical staff to pursue opportunities in Cook Inlet they believed were bypassed by the major companies who explored there in the 1960s and 1970s. One was Danny Daniels, a colorful Texas wildcatter, who formed Escopeta Oil and Gas and acquired Cook Inlet leases over areas he thought held large quantities of untapped gas. The prospects were far from shore, however, so Daniels needed to find a drillship or a jack-up rig, which is a floating rig that puts steel legs down to the seafloor and then “jacks” itself up on the legs. Daniels raised investment funds and found a suitable jack-up rig in the Gulf of Mexico in 2006 and also secured an exemption from the US Jones Act to use a foreign heavy-lift ship to bring the rig to Alaska (there were no US-built heavylift ships). However, the financing fell apart, and by the time Daniels put it back together in 2010, the federal administration had changed and a renewal of Daniel’s Jones Act exemption was denied.

Daniels gambled, hired a Chinese ship anyway, and brought the Spartan 151 rig, contracted from Spartan Drilling Co., to Cook Inlet, meanwhile hoping the federal government would relent while the rig was en route. It didn’t. Daniels’ investors rebelled and replaced him and even renamed the company Furie. Furie was later hit with a $15 million fine for flouting the Jones Act. Furie did get the rig in place, however, and drilled its wells, making the gas discovery that is now being developed. The investors Davis brought in, from Germany, are still with the company. Buccaneer pursued its own approach built on a strategy of having several prospects, onshore and offshore, and has also had successes and bumps— and more bumps recently. The company was formed by Curtis Burton, an industry veteran, who brought former ConocoPhillips veterans Mark Landt and James Watt into the company. Landt and Watt had ideas about Cook Inlet oil bypassed in the early years. Buccaneer brought a jack-up rig to Cook Inlet, too, but from Asia, so there was no Jones Act issue. A Chinese heavy-lift ship was also used, and it was

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legal. Buccaneer was short of cash, however, so it brought in the state of Alaska, through the Alaska Industrial Development and Export Authority, as an investor in purchasing a jack-up rig. It was a highly unusual move for AIDEA, which previously had invested in or financed onshore infrastructure like docks, industrial roads, and support facilities like an ore terminal. The need for a jack-up rig in the Inlet was urgent because of worries on pending gas shortages, and at the time it wasn’t at all certain that Danny Davis

would really get the jack-up rig hired by Escopeta to Cook Inlet. AIDEA decided to help Buccaneer to ensure there was at least one jack-up rig available. Mobilization of Buccaneer’s rig, the Endeavour, was delayed by technical problems, and Buccaneer missed its first deadlines for drilling the offshore oil prospects and went directly to winter moorage at Port Graham. It drilled the following spring at Cosmopolitan where Buccaneer was a minority partner with BlueCrest, and gas was discovered. Meanwhile, Buccaneer had earlier

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developed its small Kenai Loop field near the city of Kenai, and two gas wells brought into production gave the company some income. That gas is being sold to ENSTAR Natural Gas Co. But last year bad luck started to hit. Drilling at Cosmopolitan took longer than expected, and when Buccaneer repositioned the Endeavour rig at Southern Cross, one of the two Inlet prospects it hoped to drill, one of the three platform legs landed in unstable soil. The season was late, with winter approaching, so the company decided to take the rig to Port Graham for winter moorage. Meanwhile, an onshore gas exploration well east of Homer, West Eagle, turned up dry, a disappointment for the company. The cumulative financial effects of the dry hole costs, the delays in drilling Southern Cross, and a delay in bringing a third Kenai Loop gas well into production due to a dispute with a neighboring landowner, Cook Inlet Region, Inc., caused the small company financial distress. Buccaneer’s board suspended Burton, its CEO, in early 2014 as the search for additional capital got underway. An announcement of the company’s plans was expected in late April.

Powerful and Positive Effect However, the resurgence of activity in Cook Inlet is having a powerful and positive effect on the regional Southcentral Alaska economy. A study on Cook Inlet published in April by Northern Economics, an Anchorage-based consulting firm, says Cook Inlet petroleum operations employ about 1,300 with an annual payroll of about $350 million and a total economic impact of over half a billion dollars. When that is combined with the employment and benefits of the Tesoro refinery near Kenai, which depends partly on Cook Inlet oil, and the economic benefits of natural gas production in lower costs of space heating and power generation, the total economic impact comes to about $4.7 billion. That is 10 percent of the total Gross State Product of about $47 billion. The Northern Economics Report was sponsored by the Anchorage Chamber of Commerce.  Mike Bradner is publisher of the Alaska Economic Report and Alaska Legislative Digest.

Alaska Business Monthly | June 2014

www.akbizmag.com

BusinessPROFILE

Little Red Services, Inc.

More Alaska Production Act: Creating opportunity for Alaskans

n August 19th the voters will decide the outcome of SB21, also known as the More Alaska Production Act. The issue will decide more than our oil tax policy, it will decide the economic future of Alaska. The oil tax policy issue has raised a number of opinions from residents, and fortunately we all have the right to vote our opinions and weigh in on important public matters. As voters we carry the responsibility and burden of knowing the facts of what we are voting on and to not take that responsibility lightly. If you are not aware of the makeup of Alaskaâ&#x20AC;&#x2122;s unrestricted general fund, the production rate decline under ACES, the amount of capital invested in our oil resource extraction under ACES, the number of drilling rigs operating on the North Slope under ACES, the number of exploration wells drilled under ACES, and how things have changed positively in all of those categories under SB21, then you have homework to do.

The More Alaska Production Act, or SB21, has increased investment, and activity is up on the North Slope and across Alaska. This activity has already created hundreds of new jobs, and the production decline is slowing substantially as compared to our historical decline under ACES. With so much on the line for Alaska, including a potential major LNG export project, we cannot afford to get this vote wrong. Be an informed and responsible voter by carefully examining the facts about our tax policy and how the oil industry fuels the Alaskan economy.

Little Red Services, Inc. Doug Smith, President & CEO dsmith@lrs-ak.com 3700 Centerpoint Drive, Suite 1300 Anchorage, AK 99503 907-349-2931 littleredservices.com

Paid for by Little Red Services, Inc., 3700 Centerpoint Drive, Suite 1300, Anchorage, AK 99503. Douglas L. Smith, President and CEO is the principal officer of Little Red Services, Inc. Douglas L. Smith, President and CEO of Little Red Services, Inc. approved this advertisement.

OIL & GAS

David Hall and Cook Inlet Energy 36

Alaska Business Monthly | June 2014

Relishing ﬁfth year as oil and gas operator By Wesley Loy

press release issued in December 2009 declared: “Alaska has given birth to a new oil and gas company named Cook Inlet Energy.” It was an easy announcement to overlook. Oil and gas startups don’t warrant much notice in a state dominated by the likes of BP, ConocoPhillips, and ExxonMobil. www.akbizmag.com

says David Hall, the company’s chief executive. Cook Inlet Energy operates two main producing properties on the inlet’s west side: the Osprey offshore platform and the West McArthur River oil field. In February, the company expanded to the east side, add- Hall ing the North Fork natural gas field on the Kenai Peninsula. Cook Inlet Energy has big plans for all the properties, aiming to grow production quickly. To carry out the work, company executives have borrowed heavily and pulled together a fleet of drilling rigs. Cook Inlet Energy is a subsidiary of Miller Energy Resources, Inc., a publicly traded company headquartered in Knoxville, Tennessee. Most of Miller’s production comes from Alaska through the work of Hall’s team. The story of Cook Inlet Energy is, to a large degree, Hall’s story.

Work deck on Osprey platform in Cook Inlet. Photo courtesy of Cook Inlet Energy

Now, nearly five years later, Cook Inlet Energy looks to be for real. The Anchorage-based company has brought a collection of abandoned assets back to life. And it’s pursuing an ambitious slate of projects that could make serious waves in the Cook Inlet basin. “We want to be as aggressive as we can and be one of the top producers, if not the top producer, in the Cook Inlet,” www.akbizmag.com

Spotting Opportunity Hall, forty-five, is a veteran of the inlet oil scene. Working for the previous owners, he gained hands-on knowledge of Osprey and West McArthur River. “I started out in the field with my tools,” Hall says. He went from electrician to lead operator to production foreman, learning all aspects of running an oil and gas production facility. He also has an engineering background. Hall was there in 2000 when the hulking Osprey platform, built in South Korea, was floated into the inlet and set in place. He spent the night on the platform before it had power and lights. “It was pretty lonely and quiet,” he says. The company that conceived the Osprey project, Forcenergy, Inc., would merge with Forest Oil Corporation. In 2007, a California-based company, Pacific Energy Resources Ltd., bought Forest Oil’s Alaska assets. Hall persevered through all the ownership changes, becoming vice president and general manager of Alaska operations for Pacific Energy. When low oil prices and other troubles hit Pacific Energy, ultimately forcing the company into bankruptcy in March 2009, Hall saw an opportunity. Hall knew it would be tough for Pacific Energy to survive. The company

was also struggling to make a go of some offshore California properties it had acquired prior to the Alaska purchase. Production in Alaska suffered. Hall recalls how output from Osprey dwindled to “a whopping twenty barrels a day.” The West McArthur River field was managing a little over one hundred barrels per day. Seeing Pacific Energy’s challenges, Hall and another former Pacific Energy employee formed a new Alaska company, Cook Inlet Energy LLC. He candidly told his bosses at Pacific Energy he would like to take over the Cook Inlet assets. And he set about trying to raise capital at a time when loans were hard to come by. Eventually, Pacific Energy would shutter and abandon its Cook Inlet operations. This was a huge worry for the state, which faced enormous caretaking costs for the properties. Hall kept working with Pacific Energy, bankruptcy officials, and the state for a deal. Ultimately, Cook Inlet Energy would win the properties in a November 2009 auction.

Finding a Backer It wasn’t just Hall and Cook Inlet Energy that made the deal happen. Hall had been in New York City, talking with money people, when his broker told him about a small Tennessee company that could possibly help. Hall flew down to Knoxville for a meeting with “the Miller folks,” including Scott Boruff, chief executive of Miller Energy. “We just hit it off and developed a bond right out of the chute,” Hall says. Miller Energy would help finance the $4.47 million deal to acquire the Cook Inlet assets. As part of the deal, Cook Inlet Energy became a Miller subsidiary. Hall says he saw a “huge upside” in his risky pursuit of the abandoned properties. But the journey was tough. “It was not without a lot of stress, a lot of doubt, a lot of prayer,” he says. “Many times, I thought about throwing in the towel, walking away.” The acquired properties included the Osprey platform; the Kustatan production facility that processes oil piped ashore from Osprey; the West McArthur River oil field; and an assortment of other assets June 2014 | Alaska Business Monthly

Miller’s Rise These aren’t big numbers, relatively speaking, for Alaska oil producers. But they’re a far cry from the near zero production Cook Inlet Energy inherited. Aside from oil production, the company also has achieved enough natural gas production to support sales to buyers such as Chugach Electric Association. The acquisition of the Cook Inlet oil and gas assets would lift the Tennessee parent company, Miller Energy, to a much higher profile. Miller previously had been a penny stock trading on the OTC Bulletin Board. The company jumped to the Nasdaq exchange and then to the New York Stock Exchange, where it’s listed today. Miller was trading at more than $5 a share in early April and had a mar38

Alaska Business Monthly | June 2014

Photo courtesy of Cook Inlet Energy

such as the West Foreland gas field and land leases. Miller crowed that it had scored a tremendous bargain, including oil and gas reserves worth more than $325 million. Wilcox Hall and sidekick JR Wilcox, the president of Cook Inlet Energy, set about the sizeable task of restoring production from Osprey and West McArthur River wells. Several of Osprey’s wells had collapsed casings and other problems. Cook Inlet Energy has been repairing these wells with a new drilling rig custom built in Texas at a cost of more than $18 million. The company plans to drill new wells from Osprey and started the first one in March. It also has pursued new wells in or adjacent to the West McArthur River field, including a pair called Sword and Sabre. Osprey is the newest and southernmost of the sixteen platforms in Cook Inlet. It taps the Redoubt Shoal field. The platform had been a disappointment under previous owners, with crude oil production lagging expectations. By November 2013, Cook Inlet Energy had driven production from Redoubt Shoal to an average of 2,009 barrels per day, state records show. At the West McArthur River field, average daily oil production reached 1,214 barrels during this past January.

Drilling foreman Mike Murray at work at Cook Inlet Energy’s Otter exploration site on the inlet’s west side.

ket capitalization of about $230 million. Miller’s rise has been somewhat messy. Investors sued the company in 2011, claiming Miller executives had fraudulently overstated the value of the Alaska acquisition. Miller executives dispute that, and the case remains unresolved in Tennessee federal court. More recently, a group called Concerned Miller Shareholders demanded management reforms at the company. Among their complaints was that Miller executive were overpaid. The group and Miller management reached a settlement in March. In April, a big name was elected to Miller’s board of directors: Bill Richardson, the former New Mexico governor and US energy secretary.

Boom on the Kenai Cook Inlet Energy has numerous other projects on its plate. It’s exploring several natural gas prospects, including some in the vast Susitna basin north of the inlet. At the newly acquired North Fork gas field, Cook Inlet Energy aims to grow production by drilling up to twentyfour additional wells. Finally, the company is working with Tesoro toward construction of a $50 million subsea pipeline across Cook Inlet. The pipeline could provide a cheaper and more reliable alternative

to tankers for moving westside crude to Tesoro’s Nikiski refinery, Hall believes. Hall and his wife, Tina, make their home in Nikiski. During the week, he’s typically at the company office in Anchorage. Three sons work in the field for Cook Inlet Energy, which has about fifty employees, not counting contractors. Originally from Louisiana, Hall believes Alaska offers the country’s best return on investment. For example, he says, the state provides generous financial incentives for Cook Inlet oil and gas exploration and development. Part of what makes this an exciting time, Hall says, is the economic revival in his home community of Nikiski. Rick Roeske, executive director of the Kenai Peninsula Economic Development District, concurs. A resurgent oil and gas industry, led by companies such as Hilcorp and Cook Inlet Energy, is driving a building boom and even rush-hour traffic jams along the Kenai Spur Highway, Roeske says. He’s impressed by what he’s seen and heard from Cook Inlet Energy. “Nothing less than spectacular,” Roeske says. Hall is soft-spoken, he says, but the “calm assurance of how he projects dollars into action is amazing.”  Journalist Wesley Loy writes from Anchorage. www.akbizmag.com

OIL & GAS

WEATHER FACTORS: STORMGEO FORECASTS Providing ‘mission critical’ Arctic data By Julie Stricker

Diverse Client Mix StormGeo clients are companies working offshore, the media, renewable energy, and shipping industries. The company is expanding rapidly, becoming aviation certified and increasing its client base in Alaska and around the world. 40

Alaska Business Monthly | June 2014

Photo courtesy of StormGeo

eather is a constant topic of conversation in Alaska, but conversations about Alaska weather go well beyond small talk. The weather affects everything from how many layers of clothing a person puts on to whether the truck will start if it’s not plugged in to matters of life and death. For companies working in Alaska, especially in the oil and gas sectors on the North Slope, offshore, or in the air, having timely, accurate weather forecasts is essential. Alaska weather has direct consequences on business and is the direct cause of most disruptions. That’s where StormGeo comes in. The global commercial forecasting service, which encompasses Houston, Texas-based ImpactWeather, provides clients with personalized weather forecasts to help them do business effectively and safely in one of the world’s harshest climates. “In the Arctic, everything that you do is mission critical,” says Chris Wolf, the Houston director of marketing in North America for ImpactWeather/StormGeo. “So weather plays a very important role in making good business decisions. The service we provide allows our clients to make the best possible decisions when faced with weather challenges.” The company is a leader in helping companies work more safely in risky Arctic environments. StormGeo provides forecasts for clients in the Beaufort and Chukchi seas off the Alaska coast, the Sea of Okhotsk and Kara Sea off the Russian coast, Barents Sea in Norway, and Baffin Bay, Greenland.

Weather forecasting operations at StormGeo in Houston, Texas.

StormGeo can help companies choose the best site for a wind farm and how much energy a turbine can produce, for instance. It can help forecast how much energy a hydroelectric plant can generate from a rainstorm or how waves generated by a storm will impact Barnett an offshore oil rig. It can map out a route across the North Pacific for a vessel traveling between North America and Asia optimized for safety, time, fuel consumption, and emissions. In an era of climate change and elevated incidences of extreme weather, StormGeo’s risk assessment services are increasingly sought out. StormGeo’s client list is confidential, but Wolf uses the popular reality television show “Ice Road Truckers,” of which she is an avid fan, as an example of what the company provides. If one of the drivers had a cargo that had to be delivered within a specific window, StormGeo’s forecaster in Anchorage, McLean Barnett, could give

the driver a three-day forecast for Atigun Pass, a treacherous point on the Dalton Highway that is prone to high winds, drifting snow, and avalanches. Based on the forecast, and any updates Barnett provides, the driver could decide whether to leave Fairbanks on a Tuesday or to wait a day or two for dicey conditions to clear. “That’s the kind of situation where we could really provide value,” Wolf says. “The data we provide allows the client to make a go/no-go decision, so if the conditions are so harsh that it would result in unsafe conditions for personnel, they may decide not to move a rig on that day or take a helicopter out.”

Arctic Meteorologist Barnett has been working seasonally in Alaska since 2010, but recently moved up to the Anchorage area permanently to provide year-round coverage as GeoStorm boosts its presence in Alaska. www.akbizmag.com

Like many weather forecasters seen on TV, he is a certified member of the American Meteorological Society. StormGeo has access to major global weather modeling systems, which allows it to create detailed forecasts for very specific areas. But for Barnett, the big picture comes first. When he gets to work in the morning, the first thing he does is print out a large map of the northern portions of eastern Russia, Alaska, and western Canada. He and colleagues will draw the overall weather fronts affecting the region by hand, just to give them a feel of what’s happening with the weather over the Arctic as a whole. “It is extremely important to understand what is coming from the west, because that’s where your weather comes from,” Barnett says. Then Barnett imports a global overview of winds and waves and upper-level patterns and begins analyzing weather trends to create forecasts for very specific places, such as an area just off the coast of Alaska or an oilfield on the North Slope, for instance. For aviation forecasts, wind, cloud cover, and fog are important; waves and ice cover are incorporated into offshore forecasts; and temperature variations on the ground. “We give them a much more granular level of forecasting,” Wolf says of StormGeo’s clients. “We can get down to the exact longitude and latitude of their business, whether it’s a bank on the outskirts of Fairbanks, a retail store in Fairbanks, or an oil rig on the North Slope.” Once a forecast is in hand, Barnett provides the client with a standard five- or seven-day forecast. The client looks at the forecast, which may show temperatures of minus forty-five degrees are expected five days out, which may be when they plan to move an oil rig. About seventy-two hours out, Barnett “knocks on the door a little more often,” with updates, giving the client a best-case to worst-case scenario. Knowing extreme cold is likely, the client can adjust their strategy to ensure all personnel will be safe during the move or whether to put the move on hold. “We leave them the ability to make the decision with all the data,” Barnett says. “They don’t get that from a general weather forecast. That’s the value of being able to talk to us.” Besides having Barnett nearby in Anchorage, Stormwww.akbizmag.com

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Geo’s weather desks in Dubai and Houston, Texas, are staffed around the clock. Wolf notes she is often asked what the difference is between a National Weather Service forecast and a StormGeo forecast. “It really comes down to the data,” she says. StormGeo doesn’t just look ahead. Because of its finely scaled weather forecasts, StormGeo also offers incident analysis to help businesses track down possible explanations for accidents, such as plane crashes or delayed ships. The forecasts are also geared to a client’s specific needs, she says. The National Weather Service is mandated by Congress to provide weather that protects population centers. It is not allowed to issue forecasts for commercial endeavors. That’s the gap StormGeo fills.

History and Growth The company was created in Bergen, Norway, in 1997 as a spinoff of TV2, Norway’s largest commercial broadcaster and a pioneer in visual weather production. TV2 was one of the first programs to broadcast animated weather fronts and pressure systems, according to GeoStorm’s website. First called Storm Weather Center, StormGeo was co-founded by Siri Kalvig, a meteorologist and television presenter. As Kalvig puts it, “It all began with some young, enthusiastic weatherloving people who wanted to communicate their fascination of the weather and the forces of Mother Nature.” TV2 and Norway’s largest newspaper, VG, were its first clients. Energy traders also closely monitored the forecasts, and StormGeo began working with clients in the hydroelectric power industry in 1998, branching out to the oil and gas market, which included many offshore sites where safe operations relied on accurate weather forecasts. In 2008, outside investment brought a new focus on globalization for the company. StormGeo opened offices in Denmark, Sweden, the United Kingdom, and the United States. In 2011, it extended operations to the Middle East and opened offices in Rio de Janeiro and Hamburg, Germany. Along the way, StormGeo acquired several related companies, including Seaware AB, which provides onboard ship routing solutions; Met Consultancy FZ, LLC, a Dubai-based weather fore42

Alaska Business Monthly | June 2014

casting company; and ImpactWeather, Inc., a Houston, Texas, company that provides offshore and onshore weather monitoring, forecasts, and alerts. Earlier this year StormGeo added Applied Weather Technology (AWT), based in Silicon Valley, California, which provides weather and route forecasting for the shipping industry. AWT has been a leader in marine forecasting for fifteen years, supporting more than five thousand ships daily with route guidance and operational efficiency. “By combining our expertise with that of AWT, StormGeo is positioned to be a worldwide leader in services to the maritime and offshore industries,” Erik Langaker, chairman of StormGeo, says in a news release announcing the acquisition. Today, StormGeo has more than 320 employees worldwide, Wolf says. It has twenty-two offices in fourteen countries and seven global weather support systems open around the clock. EQT Mid Market, a private equity group in northern Europe, is the majority shareholder.

Weather Reporting Infrastructure StormGeo was created before the spread of the Internet made online weather forecasts available on every laptop, smartphone, and tablet. “We recognize that the Internet is a competitor of ours,” Wolf says from her Texas office. “To the uneducated consumer, the unaware consumer, they would certainly look at [the Internet] as the answer, but it’s not the same information. “Stepping away from Alaska, we service many clients here in the Gulf of Mexico, and we’re doing onshore shale operations. They’re all in really remote areas, so for something like radar, they’re so far from population centers they have to rely on private radar stations. If you’re way out there in remote Texas, you can’t rely on commercial radar.” StormGeo has access to those private radar stations, she says. The same is true for remote sites in Alaska, which has even less weather reporting infrastructure. Having personnel on the ground who understand the local weather patterns is another benefit for StormGeo. Forecasting the weather in Alaska is different from the Lower 48, Barnett says.

Weather systems in Alaska tend to be stagnant or move very slowly, he says. Down south, Barnett says, you wait a couple of days and the weather changes. An Arctic system can hang around for two or three weeks, but you have to know what to look for when the weather does change. Radar coverage is limited, and satellite coverage can be difficult to use because Alaska is so far north, Barnett says. He is able to fill in the gaps with StormGeo’s access to private radar and information collected by polar orbiters. But with only about forty manned weather observation stations across a region two and a half times the size of Texas, it’s difficult to get models of what is coming, especially with Alaska’s mountainous terrain. “It’s a complex environment,” Barnett says. Few people realize it, but Alaska is frequently in the path of tropical storm systems that form in the Pacific Ocean far to the south but then bend northeastward. They typically strike the Aleutian Islands, but can also hit the Alaska mainland, bringing high winds and heavy precipitation even in the middle of winter. And, as vast as Alaska is, the weather tends to be very local. For instance, January temperatures in downtown Fairbanks may be forty degrees lower than on nearby hilltops. Winds can rev up to hurricane strength on Anchorage’s Hillside but merely bluster through neighborhoods at lower elevations farther out. But there’s more to accurate weather forecasting than knowing how much rain to expect or how hard the wind will blow. StormGeo helps clients operate more efficiently, which means using less fuel, which helps reduce emissions and reduce their carbon footprint, a major challenge under new regulatory mandates on the shipping industry, notes Kent Zehetner, CEO of StormGeo. “We believe that our ability to combine global real-time weather data with continuous harvesting of transport and movement data from thousands of ships across the globe will enable StormGeo to give each ship and all fleet operators a unique understanding of how they can efficiently navigate the globe, whilst at the same time securing maximum safety and sound operational economics,” Zehetner says.  Julie Stricker is a journalist living near Fairbanks. www.akbizmag.com

TELECOM & TECHNOLOGY

Remote Marine Telecom Boat-based communications By Will Swagel

cean Mayo is a second-generation longliner whose family has fished for halibut and black cod in the Gulf of Alaska and the Bering Sea for decades. Their fifty-eight-foot vessel, the Coral Lee, is homeported in Sitka, as is the large Mayo clan. When the Coral Lee is far out at sea beyond the range of cell phones and even VHF radio, Ocean Mayo relies on satellite phones to stay in touch. Mayo says there is another black cod fisherman who works the same areas in the Bering Sea as Mayo, and the other fisherman uses baited pots to catch the prized groundfish. If Mayo sets his longlines where the pots have been deployed, his expensive gear might get entangled and could be lost. So the longliner and the pot fisherman coordinate by satellite phone to avoid doing just that. Mayo employs satellite phones to communicate with processors to determine who will pay the most for his latest catch. He can also talk with other vessels so they can make reports and plan strategy on a secure channel that can’t be overheard by other boats. And he can call home for both business and personal reasons. Avoiding tangled gear, finding fish, and getting the best price at the processor—these are all reasons why Mayo is happy he made the investment. “The satellite phones pay for themselves,” he says. “Even with high startup costs, they pay for themselves in a few years.” Although satellite phones have a reputation for expensive hardware and ruinous per-minute rates, the situation— like other segments of the electronics www.akbizmag.com

“More and more of the fleet is converting to satellite-based communication equipment for reliability. As the volumes continue to build, the price point continues to come down. Today, people are able to enjoy the benefits of satellite communication for as little as $300.”

—Harold Whittlesy Satellite Technical Services

industry—is evolving rapidly, says Harold Whittlesy of Satellite Technical Services, which serves the Alaska fleet from offices in Anchorage and Seattle. “More and more of the fleet is converting to satellite-based communication equipment for reliability,” says Whittlesy. “As the volumes continue to build, the price point continues to come down. Today, people are able to enjoy the benefits of satellite communication for as little as $300.” Whittlesy is referring to a DeLorme inReach, a new portable satellite device that allows mariners (and those on land or in the air) to text anyone in the world inexpensively, to get maps and charts, and to issue enhanced distress calls.

Alaska Net The system on Mayo’s boat (and on about one hundred vessels in Sitka’s busy harbors) is known as MSAT, for Mobile Satellite, a technology developed in Canada that has been in use for about twenty years. MSAT has become very common on medium-sized and even some smaller fishing vessels in Alaska, allowing fishermen private voice communications between vessels and to shore. MSAT systems work with a “pushto-talk” technique like CB radios: hold

up a microphone, push the button, talk, sign off, and then let go of the button and listen for the other person. “In Sitka, our market with just the [salmon] trollers alone has grown more than six-fold,” Whittlesy says. “We probably have seventy trollers that are running them. Five years ago we had none. [MSAT] allows these guys to confidently and confidentially communicate their business activities [with] each other and talk to their processors and others. It’s made a world of difference in their operations.” Whittlesy’s firm has set up a convenient system for Alaska MSAT users called AlaskaNet. Just by punching in a four-digit code, MSAT users can make a private call to another vessel or a shoreside processor or boatyard. At Radar Marine Electronics, with offices in Bellingham, Washington, and Kodiak, Sales Manager Rob Hisey says MSAT systems like Mayo’s cost about $5,500 to install. Unlimited calling plans come in at about $70 per month. “It’s a dispatch communication system, so the more people that have it, the more beneficial it becomes,” Hisey says. “Most commercial fishermen and processors in Alaska are on Harold [Whittlesy’s] network, so they can comJune 2014 | Alaska Business Monthly

municate with anyone on the network, along with making cell or landline calls anywhere.” Hisey says Radar Marine Electronics has receivers in both their Bellingham and Kodiak offices, putting them only four digits from their customers, and that an MSAT system on AlaskaNet “is the most popular system and the first line of communication for most commercial fishermen.” He notes that most boats have backup satellite systems as well.

Streaming at Sea Aboard the Coral Lee, Mayo can send emails from his MSAT system. But MSAT operates at speeds where Internet access is not practical. For that, fishermen can to turn to VSAT, or Very Small Aperture Terminal technology. VSAT systems use a stabilized marine antenna to connect directly with satellites that are in geosynchronous orbit (designed to remain over one terrestrial position as the Earth rotates). VSAT systems can cost $15,000 or more for hardware capable of speeds up to 2MB/sec. Usage is then purchased in data plans, usually priced at around $1 per MB. “The big boats are going to have $15,000 terminals and spend $1,000 or more per month for data,” Hisey says. “Bigger boats have crew calling to multiple stations aboard the boat, so the crew can call out or connect to the Internet.” Hisey says the most popular VSAT brand is KVH. Thrane & Thrane’s Sailor brand and Add Value Technology’s Skipper brand are also popular. Inmarsat offers another option for data and voice—Fleet Broadband network service—which is capable of high speeds and lower hardware costs. Fleet Broadband normally runs at 128-512 kb/sec—numbers familiar to those who remember early dial-up modems.

“The speed is not as fast as a typical home or office Internet connection. But it is enough to run web browsers, email, and data files.”

—Rob Hisey Sales Manager, Radar Marine Electronics

Alaska Business Monthly | June 2014

“The speed is not as fast as a typical home or office Internet connection,” Hisey says. “But it is enough to run web browsers, email, and data files.” Inmarsat gained prominence earlier this year when the company registered the first “pings” from the missing Malaysian Airlines plane on equipment not designed for GPS positioning.

Voice and Text For those most interested in affordable voice communications, the two main services are Iridium and GlobalStar. Iridium handsets cost about $1,300, while GlobalStar offers a handset for $500. For medium or small boats, GlobalStar’s so-called “slow data” —9.6 kb/ sec (up to 50 kb/sec) —is sufficient for voice communication, but ponderous for other applications. “We’re selling a lot [of GlobalStar] phones,” Hisey says. “They have good coverage in Alaska and provide exceptional voice quality. We set up Alaska customers with a 907 area code to avoid long distance or international call fees.” The smaller boats are mostly interested in voice. “They really don’t care about speed,” says Hisey. “They’re paying for data by the amount, not the speed. Most of these guys don’t have the need for a lot of data.” Because of the high data costs, fishermen use the devices mostly for email, weather reports, and time sheets, rather than data-rich activities, like Internet browsing. Hisey says GlobalStar’s reputation took a hit in the past, but that the company’s popularity is rebounding since they launched new satellites, lowered usage prices, and improved reliability. Hisey’s company provided GlobalStar phones for the 2014 Iditarod. At Satellite Technical Services, Whittlesy says he is concerned about the older portions of the GlobalStar network eroding reliability gains. Instead, he is a booster of—and distributor for—DeLorme inReach, a satellite tracking, texting, and Emergency Locator Beacon device that brings the cost of satellite communication near the cost of a cell phone service. “In my opinion, there is no alternative to it at that price point,” he says. The $299 DeLorme inReach can be used as a handheld or dash-mounted device that can send and receive texts from anyone on the planet. Emergency locator

“There is a lot of use [of our device] in Alaska—and it’s the fastest growing [region]. Alaska is a priority for us.” —Kim Stiver Vice President of Marketing, DeLorme

beacon calls sent from the device can be accompanied by texts describing the nature of the distress. GPS satellite tracking is built into the device. Wireless connection to smartphones or tablets opens the device to even more applications. At DeLorme’s headquarters in Yarmouth, Maine, Vice President of Marketing Kim Stiver explains that company founder David DeLorme started the company thirty years ago after being frustrated by the paucity of backcountry maps. DeLorme created a Maine atlas which became enormously popular. The company still sells printed maps, but now delivers their maps—along with a wide range of NOAA charts and other charts—in electronic form for use on their devices. DeLorme offers a menu of service plans that include the ability to subscribe for only part of the year, an advantageous arrangement for seasonal industry, like fishing. “There is a lot of use [of our device] in Alaska—and it’s the fastest growing [region],” Stiver says, noting that Alaska has poor cell phone coverage, high outdoor use, and a large number of pilots—as well as many commercial and recreational mariners. “Alaska is a priority for us.” At Comfish Alaska 2014, held in Kodiak in April, fishermen and pilots bought dozens of the devices. Whittlesy says their enthusiasm for the device mirrored what he has seen in Alaska, on the West Coast, and in Hawaii. “For the average guy, this is the most attainable satellite product,” says Whittlesy. “Satellite communication is where things are really getting shook. There are new, really cool things coming that are going to reshape what we’re doing in the world of satellite communication.”  Alaskan author and journalist Will Swagel writes from Sitka. www.akbizmag.com

GETTING THE FLEET TO ITS DESTINATION FASTER

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FISHERIES

Alaska Salmon Keep Boats and Businesses Afloat A rainsuit-clad seine boat ﬁsherman.

Sustainability and commercial ﬁshing By Dustin Solberg

s the summer’s commercial salmon fishing season begins in earnest, there are happenings in communities all throughout the state of Alaska that demonstrate how fishing means business. “The boat yard gets busy. And we start to see new faces,” says Fritz Johnson, a Bristol Bay commercial salmon fisherman from Dillingham.

Alaska Business Monthly | June 2014

Boats return to the water. Crews mend nets. In the hardware stores, the net lofts, the harbors, and the streets there’s an undeniably quicker pace. And most people you meet have a singular mission: to get ready. “Where streets were empty before, now they start bustling. And excitement for the season opener builds almost daily. It’s just electric,” says Kim Ryals, who directs the Copper River/ Prince William Sound Marketing Association in Cordova. The bustle is the norm in fishing ports like these on Alaska coasts, and for good reason. Alaska’s commercial salmon fishing fleet produces 95 percent of the

nation’s wild Pacific salmon catch. And those fish enter a marketplace that eagerly awaits their appearance. The Alaska Seafood Marketing Institute (ASMI) reports that its 2012 polling confirmed that consumers hold Alaska salmon in very high regard. Specifically, 43 percent of respondents said they were more likely to recommend “Alaska salmon” than any other protein source in the marketplace. (Only the more inclusive “Alaska seafood” ranked higher, at 45 percent. USDA prime sirloin came in third, at 38 percent.) In order to maintain this favorable position in the marketplace, industry observers insist Alaska’s fishing fleet will need to improve on the significant www.akbizmag.com

TON S O B O T BAY L O T S I R B

K R O W T E N R U O S

R E V I L DE

gains it has already made in ensuring the salmon it delivers are of the highest quality. Secondarily, astute marketing campaigns to targeted consumer groups help to build demand.

Five Salmon Species Targeted The state’s salmon fisheries produced a catch valued at $657 million in ex-vessel prices in 2011. That’s nearly a third of the state’s seafood ex-vessel value. These salmon fleets target five species of Pacific salmon across a far-flung geography and a diversity of gear types. Alaska salmon fisheries stretch along a remarkable extent of the state’s coastline and generate a widely distributed www.akbizmag.com

o? s or Chicag Los Angele in n o lm sa a . We Fresh Alask a Air Cargo re on Alask e th t o g it Chances are rts at the puted expe is d n u ’s ry ust are the ind afood from ipping of se sh d e it d e exp er tables cold-chain, ska to dinn la A f o rs te wa seafood the icy-cold always give e W . ca ri e Am throughout tus. priority sta

ASKA. L A S I E WIDE. M N O A I N T A R N U O VICE IS OUR SER June 2014 | Alaska Business Monthly

What Wild Salmon Need

Photo: © Clark James Mishler/TNC • Data: Matanuska-Susitna Basin Salmon Habitat Partnership

Spawning Salmon ■ Abundant quantity of clean, cool, well-oxygenated water ■ Clean, sediment-free gravel of relatively small size—one inch to three inches— depending on species Rearing Salmon ■ Clean, cool water ■ An abundance of food such as aquatic and terrestrial insects ■ A diversity of habitats including shallow riffles and pools, undercut stream banks, and deep pools with lots of cover from logs, trees, and boulders ■ A constant source of relatively uniform stream flow ■ Healthy riparian vegetation ■ Stream flows or water levels sufficient to support and provide connectivity to other habitats such as beaver ponds, side channels, and estuaries ■ Refuge habitat in winter that protects salmon from ice scours and predators ■ Migratory habitat within the stream system to access needed habitats ■ An open connection to saltwater for rearing, smolt transformation, and adults returning to spawn surge of economic activity each year. Beginning in the Tongass of Southeast Alaska, the commercial salmon fisheries extend northward as far as Kotzebue and as far west as Unimak Island beyond the Alaska Peninsula. ASMI reports salmon fisheries directly employed 38,300 workers in Alaska in 2011, the most recent year for which statistics are available. And these workers are distributed broadly across a vast region of rural Alaska: 160 towns in the state have at least one salmon harvester. In addition, the Alaska salmon fishery produces more secondary economic activity than other Alaska fisheries. “Salmon fisheries have a higher eco48

Alaska Business Monthly | June 2014

An aerial view of the Peter Pan Cannery in Dillingham, on the west side of Bristol Bay.

nomic multiplier within Alaska due to higher rates of Alaska resident involvement, more shore-side processing, great in-state purchases of goods and services in support of fishing operations, and the presence of salmon hatcheries, compared to Pollock, Pacific cod, flatfish, and crab fisheries,” according to a recent McDowell Group report commissioned by ASMI. In short, salmon fisheries are closely linked to the state’s working waterfronts. Average ex-vessel prices, or the price paid to the fisherman, have been steadily increasing in recent years, and last year was no exception. The 2012 average of eighty-seven cents per pound was up four cents from the year before. Price increases have been more notable among certain fisheries, including sockeye. ASMI reports that the state’s sockeye harvest “generally accounts for 40 to 50 percent of the total ex-vessel value of Alaska salmon.” And last year, sockeye prices in Bristol Bay reached $1.50 per pound, a price not seen since the late 1980s. Copper River/Prince William Sound sockeye commanded an average price of $2.28 per pound last year and leads the state’s fishery in ex-vessel sockeye prices. Bristol Bay accounts for a majority of the state’s sockeye harvest. Between 2005 and 2010, the Bay landed 67 percent of the state’s sockeye harvest and 50 percent of the global catch.

Largest Single Sector Employer Commercial fishing employs more workers than any single sector of the

Alaska economy. In 2011, the salmon fishery had an estimated commercial fishing workforce of 20,300, or 62 percent of the state’s commercial fishing industry, according to ASMI. What explains the state’s robust salmon fisheries? The state of Alaska proudly promotes its track record of sustainability, as mandated in Article Eight of the state constitution. In calling for a “sustained yield,” the constitution states that natural resources such as fish shall “be utilized, developed and maintained on the sustained yield principle.” The scientific management of salmon stocks has served the state well since statehood. The state’s salmon habitat is also relatively healthy and in some cases, nearly pristine. This is key to the health of the state’s salmon runs. Scientists agree on what salmon freshwater habitat requirements are. Salmon return to Alaska waters each year, and the fleets pursue them after a long winter’s wait. When the Copper River fishing fleet returns from the fishing grounds, Ryals, of the Copper River/ Prince William Sound Marketing Association, will be welcoming them back to the harbor in Cordova. “To see them come home stirs something.” Ryals says. “It feels almost celebratory.”  Dustin Solberg manages communications for The Nature Conservancy in Alaska from Cordova, Alaska. www.akbizmag.com

Invite Wild to Dinner Tonight. Every day Alaska fishermen brave nature and some of the wildest waters in the world to bring the finest seafood to your table. Natural and deliciously healthy, Alaska seafood is a quick, easy, and always tasteful addition to any meal. So go wild, and share a culinary adventure with your family tonight. And, with a swipe of your finger you can explore Alaska up close, meet our fishermen, find recipes, chefs tips and more at wildalaskaflavor.com

ÂŠ 2013 Alaska Seafood Marketing Institute

special section

Building Alaska

Alaskans, as builders and owners, help launch powerful new class of ﬁshing vessels By Wesley Loy

nside a colossal assembly and production hall in Ketchikan, with the newly built commercial fishing vessel Arctic Prowler towering over a patriotic stage, Governor Sean Parnell spoke to a special achievement for Alaska. “This is no ordinary vessel, this Arctic Prowler, because it actually is symbolic of so much,” Parnell said. “It’s proof that Alaskans can and will build Alaska-tough boats and ships to handle these stormy seas.” The boat has been undergoing final outfitting since the October 5, 2013, christening ceremony at the Ketchikan Shipyard and is expected to start fishing soon. The Arctic Prowler is one in a wave of new fishing vessels being built to modernize one of Alaska’s main industrial fleets. The boats, known as freezer longliners, target predominantly Pacific cod, among the state’s most valuable fish species. These new boats are fearsome fish killers—the Arctic Prowler will have the capability of fishing fift y-six thousand hooks per day. The building boom reflects, on several levels, the continuing evolution of the Alaska fishing industry. First, the new boats are the product of a fundamental shift in the way the Bering Sea cod fishery works, with Congress playing a big role in making it happen. Second, the construction signifies the growing role of Alaskans in owning major fishing vessels and in building them. Until recently, vessel ownership and construction was anchored almost entirely out of state. 50

Alaska Business Monthly | June 2014

Photo courtesy of Vigor Industrial

The longliner Arctic Prowler is the ﬁrst large commercial ﬁshing vessel ever built in Alaska.

Third, the new longliners also advance efforts to make Alaska commercial fishing more “green,” or environmentally friendly, by reducing pollution and fish waste. Finally, the boats are expected to enhance efficiency and safety for fishermen at sea, replacing vessels from the World War II era.

A First for Alaska Three new freezer longliners are nearing completion or have already started working.

The biggest and most sophisticated, the Blue North, is under construction in Washington state and is slated to go into service in early 2015. The boat is 191 feet long and will cost around $36 million. A second boat, the 184-foot Northern Leader, was completed in Tacoma last year and already has begun fishing off Alaska. The Arctic Prowler is the smallest of the three boats at 136 feet. But it’s nevertheless a large and powerful vessel and represents a major project for the state-owned Ketchikan Shipyard. Portwww.akbizmag.com

Photo courtesy of Alaskan Leader Fisheries

The longliner Northern Leader, which is now actively ﬁshing in Alaska waters.

land-based Vigor Industrial has operated the Ketchikan yard since 2012. In fact, the Arctic Prowler is the first large commercial fishing vessel ever built in Alaska, Vigor and the boat’s owner say. It’s also the first vessel constructed in the Ketchikan yard’s new seventy thousand-square-foot assembly and production hall, where Parnell and a large crowd of well-wishers gathered to christen the boat. Petersburg commercial fishing titan John Winther had a lot to do with choosing the Ketchikan yard to build the Arctic Prowler. Winther, who died in 2012, was a partner in the boat’s owner, Alaska Longline LLC. Winther was “a great believer in Alaska,” says Larry Cotter, a business associate. Winther had served on the Alaska Industrial Development and Export Authority, which acts as landlord for the Ketchikan Shipyard. He saw no reason a big fishing boat couldn’t be built in Alaska, and when the Ketchikan yard put in the low bid, Cotter says, “We were willing to give Ketchikan a shot.” Parnell, in his speech at the christening ceremony, drew applause when he noted some 98 percent of the workforce on the Arctic Prowler job were from Ketchikan and Saxman. www.akbizmag.com

“That’s worth clapping for,” the governor said. “I think this vessel is proof that this shipyard is ready to build more Alaska-tough, Alaska-class vessels.” Increasing shipbuilding jobs is certainly Vigor’s goal at Ketchikan, company spokesman Brian Mannion says. The Arctic Prowler was “a big first for us and for the state of Alaska,” he says. The project wasn’t without its difficulties, including cost and schedule overruns. Vigor and the vessel owner went to mediation on certain issues. The end product was a well-constructed vessel, Cotter says. “It’s a damn fine boat,” he says. “It’s going to do very well.”

CDQ Investment Cotter heads the Aleutian Pribilof Island Community Development Association. The Juneau-based nonprofit is one of six Alaska-based companies that manage federally designated “community development quotas,” or commercial fishing rights, on behalf of villages along the Bering Sea coast. Since the CDQ (Community Development Quota) program’s start in 1992, the six companies have worked to build ownership in the major fleets fishing the Bering Sea, one of the nation’s richest seafood sources.

Triple Threat hree powerful new fishing vessels are entering the Bering Sea cod fishery, one of Alaska’s largest commercial seafood harvests. These boats are freezer longliners—they not only catch the fish but clean, freeze, and pack them at sea.

F/V Arctic Prowler Owner: Alaska Longline LLC, Petersburg Builder: Vigor Industrial, Ketchikan Size: 136 feet Status: Expected to be ready for fishing in June F/V Blue North Owner: Blue North Fisheries, Seattle Builder: Dakota Creek Industries, Anacortes, Washington Size: 191 feet Status: Vessel delivery expected first quarter 2015 F/V Northern Leader Owner: Alaskan Leader Fisheries, Lynden, Washington Builder: J.M. Martinac Shipbuilding, Tacoma, Washington Size: 184 feet Status: Actively fishing June 2014 | Alaska Business Monthly

The Arctic Prowler represents a continuation of CDQ investment in top vessels, with Cotter’s company holding a 25 percent stake in the boat’s owner, Alaska Longline. Another CDQ company, Dillinghambased Bristol Bay Economic Development Corporation, owns a 50 percent stake in Alaskan Leader Fisheries, which ordered the new longliner Northern Leader. J.M. Martinac Shipbuilding, a longestablished shipyard in Tacoma, built the Northern Leader, touted as one of the largest and most innovative commercial fishing vessels made in the 52

Alaska Business Monthly | June 2014

Rendering courtesy of Blue North Fisheries

Above: The Blue North, an old cod freezer longliner built in 1945. The vessel is currently moored in Seattle and most likely headed for the scrapyard. Right: Artist’s rendering of a brilliant new replacement longliner, also named the Blue North, now under construction.

United States in twenty years. “I’m proud that Alaskans led the way on this project,” Robin Samuelsen, board chairman of Alaskan Leader Fisheries and the Bristol Bay CDQ company, said in July 2013 after delivery of the new boat. “It shows our determination to make long-term investments in Alaska’s fisheries that will provide economic benefits to our people and communities for many years to come.”

Clean and Innovative Freezer longliners deploy lengthy strings of baited hooks for catching Pacific cod and other species such as sablefish. Once hauled aboard, the fish are processed, frozen, and packed in a factory within the boat. Longlining is considered a relatively “clean” form of fishing compared to other techniques such as bottom trawling, which can damage seafloor habitat www.akbizmag.com

and kill non-target species such as crab. Work aboard a freezer longliner can be tough. On most boats, crewmen must work outdoors on deck to haul aboard the hooked fish. The Blue North, now under construction at the Dakota Creek Industries shipyard at Anacortes, Washington, will provide a new level of comfort and safety for fishermen with its “moonpool” feature—an opening in the belly of the boat through which the longline can be retrieved. This internal haul station will be a first in the United States, and means crewmen will “no longer be exposed to rough seas and freezing temperatures for hours on end,” says the boat’s owner, Seattle-based Blue North Fisheries. Designed by a Norwegian firm, Skipsteknisk, the new Blue North longliner also will allow crews to work toward 100 percent utilization of fish parts that currently go to waste. “To accomplish this, every consumable product will be retained—including the liver, stomach, roe, milt, and head,” the owner says. “Currently, many hook-and-line fleets that process

onboard only use the dressed fish, or 50 percent of the entire weight; the rest of the fish is ground up and discharged overboard, due to a lack of space, refrigeration capacity, or onboard labor.” The Blue North also will have lower air pollution emissions and will burn fuel more efficiently. The new boat will replace the old Blue North, a rusting hulk now mothballed in Seattle. That vessel, which began life in 1945 as a Navy yard oiler, is destined for scrap, says Kenny Down, Blue North president.

Fishery Revolution Construction of the new boats does not mean the cod catch will increase. Federal regulators set annual quotas based on scientific assessments of the fish stock, not the number or size of fishing vessels. If anything, the vessel construction boom is likely to reduce the number of freezer longliners, as the new boats will allow for retirement of smaller, older, and less efficient vessels. The Bering Sea cod fishery is one of Alaska’s largest annual fish harvests, and the freezer longline fleet controls

a large share of it. For 2014, the total allowable catch in the Bering Sea is 246,897 metric tons. According to the Freezer Longline Coalition, a lobby group that represents the more than thirty freezer longline vessels, the fleet’s cod catch generates between $150 million and $200 million in annual export revenues. The boat building is coming about because of a revamp in how the Bering Sea cod fishery operates. For many years, the harvest was a “race for fish” as boats competed against one on the water. It was an inefficient and wasteful style of fishing. Beginning in 2010, the fleet switched to a cooperative style of fishing, with boats holding their own catch shares. Congress passed legislation to enable the cooperative. The end of racing brought stability and the financial confidence to replace boats in what Down called “the oldest fleet in the Bering Sea,” and one of the last to convert to catch shares.  Journalist Wesley Loy writes from Anchorage.

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special section

Building Alaska

Road Construction Across Alaska What’s on the STIP this summer—new roads, rehabs, and industrial ideas By Rindi White

“We’re warning people that they should plan additional travel time when traveling the Parks this year.”

—Meadow Bailey Northern Region Spokeswoman, DOT&PF

Alaska Business Monthly | June 2014

raveling in Alaska this summer? Expect delays. The Alaska Department of Transportation and Public Facilities (DOT&PF) is bracing for one of the busiest construction seasons in recent history in both its Central region, which includes Anchorage and Mat-Su, and its Northern region, which includes from near Healy north to Prudhoe Bay.

One of the major construction corridors this summer will be the busy Parks Highway. Ten construction projects of varying degrees are planned along its length. State transportation officials say contractors have been asked to limit delays to travelers, but with several projects running concurrently, even short delays will add up. www.akbizmag.com

Caption to go here credit here

West Dowling Road Phase II project rendering.

“We’re warning people that they should plan additional travel time when traveling the Parks this year,” says the department’s Northern region spokeswoman Meadow Bailey. Bailey says the timing of the projects was more coincidence than planned. Central region construction engineer www.akbizmag.com

Source: Alaska DOT&PF

Tom Dougherty says a few Parks Highway projects in the Mat-Su were put off until later to spare travelers additional delays along the Parks.

Parks Highway Plans The work planned along the Parks Highway includes a variety of projJune 2014 | Alaska Business Monthly

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ects, from a $21 million realignment at Broad Pass, Mile 194 of the Parks Highway, to adding centerline rumble strips for $593,000 along fifty-one miles of the highway, between Mile 305 and 356. The centerline rumble strips are aimed at reducing vehicle crashes. DOT&PF data shows there were sixteen crashes in the project area, including one fatality, in which drivers crossed the centerline. Specialized Pavement Markings, Inc. was selected as the contractor on this project. The Broad Pass realignment will eliminate an “S” curve, add a new bridge across the middle fork of the Chulitna River and remove an at-grade railroad crossing, one of few remaining on the Parks Highway. Instead, vehicles will travel on a bridge over the railroad. The contractor for the project is Quality Asphalt and Paving, Inc. A thirteen-mile road rehabilitation project between Mile 239 and 252 Parks Highway near Healy might be the source of the longest delays for travelers—up to 45 minutes. The highway will be rehabilitated and widened through that stretch with new culverts, drainage, and two new passing lanes added. According to DOT&PF, this section includes several areas that require frequent pavement patches. The project will improve both the road base and drainage to keep the new road stable. Quality Asphalt Paving, Inc. won the bid on this $32 million project. It is expected to continue through this construction season and next, with wrapup in September 2015. Another major push along the Parks Highway this year is adding passing lanes in six locations to allow traffic to pass slower-moving vehicles safely and reduce crashes. This $30 million project is also expected to extend over two construction seasons, with wrap-up in fall 2015. Great Northwest, Inc. was selected as the contractor for this project. According to DOT&PF, travelers can expect delays of up to fifty minutes through the project. A few Parks Highway projects will be happening in the Central region as well. One project will rehabilitate the road between Mile 123 and 146, to eliminate ruts and cracks and reduce seasonal weight restrictions. A $17 million lane expansion and widening project between Mile 43.5 and 44.5, from Lucas Road to Church Road in Wasilla, is the final project along the Parks Highway

Alaska Business Monthly | June 2014 www.akbizmag.com

planned for this summer. Quality Asphalt Paving, Inc. won that contract. It’s the first part of a multi-phase project between Lucas Road and Big Lake Road to address high traffic volume, part of a Traffic Safety Corridor program started in 2006 to address high rates of crashes and fatalities on key Alaska roads. Other Traffic Safety Corridors include the Seward Highway, Knik-Goose Bay Road, and the Sterling Highway.

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Anchorage Improvements A few major projects are expected elsewhere in the Central region. Dougherty says one of the largest is a $37 million

“This is a route that goes from Raspberry and Minnesota all the way to Boniface and Tudor.” — Tom Dougherty Central Region Construction Engineer DOT&PF

project to continue West Dowling Road from C Street to Raspberry Road. “This is a route that goes from Raspberry and Minnesota all the way to Boniface and Tudor,” Dougherty says. Dowling is a significant east-west connector, says DOT&PF planner Jennifer Witt. Extending the road should provide important access to residents in that area. A state-funded project to build a new bridge and add lanes in Eagle River, on the Glenn Highway between Highland Drive and Artillery Road, will likely cause some traffic delays. The goal of the $40 million project is to improve traffic flow. A $45 million project to upgrade an east-west runway at Ted Stevens Anchorage International Airport won’t cause any traffic delays, but it’s possible it may cause brief delays for the air travelers, Dougherty says. The project was currently out for bid at press time. Significant delays are not expected. Another major project that should cause minimal traffic delay is $7.5 million to continue adding overhead lighting along the Glenn Highway between Mile 27 and 31, from Eklutna to the Matanuska River. The lights increase visibility with the aim of reducing moose/vehicle collisions. A $4 million project to resurface A Street between Northern Lights Boulevard and Ninth Avenue may cause some www.akbizmag.com

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“We’re paving a big ‘L’ through downtown Anchorage, through downtown and then south.”

— Tom Dougherty Central Region Construction Engineer DOT&PF

delays, but Dougherty says the work will be mostly conducted at night. Another project likely to affect drivers is a $3.5 million project to repave Fifth and Sixth avenues between Gambell and L Street. Dougherty says the work will be done at night, but it may affect people using hotels in the area. “We’re paving a big ‘L’ through downtown Anchorage, through downtown and then south,” Dougherty says. A $2 million project to add a turning lane along 36th Avenue in Midtown, between C Street and Arctic Boulevard, will also be done this year. Witt says the 36th Avenue project is aimed at increasing traffic safety. Drivers turning across traffic currently block the flow of one lane of traffic. Adding a turn lane should reduce the number of angle accidents that happen in that area, she says.

Two projects address traffic related to the Tikahtnu Commons shopping center in North Anchorage. Dougherty says $1.5 million will be spent to install permanent traffic signals accessing the shopping center on North Muldoon. Another $1.25 million will be spent to install signals on the Glenn Highway ramps on Muldoon. On the outskirts of Anchorage, a continuing project to rebuild Eagle River Road between Mile 5 and 12 will improve the road quality and add wider shoulders so bikers, hikers, and runners can use the route, which accesses Eagle River Nature Center, more easily.

Busy Season for Mat-Su DOT&PF has several projects planned for Mat-Su. One that might have significant impacts for drivers is a $3 million project to repave the Palmer-Wasilla Highway Extension between Parks Highway

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Alaska Business Monthly | June 2014

and Knik-Goose Bay Road. Unlike some Anchorage projects, where construction crews work at night primarily because it’s difficult for contractors to get material to the site, Dougherty says this project will happen during the day. Drivers are advised to re-route or brace for delays. A major project in northern Mat-Su this season will repave the first nine miles of Petersville Road, near Trapper Creek. The project won’t add any additional pavement; it stops where the road currently ends at Mile 9.2. The Mat-Su Borough is pushing forward on its own road project, the largest road project the borough has undertaken, Mat-Su spokeswoman Patty Sullivan says in an online update. It’s the Bogard Road Extension, which will pave a new path from East Arctic Avenue in Palmer to West 49th State Street near Colony Schools. A project contract is expected in mid-May, with construction starting in June and wrapping up in fall 2015. The project is estimated at $22 million, with funding from the state Legislature. According to information from the borough, the contractor will likely spend the 2014 construction season building the roadbed and relocating utilities. Paving will happen in 2015, with a new traffic signal near Palmer High School at the intersection of Felton Street and Arctic Avenue. The project is the final link in a plan to ease traffic on the Palmer-Wasilla Highway by adding east-west connections between the two cities. Future phases of the project will realign the intersection with Colony Way and 49th State Street and add safety improvements near the Colony High and Middle schools.

Quiet Season in Kenai Compared to the hubbub in Anchorage, Mat-Su, and along the Parks Highway, Kenai will be looking fairly quiet this construction season. Dougherty says a $7 million project to repave East End Road in Homer, between Mile 3.75 and 5.5, will address several issues in that area, from widening shoulders to modifying curves and flattening slopes. A pedestrian path will also be added as part of that project. Another project farther up East End Road will resurface it between Mile 12.5 to the end of the pavement at Mile 19.6. That $7.2 million project includes bridge rehabilitation. www.akbizmag.com

Check, Prepare, and Slow Down

s part of its National Work Zone Awareness Week in early April, DOT&PF said the state averages about fift y highway work zone accidents each year. To cut accidents, DOT&PF officials encourage drivers to check weekly construction updates posted online at AlaskaNavigator.org or 511. alaska.gov. Motorists can also dial 511 or follow road updates on Twitter at @alaska511 or on Facebook at facebook.com/ Alaska511. The Municipality of Anchorage also maintains anchorageroads.org with weekly updates about Anchorage road construction, traffic delays, closures, and links to state projects, traffic cams, a road closures map, and other helpful information— or follow on Twitter at @ ANCroads. In Homer, the state will repave the Sterling Highway from Mile 173, at Pioneer Avenue, to the end of the Homer Spit. That project is expected to cost $4.7 million. The state plans to spend $6.5 million adding slow vehicle turnouts between Soldotna and Homer this summer, Witt says. It will be the second season of work to repave the Sterling Highway through Cooper Landing, between Mile 45 and 58. Dougherty says contractors can’t work in July, due to the influx of fishing traffic, so work is expected to wrap up by the end of June. On the Seward Highway, travelers can expect delays while crews repave about twenty miles between Canyon Creek and the base of Portage Pass. “That one has the potential for traffic disruption, but we typically don’t allow work on the weekends,” Dougherty says.

Villages Will See Road Projects, Airport Improvements The Central region of DOT&PF includes Dillingham and the Aleutian Chain, www.akbizmag.com

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New Road for Tanana Bailey says several projects will be happening in the Northern region, including a project to resurface the first nineteen miles of the Edgerton-Parks Highway, a project that Chitina dipnetters will likely celebrate—next year. Travelers in Fairbanks will have three main projects to contend with: a $6.5 million project repaving Airport Way, a $2.6 million project rebuilding South Cushman Street, and a $10.5 million project repaving the Johansen Expressway. Airport Way and the Johansen Expressway are two major east-west corridors for the community, so road projects will be difficult to avoid. However, work on both projects will happen mainly at night to speed the project along and minimize traffic disruption. Other projects will be underway in the area, but perhaps the most noteworthy is a project to build a new road to Tanana. A mining area, the road project is part of the Roads to Resources Pro60

Alaska Business Monthly | June 2014

Photo courtesy of DOT&PF

Brotherhood Bridge medallions in June 2013 (above) and in 1965 (right).

gram, in which state agencies partner with developers and other interested parties on projects to support developing natural resources. Bailey says the 18 miles of new road will be extended beyond 16 miles of trails at the end of the existing Tofty Road, and will end on the south bank of the Yukon River, seven miles from Tanana. The road will allow roughly three hundred Tanana residents access to services like fuel deliveries and will allow greater access to mining claims in the area. Currently, Tofty Road runs 16 miles from the Elliot Highway, but the remaining length of the road is now just a trail or, in some places, completely nonexistent. Bailey says the road won’t be a broad thoroughfare; it will be built to pioneer road standards.

Southeast Sees Big-Ticket Bridge Replacement Jeremy Woodrow, spokesman for the Southeast Alaska region of DOT&PF, says Juneau will see quite a bit of work this season, especially along Egan Drive. That road connects downtown Juneau to the Mendenhall Valley. One of the major projects along that route will replace Brotherhood Bridge, named for the Alaska Native Brotherhood in Southeast. The $35 million bridge replacement includes some en-

Photo courtesy of Roy and Toby Peratrovich, Jr.

and state transportation projects include airports as well as roads. The department has been busily improving airports throughout the region to keep up with changing Federal Aviation Administration regulations. This summer projects are planned in the following places: Dillingham, where an existing safety area will be widened; Kodiak, where a runway safety area will be expanded and drainage improved throughout the airport; Koliganek, where the airport is being made wider and longer to accommodate twin-engine airplanes; Tununak, where a new airport is being built to replace an outdated one on the beach; and Platinum, where a runway is being upgraded. A $20 million project to lengthen and repave the Unalaska airport is in its second season of construction and will wrap up this summer, Dougherty says. Witt says the state is trying to make sure rural airports meet a minimum standard of three thousand feet of runway for planes to safely land. In some cases, like Tununak, airports are relocated because communities build around the airport and leave no room for expansion. The Federal Aviation Administration helps pay for the expansion and relocation projects; Tununak is expected to cost $21 million.

gineering marvels, such as the three hundred-foot pilings that will be placed to keep the bridge steady in the glacial silt and sediment that forms the floor of the Mendenhall Valley. Woodrow says the project will add two lanes to what was a two-lane bridge, and it will include a separated multi-use path that will allow bikers and walkers to cross the bridge more safely than they currently do. The existing bridge will be demolished as part of the project, but several medallions that were on the old bridge were carefully extracted and will become part of the new bridge. Also on the docket this summer is an $8 million project to add a roundabout to the intersection of Glacier Highway and Auke Bay. The roundabout replaces a dangerous wye intersection.  Rindi White is a freelance journalist living in Palmer. www.akbizmag.com

special section

Transportation

Shipping News: There’s an uptick in Alaska SB21 and the transportation industry By Julie Stricker

ver the past year, Jim Scherieble has been having the kind of problem that every business manager wants to have: almost too much business. Scherieble is general manager of Kenworth Alaska, which sells and services the vehicles that do much of the heavy transportation and field work for Alaska mining, oil and gas industry, hauling, and shipping. After a series of slow years during the Great Recession, Scherieble saw truck sales double and then rise even more in just a matter of months. The trend continued into this year. “Business is crazy right now,” Scherieble said in spring 2014. “I had to hire another salesman because my main salesman was swamped. I had the paperwork for twenty-eight truck orders piled up on his desk.” The numbers bear him out. In 2009, 2010, and 2011, Scherieble’s dealership sold fewer than 50 trucks annually. In 2012, that number jumped to 108, which he attributes mostly to an improved economy and businesses upgrading their fleets, which had stagnated after an emissions regulation change spurred fleet changes in 2006, followed by the economic downturn. Then came 2013 and business boomed. Scherieble places the uptick squarely on an oil tax revision passed by the Alaska Legislature in April 2013.

More Alaska Production Governor Sean Parnell’s More Alaska Production Act, generally referred to as Senate Bill 21 or SB21, replaced the ACES system championed under Governor Sarah Palin. Implemented in 2007, ACES featured a complicated tax levy that began at 25 percent and a pro62

Alaska Business Monthly | June 2014

“Business is crazy right now, I had to hire another salesman because my main salesman was swamped. I had the paperwork for twenty-eight truck orders piled up on his desk.”

—Jim Scherieble General Manager, Kenworth Alaska

gressivity clause that raised the tax rate to more than 50 percent as oil prices rose. It immediately boosted state coffers, but oil companies said it ate too deeply into their profits when oil prices were high, which made them less likely to consider new investment in Alaska. Critics of ACES said falling oil prices and declining production threatened Alaska’s long-term ability to provide services. Oil taxes and royalties make up more than 90 percent of Alaska’s budget. Alaska oil production is only a quarter of its 1988 peak of 2 million barrels per day and is declining at a rate of 6 to 8 percent annually. Despite estimates that Alaska’s oil fields still contain billions of barrels of recoverable oil, production has been declining. Once the top oil producer in the United States, Alaska is now fourth—after North Dakota, Texas, and California. When he unveiled SB21, Parnell said the only way to increase oil production in Alaska is to cut taxes. SB21 replaces ACES with a 35 percent flat tax and credits for production as incentives to encourage oil companies to invest in Alaska oil fields to increase future production. ConocoPhillips immediately announced plans to increase investment in North Slope oil fields, where it will add two more oil rigs, and other companies followed suit. Scherieble’s business immediately felt the effects.

“In the first quarter of 2013, we sold twenty-six trucks and eight of them were Slope trucks,” he says. “Almost one hundred trucks were ordered after the first quarter after the oil tax passed. We sold four times as many trucks in the next three quarters as we did in the first quarter. “Right now we have seventy-five trucks on order since January 1,” he adds. “That’s a 300 percent increase over first quarter last year. And fortyeight of them were Prudhoe trucks.” Kenworth trucks are workhorse vehicles on Alaska’s North Slope oil fields, as well as throughout the state. Scherieble estimates most of the trucks on order now are destined for work on the North Slope. “You’ve got everything from a tractor that will haul some kind of a tanker trailer or a material trailer like a side dump all the way up to a vacuum truck, a crane truck,” Scherieble says. “Some are bed trucks. They are the ones that move the real heavy loads. They winch it up and pull it up like a drill rig, and they haul this great big monster from field to field.”

Business Surge In addition to truck sales, transportation companies around the state are reporting a surge in business relating to Alaska’s oil fields, and most point to passage of SB21 as the reason for the surge. Jim Jansen, chairman of Lynden, www.akbizmag.com

Inc., a shipping company that provides services around the world, estimates business in Alaska is up 10 percent. “The uptick in transportation activity to Prudhoe Bay is a direct result of SB21,” Jansen says. “Not only is there more direct drilling activity, there is a renewed optimism that Alaska has reopened for business on the North Slope.” Jansen says Lynden Transport and Alaska West Express, both owned by Lynden, have been extremely busy between Fairbanks and the North Slope this year. Alaska Marine Lines is moving record volumes of rail cars from Seattle to Whittier and rail cargo is way up. “This volume is a direct result of renewed Prudhoe Bay activity, based on new commitments from the oil industry,” Jansen says. Statements from oil company executives reflect that view. After SB21 passed, ConocoPhillips immediately announced plans to boost North Slope investments, noting it planned to allocate $1.7 billion more in capital projects in Alaska in 2014, compared to 2013. Janet Weiss, BP Alaska president, told the annual meeting of the Resource

—Jim Jansen Chairman, Lynden, Inc.

$1 billion. That would result in thirty to forty new wells being drilled annually and an increase of about two hundred workers. It is also considering investing another $3 billion to develop projects in the western part of Prudhoe Bay. That development could last for decades and provide thousands of jobs, Weiss says. SB21 also provided the momentum behind plans to develop the Sag River formation, which could provide 200 million barrels of new oil.

Development Council that Alaska has taken “an important step toward an ‘energy renaissance.’ The passage of SB21 in the last legislative session signaled something important to industry: that Alaska wants to be a globally attractive place for investment,” Weiss states. “It’s already having a profound impact on the pace and scale of projects that BP, our partners, and the rest of the industry are pursuing on the North Slope.” BP says it plans to add two drilling rigs to its Prudhoe Bay fields in 2015 and 2016 and boost new investment by

Feeling the Effects Northrim Bank’s 2014 construction forecast shows Alaska’s oil and gas sector leading a construction uptick, accounting for $4.3 billion in new construction, up $1 billion over 2013. That means more jobs and more supplies, services, and equipment will be needed. Alaska companies are already feeling the effects. Scherieble added another salesman and then boosted the workforce at Kenworth’s two retail stores, one in Anchorage and one in Fairbanks. Sales increased 12.9 percent and he added

“The uptick in transportation activity to Prudhoe Bay is a direct result of SB21, not only is there more direct drilling activity, there is a renewed optimism that Alaska has reopened for business on the North Slope.”

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“Whether to vote ‘No’ on Proposition 1 or to go back to the old ACES tax law is really a citizen of Alaska issue, not an oil company issue. Oil companies can invest in many markets, but this is our home and we have the most to win or lose. I believe that people on both sides of the issue have the same ultimate goal, which is to maximize the return on our resource.” —Harry McDonald Managing Director, Saltchuk

an entire second shift to the Fairbanks store to meet demand. “Our Prudhoe customers are telling us all equipment available is already rented or working,” Scherieble says. “They’ve got these big projects like Point Thomson and CD-5, and it’s stretching out the available equipment until we can get more up there next winter. We’re getting stuff in the body shop now to be shipped up to Alpine and Kuparuk.” SB21 isn’t without its detractors, with some legislators calling SB21 a giveaway to the oil companies. They have succeeded in getting a ballot measure on the August primary, “Vote No on Proposition 1,” that would repeal the measure. Repealing SB21 would be disastrous for Alaska, says Harry McDonald, managing director of Saltchuk, which owns

Northern Air Cargo, Delta Western Petroleum/Inlet Petroleum, Totem Ocean Trailer Express, Foss Maritime, and Carlile Transportation Systems. “Whether to vote ‘No’ on Proposition 1 or to go back to the old ACES tax law is really a citizen of Alaska issue, not an oil company issue,” McDonald writes in an email. “Oil companies can invest in many markets, but this is our home and we have the most to win or lose. I believe that people on both sides of the issue have the same ultimate goal, which is to maximize the return on our resource.” McDonald says he believes a return to ACES would be short-sighted. While Alaska could get more money in the short term if oil prices rise, the longterm effects will be negative. As it is, oil prices have been declining.

“There is new enthusiasm on the Slope directly related to the new and more equitable tax system put into place as a result of the passage of SB21 last session,” McDonald says. “Most of the impact of the new law is yet to come: Projects take planning and time to implement. Rigs are not built in a day.” Saltchuk employs more than 6,500 people, most in Alaska and the Northwest, he says. “Our long-term viability in this market depends on intelligent tax support to support long-term stability.”

More at Stake While Alaska’s Department of Revenue forecasts are still showing a long-term decline in oil production, there is more at stake than oil. A healthy oil industry is necessary for a natural gas project be-

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cause both use the same infrastructure, Jansen says. “We’re just not going to have a gas line if we don’t have competitive tax rates,” he says. “This oil tax reform battle is an Alaska issue,” says Jansen, co-chair of the Keep Alaska Competitive Coalition, Vote No on #1. “Oil companies can invest anywhere in the world, where they can get the best returns, and they do. Where do Alaskans go if we lose the industry that provides our jobs, pays 90 percent of our taxes, contributes to the Permanent Fund, and supports our charities? “Alaskans have a much bigger stake in this vote than the oil industry does.” For now, oil companies are looking to the future in Alaska. In April, BP Alaska announced plans to sell interests in four of its oilfields to privately owned Hilcorp so it can focus on its Prudhoe Bay holdings and make progress on an Alaska LNG project. The sale includes all of BPs interests in the Endicott and Northstar oilfields and 50 percent interest in the Liberty and Milne Point fields. “There are some big benefits from this

“There are some big benefits from this transaction. BP will be able to focus on maximizing production from Prudhoe Bay and advancing the Alaska LNG opportunity.”

—Janet Weiss, Alaska President, BP

transaction,” Weiss states in a news release. “BP will be able to focus on maximizing production from Prudhoe Bay and advancing the Alaska LNG opportunity. Hilcorp takes ownership of two mature oil fields ready for new investment and activity, and it will operate a third field that is primed for accelerated production. And, the state gets another accomplished operator working the North Slope. Thanks to tax reform, Alaska is now on course for increased investment and production and even the possibility of LNG.” Weiss credits the passage of SB21 for putting Alaska back on track for a longawaited LNG project. Parnell came to an agreement with BP, ConocoPhillips, ExxonMobil, and TransCanada to tie a North Slope gas project to a Southcentral Alaska LNG project. The state of Alaska would have a 25 percent stake in the project, which would provide

lower-cost natural gas for Alaskans, as well as exports. The gas line would cost between $45 billion and $65 billion and could go online in the mid-2020s. It will be years before any new development on the North Slope results in a significant production uptick, but Scherieble is hopeful that what he’s seeing now is just the tip of the iceberg. “Transportation businesses are the first people that see things happening,” he says. “We’re probably at the very front of that because we’re ordering things that are going to be shipped at the beginning of the year. All of the things that we have on order now will be hitting Alaska in summer and fall for winter delivery.”  Julie Stricker is a journalist living near Fairbanks.

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June 2014 | Alaska Business Monthly

special section

Transportation

Northern Air Cargo operations at Ted Stevens Anchorage International Airport.

Air Cargo Ranks High Busy state-owned international airports in Anchorage and Fairbanks

any people across the nation and throughout the world visit Alaska for its majestic beauty and natural wonder. They come to see the vibrant Aurora Borealis, catch a glimpse of the state’s wild animals, or see what really makes up the

Alaska Business Monthly | June 2014

By Russ Slaten Last Frontier. One thing many travelers don’t consider is the vast amounts of goods that travel to—and especially through—Alaska. Passenger flights accounted for a little over 60 percent of flights in 2012— that’s a total of 6 million passengers—

to Alaska’s International Airports. The nearly 40 percent of cargo flights, however, weighed in at 5.5 billion pounds of goods, nearly two-thirds of which was in-transit, according to the Alaska Department of Transportation and Public Facilities 2013 Annual Activity Sumwww.akbizmag.com

Photo courtesy of Ted Stevens Anchorage International Airport

Cargo jets lined up at the Anchorage airport.

mary Report for the Alaska International Airport System (AIAS). AIAS is comprised of Ted Stevens Anchorage and Fairbanks international airports. Operations began in 1951, and the state was granted both airports in 1959 and assumed management a year later. Ted Stevens Anchorage International Airport is the fifth largest airport in the world for cargo throughput and the second in the United States for landed weight, according to the AIAS website.

“The most important advantage we have is location, location, location. We are within nine and a half hours of 90 percent of the industrialized world. We are the biggest airport closest to the midpoint between the manufacturing centers of Asia and the consumption centers of North America, and we’re not off the beaten path to connecting one of those two to Europe.” —John Parrott Airport Manager, Ted Stevens Anchorage International Airport

www.akbizmag.com

Location John Parrott, airport manager for the Ted Stevens Anchorage International Airport, says Anchorage’s geographic location gives the airport a distinct advantage over other airports across the nation. “The most important advantage we have is location, location, location. We are within nine and a half hours of 90 percent of the industrialized world,” Parrott says. “We are the biggest airport closest to the midpoint between the manufacturing centers of Asia and the consumption centers of North America, and we’re not off the beaten path to connecting one of those two to Europe.” Parrott says that airplanes like the Boeing 747 can overfly Anchorage and go to the West Coast but must refuel and take off cargo. “Nobody is paying them to carry fuel; they’re being paid to carry cargo, so this location is very important in allowing them to maximize their cargo revenue,” Parrott says.

FedEx, among other carriers, tends to agree on Anchorage’s advantageous position in the global cargo network. FedEx has a five hundred thousandsquare foot sorting facility, with the capacity to process fifteen thousand pieces per hour. “FedEx continues to move a significant amount of our international volume—especially deferred volume between the US and Asia—through Anchorage,” says FedEx spokesperson Scott Fielder. Nippon Cargo Air utilizes the Ted Stevens Anchorage International Airport particularly for its location, and additionally because it is fully equipped to handle the large Boeing 747-8F without restrictions, a necessity for Nippon Cargo Air. “ANC is the perfect location for maximum operating efficiency of our B747 freighter, both the -400F and the -8F. We can minimize fuel burn by operating from Narita, Japan, to Anchorage and then to Chicago O’Hare and vice versa. Compared to operating nonstop, stopping in Anchorage allows us to offer full payload without any restrictions,” says Nippon Cargo Airlines Americas President Shawn McWhorter.

Alaska Cargo Regulations Along with an advantageous location, the special federal regulations affecting Alaska play a role in attracting cargo airlines. Normally, a foreign carrier would not be allowed to handle cargo in any way or transport it between two citJune 2014 | Alaska Business Monthly

UPS workers load the ﬂight to transport a polar bear cub from the North Slope for the Alaska Zoo to the Louisville Zoo via “Operation Snowﬂake.” Photo by Carol Lahnum, Courtesy of UPS

ies within one country. But Parrott says this advantage is a significant piece of the business development and marketing efforts at the airport. “Because of its location, the US Department of Transportation decided to make an exception for Alaska in the late 90s,” Parrott says. “They said carriers can manipulate cargo, and it will not be counted as breaking the international journey because Alaska is still a long way from the rest of the United States. Those allowances were expanded in 2003 with the Stevens Amendment, which basically allows carriers to move cargo either between their own aircraft and other carrier’s aircraft, as long as a US carrier is involved, and then proceed to other cities in the United States.” Nippon Cargo Airlines uses this distinct advantage to find ways that adds to its revenue stream. “There are unique commodities that we sell from Alaska to Japan such as cod milt, roe, and other seafood. So we can also load additional revenue cargo during the stop in Anchorage when going to Japan,” says McWhorter. Other airlines that use this service include Air China, Cathay Pacific, China Airlines, Korean Airlines, UPS, and much more, Parrott says. UPS is one of Anchorage’s consistently high ranking cargo operators in terms of landed weight, generating about $4 million in landing fees a year. UPS spokesperson Mike Mangeot says the shipment and logistics company hires over a thousand people in the state. “As our primary jumping off point to Asia, Anchorage is one of the most important points in the UPS global network, and we have invested $60 million in our package operations, pilot training base, and pilot domicile there,” Mangeot says. “In recognition of Anchorage’s special place in our worldwide logistics network, UPS has given back to the community in unique ways, including moving two polar bear cubs for the good folks at Alaska Zoo.”

Safety Net Anchorage International Airport is in between the industrialized centers of Asia and consumer centers of America but not within three hours of any other airport except Fairbanks, Parrott says. He believes the location of each airport 68

Alaska Business Monthly | June 2014

www.akbizmag.com

“The partnerships we have with Anchorage and Fairbanks international airports are very strong. Both airports are very well managed and recognized throughout the world for innovation and operational excellence, and they have done an excellent job marketing these attributes to global carriers.”

—Joe Samudovsky Spokesperson, Alaska Airlines

is advantageous to the other in providing an alternative route for emergencies. “Having that safety net of Fairbanks is important to us. If you’re scheduled to go to Fairbanks, you have Anchorage as a safety net. And we’re separated obviously by a couple hundred miles of mountain range, different fault lines, and different weather patterns. There has never [been], in the history of the AIAS, a simultaneous closure of airports, except for the airspace closure associated with 9/11,” Parrott says. “That really adds a high level of safety and redundancy to operating out of either airport.” Alaska Airlines moves more than 80 million pounds of cargo in and out of its Anchorage facility annually, and the average number of arrivals and departures is 81 per day in the fall and winter, which shoots up to 113 flights per day in the summer. Alaska Airlines officials say the direct relationship between the international airports adds to its unparalleled airport system qualities. “The partnerships we have with Anchorage and Fairbanks international airports are very strong. Both airports are very well managed and recognized throughout the world for innovation and operational excellence, and they have done an excellent job marketing these attributes to global carriers,” says Alaska Airlines spokesperson Joe Samudovsky.

Alaska Freight Although the majority of cargo passing through Alaska is international freight, it is by far not the only cargo. Alaska Airlines says in addition to its typical www.akbizmag.com

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Alaska Air Cargo workers loading freight at Ted Stevens Anchorage International Airport.

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air freight commodities of fresh seafood and produce, healthcare-related, and industrial shipments, the airline also transports lumber, drywall, and other building supplies not normally seen inside of an aircraft. The unusual cargo is due to the minimal highway infrastructure in Alaska and the fact that many communities can only be reached by air, Samudovsky says. “A few years ago we conducted a tour of our Anchorage cargo facility for a group of air freight industry executives; their total industry experience was well over one hundred years,” Samudovsky says. “Quite frankly, they were amazed at the type of freight being shipped by air throughout the state.” Northern Air Cargo, a cargo carrier specializing in serving Alaska, operated 4,600 flights last year and transported more than 66 million pounds of freight

The UPS “Operation Kali” ﬂight taxis to the runway with a polar bear cub from Point Lay after the Alaska Zoo found a new home for him at New York’s Buffalo Zoo.

“We understand supplying the communities we serve, and it is not taken lightly. Because we might be the only option in getting an item to its destination, if we fail to provide that service it can have an adverse effect on the individual customer or the whole community.”

—Blake Arrington Spokesperson, Northern Air Cargo

to communities within the state. The company’s three hundred plus committed employees, along with its role in supplying Alaska with needed commodities add to the success of its mission. “We understand supplying the communities we serve, and it is not taken lightly. Because we might be the only option in getting an item to its destination, if we fail to provide that service it can have an adverse effect on the individual customer or the whole community,” says Northern Air Cargo spokesperson Blake Arrington. One airline that utilizes Alaska’s international airports not only as a shipping destination, but also as a starting off point to rural Alaska, is Lynden Air Cargo. Lynden operates the civilian version of the military C-130 Hercules www.akbizmag.com

June 2014 | Alaska Business Monthly

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aircraft, equipped to handle bulk, large, outsized pieces of freight and equipment to short, rough, unimproved airstrips. “Anchorage International Airport is uniquely positioned to receive that type of equipment from all over the world, then it transfers to us, and we move it to the final destination in western Alaska or North Slope, wherever it needs to go and wherever we can get the airplane in,” says Lynden Air Cargo President Rick Zerkel.

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Revenue and Jobs The state-owned international airports generate their own revenue through landing and fuel flowage fees, land and terminal rent, a percentage of concessions, and parking fees, Parrott says. Cargo-related revenue accounts for more than 50 percent of revenue for Ted Stevens Anchorage International Airport. “Due to our location and because of those liberalized cargo regulations—as of the end of 2013—we are the sixth busiest cargo airport in the world, behind Hong Kong, Memphis, Shanghai, Incheon, and Dubai.” The state’s international airports are responsible for one in every ten jobs in Anchorage and one in every twenty jobs in Fairbanks, Parrott says. The number of airport and airport-related jobs is more than fifteen thousand in the Anchorage bowl, accounting for about $1 billion in payroll and sales into the local economy. “The Alaska team spirit and the mentality and attitude folks have that air traffic in general, and cargo in particular, is important. We need to take care of it; we need to make it efficient; we need to properly design and construct an airport; air traffic needs to officially run the airspace; and customs and TSA need to not interfere with commerce,” Parrott says. “All of that is required to have an efficient cargo airport. And we have all of that, because everyone involved in the process gets it and works together to keep the entire system working well.”  Russ Slaten is the Associate Editor at Alaska Business Monthly.

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Alaska Business Monthly | June 2014

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Western Alaska destinations Lynden utilizes multi-modal shipping to deliver cargo. www.akbizmag.com

Rural Cargo Challenges Enhancing supply chains to lower delivery costs By Julie Stricker

or a resident of rural Alaska, a routine trip to the grocery store can result in major sticker shock. For example, a box of Tide detergent in the community of Napaskiak cost $46.64, plus tax, in August 2013. In Bethel, a container of Quaker Oats costs $9.79 and a can of Spam is $5.89. A small tub of baby formula goes for $42.65 in Sitka. A gallon of milk in Barrow costs $9.99. As high as these prices are, they could be much worse. With its small population scattered over a vast roadless area twice the size of Texas, the economics of supply and demand just don’t add up for consumers. It takes a combination of federal help and close attention to cost-cutting and efficiency on the part of Alaska’s transportation companies to keep costs down despite the staggering logistics of delivering basic groceries such as milk, bread, and eggs to far-flung communities. Delivering a gallon of milk to Napaskiak, for example, requires it to be moved on almost every mode of transportation used by Lynden Transport, which has been shipping freight to Alaska since 1954, according to David Rosenzweig, vice president of marketing and media for Lynden. Napaskiak is a village of about four hundred people on the Kuswww.akbizmag.com

“The time it takes to get to those locations vary due to the weather and remoteness and the lack of a road system.”

—David Rosenzweig Vice President of Marketing and Media, Lynden

kokwim River about five miles downstream from Bethel, the regional hub. First, the milk is picked up with a Lynden Transport truck from a distribution center in Seattle and trucked to the dock, Rosenzweig says. The trailer is loaded onto a steamship traveling from Seattle to the Port of Anchorage. There it is sent to another distribution center. When called for by the grocer in Napaskiak, the milk is loaded onto another truck and sent to Lynden Air Cargo at the airport. It is flown to Bethel in a Lynden Air Cargo L-382 Hercules, then transferred to Alaska Hovercraft, another Lynden subsidiary, and sent down the Kuskokwim River to Napaskiak. There it is loaded onto an all-terrain vehicle trailer and taken from the banks of the river to the village grocery store, “all the while being kept at the proper temperature to not allow it to spoil,” Rosenzweig says. June 2014 | Alaska Business Monthly

The process is the same for other Alaska villages such as Aniak and Allakaket, but the final leg to the village is by small airplane instead of hovercraft.

Bypass Mail Lynden is also a bypass mail contractor. Bypass mail is a US Postal Service program that subsidizes freight deliveries to rural Alaska that is perhaps the most important factor in keeping a lid on already high prices. Bypass mail allows bulk shipments to be carried on rural air carriers at par-

cel post rates, bypassing the US Postal Service sorting system. Shipments of goods and materials are separated into lots of one thousand pounds or more and loaded onto pallets. Then they are dropped off directly at an air carrier, which is reimbursed by the Postal Service for the difference between parcel post and air freight. Bypass mail is unique to Alaska. It was created in 1972 by Alaska Republican Senator Ted Stevens as a way to help reduce the cost of transporting freight to the Bush and reduce the strain on

Shipping to Alaska... We’ve got you covered! Lynden can now ship your freight to Southeast, Central and Western Alaska. We’re proud to offer reliable weekly, twice-weekly and seasonal barge service to port communities throughout Alaska. Whether you want to ship to Juneau, Dutch Harbor, Anchorage or Nome, your goods will arrive safely and on schedule. You can rely on Lynden to create innovative solutions to your transportation challenges.

www.lynden.com 1-888-596-3361

postal hubs. As the US Postal Service has tried to stem hundreds of millions of dollars in losses in recent years, the bypass mail program has come under scrutiny. In 2013, the program lost $76 million on its $108 million investment in the program. Alaska’s congressional delegation says the bypass mail program is essential in rural Alaska, where residents have a right to universal mail service. It’s an argument they’ve had to make time and again. In early 2014, without notice, the Postal Service raised bypass mail rates by 6 percent and eliminated parcel post. Rates for shipping large packages went up as much as 52 percent. Alaska’s congressional delegation fought the move, saying it disproportionately affected rural Alaskans. Rural stores were forced to raise prices to cover the increased shipping costs. In March, the postal service reversed the price hike for two hundred off-road communities, creating a special pricing category called Limited Overland Routes, or LOR, that restored prices to previous levels. In a state where residents ship everything from diapers, soda pop, and Pilot Bread to trucks, construction materials, whale meat, generators, and portable toilets, transportation companies’ ability to accommodate even the most unusual item in the most remote spot is important.

It Takes a Family to Supply a Village The Lynden family of companies is designed to serve even the most remote locations in Alaska. The Northland barge line serves villages in western Alaska from Dutch Harbor in the Aleutians to Kotzebue on the Bering Sea above the Arctic Circle. The barges supply these communities with everything from building materials to day-to-day necessities. Good planning is essential for cost-effective and timely deliveries. “The time it takes to get to those locations vary due to the weather and remoteness and the lack of a road system,” Rosenzweig says. Once ice forms in the Bering Sea and along the coast of Alaska in October, the barges can’t run again until it breaks up, usually the following May. Since air delivery is much more expen-

Alaska Business Monthly | June 2014 www.akbizmag.com

sive, planning far ahead ensures that supplies for major construction projects and general commodities can be shipped by barge during the short summer window. Northland also serves communities in Bristol Bay, home to the world’s largest wild salmon fishery. Virtually all supplies for the fishery arrive by barge, and a large portion of the catch starts its long journey to markets around the world via barge. Lynden’s long history in the state and its multi-modal transportation system allows it to offer cost-effective deliveries, even for oversize and unusual items, such as a Taco Bell delivery truck that was shipped to Bethel in 2012. The truck was needed to prepare ten thousand free tacos after a hoax circulated that a branch of the fast food chain was opening in the community. The delivery was all in a day’s work. “We accommodate oversized loads with the same cost-effective, scheduled service or flag stops to points in the Alaskan Bush,” Rosenzweig says. “We have been delivering freight in Alaska for more than fifty years and we know the challenges and terrain. We can arrange just the right flight to get your cargo delivered to practically any village or city in the state.” As is usual in rural Alaska, getting freight to its destination in a timely manner despite often challenging weather can be difficult, but Lynden is proud of its on-time record. “You can’t win with Mother Nature, but we operate in some pretty extreme conditions,” he says.

Enhanced Supply Chains Rosenzweig says another challenge to getting freight to rural Alaska is “balancing our cost with the cost of fuel. “We continue to challenge our employees to come up with new cost-cutting measures to lower fuel consumption and ultimately lower our cost to our customers,” he says. For instance, Lynden uses electric forklifts instead of propane, and opts to truck materials along the ice roads on regional rivers as soon as the ice is thick enough because truck travel is less expensive than the hovercraft. For Alaska Airlines, the use of Boeing 737-400 “combi” aircraft allows the www.akbizmag.com

IF IT POWERS JUMBO JETS, FIGHTER JETS OR BUSH PLANES

CHANCES ARE IT CAME THROUGH THE PORT. The Port of Anchorage has provided more than 50 years of uninterrupted service and today receives 100% of jet fuel for JBER, 60% of jet fuel for Ted Stevens International Airport and 100% of aviation gasoline for the entire state. That’s fuel for growth.

www.PortofAlaska.com

June 2014 | Alaska Business Monthly

AN ALASKA MINING PROJECT COMMITTED TO: LOCAL HIRE RESPONSIBLE DEVELOPMENT ENVIRONMENTAL INTEGRITY

airline to carry both passengers and cargo to certain hubs in the state. The 737-400s, introduced in 2007, replaced its fleet of 737-200s, adding more cargo space, as well as upgrading the passenger portion. They can accommodate four pallets and seventy-two passengers. Alaska Airlines also uses a centralized database to provide better tracking for shipments, automate customer billing, and allow customers to make flight-specific cargo reservations. Other cargo carriers have enhanced their supply chains to help keep costs down for customers. ACE Air Cargo serves more than fift y communities in southwestern Alaska, the Aleutians, and Southeast Alaska. It’s an all-cargo carrier that operates a fleet of Raytheon Beech 1900C pressurized turboprop aircraft. Transporting perishable items such as fresh seafood is a key component of its business. Recently, three key events occurred that allowed ACE to significantly streamline its supply chain. First, fishery regulations were changed that allowed for a consistent year-round harvest of halibut, instead of intense, short fishing seasons. That provided a consistent infrastructure that allows ACE to better plan its shipments. Second was the growth in domestic and global air traffic at Ted Stevens Anchorage International Airport, which gave potential customers many more options to send perishables around the world. It also provided more inbound options. Third was ACE Air Cargo’s collaboration with several companies in Anchorage to streamline the movement of perishables. In the past, individual companies would contact the carrier seeking unique handling service for perishables. ACE started working with Movers, Inc. and Airland to consolidate the handling and transportation of perishables. Because of these changes, according to ACE Air Cargo’s website, “customers are getting a better price for shipping, better transportation and handling, as well as visibility in the supply chain that never existed before.”  Julie Stricker is a journalist living near Fairbanks.

Alaska Business Monthly | June 2014

www.akbizmag.com

Fruit as fresh as the salmon? Yes please.

Getting fresh produce has never been easier. With more than 25 years experience connecting you to the lower 48, itâ&#x20AC;&#x2122;s no wonder why American Fast Freight is considered the expert in less-than and full container loads from anywhere in the U.S. to Alaska. Let AFF

the go-to for all of your stateâ&#x20AC;&#x2122;s delivery needs.

www.AFFinABM.com 907-782-4033

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY AIR CARGO AK AK Estab. Estab. Empls. Empls.

Company Company

Top Executive Top Executive

Ace Delivery & Moving Inc. PO Box 221389 Anchorage, AK 99522-1389 Phone: 907-522-6684 Fax: 907-349-4011

Hank Schaub, Gen. Mgr.

Alaska Air Cargo 4700 Old Int'l Airport Rd. Anchorage, AK 99502 Phone: 800-225-2752 Fax: 907-266-7808

Marilyn Romano, Reg. VP, Alaska

Alaska Air Transit 2331 Merrill Field Dr. Anchorage, AK 99501 Phone: 907-276-5422 Fax: 907-276-5400

Daniel Owen, Pres. & Owner/Operator

Alaska Airlines 4750 Old Int'l Airport Rd. Anchorage, AK 99502 Phone: 907-266-7200 Fax: 907-266-7229

Marilyn Romano, Reg. VP Alaska

Alaska Cargo Service PO Box 251 Dillingham, AK 99576-0251 Phone: 907-842-5491 Fax: 907-842-1540

Bo Darden, Owner

1976

Air cargo and express package services, air transportation nonscheduled, fuel available, local delivery services and air courier services.

Bald Mountain Air PO Box 3134 Homer, AK 99603 Phone: 907-235-7969 Fax: 907-235-6602

Gary Porter, Director of Operations

1993

Single and multi-engine; 19 passenger, cargo and fuel delivery; VFR and IFR capable; turbine fleet for reliability; off-airport and arctic operations; Flight safety trained crews; services on wheels, floats and skis; aerial scientific platforms; 100NM+ off shore survey capability.

Bering Air Inc. PO Box 1650 Nome, AK 99762-1650 Phone: 907-443-5464 Fax: 907-443-5919

James Rowe, Pres.

1979

110

Air transportation services for scheduled and nonscheduled passenger and cargo. Freight service daily to scheduled destinations. Heavy and oversized cargo charters to all destinations. Air ambulance services, helicopter charter and rental services.

Bristow Alaska Inc 1915 Donald Ave. Fairbanks, AK 99701 Phone: 907-452-1197 Fax: 907-452-4539

Danny Holder

1977

Helicopter contract and charter transportation services.

Camai Enterprise LLC 5353 W. Rezanof Dr. Kodiak, AK 99615 Phone: 907-487-4926 Fax: 907-487-4931

Candace Ellison-Theis, CEO

2000

Authorized agents for Alaska Central Express, Northern Air Cargo, Transnorthern Air Cargo, and Everts Air Cargo, with worldwide service.

Commodity Forwarders Inc. 4000 W. 50th, Suite 1 Anchorage, AK 99502 Phone: 907-243-1144 Fax: 907-243-1149

PJ Cranmer, Reg. Ops Mgr. Pac. NW

2003

Transporting perishable products worldwide. Provides logistical services for perishable products worldwide by providing transportation, documentation, warehouse and consulting services. Freezer storage in Anchorage.

Deadhorse Aviation Center PO Box 34006 Prudhoe Bay, AK 99734 Phone: 907-685-1700 Fax: 907-685-1798

Sherron Perry, Pres.

1976

The DAC is Fairweather, LLC's multimodal aviation facility designed to meet the needs of onshore and offshore oil and gas development on the North Slope. The DAC has 2 large hangars, office space, terminal, full-service medical facility, bedrooms, and full dining facility.

Delta Air Cargo 5000 W. Int'l Airport Rd., Suite SA2334 Anchorage, AK 99502 Phone: 907-249-2410 Fax: 907-249-2414

Richard Anderson, CEO

1987

Air transportation.

Desert Air Transport 4001 Old Int'l Airport Rd. Unit #9 Anchorage, AK 99502 Phone: 907-243-4700 Fax: 907-243-4705

Dennis Gladwin, President

2000

We transport cargo directly from Anchorage International Airport to more than 200 rural communities in Alaska.

DHL Global Forwarding 2000 W. Int'l Airport Rd. Anchorage, AK 99502 Phone: 907-243-4301 Fax: 907-677-0900

John Witte, Reg. Mgr.

1970

Worldwide freight services featuring total Alaska coverage. Specializing in air cargo, trucking, express services, warehousing, storage solutions, supply chain and rail freight.

Era Helicopters LLC 6160 Carl Brady Dr., Hangar 2 Anchorage, AK 99502 Phone: 907-550-8600 Fax: 907-550-8608

Elliott Neal, Vice President - Alaska

1948

130

Founded in Alaska in 1948, Era not only serves the oil and gas industry in Alaska, but provides services for state and government business, executive charter services, flightseeing tours, environmental surveys, utility and construction work.

1994

alaskanace@gci.net alaskanace.com 1932

alaskacargo.com 1984

1932

Air cargo and express-package services, air courier services, arrangement of transportation of freight, freight-transportation services, local delivery services, local trucking with storage and third-party logistics. Residential and office moves. Hot shots, and white glove residential deliveries.

~170 Goldstreak small package express, Petstreak animal express, priority and general air freight services. Full ULD and charter services also available.

Charters@FlyAAT.com FlyAAT.com

alaskaair.com

Services Services

Anchorage based air charters, serving Alaska, Canada, and the Lower 48. Aircraft include the fast, pressurized, increased weight capacity Pilatus PC-12/47, or a factory new Grand Caravan EX featuring increased power and an advanced ice protection system, and the proven workhorse Navajo Chieftain.

1700 Alaska Airlines and its sister carrier, Horizon Air, together, provide passenger and cargo service to more than 95 cities in Alaska, Canada, Mexico, Hawaii, and the Lower 48.

coordinator@baldmountainair.com www.baldmountainair.com

info@beringair.com beringair.com

dave.scarbrough@bristowgroup.com bristowgroup.com

camaillc@yahoo.com

anc-customerservice@cfi-anc.com cfi-anc.com

deadhorseaviationcenter.com

desertair@alaska.com www.desertairalaska.com

jane.treadway@dhl.com dhl-dgf.com

pgargan@erahelicopters.com erahelicopters.com

Alaska Business Monthly | June 2014

www.akbizmag.com

ALASKA BUSINESS MONTHLY’S 2014 TRANSPORTATION DIRECTORY

AIR CARGO Company Company

Top Executive Top Executive

Everts Air Cargo PO Box 61680 Fairbanks, AK 99706 Phone: 907-450-2300 Fax: 907-450-2320

Robert W. Everts, Pres./CEO

Express Delivery Service Inc. 701 W. 41st Ave., Unit D Anchorage, AK 99503-6604 Phone: 907-562-7333 Fax: 907-561-7281

Ed Hoffman, Pres.

FedEx Express 6050 Rockwell Ave. Anchorage, AK 99502 Phone: 800-463-3339 Fax: 907-249-3178

Dale Shaw, Managing Dir.

Grant Aviation 4451 Aircraft Dr. Anchorage, AK 99502 Phone: 888-359-4726 Fax: 907-248-7076

Bruce McGlasson, Pres.

Island Air Express PO Box 1174 Craig, AK 99921 Phone: 888-387-8989 Fax: 888-529-8837

Scott Van Valin, Dir. Ops/Pres.

Last Frontier Air Ventures Ltd. 39901 N. Glenn Hwy. Sutton, AK 99674 Phone: 907-745-5701 Fax: 907-745-5711

David King, Pres.

LifeMed Alaska PO Box 190026 Anchorage, AK 99519-0026 Phone: 907-563-6633 Fax: 907-563-6636

Scott Kirby, CEO

Lynden Air Cargo 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-243-7248 Fax: 907-257-5124

Rick Zerkel, Pres.

Lynden International 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-243-6150 Fax: 907-243-2143

David Richardson, Pres.

Lynden Logistics 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-245-1544 Fax: 907-245-1744

Alex McKallor, Pres.

Lynden Transport Inc. 3027 Rampart Dr. Anchorage, AK 99501 Phone: 907-276-4800 Fax: 907-257-5155

Paul Grimaldi, Pres.

Maritime Helicopters 3520 FAA Rd. Homer, AK 99603 Phone: 907-235-7771 Fax: 907-235-7773

Bob Fell, Dir. of Ops.

Northern Air Cargo 3900 Old International Airport Rd. Anchorage, AK 99502 Phone: 907-243-3331 Fax: 907-249-5191

David W. Karp, President/CEO

Pathfinder Aviation Inc. PO Box 375 Homer, AK 99603 Phone: 907-226-2800 Fax: 907-226-2801

Michael W. Fell, Pres.

PenAir 6100 Boeing Ave. Anchorage, AK 99502 Phone: 907-771-2500 Fax: 907-334-5763

Danny Seybert, CEO

Ravn Alaska 4700 Old Int'l Airport Rd. Anchorage, AK 99502 Phone: 907-266-8394 Fax: 907-266-8391

Bob Hajdukovich, CEO

AK AK Estab. Empls. Estab. Empls.

Services Services

1995

250

An Alaskan owned and operated air carrier that provides scheduled freight service to 12 rural communities and charter service to anywhere in Alaska with suitable runway conditions. Cargo charters, HAZMAT, bulk fuel, small package and oversize. Based in Anchorage and Fairbanks.

1977

Air courier services, local and Valley delivery services, special warehousing and storage. Specializing in serving the medical community. Open 24/7/365.

1973

553

Air cargo and express-package services.

1971

200

Statewide charter service in addition to providing scheduled passenger, cargo, mail and freight services to most villages throughout Alaska. Bethel hub air ambulance services, plus 32 aircraft fleet: Cessna 207, 208 Grand Caravans, Piper Chieftain Navajos, Beechcraft 200 King Airs and GippsAero GA8

2008

Island Air Express operates Cessna 208 and Cessna 206 aircraft throughout Southeast Alaska Ð Providing the only scheduled IFR service between Craig/ Klawock and Ketchikan we deliver the most reliable, on time service available. Exclusive amphib and wheel plane charter service is also available.

1997

Mineral exploration, survey, research and development, slung cargo, video and film projects, aerial photography, tours, crew transport, heli skiing, short and long term contracts.

2008

101

Statewide air ambulance services with bases in Anchorage, Bethel, Fairbanks, Palmer and Soldotna. Anchorage-based ALS ground ambulance services. CAMTS Accredited.

1996

153

Charter air cargo service. Scheduled air cargo and express package service.

1980

Air cargo and express-package services, nonscheduled and scheduled air transportation, air courier services, freight transportation services and local delivery services.

1984

Arrangement of freight transportation, information management and logistical services.

1954

134

Full-service, multi-mode freight transportation to, from and within Alaska.

1973

Maritime Helicopters supports marine, petroleum & construction industries as well as state & federal agencies. Maritime owns the Maritime Maid, an 86' vessel equipped for helicopter operations. We own & operate 6-passenger Bell 407, Bell Long Rangers & 4-passenger Bell Jet Ranger helicopters.

1956

340

Anchorage based Northern Air Cargo is AlaskaÕs largest all-cargo airline. From groceries and generators to medical supplies and lumber, customers across Alaska, including a wide array of industries such as oil & gas, mining, construction, and commercial fishing rely on NACÕs services.

2001

Helicopter on-demand charter for mining, oil, tourism, surveying, filming, aerial applications, firefighting and various other services. Currently utilizing Bell 206 series helicopters and AMD/OAS-approved pilots and aircraft.

1955

450

Passenger Transportation throughout SW Alaska. Take an extra day and enjoy some bear watching!

1948

950

Transportation; Scheduled passenger service, scheduled cargo and charter service

info@evertsair.com evertsair.com

e.hoffman@expressdeliveryak.com

fedex.com

res@flygrant.com flygrant.com

info@IslandAirX.com IslandAirX.com

helicopter@LFAV.com LFAV.com

info@lifemedalaska.com lifemedalaska.com

charters@lac.lynden.com lac.lynden.com

lafmtg@laf.lynden.com lynden.com/lint

information@lynden.com lynden.com

trananccs@lynden.com lynden.com/ltia/

info@maritimehelicopters.com maritimehelicopters.com

customercare@nac.aero www.nac.aero

pathfinderaviation@alaska.net pathfinderaviation.com

missy.roberts@penair.com penair.com

PR@flyera.com flyera.com

Alaska Business Monthly | June 2014

www.akbizmag.com

Company Company

TopExecutive Executive Top

Ryan Air Inc. 6400 Carl Brady Dr. Anchorage, AK 99502 Phone: 907-562-2227 Fax: 907-563-8177

Wilfred "Boyuck" Ryan, Pres.

Security Aviation 6121 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-248-2677 Fax: 907-248-6911

Stephen "Joe" Kapper, Pres.

Temsco Helicopters Inc. 5411 N. Tongass Hwy. Ketchikan, AK 99901-9017 Phone: 907-225-5141 Fax: 907-225-2340

Joseph Hicks, Sr. VP

TransGroup Worldwide Logistics 3501 Postmark Dr. Anchorage, AK 99502 Phone: 907-243-4345 Fax: 888-812-6295

Vanessa Keyes, Reg. Dir./AK

TransNorthern Aviation 3350 Old International Airport Rd. Anchorage, AK 99502 Phone: 907-245-1879 Fax: 907-245-1878

Andrea Larson, Gen. Mgr./CEO

United Parcel Service 6200 Lockheed Ave. Anchorage, AK 99502 Phone: 907-249-6242 Fax: 907-249-6240

Scott DePaepe, Ak Div Mgr

United States Postal Service 3720 Barrow St. Anchorage, AK 99599 Phone: 800-ASK-USPS Fax: N/A

Ron Haberman, District Manager

Warbelow's Air Ventures Inc. PO Box 60649 Fairbanks, AK 99706 Phone: 907-474-0518 Fax: 907-474-3821

Matt Atkinson

www.akbizmag.com

AK AK Estab. Estab. Empls. Empls.

Services Services

1953

100

From Platinum to Kobuk, from Gambell to Mt. Village, we know the challenges of transportation in Alaska. For more than 50 years, weÕve developed the skill, perfected the processes and implemented the technology required to efficiently move freight across the Bush.

1985

24/7 on-demand air charter. Approved carrier for State and Federal Agencies. Executive travel, crew changes, and "HOT" cargo.

1958

~50

Air transportation nonscheduled.

2011

U.S. owned full service freight forwarder and global logistics provider. We provide transportation, warehousing and specialized logistics solutions, coupled with software tailored to meet the specific needs of each individual customer - for every link in your supply chain. Areas Served: Worldwide.

1995

TransNorthern operates Twin Turbine Metroliners and Beechcraft 99 aircraft as well as four Super DC-3s - all the aircraft are for passengers, cargo and combination charters on demand. They also provide weekday FedEx and UPS freight-delivery service to Kodiak, Kenai, and Homer, Alaska.

ryan@ryanalaska.com ryanalaska.com

sales@securityaviaition.biz securityaviation.biz

temscoair.com

vanessak.anc@transgroup.com transgroup.com

charters@transnorthern.com transnorthern.com 1907

~600 UPS is a global company with one of the most recognized and admired brands in the world. We have become the world's largest package delivery company and a leading global provider of specialized transportation and logistics services.

1915

2000 Mailing and delivery of letters, magazines and parcels weighing up to 70 pounds.

ups.com

usps.com

fly@warbelows.com warbelows.com

1989

Warbelow's Air Ventures is a regional airline in Interior Alaska conducting tours and scheduled flights year-round. Alaskan-owned and operated, WarbelowÕs has been flying the Interior since 1989, and offer daily scheduled flights, charter service, and tours in 12 PA 31-350 twin-engine Navajos.

June 2014 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY’S 2014 TRANSPORTATION DIRECTORY

AIR CARGO

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

AIR CARGO Company Company

Top Executive Top Executive

Wright Air Service PO Box 60142 Fairbanks, AK 99706 Phone: 907-474-0502 Fax: 907-474-0375

Bob Bursiel, Pres.

AK AK Estab. Estab. Empls. Empls. 1967

was@alaska.net wrightairservice.com

Services Services Scheduled passenger and freight charter service. Cessna Caravans, Piper Navajos, Cessna 206s, and Helio couriers.

LAND, RAIL & TRUCK Company Company

Top Executive Top Executive

Ace Delivery & Moving Inc. PO Box 221389 Anchorage, AK 99522-1389 Phone: 907-522-6684 Fax: 907-349-4011

Hank Schaub, Gen. Mgr.

AFF Distribution Services 5491 Electron Dr. #8 Anchorage, AK 99518 Phone: 907-563-7094 Fax: 907-563-7012

Jared Lastufka, Operations Manager

AFF Logistics 7400 45th St. Ct. E. Fife, WA 98424 Phone: 253-926-5000 Fax: 253-926-5103

Kevin McCarthy, General Manager

Alaska Cargo Service PO Box 251 Dillingham, AK 99576-0251 Phone: 907-842-5491 Fax: 907-842-1540

AK AK Estab. Estab. Empls. Empls.

Services Services

1994

1984

Third-party warehousing & distribution company; short- & long-term storage; order processing, deliveries, & inventory reports; cold storage, chill to freeze; pick & pack individual orders; through bill of lading & single invoice; bypass mail service. A division of American Fast Freight, Inc.

1984

Truck, rail and ocean freight forwarding; heavyweight and over-dimensional freight movement; project logistics; arrange for permits, pilot cars, cranes and heavy haul equipment; aircraft and barge charters, warehousing and staging of finishing materials; on-site project management.

Bo Darden, Owner

1976

Air cargo and express package services, air transportation nonscheduled, fuel available, local delivery services and air courier services.

Alaska Railroad Corp. PO Box 107500 Anchorage, AK 99510-7500 Phone: 907-265-2300 Fax: 907-265-2312

Bill O'Leary, President/CEO

1914

Alaska Terminals Inc. 400 W. 70th Ave., Suite 3 Anchorage, AK 99518 Phone: 907-349-6657 Fax: 907-349-2045

Todd Halverson, Owner/Pres.

Alaska Trucking Association 3443 Minnesota Dr. Anchorage, AK 99503 Phone: 907-276-1149 Fax: 907-274-1946

Aves Thompson, Exec. Dir.

Alaska West Express 1048 Whitney Rd. Anchorage, AK 99501 Phone: 907-339-5100 Fax: 907-339-5117

Scott Hicks, Pres.

Alison's Relocations Inc. 1524 Ship Ave. Anchorage, AK 99501 Phone: 907-345-9934 Fax: 907-344-4504

Alison McDaniel, Pres.

American Fast Freight Inc. 47693 Michelle Ave., Unit 7 Soldotna, AK 99669 Phone: 907-262-6646 Fax: 907-262-1925

Ron Moore, AK Sales Manager

American Fast Freight Inc. 3501 Lathrop St., Suite L Fairbanks, AK 99701 Phone: 907-452-7129 Fax: 907-451-7103

Ron Moore, AK Sales Manager

American Fast Freight Inc. 7400 45th St. Ct. E. Fife, WA 98424 Phone: 253-926-5000 Fax: 253-926-5100

Steve Day, President/CEO

American Fast Freight, Inc. 5025 Van Buren St. Anchorage, AK 99517 Phone: 907-248-5548 Fax: 907-243-7353

Ron Moore, Alaska Sales Manager

American Relocation Services 5491 Electron Dr., Unit 1 Anchorage, AK 99518 Phone: 907-248-2929 Fax: 907-561-4244

Damian Naquin, General Manager

alaskanace@gci.net alaskanace.com

youtube.com/americanfastfreight americanfast.com

corpinfo@akrr.com alaskarailroad.com

602 Freight rail transportation, passenger rail transportation, and real estate land leasing and (year- permitting. round)

1981

As the Atlas Van Lines agent for Alaska, we perform local, interstate and international moving services for corporate, government and COD customers.

1958

Provides all the books and forms needed for operating a commercial vehicle within the state. Also provides DMV functions for titles and registration for commercial contractors and the general public.

1978

133

Alaska West Express provides truckload transportation throughout the United States and Canada, specializing in your shipment to and from Alaska, where we are the leader in transporting liquid- and dry-bulk products, hazardous and non-hazardous chemicals and petroleum products.

1997

Full service household goods moving and storage company. Providing customized moving packages-residential, commercial and industrial offices, national and corporate accounts. Ocean and Over The Road freight forwarding. Palletized shipments to Full Trailer loads. Worldwide Service.

1984

Ocean freight forwarding, freight consolidation, full loads, short- and long-term warehousing, temperature protected, bypass mail and air freight, specialized equipment, heavy haul, project logistics, intra-state trucking, Alcan express, barge, distribution, military shipments, household goods.

1984

Ocean freight forwarding, freight consolidation of all kinds, full loads, short- and longterm warehousing, temperature protected, bypass mail and air freight, specialized equipment, heavy haul, project logistics, intra-state trucking, ALCAN express, barge, distribution, military shipments, HHG

1984

Ocean freight forwarding, freight consolidation of all kinds, full loads, short- and longterm warehousing, temperature protected, bypass mail and air freight, specialized equipment, heavy haul, project logistics, intra-state trucking, Alcan express, barge, distribution, military shipments, etc.

1984

150

Ocean freight forwarding, freight consolidation, full loads, temperature protected, bypass mail and air freight, specialized equipment, heavy haul, project logistics, intra-state trucking, Alcan express, barge, distribution, military shipments, household goods.

1988

150

Commercial/residential relocation, moving and storage, temperature-controlled facilities, ocean freight forwarding, complete packing and crating services, free detailed estimates, military approved, service in and outside Alaska, certified moving consultants, budget service available.

dave@akterminals.com www.akterminals.com

info@aktrucks.org aktrucks.org

information@lynden.com lynden.com/awe

alisonsrelo@gci.net www.alisonsrelo.com

youtube.com/americanfastfreight americanfast.com

youtube.com/americanfastfreight www.americanfast.com

youtube.com/americanfastfreight americanfast.com

Alaska Business Monthly | June 2014

www.akbizmag.com

Company Company

TopExecutive Executive Top

American Relocation Services 3411 Lathrop St., Suite L Fairbanks, AK 99701 Phone: 907-456-3097 Fax: 907-456-3098

Damian Naquin, Gen. Mgr.

Best Rate Express LLC PO Box 39193 Lakewood, WA 98496 Phone: 253-535-1000 Fax: 253-535-2060

Young Summers, Member

Carlile Transportation Systems 1800 E. First Ave. Anchorage, AK 99501-1833 Phone: 907-276-7797 Fax: 907-278-7301

James Armstrong, Pres.

Commodity Forwarders Inc. 4000 W. 50th, Suite 1 Anchorage, AK 99502 Phone: 907-243-1144 Fax: 907-243-1149

PJ Cranmer, Reg. Ops Mgr. Pac. NW

Continental Van Lines Inc. 1031 E. First Ave. Anchorage, AK 99501 Phone: 907-279-2571 Fax: 907-276-7590

Leslie Carter, Alaska Mgr.

CPD Alaska LLC (Crowley) 201 Arctic Slope Ave. Anchorage, AK 99518 Phone: 907-777-5505 Fax: 907-777-5550

Bob Cox, VP

Crowley Solutions 201 Arctic Slope Ave. Anchorage, AK 99518 Phone: 907-777-5505 Fax: 907-777-5550

Bruce Harland, VP

DHL Global Forwarding 2000 W. Int'l Airport Rd. Anchorage, AK 99502 Phone: 907-243-4301 Fax: 907-677-0900

John Witte, Reg. Mgr.

www.akbizmag.com

AK AK Estab. Estab. Empls. Empls. 1988

150

Best Rate Express, LLC.: flat, step, vans, reefers and heavy haul. Rail: containers and flat cars. Air: next-day, two-day and deferred service. Marine: steamship and barge service.

1980

550

Transportation and logistics company offering multi-model trucking as well as project logistic services across Alaska and North America

2003

1952

Alaska's premier moving and storage company. Moving locally, within Alaska and worldwide.

1892

285

CPD operates fuel terminals in 22 locations in the Railbelt, western AK and now SE AK, providing home heating oil, jet fuel, diesel, gasoline and propane. Our fuel barges make direct deliveries to over 200 western Alaska communities. Crowley proudly celebrates 60 years of service to Alaska.

1892

500

Crowley Solutions was formed in 2010 to provide increased support services to the oil and gas industry including turnkey project management solutions, ocean towing, heavy lift transportation services, spill response services, tanker escort and docking services in Valdez.

1970

Worldwide freight services featuring total Alaska coverage. Specializing in air cargo, trucking, express services, warehousing, storage solutions, supply chain and rail freight.

youtube.com/americanfastfreight americanfast.com

yksummers@qwestoffice.net bestrateexpress.com

pspittler@carlile.biz carlile.biz

anc-customerservice@cfi-anc.com cfi-anc.com

lcarter@continentalvan.com continentalvan.com

bob.cox@crowley.com cpdalaska.com

crowley.com

jane.treadway@dhl.com dhl-dgf.com

Services Services Commercial/residential relocations, moving and storage, temperature-controlled facilities, ocean freight forwarding, complete packing and crating services, free detailed estimates, military approved, service in and outside Alaska, certified moving consultants, budget service available. A division of American Fast Freight.

June 2014 | Alaska Business Monthly

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

LAND, RAIL & TRUCK

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

LAND, RAIL & TRUCK Company Company

Top Executive Top Executive

Express Delivery Service Inc. 701 W. 41st Ave., Unit D Anchorage, AK 99503-6604 Phone: 907-562-7333 Fax: 907-561-7281

Ed Hoffman, Pres.

Horizon Lines LLC 1717 Tidewater Rd. Anchorage, AK 99501-1036 Phone: 907-274-2671 Fax: 907-263-5043

Marion Davis, VP & GM AK Div.

Kenworth Alaska 2838 Porcupine Dr. Anchorage, AK 99501 Phone: 907-279-0602 Fax: 907-258-6639

Marshall Cymbaluk, CEO/Mgr.

Lynden International 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-243-6150 Fax: 907-243-2143

David Richardson, Pres.

Lynden Logistics 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-245-1544 Fax: 907-245-1744

Alex McKallor, Pres.

Lynden Transport Inc. 3027 Rampart Dr. Anchorage, AK 99501 Phone: 907-276-4800 Fax: 907-257-5155

Paul Grimaldi, Pres.

Northland Services Inc. 660 Western Dr. Anchorage, AK 99501 Phone: 907-276-4030 Fax: 907-276-8733

Larry Stauffer, Pres./CEO

Northstar Trucking Inc. 13135 Old Glenn Hwy., Ste. 220 Eagle River, AK 99577 Phone: 907-373-4400 Fax: 907-373-4407

Michael L. Foster, Pres.

Pacific Alaska Freightways Inc. 431 E. 104th Ave. Anchorage, AK 99515 Phone: 907-336-2567 Fax: 907-336-1567

Ed Fitzgerald, CEO

Samson Tug & Barge Co. 329 Harbor Dr. Sitka, AK 99835 Phone: 1800-331-3522 Fax: 907-747-5370

George Baggen, Pres./CEO

Sourdough Express, Inc. 600 Driveways St. Fairbanks, AK 99701 Phone: 907-452-1181 Fax: 907-452-3331

Jeff Gregory, Pres./CEO

Span Alaska Transportation Inc. 2040 E. 79th Ave. Anchorage, AK 99501 Phone: 253-395-7726 Fax: 253-395-7986

Mike Landry, CEO

TGI Freight 4001 Old International Airport Rd., Unit 7 Anchorage, AK 99502 Phone: 907-522-3088 Fax: 907-562-6295

Todd Clark, Pres.

Totem Ocean Trailer Express 2511 Tidewater Rd. Anchorage, AK 99501-1044 Phone: 907-276-5868 Fax: 907-278-0461

Grace Greene, Alaska Gen. Mgr.

TrailerCraft | Freightliner of Alaska 1301 E. 64th Ave. Anchorage, AK 99518-1908 Phone: 907-563-3238 Fax: 907-561-4995

Lee McKenzie, Pres./Owner

TransGroup Worldwide Logistics 3501 Postmark Dr. Anchorage, AK 99502 Phone: 907-243-4345 Fax: 888-812-6295

Vanessa Keyes, Reg. Dir./AK

AK AK Estab. Empls. Estab. Empls.

Services Services

1977

Air courier services, local and Valley delivery services, special warehousing and storage. Specializing in serving the medical community. Open 24/7/365.

1964

273

Containership service between Tacoma, WA and Anchorage, Kodiak, and Dutch Harbor, AK. Linehaul trucking to the Alaska Railbelt. Seasonal feeder barge service to Bristol Bay and the Pribilofs. Connecting carrier service to other water, air, and land carriers.

1974

Truck dealer.

1980

Air cargo and express-package services, nonscheduled and scheduled air transportation, air courier services, freight transportation services and local delivery services.

1984

Arrangement of freight transportation, information management and logistical services.

1954

134

Full-service, multi-mode freight transportation to, from and within Alaska.

1977

Common carrier marine transportation between Western Alaska and the lower 48.

e.hoffman@expressdeliveryak.com

www.horizonlines.com

sales@kenworthalaska.com kenworthalaska.com

lafmtg@laf.lynden.com lynden.com/lint

information@lynden.com lynden.com

trananccs@lynden.com lynden.com/ltia/

info@northlandservices.com northlandservices.com 2003

rkb@nstialaska.com nstialaska.com 1961

Varies Heavy-haul specializing in bridge beams, cranes, double-side dumps and construction equipment.

Consolidating, on time delivery service, freight forwarding.

Info@pafak.com pafak.com 1937

~100 Alaskan owned, we offer the full range of barge freight & cargo hauling services, transporting cargo to Sitka, Cordova, Valdez, Fairbanks, Prudhoe Bay, Seward, Anchorage, Kenai Peninsula, Kodiak, King Cove, Dutch Harbor, Juneau, Ketchikan, Petersburg, Wrangell, Prince of Whales Island & Metlakatla.

1898

172

Freight-transportation services, moving and storage services.

1978

Freight transportation services to and from Alaska, less-than-truckload and truckload. Steamship and barge service to Railbelt area of Alaska. Barge service to Juneau and Southeast Alaska. Overnight service from Anchorage to Fairbanks and the Kenai Peninsula.

1989

Local freight cartage, freight consolidation, logistics and hazardous material services.

1975

Totem Ocean's Roll-on/Roll-off (Ro/Ro) cargo ship operation provides fast, on-time service between the Port of Tacoma, Washington and the Port of Anchorage, Alaska.

1969

Parts, sales and service for trucks, tractors, trailers, transport equipment, snow plows and sanders.

2011

sales@samsontug.com samsontug.com

sourdoughtransfer.com sourdoughexpress.com

kathyL@spanalaska.com spanalaska.com

toddc@tgifreight.com tgifreight.com

totemocean.com

sales@trailercraft.com www.trailercraft.com

vanessak.anc@transgroup.com transgroup.com

Alaska Business Monthly | June 2014

www.akbizmag.com

AK AK Estab. Empls. Estab. Empls.

Company Company

Top Executive Top Executive

United Freight & Transport Inc. 1701 E. First Ave. Anchorage, AK 99501-1831 Phone: 907-272-5700 Fax: 907-272-4324

Frank S. Monfrey, Gen. Mgr.

1985

United Parcel Service 6200 Lockheed Ave. Anchorage, AK 99502 Phone: 907-249-6242 Fax: 907-249-6240

Scott DePaepe, Ak Div Mgr

1907

United States Postal Service 3720 Barrow St. Anchorage, AK 99599 Phone: 800-ASK-USPS Fax: N/A

Ron Haberman, District Manager

1915

2000 Mailing and delivery of letters, magazines and parcels weighing up to 70 pounds.

Waste Management of Alaska Inc. 1519 Ship Ave. Anchorage, AK 99501 Phone: 855-973-3949 Fax: 866-491-2008

Mike Holzschuh, Territory Mgr./N.Am.

Weaver Brothers Inc. 2230 Spar Ave. Anchorage, AK 99501 Phone: 907-278-4526 Fax: 907-276-4316

Jim Doyle, Pres.

Western Peterbilt Inc. 2756 Commercial Dr. Anchorage, AK 99501 Phone: 907-276-2020 Fax: 907-276-2164

Mitch Hatfield, Gen. Mgr.

ups.com

Services Services Freight-transportation services.

usps.com 1969

Hazardous and nonhazardous waste disposal, project management, complete logistical oversight, complete U.S. and Canadian manifesting, rail transportation, over-the-road transportation, marine transportation and turnkey remedial services.

1962

155

Trucking, local drayage, linehaul, dry bulk, liquid bulk, fuel, chemical, hot oil, heavy haul, hazmat and specialty transport as well as Oil Field support.

1987

Full-service Peterbilt dealership. Offer truck sales, rentals and leasing, and contract maintenance. Full parts and service department. Additional locations in Fairbanks and Prudhoe Bay.

mholzschuh@wm.com wm.com

info@wbialaska.com wbialaska.com

khanson@westernpeterbilt.com westernpeterbilt.com

MARINE TRANSPORTATION AKAK Estab. Estab. Empls. Empls.

Company Company

Top TopExecutive Executive

AFF Distribution Services 5491 Electron Dr. #8 Anchorage, AK 99518 Phone: 907-563-7094 Fax: 907-563-7012

Jared Lastufka, Operations Manager youtube.com/americanfastfreight americanfast.com

1984

Services Services

Transportation Solutions For Your Business!

Interior Alaskaâ&#x20AC;&#x2122;s Fleet Headquarters SERVING ALASKA BUSINESS FOR 37 YEARS! Complete Line of Ford Vehicles in Stock

1625 Seekins Ford Dr. Fairbanks, Alaska 99701 (907) 459-4055 sangel@seekins.com www.akbizmag.com

SEEKINS.COM

1000 Lake Colleen Rd. Prudhoe Bay, Alaska 99734 sangel@seekins.com June 2014 | Alaska Business Monthly

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

LAND, RAIL & TRUCK

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

MARINE TRANSPORTATION Company Company

Top Executive Top Executive

AFF Logistics 7400 45th St. Ct. E. Fife, WA 98424 Phone: 253-926-5000 Fax: 253-926-5103

Kevin McCarthy, General Manager

Alaska Logistics LLC 1101 Port Ave. Seward, AK 99664 Phone: 206-767-2555 Fax: 206-767-5222

Allyn Long, Owner/Gen. Mgr.

Alaska Marine Highway System 7995 N. Tongass Hwy. Ketchikan, AK 99901 Phone: 800-642-0066 Fax: 907-225-6874

John John Falvey, Captain

Alaska Marine Lines 100 Mt. Roberts St., Suite 200 Juneau, AK 99801 Phone: 907-586-3790 Fax: 907-463-3298

Kevin Anderson, Pres.

Alison's Relocations Inc. 1524 Ship Ave. Anchorage, AK 99501 Phone: 907-345-9934 Fax: 907-344-4504

Alison McDaniel, Pres.

American Fast Freight Inc. 47693 Michelle Ave., Unit 7 Soldotna, AK 99669 Phone: 907-262-6646 Fax: 907-262-1925

Ron Moore, AK Sales Manager

American Fast Freight Inc. 7400 45th St. Ct. E. Fife, WA 98424 Phone: 253-926-5000 Fax: 253-926-5100

Steve Day, President/CEO

American Fast Freight Inc. 3501 Lathrop St., Suite L Fairbanks, AK 99701 Phone: 907-452-7129 Fax: 907-451-7103

Ron Moore, AK Sales Manager

American Fast Freight, Inc. 5025 Van Buren St. Anchorage, AK 99517 Phone: 907-248-5548 Fax: 907-243-7353

Ron Moore, Alaska Sales Manager

American Relocation Services 3411 Lathrop St., Suite L Fairbanks, AK 99701 Phone: 907-456-3097 Fax: 907-456-3098

Damian Naquin, Gen. Mgr.

American Relocation Services 5491 Electron Dr., Unit 1 Anchorage, AK 99518 Phone: 907-248-2929 Fax: 907-561-4244

Damian Naquin, General Manager

Anderson Tug & Barge Co. PO Box 1524 Seward, AK 99664 Phone: 907-224-5506 Fax: 907-224-7446

Brad Kroon, Gen. Mgr.

Bering Marine 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-248-7646 Fax: 907-245-1744

Rick Gray, Pres.

Bering Pacific Services Co. 7801 Schoon St., Suite B Anchorage, AK 99518 Phone: 206-390-3260 Fax: 907-222-7673

Mike Brazier, Mgr.

Best Rate Express LLC PO Box 39193 Lakewood, WA 98496 Phone: 253-535-1000 Fax: 253-535-2060

Young Summers, Member

Bowhead Transport Company 4025 Delridge Way SW, Suite 160 Seattle, WA 98106 Phone: 800-347-0049 Fax: 206-957-5261

Jim Dwight, Gen. Mgr.

AK AK Estab. Empls. Estab. Empls.

Services Services

1984

2003

Scheduled barge service from Seattle to Western and Central Alaska. Provides services to receive customers' freight, consolidate, manifest and track from origin to final destination. We also provide charters.

youtube.com/americanfastfreight americanfast.com

info@alaska-logistics.com alaska-logistics.com 1963

dot.ask.amhs@alaska.gov ferryalaska.com

1100 Providing marine transportation for passengers and vehicles to over 30 Alaska coastal communities. No pre-set itineraries. Amenities available include staterooms, dining, movie theatres, arcades, and viewing lounges.

1980

Twice weekly barge service to Southeast Alaska and weekly barge service to Central Alaska. Charter and nonscheduled barge services.

1997

1984

Ocean freight forwarding, freight consolidation of all kinds, full loads, short- and longterm warehousing, temperature protected, bypass mail and air freight, specialized equipment, heavy haul, project logistics, intra-state trucking, Alcan express, barge, distribution, military shipments, etc.

1984

150

1988

150

Commercial/residential relocations, moving and storage, temperature-controlled facilities, ocean freight forwarding, complete packing and crating services, free detailed estimates, military approved, service in and outside Alaska, certified moving consultants, budget service available. A division of American Fast Freight.

1988

150

1978

Ship and barge assist, line handling, and pilot boat.

1985

Bering Marine Corporation provides highly specialized, contracted marine services to reach water-locked villages and other remote Alaska locations. Bering Marine gets building materials, equipment and gravel to some of Alaska's most isolated spots.

1997

Barge transportation from Seattle to Western Alaska and between Western Alaska villages. Gravel and rock supply to most Western Alaska villages. Reliable on time deliveries at reasonable rates. Our motto is "We do what we say we'll do!"

Best Rate Express, LLC.: flat, step, vans, reefers and heavy haul. Rail: containers and flat cars. Air: next-day, two-day and deferred service. Marine: steamship and barge service.

1982

Bowhead provides marine cargo transportation along the North Slope of Alaska. Utilizing specialized vessels, Bowhead also provides vessel and crew support for offshore oil exploration, development, and production activities.

amlcsc@lynden.com shipaml.com

alisonsrelo@gci.net www.alisonsrelo.com

youtube.com/americanfastfreight americanfast.com

youtube.com/americanfastfreight www.americanfast.com

youtube.com/americanfastfreight americanfast.com

info@andersontug.com andersontug.com

information@lynden.com bmc.lynden.com

mikeb@beringpacific.com beringpacific.com

yksummers@qwestoffice.net bestrateexpress.com

info@bowhead.com bowheadtransport.com

Alaska Business Monthly | June 2014

www.akbizmag.com

Company Company

TopExecutive Executive Top

Carlile Transportation Systems 1800 E. First Ave. Anchorage, AK 99501-1833 Phone: 907-276-7797 Fax: 907-278-7301

James Armstrong, Pres.

Commodity Forwarders Inc. 4000 W. 50th, Suite 1 Anchorage, AK 99502 Phone: 907-243-1144 Fax: 907-243-1149

PJ Cranmer, Reg. Ops Mgr. Pac. NW

CPD Alaska LLC (Crowley) 201 Arctic Slope Ave. Anchorage, AK 99518 Phone: 907-777-5505 Fax: 907-777-5550

Bob Cox, VP

Crowley Solutions 201 Arctic Slope Ave. Anchorage, AK 99518 Phone: 907-777-5505 Fax: 907-777-5550

Bruce Harland, VP

Cruz Marine LLC 7000 E. Palmer-Wasilla Hwy. Palmer, AK 99645 Phone: 907-746-3144 Fax: 907-746-5557

Kevin JT Weiss, General Manager

Delta Western Inc. 420 L St., Suite 101 Anchorage, AK 99501 Phone: 800-478-2688 Fax: 206-213-0103

Kirk Payne, President

Foss Maritime Company 188 W. Northern Lights Blvd., Suite 1020 Anchorage, AK 99503 Phone: 907-782-4950 Fax: 907-782-1185

Gary Faber, Pres. Global Svcs.

Grant Aviation 4451 Aircraft Dr. Anchorage, AK 99502 Phone: 888-359-4726 Fax: 907-248-7076

Bruce McGlasson, Pres.

www.akbizmag.com

AK AK Estab. Estab. Empls. Empls.

Services Services

1980

550

Transportation and logistics company offering multi-model trucking as well as project logistic services across Alaska and North America

2003

1892

285

1892

500

2008

Shallow draft marine support for heavy civil and oil field services in based in Cook Inlet with services extending to the western and arctic coast of Alaska. Eco friendly tugs and ramp barges that have double hull fuel tanks and hospital grade silencers.

1985

100

Fuel and lubricant distribution.

1889

Foss offers tug and barge support services, contract towing, offshore support, and oil development project support. We also partner with the energy services arm of the Arctic Slope Regional Corporation to assist with petroleum field production in the North Slope while safeguarding the environment.

1971

200

pspittler@carlile.biz carlile.biz

anc-customerservice@cfi-anc.com cfi-anc.com

bob.cox@crowley.com cpdalaska.com

crowley.com

info@cruzmarine.com cruzmarine.com

deltawestern.com

info@foss.com www.foss.com

res@flygrant.com flygrant.com

June 2014 | Alaska Business Monthly

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

MARINE TRANSPORTATION

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

MARINE TRANSPORTATION Company Company

Top Executive Top Executive

Harley Marine Services PO Box 920086 Dutch Harbor, AK 99692 Phone: 206-628-0051 Fax: 206-628-0293

Jim Weimer, GM, PCM

Harvey Gulf International Marine LLC 3601 C St., Suite 1378 Anchorage, AK 99503 Phone: 504-348-2466 Fax: 504-348-8060

Shane J. Guidry, Chairman and CEO

Horizon Lines LLC 1717 Tidewater Rd. Anchorage, AK 99501-1036 Phone: 907-274-2671 Fax: 907-263-5043

Marion Davis, VP & GM AK Div.

Lynden International 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-243-6150 Fax: 907-243-2143

David Richardson, Pres.

Lynden Logistics 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-245-1544 Fax: 907-245-1744

Alex McKallor, Pres.

Lynden Transport Inc. 3027 Rampart Dr. Anchorage, AK 99501 Phone: 907-276-4800 Fax: 907-257-5155

Paul Grimaldi, Pres.

Maritime Helicopters 3520 FAA Rd. Homer, AK 99603 Phone: 907-235-7771 Fax: 907-235-7773

Bob Fell, Dir. of Ops.

Northland Services Inc. 660 Western Dr. Anchorage, AK 99501 Phone: 907-276-4030 Fax: 907-276-8733

Larry Stauffer, Pres./CEO

Ocean Marine Services Inc. PO Box 7070 Nikiski, AK 99635 Phone: 907-776-3685 Fax: 907-776-3681

Kelly McNeil, Vice President

Offshore Systems Inc. (Anchorage) 2410 E. 88th Ave. Anchorage , AK 99507 USA Phone: 800-733-6434 Fax: 907-646-1430

Jared Davis, Dir. AK Ops

Offshore Systems Inc. (Dutch Harbor) PO Box 920427 Dutch Harbor , AK 99692 Phone: 907-581-1827 Fax: 907-581-1630

Jared Davis, Dir. AK Ops

Offshore Systems Kenai (Nikiski) PO Box 8505 Nikiski, AK 99635 USA Phone: 907-776-5551 Fax: 907-776-8836

Jared Davis, Dir. AK Ops

Pacific Alaska Freightways Inc. 431 E. 104th Ave. Anchorage, AK 99515 Phone: 907-336-2567 Fax: 907-336-1567

Ed Fitzgerald, CEO

Samson Tug & Barge Co. 329 Harbor Dr. Sitka, AK 99835 Phone: 1800-331-3522 Fax: 907-747-5370

George Baggen, Pres./CEO

Seldovia Bay Ferry PO Drawer L Seldovia, AK 99663 Phone: 907-234-7898 Fax: 907-226-2230

Crystal Collier, Pres./CEO

Sourdough Express, Inc. 600 Driveways St. Fairbanks, AK 99701 Phone: 907-452-1181 Fax: 907-452-3331

Jeff Gregory, Pres./CEO

AK AK Estab. Empls. Estab. Empls.

Services Services

1975

Pacific Coast Maritime, subsidiary of Harley Marine Services, operates out of Dutch Harbor, with a state of the art, 4,000 HP tractor tug and a 240ÂŁ x 60' deck barge equipped with a Manitowoc 4100 Vicon Crane. Primary business functions include ship assist, general towing and deck cargo transport.

2010

Harvey Gulf International Marine LLC is a marine transportation company that specializes in towing drilling rigs and providing offshore supply and multi-purpose support vessels for deepwater and ultra-deepwater operations.

1964

273

1980

Air cargo and express-package services, nonscheduled and scheduled air transportation, air courier services, freight transportation services and local delivery services.

1984

Arrangement of freight transportation, information management and logistical services.

1954

134

Full-service, multi-mode freight transportation to, from and within Alaska.

1973

1977

Common carrier marine transportation between Western Alaska and the lower 48.

1982

OMSI owns and operates offshore supply vessels, landing crafts and research vessels in support of Cook Inlet oil and gas development.

1983

150

Dock facilities in Niksiki, Dutch Harbor, and Adak servicing the oil and fishing industries. Services include dock space, warehousing, cold storage, stevedoring services, heavy equipment, and fuel.

1982

Since 1983, Offshore Systems, Inc. (OSI) has been the premiere fuel and dock facility in Western Alaska. 1,500 linear feet of dock space, around-the-clock stevedoring services, secure, dry warehousing and cold storage, and material handling equipment.

1982

Vessel support services to Cook Inlet Oil and Gas companies, full service dock facility, fuel, storage and material handling services.

1961

Consolidating, on time delivery service, freight forwarding.

harleymarine.com

harveygulf.com

www.horizonlines.com

lafmtg@laf.lynden.com lynden.com/lint

information@lynden.com lynden.com

trananccs@lynden.com lynden.com/ltia/

info@maritimehelicopters.com maritimehelicopters.com

info@northlandservices.com northlandservices.com

omsi-ak.com

offshoresystemsinc.com

Info@pafak.com pafak.com 1937

sales@samsontug.com samsontug.com

2010

1898

172

Provide daily scheduled transportation between Homer and Seldovia May-September.

Info@seldoviabayferry.com Seldoviabayferry.com Freight-transportation services, moving and storage services.

sourdoughtransfer.com sourdoughexpress.com

Alaska Business Monthly | June 2014

www.akbizmag.com

Company Company

TopExecutive Executive Top

Span Alaska Transportation Inc. 2040 E. 79th Ave. Anchorage, AK 99501 Phone: 253-395-7726 Fax: 253-395-7986

Mike Landry, CEO

Totem Ocean Trailer Express 2511 Tidewater Rd. Anchorage, AK 99501-1044 Phone: 907-276-5868 Fax: 907-278-0461

Grace Greene, Alaska Gen. Mgr.

TransGroup Worldwide Logistics 3501 Postmark Dr. Anchorage, AK 99502 Phone: 907-243-4345 Fax: 888-812-6295

Vanessa Keyes, Reg. Dir./AK

United States Postal Service 3720 Barrow St. Anchorage, AK 99599 Phone: 800-ASK-USPS Fax: N/A

Ron Haberman, District Manager

Vigor Alaska 3801 Tongass Ave. Ketchikan, AK 99901 Phone: 907-228-5302 Fax: 907-247-7200

Adam Beck, President

Vitus Marine 113 W. Northern Lights Blvd., Suite 200 Anchorage, AK 99503 Phone: 907-278-6700 Fax: 907-278-6701

Mark Smith, CEO

Waste Management of Alaska Inc. 1519 Ship Ave. Anchorage, AK 99501 Phone: 855-973-3949 Fax: 866-491-2008

Mike Holzschuh, Territory Mgr./N.Am.

Western Towboat Co. 617 NW 40th St. Seattle, WA 98107 Phone: 206-789-9000 Fax: 206-789-9755

Bob Shrewsbury II, Pres.

AK AK Estab. Estab. Empls. Empls.

Services Services

1978

1975

Totem Ocean's Roll-on/Roll-off (Ro/Ro) cargo ship operation provides fast, on-time service between the Port of Tacoma, Washington and the Port of Anchorage, Alaska.

2011

kathyL@spanalaska.com spanalaska.com

totemocean.com

vanessak.anc@transgroup.com transgroup.com 1915

2000 Mailing and delivery of letters, magazines and parcels weighing up to 70 pounds.

1994

161

We are the largest most capable marine industrial service company in the AK/PNW Region focused on shipbuilding and repair. Alaska operations are concentrated in AIDEAÕs Ketchikan Shipyard. Our mobile and multi-skilled workforce travels throughout Alaska to heavy industrial and offshore projects.

2009

Vitus Marine specializes in meeting the marine transportation and fuel distribution needs of Western Alaska maritime communities. Vitus currently provides fuel and freight delivery services across Western Alaska.

1969

1960

Tug and barge operator based in Seattle serving all of Alaska and the Pacific coast with 23 tugs and six barges.

usps.com

info@akship.com vigoralaska

info@vitusmarine.com vitusmarine.com

mholzschuh@wm.com wm.com

Westerntowboat@westerntowboat.co westerntowboat.com

Totem Ocean Fresh There’s no time to waste when it comes to delivering fresh and frozen Alaskan seafood to the lower 48. That’s why the best seafood companies rely on Totem Ocean’s specialized fleet of temperature controlled equipment to transport their products on the fastest ships in the trade. Our customers count on us to deliver on time, every time. We are proud to serve companies who take pride in delivering Totem Ocean fresh and frozen seafood to their customers.

www.TotemOcean.com 800.426.0074 www.akbizmag.com

June 2014 | Alaska Business Monthly

ALASKA BUSINESS MONTHLY’S 2014 TRANSPORTATION DIRECTORY

MARINE TRANSPORTATION

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

PORTS & HARBORS Company Company

Top Executive Top Executive

Port MacKenzie 350 E. Dahlia Ave. Palmer, AK 99645 Phone: 907-861-7798 Fax: 907-861-8669

Marc Van Dongen, Port Director

Port of Anacortes 100 Commercial Ave. Anacortes , WA 98221 Phone: 360-299-1828 Fax: 360-293-9608

AK AK Estab. Empls. Estab. Empls. 2005

Port MacKenzie is expanding with new infrastructure development to efficiently create new employment opportunities, attract private companies to the 14 square mile Port District, and stimulate economic development in the Matanuska-Susitna Borough.

Bulk load out of green pet coke, sulfur, gravel, boulders, heavy lifts, docks, piling, bulk steel, and large fish farm tanks.

1961

The Port of Anchorage serves as the point of entry for 90% of the consumer goods for 87% of Alaska. It is open year around, has a five berth terminal and a dry barge berth providing facilities for the movement of containerized freight, iron and steel products, bulk petroleum and bulk cement.

1963

The Port of Angoon contains a deep-draft dock, a small boat harbor, and a State ferry terminal.

We are the southern terminus for the Alaska Marine Highway System at the Bellingham Cruise Terminal.

1940

Operate freight dock and yard, petroleum dock and berths for mooring boats and barges.

1909

695 Slips, 1300 feet of transient dock space, 2 launch ramps, boat storage and Shipyard with 150 ton Travelift.

1867

The Port of Dutch Harbor promotes the growth and health of the community of Unalaska through the planning, development, and management of marine related municipal properties and facilities to provide moorage and other marine services on a selfsupporting basis.

1998

Barge, Roll-on/Roll-off ramp, 750 feet of alongside moorage, panamax cruise ship dock, ice delivery by the ton, fuel services and moorage for all size vessels and deep draft.

1964

Homer Port & Harbor has 24/7 harbor officers, & includes a small boat harbor with over 900 reserved stalls & 700+ linear transient moorage, two deep water ports, a commercial barge ramp, steel & wood tidal grids, a 5-lane load & launch ramp, & fish dock with eight cranes & auger-delivery ice.

1976

Provides maritime infrastructure, including docks and harbors, for the cruise ship industry, commercial fisheries and recreational boating public.

mvandongen@matsugov.us portmackenzie.com josh@portofanacortes.com Portofanacortes.com

Services Services

Port of Anchorage 2000 Anchorage Port Rd. Anchorage, AK 99501 Phone: 907-343-6200 Fax: 907-277-5636

Steve Ribuffo, Port Director

Port of Angoon PO Box 189 Angoon, AK 99820 Phone: 907-788-3653 Fax: 907-788-3821

Gary Willis, Harbormaster

Port of Bellingham PO Box 1677 Bellingham, WA 98227 Phone: 360-676-2500 Fax: 360-671-6411

Rob Fix, Executive Director

Port of Bethel PO Box 1388 Bethel, AK 99559 Phone: 907-543-2310 Fax: 907-543-2311

Peter Williams, Port Director

Port of Cordova PO Box 1210 Cordova, AK 99574 Phone: 907-424-6400 Fax: 907-424-6446

Anthony Schinella, Harbormaster

Port of Dutch Harbor PO Box 610 Unalaska, AK 99685 Phone: 907-581-1254 Fax: 907-581-2519

Peggy McLaughlin, Port Director

Port of Haines PO Box 1209 Haines, AK 99827 Phone: 907-766-2448 Fax: 907-766-2716

Phil Benner, Harbormaster

Port of Homer 4350 Homer Spit Rd. Homer, AK 99603 Phone: 907-235-3160 Fax: 907-235-3152

Bryan Hawkins, Dir./Harbormaster

Port of Juneau 155 S. Seward St. Juneau, AK 99801 Phone: 907-586-0292 Fax: 907-586-0295

Carl Uchytil, Port Director

Port of King Cove PO Box 37 King Cove, AK 99612 Phone: 907-497-2237 Fax: 907-497-2649

Charles Mack, Harbormaster

1970

Ports and harbors.

Port of Kodiak and Shipyard 403 Marine Way Kodiak, AK 99615 Phone: 907-486-8080 Fax: 977-486-8090

Marty Owen, Port Dir.

2009

Shipyard; Marine Travelift 180' x 42' vessels; Container cargo up to 30 tons.

Port of Nome PO Box 281 Nome, AK 99762 Phone: 907-443-6619 Fax: 907-443-5473

Lucas Stotts, Harbormaster

1985

Nome is a new staging point for an Emergency Towing System (ETS) for use in the region.

1940

The Pelican Harbor is operated by the City of Pelican. The City has 98 berths, which includes permanent berthing spaces and transient moorage.

The Port of Portland owns 3 airports, including Portland International Airport, 4 marine terminals and 6 business parks in Portland, Oregon. 14 million passengers fly through PDX and nearly 12 million tons of cargo is shipped through the port annually.

Port of Pelican PO Box 737 Pelican, AK 99832 Phone: 907-735-2202 Fax: 907-735-2258 Port of Portland 7200 NE Airport Way Portland , OR 97218 Phone: 503-415-6000 Fax: 503-548-5971

wwport@muni.org portofalaska.com

angooncityclerk@hotmail.com

facebook.com/PortofBellingham portofbellingham.com

pwilliams@cityofbethel.net cityofbethel.org

harbor@cityofcordova.net cityofcordova.net

jdays@ci.unalaska.ak.us ci.unalaska.ak.us

pbenner@haines.ak.us

port@cityofhomer-ak.gov cityofhomer-ak.gov/port

juneau.org/harbors

lwhite@city.kodiak.ak.us KodiakShipYard.com

lstotts@nomealaska.org nomealaska.org/port cityhall@pelicancity.org pelican.net Bill Wyatt, Executive Director portofportland.com

Alaska Business Monthly | June 2014

www.akbizmag.com

Company Company

TopExecutive Executive Top

Port of Seattle PO Box 1209 Seattle, WA 98111 Phone: 206-787-3024 Fax: 206-787-3413

Tay Yoshitani, CEO

Port of Sitka 617 Katlian St. Sitka, AK 99835 Phone: 907-747-3439 Fax: 907-747-6278

Stan Eliason, Harbormaster

Port of Skagway PO Box 415 Skagway, AK 99840 Phone: 907-983-2628 Fax: 907-983-3087

Matthew O'Boyle, Harbormaster

Port of Tacoma PO Box 1837 Tacoma, WA 98401 Phone: 253-383-5841 Fax: 253-593-4534

John Wolfe, CEO

Port of Valdez PO Box 307 Valdez, AK 99686 Phone: 907-835-4564 Fax: 907-835-4479

Diane Kinney, Ports/Harbor Dir.

Port of Wrangell PO Box 531 Wrangell, AK 99929 Phone: 907-874-3736 Fax: 907-874-3197

Greg Meissner, Harbormaster

Port of Yakutat PO Box 160 Yakutat, AK 99689 Phone: 907-784-3491 Fax: 907-784-3281 Seward Boat Harbor PO Box 167 Seward, AK 99664 Phone: 907-224-3138 Fax: 907-224-7187

www.akbizmag.com

AK AK Estab. Estab. Empls. Empls.

Services Services

Port of Seattle provides: Access to the world's largest ocean carriers; Home port for the cruise industry serving Alaska & Alaska commercial fishing fleet; Local warehousing & cold-storage; Fast intermodal inland connections; Handles containerized, break bulk, roro & project cargo; air cargo hub.

2000

Harbor management, development.

1898

The Skagway Small Boat Harbor is a full service marina with moorage for pleasure and commercial vessels up to 150 ft. Transient moorage is on a space available, first come, first served basis. There is a waiting list for annual moorage.

The Port of Tacoma is an economic engine for Washington, with activities connected to more than 43,000 family-wage jobs in Pierce County and 113,000 statewide. A strategic gateway to Asia and Alaska, the Port is also a major center for containers, automobiles, bulk and breakbulk cargo.

1901

Port services include a Container Terminal with a 700 ft. floating dock (1,200 ft. with dolphins), 21-acre storage yard, electricity for reefer units, water, and garbage service. The Port has Foreign-Trade Zone #108 with industrial land available for development. Wharf at the Kelsey Dock is 600 ft.

2008

Ports and harbors.

Erving Grass, Harbormaster

1964

30 ton haul out trailer. Freshwater, 30 amp power.

Mack Funk, Harbormaster

1964

We are a full service port with 50-ton and 250-ton Travelifts, a 5000-ton syncrolift, boat repair yards, potable water and power utilities, hardware stores, grocery stores, art galleries, restaurants, hotels and many other amenities to meet every need.

portseattle.org/Cargo

stan@cityofsitka.com

m.oboyle@skagway.org ports/index.html

facebook.com/portoftacoma portoftacoma.com

portofvaldez@ci.valdez.ak.us ci.valdez.ak.us/port

harbor@wrangell.com wrangell@wrangell.com

harbormaster@cityofseward.net cityofseward.net/harbor/

June 2014 | Alaska Business Monthly

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S 2014 TRANSPORTATION DIRECTORY

PORTS & HARBORS

RIGHT MOVES USKH, Inc.

Gray

Gerondale

Limb

Corcoran

Compiled by Russ Slaten and serves on the board of directors. He is a graduate of Northeast Wisconsin Technical College. John Limb, PE, is the new Aviation Division Manager. Limb has been with USKH for more than thirteen years, is an associate, and serves on the board of directors. He is a University of Alaska Anchorage (UAA) graduate. Lisa Corcoran is now the Pacific Northwest Aviation Manager, working from the Spokane, Washington, office. She has been with USKH since 1997, is an associate and a graduate of UAA. Sara Lindberg is the new Manager of the environmental and water resources division. Lindberg has been with the company since 2006, is an associate and a graduate of The Evergreen State College, with a master’s degree from Alaska Pacific University. Cheryl Jemar has been promoted to Proposal Manager. She started with USKH as a temporary administrative assistant in 2004. She is a graduate of North Dakota State University. Josh Huettl is now USKH’s Human Resources Assistant. He started at USKH in 1998.

Alaska and more than ten years in a senior management role. Cooper has a wide range of expertise form working with various Alaska industries and Native Corporations. Michael Martin was promoted to Senior Vice President, Commercial Loan Unit Manager and In-House Counsel. He has been with Northrim Bank since August 2011. Martin has been licensed to practice law in Alaska since 1996. He has worked in Alaska banking since 1995, when he started at First National Bank Alaska.

Northrim Bank

Yuit, LLC

Miller Lindberg

Jemar

USKH, Inc. announces management changes at the Anchorage-based, multidiscipline architecture and engineering company. Lydia Gray is now Vice President for strategy and business development. She has been with USKH for ten years, is a principal in the firm, and serves on the Huettl board of directors. Jake Gerondale, PLS, is Vice President of USKH’s newly formed geospatial services department, which includes land surveyors and Geographic Information Systems (GIS) experts. He has been with USKH since 2006, is a principal,

Cooper

Northrim Bank promoted three executives to the senior management team. Jim Miller was promoted to Administrative Senior Vice President, Senior Credit Officer. He has been with Northrim Bank for seventeen years, but started his banking career in 1974. Miller worked as a Martin commercial loan officer at Northrim for about eleven years before helping establish the Loan Quality Assurance Department in 2008. Larry Cooper was promoted to Senior Vice President, Commercial Loan Unit Manager. He joined Northrim Bank in December 2013 and brings more than twenty-five years of banking experience from across

Municipal Light & Power

Anchorage Mayor Dan Sullivan appointed James A. Trent as the new General Manager of Municipal Light & Power. Trent has thirty years of leadership expertise in power system planning, design, and operations experience managing gas and electric utilities. Trent was most recently a senior consultant for Rockwell Automation in Colorado, where he helped expand the company’s global capabilities to include design and construction of energy/utilities/ power generation programs. He holds a Bachelor of Science in Public Administration from San Diego State University.

Stewart

Klinkhart

Yuit, LLC, an Anchoragebased strategic communications and software development firm, has hired videographer Michael Stewart as a Producer/ Director. Stewart’s work has earned Telly, Davey, Goldie, and various local awards. He brings extensive experience pro- Merrick ducing TV and corporate videos. Stewart earned a Bachelor of Science in Media Arts and Animation from the Art Institute of Florida. Ingrid Klinkhart joins Yuit as a Senior Account Strategist and brings a successful media relations and crisis communications background to the team. Klinkhart, a former television reporter, has also produced award-

SLED DOGS & SOFAS & MILK

OH MY!

WE’RE OFF TO RURAL ALASKA

Alaska Business Monthly | June 2014

www.akbizmag.com

RIGHT MOVES winning videos and TV commercials for clients that have included Alaska Native Corporations, the Municipality of Anchorage as well as the healthcare and telecommunications industries. She earned a broadcast journalism degree from California State University, Long Beach. Kelly Merrick, a former political staffer at both the state and federal government levels, joins Yuit as a Business Administrator. Merrick supports the firm’s software and communications teams by coordinating projects, monitoring social media, and tracking production timelines. She graduated with a business administration degree from Gonzaga University.

MSI Communications

Marek

Caldwell

MSI Communications announces Account Executives Alexa Lehman and Kim Marek have been promoted. In addition to these promotions, MSI Communic ations has further strengthened its well-regarded team with the additions of Social Media Strategist Natasha Lotz C aldwell and Traf fic Manager Amanda Lotz. Both women will work with the agency’s Art Department to produce stand-out creative work for some of Alaska’s largest employers, including Alaska Airlines, Alaska Air Cargo, and BP Alaska.

GeoNorth, LLC

GeoNorth, LLC, a subsidiary of The Tatitlek Corporation, announces new hires in Alaska. James Wortley, with over twenty years of database design, development, and management experience, has joined GeoNorth as their new Senior Programmer/Analyst. Wortley has a Master of Science in Electrical Engineering from John Hopkins University and a Bachelor of Science in Electrical Engineering from the University of Washington. Wortley operates remotely out of GeoNorth’s Fairbanks location.

Compiled by Russ Slaten Joshua Tester, with a Bachelor of Science in Computer Science from the University of Alaska Anchorage, was hired as a Web Application Developer. Along with other IT application development projects, Tester’s background includes various roles with the United States Coast Guard as a rated IT and Petty Officer.

Crossroads Leadership Institute

Crossroads Leadership Institute, one of Alaska’s oldest management consultant firms, adds Tom Englehart as Associate Coach/Consultant. He brings more than two decades experience in employer and management consultation, working with a diversified clientele that Englehart includes state and local government, nonprofit, healthcare, natural resource development, telecommunications, and Alaska Native employers. Englehart holds a Masters of Arts in College and Community Counseling from the University of Akron (Ohio) and has worked as a mental health clinician in both inpatient and outpatient settings.

Midnight Sun Home Care

Catherine Reese, who was born and raised in Anchorage, has been promoted to General Manager for Midnight Sun Home Care. Reese has worked with the organization since August 2008, when she was hired as a receptionist. She was eventually promoted to Staffing Reese Director and in July 2013 to Director of Community Outreach.

Talkeetna Alaska Lodge

CIRI Alaska Tourism welcomes Cris Rosemond as Executive Chef at Talkeetna Alaskan Lodge. Rosemond is responsible for the exquisite culinary experience at both the Foraker Restaurant fea-

Rosemond

turing fine dining, the BaseCamp Bistro, and all catered events including weddings, meetings and conferences. Talkeetna Alaskan Lodge has a long history of fine dining experience under several executive chefs and has won the wine spectator award every year since 1993. Rosemond graduated from culinary school in 1996, garnering eighteen years of professional experience by working in California, Oregon, Washington, Alaska, Thailand, and Italy.

Credit Union 1

Credit Union 1 announces Ben Heckert as the new Member Assistance M a n a g e r. W i t h a n Associate’s Degree in Applied Business, Heckert brings his varied foreclosure and bankruptcy portfolio-management experience to the Member Assistance Department. Heckert He also has more than a decade of experience performing title research and analysis for real estate title companies and lenders engaged in the purchase, refinance, or default process. Heckert will be responsible for managing the credit union’s consumer and real estate loan delinquencies as well as overseeing liquidation of repossessed collateral by overseeing the day-to-day operations of the Member Assistance Department.

ARECA Insurance Exchange

ARECA Insurance Exchange, an Alaska reciprocal insurance company, hired Phillip Galloway as its Director of Loss Control. This includes assisting Exchange subscribers with risk management and formulating loss control strategies. Galloway has more than fifteen years of safety Galloway and loss control experience, including three years with the Alaska Municipal League Joint Insurance Association. He has several certifications including Certified Safety Professional; Certified Environmental, Safety and Health Trainer; and Associate in Risk Management. Galloway has a bachelor’s degree in business management and a master’s degree in business organizational management. 

W W W. N AC . A E R O • ( 8 0 0 ) 7 27 - 214 1 • www.akbizmag.com

June 2014 | Alaska Business Monthly

INSIDE ALASKA BUSINESS

ConocoPhillips Alaska

onocoPhillips Alaska has received authorization from the United States Department of Energy to export liquefied natural gas (LNG) over a twoyear period to Free Trade Agreement (FTA) countries and non-FTA countries and plans to resume exports of LNG this spring. ConocoPhillips says it appreciates the support for resuming LNG exports from many local stakeholders and looks forward to continuing to contribute to the local economy. In December 2013, ConocoPhillips submitted applications to the DOE to resume exports of LNG from the Kenai Facility for two years. The authorization to export LNG to FTA countries was issued on February 19, 2014, and the nonFTA authorization was issued on April 14, 2014. Collectively, these authorizations allow export of the equivalent of 40 BCF of LNG over a two-year period.

Cabela’s

abela’s, Inc., outfitter of hunting, fishing, and outdoor gear, celebrated the grand opening of its Anchorage store, the company’s first Alaska location, in April. Cabela’s held a ribboncutting ceremony hosted by executives. The ribbon was cut by an arrow shot from a bow—marking the official opening of Cabela’s fift y-third store across North America, a one hundred thousand-square-foot building. Cabela’s held special appearances from Gary Moses, Counter Assault bear deterrent product ambassador, and DeeDee Jonrowe, thirty-two-year Iditarod competitor and one of Alaska’s fan favorites.

Compiled by Russ Slaten

Shell Alaska

ndeavor Management announced in April that Shell has appointed the Houston-based consulting firm’s Arctic Team to provide advisory services in preparation for the potential resumption of Shell’s Chukchi Sea drilling campaign. Endeavor will provide support and advice for a third-party audit of Shell’s management systems related to Arctic operations. Endeavor worked with Shell’s Venture Team in 2013 to develop an Integrated Operations Plan, covering the full scope of operations in the Chukchi Sea, which was submitted to the US Bureau of Ocean Energy Management. Shell Alaska has also utilized Endeavor to help them establish their development program for advisory personnel for ice management in support of their future drilling operations.

UAA

new era begins for the University of Alaska Anchorage’s (UAA) Great Alaska Shootout. In April, it was announced that GCI is the premier basketball tournament’s title sponsor. The Great Alaska Shootout—held by UAA since 1978—will take place November 25-29 at the Alaska Airlines Center, which is set to open in summer 2014. GCI intends to expand promotion of the event to encourage even more Alaskans to support this important sporting event and enjoy the action on the court through promotion of the games at more than forty retail locations statewide, along with a number of other measures. Visiting schools for this year’s GCI Great Alaska Shootout are Boise State,

Long Beach State, and Yale on the women’s side, plus Colorado State, Mercer, Missouri State, Pacific, Rice, Santa Barbara, and Washington State on the men’s side. GCI becomes just the second title sponsor in the Shootout’s existence, succeeding the Carrs/Safeway family of grocery stores, which sponsored the tournament from 1994-2013.

Manuluuraq Designs

acquelyn Nayakik has been named the first recipient of this year’s North Slope Marketplace business plan competition through ASRC and Alaska Growth Capital. Nayakik is the owner of Manuluuraq Designs, a locally owned and operated start-up business in Barrow specializing in both apparel prints and Iñupiaq arts and crafts. Nayakik will utilize the $25,000 business development grant to purchase new equipment and inventory to increase production of both apparel prints and art out of her home. Manuluuraq Designs will work to decrease prices on apparel printing to save North Slope residents money. The business will create custom apparel designs through the application of sublimation and heat transfer images and embroidery. The owner will continue to create and sell handmade Iñupiaq arts and crafts with unique designs and custom orders are welcome.

APD

CI and Anchorage Chrysler Dodge Jeep Ram Center jointly donated a brand new, fully equipped Dodge Charger to the Anchorage Police Department (APD) fleet on April 15. The Char-

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

www.pacificpile.com I (907) 276-3878 276-3873 96

Alaska Business Monthly | June 2014

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

INSIDE ALASKA BUSINESS ger was unveiled in a ceremony at APD headquarters. In addition to serving as an active APD cruiser, the Charger will be part of APD’s educational programs and make appearances at such community events as the annual Bear Paw Festival, Police Navidad, and the Polar Plunge to support Special Olympics Alaska, among others. In addition to the sponsor logos of GCI and Anchorage Chrysler Dodge Jeep Ram Center on the vehicle, the Charger’s back bumper features the logo of Special Olympics Alaska, which GCI has been proud to support for many years. This partnership represents GCI’s commitment to bring together community groups and nonprofit organizations in a cohesive approach to benefit Alaskans.

AIDEA

he Alaska Industrial Development and Export Authority (AIDEA) Board in April approved two Sustainable Energy Transmission and Supply Development Fund loans to advance natural gas distribution systems in Fairbanks and North Pole as part of the Interior Energy Project, which is to liquefy natural gas on the North Slope for trucking to the Interior and to help develop natural gas distribution systems in Fairbanks and North Pole. The first loan, to Fairbanks Natural Gas, LLC is for $15 million to fund the 2014 initial development and build-out of an expanded gas distribution system within its certificated service area. The project includes constructing thirtytwo miles of new distribution system, which will allow the company to connect 100 commercial and 2,500 resi-

Compiled by Russ Slaten

dential services to its existing service area. The second loan, to Interior Gas Utility, is for $8.1 million to fund the company’s initial work needed to develop its distribution system and affiliated infrastructure. This project includes engineering design, permitting, and program management. It is projected that the distribution build-out of the service area will provide natural gas service for more than eleven thousand residents.

Susitna-Watana

ook Inlet Region, Inc. (CIRI), six Cook Inlet village corporations, and the Alaska Energy Authority (AEA) collectively reached agreement on a complex land-use permit to support Susitna-Watana Hydro environmental study. Susitna-Watana Hydro is in the midst of a Federal Energy Regulatory Commission licensing effort and implementing fift y-eight -Commission approved environmental studies. A land access permit is necessary for AEA to implement the studies and conduct field work on private lands. As part of the Alaska Native Claims Settlement Act, Chickaloon Moose Creek Native Association; Knikatnu, Inc.; Ninilchik Natives Association, Inc.; Salamatof Native Association, Inc.; Seldovia Native Association, Inc.; and Tyonek Native Corporation own surface rights to some lands within the Susitna-Watana Hydro project area; CIRI owns sub-surface rights. Susitna-Watana Hydro would be located at river mile 184 on the Susitna River, above Devils Canyon, and would provide long-term, stable electric rates for one hundred-plus years. It is esti-

mated to provide approximately half of the Railbelt’s electrical demand, with an average fift y-year estimated cost of power at less than seven cents per kilowatt hour. The Alaska Energy Authority is a public corporation of the state whose mission is to reduce the cost of energy in Alaska.

ASRC

he new Top of the World Hotel in Barrow celebrated a grand opening in April. The old hotel had suffered smoke damage from a Labor Day weekend fire in 2013 that burned down the iconic Pepe’s North of the Border restaurant, which was located next door. The old hotel will not be reopened. “Construction of the hotel at its new location was in the works at the time of the fire, or the turnaround time would have been longer,” said Colleen Lemen, Top of the World Hotel manager. The new hotel is located on Eben Hopson Street next to the post office has seventy guest rooms, complete with Wi-Fi, cable, and free local calls. It also includes three conference rooms, a fitness area, and gift shop. The hotel will also be home to Tundra Tours Inc., which has been serving guests of the Arctic for more than forty years. Tundra Tours, Inc., doing business as The Top of the World Hotel, is a subsidiary of Arctic Slope Regional Corporation.

USDA

S Department of Agriculture-Rural Development awarded three organizations $1,158,042 through the department’s Rural Utilities Services Distance Learning and Telemedicine

Your Project, Our Responsibility. 24/7 Service

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

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

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501 June 2014 | Alaska Business Monthly

INSIDE ALASKA BUSINESS Program. Hydaburg School District, Annette Island School District, and the Council of Athabascan Tribal Governments are the three awardees. Hydaburg School District will receive $500,000 to purchase video conference equipment to provide university-level distance learning and various training content to eleven schools in three rural school districts in Southeast Alaska: Hydaburg, Southeast Island, and Craig. Annette Island School District is set to receive $394,665 to acquire interactive video conferencing for a distance learning system that will connect their students and students in Chatham, Chevak, Kashunamuit, and Klawock school districts with each other and with the world-at-large. The Council of Athabascan Tribal Governments will receive $263,377 for the telehealth project to provide video conferencing equipment to clinical project sites in Birch Creek, Venetie, Fort Yukon, Beaver, and Arctic Village. This project will serve 985 people in five villages. The telemedical equipment will allow face-toface medical consultation between local care providers and patients on one end and physicians and specialists at a distant large hospital on the other end.

Alaska Communications

ore than fift y thousand students and teachers in the Anchorage School District (ASD) will have access and increased capacity to new webbased learning tools, virtual classrooms, and faster, reliable Internet due to the district’s new technology plan with partner Alaska Communications. Alaska Communications and ASD signed a multi-year agreement that

Compiled by Russ Slaten

extends a long standing relationship between the two organizations. Under this agreement, Alaska Communications will provide enhanced broadband services, including faster broadband speeds and a private wireless network, to the district’s more than one hundred locations to meet ASD’s growing technology and educational needs. Alaska Communications will assist ASD in meeting its educational objectives by increasing bandwidth to all schools and facilities, providing secure and reliable access to web-based learning tools and student records; providing a wireless affinity program available to ASD students, families, and employees with additional discounts on wireless devices and plans; and by partnering Alaska Communications subject matter experts with ASD staff to develop technologies and bring new learning tools to the classroom.

ADOT&PF

he Alaska Department of Transportation and Public Facilities was granted certification for all eleven Alaska Marine Highway System ferries into the Passenger Vessel Association’s Green WATERS program in April. Green WATERS (We Are Taking Environmental Responsibility/Stewardship) exists exclusively for the passenger vessel industry as a voluntary program aimed toward reducing waste and operating in a cleaner, greener, and more sustainable marine environment. As a part of the certification process, Alaska Marine Highway System created a new Ship to Shore Environmental Guide to provide the policies and procedures necessary for staff to respond to environmental concerns quickly and efficiently.

ML&P

unicipal and electric utility officials broke ground in April alongside contractors to celebrate construction of what will be one of the world’s most energy-efficient, thermal generation power plants. The expansion of the 1970’s-vintage George M. Sullivan Plant 2 in east Anchorage will use GE LM6000 combustion turbine technology. The new plant will produce 120 megawatts in a 2x1 combined-cycle configuration. The $275 million plant is expected to be complete in the summer of 2016. ML&P expects to save more than $13 million annually in natural gas fuel costs at a bulk rate of $5 per million cubic feet. New technology also means 97 percent less nitrogen oxides and 80 percent less carbon monoxide emissions compared to legacy plants. Quanta Power Generation was selected as the contractor to provide engineering, procurement and construction of the George M. Sullivan Plant 2 generation expansion project. Associated Quanta companies Price Gregory International and M.J. Electric, Inc. are part of the construction team. IEC Corporation will augment ML&P’s Generation/Engineering staff. Engineering and procurement activities began in December 2013 following contract approval. Construction began in May 2014. Anchorage Mayor Dan Sullivan says the highly efficient plant is expected to achieve significant reductions in natural gas use and emissions, while benefiting the community by improving the heating of the municipal water supply and by providing additional generation capacity to meet Anchorage’s future power needs. 

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Alaska Business Monthly | June 2014

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VISITORS INDUSTRY

Alaska’s Scenic Byways

A Marine Highway Southcentral & Southwest Routes

Manley Hot Springs

Circle

E Haines Highway

L Alaska Railroad

F Parks Highway

M Prince of Wales Island Road System

Tok

O Kachemak Bay Route

Dawson City

P Walden Point Road Whitehorse

Glennallen

D Palmer

Kenai Soldotna Homer Dillingham

Haines Jkt.

G Valdez

Anchorage Bethel

N Copper River Highway

Eagle

Denali Park Entrance

Wasilla

By Susan Sommer

K Taylor & Top of the World Highways

Fairbanks

Routes to cultural riches and recreational resources

D Glenn Highway

G Richardson Highway

J G

Nome

J Steese Highway

C Dalton Highway

Livengood

I Sterling Highway

B Marine Highway

Prudhoe Bay

Barrow

H Seward Highway

Inside Passage Routes

Skagway

Haines

Cordova

Juneau

Seward

Highway

Railway Waterway

Kodiak

Sitka

Petersburg

M Prince of Wales Island

Ketchikan

Map Data: ADOT&PF

Dutch Harbor

ravel planning often begins with perusing a map. On the Alaska Scenic Byways map, nearly all of the state’s main highways, as well as the railroad and marine highway routes, are designated as scenic byways. The state’s scenic byways program information is maintained by the Alaska Department of Transportation and Public Facilities, and although Congress discontinued grant funding for new projects in 2012, existing designated routes have much to offer visitors. Alaska established the scenic byways program in 1993, two years after the creation of the national program, to recognize and enhance routes that offer access to our most scenic areas, cultural riches, and recreational resources. Local organizations applied for the designation; then they could go on to apply for national recognition. Five of Alaska’s scenic byways also carry national titles.

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Benefits of Scenic Byways Tourism organizations and local businesses along designated routes use the moniker in marketing materials to entice more travelers their way, which can generate economic growth and community recognition. An area’s history, cultures, and the natural environment can all be highlighted as well, adding educational value to a destination. Corridor management and installation of interpretive signs are just two of the ways byway communities have enhanced the visitor experience for their regions. Examples of specific projects for which grant money was approved include pedestrian and interpretive enhancements at Reflections Lake in the Palmer Hay Flats State Game Refuge located along the Glenn Highway and restoration of windows in the twohundred-year-old log building occupied by the Baranov Museum in Kodiak.

“I go out of my way as I travel to photograph scenic byways. As I know they are far more likely to be featured in magazine articles then similarly beautiful roads without any designation. I’m also more likely to pitch story ideas to editors for locations that have a scenic byway—it is more likely to grab their attention.”

—Ron Niebrugge Alaska Photographer

The designation has certainly been a boon to Alaska photographer Ron Niebrugge, whose colorful image of the Seward Highway was featured last year in Country magazine’s top ten June 2014 | Alaska Business Monthly

most picturesque drives in the nation. He has used it to pitch submissions to publishers. “I go out of my way as I travel to photograph scenic byways,” says Niebrugge, “as I know they are far more likely to be featured in magazine articles then similarly beautiful roads without any designation. I’m also more likely to pitch story ideas to editors for locations that have a scenic byway—it is more likely to grab their attention.” Lack of visitor awareness and understanding of Alaska’s scenic byways and what the designation means, however, has led some business owners to downplay the label. Rose Hetrick, innkeeper at The Inn at Tern Lake, says, “When talking with potential clients, we often mention the Seward Highway and the need to take time to enjoy the drive but usually do not refer to it as a scenic byway since that designation is not really understood.” Being located thirty miles from Seward is a benefit, though, says Hetrick, since it’s one of the “most magnificent” drives a visitor will ever have. “It would be hard to say whether the scenic byway designation is a specific benefit,” says Hetrick. “However, having a highway on the Kenai Peninsula through the Chugach Range is.”

Intrinsic Byway Qualities A byway can be designated under one or more of the six “intrinsic qualities” defined by the US Department of Transportation, Federal Highway Administration: archaeological, natural, cultural, recreational, historic, or scenic. Archaeological might mean ruins, artifacts, structural remains, or other physical evidence that has scientific significance that can be used to educate the viewer and generate appreciation for the past. Natural includes geological formations, fossils, landforms, water bodies, vegetation, and wildlife. There may be evidence of human activity, but the natural features predominate. Cultural means evidence of the customs or traditions of a distinct group of people. Cultural features can include crafts, music, dance, rituals, festivals, speech, food, and special events. Recreational qualities include opportunities to interact with the outdoor environment through activities such as skiing, hiking, boating, fishing, sightseeing, etc. 100

Historic includes legacies of the past that are distinctly associated with physical elements of the landscape, such as buildings, settlement patterns, and other examples of human enterprise. Scenic means exceptional visual experience derived from the view. Here is an overview and some highlights of each of Alaska’s designated scenic byways.

Alaska Marine Highway Besides being a state scenic byway, all of the routes, collectively, within the Alaska Marine Highway System (AMHS) are also designated as an all-American road, a national label. All-American roads must possess multiple intrinsic qualities as defined above that are nationally significant and possess features not found anywhere else. The road must also be considered a destination in and of itself. The “Inside Passage” portion of the AMHS stretches from the Queen Charlotte Islands of British Columbia north to Skagway. Plunging fjords, uninhabited islands, and lush forests are the backdrop to marine life and the rich heritage of Alaska Native cultures. This is also the same route early gold miners traveled to reach the Klondike fields; it was called the “poor man’s” trail—from Seattle to Skagway or Dyea by boat, then up and over the Chilkoot Pass and beyond by pack animal and on foot—as opposed to the all-water route that took miners from Seattle to Nome and then up the Yukon River by boat. The AMHS Inside Passage route also connects to Sitka, known for its early Russian influence and Tlingit culture. Alaska’s capital, Juneau, is part of this route, and numerous annual festivals occur along this system. The Gulf Coast portion of the AMHS features the rich fishing grounds and recreational playground of Prince William Sound, Kodiak, and the Alaska Peninsula, home to the world’s largest brown bears, spectacular fishing, strings of active volcanoes, and remnants of World War II equipment and structures. Alaska Railroad Year-round passenger service with routes between Seward and Fairbanks make the Alaska Railroad one of the most interesting ways to travel the state. Highlights of the corridor include spectacular glaciers,

Alaska’s largest city, views of Mount McKinley, and passage to and from Denali National Park and Preserve. Anchorage, now a city with any modern amenity you can think of, started out as a muddy construction camp and “tent city” for the railroad in 1915. Rail visitors to Talkeetna during the summer months can meet sunburned climbers just back from “the mountain” or take a flightseeing tour of the nation’s highest peak. And thousands of visitors to Denali National Park arrive and depart via the Alaska Railroad each season. The railroad’s scenic, natural, and historic qualities are apparent in every section of the 470-mile-long route.

Copper River Highway The Copper River Highway, east of Prince William Sound, runs a mere fifty-two miles from Cordova to the “Million Dollar Bridge.” The bridge was built in the early 1900s across Copper River as part of a railroad line that hauled copper from the old mining town of Kennicott to the port of Cordova. It was later damaged by the 1964 earthquake; permanent repairs weren’t made until 2005. A different bridge, at Mile 37, is currently not passable by car, but local guiding services are taking visitors to Childs Glacier, a popular recreation area, via boat. Much of this scenic highway passes through Chugach National Forest. Dalton Highway Named for James Dalton, a North Slope engineer, this highway was originally developed as a haul road connecting the Yukon River and Prudhoe Bay during construction of the trans-Alaska oil pipeline. Many long-time Alaskans still call it “the haul road.” The Dalton is mostly gravel, and there are few traveler services. Commercial trucks use this year-round road that stretches 415 miles from north of Fairbanks to Deadhorse on the Arctic Ocean. It’s the only highway in the nation that crosses the Arctic Circle, the Yukon River, and the Brooks Range. Coldfoot, at about Mile 175 of the Dalton, sprang up as a gold mining camp in 1898 and for several years was a busy hub with roadhouses, cafes, and prostitutes. Today it serves as a truck

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stop and home to about ten residents. It’s the last place before Deadhorse to buy anything—gas, food, or lodging.

Glenn Highway The designated scenic byway section of this road covers the 135 miles between Anchorage and Eureka Summit. This route follows the Matanuska River much of the way and offers spectacular scenery as well as historic roadhouses at Sheep Mountain and Eureka, Athabaskan history at Eklutna, and a plethora of outdoor recreation options. Tahneta Pass, near Gunsight Mountain, is a well-known route for migrating raptors; each spring, birders gather at pull-outs along the road to watch for their favorites. The Glenn is also a national scenic byway known for its glaciers. Matanuska Glacier is a destination in itself and draws hundreds of visitors every summer. Numerous lodges, guest cabins, and restaurants serve travelers. Haines Highway Running from Haines to the US/Canada border, the Haines Highway route was

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originally a packhorse trail to the Klondike goldfields in the late 1880s. It passes through coastal rainforest and climbs up into alpine tundra. It’s also a National Scenic Byway for its Chilkat Pass scenery. The annual Alaska Bald Eagle Festival is held in Haines each November.

Kachemak Bay Route A combination of roads and waterways in this glacier-carved bay with the artsy town of Homer at its hub offers travelers hundreds of recreational activities, scenic views of everything from volcanoes to farm land, and visitor services to suit every type of traveler. Scenic drives around Homer abound, and favorite pastimes include the arts, an annual spring shorebird festival, and a summer halibut derby. Primitive camping on the Homer Spit, a finger of land that reaches nearly five miles out into Kachemak Bay, is a rite of passage for many. Seldovia, a seaside hamlet of about 250 people across the bay from Homer, is accessible by boat, and draws visitors who come for its serene atmosphere, marine wildlife, and outdoor pursuits like hiking, biking, fishing, and sea kayaking.

Parks Highway Named for George Parks, territorial governor of Alaska from 1925 to 1933, this road connects Alaska’s two largest cities—Anchorage and Fairbanks. It also provides access to Denali National Park and Preserve in the Alaska Range and is recognized because of this as a national scenic byway. North of Denali Park is Healy, home to the Usibelli Coal Mine, which operates year-round and employs about 130 people. The mine has been operating since 1943. The Parks Highway also passes through Wasilla, headquarters for the Iditarod Trail Sled Dog Race; links the rustic Denali Highway to the Richardson Highway; and runs through Nenana, home of the Nenana Ice Classic. Prince of Wales Island Road System Prince of Wales Island is in Southeast Alaska near Ketchikan. It’s accessible by the Alaska Marine Highway System. The island’s designated byway covers 260 miles of mostly paved roads that lead to a variety of communities.

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Temperate rainforest, wildlife, Native culture, and history all figure into the scenic byway status here. Visitors can enjoy National Forest Service rental cabins, totem pole parks, caves, and local festivals.

Richardson Highway The Richardson Highway began as a gold rush trail to Eagle in 1898. Paving made it passable to the masses in 1957. From the interior community of North Pole near the road’s northern end to Valdez at the southern end, the Richardson Highway passes through a dizzying array of landscapes—tundra, taiga, farmland, and glacier-carved valleys, all the way to tidewater at Prince William Sound. Delta Junction, 96 miles south of Fairbanks, is home to the Alaska Flour Company as well as other local food producers. The trans-Alaska oil pipeline parallels the highway and passes through Thompson Pass on its way to the terminus in Valdez. Seward Highway The Seward Highway is one of Alaska’s busiest roads, especially during the sum-

mer months. Marine sightseers, fishermen, and other outdoor enthusiasts drive the 127-mile route between Seward and Anchorage with popular stops along the way to hike at Exit Glacier; enjoy the small town of Moose Pass; bird watch at Tern Lake; hike, ski, or snowmachine at Turnagain Pass; visit the historic town of Hope; take a tour boat to Portage Glacier; hop the train to Whittier through a tunnel; ski, hike, or pick berries at Alyeska in Girdwood; or watch the bore tide along Turnagain Arm. The Seward Highway has the allAmerican road designation for its scenic route through Chugach National Forest. Seward itself offers the Alaska SeaLife Center, whale watching cruises, all kinds of fishing, and events such as the Mount Marathon Race and the Silver Salmon Derby. And of course, Anchorage, at the northern end of the Seward Highway, offers myriad adventures for everyone.

Steese Highway This scenic byway connects Fairbanks with Circle, a small community on the Yukon River just south of the Arctic Cir-

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cle. Gold mining history draws visitors to this region that includes the White Mountains National Recreation Area and Birch Creek National Wild and Scenic River. Arctic Circle Hot Springs Resort, nine miles off the Steese Highway through the town of Central, is a historic landmark. It has been closed for ten years and is tended by caretakers and is not open to the public.

Sterling Highway From its junction with the Seward Highway at Tern Lake, the Sterling Highway follows the Kenai River west to Soldotna, then turns south and hugs the coast all the way to Homer. It’s eastern and southern ends are designated scenic byways. World-class sport fishing for salmon is a huge draw in the Cooper Landing and Kenai areas, with the Anchor Point and Homer areas known for their halibut and other bottom fishing opportunities. Hikers access the southern end of the historic Resurrection Trail from the Sterling Highway just west of Gwin’s Lodge, a long-time landmark for hungry, tired travelers. Built as a roadhouse

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in 1952 by pioneers Pat and Helen Gwin, the establishment now offers rental cabins and fishing supplies in addition to its full-service restaurant.

Taylor and Top of the World Highways The narrow, winding Taylor Highway begins at Tetlin Junction on the Alaska Highway and runs 160 miles north to Eagle on the Yukon River, leading travelers into the historic Fortymile gold mining district. Just after Chicken, the road joins the Top of the World Highway, which heads to Dawson City, Yukon Territory. The Fortymile River watershed is part of the National Wild and Scenic Rivers System. Writer Jack London arrived in the region during the Klondike gold rush. He and friends staked a mining claim, but over the winter London developed a bad case of scurvy. He made his way back to San Francisco via the Yukon River and another boat south, only to find that his father had died and he was the family’s sole provider. London wrote his first newspaper story about his trip down the Yukon. The rest is history.

Walden Point Road At a mere fourteen miles long, Walden Point Road still rates high as a scenic byway. On Annette Island south of Ketchikan, the route leads from Annette Bay to Metlakatla. It was completed by the military in 2010 as an innovative readiness training program. Some Metlakatla residents commute to Ketchikan for work or school; the Alaska Marine Highway System runs daily ferry service between Annette Bay and Ketchikan. In addition to its practical use as a transportation corridor, highlights along Walden Point Road include scenic views, abundant wildlife, and recreational opportunities. History also plays a role. Today’s Metlakatla Tsimshians are descendants of a Canadian group that moved to Annette Island in the late 1800s. The island is part of the only Indian reservation in Alaska. 

Susan Sommer writes from Eagle River.

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VISITORS INDUSTRY

Planning Meetings in Alaska Counting on experience pays oﬀ By Vanessa Orr

or many companies, meetings are an integral part of business—a way to gather information, provide training, or convey a message to a lot of people at one time and place. And when those meetings are held in Alaska, they also serve as an incentive to attendees who have always wanted to visit the Last Frontier, which gives planners an advantage when promoting a company’s event. “The fact that a meeting is being held in Alaska definitely gives us an edge,” says Tina Day, director of Visions Meeting and Events Experts, which is located in Anchorage. “The opportunity to participate in pre- and post-tours attracts attendees, and we’ve had keynote speakers agree to discount their fees or forego their honorariums if we’ll cover their travel and accommodations because they’ve always wanted to come here.” Even with an enthusiastic audience, putting a successful meeting together isn’t all that easy—especially if the person planning the event is a first-timer or has a full-time job in addition to being assigned the task of getting all of the components together. While some companies think that they will save money by using someone in-house, there are a number of challenges that face the novice planner—everything from coordinating flights to fickle weather to 104

Alaska Business Monthly | June 2014

While many meetings are held indoors, Creativation Events tries to hold as many outdoor events as possible so that attendees can enjoy the beauty of the Last Frontier. Photo courtesy of Creativation Events

outdated or incompatible technology. “Very few people realize how much time it takes to plan a meeting and make sure that it runs smoothly and efficiently; they think that anyone can do this job, but without the knowledge and expertise, it can be a challenge for someone who does not have the experience,” explains Toni Walker, president of Logistics LLC, which has offices in Anchorage and Seattle. “There are so many things to consider, from the meeting location to the caterers to the A/V equipment to transportation to vendor agreements and liability—it pays to have an expert who knows what to look for in order to save headaches down the road. “A meeting planner can even negotiate with vendors to save their clients’ money,” Walker adds. “Because of our long-term relationships with local vendors, we are often offered a preferred rate that would not be offered to a new client or a first-time meeting planner; sometimes the amount that we save our clients is enough to help pay our fees.”

Putting a Plan Together While a lot of the components of a meeting are fairly static, each meeting has its own unique requirements as well. “Creativity is key; people have been to nu-

merous meetings, conventions, or trade shows, and they are looking for something a little different, something that gets them away from day-to-day business,” explains Melissa McCormick, owner of Creativation Events in Juneau. “When they come to Alaska, they don’t want to just sit in a conference hall; they want to get outside. That’s why we try to do a lot of our events off-site and outdoors whenever possible.” Some of Creativation’s locales have included providing catered meals at Taku Glacier Lodge and Aldersheim Lodge a barbecued meal on the glacier, a chartered whale watching cruise on Allen Marine with dinner at the Orca Point Lodge; and an evening teambuilding event at the AJ Mine. When a client is thinking about holding a meeting in Alaska, Walker says that there are several things to consider. “The first is the time of year—the shoulder seasons of spring and fall are peak meeting times here, when the expense of traveling is lower, the facilities cost less, and there are more available rooms than in the summertime,” she explains. “A client should also try to be flexible with dates—we need some room to work with venues and vendors, so we suggest that they try to avoid setting their meeting dates until more rewww.akbizmag.com

by a client’s budget, or by the fact that they have volunteers or staff to do certain things. We send them a list of services we offer, and they can select the services they need, and we will provide a quote accordingly.” Visions Meeting and Events Experts also offer clients a menu of items that they can choose from to determine how much the company will do. “We have all of the resources and experience available from creating an online registration website to marketing and graphic design to badges, signage, and advertising,” says Day.

Changing with the Times Planning a meeting today requires a lot more than an easel, pens and paper, and a coffee urn. As technology has advanced, so has the way that people hear about, respond to, and participate in meetings. “There’s no doubt that social media is changing the way that we do business,” says McCormick. “Twitter, Facebook, LinkedIn, Wildfire—they are all shifting the way that businesses receive feedback. Companies can get on-time, real-time feedback versus the old school

way of participants filling out an evaluation form at the end of meeting. “It’s also now virtually free to get your conference promoted to your attendees; you can pay a nominal advertising fee on many social media sites, compared to the cost of printing and mailing out conference information to all of your potential registrants.” “Social media has provided us with a way of getting information to a larger, broader range of people and enabled us to get them engaged prior to the meeting—to get them excited,” says Walker. “Back in the day, they may not have been on an organization’s mailing list, so they wouldn’t have known about the event; now everything is online. Whether it’s a one-day event open to the public, or a meeting where they need to register, word still spreads like wildfire. “It’s not enough just to have a good speaker anymore,” she adds. “You have to have social media involved. If not, you’re behind the times. And it’s important to integrate social media into meetings before and even after the event, when people want to continue the discussion.”

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search is done on available. They also need to be cognizant of other big events going on; if the Alaska Federation of Natives is coming to town in October, it could be very challenging trying to arrange a meeting or event around that type of large convention.” And of course, budget is always at the forefront of planning, though having a smaller budget doesn’t preclude companies from having successful meetings. “We can work within a client’s budget, no matter how tight it is,” says Walker. “There’s a myth that it costs too much money to have a conference in Alaska, but that’s not true. The prices to get here are comparable with other destinations, and catering and venue prices are very reasonable compared to other cities.” Companies who come to the 49th state can choose to have a meeting planner handle the whole event or just deal with certain aspects on a local level. “We do everything from a single component, such as online registration or setting up exhibitors, to planning and coordinating the entire meeting,” says Walker. “Sometimes this is determined

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June 2014 | Alaska Business Monthly

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If a client is interested and has a large enough group, staff at Visions Meeting and Events Experts will create an app specific to the meeting that attendees and others can follow. “Not only does this cut costs from a printing standpoint, but also from a marketing standpoint,” Day explains. “It also allows companies to go greener by not printing programs.” Meeting planners are also using technology to promote themselves and the different types of services that they offer. “The first thing I’d recommend when trying to choose a meeting planner is to look at their website to get a good sense of their experience in specific types of meetings, to see how experienced their staff is, and to see if they offer in-house services, like graphic design,” says Day. “In Alaska, everyone has their own niche; we focus on conferences, conventions, and meetings, and other companies focus more on special events, like sporting or fundraising events or weddings. “We all work together,” she adds. “If it isn’t in our mix, or we don’t have the timing or resources available, we will

recommend other companies in town.” Meeting planners also work with the sales staff at each cities’ convention and visitors bureau, including Visit Anchorage and the Juneau Convention and Visitors Bureau, as well as with the convention service, catering, and sales staff at some of the larger venues. “Some facilities have set vendor resources. For example, about 90 percent of venues require us to use their onsite catering services,” says Day. “However, for other things, like entertainment, audiovisual equipment, transportation, and more, we have our own list of preferred vendors.” “It really depends on the events and where we are. In Anchorage, for example, we use the onsite caterer at Dena’ina, and Centennial Hall in Juneau has an approved catering list,” adds McCormick. “But if we’re holding an offsite event, I like to change it up and hire someone different. We are very selective when it comes to choosing caterers, DJs, bands, audio/visual service providers, and rental companies, but it is nice to have a little flexibility when we take our events outside.”

Byron Bluehorse THE MEETING: National Tribal Transportation Conference Sept. 22-25, 2014 500 delegates Estimated Economic Impact: $715,000

MEETINGS PAY IN ANCHORAGE 106

Alaska Business Monthly | June 2014

Expecting the Unexpected Perhaps the best reason to hire a meeting planner is because no matter what happens, they are prepared to deal with all kinds of unforeseen issues, including those that might completely derail someone less experienced. “One year, we were working with the Alaska Travel Industry Association, which was holding its meeting in Valdez in October,” says Walker. “There was major flooding—people were stuck on busses when roads were closed; they couldn’t leave because water had washed away bridges. We were expecting five hundred people, and three hundred came in, and we had to work with the ferry system to get everyone out. “Despite the fact that it was a challenge, everyone had a great time at the meeting and it was still successful,” she adds. “Alaska being Alaska, anything can happen at any given moment, so you have to be able to think on your feet and be prepared for last-minute challenges.”  Vanessa Orr is the former editor of the Capital City Weekly in Juneau.

CONGRATULATIONS BYRON BLUEHORSE, VISIT ANCHORAGE MEETING CHAMPION! Professor Byron Bluehorse knows all about getting people moving in Alaska. His work with the Alaska Tribal Technical Assistance Program helps tribal governments develop and manage their transportation programs. And by helping to secure the 2014 National Tribal Transportation Conference, he’s guaranteed hundreds of professionals in the field will convene in Anchorage this fall. When it comes to picking a meeting venue, help from Alaskans like Professor Bluehorse moves Alaska in the right direction.

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ALASKA THIS MONTH By Tasha Anderson

ENTERTAINMENT

Photo courtesy of the Alaskan Scottish Club

Highland Games

Athlete competing in the traditional “weights for height,” or “weight over the bar.”

any Alaskans are familiar with the Highland Games, a product of the Alaskan Scottish Club, which was established to promote Scottish culture, heritage, and teachings. As Chris Anderson, Alaska Scottish Highland Games Chair, says, “If you have never been to the games, this is an event you don’t want to miss.” This is the first year that the games will be held at the Alaska State Fairgrounds in Palmer, rather than in Eagle River as they have been previously, allowing the games to expand their vendors, activities, and parking accommodations. Parking in general is free, but the Blood Bank of Alaska will be selling premium parking to raise funds for their new building, Anderson says. Of course, parking is just the beginning. The Games are a festival atmosphere with Scottish flare and feature heavy athletics, piping, dancing, a flyball dog competition, food, and drink. “If you love the bagpipes, this is a great time to come out and hear them,” Anderson says. Six pro Scottish athletes will be at the Games this year competing in the heavy events, and the weekend before the games take place another pro will be in Alaska to give a clinic. “If you have always wanted to taste some high quality scotch, we have the scotch tasting,” Anderson says. This year, a limited special education scotch tasting will take place in addition to the traditional scotch tasting, and participants can take home a glass made in Scotland. The concert, which takes place after the closing ceremony, will feature Seven Nations, a Celtic rock band—the price of the concert ticket is included in the gate price. Tickets are available in advance at The Book Shelf in Eagle River and Celtic Treasures in Anchorage and will be available at the gate. The Highland Games will be on June 28 at the Alaska State Fairgrounds in Palmer. alaskascottish.org/games.html  108

Alaska Business Monthly | June 2014

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EVENTS CALENDAR

Compiled by Tasha Anderson

ALASKA-WIDE

Lemonade Day

Youth around Alaska practice skills they need to be successful in the future by participating in this nation-wide event. Young people participate in the day for free, opening their own lemonade stands. The youth keep all of the proceeds and are encouraged by the program to save a little, spend a little, and give a little to charity. For those out and about who happen to stop at a lemonade stand, take a moment to support the entrepreneurial youth of Alaska. alaska.lemonadeday.org

ANCHORAGE

Alaska PrideFest

Enjoy various vendors and live entertainment while celebrating gay, lesbian, bisexual, and transgender pride in Anchorage. Delaney Park Strip between L Street and P Street, all day. alaskapride.org

Summer Solstice Festival and Hero Games

Join the Anchorage celebration of the longest day of the year in Town Square. Events include live music, chain saw artists, an art fair, jazz fest, and the Alaskan Kid’s Zone featuring activities such as a kayak pool and giant sandbox. In addition, the Hero Games are a friendly competition between the fire department, law enforcement, and each branch of the military. Fourth Avenue and Town Square, Noon to 6 p.m. anchoragedowntown.org

Gold Rush Days

28-29

Festival of Fun

This carnival is a fund raising opportunity for local charities that run the games. There will be a pie eating contest, popcorn, cotton candy, lots of prizes, and, of course, carnival games. Nugget Mall, Saturday 5:30 to 7:30 p.m. and Sunday 10 a.m. to 5:30 p.m. nuggetmalljuneau.com

KETCHIKAN

“Sole”stice Shoe Auction

This annual auction raises funds for special projects or operations at the PeaceHealth Ketchikan Medical Center. Shoes are auctioned during silent and live auctions, and drinks and hors d’oeuvres are served. Ted Ferry Civic Center, doors open at 5:30 p.m. peacehealth.org

6-7

PALMER

Machetanz Arts Festival

Mayor’s Midnight Sun Marathon & Half Marathon

This festival invites all to look to the arts for inspiration, relaxation, and fun. There are various workshops available, including digital photography, drawing, mixed media, Alaska Native arts, painting, paper making, print making, and the featured artist workshop. Mat-Su College, various times. matsu.alaska.edu

Polynesian Culture Flag Day

Honoring the colonists who started the Palmer farming community, this festival includes a car rally, craft fairs, horse-drawn wagon rides, kids’ games, carnival rides, a bike rodeo, parade, live entertainment, and a local farmer’s market. Downtown Palmer, various times. palmerchamber.org

This annual marathon draws nearly four thousand runners and walkers to the trails of Anchorage. The event also has a four-person marathon relay, half marathon, a four-miler, and a Youth Cup. New this year is the Buddy half marathon. Routes go throughout Anchorage, starting times vary. mayorsmarathon.com

This cultural awareness day celebrates Polynesian culture in Anchorage through Polynesian food, dances, singing, arts, crafts, and games, as well as honor family and loved ones who have served in the armed forces. Delaney Park Strip between 9th Avenue and 10th Avenue, 10 a.m. to 5 p.m. polynesianassocofalaska.com

CHICKEN

13-14

Chickenstock Music Festival

The best place to be for those who love both music and chicken, this music festival has been an annual event since 2007. Chicken Gold Camp, various times. chickengold.com

FAIRBANKS

Fairbanks Summer Folk Fest

This annual festival takes place outdoors and features a wide variety of live music. Pioneer Park, various times. fairbanksfolkfest.org

Midnight Sun Festival

Celebrate summer under the midnight sun and enjoy food, vendors, and live entertainment and competitions. First, Second, and Third Avenues are closed to motor traffic and become pedestrian only. Downtown Fairbanks, Noon to Midnight. downtownfairbanks.com

21-22

This is an annual gathering to celebrate Juneau’s heritage and features logging and mining skills competitions, exhibits, food, and family activities. Savikko Park, various times. traveljuneau.com

6-8

Colony Days

SKAGWAY

Elks Summer Solstice Picnic

This celebration of solstice features food, music, and games. Seventh Pasture Ballpark, 6 p.m. to 1 a.m. Call 907-983-2235 for more information.

VALDEZ

Chugach Kit & Fun Festival

This festival includes a kite building workshop, kite flying demonstrations, and an evening of dancing, live music, food service, and a beer garden. Various times and locations. valdezalaska.org

14-15

WASILLA

Alaska 4X4 Meet and Greet

Hosting more than five hundred off-road enthusiasts, this annual event is an opportunity to unify the off-road community, promote off-road safety and preparedness, and improve the accessibility of trails in Alaska. Events include an obstacle course, articulation ramp, kids’ games, an auction, food, and more. Museum of Alaska Transportation and Industry, 9 a.m. to 10 p.m. facebook.com/Alaska4x4MeetandGreet

HOMER

Kachemak Bay Water Trail Ribbon Cutting

This event celebrates the official opening of the water trails in Homer. Events include music, food, kids’ events, and a boat splash. Homer: Launch site behind Pier 1 Theater on the Homer Spit, 5 p.m. to 8 p.m. homeralaska.org

JUNEAU

11-14 Celebration

Sponsored by the Sealaska Institute, this major dance and culture festival is held every two years, and is one of the largest cultural events in the state drawing thousands to the capital. Events include dance performances, a juried art show, Native artist market, seaweed contest, soapberry contest, and the Toddler Regalia Review, along with workshops, lectures, and a parade. Various locations and times. sealaskaheritage.org www.akbizmag.com

June 2014 | Alaska Business Monthly

109

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What’s Next July in Alaska Business Monthly SPECIAL SECTION: MID-YEAR ECONOMIC OUTLOOK

■What leaders across the state have to say about the Alaska economy in the second half of 2014.

SPECIAL SECTION: TELECOMMUNICATIONS & TECHNOLOGY

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■Alaska Native Corporations: Investing in Alaska Companies, a look at subsidiary growth. ■Construction: Private projects boosting the economy and being built this summer. ■Energy: Solutions in the Arctic: Looking for ways to power resource development. ■Financial Services: Small Business Lending: Project support by local banks and credit unions. ■Health & Medicine: New innovations in technology benefit Alaskans healthcare options. ■Insurance: Insuring for Special Circumstances: Policies to protect businesses bottom lines. ■Oil & Gas: National Petroleum ReserveAlaska: Anticipated activity in NPR-A. ■Oil & Gas: Post-Session update on changes for the industry passed by Legislature. ■Oil & Gas: Update on AGDC and the instate natural gas pipeline. ■Transportation: Rails: Existing & Planned: An overview of the Alaska Railroad Corporation. ■Visitor Industries: Top Destinations

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■From the Editor ■View from the Top ■HR Matters ■Right Moves ■Inside Alaska Business ■Agenda ■Alaska Trends ■Alaska This Month & Events Calendar ■What’s Next www.akbizmag.com

ALASKA TRENDS

By Amy Miller

Alaska Transportation Industry Going Strong

mployment in Alaska’s transportation, warehousing, and utilities sector has grown steadily since 2001 and is projected to continue this trend. At the beginning of the millennium, Alaska’s total employment in the transportation, warehousing, and utilities sector stood at 60,200; by 2013, the annual average employment had increased to 64,000. Although the industry took a slight hit with the nationwide economic downturn in 2008, it quickly rebounded to pre-recession employment levels and continued to grow. This is divergent from the national employment data for this industry. Employment numbers nationally were also on a climb prior to the recession, but unlike in Alaska, the national industry never recovered to its pre-recession level. Overall employment today remains below employment levels for 2001 in the United States. It appears the transportation, warehousing, and utilities industry will continue to perform better in Alaska over the next several years as well. The Alaska Department of Labor and Workforce Development released a forecast in 2010 that projected a 7.38 percent increase in employment in this industry by 2020; a similar study released by the US Bureau of Labor Statistics for the United States as a whole projected a 6.9 percent increase for the period from 2012 to 2022. Not only are employment rates for this industry expected to be stronger in Alaska than the Lower 48, pay for workers employed in this industry is better as well. The Bureau of Labor Statistics reported that Alaska has the highest mean hourly ($23/ hour) and annual wages ($47,830/year) for transportation and materials moving occupations of any state in the United States.

Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

65000

Alaska Trade, Transportation & Utilities Employment 2001-2013

64000 63000 62000 61000 60000 59000 58000 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2012

2013

U.S. Trade, Transportation & Utilities Employment 2001-2013 (in thousands) 27000 26500 26000 25500 25000 24500 24000 23500 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

The next closest was Washington, DC, where the mean annual wage was $40,940—nearly $7,000 less than in Alaska. Additionally, Anchorage and Fairbanks are the top-paying metropolitan areas in the nation for this occupation, with Anchorage employees in this industry earning $23.42 per hour and $48,700 per year on average; Fairbanks employees earn an average of $22.62 hourly and $47,050 annually. Jobs in this industry include those associated with moving goods and people by air, rail, water, road, and pipeline. 

SOURCE: Alaska Department of Labor and Work Force Development, Research and Analysis Section

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111

ALASKA TRENDS

Indicator

GENERAL Personal Income—Alaska Personal Income—United States Consumer Prices—Anchorage Consumer Prices—United States Bankruptcies Alaska Total Anchorage Total Fairbanks Total EMPLOYMENT Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Sectorial Distribution—Alaska Total Nonfarm Goods Producing Services Providing Mining and Logging Mining Oil & Gas Construction Manufacturing Seafood Processing Trade/Transportation/Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information Telecommunications Financial Activities Professional & Business Svcs Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Svcs & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government Labor Force Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Unemployment Rate Alaska Anchorage & Mat-Su Fairbanks 112

By Amy Miller Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

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

4thQ13 3rdQ13 2nd H13 2nd H13

37,179 14,251,060 213.91 233.55

36,923 14,173,058 210.85 232.37

36,649 14,055,505 206.61 230.34

1.45% 1.39% 3.53% 1.39%

Number Filed Number Filed Number Filed

February February February

28 15 4

29 17 3

52 35 12

-46.15% -57.14% -66.67%

Thousands Thousands Thousands Thousands Thousands

February February February February February

334.32 187.29 42.39 33.88 35.86

335.40 189.65 42.34 33.95 35.49

333.92 188.53 42.27 34.03 34.76

0.12% -0.66% 0.28% -0.44% 3.16%

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

February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February

322.3 45.5 276.8 17.2 17.0 14.2 14.2 14.1 10.5 60.8 6.4 34.9 6.4 9.7 19.5 5.5 6.2 4.1 11.7 28.1 47.5 33.7 28.6 5.9 18.6 11.1 81.7 14.5 26.6 8.6 41.7 23.8 3.5

319.2 43.3 275.9 17.0 16.8 14.1 14.3 12.0 8.4 60.6 6.3 35.2 6.2 9.9 19.1 5.5 6.2 4.1 11.9 28.3 47.2 33.7 28.6 6.0 18.6 11.4 82.8 14.5 26.2 8.3 41.0 23.0 3.6

321.8 43.0 278.8 16.9 16.7 13.9 13.2 12.9 9.4 59.8 6.4 33.8 5.9 9.4 19.6 5.5 6.0 4.0 11.9 29.4 47.0 33.3 29.1 6.2 18.9 11.5 84.1 15.3 26.7 8.8 42.1 24.5 3.4

0.16% 5.81% -0.72% 1.78% 1.80% 2.16% 7.58% 9.30% 11.70% 1.67% 0.00% 3.25% 8.47% 3.19% -0.51% 0.00% 3.33% 2.50% -1.68% -4.42% 1.06% 1.20% -1.72% -4.84% -1.59% -3.48% -2.85% -5.23% -0.37% -2.27% -0.95% -2.86% 2.94%

Thousands Thousands Thousands Thousands Thousands

February February February February February

362.57 200.20 45.45 37.24 39.38

362.15 201.71 45.28 37.14 38.91

360.50 200.63 45.29 37.14 38.13

0.57% -0.21% 0.35% 0.27% 3.28%

Percent Percent Percent

February February February

7.8 6.4 6.7

7.4 6.0 6.5

7.4 6.0 6.7

5.41% 6.67% 0.00%

Alaska Business Monthly | June 2014 www.akbizmag.com

ALASKA TRENDS

By Amy Miller Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

Percent Percent Percent

February February February

9.0 9.0 7.0

8.6 8.8 7

8.3 8.8 8.1

8.43% 2.27% -13.58%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

February February February

14.42 7.64 106.3

16.79 8.13 103.82

15.15 9.13 112.76

-4.79% -16.32% -5.73%

Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. Per Pound

February February February February February

13 1769 1300.97 20.83 2.04

11 1769 1244.80 19.91 2.04

9 1762 1627.59 30.33 1.06

44.44% 0.40% -20.07% -31.32% 92.45%

Millions of $ Millions of $ Millions of $

February February February

61.7 8.53 28.84

45.28 6.75 38.53

59.83 8.73 44.99

3.13% -2.29% -35.90%

Total Deeds Total Deeds

February February

467 135

525 130

857*Geo North 262

-45.51% -48.47%

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

Thousands Thousands

February February

299.94 71.27

332.66 70.6

287.87 65.81

4.19% 8.29%

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

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

February February February February February February February

50052.5 50689.1 256 1399.3 68.8 4.5 1060.5

48,585.8 49,180.6 204.0 -725.4 72.9 82.4 -857.4

44,941.50 45,717.10 178.4 1,654.7 7.5 1.50 -16.5

11.37% 10.88% 43.50% -15.43% 817.33% 200.00% -6527.27%

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

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

4thQ13 4thQ13 4thQ13 4thQ13 4thQ13 4thQ13 4thQ13 4thQ13 4thQ13

5,394.16 141.17 1,753.74 2,543.77 17.58 4,656.83 4,046.21 1,623.39 2,422.82

5,432.27 281.86 1,666.44 2,478.91 17.22 4,697.47 4,086.89 1,693.48 2,393.41

5,219.35 171.34 287.89 1,377.40 21.17 4,482.37 3,936.18 1,558.47 2,377.41

3.35% -17.61% 509.17% 84.68% -16.96% 3.89% 2.80% 4.17% 1.91%

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

Yen Canadian $ Pounds Euro Yuan

February February February February February

102.13 1.11 0.60 0.73 6.11

104.05 1.09 0.61 0.73 6.05

93.06 1.01 0.64 0.75 6.29

9.75% 10.19% -6.85% -2.31% -2.84%

Indicator

Southeast Gulf Coast United States PETROLEUM/MINING Crude Oil Production—Alaska Natural Gas Field Production—Alaska ANS West Coast Average Spot Price Hughes Rig Count Alaska United States Gold Prices Silver Prices Zinc Prices REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Deeds of Trust Recorded Anchorage--Recording District Fairbanks--Recording District

Notes: 1. Source of Anchorage Deeds of trust (GeoNorth) is cited in the data field. 2. 4th Qtr. banking data is not available at this time. 3. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska. www.akbizmag.com

June 2014 | Alaska Business Monthly

113

ADVERTISERS INDEX Alaska Air Cargo...........................47 Alaska Photobooth Co............. 110 Alaska Railroad..............................41 Alaska Seafood Marketing Institute (ASMI)....................... 49 Alaska Traffic Co...........................75 Alaska USA Federal Credit Union............................. 11 Alaska USA Insurance Brokers.. 13 Alyeska Resort...........................105 American Fast Freight.................79 American Marine/PENCO.........111 Arctic Office Products (Machines).................................16 Arctos.............................................30 AT&T .................................................9 Bering Air.....................................108 Bowhead Transport Co...............65 Brand Energy & Infrastructure.39 Calista Corp...................................56 Carlile Transportation Systems.81 Chris Arend Photography.........114 Ciri Alaska Tourism...................102

114

Construction Machinery Industrial LLC..............................2 Cook Inlet Tug & Barge Inc....... 68 Cornerstone Advisors............... 115 Cruz Construction Inc.................33 Delta Rental Services................. 58 Delta Western...............................53 Donlin Gold....................................78 EDC Inc...........................................59 EHS-Alaska.....................................21 Fairbanks Convention & Visitors Bureau...................... 101 First National Bank Alaska...........5 GCI ......................................... 41, 116 Great Originals Inc......................20 Greer Tank..................................... 24 Harley Marine Services..............64 Horizon Lines................................ 89 Island Air Express......................108 Judy Patrick Photography.........20 Kinross Ft. Knox........................... 15 Little Red Services Inc.................35

Lynden Inc. .............................73, 76 N C Machinery..............................61 North Slope Telecom Inc............53 Northern Air Cargo.............. 94, 95 NTCL ...............................................93 Nu Flow Alaska.............................59 Offshore Systems Inc.................. 31 Oxford Assaying & Refining Inc............................109 Pacific Alaska Freightways.........55 Pacific Pile & Marine.... 96, 97, 98 Paramount Supply..................... 110 Parker, Smith & Feek.....................3 Pen Air............................................. 71 Personnel Plus...............................27 Port of Anchorage........................77 Ravn ALASKA...............................69 Remax / Dynamic Properties Matt Fink................................... 17 RIM Architects.............................. 17 Ritchie Brothers Auctioneers (America) Inc.............................63 RSA Engineering Inc....................56

Ryan Air..........................................83 Samson Tug & Barge....................78 SeaTac Marine Services..............72 Seekins Ford Lincoln Fleet........ 87 Seward Chamber & CVB.........103 Span Alaska Consolidators........70 Stellar Designs Inc .................... 110 Ted Stevens International Airport........................................72 Totem Ocean Trailer Express (TOTE)........................................91 Trailercraft Inc. Freightliner of Alaska..............85 Tulalip Casino Resort................107 UMIAQ...........................................30 US Travel......................................102 Verizon ...........................................45 Vigor Alaska.................................. 29 Visit Anchorage..........................106 Washington Crane & Hoist........19 Waste Management .................. 34 Yukon Equipment.........................57

Alaska Business Monthly | June 2014 www.akbizmag.com