Alaska Business Monthly June 2015 by Alaska Business

OIL & GAS | CONSTRUCTION | WILD SALMON | WORKFORCE TRAINING | ECONOMY

June 2015

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Transportation Maritime Economy Annual Directory Rural Air Carriers Leadership Special Section begins on page 38

Bob Hajdukovich, Ravn Alaska CEO

XTO Energy is proud to be part of Alaska’s growing economy. You expect us to be responsible neighbors; we’re working hard to make sure we are.

www.xtoenergy.com XTO Energy Inc.

52260 Wik Road, Kenai, Alaska 99611 907.776.8473

810 Houston Street, Fort Worth, Texas 76102 817.870.2800

June 2015 TAB LE

CONTENTS ABOUT THE COVER

DEPARTMENTS From the Editor �� 7 Right Moves ��116 Inside Alaska Business ��118 Agenda ��121 Alaska This Month ��122 Events Calendar �� 124 Market Squares ��125 Alaska Trends ��126 Ad Index ��130

Ravn Alaska CEO Bob Hajdukovich on the tarmac in front of the company’s hangar at Ted Stevens Anchorage International Airport. The company’s story is part of the annual Transportation special section (begins on page 38). Cover Photo: © Chris Arend Photography

ARTICLES

Photo courtesy of First National Bank Alaska

Daniel Hon Cuddy

Iconic Alaskans 8 | Fran Ulmer By Shehla Anjum

Obituary

12 | Alaska Loses Pioneer and Banking Leader Daniel Hon Cuddy passed away in Anchorage May 12

Economy

14 | North Dakota Pays Its Way with Much More Than Just Oil and Gas Taxes By Larry Persily

Business Succession Agreement Basics

18 | Cross Purchase, Stock Redemption, Wait & See… oh my! What does all this mean? By Mel B. Bannon

Legal Speak

20 | Pass-Through and Disregarded Business Entities A tax advantage Alaskans should know about By Andrea N. Canfield

Gaffing a wild salmon in Southeast Alaska.

Fisheries

22 | Wild Alaska Salmon Advantages Go Beyond Taste and Texture Price crash in 2000 led to industry innovations and superior product By Will Swagel

26 | Patented Fish Grinder Designed in Alaska By Russ Slaten

Workforce Training

30 | Alaska Process Industry Career Consortium Developing the framework to replace an aging workforce By Mike Bradner

Insurance

34 | Protecting the Fleets in Alaska Waters Insurance critical for marine transportation, commercial fishing, and other maritime businesses By Tracy Barbour

Mustang Road on the North Slope.

Financial Services

76 | CapEx Funding Demand is strong across the board By Julie Stricker

Alaska Business Monthly | June 2015 www.akbizmag.com

We believe in Alaska business In Alaska, there’s no such thing as “business as usual.” From permafrost to daunting logistics and a changing economy, Alaska businesses face unique challenges.

Hard work, commitment, innovation. These are the hallmarks of Alaska business. First National Bank Alaska began as a small community business. We’re local bankers who understand your business and what it takes to succeed. Jenny Mahlen Vice President

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Learn how local knowledge and experience make the diﬀerence. Call 907-777-4362 or 1-800-856-4362.

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CONTENTS

special section

Transportation

Building Alaska 90 | Statewide Construction Project Roundup Thousands working on projects worth billions By Russ Slaten

Expanded in Digital Edition 96 | Reaching Alaska’s Resources Heavy construction projects within natural resource sectors By Kirsten Swann Photo courtesy of Everts Air Cargo

Community members are the ground crew unloading an Everts Air Cargo DC-6 in remote, rural Alaska.

Expanded in Digital Edition 38 | Economy, Labor Shortages Big Issues for Trucking Industry 46 | Ravn Alaska Flying everywhere, with anything By Tasha Anderson 50 | Small Air Carriers Improve Rural Life By Julie Stricker

Expanded in Digital Edition 54 | Southeast Alaska Maritime Economy Grows Industries and jobs shift from forest to ocean By Mike Bradner 62 | Alaska Business Monthly’s 2015 Transportation Directory

80 | New Age of Air Support to Oil & Gas Industry Unmanned aviation systems on Alaska’s North Slope By Julie Stricker

Expanded in Digital Edition 86 | Shell’s Extensive Arctic Logistics Keeping vessels, crews, and the ocean safe By Mike Bradner 88 | ‘Realizing the Promise’ of Alaska’s Arctic OCS NPC report shares key findings and recommendations By Mike Bradner 6

106

Photo courtesy of CCHRC

Integrated trusses ready for shipment down river to Bethel.

ARTICLES

Oil & Gas

102 | Partners in Safety Include OSHA and Insurance Agents By Brian McKay

Visitor Industry

112 | Business-Class Hotels in Alaska Comfort, convenience, and unbeatable views By Kirsten Swann

106 | Trusses on the Tundra Sustainable Housing Technologies in Southwest Alaska By Molly Rettig, Cold Climate Housing Research Center

Correction

DIGITAL EXCLUSIVE Entrepreneurs

Wells Fargo and UAA College of Business Team Up to Support Alaska’s Youth Lemonade Day Alaska growing the next generation of entreprenuers By Samuel Callen

We incorrectly identified TSS, Inc., owned by Renee Schofield, Alaska Small Business Person of the Year 2015, in the May issue.

Schofield

Alaska Business Monthly | June 2015 www.akbizmag.com

FROM THE EDITOR

Truck Drivers Wanted in Alaska Follow us on and

Volume 31, Number 6 Published by Alaska Business Publishing Co. Anchorage, Alaska Jim Martin, Publisher 1989~2014

EDITORIAL STAFF

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

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

BUSINESS STAFF

President Billie Martin Vice President & Jason Martin General Mgr. VP Sales & Mktg. Charles Bell Senior Account Mgr. Anne Campbell Senior Account Mgr. Bill Morris Account Mgr. Janis J. Plume Accountant & Melinda Schwab Circulation 501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2014, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/archives, www.thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

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High wages to show up and work

hat’s the big takeaway I got from talking to transportation leaders about key issues facing the industry. Labor and the economy were the two main challenges and recruiting drivers is a big deal. There’s not much I can do about the economy, so I thought I would try to help get the industry more drivers. At least twenty-one years old? Have a CDL? Drug free? Then show up and work. There is an enormous opportunity for great wages and benefits for qualified drivers. We’ve got an exceptional magazine again this month, and in the Transportation special section is the discussion with industry leaders (starts on page 38). We talked for an hour and there wasn’t enough room for it all so I’ve included a bit of it here. In addition to the economy and the dire shortage of truck drivers, another topic discussed was the recent crisis on the Dalton Highway, and its maintenance is at the top of the list of the Alaska Trucking Association’s Legislative Priorities. When Harry McDonald, Terry Howard, Jimmy Boyle, and Aves Thompson showed up April 8 at the offices of Alaska Business Monthly the Dalton Highway had been closed due to flooding from overflow from the Sag River, which was quite compelling. The magnitude of the haul road shutdown is unfathomable from both the logistics nightmare it created and the sheer force of nature it displayed. The governor declared it a disaster. Thompson brought up a very interesting point: A lot of people don’t know about the Dalton Highway. They don’t know where it is, or what it is, or how important it is. Here’s what he said about the Dalton Highway: One of the other issues on our priority list was the maintenance of the Dalton Highway. And I think today is a perfect example of maintenance and the importance of the Dalton Highway. If you stop someone on the street tomorrow and say, ‘Where is the Dalton Highway?’ They would look at you with a blank stare—because they don’t know. There are a lot of people who should know that don’t know, they don’t know why it’s there, they don’t know what travels on that road. We posted a three-minute video on our Facebook page that was taken by a driver going through that trouble—that flooded area up there—it took him more than an hour to get five miles. We got forty-five thousand views on our Facebook page. My daughter does a little bit of social media work and she sent me a text and said, ‘Hmmm, in the social media world we call this a success.’ We spent two hours with the Senate Transportation Committee two or three weeks ago [in March] talking about the Dalton Highway and what it means to the industry, what it means to the state, and what it means to the people in the state of Alaska. Then this [the flooding and closing of the Dalton Highway] just sort of drives that point home of how important it really is. By April 8 it was necessary to fly fuel up to the North Slope to keep operations going and there were seven hundred to eight hundred loads back up in Fairbanks. Facebook.com/AlaskaTruckingAssociation has photos and commentary along with the video posted April 7, which by press time in May had 165,489 views. So check that out and check out the June issue of Alaska Business Monthly. The team has put together another really great magazine, enjoy! —Susan Harrington, Managing Editor June 2015 | Alaska Business Monthly

ICONIC ALASKANS

Fran Ulmer By Shehla Anjum

Midwestern Roots Ulmer grew up in the small Midwestern town of Horicon, Wisconsin, located between Madison and Milwaukee. Her parents owned the town’s furniture store 8

ost would agree that Fran Ulmer is one of the most accomplished Alaskans: Legislative attorney, state government policy director, Mayor of Juneau, Lieutenant Governor, university think tank director, university chancellor, and now director of a respected federal research commission. What hasn’t Ulmer done? And yet, at sixty-eight, she still seems young in her career, meeting new challenges in a presidential appointment as chair of the US Arctic Policy Research Commission. Here are two Ulmer stories, both from her: When she was appointed Governor Jay Hammond’s legislative liaison in 1975 (the governor’s lobbyist), she found a gift in her desk drawer, left there by Alex Miller, who held her job under Governor Bill Egan. It was a cigar, a Miller trademark. Ulmer didn’t tuck it away as a keepsake. She lit up, put her feet up on Alex Miller’s former desk, and puffed away. Another story that she takes quiet pride in was when she began her first Alaska job as a staff attorney for the Legislature in 1973 in Juneau. Ulmer unexpectedly set an example for professional women—that they didn’t have to adhere to an unspoken dresses-only code. Her decision to wear trousers, customary for professional women in Washington, D.C., sent a strong signal to other women in Alaska’s capital that they could choose to dress similarly, and they did.

“I decided law was the best path and an advanced degree would open more doors than just a bachelor’s degree. And I was right.” and funeral home and she helped with both, including singing for funerals. Although neither parent attended college, both Ulmer and her older sister did. Ulmer earned an undergraduate degree with a double major in economics and political science and a law degree, both from the University of Wisconsin. Her choice of a career in public policy seems natural. But it wasn’t always so. As a child she wanted to be either a ballerina or a singer. As she grew older she realized that although “performing was exciting and demanding, it looked like an unstable lifestyle, so I opted for something much more predictable.” Music, however, remained a constant in her life. Ulmer went on to sing in college musicals, performed in a USO tour to Greenland and Iceland, and af-

ter becoming an Alaskan, sang the National Anthem at the Kingdome to open Alaska Day at a Seattle Mariners game in 1994. In the late 1960s, when Ulmer finished her undergraduate degree, few women attended professional schools— medicine, engineering, and law. But things were changing. Susan Davis, a college roommate who now runs a communications firm in Washington, D.C., remembers Ulmer’s desire to study law. “She was very focused on a career in government and possibly politics and definitely wanted to be engaged in public service.” Ulmer’s parents, who were involved in community work, had passed along the desire for public service to their daughter. Ulmer, too, knew a law degree would

Alaska Business Monthly | June 2015 www.akbizmag.com

allow her to work and advance in the public sector. “I decided law was the best path and an advanced degree would open more doors than just a bachelor’s degree. And I was right.” She got her juris doctorate in 1972 and went to work at the Federal Trade Commission in Washington, D.C. But her job as an anti-trust attorney wasn’t inspiring. She wanted a change and heard about Juneau and its rich outdoor life from a former boyfriend who had moved there.

An Alaska Change Alaska seemed just right. She had had a life-long interest in outdoor activities, wildlife, and conservation. Her hometown was “next to the Horicon Marsh, a federal and state wildlife area with a freshwater marsh that attracted hundreds of thousands of migrating waterfowl every spring. I hiked, fished, canoed, and ice skated in this peaceful place, literally in my backyard.” Soon after arriving in Juneau in 1973, Ulmer got her first Alaska job—as the first woman attorney in the state Legislature’s legal services division. In that nonpartisan position, she drafted bills, researched issues, and served as staff for the Senate Judiciary Committee when that committee met. Those on the Capitol’s third floor, the governor’s office, noticed her work. In 1975, then-Governor Jay Hammond asked her to become his legislative liaison. Two years later he appointed her director of the Division of Policy Development and Planning (DPDP). The DPDP appointment came the same year that oil started flowing through the Trans Alaska Pipeline System and communities on the North Slope began voicing concern about future oil and gas activity and its impact on their way of life. They found one avenue to voice their concern—a local coastal management program that operated in tandem with the state’s coastal management program that Ulmer was setting up at DPDP. “We approved the first local plans and coordinated the federal, state, and local efforts to align the programs so they complied with the federal and state laws and accommodated the concerns of communities,” Ulmer says. That program was very successful for www.akbizmag.com

the first few decades in Alaska and allowed coastal communities a say in how oil and gas activities were conducted in their regions. It now no longer exists.

Balancing Work and Family In 1977, the year that she started work at DPDP, Ulmer married attorney Bill Council. They had two children, Amy and Louis. One of Ulmer’s closest friends is Jane Angvik, of Anchorage. Their friendship dates back to the Hammond days in the 1970s. “She was DPDP’s new director

and I was at the Alaska Public Forum [a citizen outreach program]. We have had a most joyful relationship. She was also having babies the same time that my husband and I adopted our daughter.” Ulmer won Angvik’s admiration for the way she balanced her busy working and home lives. “People read a lot about Fran’s public service but few know that she was also a terrific parent.” Living in Juneau offered an advantage—it allowed Ulmer to combine a high profile job and still be home in time to make dinner, Angvik says.

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June 2015 | Alaska Business Monthly

Fran Ulmer at the Alaska Airlines Center on the UAA campus in Anchorage.

Although Ulmer and her husband both had busy careers, they made time for family. “We never felt neglected and we were a close family. We went on trips together and ate sit down meals,” Louis Ulmer says.

Politics The elected official phase of Ulmer’s career began in 1983, at age thirty-six, when she became Juneau’s mayor. In 1986 she won election to the Alaska House of Representatives as a Democrat. She served until 1994, becoming the House minority leader in her last year. The move from local to statewide office came when Ulmer was elected lieutenant governor in 1994. She was not only the first woman elected to that post in Alaska but also the first to win a statewide office. Alaska’s lieutenant governor’s chief responsibility is overseeing the state’s elections. Ulmer successfully transitioned the state to an electronic ballot counting system, led efforts to create the state’s first web pages, and made routine state services, such as renew10

ing motor vehicle licenses and fishing licenses, available online. John Lindback, Ulmer’s chief of staff when she was lieutenant governor, credits her foresight in developing a modern voting system in Alaska. “We were using punch cards [before] and it was very clear to us that the system was antiquated. The machines were getting more and more difficult to maintain and it was time to move on,” he recalls. “Fran supported the transition and understood the need for it. We transitioned to optical scan voting in 1998. Alaska wasn’t the very first, but the first to do it on a statewide basis. That was two years before the 2000 election and the big controversy over punch cards in Florida” in the contested Al Gore vs. George W. Bush presidential election. Lindback also complimented Ulmer’s ability as a gifted speaker. “She was one of the few politicians who was fully capable of putting together a speech on her own.” She spoke in an almost extemporaneous fashion, which was “very unusual, but she could do that because her debating background helped her become articulate and good at thinking on her feet,” Lindback says. Ulmer served eight years as lieutenant governor and ran for governor as the Democratic candidate in the 2002 governor’s race, but lost to Frank Murkowski. She may have not won, but earned a reputation for the way she campaigned, highlighting the realities of Alaska’s near-complete dependence on oil and the problems it would create in future years (a prediction now come true). Reflecting on this, her son, Louis Ulmer, says: “My mother knew that not everyone agreed with her, and she respected that. But to this day when people find out that my mom is Fran Ulmer, people still comment how she should have been governor.”

Academia The eighteen years as an elected representative at the local and state level built Ulmer’s reputation for being focused and being able to get things done. She wasn’t idle for long after her race for governor. She returned from a fellowship at Harvard’s Kennedy School of Government in 2004 and joined the University of Alaska Anchorage as a visiting professor. In 2005 she became

director of UAA’s ISER (Institute of Social and Economic Research). At ISER, Ulmer oversaw research on a variety of issues—status of Alaska Natives, the needs and problems of remote communities, and the costs of global warming on Alaska’s infrastructure. She stayed at ISER for two years, until 2007, when the University of Alaska’s president Mark Hamilton appointed Ulmer UAA’s interim chancellor and then chancellor in spring 2008. It was a popular decision. “The faculty, staff, and academic leadership were excited and enthusiastic for her leadership. Fran received a standing ovation at the faculty-staff convocation that fall,” says Beth Rose, assistant vice chancellor for development during Ulmer’s years as UAA chancellor. Working together as a team was important to Ulmer, who “nurtured leadership and would freely give credit to others for their accomplishments,” according to Rose. Ulmer’s deep commitment was to building a strong relationship between UAA and the community, Rose says, and those efforts helped the university raise funds for several projects. For Ulmer it wasn’t just fundraising but rather the linkages to the community, “an alignment of values, purpose, and a sense that there were many great programs—from the award winning debate program to Alaska Native Science and Engineering Program—that people didn’t really know about.” Funds raised during Ulmer’s tenure as chancellor paid for the construction of several new facilities at UAA: the health sciences building, parking garage, and sports center. Contributions increased substantially, including a gift of $15 million from ConocoPhillips, the largest in the university’s history.

Appointments from Afar Even before she left the university in 2011, national leaders had noticed Ulmer. As a state legislator she had served on the Special Committee on the Exxon Valdez Oil Spill Claims Settlement, a complex assignment to advise on environmental restoration issues. Experience gained on that committee led to a presidential appointment in 2010 when President Barack Obama appointed her to a national assignment, the Commis-

Alaska Business Monthly | June 2015 www.akbizmag.com

sion on the BP Deepwater Horizon Oil Spill and Offshore Oil Drilling. The appointment was in keeping with Ulmer’s role in shaping both public and environmental policy throughout her years in Alaska. Although Ulmer left UAA as planned in May 2011, she didn’t actually retire. A few months before her departure, the president appointed her to another national position—chair of the US Arctic Research Commission. The Arctic research appointment came at a good time. State and national leaders are increasingly concerned about climate change. While global, such changes are more pronounced in the Arctic, where coastal villages are in danger of sliding into the oceans, roads are buckling, and glaciers are melting. “Her work on the commission is a culmination of her forty years of experience in Alaska,” Jane Angvik says. Besides chairing the Arctic Research Commission, Ulmer will also serve as the US Arctic science and policy advisor and will be involved with the Arctic Council, the group of eight Arctic nations formed in 1996 to work on issues of mutual interest. The council chairmanship rotates among the eight nations every two years and the United States became the chair in April 2015. Jimmy Stotts, an Inupiaq from Barrow and president of the Inuit Circumpolar Council Alaska, has long worked on Arctic issues. The Inuit Circumpolar Council is one of the six permanent participants of the Arctic Council, and Stotts regularly attends its meetings. Stotts notes the disconnect between the state’s position, geared toward Arctic development, and that of the federal government, focused on environmental issues such as carbon dioxide reduction. Stotts says he was glad that Ulmer was chosen as the science adviser. “Fran is an Alaskan; she understands both the federal and the state’s position, and she will be a good conduit between the two.” That Ulmer is also a member of the Nature Conservancy’s global board will help in that because it gives her credibility with environmental organizations. The next two years will be busy and challenging for Ulmer. They will also give her a chance to contribute to the important debate on Arctic issues and www.akbizmag.com

climate change and to focus attention on Alaska. Hard times are ahead for Alaska because of the budget crisis due to falling oil prices. But Ulmer remains optimistic. “We have abundant resources— natural, human, and financial—that can be managed for our small population to do well for a long time,” she says. She offered this assessment: “The bad news is our dependence on our state government providing things for free: free roads, schools, troopers, resource management—all of which cost money. But

the good news is our resilient population, which must now accept that taxes are necessary to assure a high quality of education, safety, and other public services. “We must stop pretending that oil can pay for everything. We need much more engagement by citizens in problem solving. Elected officials cannot take care of all the thorny issues without our help and support.” R Writer Shehla Anjum is based in Anchorage.

June 2015 | Alaska Business Monthly

OBITUARY

Alaska Loses Pioneer and Banking Leader Daniel Hon Cuddy passed away in Anchorage May 12 Editor’s Note: The team at Alaska Business Monthly joins the greater community of Alaska to pay tribute to Dan Cuddy. He graced the first cover of our magazine and we will remember his business insight and commentary throughout the years. He was a great man and he will be missed.

laskan pioneer Daniel Hon Cuddy passed away in Anchorage, Alaska on May 12, 2015 at the age of 94. His was a life well lived. He was born on February 8, 1921 in Valdez, Alaska, a thriving community of nearly 500 residents. His parents, Warren and Lucy Cuddy, ventured north separately, but with the common goal of adventure. The couple met in Valdez in 1916, and quickly became an integral part of the growing territory. This spirit of adventure and commitment to being a productive part of community was instilled in Dan at an early age. Dan had many adventures with his older brother, David and his parents. He, along with many other Alaskan legends such as Alaska’s first governor, Bill Egan, Alaska Permanent Fund Chairman, John Kelsey, judge and statehood proponent Anthony Dimond, and Anchorage Mayor George Sullivan all got their start in Valdez. Warren was the US District Attorney for the territory, but was replaced when President Roosevelt was elected, and the politics changed. Warren moved his young family to Anchorage in 1933. A road to Anchorage did not exist, so Dan experienced his first plane ride with Bob Reeves as his pilot. Warren set up a law practice in Anchorage, a town of nearly 2,000 at the time. He began buying stock in the First National Bank of Anchorage, ultimately attaining controlling interest and assumed the role of president. Dan attended Anchorage High School and was very involved in various school activities. Both he and his brother were

on the basketball team. Dan broke his nose during one of the games—when he ran into his brother’s head. Dan and David continued their wildlife adventures, running a trap line along Ship Creek, duck hunting on the Cook Inlet mud flats, and sheep and moose hunting in the Chugach Mountains. As a young boy, Dan served as grounds keeper of the golf course at the Park Street and later as an employee of the Emard Packing Company, rising quickly from the “slime line” to supervisor in 1938. Dan attended Stanford University, but World War II interrupted his education. He was assigned to the 1255th Engineer Combat Battalion and advanced very quickly in rank, rising from private to captain in eighteen months. Dan fought in the Battle of the Bulge and assisted in the closing of the concentration camp at Buchenwald, Germany. Dan had tremendous respect for his fellow soldiers, and always referred to them as “The Heroes.” Dan returned to Stanford after the War. He graduated with a bachelor’s degree in

Economics. Upon graduation, Dan went to law school at the University of Washington. While in law school, he agreed to a blind date with Betti Puckett. They were married the following year. Their honeymoon was a drive up the Alcan Highway, a trip where Betti naively thought she could talk this wild man from Alaska into settling down in Seattle. They continued on to Alaska. Once in Anchorage, they quickly set down deep roots. Dan clerked with Roger Cremo and Betti, new to the territory, jumped into the Anchorage community with both feet, equally leaving her imprint. Dan’s early legal work focused on adoptions. He and Betti were a team, intent on creating the right match for the baby and parent. Dan worked in his father’s law firm until Warren’s death in 1951. Dan had to then make the tough decision of continuing his law practice or launching himself into the world of banking. He chose banking, and at age 30, Dan assumed the role of president. It is believed that Dan was the youngest bank president in the nation at the time.

Alaska Business Monthly | June 2015 www.akbizmag.com

Dan enjoyed banking because he said, “he liked helping people, serving the community, and helping it grow.” Dan grew the bank from $25 million in assets to its current size of over $3 billion. In all that time he often remarked, “he had never received a promotion!” During his tenure at the bank, he helped build businesses, rebuilt businesses after the 1964 Good Friday earthquake, witness the historic North Slope oil lease auction, and the following boom and bust of the pipeline era. Dan became a private pilot shortly after he and Betti married. They thoroughly enjoyed flying to remote areas. Dan loved Alaska and respected those who chose to live and thrive in this State. He loved his family, he loved his Bank, he loved to fish and hunt, and he taught his family to share his loves. Civic and industry organizations gave formal recognition to Dan through the years, bestowing such awards as the Anchorage Chamber’s Gold Pan award for individual achievement in 1965. In 2002, a statewide committee of civic leaders selected him Alaskan of the Year. In 2006 the Alaska State Chamber awarded him the William A. Egan Outstanding Alaskan Award. In 2007 the Armed Services YMCA of Alaska dedicated its Welcome Center on Elmendorf Air Force Base in his name, and most recently in 2009 the Associated General Contractors of Alaska bestowed its coveted Hard Hat Award to Dan. Dan is preceded in death by his parents, Warren and Lucy, his brother, David, his wife, Betti, and his granddaughter Nikki. He is survived by his six children and their spouses, fourteen grandchildren and their spouses, and three great grandchildren. A memorial service was to be held at the Wendy Williamson Theater, with a reception immediately following at the Lucy Cuddy Center at the University of Alaska. In lieu of flowers, donations may be made to the Betti Cuddy Foundation by making checks payable to Betti Cuddy Foundation and mailed to the Foundation c/o Raymond James, 3401 Denali Street, Ste 103, Anchorage, AK 99503. Contributions may also be made in memory of D.H. Cuddy to the University of Alaska Foundation in support of the Cuddy Hall Renovation Project fund, sent to the University of Alaska Foundation, 1815 Bragaw St., Suite 203, Anchorage, AK 99508. R —First National Bank Alaska www.akbizmag.com

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June 2015 | Alaska Business Monthly

ECONOMY

North Dakota Pays Its Way with Much More Than Just Oil and Gas Taxes By Larry Persily SOURCE: State of North Dakota “Executive Budget 2015-2017 Biennium”

any Alaskans want their state to be more like North Dakota—for all that oil production that moved the northern Great Plains state ahead of Alaska as the nation’s second biggest oil producer. But be like North Dakota for personal taxes? Thinking about buying a new car or truck in North Dakota? Add in $1,500 for the 5 percent state tax on a $30,000 pickup truck. And you’ll owe state income tax on the wages you earn to pay for that new truck (used trucks, too). You’ll also see the tax difference when you fill up at the pump. North Dakota collects twenty-three cents a gallon on gasoline and diesel. Alaska’s rate is just eight cents a gallon—it was the same eight cents back in 1961. Prefer flying your own plane to driving? There is a 5 percent state tax on the purchase price or market value of aircraft registered in North Dakota (just 3 percent if the plane is used for agricultural purposes). It may surprise Alaskans to know that North Dakota’s general fund—the same kind of discretionary money that Alaska legislators, the governor, and the public battle over every year—gets far more of its revenue from sales tax, personal income tax, and motor fuel tax than it does oil and gas production and extraction taxes. Most of North Dakota’s oil and gas revenue goes into savings or designated spending accounts: a larger percentage than Alaska deposits into its Permanent Fund.

How the State of North Dakota allocates collected oil and gas taxes.

North Dakota’s diversified income stream helps protect public services from painful budget cuts when oil prices are low. To fully understand, let’s start at the wells and work our way to the dollars.

A Primer Alaska North Slope producers are expected to pump an average 508,000 barrels of crude per day in the state fiscal year ending June 30, according to the Department of Revenue’s spring forecast. That means the trans-Alaska oil pipeline is three-quarters empty from its peak flow in 1988. More than 2,100 air miles to the southeast, the Bakken Shale oil and gas

Though painfully low oil prices have idled drilling rigs— leading the energy information agency to predict Bakken production will slip backward just a bit, at least through May— North Dakota is still counting a lot more oil and gas dollars than Alaska. 14

play in North Dakota is booming, reminiscent of Alaska’s heydays of the 1970s and 1980s. In January of this year, North Dakota produced an average 1.2 million barrels of oil per day—almost 13 percent of total US production—according to the US Energy Information Administration. Only Texas produces more. Though painfully low oil prices have idled drilling rigs—leading the energy information agency to predict Bakken production will slip backward just a bit, at least through May—North Dakota is still counting a lot more oil and gas dollars than Alaska. The Peace Garden State—named for the border park it shares with the Canadian province of Manitoba—collects 5 percent tax on the gross value of oil production and a 6.5 percent extraction tax, also on the gross. The state website explains the production tax “is imposed in lieu of property taxes.” Like Alaska, North Dakota has its share of tax incentives. Some wells can qualify for a 4 percent extraction tax rate

Alaska Business Monthly | June 2015 www.akbizmag.com

and some wells in the Bakken can get a 2 percent rate. The reductions and/or exemptions can apply to new wells, workover wells, stripper wells, inactive wells brought back to life, horizontal re-entry wells, and enhanced-recovery wells. The production tax on natural gas varies, and is set each year depending on prices. It’s at about ten cents per thousand cubic feet for the state fiscal year ending June 30. That’s even lower than the kindly production tax rate charged on Alaska’s Cook Inlet gas. The state royalty share is not the issue in North Dakota that it is in Alaska, since the 39th state generally doesn’t own the subsurface rights to oil and gas like we do in the 49th state. With its 1.2 million barrels of oil per day, plus substantial gas production— even though North Dakota producers are still flaring more than one-quarter of their gas due to a lack of processing and pipeline capacity to get the fuel to market—the state in January predicted it would average more than $2 billion a year in total oil and gas tax revenues for the 2015-2017 two-year budget cycle. That’s similar to Alaska’s total state

take. North Dakota state officials based their January forecast on oil averaging $45 to $65 a barrel the next two years, also similar to Alaska’s spring forecast of almost $57 for next year. And just as Alaska’s unrestricted general fund oil and gas revenues fell by more than half from fiscal 2014 to 2015 as oil prices plummeted, North Dakota’s projected revenues for 2015 to 2017 fell by almost half from earlier estimates based on oil in the $80 range. But while the Alaska legislature and governor are cutting spending—and talking of more cuts in the future— North Dakota Governor Jack Dalrymple in December 2014 proposed a 5.4 increase in state general fund spending for 2015 to 2017. The governor proposed additional funding for roads, law enforcement, school construction, state parks, early childhood education, and housing, although all that was based on oil in the $74 to $82 range and a forecast of a big jump in sales tax dollars. Certainly, North Dakota legislators were not likely to approve all of the governor’s requests by their end-of-April adjournment deadline, especially with

low oil prices. But with a more diversified state revenue stream, their task likely was easier than the budget-cutting stress endured at the same time by Alaska legislators.

North Dakota’s ‘Other’ Tax Revenue Just how much does North Dakota earn from income and sales taxes, and how much do residents pay? Let’s say residents living in North Dakota earn the median household income of almost $54,000 a year. They would pay a state income tax of 1.22 percent on the first $30,000 to $60,000, depending whether they are single or married. The next tax bracket would cost 2.27 percent of their taxable income, working up to the 3.22 percent bracket when they near $400,000. At $54,000 a year, single, standard deduction, an individual’s income tax would be about $650. If he or she is married, filing jointly, with a combined taxable income of $100,000 a year, the tax bill would be over $1,600. Pull in $150,000 a year in taxable income and a married couple could owe almost $2,900.

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Perhaps not surprising, considering the state’s oil wealth, a legislator this year proposed setting the income tax rate at zero. If he had succeeded, North Dakota would have been the first state to do that since Alaska eliminated its personal income tax in 1980 as oil dollars gushed into its treasury. North Dakota has had an income tax since 1919. The chair of the state Senate Finance and Taxation Committee, commenting on the legislation and the state’s history of income tax, sales tax, and energy taxes, said he wasn’t sure if the state would be stable “on a threelegged tax stool that has one less leg.” The North Dakota Office of Management and Budget estimated—before the oil-price collapse—almost $430 million a year for the 2015 to 2017 budget cycle from personal income taxes, almost 16 percent of state general fund revenues. But that’s dwarfed by the state’s sales and use tax. At 5 percent on most goods and some services, the state expects to earn about $1.5 billion a year in the next budget cycle from sales tax—more than half of its general fund revenues.

tion to eliminate property taxes, filling the gap with oil dollars and state sales tax dollars. The measure failed by more than a 3-to-1 margin. The state chamber of commerce president told reporters after the vote that he wasn’t surprised by the wide margin of defeat. “It’s a very conservative state and we like it that way … It’s just the culture here.”

Oil and Gas Revenue And where does oil and gas fit into North Dakota’s general fund revenue stream? Just $150 million a year will go into the general fund out of an estimated $2 billion a year in total oil and gas revenues the next two years. That $150 million is just a few percentage points of ongoing state expenditures. It’s the law. “It is important to remember that our ongoing general fund spending is limited to $300 million [per two-year budget cycle] in oil and gas tax revenues as prescribed in state law,” Governor Dalrymple said in his December 3, 2014, budget address to lawmakers. That helps shield ongoing general fund spending from the volatility of oil prices.

Legacy Fund receives 30 percent of all production and extraction tax dollars. That looked to be $1.8 billion for the 2013-2015 budget cycle, according to the state’s March 2015 forecast. If that forecast is accurate, the fund would end the fiscal cycle on June 30 with about $3.5 billion. The fund is invested in stocks, bonds, and real estate, just like Alaska’s oil-wealth savings account. Revised lower-oil-price projections show it still could grow to $5 billion by the end of the 2015-2017 budget. The Alaska Permanent Fund, which has been receiving a share of the state’s royalty take—not production taxes—since 1977, was at almost $55 billion as of April 16.

Rules for Sharing The other key difference between the two states’ savings accounts—besides the size and Alaska’s individual dividends—is what to do with the money in the future. The North Dakota constitution says the principal and earnings of the fund may not be spent until after June 30, 2017. After that date, earnings on the fund are automatically trans-

In North Dakota, oil and gas dollars are diverted to several funds, including income-producing endowments and designated accounts for ongoing government programs. They’re just not part of the general fund. That’s 5 percent on most of what is bought each day, including communication services. And there is no cap or maximum. It’s 5 percent on a $1 pen and 5 percent on that $30,000 truck. Municipal and county sales taxes are on top of the state rate. The city tax rates fall between 1 percent and 3 percent. More than one hundred Alaska cities and boroughs collect a general sales tax, but not the state’s two largest cities (Anchorage and Fairbanks) and not the state. The highest rate in Alaska is 7 percent in Wrangell, with ten municipalities tied for second at 6 percent. Like Alaska, property taxes belong to municipalities in North Dakota, be they counties, cities, townships, school districts, and other taxing districts. And, as in Alaska, property taxes can be contentious in North Dakota, where voters in 2012 were asked in a ballot measure if they wanted to amend the constitu16

“The remainder of oil tax revenues … is dedicated to a number of special purposes as required by the constitution and state statute,” the governor explained. Here again, Alaska is different, in that its constitution bans dedicated funds—except for those that already existed at statehood and the Permanent Fund, approved by voters in a 1976 constitutional amendment. In North Dakota, oil and gas dollars are diverted to several funds, including income-producing endowments and designated accounts for ongoing government programs. They’re just not part of the general fund. n The Legacy Fund is a constitutionally protected savings account similar to the Alaska Permanent Fund—but without the dividends. Approved by voters in a 2010 constitutional amendment—as Bakken Shale dollars were starting to gush—the

ferred to the state general fund, but any expenditure of principal after that date requires a vote of at least two-thirds of the members of each legislative chamber. And if lawmakers want to withdraw money, the constitution limits them to not more than 15 percent of the principal in a two-year budget cycle. n The Strategic Investments and Improvements Fund was created by the Legislature in 2011 and is funded with a portion of production and extraction taxes, varying each year with oil prices and revenues to the state. In December 2014, before the oil-price collapse had really messed up budget projections, the fund was estimated to end the fiscal cycle on June 30, 2015, with $1.1 billion. The governor in December proposed a massive program of increased spending for roads, streets, airports, water systems, flood control, and even a $300 million loan fund for new school construction

Alaska Business Monthly | June 2015 www.akbizmag.com

in rapidly growing districts. “Economic growth cannot be sustained without strategic investments in infrastructure,” the governor said in his budget address. But low oil prices may curtail those investments. Whereas the state expects the Strategic Investments and Improvements Fund will collect about $1 billion in the two-year budget ending June 30, in March it predicted just $200 million in deposits in the 2015-2017 cycle. n The Common Schools Trust Fund dates back to statehood, when the federal government granted North Dakota 2.5 million acres for the support of schools. Much of the land was sold over the years, but income from the remaining land (which includes oil lease and royalty revenues from trust land), plus a percentage of oil extraction tax dollars, plus a share of the state’s slice of the nationwide tobacco litigation settlement, has put about $3 billion away for safekeeping. The principal cannot be spent. Instead, 5 percent of the five-year average of the fund is appropriated each year to help pay for schools in North Dakota. There also are several other funds that share in oil and gas tax dollars:

ernor, would be shared 30 percent for the Legacy Fund; 29 percent for political subdivisions (counties, cities, school districts and tribes); 19 percent to constitutionally dedicated accounts; almost 17 percent to statutorily dedicated accounts; and 3.6 percent to the state general fund. North Dakota carves up its oil and gas revenues into special accounts much more than Alaska. But like Alaska, the plains state will have to cut back on the carving board as oil prices shrink the size of the meal. R

Larry Persily is a former federal coordinator for Alaska North Slope natural gas pipeline projects; a former deputy commissioner at the Alaska Department of Revenue; a former longtime journalist; and currently working as a special assistant to the mayor of the Kenai Peninsula Borough for oil and gas issues.

 A Property Tax Relief Fund, which the governor proposed using in the 2015-2017 budget to reduce county property taxes by 12 percent.  The Resources Trust Fund, approved by voters as a constitutional amendment in 1990. The fund helps pay for water projects and energy conservation initiatives.  An Oil and Gas Research Fund receives 2 percent of the state’s oil extraction tax revenues, up to a maximum of $10 million per budget cycle.  An Oil and Gas Impact Grant Fund, created by the Legislature in 1998 to help areas most heavily impacted by development. In addition, a big share of production tax dollars are distributed to counties, cities, townships, and school districts— recently, several hundred million dollars a year. Tribes also receive a share of production tax and extraction tax dollars. In total, oil and gas tax revenues for 2015 to 2017, as proposed by the govwww.akbizmag.com

June 2015 | Alaska Business Monthly

BUSINESS SUCCESSION AGREEMENT BASICS

Cross Purchase, Stock Redemption, Wait & See… oh my! What does all this mean? By Mel B. Bannon

jax Engineering, Inc. was owned equally by Matt and Jeff, both in their mid-forties. Shortly after celebrating the tenth anniversary of the firm, Jeff left for a fall hunting trip with some of his college buddies. He never returned. A tragic accident occurred during the hunt, killing Jeff instantly. Matt suddenly had lost his longtime business partner. What’s more, after Jeff’s estate was settled, Matt found himself with a new co-owner, Jeff’s wife. Absolute chaos resulted. Jeff’s wife had no training or experience in engineering, let alone in running a firm. She was focused on income for living expenses and upcoming college education expenses for her three children. However, Jeff’s assets were virtually all tied up in the business and it was the income from his work product and business profits that was providing family lifestyle income. He had few assets outside his business interest and little life insurance. Unfortunately, they were left with little choice but to sell the company on short notice for just a fraction of what it was really worth as a going concern. Both this business and family tragedy could have been avoided. A buy-sell agreement and proper funding could have saved their business while providing needed income for Jeff’s family after his death. Buy-sell agreements lay out how ownership will change hands and how the transfer will be paid for in case of a co-owner’s death, disability, or retirement. Typically, the agreement provides for the purchase of the departing shareholder’s stock by the surviving shareholders or the company itself.

Properly designing and funding a buy-sell agreement may achieve the following objectives:  Avoid liquidation of the business  Replace lost income to a deceased owner’s family  Set a purchase price that fixes the estate tax value of the decedent’s stock  Indicate the continued stability of the firm to customers and creditors

Life Insurance Funding The first step, of course, is designing and drafting the agreement. However, the agreement in and of itself will have limited practical benefit unless the purchaser can afford to buy the deceased owner’s shares. Life insurance is often used as the preferred source of cash. When a business owner dies, the policy proceeds are received tax-free and in turn used to buy the shares from the deceased owner’s estate at a price set forth in the agreement. The “cost” of the purchase is not the purchase amount, but the sum of premiums paid, a fraction of the actual amount of money transferred. There are two basic types of buy-sell arrangements: the “cross-purchase” agreement and the “stock redemption” agreement. Life insurance can be used to fund both. Cross-Purchase Agreement In Matt and Jeff’s situation, each of them buys (and is the owner and beneficiary of) a life insurance policy on the other. Upon Jeff’s death, Matt receives the policy’s death benefit, which he uses to purchase Jeff’s shares from Jeff’s estate. In turn, that cash payment gives Jeff’s family needed income to offset the loss of his earnings. Cross-purchase plans have several advantages. For example, the surviving shareholder receives a “step up” in the income tax basis for the stock bought

from the deceased’s estate. This could reduce income taxes when the surviving shareholder subsequently sells the stock. Additionally, with cross-purchase agreements, the insurance proceeds are not subject to the corporate AMT, or alternative minimum tax, nor to the claims of corporate creditors. A disadvantage of these plans is that they can be hard to administer if there are many owners. Since the shareholders individually own policies on the lives of their fellow shareholders, multiple policies would be required in a situation where there are several shareholders. For example, if there were four shareholders, twelve separate insurance contracts would be needed.

Stock Redemption Agreement In this situation, Ajax Engineering, Inc. buys and owns insurance policies on the lives of Matt and Jeff. When Jeff dies, the corporation buys his stock with the insurance proceeds. The stock is subsequently retired as “treasury stock” (absorbed back into the company). Stock redemption plans may make sense when there are multiple owners of the corporation, there are large differences in age and ownership levels among the owners, or the corporation is in a lower tax bracket than the owners. Two potential drawbacks to these plans: the death proceeds received by the corporation may be subject to the corporate AMT and the surviving shareholders do not get the benefit of an increase in the income tax basis of their shares when the corporation redeems the stock. Hybrid Agreement— ‘Wait & See’—Buy-Sell This agreement is structured much as it says—shareholders can wait and see whether to use the cross-purchase approach or the stock redemption approach until a trigger event such as death or disability occurs. It is basically an agreement with a first right of refusal. The first option to purchase is extended to the surviving shareholder(s). If this option were to be exercised, the transaction would occur under the cross-purchase scenario. If this first option were not exercised by the surviving shareholder(s), the company would be required to purchase the busi-

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Landye_Hume_AKBusMon_2013_Layout 1 12/20/12 10:50 AM Page 1

ness interest from the deceased shareholder’s estate. This transaction would amount to a stock redemption.

Minimize Taxation Not knowing what the future may hold for corporate vs. individual tax rates, step-up in basis rules, AMT legislation, or capital gains tax rates, having the flexibility to define the sales transaction as a cross purchase or stock redemption often provides the best of both worlds. Whichever approach best fits the shareholders’ needs, based on the facts and circumstances when the sale transaction occurs, can be used, thus minimizing taxation and providing for a seamless transition of business control. Buy-sell agreements can help protect your business and your family. Seek the guidance of a professional financial adviser who can identify the various issues and considerations that will help determine what type of buy-sell agreement makes the most sense for you. R Mel B. Bannon, CLU, ChFC, RFC, CA Insurance License #0412338, is a registered representative of Lincoln Financial Advisors Corp. Securities offered through Lincoln Financial Advisors, Corp., a broker/dealer (Member SIPC). Investment advisory services offered through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor. Insurance offered through Lincoln Marketing and Insurance Agency, LLC and Lincoln Associates Insurance Agency, Inc. and other fine companies. 31111 Agoura Rd., Ste. 200, Westlake Village, CA 91361 (818) 540-6967. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances. CRN-1139488-030315 www.akbizmag.com

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Legal Speak

By Andrea N. Canfield

Pass-Through and Disregarded Business Entities A tax advantage Alaskans should know about

very business—regardless of the size, the number of employees, or the industry—is subject to state and federal tax. For this reason, all business owners at some point will ask the same question: how can my business pay less in taxes? Surprisingly, the answer may be as simple as using Alaska residency as part of their tax planning strategy. Alaska, after all, is one of only two states in the Union that offer both no income and no state sales tax to its residents. Additionally, Alaska’s overall tax burden ranks among the lowest in the country at about 7 to 7.5 percent annually. These tax advantages, which generally benefit the individual taxpayer, can also be used to benefit businesses as well.

Pass-Through Entities Consider the tax implications of the four main types of business entities: corporations (which can be taxed as either C corporations or, under certain circumstances, S corporations), sole proprietorships, partnerships, and limited liability companies (LLCs). For both federal and state income tax purposes, the C corporation is a separate entity from its shareholders, the owners of the corporation. As a result, the profits of a C corporation are subject to double taxation: first at the corporate level when income is earned and again at the individual shareholder level when profits are distributed or stock is sold. In contrast, S corporations, sole proprietorships, partnerships, and LLCs are not automatically treated as separate entities for federal or state income tax purposes. The profits realized 20

Alaska, after all, is one of only two states in the Union that offer both no income and no state sales tax to its residents. Additionally, Alaska’s overall tax burden ranks among the lowest in the country at about 7 to 7.5 percent annually. These tax advantages, which generally benefit the individual taxpayer, can also be used to benefit businesses as well. through entity. If a company operates as a partnership, sole proprietorship, or LLC, the default is to treat that company as a pass-through entity. A domestic LLC with more than one owner can, however, ignore the default and elect to be treated as a corporation. In contrast, the owners of an S corporation must affirmatively elect pass-through status. Fortunately, the election process is relatively simple. Accounting for the income of a passthrough entity is not as simple. The owner of a pass-through entity must prepare and file a separate income tax return despite the fact that business income will be reported on the individual owners’ tax return. Andrea N. Canfield

by any of these four types of entities can pass to the individual owners without first being taxed at the corporate level. Thus these entities, commonly referred to as “pass-through entities,” offer the advantage of avoiding the double taxation that applies to C corporations. This tax advantage is even more valuable to Alaska resident business owners who can also escape owner-level income tax. It is relatively easy to form a pass-

Disregarded Entities Just as corporations are owned by shareholders, LLCs are owned by members. A multi-member LLC is, as discussed above, a pass-through entity unless it elects to be treated as a corporation. If the entity is a single-member LLC, however, the default is to treat the entity as disregarded. Disregarded entities are in some respects very similar to pass-through entities. Both types of entities are passthrough entities insofar as they are not themselves subject to federal and, in

Alaska Business Monthly | June 2015 www.akbizmag.com

Alaska, state entity-level income tax. The Alaska resident owner of a pass-through or disregarded entity can avoid ownerlevel income tax. Both types of entities can be formed easily with the use of the applicable election or default tax treatment. Finally, and perhaps most importantly, both entities provide liability protection to their owners. If, for example, a pass-through or disregarded entity is sued, the owners are not personally liable for any liabilities of the entity. Despite these similarities, however, several distinctive characteristics have enabled disregarded entities to grow in popularity among business owners. As a disregarded entity, for instance, the assets and income of the entity are treated as the assets and income of the member. The member essentially owns every item that is purchased, sold, or acquired by the entity. Additionally, unlike owners of pass-through entities, the sole member of a disregarded entity generally is not required to file a separate tax form. The income tax consequences related to the operation of a disregarded entity are accounted for on the tax return of the owner.

Conclusion With increased pressure to cut costs and improve efficiency, business owners are constantly searching for simple ways to save money. Many business owners have found the tax advantages provided by pass-through and disregarded entities to be the perfect solution. This is certainly true in Alaska, where over 70 percent of the new or newly registered businesses in 2014 claimed passthrough or disregarded status. This statewide popularity is arguably due to the added benefit pass-through and disregarded entities provide Alaska resident business owners. R Disclaimer: This article is limited in scope and in detail. Please consult a professional before choosing a business entity.

Andrea N. Canfield is an attorney with Stoel Rives LLP whose practice focuses on counseling Alaska-based clients in general commercial transactions and mergers and acquisitions. Contact her at andrea.canfield@stoel.com. www.akbizmag.com

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FISHERIES

Wild Alaska Salmon Advantages Go Beyond Taste and Texture

Troll caught salmon in Southeast Alaska. ÂŠ Chris Miller / Courtesy of Alaska Seafood Marketing Institute

Alaska Business Monthly | June 2015 www.akbizmag.com

Price crash in 2000 led to industry innovations and superior product By Will Swagel

ost people agree that competition is good for any industry, leading to innovation and efficiency. But try telling that to a glumfaced Alaska salmon fisherman circa 2000; it’d be a tough sell. In the 1990s, Atlantic salmon raised on fish farms flooded the retail market and the price of Alaska wild salmon crashed. The fish farms could offer a fresh whole fish or custom fillets, butchered and shipped immediately and available on demand. While the Alaska wild product was intrinsically superior, Alaska processors could offer only frozen product or fresh product available just part of the year. The situation grew dire when Alaska’s wild salmon runs underperformed and ceded even more market share to the

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farmed fish that were streaming into the United States from Norway, Scotland, Chile, Canada (via British Columbia), and other coastal nations. “The growth of the salmon farms was prolific,” says Tyson Fick, communications director for the Alaska Seafood Marketing Institute (ASMI). “That really culminated into desperate times for the wild salmon market in late 1990s and early 2000s.” During that time, the industry lost more than half of its fishermen and processing companies. Alaska’s fishermen, processors, marketing boards, and the state and federal government responded to the economic emergency and have achieved an almost complete turnaround. Today, the industry enjoys high prices for both fish and fishing permits. Although farmed salmon dominates today’s market worldwide, the market for wild Alaska salmon is healthy and growing. The Alaska product fetches premium prices. Fishermen have embraced such technical innovations as chilled seawater holds and consistent bleeding and icing of fish at sea. Processors have developed consumer-friendly products and packag-

ing and have greatly improved the quality of their fresh and frozen offerings. Eric Jordan, a salmon troller in Sitka, remembers receiving only about $1 per pound for “beautiful, troll-caught king salmon” in 2002–2003. In the winter of 2014–2015, he scored $11 per pound for king salmon that was shipped fresh. “We can hardly afford to eat our own fish,” Jordan says.

Charity Begins at Home The story of Kodiak-based purse seiner Bruce Schactler illustrates some of the changes in marketing Alaska wild salmon. Schactler says he started as a “simple salmon fisherman” who also was reeling from the low prices he was paid for his catch. Today, Schactler is the director of ASMI’s Global Food Aid Program. In the mid-1990s, Schactler joined an ASMI program that sent a small army of Alaskan fishermen to supermarkets in the Lower 48 to offer samples of their salmon to customers. Schactler was sent to stores in Cincinnati and Dayton, Ohio. While the fishermen told stories to customers, cooks sautéed coho fillets on a portable cooktop.

June 2015 | Alaska Business Monthly

Canning wild Alaska salmon. Courtesy of Alaska Seafood Marketing Institute

“They couldn’t cook fast enough, there was always a line,” Schactler says. “The customers wanted to hear the stories and sample the fish.” He says the store demonstrations were backed up by radio interviews and articles and ads in local newspapers. “[The promotion] was quite successful,” he says. “It was the beginning of a new type of marketing effort for the state. At the time, we were trying to figure out anything that would stem the flow [of market share to farmed salmon].” They studied opportunities in product development, quality, infrastructure improvement, and government regulations and legislation. In 2003, Schactler became concerned about a growing glut of canned salmon. He began working on a plan to change the industry through new markets and program development, which received the enthusiastic go-ahead from thenGovernor Frank Murkowski. 24

Schactler says the subsequent creation of the Alaska Fisheries Marketing Board by then-US Senator Ted Stevens—using his ideas and legislation to create it—was a major contributor to the surge in new product development in the salmon business. Schactler promoted Alaska canned salmon to domestic and international aid agencies. Canned salmon provides excellent protein, has a long shelf life, doesn’t need potable water or cooking, and is kosher, meeting the dietary restrictions in some parts of the world. This last year, more than a million cases of canned salmon were sold to domestic and international feeding programs. “In the world of food aid, it is almost a luxury item, but nutritionally, it is pure rocket fuel,” he says. “Our Global Food Aid Program has expanded a lot in the last thirteen years,” says Schactler. “[And] I think we have probably expanded commercial

sales around the world because of it.” The theory is that introducing new customers to canned Alaska wild salmon can pay dividends in the future. “There’s a saying,” Schactler says. “A country today that is a food-aid country today will, in the future, be a customer.” While canned salmon is an excellent food, it is heavy to ship and has grown more expensive as the price of Alaska wild salmon has increased as much as fivefold and quadrupled at retail. Schactler is among those developing new products for the food aid community, including a protein powder made from salmon (or other fish). The powder, easy to transport, could take the place of meat in stews or soups. Manufactured from fish heads and frames, the powder is 65 percent to 90 percent protein and can be fortified with trace elements, such as iron. “The protein powder has been extremely well received so far by those who are eating it,” he says. “People around the

Alaska Business Monthly | June 2015 www.akbizmag.com

world are watching and waiting to see when this is a product they could buy.” The protein—along with canned herring—is being tested in pilot projects in Africa. Schactler says both products are proving easy to use and nutritionally rich.

McSalmon This kind of innovation in the wild salmon industry is apparent industrywide. A good example is Trident Seafoods’ best-selling salmon burgers. John Salle, Trident’s vice president of marketing and innovation, says development of the burger was in direct response to the flood of farmed fish and the need to find new markets, especially for pink salmon. “To compete with farmed salmon, you have to put your finished product in a form that’s easy to prepare and convenient for consumers,” Salle says. Studying the market and armed with matching grants from the Alaska Fisheries Marketing Board, Trident decided to throw itself into producing a highquality salmon burger. Previously, Salle explained, the majority of salmon burgers on the market

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were created as a way to utilize the lesschoice parts of the fish, like trimmings and bellies. “We started from scratch and asked ourselves if we were going to make a great-tasting salmon burger, what would we do? So, instead of using trimmings we actually used top-quality whole fillets of both pinks and chum salmon,” he says. Today, the company uses tens of millions of pounds of Alaska pink and chum salmon in their burgers. The burgers are sold nationwide, including in major store chains like Costco. Trident is now producing an Alaska pollock burger as well. But the company’s innovative push didn’t stop with burgers. In addition to creating “exact weight” portions of pink and keta (another term for chum, based on its scientific name) salmon, Trident began producing a fully-cooked, grillmarked, pink salmon fillet that restaurant operators can simply thaw and serve in sandwiches, salads, and teriyaki bowls. “We’ve taken virtually all the work out of serving wild Alaska salmon and provide an exciting new menu option to

restaurants that don’t have the expertise or the equipment to cook it,” Salle says. “So even a deli can now serve a poached salmon sandwich—they don’t even need a stove.” Trident has made other changes to improve Alaska wild salmon’s convenience with its recent introduction of a ready-to-eat, individually-packaged cream cheese-filled salmon stick under its popular Louis Kemp brand. “Full utilization of the resource is the other leg of sustainability and the right thing to do,” Salle says. “Products such as our Alaska Naturals crunchy pet treats and Pure Alaska Omega oil supplements for people are utilizing more of what we catch and filling other voids in the marketplace.” Salle says Trident’s wild Alaska salmon oil is cold-pressed and extra virgin and is superior to many other fish oil supplements.

Emergency Funding While fishermen and processors made profound investments to improve their product, they also received help from both Juneau and Washington, D.C.

June 2015 | Alaska Business Monthly

Patented Fish Grinder Designed in Alaska Rendering of the water-powered fish carcass grinder designed by Alexandra West. Courtesy of PND Engineers

By Russ Slaten

lexandra West, staff engineer at PND Engineers, Inc. and University Honors College graduate with a civil engineering degree from the University of Alaska Anchorage (UAA), was awarded US Patent 8,833,682 B2 for designing a water-powered fish carcass grinder aimed at lowering the interactions between fishermen and wildlife. Inspired by life growing up along the Kenai Peninsula with a father who was the former manager of the Kenai National Wildlife Refuge, West was raised knowing the concerns of minimizing human and bear interactions during the summer sockeye salmon runs. Along the major fishing zones of the Kenai and Russian rivers, fishermen discard fish carcasses in the water that end up West downriver, attracting bears and eventually leading to dangerous humanbear interactions. State, federal, and tribal entities have tried to encourage fishermen to use hand-powered grinders, chopping disposable fish parts into small pieces, packing the fish whole, and by completely removing fillet tables along the river. “Fish and Game currently tells anglers to ‘stop, chop, and throw,’ involving filleting your fish, chopping the carcass into small pieces, and then throwing them into fastmoving water. Chunks still get caught up in eddies and end up on the banks, and it’s a tasty treat for bears,” West says. As a senior undergraduate thesis project for UAA’s Honors College, West decided on making a disposal system that would grind fish carcasses near the banks of the river using a hydro-powered device connected to a generator. 26

“It’s a floating, paddle wheel device in the river. The angler would fillet the fish on the table and then throw it down a slide that would send the remains through a grinder encased in a hopper. The device would then grind up the fish and be placed back into the water,” West says. West conceptually designed and sketched the device in 2011, and UAA Vice Provost for Research and Graduate Studies Dr. Helena Wisniewski approached her to pursue a patent. UAA paid for the initiation fees, attorney fees, and patent upkeep. After receiving her patent on September 16, 2014, West became the first student to earn a place on UAA’s Patent Wall of Fame. Although the patent went through in 2014, West is still working with current civil senior design and senior mechanical engineering students at UAA to fine-tune her design with hopes to fabricate a prototype this summer, she says. UAA engineering students Brandi Opsahl, Jennifer Baker, and Nathan Harris are fleshing out the design details of materials used, dimensions, and cost estimates. Permitting now plays a major role in whether the project will become a reality this summer. “The US Forest Service has a chunk of land, and then right on the edge where we want to put [the fish grinder] the land transfers to the US Fish and Wildlife Service,” West says. “They’re all excited about it, but it just requires coordination, money, permitting, and testing in order to get this up and running.” R Russ Slaten is an Associate Editor at Alaska Business Monthly.

Now retired from the Alaska Legislature, Alan Austerman represented Kodiak in the House of Representatives between 1997 and 2003 and again from 2009 to 2013. For four years in the interim, he went to work as Murkowski’s fisheries policy advisor, just about at the low point of Alaska salmon. “He basically put me in charge and told me to go fix it,” Austerman says. In Juneau, Murkowski appointed a subcabinet group composed of representatives of various state agencies, including the Alaska Fish and Game and Commerce departments. In Washington, Stevens secured $35 million in federal funds to deal with the salmon emergency. Austerman’s group identified another $15 million in Alaska Department of Fish and Game funds (not spent administering the transboundary Pacific Salmon Commission) that was diverted to the emergency marketing effort. Austerman says more than $7 million was paid directly to fishermen and coastal communities to help “make them whole.” The rest of the money was distributed to those industry stakeholders who wanted to re-tool their operations. The stakeholders were asked to put up their own money as well. He estimates the $50 million in emergency funds probably resulted in industry investments of $130 million. ASMI responded to the emergency by reforming itself. The group’s governing board was restructured, from having more than two dozen seats to having only seven. This move, Austerman says, encouraged the larger seafood companies to send higher level executives to meetings and allowed more effective decision making. Today, the ASMI board is working on ways to get Alaska wild salmon better recognized in the European market as a sustainable product. In April, a large group of Alaska seafood producers who had left the Marine Stewardship Council three years ago decided to rejoin. They hope the certification, along with an ASMIconnected program known as Responsible Fisheries Management, will help sell more salmon in Europe by offering buyers a wide choice of certified options.

Taste Profiles Jordan also participated in ASMI’s “fishermen in the stores” promotion, serving samples of chum salmon to customers in

Alaska Business Monthly | June 2015 www.akbizmag.com

Courtesy of Alaska Seafood Marketing Institute

Alaska Seafood Marketing Institute releases the Seasonal Harvest Guide to inspire home cooks and foodies: “Seafood for All Seasons” illustrates the array of Alaska seafood available year-round timed with the opening of Alaska halibut and black cod harvests.

Dallas, Texas. A lifelong, second-generation fisherman and an active member of fisheries advisory groups, Jordan is clearly proud and excited about the changes he has seen in his industry of late. There has been wide adoption of methods—like bleeding and icing fish at sea—that greatly boost quality. Fishermen who used to store their fish in dry holds now store their fish in chilled seawater. Chain-of-custody systems—like computer tracking of fish—ensures that processors can track their production and distribution and quickly identify fish whose handling has been compromised. “The whole industry is focused on producing a quality fish from the time we catch it until the consumer is putting that piece of fish in their mouth,” Jordan says. “Whether we’re freezing [fish] or it’s shipped fresh, we’re learning to do that. The farmed industry has challenged us to improve.” In places like Sitka during the salmon crisis there was plenty of acrimony aimed at farmed salmon. A popular 28

bumper sticker at that time read: Friends Don’t Let Friends Eat Farmed Fish. But Jordan joins many others in the Alaska fishery industry who avoid criticizing farmed salmon. Instead they prefer to emphasize the superiority of wild Alaska fish, much the same as producers of free range meats market their fare. And, much the same as free range meats, wild fish have a firmer texture than fish raised in crowded pens. The Alaska fish are also free of the antibiotics needed to cope with diseases that can arise from that crowding and of the dyes farmed salmon receive to make their flesh a desirable bright red color. Jordan says he has signed up for a program called “This Fish” which allows home or restaurant chefs to track exactly what boat caught their salmon. “Europe is leading the way,” Jordan says. “The consumers [there] want to know right where their fish was caught or farmed and by whom.” Consumers in Europe—and, increasingly, in the United States—want to ensure

that their seafood comes from sustainable fisheries. They also want to be sure that processors use all parts of the fish. Tim Ferleman is the operations director and seafood buyer for Anthony’s Restaurants, a group with twenty-five restaurants in the Puget Sound area, Eastern Washington, and Oregon. Anthony’s serves only wild salmon. Ferleman echoes Jordan’s comments that the qualities of different fish, feeding on the different feed, can make for a distinctive dining experience. “There are all these different catch methods and species of wild salmon,” Ferleman says. “You’re going to get different eating experiences and flavor profiles. That is what makes wild salmon so much better.” “We map out all these salmon seasons,” he continues. “I know about July 15, I’m going to start buying troll-caught silver salmon out of Southeast Alaska.” R Author and journalist Will Swagel is based in Sitka.

Alaska Business Monthly | June 2015 www.akbizmag.com

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WORKFORCE TRAINING

Alaska Process Industry Career Consortium Developing the framework to replace an aging workforce

By Mike Bradner

espite the petroleum industry’s current challenges, much of Alaska’s natural resource-based economy is doing fairly well, it appears. The state’s six producing mines appear to be profitable and most are expanding, adding resources and new production. Seafood appears to be doing well, with another record-breaking salmon harvest likely in 2015. Even oil and gas employment remains strong, at least for now, although the current activity is mostly with projects committed to before crude oil prices plunged in late 2014. Industries that support basic resource industries, like construction and transportation, are also holding their own, if employment statistics are any indication. This ebb and flow is, however, a common challenge that faces all of these industries. Despite commodity swings, oilfields and mines will continue to produce. There will be needs for service, support, and maintenance. Since what goes down comes up, eventually, the prudent operator must be prepared for the upswing. The challenge all of Alaska’s traditional “blue-collar” industries now face is that their workforces are aging; skilled workers are retiring and must be replaced. This is a real problem during a down cycle. Young people may not perceive a future in such fields, and education and training takes years. Low prices may impair training budgets and funding for university workforce programs. Right now, with the state budget hit hard by declining oil revenues, the university and the resource industry community is worried about preserving the training infrastructure that has been established. Training is increasingly needed, too, and industry can’t do it all. “Seventy eight percent of middle-wage jobs require some kind of certification,” says Cari-Ann Ketterling, acting director of Alaska Process Industries Career Consortium (APICC). “We want to work with the training providers, including the university, to ensure that the skills 30

that are currently needed are what is being taught.” APICC is a consortium of industries formed to help coordinate training in the process technologies.

Identifying Critical Skills Mining, one of the state’s oldest industries, offers a prime example of an industry that could be soon expanding, but yet is already struggling with an aging production workforce and recruitment issues. Mining is not one of the state’s major employers, unlike seafood or tourism, but the jobs pay well—$100,000 per year on average, second only to petroleum—and most mining jobs are steady and year-round, not seasonal, since the state’s large producing mines operate twelve months of the year. Wages in mining have been growing much faster than wages for the state as a whole, up 22 percent between 2002 and 2011 compared with an 8 percent average wage growth for all Alaska private sector workers. About 4,600 Alaskans were employed in mining in Alaska in 2013. That number has been increasing gradually in recent years. With several new mining projects being planning and existing mines being expanded, the industry is expected to grow about 2,000 two thousand over the next decade. That need must be coupled with the needed replacements of retiring workers. “Within the current workforce there is considerable aging of higher skilled employees; for example, 47.1 percent of mechanics, 51.1 percent of mining materials engineers, and 65.4 percent of mining machine operators are forty-five years of age or older,” according to the Alaska Miners Association’s workforce development plan. Many jobs in mining require skills similar to construction, oil and gas support, maritime, and even fisheries in some respects (maintenance in seafood plants, for example). Similar statistics of an aging skilled workforce are seen in all these industries. Fish harvesting can be

included, too, since the average age of a salmon limited-entry permit holder is now fifty. While healthcare is not a “blue-collar” industry like mining or oil and gas, it provides support to those industries and has become an important part of the state economy. Although the healthcare workforce has a younger demographic than, say, construction, there are critical parts of it that are aging. Many physicians in private practice are approaching retirement, for example, and Alaska already has a shortage of physicians. Concerned about the trend, in 2011 the mining industry began preparation of a workforce development plan through its industry association, the Alaska Miners Association, and by 2013 had completed an assessment to identify high priority occupations where special skills could be in short supply. Four basic categories of skills were identified:  Heavy equipment operations, including underground miners; drillers and blasters; haul truck drivers, and equipment operators.  Maintenance technicians, including millwrights, diesel mechanics, and electrical and instrumentation technicians.  Process technology, mainly mill operators.  Engineering, including mining and mechanical engineers, geologists, metallurgists, and skilled support staff like metallurgy, chemical, geological, and environmental laboratory technicians. The seafood and maritime industries initiated similar efforts to identify critical skills and potential shortages, as did the healthcare industry. The petroleum industry has been seriously looking into the effort for about eighteen years.

Training Investments The foundation of many of the industry efforts was in the formation in 1998 of

Alaska Business Monthly | June 2015 www.akbizmag.com

APICC, an initiative led by the petroleum industry and later joined by others like refining companies, Agrium Corporation with its large fertilizer plant near Kenai, mine operators, and utilities. What these industrial groups had in common was the operation of process facilities, such as oil and gas processing plants, power plants and refineries, and ore processing mills at mines. “Any industry that takes a raw material and turns it into something else typically uses some form of process control technology to manage flow, temperatures, and pressures. All this is much more automated, and highly technical, than it was thirty years ago when things were more ‘hands-on,’” says Ketterling. In 1997 and 1998 the petroleum industry was concerned with the aging of its existing process technology workforce, with pending retirements and a potential shortage of operators. APICC was formed to provide a mechanism for companies operating processing facilities to work together with training providers like the University of Alaska to establish courses and certification standards for operators. For the training community it was a chicken-or-egg question. To make the investment in establishing training, information was needed on what skills were needed and how many workers would be required. Only the industries involved could provide this information, and APICC became the forum where agreements could be reached not only on what skills were needed but also skill descriptions and how many workers might be needed. Some of this involved sensitive information—a company’s estimate of future plans and human resource needs is usually confidential—but a method was worked out through APICC to compile data in aggregate while maintaining confidentiality for individual companies. This was crucial for the training community to invest to meet the demand for skilled workers. The results were highly successful. The university established two-year process control Associate Degree programs on three campuses (in Fairbanks, Anchorage, and Kenai) and many companies stepped forward to provide scholarships and internships, which gave employers a way to spot promising future employees. The program has continued to this day with about two hundred people enrolled on the three campuses, with about sixty www.akbizmag.com

graduates a year, Ketterling says. About 80 percent are hired by the oil and gas industry, with BP hiring the most. One part of APICC’s core mission is still to ensure communication between industry and the education and training community so that trainers are able to keep up with changes in industry work practices and needs, Ketterling says.

Aggregation Gains Collaboration APICC has meanwhile set the paradigm for other industries that similarly are composed of firms and organizations that are often competitors and need a way to collaborate to reach a common goal—in this case, workforce development. While each industry has followed a similar path it has done so in different ways, most often not as formalized as APICC, which is now an independent nonprofit. The mining industry, for example, works through the human resource committee of the Alaska Miners Association to communicate with the university in training skilled miners: in the past underground miners and more recently planning for a new program to train mill operators. The construction industry has the Alaska Construction Education Foundation, which works with schools and Alaska Construction Academies. The healthcare industry has its own informal consortium to work with the university, an initiative largely led by Providence Health & Services Alaska and Fairbanks Memorial Hospital, which led to a highly successful university program to train nurses. A recent initiative is to identify sets of common skills demanded by several industries, which can provide opportunities for collaboration in working with the university or other training providers and state agencies like the Department of Labor and Workforce Development, which administers federal training funds. APICC was to host a multi-industry meeting in May to identify the crossskills that are identified common to several industries, Ketterling says, with a report expected to be published in the fall. The report will provide important information for the principle state entity that guides much of the federal and state funding available for training, the Alaska Workforce Investment Board. The board, composed of industry and state officials, makes recommendations on the allocation of state and federal training funds. June 2015 | Alaska Business Monthly

Training Locations Impede Access For the mining industry, meanwhile, the preparation of a formal workforce plan has been helpful. “The assessment process [in the plan] identified needs, with training providers contacted to obtain information on current and planned programs,” the plan said. “Alaskan training and education institutions have a number of programs that can prepare Alaskans for most of the entry-level positions in the various mining occupations,” the miners’ association said in the plan. However, “there are some gaps, both in programs—such as for metallurgists— and in the numbers of graduates from the programs, such as machinists, mechanics, and geo-technologists.” The report emphasized the importance of regional training, however. “The largest issue with the current training picture in the state is not availability but access. For many of the priority occupations, training may be offered but at a site that requires relocation by a potential employee,” the miners’ plan said. “Such relocation can be expensive not only in terms of financial outlay but

also in time away from family and often results in students dropping out of the training before completion. Providing training at multiple locations throughout the state is a more efficient way of meeting workforce needs,” the report said. Developing and maintaining a strong, regionalized system of training in the state is a challenge even in good times, but even more so when times are economically challenged. State general funds for regional training centers in King Salmon, Nome, and Kotzebue are sharply cut for the next state fiscal year beginning July 1 to about half the levels provided in the current year. The Department of Labor and Workforce Development is currently working on ways to keep the regional centers operating, along with state job centers in outlying communities. The training centers have some access to federal funds and certain other state funds, and the labor department is working on ways of sharing facilities to keep the job centers open.

Long-Term Commitments In a paradox, the demand for training is actually greater during times of downturn because workers temporarily out of work

frequently seek training to upgrade their skills, to be ready for the next upswing. It is critical, during these times, to maintain the training infrastructure. State and industry officials engaged in workforce development are now struggling with this. Another aspect, however, is retention of workers once they are trained, the miners association said in its plan. “Securing an adequate workforce is only part of the equation. Equally important is keeping the workforce in place,” the miners’ plan said. “A positive work environment that respects the culture of the region and training that allows upward movement on a career ladder provide incentives for employees to make a long-term commitment to a company or a project,” the association said in its plan. All this will take everyone working together. “These action steps stress the need for program alignment across training institutions, collaboration among training partners and industry sectors and regionalization of program delivery,” the miners said. R Mike Bradner is publisher of the Alaska Legislative Digest.

Alaska Business Monthly | June 2015 www.akbizmag.com

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INSURANCE

Courtesy of Crowley

Protecting the Fleets in Alaska Waters

Crowley tug Nachik and barge DBL 165-2 off the coast of Kotzebue. The Nachik is a shallow-draft tug and the DBL 165-2 is a double-hull fuel and freight barge.

Insurance critical for marine transportation, commercial fishing, and other maritime businesses

By Tracy Barbour

he Alaska Marine Highway System (AMHS) has been rolling along since 1963, providing passenger and vehicle service to more than thirty communities in Alaska, plus Bellingham, Washington, and Prince Rupert, British Columbia. The AMHS has a fleet of eleven vessels that carry an average 312,000 passengers and ninetyeight thousand vehicles annually. However, none of this would be possible without the marine insurance the AMHS has in place to protect its vessels, passengers, and employees from certain risks associated with running the extensive system. Primarily, the state carries hull and machinery insurance to cover physical damage to the vessels, as well as protection and indemnity (P&I) coverage for the liability exposures (including pollution). “The exposure/risk would be too great if [we were] completely self-insured, so having the coverage is critical to the continuous operation of the fleet,” says General Manager Captain John Falvey Jr. Marine policies protect commercial vessels—ships, barges, tugs, fishing boats, factory trawlers, charter boats, and even shipping containers—for insured losses. The loss can include damages caused by machinery, fire, sinking, collision, inclement weather, and/or a pollution-related incident like an oil spill. Insurance also provides financial compensation for eligi-

ble maritime crews and other employees who suffer work-related injuries.

Types of Marine Insurance The two main types of policies purchased by marine transportation, commercial fishermen, and other maritime businesses are hull and machinery and P&I, according to Terry Johnson, a marine advisory agent and professor with the Alaska Sea Grant Marine Advisory Program. Hull and machinery insurance covers the vessel and its attached components, including engines, deck machinery, and electronics. Coverage is based on either the agreed or actual value. And the policy offers protection against “all risk” or “named hazards.” P&I insurance pays fleet owners if they suffer financial loss due to accidents involving or caused by their vessels. Covered incidents can include personal injury, illness to crew, wreck removal, salvage expenses, certain fines and penalties, and litigation expenses. Vessel owners who transport cargo and/or passengers for hire might need additional liability coverage and/or a cargo policy for equipment and other items not fixed to the boat. And depending on the circumstances, some maritime businesses also need breach of warranty insurance. This insurance pays off a lender in the event a vessel doesn’t have valid coverage due to being in

violation of its policy’s navigation limits, lay-up terms, crewing, or other provisions. So how much insurance is enough? It boils down to how much the vessel owner can afford to lose. “You’re not just insuring a boat; you’re insuring a business,” Johnson says. “You’re also insuring your future, so take into account all the costs that would be involved if you have a casualty with your boat.” Technically, hull and machinery insurance is a function of the vessel’s value, as determined by a survey—which minimizes the chances of under or over insuring. P&I insurance is more subjective, with minimum coverage often dictated by the lender. A P&I policy may not be nearly enough to protect all the owner’s assets, but the idea is to provide a big enough payoff (if the owner is found liable) to buy off a settlement or pay a court-ordered judgement, Johnson says.

Technically not a Legal Requirement Marine insurance is a practical necessity because of the myriad of risks and responsibilities that vessel owners have, according to R. Isaak Hurst, Esq., principal attorney for International Maritime Group PLLC—a maritime law firm based in Seattle. Vessel owners have serious legal obligations toward their employees. Here’s why:

Alaska Business Monthly | June 2015 www.akbizmag.com

With respect to crewmembers, or “seaman” as defined by the courts, if an injury or death is caused by the negligence of a seaman’s employer or its fellow employees, the seaman can recover damages from his employer under the Jones Act (46 U.S.C. § 30104). Damages can include compensation for all past and future losses of income, expenses associated with medical care, compensation for pain and suffering, and disability associated with loss of enjoyment of activities of normal life. “Put differently, a seaman’s remedies are far more liberal than the benefits of a traditional worker’s compensation claim, which is why a vessel owner has such serious legal obligations to care for their employees should they become injured,” Hurst says. Owners also have a legal obligation to provide a seaworthy vessel to seaman assigned to the vessel. It can be difficult for a vessel owner to disprove he or she didn’t have a duty to provide a seaworthy vessel in the event a crewmember gets injured or killed on the job, according to Hurst. However, if a seaman’s death or injury was caused by “unseaworthiness” of the vessel, remedies similar to those available under the Jones Act could be warranted. “Indeed, the reality is that seaman, which courts classify as ‘wards of admiralty,’ are a protected class of employees under US law,” Hurst says. “And because of the dangers these individuals are exposed to on a daily basis and the concurrent benefits they provide to maritime commerce and national defense, seaman have a longstanding right to be protected under the law and are entitled to liberal interpretation of the concepts of negligence to foster their protection.” That aside, although vessel owners have strict legal obligations to their vessels and crew, there’s no hard-and-fast legal requirement for them to have insurance coverage, says Hurst. However, certain federal and state laws indirectly require vessel owners to carry certain amounts of insurance. For example, every seaman who becomes ill or injured during his or her employment—regardless of any fault of the vessel owner or operator—is entitled to maintenance, cure, and unearned wages as a matter of right. “Indeed, these are very serious legal obligations imposed on vessel owners, which is why most vessel owners take out some form of P&I insurance to cover for their maintenance and cure obligations,” Hurst says. www.akbizmag.com

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Without P&I insurance, a vessel owner is personally assuming the responsibility for exposures (including any maintenance and cure or Jones Act liabilities) that occur on his or her vessel. And this amounts to financial and legal roulette, given the potential damages involved, Hurst says.

Covering Alaska’s Marine Needs Marine policies, essentially, allow fleet owners to transfer certain business risks to insurance underwriters. The risks associated with these types of policies are a unique and constantly-evolving area of insurance. So it’s important, Hurst says, for vessel owners to work with a broker who is familiar with marine insurance policies, has access to the domestic marine insurance market for shopping purposes, and who is plugged into the Lloyds of London syndicate. However, finding an insurance broker with this maritime expertise in Alaska can be difficult. Consequently, maritime businesses in Alaska often turn to companies based in the Lower 48, such as USI, for insurance. With regional offices in Anchorage, Northern California, Oregon, Washington, and Idaho, USI provides property casualty insurance, risk management consulting, and other services. USI’s ONE Advantage process integrates analytics, resources, and enterprise planning tools to customize marine policies with insuring terms and conditions to the specific needs of businesses, according to USI Alaska President Bosco Baldwin. This ensures that clients’ specific risks are identified and covered in the policies. “We have access to a variety of insurance markets in order to arrange the coverage on behalf of our clients,” he says. “Which market is used depends on what they need.” Baldwin adds that no two marine risks or vessels are the same, and each one has unique risks depending on the type of vessel and the usage. “All policies are written after extensive underwriting with the insurance carriers who quote and confirm the coverage,” he says. “Endorsements are written to correct or amend the insuring terms to the individual risks.” The Alaska market is complicated, given its location, environment, and weather, Baldwin says. However, the Alaska and the Northwest region are uniquely tied together. “The marine, transportation, fishing, and environmental industries are interesting examples of how 36

our economies and communities are intertwined,” Baldwin says. “We support these special connections with our marine insurance practice and service.”

Meeting Their Needs Vessel operators in Alaska are satisfying their insurance needs in a variety of ways. Take the AMHS, for instance. Its fleet of eleven vessels consists of nine passenger roll-on/roll-off vessels and two fast ferry roll-on/roll-off vessels. The AMHS carries ample hull and machinery insurance, along with P&I coverage to handle the inherent risks involved with transporting people, vehicles, and goods. “The state has excess coverage for hull and machinery with a $500,000 self-insured retention with Lloyd’s of London,” Falvey says. “The hulls are insured to value. The protection and indemnity coverage is insured with SKULD-Consolidate with a $500,000 [self-insured retention] and $1,000,000,000 policy limit.” Crowley, which has been providing marine transportation, logistics, and other services in Alaska since 1953, has a comprehensive insurance program to cover its global operations. The company owns about 150 vessels worldwide, ranging from tugs, barges, and container vessels to heavy lift vessels, oil spill recovery vessels, and tankers. Its vessel liabilities are insured through entries into the International Group of P&I Clubs, sometimes simply referred to as the “International Group” or “IG,” according to says Laurie Luke, director of risk management for Crowley. “All combined, the IG insures 95 percent of the world vessel fleet,” Luke says. “The thirteen clubs which are part of the International Group are able to offer significant limits of liability due to the combined financial strength of the mutual funding of the individual members of each Club, bolstered by the largest reinsurance contracts in the world. The current limits provided are oil pollution, USD 1 billion, and an aggregate of passenger and crew risks of USD 3 billion,” Luke says. Hull and machinery coverage is also an important component of Crowley’s vessel insurance program. The company insures the values of each vessel, and the combined values are reinsured throughout the world on a subscription reinsurance basis. Its insurers and reinsurers are selected from a network of the highest caliber underwriters. “For Crowley,

financial security and service levels of those reinsurers have priority over pricing relative to selection,” Luke says.

Alternative Source on Offer When it comes to marine insurance for commercial fishing, vessel owners often secure policies through trade groups and associations. Some examples are Bristol Bay Reserve, Southeast Alaska Fishermen’s Alliance Reserve, and Seine Vessels’ Reserve. A self-insurance pool is another option for vessel owners wanting to avoid the high cost of traditional insurance. With a pool, members of an organized insurance group collect money in a fund to pay claims and sometimes dividends. However, insurance pools may not be feasible for everyone. They often require a larger amount of cash up front and have strict membership requirements. In some pools, members can get expelled after having just one claim. “A lot of the small guys who have been kicked out of the pools or who can’t afford the pools are left by the wayside,” Hurst says. Hurst says he’s noticed vessel owners trending away from using self-insurance pools. This could be attributed, in part, to some of the adjustments carriers in the domestic market are making to meet customers’ budgets and needs, he says. Terms Are Negotiable Hurst has also noticed that marine policies are becoming more expensive and are consuming a bigger portion of vessel owners’ annual budget. “As a result, I feel like a lot of smaller owners are underinsuring their boats,” he says. But insurance policies can often be adjusted by tailoring the terms. “A lot of people don’t realize you can negotiate the hull apart from the machinery to lower the costs,” Hurst explains. Johnson reminds fleet owners that marine insurance premiums are largely negotiable, thanks to controllable factors like the deductible and lay-up period. He also advises owners to discuss options with their broker or agent, to read their policy, and understand what is—and isn’t—covered: “There’s a long history of people who thought they were covered—only to find out there was an exclusion.” R Tracy Barbour is a former Alaskan.

Alaska Business Monthly | June 2015 www.akbizmag.com

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Transportation

Economy, Labor Shortages Big Issues for Trucking Industry

laska Business Monthly met the first week of April with Alaska transportation industry leaders to talk about some of the issues facing Alaska, facing the industry, and facing their companies. Saltchuk Managing Director Harry McDonald, Carlile Transportation President Terry Howard, Weaver Bros. Vice President Jimmy Boyle, and Alaska Trucking Association Executive Director Aves Thompson shared industry insights and most of that is in the print edition. The entire discussion appears online and in the expanded digital edition and mobile app.

Alaska Business Monthly

Harry McDonald of Saltchuk, Terry Howard of Carlile, Jimmy Boyle of Weaver Bros., and Aves Thompson, Alaska Trucking Association.

mitments they made. I know it’s challenging for everybody at these oil prices. But at the same time we know that on a state level with the budget deficits that we’re looking at there’s going to be some issues to deal with that are more than likely going to impact the economy as a whole. The state budget, of course, getting cut is going to impact everybody. There’s just going to have to be actions over the next year or two to get that spending in line with our income, and my personal opinion, and I’m no expert, is that this oil price could go for a good long while. I’m not optimistic that it’s going back to a hundred [dollars a barrel] anytime soon.

Alaska Business Monthly: What do you think are some of the issues facing the industry—the key issues?

Alaska Business Monthly: Are you talking for years? Or ever?

McDonald: Well I think the biggest issue we’re looking at right now is undoubtedly the economy, because it’s kind of a strange situation at this exact time because right now there’s more work than we’re able to produce. I think we’re backed up and I think the other carriers are too, especially with the North Slope. Well, partly because it’s spring time and there’s ice floes and everybody’s getting out and it’s always busy at this time of year. So, today, there’s a lot of work. We feel pretty optimistic with the oil companies’ work on the Slope—Exxon and Conoco. We were at an oil industry function last night and I think they’re moving ahead with the com-

McDonald: Well, Yes that’s above my expertise level, but I think if you look at the issues and we get the issues resolved with Iran, and we’re already producing 2 million barrels a day more than is getting consumed and Iran will add another million barrels a day. Well, that doesn’t seem like a good formula for oil prices to rise, but, things could change, and there are people that know a lot more than I, but I think we should be prepared for a longterm price more like what we’re at now. As far as the industry, my personal opinion, and, Terry [Howard] can kick in too, probably the single biggest issue we’re facing is labor. We have all these

programs for training and really it’s just a matter of not enough bodies coming into the system to replace retirements and attrition. And I think it’s universal. Everybody’s struggling to keep the trucks full of competent drivers. When we start talking gaslines and things like that there’s not enough labor—especially in Alaska—to even think about getting that project done. , maybe we’ll have a major depression in the US that will free up a bunch of labor and maybe from there, I don’t know, but the way it sits today and they’re talking four or five times as many loads a day as we’re moving [now] for several years, that’s going to be a single issue we’re going to have to get addressed to get ready for that. Howard: I would say the same. If you look at our industry or any of the industries, the craft personnel, that pool is very limited, a lot of your young people aren’t getting into it: whether that be mechanics or welders or drivers or warehouse people. We’ve all attended meetings about the gasline, and they anticipate a ramp-up of anywhere between forty-five hundred and five thousand people will be needed just on that project alone. Even at our current levels we’re having trouble with maintaining an influx of people to offset the people that are leaving and then you throw in a big project like that and it’s going to be a draw for all of us. It’s going to be difficult and they’ll probably overcompensate to get those people, so

Alaska Business Monthly | June 2015 www.akbizmag.com

even if we get to keep our people, they’ll harm the wage structure, for sure; they’ll have to adjust it—upwards—quite a bit. Boyle: And it’s just not going to get any better. Like both of these guys [Harry and Terry] have said , the guys that are retiring that have worked in the last twenty or thirty years, they were all raised on ranches and farms. They were all used to using their hands to do the work and the generation of folks that are coming to us now just aren’t used to doing physical type labor, they’re more used to sitting in front of a computer screen. I think the interests of those who want to get out and do this type of work—all crafts, not just truck driving, but any kind of manual labor, that interest just isn’t there. Now we’re a nation of users instead of producers and so you have less people that want to get into the industries like truck driving. McDonald: When we were kids, our dads were [teaching us to drive.] When we were ten years old we were out there driving something—trucks, tug boats, fork lifts. And the economy now, with the labor laws and everything, it’s just the way things are today, and kids don’t get that kind of work experience to where when they’re eighteen they can roll right into a job without much training at all. Thompson: One of the things following on that thought here is that from a policy standpoint, the associations—like myself and the Alaska Truckers Association, and other states’ trucking association along with the American Trucking Association, they’re all trying to formulate plans to try to attract younger drivers. One of the big obstacles is the US DOT’s [federal Department of Transportation] regulation that says you must be twentyone years old to have an Interstate CDL. So the question then becomes: What do you do with that young man or woman who gets out of high school and thinks they might like to drive a truck but they can’t drive a truck until they’re twenty one? We’re trying to develop proposals now that will perhaps create a graduated license, whereas maybe at eighteen you could start with some bunny truck stuff and local delivery, pick-up and delivery, and then in at nineteen you could go into the larger rigs—you could work your way www.akbizmag.com

in to it. But you could get them in a truck without having to keep them in a warehouse job for three or four years because you’re not going to keep them that long. And then, the other thing that’s going on is all the gadgets in the trucks. Young guys and gals kind of like those. We can’t make the transition from high school to the twenty-one year requirement. Alaska Business Monthly: Also, I read recently that insurers want drivers to be twenty-three. Is that true for your drivers; do they have to be twenty-three? McDonald: Our insurance company doesn’t have any hard and fast rule, I think twenty-one is fine, but there may be statistics that show accident rates go down at twenty-three—that would probably be what would drive that. A lot of that is how you manage your drivers. There is a lot of technology to use to manager your drivers now, as far as speed, driving techniques, braking techniques, and also it just depends on how much of that is in use. They have collision avoidance and lane avoidance and some of which works in Alaska and some of which doesn’t. But more and more companies are starting to take advantage of that. Mmaybe that, coupled with some relaxing of federal law, but how it is. I’ve been involved with the American Trucking Association now for a long time and it’s a slow process to change something at the federal level. Nothing happens overnight. Here in Alaska you can call the governor and get something done—right or wrong or indifferent—but on the federal level it’s much more difficult. Howard: I think of some of the things we’ve had to do to mitigate that. When we were growing up we learned how to drive a manual transmission, right, and it was very commonplace, and now very few people know how to drive a manual transmission— Even in the trucks, some of the newest trucks that we’ve been ordering— and I’m sure these other guys, Jimmy’s given it consideration. We’ve switched to automatic transmissions in some of our lighter duty trucks to facilitate the transition from inexperienced drivers to get them into the trucks and comfortable with the size of the vehicle and the traffic patterns and so June 2015 | Alaska Business Monthly

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they’re not focusing on the transmission— they’re focusing on driving. And then we progress them to more complex vehicles; that’s some of the technology we’ve had to take advantage of and thankfully the pricing is starting to come down on it. Ten years ago people had automatic transmission on a truck and it would have been very painful financially and now the pricing is starting to get more reasonable. We use it as a progression. We’re actually putting [inexperienced new drivers] in smaller trucks, so that they can just become familiar with operating a larger piece of equipment or vehicle, and then once we know they are comfortable with that, then we start to progress them out of that. Alaska Business Monthly: What about labor—labor and the economy, do you agree with that too? Boyle: Absolutely. The labor piece is 50 percent of what we do; 50 percent of our business is labor and 50 percent is capital expenditures, the infrastructure and stuff. The Lower 48 has been dealing with driver shortage for thirty years ahead of us, and we’ve been dealing with it for the last ten, at least. It used to be that you got a number of potential candidates in the door and you had to do some screening to get the good ones. Right now, you’re just not getting people in the door because they’re not looking for a job. The few that are out there are already hired and satisfied with where they’re at. You’re just not getting people through the door looking for jobs. Alaska Business Monthly: Okay, then, so, how are you going to solve this? Is it solvable at the federal, state, or local level? What is the answer? McDonald: Well, the State of Alaska has been working on that. The Department of Labor has had some training and grants with some of the truck driving schools, the two that are up here. They’re both proactive you get a grant and you think you’re doing something and the truck driving school will train six, six guys! Well, that doesn’t even hold us even, why, by the time we get those six in the system between us then, maybe out of six four of them make it—or one—like it or do it. So you get four guys in and six retire.

At any day Carlile could hire ten drivers in Fairbanks and not have too many. ANY day—if ten competent guys came through the door, they could go to work. But, we just can’t seem to gain them, every time for the last five years I’m up there [asking] “How we doing on drivers?” and they’re telling me we have five empty trucks. We just can’t keep up. That’s been kind of the standard, now. I was just on a phone call with a lot of our other companies down south and we had one that runs a couple thousand trucks a day and he had forty-eight empty today and that’s what he figured, what he calls 100 percent, he says that’s as good as it gets. They have an issue down there too, but the drivers down there have it different. , It’s a lot easier to train a guy to cruise down the freeway than it is to go to Prudhoe Bay or deal with the roads up here. Not only the roads, so much, but also we pull doubles which are a little more complicated. Driving in Alaska takes a step above— in training and competence. Alaska Business Monthly: Where does private enterprise fit into the solution? Boyle: Each of us does the best job, or it’s our intention to do the best job we can, as far as training the drivers that we have. Then sometimes drivers go out by word of mouth and encourage other drivers to come to your company and give it a shot. So of course you want to treat them well, give them good wages and benefits, and then hopefully they’ll stay and then go out with word of mouth and interest others. , you’ve got to do the recruiting. Certain companies in the states had to do the recruiting and we didn’t have to for a long time. I think that’s closer and closer to becoming a reality for up here. McDonald: We’ve had to at Carlile. A couple of years ago, we actually tried to by going out to some towns and setting up little private job fairs just for our company to say, “If you come to Alaska to drive you can basically, (most truck drivers there are gone for a month at a time), you can come to Alaska and drive two on and two off and basically have the same lifestyle, same income.” But even at that, we got a few but not a large amount. The industry needs hundreds right now, probably, I would

Alaska Business Monthly | June 2015 www.akbizmag.com

say. For everybody, for where you were relaxed, because they’re all working hard. Thompson: That’s one of the things that’s changed in the last ten years and that’s the relationship between the employer and the drivers. And the middle positions in between—the dispatchers. And what you’ve got to realize is you’ve got to treat your drivers right, and if you’ve got a dispatcher that’s badmouthing the drivers, giving the drivers a hard time, those folks aren’t going to stay. So you teach respect, respect within your own organization, to keep your drivers. To teach each other’s their position, and, here’s what you do and how you do it and say please and thank you—sometimes you say it in a little harsher terms, but you say it. But other than that, it’s the relationship— it’s the employer-employee relationship ethic that has changed. Howard: And I would also say that, and Jimmy and Harry have known this for quite some time, obviously, and one of the biggest attributes of our company is that we promote from within. You’re not going to find Mr. and Mrs. Perfect any more that’s going to come to you and has a perfect driving record and wants to work your exact schedule for your exact compensation, so within our organization and I’m sure Weaver Bros. does it too, we find ourselves recruiting new people from within our own workforce to fill other roles. Helping them get their licenses, helping train them, more like a farm system on a baseball club. You’re not going to go out and steal other people’s drivers, you’re going to have to grow them yourself, and I think that we’ve been very good at that. And I’ll say one thing that as stiff as the competition gets, we haven’t gone over and poached each other’s drivers. We still have that code of honor that we hold too. I think the biggest thing with us is recruiting and training from our ranks, and then the other thing is: Carlile, along with AT [Alaska Trucking Association] and the other companies, goes to the schools in the community. We are teaching the younger kids about the value of our contribution to commerce and the community as far as the jobs and things of that nature and encouraging them to take an interest in these types of positions. So really, it’s about us cultivating our own employees. www.akbizmag.com

Thompson: Let me just say something else. In a couple of weeks we are having our annual meeting and one of the keynote features of that is a trainer, a professional trainer is coming from Outside to talk about recruiting and training, and asking: “Do you have a plan for recruiting?” As Jimmy said earlier we really haven’t had to do a lot of recruiting up until five, ten years ago. But now you need to know how to do it and you need to know how to develop those kinds of skills within your organization. And that’s one of the things we can bring to the table—is that kind of training. McDonald: Innovation-wise, now, the trucks are nice. Tthere’s nothing nicer to drive now than a new Peterbilt or Kenworth. They are first class, they’ve got all the technology. We’re going to electronic logs now, which takes a lot of load off the driver, and no more worrying about filling out his private ticket log and worrying about getting audited and ticketed, and now the electronic log takes care of all that. Electronics takes a lot of that risk out from the driver. The company really makes it easier. The communications are good. We can interact with a driver anywhere if they have a problem so they’re not out there by themselves any more like they used to be if they break down or something like that. The comfort in the sleepers, and everything, it’s top notch. If you do get guys that like it, the technology is just extremely good and getting better. Some of that is doing automatics on a lot of the mid-level trucks, and you guys [Jimmy] have run automatics too for a long time, right, even on your tractors? Boyle: Yes, we just recently got line haul trucks and the guys like them. McDonald: In Europe they’re all automatic. Those guys, no one knows what a manual is in a truck over there, but here it’s still coming—it hasn’t really taken over, but it’s starting to. It’s standard in trucks running down south, but here, it’s getting here, the technology is moving pretty fast. Howard: I think the technology is improved, yes, but isn’t the pricing starting to come down also, right? On the automatic transmissions, automatic June 2015 | Alaska Business Monthly

transmissions used to be a very expensive option and the technology wasn’t proven for this application. So they are kind of hitting a sweet spot where the technology is getting better and the price is coming down. McDonald: But I still say the main issue is we’ve got to figure out how to get large volumes of people interested in the industry and I think before we build this gas line there’s going to have to be a nationwide influx of drivers to make it happen, I’m sure. And not just drivers, I know the aviation industry has another one of the same problem with pilots. Everybody is scratching for labor. Boyle: When you have a national shortage you’ve heard in the news of a national shortage of doctors, and other specialized jobs. It’s not like a spigot, you can’t just run on a nozzle and increase the number of candidates out there. It takes a while, it takes getting folks into the pipeline. It takes a while. Howard: We spend a lot of time on military recruitment—people leaving the military. Veterans have the skill sets, they meet the age demographic, they know about structure and schedule and things of that nature, so but as far as any one specific group I think we’d just be happy to get some people in the seat so we don’t really target any one group. McDonald: Alaska is a good place to drive truck from the aspect that you don’t go on long trips usually, the longest we do is a couple days away from home, whereas long haul in the continental US you’re usually gone from home anywhere from a week to six weeks. So Alaska is a good place to work in that respect because you do get home a lot. Thompson: Terry mentioned veterans. We were able to adopt a law change that allows certain exemptions for veterans who have heavy duty driving experience. They are able to, they have to pass the written test for their CDL, but they can waive the skills test, with certain certifications from the military—it has to be recent—but this is a little bit of an advantage to attract and recruit veterans and say come on over, we recognize your skills and although then they have the CDL, the employer still has that last bite of the 42

apple, so to speak, in making the decision whether or not to hire that person. So when someone walks in the front with a CDL, probably the first thing you want to do before you give them an offer of employment is to give them a driving test. Take them out and, have your driver trainer take them out and see if they know what they are talking about, if they can drive the truck and if they can then well you move forward from there. It’s giving, it’s recognizing the veterans for what they have done and it’s giving them the opportunity to transition into the private sector workforce. McDonald: A piece of technology we use for that is we have a driving simulator that we’ve had for six or eight years. You can put a guy in there that walks in the door and get a pretty good idea of where a guy’s going to go and what he’s going to do without actually putting him in a truck, which creates some risk. If you put a guy you don’t know in the seat of a truck then that creates a lot of risk. You can abate some of that with that piece of technology. We’ve been using that quite a number of years. Alaska Business Monthly: What happens if, say, ten years from now if all the Baby Boomers are retired and you don’t have enough drivers, what will happen? What will you do? McDonald: That is a problem that has to get solved between labor, and, what can get done? And I don’t think, personally, I don’t think there’s going to be a lack of work up here. We were at a function last night with oil companies and they’re moving ahead and there’s going to be a lot going on for the next few years—even without the gasline. The biggest challenge is going to be to figure out how to do the labor. We’ve had a lot of meetings with these groups planning. There are groups planning on the liquefaction plant and the gasline planning—there are four separate groups—and the amount of work they’re talking about is just mind boggling, even compared to the oil pipeline—that seems like nothing compared to what this gasline is going to be. In the end, the labor will determine how fast they can build that gasline.

Alaska Business Monthly: On the economy and state spending, one thing is the road work that needs to be done. Even though much of that is paid for by the feds but goes through the state, some of it is state money. McDonald: Yes, the state’s going to pay maybe only 10 percent build-up but they still have to maintain it. I don’t know that the Alaska population has really grasped this deficit that’s facing us right now because money’s still flowing and they’re still getting their Permanent Fund Dividend. I don’t know that the average guy driving one our trucks really grasps it. We’re talking about running out of money—not the Permanent Fund—but all the rest of the funds in a couple years. Now they’re talking about the deficit, what’s it up to now, $4.2 billion, and they’re talking about maybe saving $700 million this year, so that gets it down to $3.5 billion— what we thought it was. I think they’re doing the best they can without putting the economy into a diving spin, but, I don’t know that people have really grasped how serious it really is, because next year there’s going to be changes—taxes or dividends cut or a combination of all those. Boyle: Yes, absolutely. Another thing, a positive that’s happened since January when the price of oil dropped is the price of gas at the gas stations dropped. So there’s that. So the only thing for everybody out there just looking at paying bills day to day, the positive thing they have—that got better. And we know some of the projects we work on, and we transport to, are getting funded from years past. We know that this summer, they’re going to continue on. But next year, like you said Harry, something’s got to happen because you can’t take a 50 percent cut in your income and still have the same kind of out go you have, and that is what the State is looking at. McDonald: Somewhere that spending, the fact that the State is not going to be able to spend money, will have an impact. We were listening last night to them and they [oil companies] are feeling pretty optimistic about maintaining the projects they have going on line up on the [North] Slope, but that’s still only part of the economy and part of that is that we need to get

Alaska Business Monthly | June 2015 www.akbizmag.com

off of that and not depend wholly on that. It’s going to be an interesting few years. Alaska Business Monthly: And there’s a huge world glut of oil that’s not going to get used up very quick, and we’re all continuing to make more, with the fracking and oil sands and all that. McDonald: That’s another thing they said last night is: “You guys should feel pretty lucky because we haven’t got anything up here really at all, but the oil companies have cut A LOT of people in Texas and North Dakota. So they are feeling the impact much more significantly—which may help our labor situation, because when all that started happening it kind of impacted and made our labor situation worse. A lot of guys could go to North Dakota and make just as much money as they could driving to Prudhoe Bay so a lot of them that had families down there moved down. So, that might reverse and make it easier to keep some drivers up here.

heading “Invest in the National Highway System” ten different projects that are federally funded. We a wanted to be sure that the federal money that came in, to which is applied a small state money match, is used for these projects, rather than taking federal highway dollars and building a scenic overlook someplace or a post office or a bike trail or something like that. So that was the focus of our choosing these projects. I think most of these are going to happen, but I don’t know that for sure, but that was the focus of our priority list.

Boyle: That’s a 10 percent investment but that money keeps getting turned over and over and over again because the construction company hires employees, and those employees spend the money at the grocery store and everywhere, so that money just keeps rolling over, so that’s a pretty good return for a smaller investment. So, we haven’t heard if everything got funded but that’s a good bang for your buck if it does. Thompson: They taught me in Econ 101 that there’s a multiplier of seven, so for every dollar you spend it multiples

Alaska Business Monthly: Has the Legislature funded all the projects you wanted funded that were priorities for this year, Legislative Priorities? Thompson: They haven’t. They haven’t revealed the Capital Budget yet so we don’t know what they’re doing. I think they are going to start working on that today or tomorrow. That’s been a closely held secret about what they’ve been doing. The Capital Budget isn’t going to be much. McDonald: That’s no secret—they said it in the paper this morning. I think from our company we’re focused pretty heavily on the oil industry, which impacts the economy. Carlile does a lot of different work retail, too, but if the oil economy goes bad it will impact all of that. We don’t focus so much on the state funded projects per se, and we’re hoping that the offshore stuff they’re working on for the Chukchi Sea is successful this year, because that has a big impact on us—both trucking-wise and our tug boat operations, and even our airplane operations. Thompson: On our Association priorities we identified under the title www.akbizmag.com

June 2015 | Alaska Business Monthly

seven times in the economy. I don’t know if it is still that high. McDonald: I noticed that almost all the bond issues passed last night in Anchorage, so it kind of indicates that the populace is willing to step up and pay and it keeps up some economic activity, that’s a lot of money. Thompson: And there’s a sense of confidence there too. McDonald: I’m always bullish on Alaska. Most of us have been here almost all our lives and we’ll probably be here no matter what happens—life goes on one way or another, and hopefully it’s as easy on our kids and our grandkids as it was on us, because we’ve had a pretty good life. Thompson: Yes we have. Alaska Business Monthly: So, I wonder how to get the Millennials into manual labor? That seems to be the biggest question. McDonald: That’s true, you always tell your kids: “Go to college.” Oh there’s a fair number of truck drivers driving around that have bachelor’s and master’s degrees. You’d be surprised how many, because guys get in the life and they adapt to it. We have a lot of drivers that make executive type wages driving truck and sometimes that brings people back out of teaching school into driving a truck. We’ve got a number of guys that have teaching degrees that taught for a while and can make twice as much money driving truck and they go back doing that. Thompson: Driving a truck is probably more fun than teaching. McDonald: And on the other side, basically, with a high school education you can make a pretty darn good living driving a truck too, so you don’t have to spend that money and that time going to college, if you’re not inclined to do that. It gives them a little bit of a head start if that’s what they want to do. Boyle: Well, with that skill set you can go anywhere in the US and have a truck driving job. If you’re good. 44

McDonald: We have at Saltchuk a program, we were just talking about that yesterday, that is focused on youth development and higher education. We’re really putting some emphasis on the rural education; there’s an aviation school out in Bethel, and there’s a couple of Vo-Tec schools—besides the one in Seward—there’s one in Kotzebue and one in Nome, with AMAZING technology. There are simulators for Cats and dozers. I toured one of them up there. So they have all the facilities, they just need kids to get interested in that. I toured up there and there’s nobody around. They got these million dollar facilities—millions in facilities, and so really what they need to do is fill those up. Thompson: Another legislative issue is to re-evaluate that whole program because you have these monstrous facilities with all this good stuff in it and there are no students, so you have to figure out which ones are working, and feed the good ones, and starve the bad ones. Because there are also a lot of private sector infrastructure available to provide training; Teamsters do, they have their driver training school. Northern Industrial Training out in the Valley does driver training as well as other craft training. I know we’ve worked with Northern Industrial Training a couple of times on some grant issues. Harry mentioned the six grants that were funded and then you graduate six students, but that barely fills the gap that you’ve lost the six weeks they’ve been training. We need to focus on how we can fill the seats in the existing schools so that those seats can then go sit in a truck. McDonald: And I think besides labor and besides the oil industry that is kind of always front and center, there’s the mining industry that is important to the trucking industry and all the transportation industries—the fishing industry is big, the military is a big. So those are most of the drivers. So all the issues that face those industries are important, so when we’re lobbying the State Legislature, talking to our state legislators, whatever issues are facing them, whether it’s mining or oil or whatever, usually we’re supportive of reasonable regulations. You can make reasonable things happen,

not necessarily everything, but reasonable things. That, and a good balance. A good balance between doing it right and still having a good economy. Alaska Business Monthly: Something else people want to know is what do drivers make? Boyle: I think that you’ve got some drivers that enjoy working forty hours a week, and there are some jobs that fit that, and you’ve got some drivers that enjoy working more than that, I think the typical thing can be $50,000 all the way up to… McDonald: To $135,000. I was going to say $60,000 for a full-time truck driver, from $60,000 to $135,000. I know we’ve got guys that have been above that. Thompson: And the top end, Susan, is that highly skilled driver that can transport the super heavy stuff. McDonald: The heavy haul stuff. Thompson: The heavy haul, the large and heavy loads. McDonald: A good basic truck driver running Prudhoe Bay is going to be well over $100,000 on the average, if he’s working full time, probably $100,000, $125,000. Boyle: I just took simple math and twenty-five bucks an hour times two thousand hours, you have someone who wants to work a straight job, that’s $50,000 a year, but you’re right, you’re right there it’s $60,000 right on up for the guys like you said have the skill level and have the desire to work. McDonald: Yes, they’re working, those guys are working two and a half trips to Prudhoe a week, basically through the year. They’re running 120 trips to Prudhoe a year, so they’re making about a hundred twenty grand. Alaska Business Monthly: That’s something people always want to know, then of course, the benefits—full benefits? McDonald: The benefits are, well I can’t speak for everybody, but I’m pretty sure all the mainline companies... There’s

Alaska Business Monthly | June 2015 www.akbizmag.com

the best health insurance Carlile’s ever had—a great health plan that is very, very, good and the company pays the biggest share of it. They have good 401K matches, they have personal days, and vacation days, and… They have half of their wages, like driving Prudhoe in the winter, over half the wages they get are overtime. Howard: And I think some of the concern we have is that with this level of competition we have for a finite resource all of us have very competitive wages and benefits and things of that nature and if you throw in a big mega project, even if we don’t lose our employees it’s going to dramatically alter our compensation I’m sure.

that he’s advertising Outside—in Western states—and he’s paying a signing bonus. He can’t fill the jobs. Howard: They’re making significant commercial decisions based on whether they can get those type of people or not. Some of your truck dealers are either opening branches or not opening branches, or closing branches, based on whether they can get mechanics. I recently came from the crane industry and it’s the same way, whether it’s crane operators or mechanics or oilers

or riggers or signal people—it’s all the same—you read any type of trade publication you can get and they talk about the shortage of people. Alaska Business Monthly: So it sounds like labor is the main thing. McDonald: Well, the economy is the main thing—We’ve got to have an economy to have a labor shortage. We hope [for the economy]. Having a labor shortage isn’t all bad. It all goes together. R

McDonald: Yes, which we’ll be able to handle while they’re building the pipeline. Howard: Right, yes. McDonald: But afterwards is when it is going to be tough. Figuring your way out of manage into that big project and get out of it, even if you’re, like I used to own Carlile and now I work for a very large company that owns trucking companies and airplanes and tugs and barges and ships, but managing your way into that with the capital and the labor and then back out without losing everything that you made while it’s going on is going to be the real challenge I think. It’s going to take a lot of planning and a lot of training and a lot of management while it’s happening—to make that work. Boyle: I think the only other thing I would add is, we’ve talked a lot about drivers, I think we also probably all of us have a shortage of mechanics, not just truck drivers. Probably for every ten to fifteen drivers you also need a mechanic—probably along the same lines as cars—and people working with their hands, their bodies, mechanics are also a shortage. I don’t know if the general public knows that, but there’s plenty of mechanic jobs and the same thing goes as for a truck driver; you can make good money, you can be home every night, and if you enjoy that kind of work there are plenty of opportunities. Thompson: One of our members is a truck dealer and he told us that he has six openings for diesel technicians and www.akbizmag.com

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June 2015 | Alaska Business Monthly

Transportation

special section

Ravn Alaska’s hangar and offices at Ted Stevens Anchorage International Airport.

Ravn Alaska Flying everywhere, with anything By Tasha Anderson

avn Alaska has had anything but a traditional business history. The company’s 2014 rebranding delineated clearly for clients and customers what the company is and how it’s going to move forward providing scheduled and chartered passenger and cargo services throughout Alaska.

A Ravn Alaska commuter plane takes off in Anchorage. © Chris Arend Photography

The Briefest History Possible Many know parts and pieces of the airlines that have come together under the Ravn name, but the whole history may be outside of the purview of most. Taken down to the barest brass tacks, the history is this: Frontier Flying Service was founded in 1950 by retired US Air Force Colonel Richard McIntyre. John Hajdukovich bought Frontier in 1974, and in 2005 Frontier acquired the assets of Cape Smythe Air Services. Hageland Aviation Services was founded by Mike Hageland in 1981. In 2008, Frontier and Hageland combined their services, becoming wholly owned subsidiaries by parent company HoTH (H-ajdukovich “o” T-weto H-ageland). In 2009 Era Aviation was purchased by HoTH. In 2014, to address some confusion in who was who and what did what, the entire group rebranded. Era has changed its name to Corvus. Corvus is Ravn Alaska: any plane seen flying with Ravn Alaska on the fuselage is a Corvus plane. Hageland and Frontier are still wholly owned subsidiaries that operate Corvus flights under the name Ravn Connect. Collectively, all three can

be referred to as Ravn Air Group.

Why Ravn? Bob Hajdukovich, CEO of Ravn Alaska, says there were a few factors that led to rebranding making sense. In its early days, Era was one company that operated both helicopters and fixed-wing airplanes. It was owned by Rowan, a drilling company, which decided to sell Era. The two types of services were split; SEACOR purchased the helicopters side and turned it into Era Helicopters LLC, while what is now Ravn purchased Era Aviation. “There was this natural confusion in the marketplace between people that understood Era since 1968 to be Era: Era is Era is Era. When Era Helicopters took their company public as Era Group, Inc., they were concerned over the brand name confusion,” Hajdukovich says. Additionally, people had begun to refer to Frontier and Hageland as Era, which wasn’t accurate. To clear the air, it was determine an entirely new name was necessary. “The word raven kept coming up on people’s list… and I recalled that the

Alaska Business Monthly | June 2015 www.akbizmag.com

bird on our tail was actually a raven, but a 1980s version when the style was all hard lines,” Hajdukovich says. “So we picked the word raven, but there were too many raven everythings. We decided to remove the letter ‘E’ because it’s silent, and you can say the word without it.” Once Ravn Alaska was settled on as the brand name for the air group, Era still needed to be renamed, becoming Corvus (the Latin word for raven). “Why didn’t we name Corvus Ravn Alaska? Hageland and Frontier can’t do business as another company; they can’t do business as Corvus [being a separate airline] but they can do business as a Ravn Alaska carrier,” Hajdukovich explains. Hajdukovich says that the new name actually provides new opportunities for the company externally and internally. “It’s been really fun to have the employees really kind of coalesce around the image… we can actually have a mascot. You can’t have an Era mascot because no one knows what that would look like. It’d just be abstract letters. We’d have to have three mascots: one is an E, one is an R, one is an A, and they would have to run around together,” he laughs. In contrast, there’s a lot of symbolism and meaning that can be associated with

Structure and Services Ravn Air Group is certainly resourceful. The company’s unique structure is deliberate, not accidental. “We have three airlines that have autonomous, independent souls with individual relationships with the FAA, so we deal with a group of inspectors for each of Hageland and Frontier and a group of inspectors for Corvus.” But, Hajdukovich says, even with separate airlines, those things that are common across all the airlines don’t need to be duplicated; accounting, payroll, human resources, and other services can be pooled and shared among the three. “We can have one human resources department process employees for three airlines. We can have one training department process training for three airlines.” Additionally, Ravn Alaska does all of the marketing for the group, a boon for potential customers. “The concept is a one-stop shop. You can just go to Ravn Alaska’s website,” which Hajdukovich says is one of the greatest values that Ravn brings to their customers. In addition, if customers do have an issue or concern, they don’t need to call several different locations. Also, because the companies are pooling resources, when customers do have problems, there’s a larger collec-

“The word raven kept coming up on people’s list… and I recalled that the bird on our tail was actually a raven, but a 1980s version when the style was all hard lines. So we picked the word raven, but there were too many raven everythings. We decided to remove the letter ‘E’ because it’s silent, and you can say the word without it.”

—Bob Hajdukovich, CEO, Ravn Alaska

a raven. Hajdukovich, who has a deep interest in birds, lists many of the attributes the birds have that make them an ideal symbol: they’re highly intelligent, hugely gregarious, have high levels of communication, are family oriented, mate for life, etc. In Alaska, especially, ravens are culturally significant. They’re often presented as tricksters, but even that reputation speaks to being clever and resourceful.

www.akbizmag.com

tive pool to help with solving them. “Instead of just waiting for one guy to deal with five hundred phone calls, you have five guys. And as we grow larger, we can have more support for our customers.” Ravn Air Group also has the huge benefit that the infrastructure and equipment brought in by each individual airline can be utilized by all the airlines. “We have these incredible resources all over the state. We have ten hangars throughout

the state of Alaska, more than anyone else, and we basically tuck our airplanes in every night.” This reduces wear and tear on the planes as well as increases the comfort and safety of employees when performing maintenance or repairs on the aircraft. It also allows Ravn to provide service to essentially all of Alaska. Hajdukovich says, “It’s this massive area of the state that covers everything except the Aleutian chain and the south panhandle… We have eight facilities in Barrow, two large hangars that will house six aircraft; we have a large hangar in Kotzebue; a Nome hangar; Unalakleet hangar; [and] a massive complex in Bethel, with six buildings, sixty-three employees and sixteen aircraft.” Ravn also has facilities in Aniak, St. Mary’s, Fairbanks, Deadhorse, and Anchorage. Hajdukovich says that Ravn services more than one hundred destinations every day. “We do a hub and spoke operation,” he says. “The concept of a major airline versus a regional carrier is major airlines go hub-to-hub and regionals go hub-to-spoke… For us, we’re a selfcontained hub and spoke. Our hub-tohub is Corvus and our hub-to-spoke is Hageland and Frontier Flying, operating as Ravn Connect.” This type of operation is possible only because of the cross-training provided to each subsidiary. Because each airline is a separate entity to the FAA, their individual processes must be followed appropriately no matter who is performing them. “We can determine that in Bethel, Hageland needs to turn [a] Corvus [aircraft] when it shows up. So those are Hageland employees that turn the aircraft in Bethel. Corvus trains Hageland employees to turn Corvus [planes] as if they were a contractor [and vice versa],” Hajdukovich says. All of the flights scheduled through Ravn Alaska’s website are technically Corvus flights; however, once a plane is traveling from a hub to a spoke, it is operated by whichever company is most appropriate. “Hageland has no scheduled flights; they’re all Corvus flights operated by Hageland,” Hajdukovich explains. The final result is a comprehensive, well-oiled network operated by several companies, all of which have unique

June 2015 | Alaska Business Monthly

180

178

176

174

172

170

168

166

164

162

160

158

A R C T I C

154

152

150

Deadhorse (SCC)

3,992

HW Y

4,589

Barter Island (BTI)

4,818

C o l v i l l e

Point Hope (PHO)

6,500

Nuiqsut (NUI)

Statewide Map

4,500

e r i v

D AL T O N

NORTHERN REGION Red Dog (RDB)

6,312

4,800

u k o b

Ambler (ABL, AFM)

KianaK(IAN)

Kotzebue (OTZ)

4,000

R i v e Kobuk (OBU) r

Shungnak (SHG)

Shishmaref (SHH)

4,001

Selawik (WLK)

4,997

r v e R i

3,000

3,400

Noorvik (ORV)

5,900

RU UN

E IT

2,990

Huslia (HSL)

Teller (TLA, TER)

4,000

2,983

3,000

4,400

4,000

Elim (ELI)

4,000

7,249

4,000

Shaktoolik (SKK)

4,001

N O R T O N

H 250

5,900

AL NO RT HE CE RN NT R RA L R EGION EG ION

RD K

4,001

4,400

2,200

2,420

Akiak(AKI)

3,000

Nightmute (NME)

3,180

3,000 Napakiak (WNA) 3,248

2,400

Kongiganak (KKH)

Kipnuk (KPN)

GE ORGE

i v e r R Stony River No 2 (SRV)

2,601

Sleetmute (SLQ)

GLENN Palmer (PAQ)

6,009 Valdez 6,500 (VDZ)

3,100

12,400

3,401

Anchorage (ANC)

3,300

Kwethluk (KWT)

3,199

Eek (EEK)

CENTRAL REGION

3,000

3,025

3,230

4,820

k o k w i m u s Chuathbaluk (CHU)

Napaskiak (PKA)

Tuntutuliak (WTL)

Chefornak (CYF)

Red Devil (RDV)

3,196

Atmautluak (ATT)

NUNIVAK ISLAND

Tuluksak (TLT)

Kasigluk (KUK)

3,218

Mekoryuk (MYU)

3,300

Nunapitchuk (NUP)

Toksook Bay (OOK)

3,070

3,198

6,400

Bethel (BET) Akiachak (KKI)

Newtok (WWT)

Tununak (TNK)

2,500

Aniak (ANI)

6,000

S u s i t n a

3,620

Kalskag (KLG)

1,778

Crooked Creek (CKD)

Russian Mission (RSH)

Chevak (VAK)

ST MATTHEW ISLAND

Holy Cross (HCR)

4,000

3,200 Y

3,220

3,400

4,000

Marshall (MDM,MLL) u ko

R i v e r

Shageluk (SHX)

2,540

6,008

3,300

4,000

400 Mountain Village (MOU) Pilot Station (PQS) 3,501 Scammon Bay (SCM) Saint Mary's (KSM)

HWY

Grayling (KGX)

Anvik (ANV)

Hooper Bay (HPB)

ALI

Kotlik (KOT)

3.001

DEN

PAR

DENALI

Saint Michael (SMK)

RD RICH A

2,999

4,601 4,000

Unalakleet (UNK)

Alakanuk (AUK)

SON

3,986

Stebbins (WBB)

Emmonak (EMK)

na n T a a

Ruby (RBY)

4,000

Kaltag (KAL)

S O U N D

ST LAWRENCE ISLAND

Galena (GAL)

Nulato (NUL)

3,401

New Golovin (GLV)

STE

6,001

Savoonga (SVA)

11,800

IO ELL

n k o Y u

RIC

Nome (OME)

4,499

i v e r

Gambell (GAM)

Koyukuk (KYU)

Fairbanks (FAI)

Tanana (TAL)

Koyuk (KKA) White Mountain (WMO)

3,200

Brevig Mission (KTS)

i v

y u

Buckland (BKC)

3,990

5,000

3,320

Wales (WAA)

Fort Yukon (FYU)

4,020

3,002 Deering (DRG, DEE)

500

S O U N D

Anaktuvuk Pass (AKP)

3,992

R i v e r

a k

JAM

K O T Z E B U E

o a t

3,000

Noatak (WTK)

4,494

Point Lay (PIZ)

Kivalina (KVL)

144

Wainwright (AIN)

4,370

146

7,100

Atqasuk (ATK)

148

O C E A N

Barrow (BRW)

WEATHER & APPROACH APPROACH ONLY NO WX / NO APPROACH WEATHER ONLY

156

Kenai (ENA)

7,830

HWY

3,242

3,200

Quinhagak (KWN)

300

4,000

STE

1,835

RLIN

Kwigillingok (KWK)

K U S K O K W I M B A Y

100

Homer (HOM)

6,701

Goodnews (GNU)

3,300

Platinum (PTU)

3,300

150

Dillingham (DLG) Togiak (TOG)

6,400

4,400

L F G U

200 8

PRIBILOF ISLANDS

B R I S T O L

B A Y

Kodiak (ADQ)

7,550

MAP: Courtesy of Ravn Alaska

174

176

Unalaska / Dutch Harbor Apt

4,100

Alaska Business Monthly | June 2015 www.akbizmag.com 52

178

142

140

138

136

134

Hub

ANC

ANC ANC ANC ANC ANC ANI ANI ANI ANI ANI ANI ANI ANI ANI ANI ANI BET BET BET

BET

ADA CAN ES TAT ED S

UNIT

i v e r

132

130 1

Airport

70 Anchorage (ANC)

Cordova (CDV) Homer (HOM) Kenai (ENA) Kodiak (ADQ) Valdez (VDZ) Aniak (ANI) Anvik (ANV) 2 Crooked Creek (CKD) Grayling (KGX) Holy Cross (HCR) Kalskag (KLG) Red Devil (RDV) Russian Mission (RSH) Shageluk (SHX) Sleetmute (SLQ) Stony River No 2 (SRV) 68 Akiachak (KKI) Akiak(AKI) Atmautluak (ATT)

Bethel (BET)

BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET BET

Chefornak (CYF) Chevak (VAK) Chuathbaluk (CHU) Dillingham (DLG) 3 Eek (EEK) Goodnews (GNU) Hooper Bay (HPB) Kasigluk (KUK) Kipnuk (KPN) Kongiganak (KKH) Kwethluk (KWT) Kwigillingok (KWK) Mekoryuk (MYU) 66 Napakiak (WNA) Napaskiak (PKA) Newtok (WWT) Nightmute (NME) Nunapitchuk (NUP) Platinum (PTU) Quinhagak (KWN) Scammon Bay (SCM) 4 Togiak (TOG) Toksook Bay (OOK) Tuluksak (TLT) Tuntutuliak (WTL) Tununak (TNK)

BRW

Atqasuk (ATK)

BRW BRW FAI

Point Lay (PIZ) Wainwright (AIN) 64 Anaktuvuk Pass (AKP)

FAI FAI FAI FAI FAI FAI FAI

Fort Yukon (FYU) Galena (GAL) Huslia (HSL) Kaltag (KAL) 5 Koyukuk (KYU) Nulato (NUL) Ruby (RBY)

HWY

LA S

TAYLOR

FAI

N DIKE

X X X X X X X X

X X

X X X

X X

X X X X

X X X

Fairbanks (FAI)

12,400 7,500 6,701 7,830 7,550 6,500 6,000 4,000 2,500 4,000 4,000 3,198 4,820 3,620 3,400 3,100 2,601 3,300 3,196 3,000 6,400 3,230 3,220 3,401 6,400 3,242 3,300 3,300 3,000 3,200 2,400 3,199 1,835 3,070 3,248 3,000 2,200 3,180 2,420 3,300 4,000 3,001 4,400 3,218 3,300 3,025 1,778

BRW Barrow (BRW)

O KL

WX APRCH Length

X X

X X X

X X X X X X

X X X X X

X X X X X X X X X X

X X

Hub

Airport

KSM KSM KSM KSM KSM KSM

Alakanuk (AUK) Emmonak (EMK) Kotlik (KOT) Marshall (MDM,MLL) Mountain Village (MOU) Pilot Station (PQS)

KSM Saint Mary's (KSM)

4,000 4,601 4,400 3,200 3,501 2,540 6,008

OME OME OME OME OME

Brevig Mission (KTS) Elim (ELI) Gambell (GAM) Koyuk (KKA) New Golovin (GLV)

X X X X X

2,990 3,401 4,499 3,000 4,000

X X X X X X X X X X X

X X X X X X X X X X X X

6,001 4,400 4,997 2,983 3,990 3,000 3,000 3,200 3,320 3,400 3,000 4,020

X X X X

5,900 3,992 4,000 3,992 6,312 3,002 4,001

X X X X

X X

OME Nome (OME) OME OME OME OME OME OTZ OTZ OTZ OTZ OTZ OTZ

Savoonga (SVA) Shishmaref (SHH) Teller (TLA, TER) Wales (WAA) White Mountain (WMO) Ambler (ABL, AFM) Buckland (BKC) Deering (DRG, DEE) Kiana (IAN) Kivalina (KVL) Kobuk (OBU)

OTZ

Kotzebue (OTZ)

OTZ OTZ OTZ OTZ OTZ OTZ

Noatak (WTK) Noorvik (ORV) Point Hope (PHO) Red Dog (RDB) Selawik (WLK) Shungnak (SHG)

X X

SCC

Barter Island (BTI)

4,818

Deadhorse (SCC)

X X X X

6,500 4,589 4,001 4,001 2,999 5,900

SCC

SCC UNK UNK UNK

experience well-suited to their particular tasks. “I did the math, and I think we’re collectively 238 years of aviation history in the state of Alaska,” he says.

WX APRCH Length

Nuiqsut (NUI) Saint Michael (SMK) Shaktoolik (SKK) Stebbins (WBB)

UNK Unalakleet (UNK)

4,370 7,100 4,500 4,494 4,800 11,800 5,000 7,249 4,000 3,986 4,000 4,000 4,000

R i ve r Y

136

134

132

130

128

OFF

HWY K

AL AS

DIK

p pe r

ON KL

ARD SON

ALA SK

HWY Y

INE

Y OR RIT ER IA MB N T LU O C SH ITI

O UK

ERT

HW Y

EDG

SSIA

7,500

TO CU

Cordova (CDV)

A L A S K A

O F

UT H

LL 170 172

178

176

174

Only Moving Up Ravn provides a desperately necessary service in Alaska, bringing in goods to areas of the state that have no roads at all or are difficult to reach overland or impossible to reach by sea. It’s a service the company takes seriously; having grown up in Alaska, all of the parts and pieces of Ravn want to see Alaska thrive. “What we’ve tried to create is something that we recognize has its challenges, but we can also say that we’re stronger than we’ve ever been. Because we’re strong we should be around a long time, and we’ll get it eventually,” Hajdukovich laughs. “If you tell us enough of your advice as a customer, we’re going to get it.” R 8

180

126

CUT

Just a Little Turbulence Some of that history, though, naturally led to some head-butting as the companies implemented common practices and structures to function as a single entity. “I think there have been cultures built within the organizations throughout those many years; those cultural attributes tend to work against each other… the positive side of culture is experience and the negative side is differences between the cultures that clash,” Hajdukovich says. “My job is to kind of pry open the minds of the groups and say, ‘Let’s be open to best practices; let’s be open to new ways of doing things; let’s not change for the sake of change, but let’s not say we aren’t changing just because we aren’t changing.’” The rebranding, Hajdukovich says, has been beneficial in uniting the companies. “No one shared the name Ravn, therefore you didn’t win, you didn’t win, and you didn’t win. Now we are one common name moving forward, whereas when we were Era Alaska, there was a remnant of Era. So did Era buy Frontier and Hageland, or did Hageland buy Frontier? No, it’s a parent/subsidiary relationship. We’ve been able to [move forward] this last twelve months and kind of coalesce.”

10 52

Tasha Anderson is an Associate Editor for Alaska Business Monthly. 52

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June 2015 | Alaska Business Monthly

special section

Transportation

Small Air Carriers Improve Rural Life

Photo courtesy of Everts Air Cargo

An Everts Air Cargo DC-6 landing in rural Alaska.

By Julie Stricker

t is early afternoon in Brevig Mission on Alaska’s Seward Peninsula and the kids are clamoring for fresh pizza for dinner. The nearest pizza joint is sixty-five roadless miles away in Nome, but all it takes is a phone call and a couple hours later a half-Hawaiian, half-reindeer sausage pizza from Nome’s Airport Pizza is delivered, courtesy of Bering Air’s regularly scheduled flight. In fact, residents of more than a dozen remote villages from Savoonga to Kotzebue can order out—way out—and have dinner delivered straight to the airstrip, thanks to Bering Air, a small regional airline based in Nome that serves dozens of communities as well as charter flights to the Russian Far East. It’s just one example of the way Alaska’s small air carriers are woven into the fabric of rural life.

Lifelines In a state a fifth the size of the Lower 48, with scattered communities far from the road system, airport runways are lifelines, says Lee M. Ryan, vice president of Ryan Air. “It’s a very fitting term,” Ryan says. “If you’re down to life and death, the only way to get out is the airport. The ability to feed communities, the ability to connect communities—you don’t think about roads too much when you’re driv50

ing around the city, but you really think about roads when you don’t have them.” Ryan Air, which in 2013 celebrated its sixtieth anniversary, is a family enterprise that was started by Lee Ryan’s grandfather, Wilfred Ryan Sr., as Unalakleet Air Taxi. Over the decades it grew to become one of Alaska’s key freight carriers, operating out of seven regional hubs with a fleet of Cessna 207s, CASA 212-200s, and a Cessna Caravan 208x. It has more than ninety employees and is Bush Alaska’s largest freight company, Ryan says. For seventy communities, Ryan Air is the way residents get diapers, pilot bread, batteries, and all the things necessary for life in rural Alaska. They can travel between villages or to Anchorage to visit relatives, get medical care, or connect to the rest of the United States and the world. “People have the ability to live their lives every day,” he says. “They’re able to be themselves, able to keep their culture, keep their traditions, keep their lifestyle, and still be able to reach the Lower 48. Still be connected. “Our goal is to have everybody who makes their home out in the Bush to be able to live like they were in the city with all the amenities,” Ryan says. Ryan Air’s planes can handle just about anything that fits in the cockpit within weight limits, including cars, as well as more unusual cargo. “We’ve hauled a walrus before—a live walrus,” he says, recalling an instance

in which the young walrus hauled out on the barges at the port of the Red Dog zinc mine north of Kotzebue and wouldn’t leave. “It ended up going to the [Alaska] SeaLife Center.”

Improving Lives Air freight is not inexpensive, but most rural Alaskans are able to take advantage of federally subsidized bypass mail, which allows rural air carriers to transport bulk shipments at parcel post rates without going through USPS. The bypass system helps keep prices down for rural Alaskans and is a major part of business for the carriers themselves. The smaller carriers frequently work directly with larger carriers such as Alaska Airlines, Northern Air Cargo, Lynden Air Cargo, and Everts Air Cargo, which work out of Anchorage and Fairbanks with larger planes that service the larger hubs. Everts Air Cargo and Everts Air Alaska is another family-owned airline, established by Robert W. Everts in 1978 in the Interior Alaska village of Eagle as Tatonduk Flying Service. Now under the umbrella of Tatonduk Outfitters Limited, Everts flies freight, bulk fuel, and passengers to twelve major hubs in Alaska. Operations are based in Fairbanks, but scheduled flights are out of Anchorage. The company has 300 employees, 290 in Alaska and 10 in the Lower 48. Robert Everts’ father, Cliff Everts, began hauling fuel in converted mili-

Alaska Business Monthly | June 2015 www.akbizmag.com

tary aircraft, which are still an important part of the Everts fleet, according to Paul Abad, sales manager for Everts Air Cargo. In fact, Alaska is the only place the twin-engine, propeller-driven Curtiss C-46 Commando and the fourengine Douglas DC-6 are still used. The planes, which were first produced in 1940 and 1946, respectively, are reliable workhorses, but aren’t without their quirks. “They always need parts, so we have someone on staff who searches the world and buys whole planes for the parts,” Abad says. “There is a huge ‘graveyard’ in Fairbanks.” From the beginning, Everts’ corporate goal has been to improve the lives of those who depend on them, Abad says. . They are always working to identify growing markets, such as Togiak in southwest Alaska, which recently began to receive regular DC-6 flights that can accommodate larger bulk items, reducing shipping costs to the area. In return, Togiak is hoping the increased traffic will result in upgrades to its current gravel runway, which could lead to future economic growth. That works directly with Everts’ mission to improve the lives of the people, especially Alaska Natives, who depend on them, Abad says. Everts employees reflect this mission. “Everts employees are very hardworking Alaska people,” he says. “We are tough and rugged Alaska people— like our planes. Pilots offload the planes in rural Alaska. They are the crew. They are amazing people.” The cargoes delivered by Everts crews can roughly be distributed into a pie with six pieces: bypass mail, regular mail, small parcels, bulk freight, oversize freight, and hazardous materials. “Everything that will fit in the cargo door,” Abad says. “The owners have an entrepreneurial spirit and motivate employees and make them passionate about being in the company,” Abad says. “They all share the same purpose and belief and that is to assist Alaska people, first and foremost. “There may be better opportunities and better planes, but the employees are there so they can be assisting and helping fellow Alaskans. A lot of employees work herefor decades and decades. It is a unique environment to work and operate in.” www.akbizmag.com

Unique Partnerships That unique environment can lead to some unique partnerships. Although the air carriers are in competition with each other, they also work together to ensure the communities’ needs are met. For instance, PenAir is Alaska’s largest commuter airline. It operates a fleet of forty aircraft, providing scheduled service to thirty-six communities in southwest Alaska, including Cold Bay, Sand Point, and Dutch Harbor in the Aleutians, which are known for terrible weather. PenAir has a capacity purchase agree-

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EQUIPMENT

COMMUNICATIONS

EXCAVATION

ment with Alaska Airlines to fly to those remote communities, says Missy Roberts, vice president of marketing and sales. “It’s an Alaska Airlines market,” she says. “They market it; they sell it; we use our aircraft and our crew.” PenAir uses a Saab 340B, a thirty-passenger aircraft with a bathroom, to fly into Dutch Harbor but is purchasing three new Saab 2000s this fall, faster airplanes that can carry forty-five passengers and will shave an hour off the current threehour trip to the remote island. Being able to connect residents of

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June 2015 | Alaska Business Monthly

southwest Alaska to Anchorage is important, Roberts says. Residents are dependent on being able to fly in and out of Anchorage for medical, personal, and corporate reasons. “It’s a really big deal,” she says of the carrier’s importance in the villages. “For all of them that we serve, except for two places, there is nobody else flying between them and Anchorage. No road access at all.” PenAir also has two cargo-only planes that service many of the same communities as their passenger flights. They also have operations in Boston and will be starting operations in Portland, Oregon, this fall.

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

Safe Landings Infrastructure is another key part of the air carrier business in Alaska. The Alaska Department of Transportation and Public Facilities is responsible for maintaining public runways throughout the state. Depending on the community, these can range from the ten thousand-plus feet needed for big jets to short gravel runways on which only the smallest planes can land safely. One of the reasons Everts still relies on its World War II era planes is that they can safely land and take off from runways of only 3,500 feet. The DC-9 jet requires a runway of 5,900 feet, while the MD-80 requires a 6,000 foot runway, Abad says. In some communities in Southeast Alaska, there are no runways, which is why Ketchikan-based Taquan Air maintains a fleet of eight DeHavilland Beaver floatplanes, says general manager Tory Korn. “Of the communities we serve, only one of them really has an operating runway,” Korn says. Taquan does have an amphibious Cessna Caravan that could land at the Ketchikan airport, but they’ve never needed to do so, he adds. Taquan provides regular mail and passenger service to more than a dozen communities in Southeast Alaska. For most of them, Taquan is the only way in or out that doesn’t require a boat. If there is another carrier serving a community, such as Metlakatla, Taquan will split the mail delivery with the other carrier, Korn says. In recent years, a contract with Lynden for UPS deliveries has been a mainstay of Taquan’s freight business, thanks to ordering goods off the Internet. “Everyone is using Amazon Prime

Alaska Business Monthly | June 2015 www.akbizmag.com

now, and you get free shipping on it,” he says. Taquan also will deliver prescriptions from the pharmacy, heated toilet seats, construction materials, “anything they need we can do as long as it fits into a Beaver.” The Beavers have a 1,200-pound capacity “that includes people,” he says. “If you have two people and they weigh two hundred pounds each, that only leaves you eight hundred pounds for freight.” The DeHavilland Beaver was only manufactured for twenty years, from 1947 to 1967. Only 1,652 Beavers were built, according to Taquan Air, 800 of which were purchased by the US military. It is often considered the “best bush plane ever built” for the rugged conditions in Southeast.

around the clock like larger carriers such as Alaska Airlines. “We’re operating basically store hours,” he says. “Probably the hardest thing for us is to get deliveries to the stores while they’re open.” Small air carriers do many things to improve day-to-day lives in rural Alaska. Besides delivering pizza, the carriers will also pick up recyclables from villages. They have transported orphan wildlife, injured eagles, and baby goats. Taquan Air also picked up several abused and neglected dogs from an island community and took them

to the Ketchikan animal shelter, where they were adopted into the community. It’s the little things that can make up for big challenges. “It’s not easy to run an airline operating in an area the size of the middle United States,” Ryan says. “It’s a huge area with a lot of moving parts, but it’s very rewarding.” R

Julie Stricker is a journalist living near Fairbanks.

Improvements All Around In addition to a rigorous maintenance program, Taquan also earned fivestar certification under the voluntary Alaska Medallion Foundation Safety in Aviation Program. In 2008, it was awarded the Medallion Shield. It also adopted FAA’s Capstone Program and became the first floatplane carrier in Alaska to install state-of-the-art glass cockpit avionics navigation equipment throughout its fleet. “For an airline our size, it’s a real feather in our cap to have that certification done,” Korn says. Everts, PenAir, and Ryan also participate in the Medallion Foundation program, a nonprofit organization that works with carriers to create safety management systems. Ryan says it’s one indication of how the safety culture has changed in rural Alaska in the past four decades. “My dad started flying in 1970 and it’s totally different between now and back then,” he says. “It was the tail end of the bush pilot days and going into the airline pilot days. He played a big part in that transition.” The old bush pilot fly-by-the-seat-ofyour-pants mentality is long gone, Ryan says. “I would never consider myself a bush pilot. I would consider myself a rural pilot.” Besides Alaska’s notorious weather, other challenges to running a rural air carrier include connectivity and infrastructure, or lack thereof, Ryan says. Computer systems have made it easier to connect with communities and streamline efficiency, but Ryan Air can’t operate www.akbizmag.com

June 2015 | Alaska Business Monthly

special section

Transportation

Southeast Alaska Maritime Economy Grows

Alaska Business Monthly | June 2015 www.akbizmag.com

Industries and jobs shift from forest to ocean By Mike Bradner

f there’s an anchor to the economy in Southeast Alaska it’s the regional maritime industry, which ranges from fisheries, water transportation, cruise ship support, the state ferry system (itself one of the largest marine employers) to, finally, shipbuilding, the new bright spot for the region. About a fourth of all Southeast Alaska wages stem directly from oceanrelated “blue” jobs, which totaled

8,200 in the region in 2013 and accounted for $475 million in wages. This is according to Southeast Conference, the regional economic development association, in its March2015 report, “The Maritime Economy of Southeast Alaska.” The report relied on data compiled by Rain Coast Data, a Juneau consulting firm. “We are a maritime economy. It is what marks our identity and what fuels our economic engine,” said Shelly Wright, executive director of the Southeast Conference. The ocean is the most dominant feature of Southeast Alaska, the report said. The region is defined as stretching five hundred miles from Dixon Entrance near Ketchikan to Yakutat, on the Gulf of Alaska coast north-

west of Juneau and the northern Lynn Canal communities of Haines and Skagway. The mainland coast is defined, in most places, as a narrow strip of land between mountains and shore. There are 1,100 islands making up the Alexander Archipelago in Southeast, which creates a total shoreline of approximately eighteen thousand miles.

Long History Southeast’s maritime tradition dates back ten thousand years, the report notes, and is rooted to the seafaring traditions of the original Tlingit, Haida, and Tsimshian peoples of the area. Russians were in the region in the 1700s after furs, and in the late 1800s there was gold mining and seafood processing, all dependent on waterborne trade. The Tlingits in particular used the wealth of the sea to develop sophisticated trade relations and craft skills. They became skilled navigators along ocean trade routes using large, ocean-going canoes. After the American purchase of Alaska from Russia in 1867, it wasn’t long until the natural beauty of the region came to the nation’s attention along with its mineral wealth. Conservationist John Muir wrote about the scenic splendor of the Southeast coast in the 1970s, and by the 1980s

Ketchikan Shipyard, now being operated by Vigor Alaska. Courtesy of Vigor Alaska

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June 2015 | Alaska Business Monthly

steamships carrying freight and passengers, among them gold miners, were bringing the first cruise tourists. Today the number of visitors on cruise ships approaches 1 million, which has given rise to new ocean-related tourism businesses like whale watching and sea kayaking, as well as sports fishing.

Employment Growth What’s striking is how steadily the Southeast maritime sector is growing, according to the information compiled by Rain Coast Data. From 2010 to 2013 maritime-related total wages in Southeast grew 24 percent across all components of the industry, an increase of $74 million in direct wages. Cycles in salmon harvests and earnings explain part of this, but the growth is striking in comparison to 5 percent growth in maritime earnings statewide, or $139 million, during the same period. Direct employment also increased, up by 13 percent, or eight hundred jobs. “This includes a 49 percent increase in US Coast Guard jobs, a 24 percent increase in marine tourism jobs, a 12 percent increase in marine transportation jobs, and a 7 percent increase in seafood sector jobs,” the Southeast Conference said. The Rain Coast Data report showed seafood processing and fish harvesting jobs increasing to 4,252; an increase in marine jobs related to tourism to 952; US Coast Guard jobs up to 761; marine transportation jobs were up to 450; and marine-related construction jobs were up to 51. Shipbuilding and repair dipped slightly, down 2 percent to 231, but this was prior to work beginning on new state ferries being built in Ketchikan. Broad gains from 2012 to 2013 were reflected through the data. In 2012 there were 402 firms engaged in marine-related work in Southeast, employing 8,200 and paying $474.4 million in total wages, or $57,860 as an average annual wage, according to the data. Employment in maritime industries increased 12 percent between 2012 and 2013, while wages grew 12 percent. Public sector maritime employment is big, through the Coast Guard and Alaska Marine Highway System, but private sector marine jobs still total 75 percent of the total, according to the Southeast Conference’s maritime report. 56

Alaska Business Monthly | June 2015 www.akbizmag.com

Star Performer If there is a star performer for Southeast’s growing maritime industry, it is in shipbuilding and repair. Ketchikan’s shipyard, long in development and with its ups and downs over the years, has now developed into a well-equipped vessel construction and major maintenance site. Most recently the Alaska Department of Transportation and Public Facilities has contracted with the shipyard to build two large “Alaska Class” ferries for the Alaska Marine Highway System. But there are other Southeast communities that have developed local shipbuilding, support, and repair centers, particularly Sitka and Wrangell. In Ketchikan, Vigor Alaska now has about 168 people at work with more being added every week, according to Doug Ward, Vigor Alaska’s development director. Much of the new work is on the two “Alaska Class” ferries under construction in the Ketchikan Shipyard, which is operated by Vigor. The two sections for the vessels are built and work has shifted to fabrication of modules for the top sections, which will be built and then stored at the site until the installation, which will come later. Americanmade specialty steel, a higher-grade steel to ensure the watertight integrity of the hull, has also been ordered. At the peak of activity, Vigor expects to have about 80 to 100 employees working full-time purely on the two new ferry vessels for four years, as well as about 150 employed in other work the yard will be doing. A workforce of 160 translates to an approximate $10 million annual payroll, Ward says. Reinvigorating the Base Ketchikan’s success with shipbuilding is the most striking example of how shipbuilding can reinvigorate a community’s industrial base. When the Ketchikan Pulp Mill closed in 1997, well-paying jobs were lost and the industrial base of the community was seemingly wiped out. Community leaders began working with the idea of expanding ship maintenance in Ketchikan as a replacement industry as some of the skills of laid-off pulp mill workers corresponded to skills needed in ship repair. Ketchikan is also www.akbizmag.com

well located to provide maintenance on fishing and vessels engaged in marine transportation, so operators don’t have to send their vessels all the way to the Pacific Northwest for annual servicing. State officials were interested in helping. In the 1970s the first nine ferry vessels of the Alaska Marine Highway System fleet were built, but there was no facility in Alaska capable for providing the annual maintenance these large, modern ships needed. The state Department of Transportation and Public Facilities stepped in to develop a ship-

yard in Ketchikan to support the ferry fleet and spent $30 million in the 1980s to develop the yard on what was originally a 16-acre site of an abandoned cannery (the yard has now grown to occupy 25.2 acres). There was already a small ship maintenance facility in Ketchikan that began operating mainly on a seasonal basis in 1981. Ship repairs were done in winter, including maintenance on state ferry vessels, and employing skilled labor who worked on major maintenance projects on the pulp mill during summer.

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June 2015 | Alaska Business Monthly

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Finding Success The shipyard had its problems in the early years. Under an agreement with the state Department of Transportation and Public Facilities and the City of Ketchikan, the site was subleased for operation of the shipyard by private operators. However, each experienced operational and financial difficulties and the facility was closed for two years, reopening in 1994 with a new private operator, Alaska Ship and Drydock (AS&D). AS&D, locally-owned, straightened out the problems and the shipyard developed a long-term program for growth. In 1997 the ownership of the shipyard was transferred to AIDEA (Alaska Industrial Development and Export Authority), the state’s development finance corporation, which still owns the yard. The AS&D lease continued. The Alaska Department of Transportation and Public Facilities’ focus was mainly on support of the marine highway fleet, but AIDEA’s mandate is larger: to foster economic development. The idea of building ships at the yard was conceived at first as a way to even out the annual work. Winter was the maintenance season for existing vessels, but if there were orders to build ships it would keep skilled staff busy year-round. Over several years the shipyard’s work was expanded to include, in addition to annual ferry vessel overhauls, work on vessels for the US Coast Guard, federal and state research agencies, and large fishing and tourism vessels. The shipyard was still critical to the ferry system, however, and in 2004 the headquarters of the ferry system was moved from Juneau to Ketchikan so that ferry system managers would be located in the same community as the shipyard. With privately-owned AS&D as operator and AIDEA as owner, the shipyard was finally a success, growing from 21 employees and $2.4 million in revenues in 1994 to 120 employees and $37 million in revenues in 2012. In 2012, AS&D was strengthened through its purchase by Vigor Industrial, a major Pacific Northwest shipyard operator. Vigor added Ketchikan to Vigor’s existing six shipyards in the Northwest, retaining AS&D as a Vigor subsidiary with its name changed to Vigor Alaska.

Alaska Business Monthly | June 2015 www.akbizmag.com

Shipbuilding jobs pay well, too. “Nationally, average annual wages in shipbuilding and repair are 45 percent higher than the average for the private sector economy. Similar earnings ratios are reported in Ketchikan,” according to an industry workforce blueprint, the “Alaska Maritime Workforce Development Plan,” published in May 2014. The seafood and marine service industries and the University of Alaska worked together on the report as part of the state’s 2012 Fishing, Seafood and Maritime Initiative.

Maritime Maintenance Ketchikan isn’t the only community benefiting from increased ship maintenance and repair work. According to a September 2014 report on Alaska’s maritime support sector by the Alaska Department of Commerce and Economic Development, several coastal communities are moving to develop local ship maintenance facilities. One is Wrangell, north of Ketchikan, which is host to a fleet of fishing, recreation, and work boats. The recent installation of two hydraulic lifts and

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Courtesy of Vigor Alaska

Bow of the longliner F/V Handler under construction at the Ketchikan Shipyard by Vigor Alaska. (See the digital edition for a series of photos detailing the building of this boat.)

June 2015 | Alaska Business Monthly

SEATAC MARINE SERVICES

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a marine railway at Wrangell’s marine services center have allowed 300-ton vessels to be hauled out and worked on. Petersburg, near Wrangell, has a large commercial fishing fleet and two hydraulic lifts that can also haul out 300-ton vessels for maintenance. Not to be left out, the smaller community of Hoonah, to the north, has a 220-ton lift. An example of the benefit of having maintenance work done in the state was a case of a tug from Juneau which had its annual maintenance done in Wrangell: avoiding a trip south to Bellingham or Port Townshend, in Washington state, saved $20,000 in fuel, according to the state commerce department report. The future looks good, too. “With Alaska state ferries under construction in the state for the first time, a rebounding tourist sector, and expected increases in 2015 seafood harvests, the outlook for the maritime economy is for continued growth,” the Southeast Conference said. The demographics of the Alaska fleet, in which many vessels are aging, will mean work for regional ship builders and repair facilities. By 2025, in the Alaska small vessel fleet, of those sixty feet or under, 3,100 vessels will be fortyfive years old or older. The smaller Alaska ship maintenance facilities will be ideal for work on these smaller vessels. Today new maritime opportunities are emerging across Alaska, the Southeast Conference report said. “Retreating sea ice has increased the accessibility of the Arctic, generating new economic opportunities and an increasing US Coast Guard presence,” the report said. Even though the Arctic is far from Southeast Alaska the region’s maritime support industry as well as the Coast Guard, which has its Alaska headquarters in Juneau, will likely be engaged in vessel maintenance and other support work that may eventually develop. It has been a surprising turnaround for a region that once had a strong industrial base rooted in the forest industry, with pulp and saw mills, but is now looking to a bright future in its oldest industry, the ocean. R

Mike Bradner is publisher of the Alaska Legislative Digest. 60

Alaska Business Monthly | June 2015 www.akbizmag.com

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ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S

2015 TRANSPORTATION DIRECTORY Company

Top Executive

ACE Air Cargo 5901 Lockheed Ave. Anchorage, AK 99502 Phone: 907-334-5100 Fax: 907-245-0243

Mike Bergt, Pres.

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

Hank Schaub, GM

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 Forwarding 4000 W. 50th Ave., Suite 6 Anchorage, AK 99502 Phone: 907-248-4697 Fax: 907-248-9706

Jeff Dornes, Co-Owner

Alaska Air Taxi LLC 4501 Aircraft Dr. Anchorage, AK 99502 Phone: 907-243-3944 Fax: 907-248-2993

Jack Barber, Owner

Alaska Air Transit 2301 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 AK

Alaska Cargo Service PO Box 251 Dillingham, AK 99576-0251 Phone: 907-842-2400 Fax: 907-842-1540

Bo Darden, Owner

1976 1976

3 3

Arctic Prism Helicopters 1415 N. Local 302 Rd. Palmer, AK 99645 Phone: 907-745-5775 Fax: 907-745-5787

David King, Pres.

1998 1998

0-5 0-5

Helicopter charter.

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

Gary Porter, VP

1993 1993

16 16

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 1979

150 150

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.

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

Candace Ellison-Theis, CEO

2000 2000

2 2

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 2003

375 14

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

Tim Cudney, Dir.

2012 2012

10 10

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 a full dining facility.

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

Dennis Gladwin, Pres.

2000 2000

5 5

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

AIR

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

Mike@aceaircargo.com aceaircargo.com

alaskanace@gci.net alaskanace.com

alaskacargo.com

4help@alaskaaircargo.com alaskaaircargo.com

info@alaskaairtaxi.com alaskaairtaxi.com

Charters@FlyAAT.com FlyAAT.com

alaskaair.com

debbie@lfav.com arcticprismhelicopters.com

coordinator@baldmountainair.com baldmountainair.com

info@beringair.com beringair.com

camaillc@yahoo.com

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

deadhorseaviationcenter.com

desertair@alaskan.com desertairalaska.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1988 1988

104 104

On Demand passenger charters throughout the State of Alaska. Cargo transportation provider offering scheduled cargo service to 21 locations in Alaska. ACE Logistics freight-forwarding and logistics provider. ACE Air Services offers aviation groundhandling for commercial and private carriers.

1994 1994

11 11

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.

1932 1932

10,239 Goldstreak small package express, Petstreak animal express, priority and general air 500 freight services. Full ULD and charter services also available.

1969 1969

30 4

Air freight, trade shows, shipment consolidations, nationwide purchase order procurement service and international shipping.

1987 1987

8 8

Passenger & Cargo Air Charters - Direct charter flights to your community from Anchorage. We offer combination flights that move your crew and cargo at the same time saving you time and money! We provide support services for the oil & gas, mining, and fishing industries, as well as tourism.

1984 1984

16 16

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

1932 1932

13,800 Alaska Airlines and its sister carrier, Horizon Air, together, provide passenger and cargo 1,750 service to more than 100 destinations in Alaska, Canada, Mexico, Hawaii, and the Lower 48. Air cargo and express package services, air transportation nonscheduled, fuel available, local delivery services and air courier services.

June 2015 | www.akbizmag.com

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ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

Top Executive

DHL Global Forwarding 6375 Kulis Dr. Anchorage, AK 99502 Phone: 907-243-4301 Fax: 907-677-0900

Mindy Huston, AK Ops

Egli Air Haul PO Box 169 King Salmon, AK 99613 Phone: 907-246-3554 Fax: 907-246-3654

Sam Egli, Owner

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

Elliott Neal, VP AK

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.

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

Bruce McGlasson, Pres.

Great Circle Flight Services 6121 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-245-1232 Fax: 907-245-1501

Cathy Porter, Mgr.

Homer Expediters 990 SeaPlane Ct. Homer, AK 99603 Phone: 907-235-5244 Fax: 907-235-5244

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

dfganc@dhl.com dhl-dgf.com

egliair.com

erahelicopters.com

1970 1970

1982 1982

1948 1948

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

32,000 Worldwide freight services featuring total Alaska coverage. Specializing in air cargo, 10 trucking, express services, warehousing, storage solutions, supply chain, and rail freight.

5 5

Helicopter and airplane charter, aviation fuel sales, and hanger space rental.

1,000 Founded in Alaska in 1948, Era not only serves the oil and gas industry in Alaska, but 150 provides services for state and government business, executive charter services, flightseeing tours, environmental surveys, utility and construction work.

1995 1995

259 249

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 1977

20 20

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

1971 1971

200 200

Scheduled commuter air carrier that provides 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.

2005 2005

8 8

GCFS provides personal and attentive concierge style FBO services to private and charter aircraft traveling to, from, and throughout Alaska. Open 24/7/365.

Jules Ravin , Owner/Operator

1986 1986

1 1

Air cargo and express-package services, local delivery services, freight-transportation and air-forwarding services.

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

Scott Van Valin, Dir. Ops/Pres.

2008 2008

21 21

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.

Kenai Aviation PO Box 46 Kenai, AK 99611 Phone: 907-283-4124 Fax: 907-283-5267

Robert T Bielefeld, Owner

1961 1961

7 7

Air taxi. Charter, Aircraft Maintenance.

Last Frontier Air Ventures Ltd. 1415 N. Local 302 Rd. Palmer, AK 99645 Phone: 907-745-5701 Fax: 907-745-5711

David King, Pres.

1997 1997

0-5 0-5

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

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

Rick Zerkel, Pres.

1996 1996

154 154

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

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

David Richardson, Pres.

1980 1980

236 51

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

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

Alex McKallor, Pres.

1984 1984

10 3

Arrangement of freight transportation, information management and logistical services.

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

Paul Grimaldi, Pres.

1954 1954

291 150

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

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

Robert Fell, Dir. Ops

1973 1973

80 80

Maritime Helicopters supports Marine, Petroleum & Construction industries as well as State & Federal agencies. We own and operate 206 B/L, 407 Bell Helicopters, BO-105 twin engine Eurocopters & a helipad equipped 86' vessel for remote marine operations. Bases in Homer-Fairbanks-Kenai-Kodiak-Valdez.

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

David W. Karp, Pres./CEO

1956 1956

300 280

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.

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

Michael W. Fell, Pres.

2001 2001

45 45

Pathfinder Aviation, Inc. supports Petroleum, Mining, Survey, Film, and various other industries utilizing twin-engine Bell 212s & EC-135 & single engine Bell 206 series helicopters with OAS-approved pilots and aircraft. They operate field bases throughout Alaska with a main base in Homer. June 2015 | www.akbizmag.com

info@evertsair.com evertsair.com

e.hoffman@expressdeliveryak.com

res@flygrant.com flygrant.com

dispatch@greatcircleflight.com greatcircleflight.com

info@IslandAirX.com IslandAirX.com

kenaiav@yahoo.com KenaiAviation.com

helicopter@LFAV.com LFAV.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 nac.aero

pathfinderaviation@alaska.net pathfinderaviation.com

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

Bob Hajdukovich, CEO

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.

Ted Stevens Anchorage Int'l Airport PO Box 196960 Anchorage, AK 99519-6960 Phone: 907-266-2119 Fax: 907-243-0663

John Parrott, Airport Mgr.

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

Todd Clark, Pres.

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

Vanessa Keyes, Reg. Dir./AK

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

Ron Haberman, District Mgr.

Ward Air Inc. 8991 Yandukin Dr. Juneau, AK 99801-8086 Phone: 907-789-9150 Fax: 907-789-7002

Ed Kiesel, Pres.

June 2015 | www.akbizmag.com

TOP EXECUTIVE

FOUNDED/ESTAB. AK

sales@flyera.com flyravn.com

ryan@ryanalaska.com ryanalaska.com

sales@securityaviaition.biz securityaviation.biz

dot.aia.ancinfo@alaska.gov anchorageairport.com

toddc@tgifreight.com tgifreight.com

vanessak.anc@transgroup.com transgroup.com

ups.com

usps.com

Reservations@WardAir.com WardAir.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1948 1948

900 900

Transportation; Scheduled passenger service, scheduled cargo and charter service.

1953 1953

100 100

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

1985 1985

25 25

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

1951 1951

383 383

World class cargo airport, largest passenger airport in Alaska and the world's busiest float-plane base.

1989 1989

7 7

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

2011 2011

500 2

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.

1907 1985

435,000 UPS is a global company with one of the most recognized and admired brands in the 483 world. We have become the world's largest package delivery company and a leading global provider of specialized transportation and logistics services.

1915 1915

~55,000 Mailing and delivery of letters, magazines and parcels weighing up to 70 pounds. ~1,300

1995 1995

21 21

Air transportation nonscheduled.

AIR

Top Executive

COMPANY

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

LAND

AIR

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company COMPANY

Top Executive TOP EXECUTIVE

YRC Freight 2040 E. 79th Ave. Anchorage, AK 99507-2956 Phone: 907-344-0099 Fax: 907-344-0939 Company

Roslyn Mitchell, Terminal Mgr.

FOUNDED/ESTAB. AK

yrcfreight.com

1924 1981

Top Executive

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

Hank Schaub, GM

ACE Transport, Inc. 7500 Park West Circle Anchorage, AK 99502 Phone: 907-229-9647 Fax: 907-245-8930

Henry S. Minich, Pres.

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

Jared Lastufka, Ops Mgr.

Alaska Railroad Corp. PO Box 107500 Anchorage, AK 99510-7500 Phone: 907-265-2300 Fax: 907-265-2443

Bill O'Leary, Pres./CEO

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

Ron Moore, AK Sales Mgr.

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

Ron Moore, AK Sales Mgr.

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

Ron Moore, AK Sales Mgr.

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

Damian Naquin, GM

American Relocation Services 2430 Beaver Lake Dr. Kodiak, AK 99615 Phone: 907-486-1015 Fax: N/A

Damian Naquin, GM

American Relocation Services 47693 Michelle Ave., Unit 7 Soldotna, AK 99669 Phone: 907-262-6646 Fax: N/A

Damian Naquin, GM

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

Damian Naquin, GM

AMS Couriers 5001 Arctic Blvd., Unit 2 Anchorage, AK 99503 Phone: 907-278-2736 Fax: 907-258-4293

Jaime Fink, Managing Shareholder

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

Young Summers, Member

alaskanace@gci.net alaskanace.com

acetransportalaska.com

youtube.com/americanfastfreight americanfast.com

corpinfo@akrr.com alaskarailroad.com

dave@akterminals.com akterminals.com

info@aktrucks.org aktrucks.org

information@lynden.com/ lynden.com/awe

alisonsrelo@gci.net alisonsrelo.com

alaska@americanfast.com americanfast.com

youtube.com/americanfastfreight americanfast.com

info@amscouriers.com amscouriers.com

yksummers@qwestoffice.net bestrateexpress.com

WORLDWIDE\AK EMPLOYEES

Services SERVICES

32,000 YRC Freightﾃ不 operations in Alaska, give you an integrated solution for moving LTL and 4 TL freight between key markets using just one carrier from beginning to end. In addition, YRC has comprehensive coverage throughout North America, including cross-border to and from Canada and Mexico. Services

1994 1994

11 11

2003 2003

1 1

Heavy hauling of equipment, modules, etc.

1988 1988

10 6

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.

1914 1914

600 600

Freight rail transportation, passenger rail transportation, and real estate land leasing and permitting. Employees increase seasonally to 700.

1981 1981

35 35

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

1958 1958

4 4

An authoritative voice in trucking; the Alaska Trucking Association provides regulatory guidance, a bridge between industry and DOT, as well as a voice in Juneau via our registered lobbyist. ATA provides DMV services to both members companies and the general public.

1978 1978

164 154

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 1997

30 30

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 1984

350 160

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.

1984 1984

350 160

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 1984

350 160

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.

1988 1988

55 50

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.

1988 1988

60 55

1988 1988

55 50

1988 1988

155 150

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.

1964 1964

15 15

Specializes in Route and On-Demand Same-Day Deliveries in Alaska. Provides Transportation, Warehousing, and Logistics solutions for the Medical, Legal, Telecommunications, and Financial industries. Open 24/7/365.

2004 0

0 0

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. June 2015 | www.akbizmag.com

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

Terry Howard, 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

DHL Global Forwarding 6375 Kulis Dr. Anchorage, AK 99502 Phone: 907-243-4301 Fax: 907-677-0900

Mindy Huston, AK Ops

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.

Homer Expediters 990 SeaPlane Ct. Homer, AK 99603 Phone: 907-235-5244 Fax: 907-235-5244

TOP EXECUTIVE

FOUNDED/ESTAB. AK

carlile.biz

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

bob.cox@crowley.com crowleyfuels.com

dfganc@dhl.com dhl-dgf.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1980 1980

650 500

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

2003 2003

375 14

1892 1953

5,000 CPD operates fuel terminals in 22 locations in the Railbelt, western AK and SE AK, 500 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 over 60 years of service to Alaska.

1970 1970

32,000 Worldwide freight services featuring total Alaska coverage. Specializing in air cargo, 10 trucking, express services, warehousing, storage solutions, supply chain, and rail freight.

1977 1977

20 20

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

Jules Ravin , Owner/Operator

1986 1986

1 1

Air cargo and express-package services, local delivery services, freight-transportation and air-forwarding services.

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

Marshall Cymbaluk, CEO/Mgr.

1974 1974

235 42

Truck dealer.

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

David Richardson, Pres.

1980 1980

236 51

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

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

Alex McKallor, Pres.

1984 1984

10 3

Arrangement of freight transportation, information management and logistical services.

June 2015 | www.akbizmag.com

e.hoffman@expressdeliveryak.com

sales@kenworthalaska.com kenworthalaska.com

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

information@lynden.com lynden.com

LAND

Top Executive

COMPANY

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

LAND

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

PORTS

Company

Top Executive

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

Paul Grimaldi, Pres.

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

Ed Fitzgerald, 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

Tom Souply, Pres.

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

Todd Clark, Pres.

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

Lee McKenzie, Pres./Owner

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 Mgr.

Waste Management of Alaska, Inc. 1519 Ship Ave. Anchorage, AK 99501 Phone: 907-274-0477 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, GM

WestPac Logistics LLC 130 Marvin Rd. SE, Suite 204 Lacey, WA 98503 Phone: 360-491-4452 Fax: N/A

King Hufford, Pres.

YRC Freight 2040 E. 79th Ave. Anchorage, AK 99507-2956 Phone: 907-344-0099 Fax: 907-344-0939 Company

Roslyn Mitchell, Terminal Mgr.

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

trananccs@lynden.com lynden.com/ltia/

Info@pafak.com pafak.com

sourdoughtransfer.com sourdoughexpress.com

billm@spanalaska.com spanalaska.com

toddc@tgifreight.com tgifreight.com

sales@trailercraft.com trailercraft.com

ups.com

usps.com

mholzschuh@wm.com wm.com

info@wbialaska.com wbialaska.com

khanson@westernpeterbilt.com westernpeterbilt.com

info@westpaclogistics.com westpaclogistics.com

yrcfreight.com

Hank Schaub, GM

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

Allyn Long, Owner/GM

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.

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

Todd Halverson, Owner/Pres.

alaskanace@gci.net alaskanace.com

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

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

amlcsc@lynden.com shipaml.com

dave@akterminals.com akterminals.com

Services

SERVICES

1954 1954

291 150

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

1961 1961

90 65

Consolidating, on time delivery service, freight forwarding.

1898 1902

200 200

Freight-transportation services, moving and storage services. Steel Connex Container Sales/Lease.

1978 1978

140 80

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 1989

7 7

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

1969 1969

55 55

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

1907 1985

1915 1915

~55,000 Mailing and delivery of letters, magazines and parcels weighing up to 70 pounds. ~1,300

1969 1969

~42,700 Hazardous and nonhazardous waste disposal, project management, complete logistical 7 oversight, complete US and Canadian manifesting, rail transportation, over-the-road transportation, marine transportation, and turnkey remedial services.

1962 1947

135 135

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 1987

400 40

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.

2010 2013

5 2

1924 1981

Top Executive

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

WORLDWIDE\AK EMPLOYEES

We do project logistics, project forwarding, and transportation. We also operate WestPac Transportation and WestPac Terminals; we are a terminal operator at Port MacKenzie.

1994 1994

11 11

2003 2003

55 35

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.

1963 1963

1,100 Providing marine transportation for passengers and vehicles to over 30 Alaska coastal 1,100 communities. No pre-set itineraries. Amenities available include staterooms, dining, movie theatres, and viewing lounges.

1980 1980

233 28

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

1981 1981

35 35

As the Atlas Van Lines agent for Alaska, we perform local, interstate and international moving services for corporate, government and COD customers. June 2015 | www.akbizmag.com

Alison McDaniel, Pres.

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

Ron Moore, AK Sales Mgr.

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

Ron Moore, AK Sales Mgr.

Arctic Marine Solutions PO Box 3302 Seward, AK 99664 Phone: 907-360-2982 Fax: N/A

Jim Hubbard, Pres.

Bering Marine Corporation 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, Dir. Business Dev.

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

Terry Howard, Pres.

TOP EXECUTIVE

FOUNDED/ESTAB. AK

alisonsrelo@gci.net alisonsrelo.com

alaska@americanfast.com americanfast.com

youtube.com/americanfastfreight americanfast.com

mattk@arcticmarinesolutions.com arcticmarinesolutions.com

information@lynden.com bmc.lynden.com

mikeb@beringpacific.com beringpacific.com

yksummers@qwestoffice.net bestrateexpress.com

info@bowhead.com bowheadtransport.com

carlile.biz

Services

WORLDWIDE\AK EMPLOYEES

SERVICES

1997 1997

30 30

1984 1984

350 160

1984 1984

350 160

2010 2010

10 10

We provide cargo and personnel transport on the water and over the tundra year round.

1985 1985

26 26

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 2004

5 4

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!"

2004 0

0 0

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 1982

10 10

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.

1980 1980

650 500

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

MARINE

Top Executive

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

COMPANY

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

Rugged as a Bear STABLE … STURDY … SOLID

With decades of experience serving the Alaska market, Span Alaska’s seasoned team has time-tested solutions for shipping to the Last Frontier. SHIPPING TO ALASKA? CALL SPAN ALASKA.

1.800.257.7726

June 2015 | www.akbizmag.com

•

w w w. s pa n a l a s k a . c o m

MARINE

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

Top Executive

Coastal Transportation 4025 13th Ave. W. Seattle, WA 98119 Phone: 800-544-2580 Fax: 206-283-9121

Jeff Allen, Dir. Marketing

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

Cook Inlet Tug & Barge 188 W. Northern Lights Blvd., Suite 1020 Anchorage, AK 99503 Phone: 907-277-7611 Fax: 907-272-3410

Ben Stevens, GM

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

Bob Cox, VP

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

Kirk Payne, Pres.

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.

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/CEO

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

Marion Davis, SVP & GM AK Division

Kvichak Marine Industries 469 NW Bowdoin Pl. Seattle, WA 98107 Phone: 206-545-8485 Fax: 206-545-3504

Keith Whittemore, 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

Robert Fell, Dir. Ops

North Star Terminal & Stevedore Co. 790 Ocean Dock Rd. Anchorage, AK 99501 Phone: 907-263-0120 Fax: 907-272-8927

Jeff Bentz, Pres.

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

Jared Davis, Dir. AK Ops

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

Jared Davis, Dir. AK Ops

Olympic Tug and Barge 910 SW Spokane St. Seattle, WA 98134 Phone: 206-628-0051 Fax: 206-628-0293

Sven Christensen, GM

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

cs@coastaltransportation.com coastaltransportation.com

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

info@cookinlettug.com cookinlettug.com

bob.cox@crowley.com crowleyfuels.com

deltawestern.com

info@foss.com foss.com

info@harleymarine.com harleymarine.com

harveygulf.com

horizonlines.com

sales@kvichak.com kvichak.com

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

information@lynden.com lynden.com

trananccs@lynden.com lynden.com/ltia/

info@maritimehelicopters.com maritimehelicopters.com

scottv@northstarak.com northstarak.com

offshoresystemsinc.com

info@harleymarine.com harleymarine.com

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1984 0

130 0

A family owned U.S. flag marine transportation company. Coastal operates six vessels with scheduled year-round sailings between Seattle and ports throughout Western Alaska and the Aleutian Islands. Twenty-eight years in Western Alaska provides a level of expertise that is unmatched.

2003 2003

375 14

1924 1924

18 18

Cook Inlet Tug & Barge is a marine transportation company, specializing in harbor services, with a primary marketing focus on the Port of Anchorage and Cook Inlet.

1892 1953

1985 1985

1889 1922

Fuel and lubricant distribution.

1,537 Foss offers tug and barge support services, contract towing, offshore support, and oil 6 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.

1975 1975

78 0

Primary business functions include ship assist, general towing and deck cargo transport.

2010 2010

855 5

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

1956 1964

1,780 Containership service between Tacoma, WA, and Anchorage, Kodiak, and Dutch 260 Harbor, AK. Linehaul trucking to the Alaska Railbelt. Seasonal feeder barge service to Bristol Bay and the Pribilof Islands. Connecting carrier service to other water, air, and land carriers.

1981 1981

100 0

Builder of aluminum commercial workboats.

1980 1980

236 51

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

1984 1984

10 3

Arrangement of freight transportation, information management and logistical services.

1954 1954

291 150

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

1973 1973

80 80

1950 1950

~50 ~50

Stevedore, marine logistics and operated crane services. We are also providing state of the art driven foundations with our ABI Mobile Ram Machines.

1982 1982

150 138

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.

1983 1983

160 150

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

1987 1987

228 18

Full service maritime corporation. Bunkering, Oil transportation, Ship assist and General towing. June 2015 | www.akbizmag.com

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

Ed Fitzgerald, CEO

Pacific Coast Maritime PO Box 920086 Dutch Harbor, AK 99692 Phone: 206-628-0051 Fax: 206-628-0293

Jim Weimer, GM

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

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

Tom Souply, Pres.

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

Grace Greene, AK GM

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

Ron Haberman, District Mgr.

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

Adam Beck, Pres.

June 2015 | www.akbizmag.com

TOP EXECUTIVE

Info@pafak.com pafak.com

info@harleymarine.com harleymarine.com

sales@samsontug.com samsontug.com

Info@seldoviabayferry.com Seldoviabayferry.com

sourdoughtransfer.com sourdoughexpress.com

billm@spanalaska.com spanalaska.com

totemocean.com

usps.com

info@akship.com vigoralaska

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1961 1961

90 65

Consolidating, on time delivery service, freight forwarding.

1975 1975

12 11

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 240ﾂ｣ x 60' deck barge equipped with a Manitowoc 4100 Vicon Crane. Primary business functions include ship assist, general towing and deck cargo transport.

1937 1937

145 110

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.

2010 2010

1 1

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

1898 1902

200 200

Freight-transportation services, moving and storage services. Steel Connex Container Sales/Lease.

1978 1978

140 80

1975 1975

140 30

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.

1915 1915

1994 1994

~55,000 Mailing and delivery of letters, magazines and parcels weighing up to 70 pounds. ~1,300

2,400 We are the largest most capable marine industrial service company in the AK/PNW 200 Region focused on shipbuilding and repair. Alaska operations are concentrated in AIDEAﾃ不 Ketchikan Shipyard. Our mobile and multi-skilled workforce travels throughout Alaska to heavy industrial and offshore projects.

MARINE

Top Executive

COMPANY

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

PORTS

MARINE

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

Top Executive

Vitus Energy LLC 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: 907-274-0477 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.

WestPac Logistics LLC 130 Marvin Rd. SE, Suite 204 Lacey, WA 98503 Phone: 360-491-4452 Fax: N/A

King Hufford, Pres.

YRC Freight 2040 E. 79th Ave. Anchorage, AK 99507-2956 Phone: 907-344-0099 Fax: 907-344-0939 Company

Roslyn Mitchell, Terminal Mgr.

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

info@vitusmarine.com vitus-energy.com

mholzschuh@wm.com wm.com

2009 2009

WORLDWIDE\AK EMPLOYEES

47 47

yrcfreight.com

1960

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

2010 2013

1924 1981

Top Executive

City of Craig PO Box #725 Craig, AK 99921 Phone: 907-826-3404 Fax: N/A

Michael Peel, Harbormaster

City of Whittier Harbor PO Box 639 Whittier, AK 99693 Phone: 907-472-2327 Fax: 907-472-2472

Cole Haddock, Harbormaster

Hoonah Harbor PO Box 360 Hoonah, AK 99829 Phone: 907-945-3670 Fax: 907-945-3674 Petersburg Port & Harbor 223 Harbor Way Petersburg, AK 99833 Phone: 907-772-4688 Fax: 907-772-4687

SERVICES

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 1969

Westerntowboat@westerntowboat.co westerntowboat.com

info@westpaclogistics.com westpaclogistics.com

Services

5 2

We do project logistics, project forwarding, and transportation. We also operate WestPac Transportation and WestPac Terminals; we are a terminal operator at Port MacKenzie.

1922 1907

4 4

Harbor Department.

1970 1970

7 7

The Whittier Harbor is your Gateway to Prince William Sound. We are an ice-free port, open year round. There are 350 slips for both transient and permanent berth holders, to lengths of 54'. The Whittier Harbor is a full-service establishment that tries to meet the needs of all boaters.

Sherry Mills, Harbormaster

1901 1901

3 3

We are a small boat harbor, with shore power for most of the 274 stalls, fresh water, a two-lane launch ramp; a tidal grid; a transient dock with no breakwater; and a 220ton Travelift haulout.

Glorianne Wollen, Harbormaster

1910 1910

8 8

Petersburg port and harbor.

harbormaster@craigak.com

harbor@whittieralaska.gov whittieralaska.gov

ci.petersburg.ak.us

June 2015 | www.akbizmag.com

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

Josh Beaner, Ops Dir.

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

Steve Ribuffo, Port Dir.

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

Rob Fix, Exec. Dir.

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

Peter Williams, Port Director

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

Peggy McLaughlin, Port Director

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

Bryan Hawkins, Dir./Harbormaster

Port of Ketchikan 2933 Tongass Ave. Ketchikan, AK 99901 Phone: 907-228-5632 Fax: 907-247-3610

Steve Corporon, Port & Harbors Dir.

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

Charles Mack, Harbormaster

1970 1970

4 4

Ports and harbors.

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

Lon White, Port Director

1958 1958

17 17

Shipyard; 600 ton Marine Travelift, Deep draft Container Terminal.

TOP EXECUTIVE

josh@portofanacortes.com Portofanacortes.com

wwport@muni.org portofalaska.com

facebook.com/PortofBellingham portofbellingham.com

pwilliams@cityofbethel.net cityofbethel.org

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

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

city.ketchikan.ak.us

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

SERVING ALASKA

June 2015 | www.akbizmag.com

FOUNDED/ESTAB. AK

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1926 -

31 -

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

1961 1961

25 25

The Port of Anchorage (POA) provides critical transportation infrastructure not only to the citizens of Anchorage, but to a majority of the citizens of the State of Alaska both within and beyond the Railbelt.

1920 0

100 0

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

1940 1959

3-9 3-9

Operate freight dock and yard, petroleum dock and berths for mooring boats and barges and a small boat harbor.

1867 1867

10 10

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.

1964 1964

17 17

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 & ice delivery.

1880 1880

12-50 Ketchikan has four panamax sized cruise ship berths. They are numbered sequentially 12-50 from south to north along the downtown waterfront. Each berth also has an adjacent float.

PORTS

Top Executive

COMPANY

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

OR F T L I BU KA

ALAS

PORTS

ALASKA BUSINESS MONTHLY | 2015 TRANSPORTATION DIRECTORY

Company

Top Executive

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

Lucas Stotts, Harbormaster

Port of Pelican PO Box 737 Pelican, AK 99832 Phone: 907-735-2202 Fax: 907-735-2258

Patricia Phillips, Mayor

Port of Sand Point Sant Point Boat Harbor Sand Point , AK 99661 Phone: 907-383-2331 Fax: 907-383-5611

Richard Kochuten Sr., Harbormaster

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

Tay Yoshitani, CEO

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

Seward Boat Harbor PO Box 167 Seward, AK 99664 Phone: 907-224-3138 Fax: 907-224-7187

Mack Funk, Harbormaster

COMPANY

TOP EXECUTIVE

FOUNDED/ESTAB. AK

lstotts@nomealaska.org nomealaska.org/port

cityhall@pelicancity.org pelican.net

sptcity@arctic.net

portseattle.org/Cargo

m.oboyle@skagway.org skagway.org

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/

WORLDWIDE\AK EMPLOYEES

Services

SERVICES

1985 1985

4 4

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

1940 1940

9 9

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

1988 1988

6 6

We are a fishing community that caters to a local fleet of vessels 32 to 60 feet.

1911 -

1,700 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.

1898 1898

3 3

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.

1918 0

235 0

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 1901

4 4

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 2008

6 6

Ports and harbors.

1964 1964

11+ 11+

We are a full service port with 50-ton and 330-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.

June 2015 | www.akbizmag.com

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Crowley.com/ABM | 907.777.5505 crowley.com/social

FINANCIAL SERVICES

Courtesy of AIDEA

Construction crew at ribbon cutting for $20 million, five-mile road and nineteen-acre gravel pad built by AIDEA’s Mustang Road LLC for the Brooks Range Petroleum Company operated Mustang oil development project on the North Slope.

CapEx Funding Demand is strong across the board By Julie Stricker

ith all the talk out of Juneau this spring about shrinking revenue and budget deficits, it’s tempting to look in the rearview mirror to see if Chicken Little is about to overtake the car. And while low oil prices are causing their share of problems on a state level, they’re proving to be a boon to many Alaskans, bank officials and others say. While they don’t expect a boom year, demand for capital funding is strong across the board in the healthcare, fishing, mining, and tourism industries. Several oil and gas projects on the North Slope are also looking strong, such as ExxonMobil’s Point Thomson. Overall oil and gas expenditures are expected to be about $3.8 billion, according to a forecast by ISER, the Institute of Social and Economic Research at the University of Alaska Anchorage. Darren Franz, Alaska regional banking manager for Wells Fargo, says any gloom and doom forecasts are off the mark.

“The real challenge here is how long these $50 [per barrel] prices last,” Franz says. “The economy in Alaska has not been growing by leaps and bounds, but there’s certainly been steady growth.” “Just look at Arctic Man,” he adds. “I think there were twenty thousand people out there running around. It’s not depressing out there. They burn more fuel at Arctic Man than you do in your house.” In fact, Alaska is growing, and demand for capital funding has been strong for years, he says. “We’ve been doing a little over half a billion dollars in new loans every year,” he says. “I think most Alaska businesses are actually quite healthy and really poised for opportunities that come down the pipe. Even the state has $15 billion in their general savings account from a lot of good years. I do think there are tons of things that are going to happen in upcoming years.”

Darren Franz, Alaska regional banking manager for Wells Fargo.

Fishing, Healthcare, Tourism This year, strong demand is coming from the fishing industry as forecasts call for one of the biggest Bristol Bay

Alaska Business Monthly | June 2015 www.akbizmag.com

sockeye salmon harvests in the past twenty years. The Alaska Department of Fish and Game predicts 54 million sockeye will return to the region this summer. Strong returns are also expected for Kodiak and Southeast Alaska. “Fishing continues to be strong and we’re continuing to see investment in that area,” Franz says. “Lots of new boats.” Fishermen are buying Individual Fishing Quotas and processors are expanding operations in Naknek, for instance, he says. “That had been virtually a ghost town. Now there are several processors there.” Franz says foreign appetites are responsible for much of the demand. “A lot more of our fish we’re seeing going overseas,” he says. “There’s a lot of hungry people in this world and we’re sitting on the edge of one of the world’s biggest fish ponds.” Healthcare is another growth area. Franz says new medical clinics and doctors’ offices are opening or expanding around the state, including the Alaska Native Medical Center in Anchorage, which is building a two hundred-room patient housing facility. Major projects

are also planned for health facilities in Fairbanks, Ketchikan, and the Kenai Peninsula, according to ISER. “There’s definitely still unmet healthcare needs in the state,” he says. “Especially, even in Anchorage, longer-term care facilities for elders. There’s pent up demand for that.” The lower gasoline prices are also expected to bring more tourists to the state. The low gas prices are a boon to the mining industry, lowering the cost to produce metals and finance exploration. Mining overall is expected to be up 19 percent, according to ISER. Demand for RVs, boats, and other vehicles is strong in both mining and tourism. The housing market is expected to be centered on the booming Matanuska-Susitna region, but relatively stagnant elsewhere, according to ISER.

Conservative Investments In the oil and gas sector, companies are looking at service-related financing, such as equipment maintenance and replacement or the construction of modular living facilities, according to Lori McCaffrey, senior vice president

Lori McCaffrey, senior vice president and commercial banking sales leader for Key Bank in Alaska.

and commercial banking sales leader for Key Bank in Alaska. “The low price of oil typically means that the producers have less cash available for new projects,” she says. Investment decisions are made conservatively and are based on long-range oil prices. In the short term, all the projects that

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have been accounted for as far as spending tied to state government spending are still going forward. On exploration, things are “maybe a little more cautious in that arena, but there are still opportunities there,” she says. Lending requests have remained stable. As far as financing for natural gas projects, McCaffrey says they’re hearing “a lot of discussion around activities, but as far as financing, they’re minimal at this point.”

Watch and Wait Key Bank is keeping a close eye on what the state government does with its capital budget. “Everything that has been appropriated for this year is fine, specifically for construction,” she says. “This coming year, who knows? Construction spending was expected to be stable and even grow a little bit. Depending on the state government shortfall, we could certainly see a negative impact for 2016. “The unknown for 2016 is commercial construction; it’s so tied to the state budget and the state budget is tied to the price of oil and how much is coming in.” Mt. McKinley Bank in Fairbanks is also keeping a close eye on the Legislature and governor’s office, says David Durham, senior vice president and manager of commercial and consumer lending. “We’re really watching what the state does with our budget,” Durham says. “We’re a little concerned because a lot of our contractors do a lot of state work.” Otherwise, Durham is optimistic about trends in Interior Alaska. “For this time of year, I think what we’re seeing is pretty good,” he says. “Nothing earth-shattering, but some solid folks looking at doing some building.” 2014 was a “pretty phenomenal” year with a lot of commercial refinancing, Durham says. “I’m pretty optimistic this year will also look pretty good. We’re really also looking at the future very cautiously and making sure we stay ahead of that curve.” Tourism is a growth area, with more hotels adding rooms in the Denali area, he says. The mining industry is strong, with an uptick in demand for new equipment. Durham says the one hundred-pound gorilla in the room is “trying to find out what the Fed [Federal Reserve] is going to do.” Even if full employment is reached,

Alaska Business Monthly | June 2015 www.akbizmag.com

inflation is still an issue. “There’s momentum to move the rates up this year, but we’ll see if that pans out.”

Access to Capital The Alaska Industrial Development and Export Authority (AIDEA) is looking at the North Slope for one of its next major projects, according to James Hemsath, director project development and asset management. Even in the development stage, the project is already paying dividends. In a case of “build it and they will come,” AIDEA, the state’s development financing authority, formed a limited liability corporation, Mustang Road LLC, which completed a five-mile gravel road and nineteen-acre gravel pad on the North Slope in 2013, the first phase of the Mustang oil development project. AIDEA invested $20 million toward the facility, which is operated by Brooks Range Petroleum Co. Last winter, ConocoPhillips and Repsol used the pad to launch their ice road construction, Hemsath says, “simply because the pad was there and the infrastructure was there.” Repsol and other companies are now in discussions to use the pad and

the production facility planned for the site as a hub processing center. AIDEA struck a deal with CES Oil Services Pte. Ltd. to jointly finance and own the Mustang oil and gas facility. AIDEA will invest up to $50 million toward the $225 million facility. The project is designed to help offset declines in throughput in the transAlaska oil pipeline. Exploration drilling at the Mustang prospect showed more than 25 million barrels of potentially recoverable oil. Other major AIDEA projects include the DeLong Mountain Transportation System at the Red Dog Mine, the Federal Express Aircraft Maintenance Facility in Anchorage, the Ketchikan Shipyard, and the Skagway Ore Terminal. It also invests in a variety of other projects through loans. It is authorized to issue bonds to finance infrastructure and construction costs associated with the development of the Bokan-Dotson Ridge Rare Earth Element project. AIDEA is also continuing to work on the Interior energy project and is keeping an eye on potential investments in a drill rig, Agrium; production of ultra-

low sulfur gas; and methanol on the North Slope. Hemsath is bullish on Alaska’s potential. “Our goal is to provide access to capital that may not be available to some of these smaller companies or providing capital at a cost that helps make the project successful in Alaska,” he says. AIDEA can assure that the project is able to weather early bumps and get to the point where smaller companies can maintain jobs and create economic opportunities. The production facility at the Mustang Road location is due to be completed in 2016. When it is, it will be a milestone for Alaska, Hemsath says. It will be the first independent production facility, and if capacity is there, other oil companies can use it as well. “There’s so much,” Hemsath says. “There are so many opportunities and people are becoming more and more aware of the ability to do business in Alaska and that we’re not hiding out at the end of the world.” R Julie Stricker is a journalist living near Fairbanks.

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June 2015 | Alaska Business Monthly

OIL & GAS

New Age of Air Support to Oil & Gas Industry Unmanned aviation systems on Alaska’s North Slope By Julie Stricker

rom a distance, what looks like a toy plane is flying a few feet above the tundra alongside the web of pipelines radiating from BP Alaska’s oil fields on the North Slope. The tiny aircraft flies low and straight, aiming an infrared camera at the pipeline while a group of people monitor it from a nearby gravel pad. When they’re done, the aircraft lands lightly on the ground and is easily held by one person. This is no hobbyist aircraft. It’s a high-tech Puma AE operated by California-based AeroVironment on one of the first permitted commercial flights of unmanned aircraft systems in the United States.

An AeroVironment technician launching a Puma AE for BP on the North Slope. Courtesy of AeroVironment

“This is not a toy you buy in the store,” says Steven Gitlin, AeroVironment vice president of marketing strategy and communication. “It’s a highly engineered, highly designed piece of technology that is designed to perform to high specifications.”

New Dimension Added The high-tech aircraft are adding a new dimension to how BP is working in the North Slope’s sprawling, often inhospitable terrain. Besides inspections, they are used for three-dimensional mapping, infrastructure maintenance, and are being eyed for wildlife management and other tasks. BP contracts with AeroVironment, which owns and operates the aircraft. The company was founded in 1971 and developed the first small unmanned aircraft system in the mid-1980s, according to Gitlin. Its unmanned aircraft systems are used around the world. (They are called drones by some, although that’s a term many in the field find derogatory.) “We believe this technology is really going to enable a lot of customers in a lot of places,” Gitlin says. “It can en-

hance their productivity, enhance their safety, and reduce their costs.” And while they’ve been used for commercial purposes for less than a year— the first commercial flight was June 6, 2014—unmanned aircraft have been put to the test by the Alaska Center for Unmanned Aircraft Systems Integration at the University of Alaska Fairbanks, according to Director Marty Rogers. “Alaska is in many ways quite unique from an unmanned aircraft perspective because we have a lot of airspace,” Rogers says. “A lot of the science and research work that is going on, especially with the high emphasis on the Arctic right now, Alaska is a great place to do it. “We have the largest university-based unmanned aircraft program in North America. We have the oldest universitybased unmanned aircraft program in North America,” he says. “We’ve been in continual operations for fourteen years, flying very difficult missions. Nobody has any kind of experience like we do flying in the Arctic. We have over one hundred aircraft and we do science and research. We look at things like invasive species, marine mammal research, wildfires. It’s almost sort of an endless list. Environmental monitoring. Anything you can

Alaska Business Monthly | June 2015 www.akbizmag.com

An AeroVironment Puma AE on the ground at Prudhoe Bay.

use manned aviation for, we’ve been able to successfully use unmanned craft.”

Keep Flying—Keep Testing One secret to their success, Rogers says, is simply to fly as much as possible. That way they can learn from the mistakes they make so clients aren’t making those mistakes. “Testing is important,” he adds. If an aircraft is to be used in the Arctic, it needs to be tested in the Arctic—over and over and over again. Unmanned aircraft allow researchers to conduct science and research missions in conditions that fall into the “dull, dirty, dangerous, and denied categories,” Rogers says. Those are such things as twelve hours of flying grids for a mapping mission, flying over forest fires, or to sample ash and gas from an actively erupting volcano. “An unmanned aircraft can actually go in and do that and not put a human at risk,” Rogers says. The aircraft are proving invaluable in commercial settings, as well. That’s what caught BP’s interest. “We’re always looking at how we can do things more efficiently and safer,” says Curt Smith, technology director for BP. “If you don’t have people involved, it’s always safer.” With BP, AeroVironment is using two different aircraft, a rotorcraft and the Puma AE. The Puma weighs 13.5 pounds and has an eight-foot wingspan. It is battery powered and is designed to land on the ground or in the water. It was the first small unmanned aircraft system to receive FAA approval for commercial uses in the United States, as part of BP Alaska’s operations. “It has been proven in many tens of thousands of operating hours in the military to be reliable, safe, and effective,” Gitlin says. The Puma is capable of tasks that manned aircraft simply cannot do, as well as routine tasks that could pose risks to people, such as leaning out of a moving helicopter to inspect power lines, Smith says. “It allows us to do things we couldn’t do before,” Smith says. “To inspect the flare stacks where they burn off the gas, the way you do it now, you shut it off and then you inspect it, mostly with binoculars because you can’t climb up there.” But using a rotorcraft type of unmanned system (like a mini-helicopter with multiple small rotors), BP is able to www.akbizmag.com

Courtesy of AeroVironment

UNM ATC HE D SUP P O RT

ON TH E S LOP E

Fairweather’s Deadhorse Aviation Center (DAC) is strategically designed to provide North Slope operators with a safe and efficient aviation command center to manage onshore and offshore exploration and production activities. Offering secure access to the airport, roads and ocean, DAC provides the infrastructure needed to meet the toughest challenges. Plans are underway for a major expansion with many build-to-suit options. This level of support, service and reliability is unsurpassed on the North Slope. DAC West • 21,000-square-foot hangar with private apron and 23-acre lay-down yard • Medical clinic with ambulance service and medevac staging • 11,000 square feet of office space, 24 bedrooms and dining facility • Passenger terminal for fixed-wing and rotor operations DAC East • 12,000-square-foot hangar and 4,000-square-foot office/passenger terminal DAC Expansion Plan • 13-acre cargo and logistics facility with taxiway access • 28,000-square-foot hangar designed to accommodate C-130s and 737s • Additional offices, sleeping quarters, warehouse space • Plans to develop an additional eight acres of lay-down yard Deadhorse Aviation Center is wholly owned by Offshore Support Services, LLC (an Edison Chouest Company), Fairweather, LLC and the Kaktovik Iñupiat Corporation.

Managed by Fairweather, LLC 301 Calista Court • Anchorage, AK 99518 Phone: 907-346-3247 • Fax: (907) 349-1920 www.fairweather.com www.facebook.com/fairweatherllc June 2015 | Alaska Business Monthly

“It can ensure that their gravel roads are in conformance with their standards, that they can understand the effects of the environment on their pipelines. It gives them an overall picture of the infrastructure and the environment they operate in. Inspections are really a no-brainer with these things.”

—Curt Smith Technology Director, BP

take pictures of a flare from just a few feet away, even while it’s still burning. Not shutting down the stack allows the craft to gather more information and no people are endangered, Smith says. “If you see anything that needs to be fixed, unless it’s an emergency, of course, then you can order the parts and then shut it down when it’s time to fix it,” he says.

Mapping Changes Mapping is another important task for the aircraft, Smith says. “Knowing where things are on the ground and knowing how they change over time is important.” Using photos and LIDAR, a technology similar to radar that uses light to measure distance, BP can create three-dimension-

al pictures of pipelines, roads, and even gravel pits and be able to see even tiny changes. For instance, Smith says, the gravel for the roads comes from a state pit. BP needs to stay within the boundaries of its permit and calculate how much gravel is removed as well as figure out where to place pumps to keep water out. Using the LIDAR mapping system to calculate volume, “it’s pretty easy to take a 3D image of the pit and then come back a month later and take another picture and then subtract one from the other,” Smith says. Gitlin says AeroVironment’s system takes the LIDAR’s three-dimensional points of information and uploads them into a custom cloud-based data

processing system they have developed that creates 3D maps. “At the end of the day, we deliver to BP much better quality information than they’ve been able to get before,” he says. “It can ensure that their gravel roads are in conformance with their standards, that they can understand the effects of the environment on their pipelines. It gives them an overall picture of the infrastructure and the environment they operate in.” “Inspections are really a no-brainer with these things,” Smith says. Depending on the mission, the aircraft can hold high-resolution still cameras, LIDAR, or infrared cameras to look for heat anomalies. Drones are being used in other countries to inspect such things as the insides of oil tankers, refinery towers, and offshore oil platforms.

Improvements Increase Use As the technology improves, so do the possible applications, Gitlin says. Computers can do more with less, processing power keeps increasing, battery life has improved, and cameras and other components are smaller, lighter, and more powerful than ever.

Alaska Business Monthly | June 2015 www.akbizmag.com

In the past couple of years, autopilot technology has improved tremendously, Rogers says. Better batteries allow longer flight times and heavier payloads as well as better command of the aircraft. “The amount of human intervention is less and less and less and you’re letting the computer do the work,” he says. “There’s huge benefit in that because you’re allowing a certain amount of repeatability… At the same time, the ground crew still has the ability to manually override the program and land the aircraft if necessary.” Mapping roads and other infrastructure is one important area for BP. Even tiny imperfections in the grade can cause problems and cost money, Smith says. “The well pads have to be within an eighth of an inch of level, so there’s some really precision engineering going on,” he says. The LIDAR can highlight specific areas that need work, so crews can fix those without having to redo the entire roadbed, as they had to do in the past, Smith says. The road graders are GPS-guided, with a display that shows the driver the exact center of the road. The blade goes up and down according to a computer-guided system to

Courtesy of AeroVironment

BP contracts with AeroVironment, which owns and operates the Puma AE, to use the unmanned aerial system technology at Prudhoe Bay and elsewhere on the North Slope.

keep the road to exact specifications. That can save significant time and money. “A drill rig on a bad road may only go a half-a-mile an hour,” Smith says. “On a good road, it may be able to do two miles per hour.” That doesn’t seem like a big increase, but considering it costs thousands upon

thousands of dollars an hour to move a drill rig from one spot to another, quartering the time it takes saves enormous amounts of money. “From an economic standpoint, unmanned aircraft make sense,” UAF’s Rogers says. “However, there is nothing unmanned about unmanned aircraft.”

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June 2015 | Alaska Business Monthly

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Gitlin agrees. A team of highly trained technicians launch and oversee every flight. Most are from a military background, so they are well-suited to achieve their mission objectives despite the challenges of the many regulations and unpredictable weather on the North Slope.

Permit Backlog One drawback is the permitting system, or rather the lack of an established permitting system, for the use of unmanned aircraft in commercial operations. AeroVironment must get a permit from the FAA, called a section 333, for every mission it wants to do. The result is a huge backlog of permit requests. BP and AeroVironment have been working closely with the FAA to establish and streamline such a system. “The big problem is the FAA doesn’t really have a rulebook,” Smith says. “They’ve been working with us to kind of get things approved using the manned [aircraft] rulebook. They’ve been helping us by looking at creative ways to do things.” While it can sometimes take months under the current system for the FAA to grant a permit, when there’s an emer-

gency, such as a search and rescue, it’s a different story, Rogers says. “We’ve had emergency COAs [certificate of authorization] in less than half an hour,” he says. “When it comes to real urgent need to respond to a situation, the FAA has been amazing.” Rogers notes that BP, as the leader in the use of unmanned aircraft, is also helping the industry as a whole. “Industry has a way of pursuing its own private interests, but what I’ve seen on the whole is that industry understands that what benefits one benefits all typically, and they really want to move this thing forward,” he says.

Beyond Line of Sight At UAF, Rogers and his team are looking to expand what unmanned aircraft can be used for in Alaska. Now, commercial activity is strictly limited to line of sight. “You’ve got to be able to see that aircraft and all the airspace around that aircraft at all times,” he says. “The holy grail for unmanned aircraft work is what we call a ‘beyond line of sight’ missions,” he says. The goal is to be able to use unmanned aircraft on

long-range missions to look at oil and gas infrastructure or fly over the path of a tornado or tsunami to assess damage. Search and rescue is a great application for unmanned situations but only with beyond line of sight capability. “You may be in a situation where you might not be able to get a manned aircraft out there because of visibility or weather conditions, but you could launch an unmanned aircraft basically immediately,” he says. Interest in UAF’s program has grown exponentially in the past couple of years, and Rogers finds himself in great demand for conferences all over the globe. However, for all his enthusiasm and energy for unmanned aircraft and its future, he wants to make sure people know the drones aren’t going to take over. “It’s a machine,” Rogers says. “It is not a replacement for manned aviation. It complements manned aviation. It does not replace manned aviation. I think that’s important.” R Julie Stricker is a journalist living near Fairbanks.

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OIL & GAS

Shell’s Extensive Arctic Logistics Keeping vessels, crews, and the ocean safe By Mike Bradner

hell’s planning for its summer 2015 Chukchi Sea exploration drilling involves an extensive logistics exercise involving as many at twenty-nine vessels, including two large mobile offshore drilling structures, the drillship Noble Discoverer, and the semi-submersible Polar Pioneer. The other twenty-seven vessels will be engaged in support activity. The U.S. Bureau of Ocean Energy Management gave tentative approval to Shell’s exploration plan April 11. A major concern for Shell, however, is keeping the vessels and crews safe from harassment by Greenpeace, an environmental organization that has said it will attempt to disrupt the company’s exploration activities. Six Greenpeace activists boarded a Shellchartered vessel in the mid-Pacific this spring but quit the ship as it approached US waters. A restraining order against Greenpeace has been issued by a US District Court in Anchorage, but Shell is still wary. One of Shell’s drill vessels is the Noble Discoverer, owned by Noble Drilling Co., which conducted drilling for Shell in the Chukchi Sea and drilled a partially-complete exploration well, which was planned. The Discoverer encountered engine problems late in the season and has undergone extensive refitting. The other drill vessel is the Polar Pioneer, owned by Transocean Ltd., a harsh-weather offshore rig that has spent several years drilling in the Norwegian Arctic.

High Seas Bandits

Earlier this year both the Noble Discoverer and the Polar Pioneer underwent operations “shakedowns” in Southeast Asia before being brought to North America. Both vessels left Malaysia in March for Puget Sound, with the Polar Pioneer loaded atop the Blue Marlin, a large “heavy-lift” ship. An event that occurred during the Blue Marlin’s transit was its boarding by six Green86

Shell’s Noble Discoverer. peace activists in mid-ocean, when the vessel and rig were about seven hundred miles northwest of Hawaii. The activists climbed up into the Polar Pioneer and remained there until the Blue Marlin approached US territorial waters. Greenpeace’s people, including one employee of the organization along with five volunteers, left the rig just before a US District Court in Anchorage had issued a Temporary Restraining Order against the environmental organization. Prior to sailing for the Arctic, many of the vessels supporting the drilling underwent conversions and installation of equipment specific to the Arctic drilling mission. The crews underwent training also, and prior to sailing many of the vessels took on supplies and fuel.

Arctic Support Fleet

Once in the Arctic, both drilling vessels will be supported by a small fleet of support ships. Shell described the operation in affidavits submitted to the federal court for the injunction hearing: The schedule calls for the Polar Pioneer, Noble Discoverer, and the supporting vessels to pass through the Bering Strait about July 1 and then onward to the “Burger” prospect in the Chukchi Sea as soon as

weather and ice conditions allow. Exploration should continue through October 31. “These vessels will be used for ice management, anchor handling, refueling, resupply, water sample connection, and oil spill response in the unlikely event it is necessary. The vessels Tor Viking, Aiviq, and Ross Chouest will be engaged in anchor handling and deployment, while the Harvey Explorer will be performing monitoring of drilling fluids that are discharged,” according to Shell’s affidavit filed with the federal court. Two vessels, the Nordica and Fennica, will be available for ice management. Oil spill response vessels, with several attendant workboats, containment boom, and recovery equipment, will be in the project area when drilling into subsurface liquid hydrocarbon-bearing formations. These will include the Nanuq, Arctic Endeavor, Klamath, and Arctic Challenger, which will be immediately available to perform oil spill response and containment. These vessels will either be close to the rigs as necessitated by their response time or in Kotzebue Sound. The Arctic Containment System is intended to be located in Kotzebue Sound throughout the drilling season. Aviation operations, based in Anchorage

Safety Zones US Coast Guard Existing Regulations 500 Meters 547 yards 0.27 nautical miles 0.31 miles

Shell Requested Exclusion Zones Vessels In Motion Drill Vessels 1,000 meter 1,500 meters 1,093 yards 1,640 yards 0.54 nautical miles 0.81 nautical miles 0.62 miles 0.93 miles

Alaska Business Monthly | June 2015 www.akbizmag.com

and Dutch Harbor and the two Arctic communities closest to the exploration, Barrow and Wainwright, will support the drilling, including transport of personnel to the various vessels along with resupply and other logistics support including search and rescue, if needed.

Safety Zones

At the Burger prospect, the anchoring of the Noble Discoverer and Polar Pioneer will require the placement of a carefully coordinated and planned anchoring system involving eight anchors weighing fifteen tons each in a circular formation around each drillship, at about a 1,000 meter radius. Anchors for the Noble Discoverer, the drillship, will be pre-positioned prior to the drillship’s arrival. The semi-submersible Polar Pioneer is carrying its own anchors. Placement of the anchors and chain will be an intricate operation. Chain extending back to the position of the drillship will also be installed, along with an intermediate buoy to aid the connection of the lengths of chain. Once the chains are in place the buoy will be submerged to allow safe passage of vessels for the connection and disconnection of the chains and anchors or for an emergency recovery. The distance of the anchors and the length of the anchor chains is a major reason why Shell has asked the US District Court for a larger safety, or exclusion, zone of 1,500 meters around the drillships than can be provided by the US Coast Guard in the 500-meter safety zones it can establish under its regulations. If only the Coast Guard’s 500-meter safety zone were to apply in the Arctic, Greenpeace vessels will be able to navigate between the anchors and the drillships, creating safety problems, Shell’s attorneys said in federal District Court hearings. “The process of anchoring all eight preset anchors is conducted in two stages and involves highly trained personnel handling very large, heavy-duty equipment according to a specific set of protocols and safety procedures,” Shell said in its affidavit filed in the court hearing. “It is absolutely essential that this process is carried out free of outside interference and crew distractions,” Shell said in its affidavit. “It is also essential that all the preset equipment is not interfered with prior to the drillship’s or MOU [Mobile Offshore Unit] arrival and during the course of drilling operations. Any such interference or distractions pose unacceptable, significant, and substantial safety risks,” Shell said.

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June 2015 | Alaska Business Monthly

‘Realizing the Promise’ of Alaska’s Arctic OCS

NPC report shares key findings and recommendations By Mike Bradner

he offshore Alaska Arctic contains huge potential oil and gas resources that will be needed because, in the long run, the present boom in shale oil production will not be sustained. Moreover, the technology exists today to access much of this resource potential, based on decades of experience in the petroleum industry with Arctic offshore drilling. These are two conclusions in “Arctic Potential: Realizing the Promise of U.S. Arctic Oil and Gas Resources,” a major study released in late March of Arctic offshore potential and technology problems by the NPC (National Petroleum Council), a prestigious US industry and government advisory body. However, the study also notes that there are significant challenges created by the Arctic environment, such as remoteness and high costs, and economic problems created for industry because of short drilling seasons due to the presence of ice. More flexibility in government rules can offset some of these problems, the study authors found. Another key recommendation of the report is that public confidence in the industry’s ability to contain and clean up Arctic spills must be boosted. To do this, the study recommends continued research, including field demonstrations, on spill cleanup procedures like in-situ burning of spilled oil, and that government agencies join industry in that research.

426 Billion Barrels

Overall, the Arctic is estimated to hold 426 billion barrels of oil equivalent (the combined energy value of both oil and natural gas), of yet-to-be discovered conventional hydrocarbon resources. This represents 26 percent of the remaining global undiscovered conventional resource potential, according to the NPC report. About 30 percent of this is estimated to be in liquids, such as crude oil. While Russia dominates this resource potential in natural gas, the United States (meaning Alaska) and Russia are about equal in expected liquid hydrocarbon potential. The Alaska Arctic is estimated to hold 34 billion barrels of liquid resources while Russia is estimated to hold 36 billion barrels of liquids. Russia’s potential gas resources are huge, however, at 260 billion barrelsof-oil equivalent compared with 60 billion barrels-ofoil equivalent for the United States. In the report, the NPC notes the potential of Canada, Greenland, and Norway are dwarfed by the United States and Russia.

Arctic Difference

A key finding of the NPC is that the Arctic environment, while challenging, is generally well understood: “The Arctic environment has been studied for many years by industry, government, and academia, and much is known about the physical, biological, and human environments.”

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Besides supplying domestic oil, development of Arctic resources would benefit the nation in other ways, such as enhanced national security through the presence of infrastructure in the region that industrial development could create. For example, navigational aids in the Bering Straits region would be created, along with ports and communications facilities. Many of the challenges of the Arctic are similar to other oil and gas production areas, and experience and technologies from those areas can be applied to Arctic development, with an exception. “For example,” the report noted, “the design practices, technologies, and safety systems for deep water and subarctic regions are adaptable to the Arctic. Logistical challenges associated with long distances and lack of infrastructure are similar to recent projects in Africa and Papua New Guinea. The key characteristic that distinguishes the Arctic from other oil and gas production areas is the presence of ice. The ice environment varies substantially throughout the Arctic depending on the season and location.” Ice does pose challenges, and many of those relate to water depths and the technologies that would be employed. Most of the potential of the Alaska Arctic lies in water depths of less than one hundred meters, though, and the report states, “Developments in ice-prone water depths less than about one hundred meters are amenable to well-established technology of structures resting on the sea-floor, or bottom-founded.”

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Time to Ramp Up

The exploration and development of US Arctic resources needs to begin now if the region is to be able to provide new oil and gas supplies in the 2030s and 2040s, when domestic production from other regions, including onshore Alaska, is expected to be declining and domestic shale oil The surge of domestic production due to shale oil will have run its course by then, according to the NPC report. Between 2008 and 2014 domestic production increased from 5 million bbl/d to 8.5 million bbl/d, according to the Energy Information Administration, and that federal agency expects 7.7 million bbl/d by 2019 and 7.5 million bbl/d by 2024. In nine years—2024— the nation may only will be producing only 49 percent of its oil requirements domestically, down from 57 percent in 2014. That is a “base case” that assumes not only declines in Lower 48 shale oil and conventional oil production but also a continued drop of Alaska onshore oil from its current level of about 0.5 million bbl/d to about 0.3 million bbl/d. In a more optimistic scenario Alaska production increases to 1 million bbl/d by 2024 and brings US oil self-sufficiency to 85 percent. However, the NPC warns, “these new sources of crude oil production in the 2030s and 2040s will only be available if new offshore exploration drilling can ramp R up in Alaska during this decade.”

vessels will also be involved in ice management to protect the drill vessels and anchoring systems from any encroaching ice. “Were ice allowed to build up against the hull of the drillship or the columns of the MODU [Mobile Offshore Drilling Unit], it could be forced off its anchors, or in a worst-case scenario, damage to the drillship or MODU could result,” Shell said. In addition to procedures to prevent ice build-up against drilling vessels, Shell will have plans in place for safe suspension of drilling and moving to a nearby location until the ice hazard has passed. “These emergency procedures involve multiple large vessels moving around in close proximity to each other and sea ice and include an operation where anchor wires are released from anchor chains,” Shell said. In operating conditions like these it is very important to keep organizations like Greenpeace at a safe distance, which in its affidavits, Shell asked for the 1,500-meter safety zones for the drill vessels and 1,000-meter safety zones for most of the vessels when under tow or engaged in towing. Safety zones of 1,000 meters were also requested for two resupply tankers that will be engaged for the drilling season. R Mike Bradner is publisher of the Alaska Legislative Digest.

June 2015 | Alaska Business Monthly

special section

Building Alaska

Statewide Construction Project Roundup Photos by Derek Gilbertson/Brice Inc.

Thousands working on projects worth billions By Russ Slaten

ummer in Alaska is a time to build, and this year is no different. Construction contractors are building roads, bridges, and many buildings and will continue through the fall and, for some builders, even through the winter. A sampling of projects finds work underway throughout the state.

Northern Alaska Stage 1 of the Kotzebue Airport and Safety Area Improvements continues this year. The project began in October 2013 and ADOT&PF officials expect it to be complete by August. General contractor Brice Incorporated, a wholly-owned subsidiary of Calista Corporation, says thirtyfive workers will be employed at peak construction for this $30 million project. Brice is also contracted through ADOT&PF to reconstruct a thirteen mile stretch of the Dalton Highway, from milepost 401 to 414 near Deadhorse on the North Slope. The $26 million project expects to see fifty workers at peak construction. Slated to be complete in August 2016, Brice says it will raise the grade, replace all culverts, and resurface the road. The Deadhorse Airport will see improvements one step at a time as Brice installs a foundation pad, piles, and a passive refrigerated foundation system in preparation for building equipment bays, a sand storage bay, and upgrades to the existing Airport Rescue and Firefighter Facility and Snow Removal Equipment Storage Building. The $2 million contract will see fifteen workers 90

Brice Incorporated continues work on the Kotzebue Airport and Safety Area Improvements project it began in October 2013. The company brought in aggregates for the work last June and expects to complete the project by this August.

at peak construction and is expected to last a month, beginning this month with completion in July, according to Brice.

Interior The University of Alaska Fairbanks (UAF) Engineering Facility project began in April 2013 by general contractor Davis Constructors. The $118.1 million project is a six floor, 119,000-square-foot building with renovations to 23,000 square feet of the adjacent Duckering Building. Davis completed exterior construction in April and quickly proceeded with mechanical, electrical, and plumbing work, but UAF has not yet announced a completion date. ECI Hyer was the architect; AMC Engineers was the mechanical and electrical contractor; PDC, Inc. handled structural and civil engineering; and NBBJ was the project planner. UAF expects eighty contractor employees at peak construction. The US Army Corps of Engineers contracted Tunista Construction to build a 13,163-square-foot Company Operations Facility for the Aviation Task Force Phase 3B at Fort Wainwright. The facility will

house an administrative module, a readiness module, and an enclosed hardstand facility. The building will be fit for office and warehouse space, Tunista says. The $9.5 million contract includes construction of water, steam, condensate, sewer, and power for the entire facility. The project began in April 2014 and will be complete in October. Tunista expects 122 workers at peak construction including subcontractors. The US Army Corps of Engineers contract to design and construct the Mechanical-Electrical Building on Fort Greely, Missile Field 1, was awarded to Watterson Construction for $44.3 million. Watterson began the foundations in April and expects to complete the project by spring 2016. Watterson says it expects eighty workers at peak employment. General contractor Westmark Construction began building the Koyukuk Health Clinic in Koyukuk, nearly three hundred miles west of Fairbanks in May 2014. The Denali Commission funded 80 percent of the $2.8 million City of Koyukuk project. The 1,580-square-foot facility

Alaska Business Monthly | June 2015 www.akbizmag.com

was ready for occupancy in February, but the Denali Commission anticipates completion of the remaining items by July.

Western Alaska In the Western city of Emmonak ten miles from the Bering Sea, the Denali Commission provided more than $1.8 million to upgrade about three miles of the Emmonak Road surface. Anchoragebased Bering Pacific Construction was awarded the contract in November 2012, began the bulk of the work in 2014, and expects to finish the job this year, according to the Denali Commission. STG Incorporated, a wholly-owned subsidiary of Calista Corporation, began construction on the Emmonak Power Plant in May. Owned by the Alaska Village Electric Cooperative, the Emmonak Power Plant will be 2,496 square feet. STG estimates about twelve workers at peak employment and expects to complete the project in July 2016. Through the Association of Village Council Presidents, Brice Marine, a wholly-owned subsidiary of Calista Corporation, is upgrading community streets in Chevak near Hooper Bay. The $3 million contract began in June and is expected to be complete in July. Brice Marine says it will employ ten workers at peak construction. Ekwok Village Council awarded STG Incorporated the contract to complete the Ekwok Landfill Bridge project. Spanning approximately 115 feet, the project began in March and is expected to be complete in September 2016. The workforce is made up of four to six skilled field employees and up to four Ekwok-based employees, according to STG. This is part of a $5.88 million project for a new landfill with a road and bridge for the village to access it. The Denali Commission funded a $2.6 million project for Delta Junction-based Carpenter Contracting, Inc. to complete a 2,400-foot-long board road (about 19,200 square feet) in Tununak. The contract was awarded in June 2014, and the project for the Native Village of Tununak is expected to be complete by October, according to the Denali Commission. Kodiak On Kodiak Island, Watterson Construction began site, utility, and building improvements to the existing Kodiak High School in May 2013. At 720 Mill www.akbizmag.com

June 2015 | Alaska Business Monthly

Bay Road in Kodiak, work encompasses about seventy-seven thousand square feet of new construction, including a four-story tower, commons, and other new construction, according to Watterson. Additionally, about ninety thousand square feet of selective demolition and renovation to existing construction will continue in the Kodiak Island Borough school. Site work includes replacement of existing utilities, parking and driveway improvements, landscaping, site lighting, and other improvements. Work also includes heating control and metering for the adjacent existing swimming pool and Gerald C. Wilson Auditorium. The total project is worth about $80.5 million, with $63 million of that contracted to Watterson. Peak employment is expected to reach seventy workers, and completion is slated for this December. Also on the island, the Kodiak National Wildlife Refuge granted a $2.03 million contract to Anchorage-based Tunista Construction to build a Kodiak National Wildlife Replacement Triplex in September 2013. The project includes one single-story unit and two two-story units. Tunista Construction, a whollyowned subsidiary of Calista Corporation, expects peak employment at fortysix workers and completion by July.

Aleutians Akutan, more than 750 miles southwest of Anchorage in the Aleutians East Borough, is seeing dock improvements this year. The Akutan City Dock Improvement project was awarded to Turnagain Marine Construction Corporation in October 2014. The $1.21 million project will allow Turnagain Marine to reconstruct various portions of the existing city dock in Akutan to better accommodate Alaska Marine Highway System ferries and other use. Construction was anticipated to begin in spring. Cold Bay, farther up the Aleutian Chain and still part of the Aleutians East Borough, will also undergo dock improvements this year. Turnagain Marine was awarded the Cold Bay Dock Improvements project in October 2014. The $1.32 million project will restore the existing fender system and other deteriorated components. The Cold Bay dock services Alaska Marine Highway System ferries and other shipping and freight users. Construction is anticipated to begin in fall. 92

Southeast The City and Borough of Sitka, along with general contractor Barnard Construction Inc. and construction manager McMillen Jacobs Associates, officially dedicated the newly expanded Blue Lake Dam in May. The City of Sitka relies on two hydroelectric power plants to supply nearly all of its electricity. In recent years, Sitka has experienced load growth due to rising oil prices and increased demand for more affordable hydro powered electric heat. The expansion project raised the dam by eighty-three feet, increasing Blue Lake’s production by 50 percent and providing 27 percent more electricity for Sitka. Along with expansion, the dam has a new intake, surge shaft, and powerhouse. First National Bank Alaska’s new Juneau Regional Branch is under construction. Located at the corner of 10th Street and Glacier Avenue in the downtown area of Alaska’s capital city, the branch is set to open this fall. First National says the Juneau Regional Branch will provide access to the only drive-up lane and 24/7 driveup ATM in the capital city’s downtown area. It will have on-site parking, online account access at the lobby’s customer service kiosk, and more privacy when using safe deposit boxes in a special room. The Brotherhood Bridge Replacement project in Juneau moved into its second phase this spring and summer with completion scheduled for fall. The $30 million project will accommodate two lanes of traffic in each direction over the bridge and add both a multiuse path on the upstream side and a sidewalk on the downstream side. Juneau-based Secon, owned by Colaska, Inc., continues its work on the North Douglas Pavement Rehabilitation and Roundabout to Fish Creek Road project. After completing the pavement overlay and guard rail installation on North Douglas Highway in October 2014, Secon returns this summer to complete the unfinished driveways. In late summer Secon will install a new membrane and overlay for the Lawson Creek Bridge. Fritz Cove Road in Juneau along Auke Bay is undergoing rehabilitation and repairs this year. The $3.1 million contract with Secon will widen the road, install new guardrails, rehabilitate the existing grade, and install new pavement. ADOT&PF expects the project to be complete by the end of July.

The Mendenhall Dust Control Project will allow Secon to install new sub base and asphalt pavement on thirteen City and Borough Juneau residential streets in order to control dust. The $1.7 million project is expected to be finished in August. On Prince of Wales Island, the Hydaburg Highway Pavement Rehabilitation will be underway. Under the $11.9 million contract, Haines-based Southeast Road Builders plans to install new culverts and bridge railings, correct super elevation on curves, and install a chip seal surface over the twenty-twomile road. ADOT&PF expects the project to be complete in August 2016. Seattle-based Western Marine Construction has been stockpiling material, and the offsite fabrication of marine structures is underway for the Haines Ferry Terminal. The $15 million project is scheduled for completion in summer 2016. The Annette Bay Ferry Terminal Improvements project was awarded to Western Dock and Bridge LLC in December 2014. The $782,000 project will provide a new mooring dolphin at the Annette Bay ferry terminal facility in order to better accommodate use by the Inter-Island Ferry Authority ferry system vessels as well as the Alaska Marine Highway System. Construction started in spring of this year.

Southcentral Drivers traveling between Anchorage and Eagle River will notice the Glenn Highway Capacity Improvements project. Managed by ADOT&PF (Alaska Department of Transportation and Public Facilities), the $42.5 million project broke ground in September 2014 and is scheduled to be complete in the fall. Design-build contractor Kiewit Infrastructure West Co., along with subcontractor HDR Alaska, will undergo improvements to the north and southbound lanes of the Glenn Highway between the Hiland Drive interchange and the Artillery Road interchange in Eagle River to improve driving conditions, according to ADOT&PF Central Region. A road project in the Anchorage area includes one that the Municipality of Anchorage awarded Roger Hickel Contracting the 48th Avenue and A Street extension and upgrade project. The $3 million contract will see six to twelve workers on site, according to Roger Hickel Contracting. The project

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Photo courtesy of Alaska DOT&PF

For the fifty thousand cars traveling the Glenn Highway every day, a new bridge over Eagle River, a different alignment, and another lane are parts of the project between the Hiland Drive and Artillery Road interchanges.

began July 2014 and is expected to be complete in August. Construction continues on the $38 million West Dowling Road project as ADOT&PF works with Granite Construction to extend Dowling Road west from C Street to Minnesota Drive. West Dowling Road is scheduled to open to traffic in October and is scheduled to be complete in June 2016. In Girdwood, Davis Constructors was awarded the $2.4 million bid to make improvements to Olympic Mountain Loop near Alyeska Resort through ADOT&PF. This federally-funded project will rehabilitate and pave Olympic Circle from Arlberg Avenue to the connecting end at Arlberg Avenue in Girdwood. The project also includes striping and drainage improvements. Numerous other road improvement projects are in progress throughout the streets of the Municipality. Also in Anchorage, the city is seeing many new buildings and improvements, including healthcare centers, schools, and the facilities that keep the city running smoothly. On the Alaska Native Health Campus, the two-story Southcentral Foundation Therapy Center is seeing progress. Anchorage-based Watterson Construction began building the center in August 2014 and expects to complete it in January 2016. Located at 4085 Tudor Centre Drive, the facility is made up of a therapy center and space for training, public programs, and offices. The large therapy room on the www.akbizmag.com

building’s first floor can seat two hundred people. A new parking lot with irrigation and landscaping completes the site work. Watterson says the 60,061-square-foot building cost nearly $24.6 million and will employ about seventy workers. The Asplund Wastewater Treatment Facility on Hutson Drive near Ted Stevens Anchorage International Airport is undergoing a $7.7 million building demolition and renovation. Roger Hickel Contracting began the Anchorage Water & Wastewater Utility project in August 2014 with expected completion in October. Roger Hickel Contracting says peak employment reached twenty-five workers. Subcontractors for the project are GV Jones & Associates, Electric Power Systems, HDR Alaska, PM&E Services, Reid-Middleton, RSA Engineering, and UMIAQ.

Downtown Work In Downtown Anchorage, the Anchorage 5th Avenue Mall will see changes. Simon Properties contracted Anchorage-based Cornerstone General Contractors to upgrade mall restrooms. The project began this month and ends in October. Cornerstone is also contracted by lululemon athletica—the Vancouver, BC retailer known for yoga style athletic apparel—to build the interior space of the store. The project began in April, and Simon Properties says it will be completed in the summer. The building located on 609 F Street undergoing significant renovations is now known as Williwaw. As of May, Benchmark Construction had made

significant progress on the project. Interior demolition and abatement was completed. Structural refit, including installation of new steel beams and columns was completed, according to Pfeffer Development. A new elevator and stair tower was constructed. The old exterior canopy was removed and exterior site preparation continued for entry stairs, patio, and handicap ramping. The new entertainment venue will house SteamDot coffee and the Blues Central bar and music venue. The project, near the corner of Sixth Avenue and F Street, is scheduled for completion this month. EasyPark parking garages are undergoing renovations in Anchorage. Concrete & Masonry was awarded the contract, and will be coordinating with Gunnar Malm & Associates, Inc. and Anchorage-based engineering firm BBFM Engineers, Inc. for facility structural improvements this summer. Phase 1 work at 7th and G Street, 6th and H Street, and 5th and B Street parking garages began in May and are expected to be complete in August. The work consists of garage sealant removal and replacement, crack repairs, concrete repair, traffic membrane repair, application of silane water-repellant, and line striping. The Delta Western Bulk Fuel Facility near the Port of Anchorage will undergo civil site work by general contractor Roger Hickel Contracting. With ten to fifteen workers on site, Roger Hickel Contracting began in April and expects to complete the project in October. At 1300 Ocean Dock Road near the Port of Anchorage, the Anchorage Sand & Gravel ABI Cement Loading Facility began to see concrete foundation work in April. General contractor Roger Hickel Contracting conducted civil site and foundation work, with employment between twelve to twenty-four workers at a time. Roger Hickel Contracting says the facility is expected to be complete in October. Engineers involved in the project were Franklin & Associates, Fergusson & Associates, and DOWL. The Kings Landing at Ship Creek Phase II project was awarded to Davis Constructors and Engineers, Inc. for $1.9 million. According to the Municipality of Anchorage, the project consists of a 7,000 square-foot plaza with decorative paving and 3,100 square feet of concrete pavers; concrete walls with a woodJune 2015 | Alaska Business Monthly

en boardwalk; restroom building; 15,000 square-foot asphalt parking lot; and electrical and landscaping work.

Around Town Milepost 1 to 3.5 of the Chester Creek Trail in Anchorage will see improvements this summer. Davis Constructors was awarded $1.4 million to improve 3.5 miles of the main trail corridor from Arctic Boulevard tunnel to Nichols Street and to repair spurs along the trail. The project began in May and is expected to last until October, according to the Municipality of Anchorage. The University of Alaska Anchorage (UAA) Wells Fargo Sports Complex will see improvements this year. Davis Constructors was awarded the $6.6 million contract that incorporates replacing the existing ice plant and ice rink; refurbishing the existing air handler unit; fire alarm system upgrades; electrical system upgrades; and remodel of interior offices, locker rooms, and fitness spaces. Construction began in May and will be complete in midSeptember, according to UAA. Construction of the UAA Engineering and Industry Building at the corner of Providence Drive and Spirit Drive

is expected to be completed in the fall, according to UAA. Neeser Construction, Inc. is the general contractor on the $78.3 million project. The UAA Health Campus Pedestrian Bridge over Providence Drive connecting the Engineering and Industry Building with the Health Sciences building will be completed by the end of the month. Neeser Construction, Inc. was the general contractor for the $6.1 million project. The UAA School of Engineering four-story, 485-space parking structure is under construction at the corner of Mallard Drive and UAA Drive. The $23 million project will be completed in the fall and opened to parking in August 2016. Neeser Construction, Inc. is the general contractor for the post-tensioned concrete parking garage project. The Anchorage Fire Department broke ground on two new Anchorage fire stations, Fire Station 3 in Airport Heights in May and Fire Station 9 in South Anchorage this month. The new Fire Station 3 will enable faster response times, additional privacy, and improved living areas for firefighters and additional space for apparatus and storage. SR Bales Construc-

tion is the general contractor and the station was designed by Burkhart Croft Architects. Station 3 upgrades are funded by an appropriation from the Alaska State Legislature, and supplemented with funding from a municipal bond.

School Sampler The Anchorage School District is seeing many changes this year to area-wide schools. In East Anchorage, the Airport Heights Elementary School addition and remodel, spanning about sixty-five thousand square feet, began in May. The addition and remodel includes hazardous materials abatement, structural upgrades, new roof and upgraded exterior finishes, new mechanical and electrical systems, demolition of a portion of the existing school, and the addition for a new kitchen, library, and music areas. Watterson says peak employment will be at fifty workers for the $16.7 million contract. Construction of the secured exterior construction area and upgrade to the technology lab at Begich Middle School began this month, according to the Anchorage School District. Cornerstone expects to complete this $527,000 contract in October. A $1.9 million contract will see civil site upgrades at Wonder Park Elementary in East Anchorage. General contractor Roger Hickel Contracting began the project in May, and will complete it three months later in August. Workers ranged between six to twelve workers during the life of the project, according to Roger Hickel Contracting. The $678,000 contract to remodel and upgrade the exterior of Bayshore Elementary in Anchorage will be completed by Roger Hickel Contracting. Designed by RIM Architects, the renovations will see twelve workers at peak construction. The Anchorage School District project began in May and is slated to be finished in August. The new Rilke Schule German School of Arts and Science building, located on East 64th Avenue near Burlwood Street, had seen great progress since Criterion General began in February. In May foundation footings and slab on grade had been formed, poured, and stripped; steel erection began; and framing, mechanical, electrical, and plumbing had also proceeded. Pfeffer Development says the school is on schedule to open in September. West High School and Romig Mid-

Alaska Business Monthly | June 2015 www.akbizmag.com

dle School are seeing improvements through a $15 million contract with Cornerstone General Contractors. The project will improve one classroom and add three additional classrooms to Romig Middle School and connect a twelve-classroom, two-story building to West High School. The Anchorage School District project began September 2014 and will be complete in December. The Girdwood K-8 School addition and remodel began in May 2014. The $18.5 million contract awarded to Watterson Construction will cover about sixty-five thousand square feet. Work on the addition is nearing completion with site work and the remodel of a portion of the existing school scheduled this summer, and the project slated to be finished in August. Watterson says more than forty workers are currently employed to this project.

Outside Anchorage Outside of the Municipality of Anchorage, projects totaling hundreds of millions of dollars in new construction and improvements are occurring throughout the Southcentral region. Highway improvements are happening all along the Railbelt this year, but the Parks Highway will see major improvements this season. Parks Highway Reconstruction Phase I, from milepost 43.5 to 44.5, between Lucus Road and Church Road in Wasilla, will see a $16 million improvement in lighting and pedestrian pathways. QAP Construction began in spring 2014 and will wrap up this year, according to ADOT&PF Central Region. Parks Highway Reconstruction Phase II, from milepost 44.5 to 48.8, between Church Road and Pittman Road, will upgrade from a two lane road to a four lane divided highway with at-grade intersections spaced every half mile. For this $40 million to $50 million project, existing frontage roads and pedestrian pathways will be improved, lighting will be installed, and a bridge over the Alaska Railroad will be installed. The project began in 2015, but ADOT&PF Central Region says it will see the bulk of the construction in 2016. In Wasilla, Cornerstone General Contractors was awarded the contract to build the new Wasilla Public Library. The twenty-four-thousand-square-foot building will be located at the corner of Swanson Avenue and Crusey Street near Wasilla Middle School. Cornerstone bewww.akbizmag.com

gan the $15 million project in April and the City of Wasilla expects the project to be complete in June 2016. The Matanuska-Susitna Borough broke ground on Iditarod Elementary and Dena’ina Elementary in May. Iditarod Elementary is a fifty-fivethousand-square-foot school that will replace an old building. The construction site of the $25.2 million project is a quarter mile north of the existing school on Wasilla-Fishhook off the corner of Wasilla-Fishhook and Carpenter Circle. Architects are McCool Carlson Green and builders are Collins Construction. Dena’ina Elementary is a forty-fourthousand-square-foot school on the campus of the new Joe Redington Sr., Jr./Sr. High School. The site of the $26.5 million project is off Knik Goose Bay Road at mile 10. Architects are Bettisworth North Architects and builders are F-E Contracting. Additionally, Joe Redington Sr., Jr./ Sr. High School is set to be completed by August, and a thirty-three-thousand-square-foot addition to the MatSu Career and Technical High School is set to be completed by the fall, according to the Mat-Su Borough. In Sutton, Chickaloon Village Traditional Council broke ground on its new health and wellness building in April. The building’s name Ahtnahwt’aene’ Nay’dini’aa den means “Ahtna People Chickaloon Place.” Located at 21117 East Myers Avenue, the new facility will house the community health center and the council’s health department. The two-story, 8,100-square-foot building is designed to maximize energy efficiency. It is built with solar panels, a wellinsulated structure, and heat recovery ventilators. Construction is slated for completion by December, according to Southcentral Foundation. One of many projects on the Kenai Peninsula is the Homer City Dock Improvement. It was awarded to Turnagain Marine Construction Corporation on February 3. This $1.22 million project managed by ADOT&PF will reconstruct the fender system and provide a covered pedestrian walkway for ferry passengers. ADOT&PF Southcoast Region says construction is anticipated in fall. R Russ Slaten is an Associate Editor at Alaska Business Monthly. June 2015 | Alaska Business Monthly

special section

Building Alaska

Courtesy of Furie Operating Alaska

Reaching Alaska’s Resources

Furie Operating Alaska began horizontal directional drilling from the onshore facility in Nikiski on the Kenai Peninsula this spring.

Heavy construction projects within natural resource sectors By Kirsten Swann

laska is a state built on natural resources, from oil and gas to mining, fish, and forests. They provide tens of thousands of jobs and a multibillion-dollar economic impact. Natural resources are also the driving force behind most of the civil heavy construction projects taking place throughout the state this year. Major construction on natural resource developments is set to take place from the far north to Southcentral and beyond. The work involves dozens of companies large and small: homegrown Alaska firms and Lower 48-based corporations with worldwide reach— and nearly everything in between. All told, the heavy construction work set to take place in Alaska’s natural resource sectors this year totals billions of dollars in project costs and progresses several long-awaited developments—particularly within Alaska’s oil and gas industry.

North Slope On the North Slope, construction is underway at CD-5, an Alpine satellite field under 96

development by ConocoPhillips Alaska. The company says it plans on spending upwards of $1 billion to drill and develop the site and employed an estimated seven hundred people during peak construction. In late March, the corporation also announced that it would be moving forward with construction at the Kuparuk viscous oil development 1H NEWS, the largest investment in viscous oil at Kuparuk in more than ten years. The work is expected to add approximately eight thousand barrels of oil per day gross at peak production, and the project is expected to employ around 150 people during peak construction, according to ConocoPhillips. The construction work includes adding a 9.3-acre extension to the existing Drill Site 1H and installing surface facilities to support four new production and fifteen injection wells, according to the company, and construction is expected to continue through 2016. First oil is anticipated in early 2017. Construction work continues on new-build rigs Doyon 142 and Nabors

CDR3, according to the corporation, and Drill Site 2S is also on schedule and should have first production by the end of this year. Work is also moving forward at Greater Mooses Tooth 1. But the North Slope is hardly the only big construction zone when it comes to major resource development projects: Plenty of work is set to take place in Cook Inlet this year, too. Hilcorp planned construction of a 2.8-acre gravel pad and access road within its Ninilchik unit to drill up to two gas exploration wells targeting areas unreachable by a current pad, according to the Alaska Division of Oil and Gas.

Kenai Peninsula Furie Operating Alaska LLC is also preparing to complete a few major construction milestones before beginning production from the Kitchen Lights Unit later this year. The company’s unitized leases sit in the center of Cook Inlet off the northwestern coast of the Kenai Peninsula, and Furie plans on installing a sixteen-

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mile subsea pipeline and monopod, in addition to its new onshore gas processing facility in Nikiski. “It’ll be a busy year,” says Bruce Webb, Furie’s senior vice president. Dependent on Cook Inlet ice and weather conditions, he says the construction season kicked off in mid to late April. The process begins with horizontaldirectional drilling (HDD), which starts from the onshore facility in Nikiski and travels through the bluff and under the tidal flats, emerging on the seabed floor about three thousand feet away from the bluff. This way, Webb says, the company is able to drill underneath the AKORN fiber optic line and avoid damaging one of the main connections between Alaska and the Lower 48. The horizontal directional drilling builds on an eight-inch pilot hole drilled by Mears Group, Inc. last year. Mears—part of a national network of companies that operate under the umbrella of Quanta Services, Inc., a Houston-based Fortune 500 Company—is a leader in horizontal directional drilling. Its services span everything from oil and gas projects to electrical, water, and wastewater projects, according to the company, and its reputation has been built over many years of professional construction and engineering work. “Changing regulations, safety, and quality standards and environmental concerns” are a consistent challenge when it comes to pipeline projects, according to Mears, so the company works with a team of in-house logistics and field personnel, steering technicians, engineers, and project managers. Its fleet of drilling rigs and support equipment is capable of completing projects with a pipe diameter of up to sixty inches, with continuous lengths of more than eleven thousand feet. For the Furie project, Webb says, the company will expand the pilot hole to twelve inches, then sixteen inches then, finally, twenty-four inches in diameter. Once the hole is complete, plans call for a sixteen-inch casing to house the development’s ten-inch pipeline. Webb says the process involves multiple passes and the help of the Spartan 151 jack-up rig, which drilled several exploration wells in the Kitchen Lights Unit in years past. This time around, the rig will be set up at the HDD’s offshore exit point, and Webb says it will

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be used to assist in the process by pulling from offshore while drilling activities take place simultaneously onshore. Using the jack-up rig makes the whole thing “a lot safer,” Webb says, and the process is estimated to take place over a fairly quick two- to four-week span. The massive rig isn’t the only piece of heavy equipment used to put the unit into production, though. Furie’s senior vice president says the company is working with the MV Svenja, a 12,975ton heavy-lift vessel owned by the Hamburg-based SAL Heavy Lift. The massive ship is equipped with a Kongsberg Dynamic Positioning I System, which means it has the ability to work in water of any depth and is completely self-propelled, according to SAL. The Svenja doesn’t require tug assistance and can rapidly respond to changes in weather conditions or operational requirements. There’s “no risk of mooring lines or anchors damaging seabed hardware,” according to SAL. The vessel also boasts two cranes with a one thousand ton safe working load each. After Furie’s production monopod arrives by Crowley barge from Seattle, Webb says, the Svenja is tasked with lifting the monopod off the barge and placing it over the Kitchen Lights Unit #3 discovery well, drilled in 2013. The heavy-lift vessel is the project’s main construction component, he says. “It was here last year for about two weeks, and then when we looked at the schedule we realized it was getting too close to winter and we might not be able to make it,” says Webb. At that point the project was postponed, he says, and Furie now expects to place the monopod sometime in early May, depending on ice and logistics. It’s a major milestone. “Setting the platform is the most technical aspect of the whole project,” Webb says. To accomplish the feat, the heavylift vessel must remain perfectly still. Furie’s senior vice president says it will employ a twelve-point anchoring system to brace the boat against Cook Inlet’s notorious tides and currents. Webb says the Svenja is also responsible for lifting the monopod’s support structure, its main deck, and its helideck. While installing the monopod may be the most technically challenging piece of the project, there’s another major com-

Alaska Business Monthly | June 2015 www.akbizmag.com

ponent: The sixteen-mile subsea pipeline running between the platform and the place where the HDD pipe emerges. The long pipeline will be built from segments of pipe stashed at Point MacKenzie over the winter months, Webb says. Construction involves a special lay barge equipped with welding stations, x-ray stations, pipe coating stations, and a tensioner, which keeps the pipe tight throughout the process. Like the Svenja, the pipe lay barge also has its own anchoring arrangement. Unlike the Svenja, though, the lay barge is constantly moving, Webb says, so the anchors must move along with it. The whole thing employs winches and a leap-frog anchor system to move smoothly through the water as the pipeline is assembled and installed beneath the surface. Once the pipeline is complete at the location where the HDD line emerges, Webb says, the two pipelines will be joined together and eventually hook up to the onshore facility in Nikiski. Next come the pressure tests, then commissioning—flowing gas through the pipeline and facilities to ensure everything operates smoothly and ac-

“We try to hire as many local businesses and entities as we can. It’s better for the state and better for the economy. The Kitchen Lights Unit development is the only development Furie has, so we’re an Alaskan company.”

—Bruce Webb Senior Vice President, Furie

cording to plan. That all-important step is scheduled to take place in August or September, Webb says, putting the entire project on track to sell gas to market by September or October. Besides the heavy equipment—the Svenja and the lay barge—the success of Furie’s Cook Inlet construction projects depends on an array of other resources. Webb says his company is working with approximately fourteen engineers from around the globe, including engineers from Ireland, Canada, Norway, Germany, and Australia. There are engineers to oversee anchor handling and mooring and engineers to handle HDD operation: others focus specifically on the pipeline and installation aspects, while still other

engineers work on tying back the Kitchen Lights Unit #3 well as the first producer. There are also a number of contractors, besides Crowley, who’ve worked with Furie on the giant construction project, Webb says. For general construction services, the project turned to CONAM Construction Co. A company with deep Alaska roots, CONAM began work in 1984 as an open shop contractor to Alaska’s oil patch. Like Mears, CONAM also operates under Quanta Services, Inc. after being purchased by the international corporation in 2009. Headquartered in Anchorage, CONAM runs field offices and equipment yards in Deadhorse and Kenai, according to the company. Its shops

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provide Ford Cummins and Peterbilt equipment repairs and warranty services, and both the Kenai and Deadhorse locations maintain heavy duty equipment fleets for work on a number of large construction projects. Equipment includes cranes, loaders, sidebooms, excavators, drill rigs, trenchers, welding trucks, tractors and trailers, and other support items, according to CONAM. McLane Consulting, Inc. out of Soldotna provided land engineering for the Furie project’s well, septic system, roads, and pad.

Jacobs Engineering provided environmental permitting services prior to construction, Webb says—an invaluable service when considering the litany of permits required to construct an offshore structure in the middle of Cook Inlet. Michael L. Foster & Associates provided a third-party engineering review for the state fire marshal’s permit, according to Furie. “We try to hire as many local businesses and entities as we can,” Webb says. “It’s better for the state and better for the economy. The Kitchen Lights Unit development is the only development Furie

has, so we’re an Alaskan company.” The monopod itself is a huge piece of equipment manufactured in Corpus Christi. It’s a state-of-the-art design, Webb says, built with an emphasis on safety. Everything is automated and capable of operating unmanned: The platform has a satellite with a direct microwave connection to the onshore facility, and the platform’s control panel is accessible from Nikiski, as well as offices in Houston or Anchorage. The platform’s helipad is outfitted with heat tracers to melt away snow and ice and allow for a helicopter to land in inclement winter conditions, Webb says. Furie’s senior vice president says the company plans on having people work aboard the platform for the first few months of operation. Eventually they’ll scale back to part-time, working on the onshore facility and traveling out to the platform a couple times a week. After it is up and running smoothly for the first year, Webb says, Furie may opt to let the platform go unmanned. The most challenging part of the whole construction project is the seasonal nature of Cook Inlet, he says: “Dealing with Mother Nature and the ice and the high winds and the high seas.”

Point Thomson At the opposite end of the state, in equally unique conditions, ExxonMobil is moving forward with construction at Point Thomson, which holds an estimated 8 trillion feet of natural gas and associated condensate. Kim Jordan, the corporation’s Alaska public and government affairs coordinator, listed several construction milestones set to take place at the North Slope development this year. They include installing and maintaining the ice road out to the development, located sixty miles east of Prudhoe Bay and sixty miles west of Kaktovik, mobilizing the drill rig and beginning to drill at the development’s Central Pad. The West Gathering Line and Central Pad’s piping and underground utilities will be installed, as well as the foundations for Point Thomson’s processing facilities. Truckable and sealift modules are also set to be installed this season, according to ExxonMobil. “Key activities during winter 2015 are drilling and preparing for the installa100

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tion of the large processing facilities in summer 2015. The total weight of the processing facilities is about ten thousand tons,” Jordan writes in an email. “Once the modules are in place, we will complete the hookup and commissioning and be ready to produce through the West Pad Well in 2016.” The initial production system is scheduled for startup in 2016, according to a statement released by Exxon in midMarch. It’s designed to produce up to ten thousand barrels of natural gas condensate daily, with two injection wells working in tandem with a production well to cycle up to 200 million cubic feet of natural gas through the onsite production facility every day. A twenty-two-mile pipeline will connect Point Thomson gas to the Trans Alaska Pipeline System. Well over two thirds of the companies contracted to work on the project are based in Alaska, according to ExxonMobil, and eight hundred people work on-site to contribute to the success of the project. Together, ExxonMobil and working interest owners have invested more than $2.6 billion in the development of

Point Thomson, according to the corporation, with about 70 percent of that total spent in Alaska. Developing Point Thomson relies on the work done by a wide variety of companies. Approximately ninety-two companies are involved with the project, according to Jordan, including WorleyParsons, Fluor, PRL Logistics, Alutiiq, ASRC Energy Services, and Alaska Frontier Constructors, Inc. (AFC). Active in Alaska’s natural resource sector since the 1970s, AFC has played a key part in development projects across multiple industries. Experience in remote site and Arctic construction technology has helped the company build a reputation for completing projects on time and within budget, and AFC’s services include everything from ice road, bridge, and dock construction to heavy haul trucking, large scale earthwork, gravel quarry development, island construction, slope protection fabrication and installation, and subsea pipeline trench excavation and backfill. “The AFC team has developed and perfected numerous innovative offshore construction techniques in sup-

n B U I LD IT iN a W E EK E D

port of the oil and gas industry and has been instrumental in the construction of many Alaskan and Russian mines,” the company writes. Projects have included heavy civil construction work at the Oooguruk, Nikaitchuq, and Liberty fields, according to AFC: Now, that portfolio will encompass Point Thomson, too. According to the 2015 “Alaska’s Construction Spending Forecast: Annual Report for the Construction Industry Progress Fund and the Associated General Contractors of Alaska” written by Scott Goldsmith and Pamela Cravez of the Institute of Social and Economic Research, University of Alaska Anchorage, oil and gas development make up the vast bulk of civil construction project spending within the state’s natural resource sectors. At an estimated $3.8 billion, no other industry comes close. By comparison, construction at Alaska’s mines is expected to total around $210 million this year. R Kirsten Swann is a freelance journalist based in Anchorage.

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special section

Building Alaska

Partners in Safety Include OSHA and Insurance Agents

By Brian McKay

ccording to the Bureau of Labor Statistics, 12 people will die as a result of occupationally related injuries at work today. Another estimated 137 people will die as a result of occupationally induced illnesses including cancers and respiratory diseases on this same day. This latter number, derived from inferential metrics, is the best estimate produced in collaboration with the National Institutes of Health and is probably underestimated; there is no consistent method to count these fatalities because it is difficult to provide a causal relationship after, in many cases, a profoundly long time between exposure, incubation, and the outcome of illness. The good news is that occupationally related fatality rates have been declining in the United States for decades now. According to the US Department of Labor, in 1970, we could expect 38 worker deaths per day compared to the 12 we have now. The rates of worker injury and illnesses are also down from 10.9 incidents per 100 workers in 1972 compared to 3.4 per 100 workers in 2011. Today’s US workforce is healthier, more informed, and arguably safer than any other time in US history. However, the rapid development of technology often times outpaces business’s ability to “keep up” with the times and plan for the safety of the workforce. Public health agencies, scientists, and sheer experience continue to refine what is known about chemicals and occupational exposures in the environment, further refining protective methods and procedures designed to protect the workforce. The changing exposure limits, new OSHA regulation, and industry standards are almost too much for the business owner to keep up with at times, and that sentiment is heard of102

ten and loudly. The good news is, no one has to go it alone. The bad news is that the necessary partners in this endeavor may be the very people businesses are hesitant to deal with, OSHA (Occupational Safety and Health Administration) and insurance agents.

OSHA OSHA is the federal agency tasked in the enforcement of the federal regulations affectionately known as 29 CFR 1910 (General Industry) and 1926 (Construction). This modest federal agency had a budget of a little over $535 million in 2013 and 2,200 inspectors, according to OSHA’s website. While OSHA regulations are “the law of the land,” and OSHA is charged with the enforcement of these safety regulations, the federal agency does have the ability to grant this authority to states. Alaska is one of the states that has taken on this responsibility. In order for states to sponsor their own programs, they must be at least as effective as the federal plans and have regulations that are at least as prudent as the federal regulations. Alaska’s OSHA (AKOSH) plan was initially approved on July 31, 1973, with subsequent and final approval on September 26, 1984. According to the Alaska State Plan webpage, AKOSH has incorporated the federal OSHA regulations by reference and are therefore identical with the following exceptions: Alaska has adopted some specific language dealing with petroleum refining and drilling production as well as providing specific long shoring details. However, the AKOSH does more than just administer to the regulations; they provide services in both the enforcement of regulations and the in the prevention of occupational injuries.

There are two divisions within the AKOSH system. According to Krystyna Markiewicz, chief of Consultation and Training for AKOSH, “the Enforcement Division [is] responsible for the field audits, compliance audits, and incident investigations in the field.” She continues, “the Consultation and Training Division offers no cost training and consultative services to small to medium sized Alaskan businesses, especially targeting high hazard industries.” The Consultation and Training Division acts on between three hundred and four hundred consultations with Alaska businesses each year and provides training to approximately two thousand personnel through their programs. There are approximately eleven enforcement officers in the state comprising five industrial hygienists and six safety specialists. The Consultation and Training Division has eleven consultants and one trainer who travel to businesses upon notification in order to identify and assist in the implementation of an OSHA compliant safety and health program. In order to engage the AKOSH consultant services, companies must fill out a Consultation and Training Services request form. When filling out this document, there are options to choose from including full site/program assessments and limited assessments that may focus on specific subjects like fall protection. Other services provided by the AKOSH Consultation and Training Division include program authorship using “safety writer” software; industrial hygiene monitoring; training including OSHA specific courses (e.g., 10 hour construction); industry specific training (e.g., seafood); and audits and walkthroughs.

Alaska Business Monthly | June 2015 www.akbizmag.com

Interestingly enough, when a company is engaging the services of the Consultation and Training Division, they are exempt from scheduled inspections from the Enforcement division, home of the “OSHA Inspector.” The two divisions are separate entities under the same roof, and they share a common mission: “to work in partnership with Alaskan employers and workers towards the elimination of workplace injuries, illnesses, and deaths and to assist employers in complying with state and federal regulations relating to occupational safety and health,” according to the AKOSH Strategic Plan for 2014-2018. However, they do not share information about their activities. It’s kind of like the old saying, “what happens in Vegas, stays in Vegas,” although in this case, what happens in Consultation and Training, stays in Consultation and Training. The important thing is that if a company is struggling with their expectations or delivery of a safe working environment for their employees, they have a partner in the OSHA regulating office that can help them come up to compliance. They will not be penalized during the consultation and training process, but they don’t necessarily get a free ride either. There is an expectation that corrective measures will be adopted within that company during the consultation process and that any life threatening issues are corrected immediately.

Alaska NIOSH The National Institute of Occupational Safety and Health (NIOSH) has a presence in Alaska through the Western States Division-Alaska, formerly known as the Alaska Pacific Office. Under the direction of Dr. Jennifer Lincoln, this office is responsible for addressing the high rates of occupational injury and fatality in Alaska. NIOSH facilitates focused research programs and a collaborative effort between industry, government, and other safety interest groups. These collaborative efforts have led to industry wide improvements including increased effectiveness—and use—of personal floatation devices for fisherman and the deployment of target industry campaigns designed to subtly influence the adoption of important safety and health initiatives. One of the most successful campaigns www.akbizmag.com

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targets the commercial fishing industry and is called “Live to be Salty.” This multimedia campaign introduces Angus Iverson, a salty sea dog with a fast wit and short temper when it comes to shortcuts in safety and health on the job. NIOSH has also had a strong presence in aviation safety and “continues to develop successful interventions while working with the aviation industry and governmental agencies,” according to Mary O’Connor with the Aviation Safety Program. “NIOSH has worked with industry to develop interventions in helicopter logging in the 1990s and we are currently working on a pilot fatigue prevention training tool. We are committed to making improvements in aviation safety in Alaska,” O’Connor says. The “Live to be Salty” campaign (livetobesalty.org) and other collaborative efforts between business and industry are making a difference in Alaska. Since the opening of the Alaska NIOSH office in 1991, there has been a 63 percent decrease in occupational fatalities in Alaska. NIOSH, of course, cannot take all the credit for this dramatic decrease, but their role in the collaboration and bringing the message home to industry cannot be underestimated either. Business and industry’s role in this partnership can be enhanced through collaborative research and other opportunities. Take a look at the NIOSH website (cdc.gov/niosh/contact/im-alaska. html) and get involved in the discussion. The people at NIOSH would love to hear about problems in the field, questions about their work, and any other occupationally related questions. The website is full of information and resources including research and injury prevention interventions, so check them out—use the some of the most cutting edge and successful safety interventions available and “be salty.”

Workers’ Comp Companies have a wide range of insurance needs depending on what they own and what services they offer. One specific type of insurance that every company with employees must have is workers’ compensation (workers’ comp). Depending on the industry and number of employees, workers’ comp insurance is often a very large annual expense that 104

is begrudgingly paid as a “cost of doing business.” But the comprehensive service doesn’t necessarily have to end when the check is cashed; many workers’ comp insurers provide additional services to their customers in the form of loss control. After all, it is in their best interest to keep injury rates down just as much as it is in the best interest of the company and the employees. Typical loss control programs may offer a wide range of services focused on workplace injury and illness prevention. It is almost always much more expensive to treat an injury or illness than it is to prevent those injuries or illnesses. Some of the resources a loss control department might bring to bear in helping a business include:  Hazard assessment: A “cold eyes” review from a loss control expert is an option. They can walk through the workplace and help identify issues that may be “lost in the background” or which need follow up. If there appears to be an opportunity for improvement, recommendations are made to the company.  Industrial hygiene surveys: This may include evaluating exposures such as noise, welding fume, dust (total and respirable), ergonomic, vibration, and chemical exposures.  Training: Various trainings can be offered that might include OSHA 10-Hour courses or smaller more specific topics provided during a tailgate meeting. There are typically online resources such as PowerPoint presentations, videos, and articles that may be downloaded.  On-going consultative services: Depending on a variety of factors, a Loss Control consultant may establish a relationship with the insured company to establish a long term plan for injury prevention program improvement.  Safety management audits: Beyond identifying specific hazards and controls, a safety management audit evaluates the process by which a safety program is managed. When completed, a report is generated to the insured company outlining opportunities for improvement.  Accident investigation: Investigating why an injury or illness occurred and

identifying the root cause is critical in preventing future injuries of the same type. This goes well beyond simply blaming the injured employee for “not paying attention.”  Loss analysis: An in-depth analysis of past injuries can identify trends and help focus injury prevention efforts. The services listed above are not allinclusive and may vary from carrier to carrier. The least expensive policies probably offer limited additional services while the more expensive (i.e., expansive) policies will offer more complete health and safety packages. It is important that each company with a workers’ comp policy understand what services are available to them and to use those services to their fullest advantage.

Conclusion Occupational injury, illness, and fatality continue to be a burden on modern society. Monumental effort has gone into the development of a suite of injury intervention methods used both in the field and at the desk. Despite these efforts, people continue to get hurt at work. New methods for injury control are constantly being developed and tried in the field. These efforts are not always easily accessible to the small business owner or small manufacturing plant. That is why it is important to leverage the existing resources out there: the people who develop, analyze, and study risk and occupational health on a daily basis. These people can be found at the federal level through OSHA and NIOSH and can even be as close as your insurance agent. R Brian McKay has a post graduate degree in Public Health and is a Certified Safety Professional (CSP) and Certified Industrial Hygienist (CIH). McKay is the Director of Quality, Health, Safety, and the Environment for Fairweather, LLC. Contact him at 907-270-6804 or brian.mckay@fairweather.com.

Alaska Business Monthly | June 2015 www.akbizmag.com

business

Bettisworth North

rofile

Design that reflects Alaska’s unique environment and people

Incorporating Landscape into Building Design To integrate landscape architecture into the building design process, clients should include landscape architects as early as possible to help cultivate and solidify their vision. “We work with our architects to extend the function and aesthetics of a building’s interior into the site and landscape,” Kimerer says. Bettisworth North also gives close consideration to building and site operations and maintenance. “We start by asking questions about the initial

Kevin Smith Photography

or Bettisworth North, responding to Alaska’s diversity is central to good design. Bettisworth North provides architecture, planning, landscape architecture, interior design, and energy services statewide. With offices in Anchorage and Fairbanks, this 36-person design firm’s mission is to be community builders for Alaska. Focused on each community’s distinct environmental features, Bettisworth North helps clients effectively use landscape architecture to enhance the functionality and appearance of architecture, streets, parks, and trails. The firm also uses site planning to create exterior spaces that people can enjoy year-round. Bettisworth North carefully considers Arctic design and seasonal issues like winter city design, snow storage and clearing, wayfinding, stormwater drainage, and vehicular and pedestrian circulation. The firm also uses green infrastructure such as native plants and other natural elements to enhance the landscape and provide onsite stormwater management. “We are passionate about our work and find satisfaction in projects that use green infrastructure, native plants, and creativity—while we meet the client’s vision and budget,” says Principal and Senior Landscape Architect Mark Kimerer.

cost versus the long-term maintenance costs,” says Marketing Director Leah Boltz. “We help clients invest, set goals, and design on the front end to maximize the program and save on operations and maintenance costs over the life of the facility.” Communication is essential to meeting clients’ goals. Bettisworth North’s landscape architects ask a lot of questions and conduct a lot of research, starting with a site analysis. They use 3D and 4D modeling to examine solar orientation, predominant wind direction, time, plant communities, soil types, access, views, and adjacent structures—which influence building placement and performance. “It creates a basis for conversation with the owner and the rest of the design team,” Kimerer says. “It helps the design team create opportunities and constraints for the project overall.”

Integrative Approach to Design Bettisworth North maintains a collaborative design process that results in highly functional, regional- and culturespecific solutions. A prime example is the Chief Andrew Isaac Health Center in Fairbanks. It features south-facing –

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walls to optimize natural light, a visual connection to open landscape areas, and native plants. “It was a very integrated design,” Boltz says. “The building seems like it has grown up out of the land.” The project earned a 2013 Healthcare Design Magazine silver award for landscape architecture and LEED Gold certification, among other accolades. Bettisworth North also designs various commercial, academic, civic, and industrial projects, including schools, visitor centers, housing, healthcare facilities, office buildings, sports facilities, and street reconstruction and improvement. The company’s expertise also encompasses wayfinding signage, trail and outdoor recreation design, and inclusive playground design. Regardless of the project scope, Bettisworth North is committed to designing solutions that are appropriate and responsive to Alaska’s unique and diverse environments.

Roy Rountree, President 2600 Denali St., Ste. 710 Anchorage, Alaska 99503 907-561-5780 bettisworthnorth.com

special section

Building Alaska

Courtesy of CCHRC

Cold Climate Housing Research Center-designed energy-efficient Bethel duplexes under construction earlier this year in February.

Trusses on the Tundra Sustainable Housing Technologies in Southwest Alaska By Molly Rettig, Cold Climate Housing Research Center

tâ&#x20AC;&#x2122;s cold and windy outside, a typical March day in Bethel, Alaska. The snowpack is thin on the windswept tundra. But itâ&#x20AC;&#x2122;s warm and cozy inside two new homes on Chief Eddie Hoffman Highway, heated only by construction lights. The Association of Village Council Presidents (AVCP) is building the super-efficient duplexes to house students for its popular aviation school. The homes are made from integrated trusses that connect the roof, walls and floor joists into single units that are tipped up like the ribs of a whale, a clean, simple design for the extremes of the tundra.

Courtesy of CCHRC

Left: Integrated trusses before enclosure at the Bethel duplexes. Above: Integrated truss system can be sized to needs. 106

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Yuut Yaqungviat, Yup’ik for “Where people get their wings,” trains local pilots for the region, which has the third busiest airport in Alaska. Single-engine turboprops, small bush planes, and cargo aircraft connect dozens of remote villages to just a couple of urban hubs. Air travel is a way of life on the Yukon Kuskokwim River Delta, where fortyeight small villages are spread across an area the size of Oregon with no roads and few centralized services. Southwest Alaska has been occupied by Yup’ik Eskimo for thousands of years, yet communities have struggled to adapt as the region has rapidly modernized over the past fifty years, shifting from a subsistence lifestyle to a cash economy, from seasonal shelters to modern housing and energy. “The Yukon Kuskokwim region has the lowest per capita income, the highest unemployment, the highest suicide rate. We don’t have tourism. We don’t have

oil. We don’t have forestry. We have a rich culture,” says Mike Hoffman, executive vice president for AVCP, a nonprofit tribal organization in Bethel. It was a blow to the region when high operating costs forced the aviation school to close last year. Students couldn’t afford to spend $1,000 a month on energy on top of tuition. AVCP hired the Cold Climate Housing Research Center (CCHRC) to design new energy-efficient duplexes for students to help the school reduce its energy burden and re-open its doors. CCHRC is a research center based in Fairbanks that develops and tests sustainable housing solutions for the north. Bethel is one of the most challenging places to build in Alaska. Sitting in one of the largest deltas in the world, where the Yukon and Kuskokwim rivers empty into the Bering Sea, it is a treeless tundra exposed to wind-driven rain and coastal storms. The soil is constantly

Courtesy of CCHRC

See the interactive annual report and find more info about the integrated truss and other cold climate innovations at cchrc.org. Videos available at https://www.youtube.com/user/ColdClimateHousing Bethel duplex designed for aviation school.

shifting, with a high water table and a deep active layer that freezes in the winter and turns to mush in the summer. Most housing in the region was imported from the Lower 48 and has succumbed to moisture, mold, and structural damage over the past few decades. Many are now rotting from the inside out. The average household in Bethel spends $6,500 a year on energy, more than three times the national average, thanks to leaky housing and imported heating oil that runs $6.50 a gallon. Nearly half the homes in the region are overcrowded, with three or more generations often packed into three-bedroom homes. CCHRC designers worked with AVCP and the community to come up with a Ice fishing on the Kuskokwim is a tradition dating back thousands of years for area residents. Courtesy of AVCP

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Courtesy of CCHRC

design that fit the climate and culture of the region. The prefabricated trusses are built in a factory and shipped in full house-shaped pieces. The units are set and braced two feet apart in a straight line for the full length of the home. There are several benefits of this design. First, the truss system is easy to build, even for an unskilled crewâ&#x20AC;&#x201D;five of the six workers in Bethel had no carpentry experience. The prebuilt trusses can be assembled in a single day, rather than a week it would take to stick-frame a home. This saves precious time during the short building season of Alaska and allows crews to get out of the elements quickly. A faster build means lower cost,

Courtesy of CCHRC

Yukon-Kuskokwim region.

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Courtesy of CCHRC

Integrated trusses being raised by construction workers in Atmautluak without heavy equipment.

freeing up money for additional housing. The truss system also lends itself to super-efficient construction, as the depth of the walls, roof, and floors can be scaled to accommodate more insulation. The Bethel homes are filled with nine inches of polyurethane spray foam for an R-value of approximately 50, more than twice a conventional 2x6 framed wall. In addition, each piece of the truss is comprised of an inner and outer chord with webbing in between, which largely cuts down on conductive heat loss. The trusses can be assembled without heavy equipment, which is scarce in the Bush. “The components are light, and the trusses can be tipped up by four men,” says Jack Hébert, CEO of the research center. Because spray foam is vapor impermeable, this design solves the moisture problems that are endemic to the Bethel region, preventing interior vapor from leaking into the walls and condensing on cold surfaces. The integrated truss design is part of a larger effort to build a local construcwww.akbizmag.com

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Alaska's Trenchless Technology Engineering Specialists - Cured In Place Pipe Lining - Horizontal Directional Drilling - Pipe Inspection - Sliplining

Juneau Airport Slipline

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Courtesy of AVCP

A white spruce lumber mill upriver from Bethel.

tion industry in Bethel, developing a lumber mill upriver and a truss plant in Bethel. Lumber would be sent down the Kuskokwim by barge in the summer and ice roads in the winter, keeping jobs and money in the region. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re looking at producing a million board feet of white spruce on the Kuskokwim, so we can build and manufacture our own trusses,â&#x20AC;? Hoffman says. Nearly four thousand new homes are needed in the Bethel region alone to alleviate overcrowding and replace aging buildings. The integrated truss design is just one of a suite of approaches that addresses the need for affordable housing in rural Alaska. In the Yukon Kuskokwim Delta, AVCP and its partners are using technology and local knowledge to make housing work for the people. R Molly Rettig is a freelance writer and communications director at the Cold Climate Housing Research Center in Fairbanks. 110

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VISITOR INDUSTRY

Courtesy of Anchorage Sheraton

The Anchorage Sheraton has nearly twenty-five thousand square feet of meeting space.

Business-Class Hotels in Alaska A

By Kirsten Swann

laska is well known as a worldclass travel destination. The state’s natural beauty and outdoor adventures draw tens of thousands of visitors every year, and tourism is a major economic driver for communities across the state. But it’s not all for tourists. For those traveling on business, Alaska offers a wide variety of accommodations and amenities that continue to blur the lines between work and play. There are rooms that reflect the state’s frontier spirit and meeting facilities on par with anything that might be found in the Lower 48. Business travelers can find everything from upgraded

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Comfort, convenience, and unbeatable views

sound systems in renovated conference halls to hotels that offer Alaska Airlines miles with every stay.

Southeast Suites In Juneau, Aspen Suites Hotel General Manager Stephanie Weitman says guests are rewarded with 250 airline miles for every visit: a nice perk for frequent flyers whose business keeps them on the move. Less than five years old, Juneau’s Aspen Suites is one of the newest hotels in town and offers a twenty-four-hour fitness center, laundry facilities, and free Wi-Fi. Weitman says every room comes with a kitchenette—complete with a two-burner cook top—a large sized table, and a forty-inch flat-screen television.

For business trips lasting more than just a day or two, the hotel’s home-like accommodations are especially convenient. The Juneau Aspen Suites also boasts meeting space that fits up to seventy people and a board room that can fit ten people—complimentary for groups and “used quite a bit,” Weitman says. But picking a place to stay often involves considerations besides just room size, price, or internet speeds. For many guests, safety is also a priority. At the Juneau Aspen Suites, the building is locked and inaccessible to non-guests between midnight and 6 a.m., according to the hotel’s manager. There are no late checkouts, she says, and that provides the hotel with an additional level of safety.

Alaska Business Monthly | June 2015 www.akbizmag.com

“One of the things I like about our property is how secure it is,” Weitman says. “It’s the most secure facility I’ve worked in, just because we’ve set those standards.” She says the hotel chain plans on opening a fifth Alaska location in Haines this summer. Its other hotels are found in Kenai, Soldotna, and Anchorage.

Anchorage Accommodations The largest city in Alaska, Anchorage has no shortage of accommodations for people traveling on business, whether that involves a short commute and an overnight stay or an exhausting flight and many days at a hotel. Business travelers can find accommodations throughout the municipality, but hotels are primarily concentrated in midtown and downtown. They offer close proximities to Anchorage’s main commercial centers, quick drives to Ted Stevens Anchorage International Airport, and a wide variety of restaurant options and leisure opportunities—because business travel doesn’t have to be all work and no play.

A few Anchorage hotel options stand out from the crowd. When it comes to business, the Anchorage Sheraton has one major advantage: nearly twenty-five thousand square feet of meeting space. “Outside the Dena’ina and Egan Center, I’ve got more meeting space than any other place in the state,” says Michael Jesperson, the hotel’s assistant director of sales and marketing.   Most of that meeting space can be found on the hotel’s second floor, with some boardrooms and other facilities on the third floor. The Howard Rock ballroom can fit more than 650 people for a banquet function, Jesperson says. The space means the hotel can handle almost any type of meeting, he says. It currently hosts several convention-type events every year, where an organization uses all of the hotel’s meeting space and then rents the meeting space room to its own vendors.   All of the Sheraton’s meeting spaces were renovated in 2011 and 2012, ending with the Ptarmigan Bar on the first floor. Jesperson says all of the beds and chairs in the hotel’s 370 guest rooms

Courtesy of Aspen Suites Hotel

Juneau’s Aspen Suites Hotel meeting rooms are busy with business travelers.

were replaced in December 2014. The Summit Room, another meeting space located on the hotel’s 15th floor, is scheduled for another renovation following this year’s spring meeting season, he says.   The Sheraton has a full service spa, The Ice Spa, located at the very top of the building on the 16th floor. The hotel also boasts a world-class fitness facility, with sweeping panoramic views over downtown Anchorage. Mount Susitna sits in the distance, giving visitors the perfect place to unwind on a treadmill

UAA professors are smart. It’s obvious in the classroom and the lab. But their knowledge and savvy is evident when it comes to planning meetings too. Four UAA professors have combined to bring half a dozen meetings to Anchorage: • Emergence in Chemical Systems Conference (4 consecutive years) • IEEE Nanotechnology Materials and Devices Conference • International Society for the Study of the Origin of Life and Astrobiology Society

MEETINGS PAY IN ANCHORAGE www.akbizmag.com

Leaders in their fields and champions in Anchorage, we give them high marks for their hard work.

Combined estimated economic impact of all six meetings:

CONGRATULATIONS TO DR. JERZY MASELKO, PROFESSORS SAIF ZAHIR, ADRIANO CALVACANTI AND MARTIN CENEK, VISIT ANCHORAGE MEETING CHAMPIONS! ARE YOU A MEMBER OF AN ASSOCIATION? CONTACT VISIT ANCHORAGE TO BRING YOUR GROUP TO TOWN: MEETINGS@ANCHORAGE.NET | 907.257.2349

$1,672,239

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and watch the sunset after a day full of meetings. The view is so picturesque, the facility has been ranked by CNN as one of the top ten hotel fitness center views on earth. “The first time they did it, we didn’t even know they’d been here,” Jesperson says. “If you go up to our workout facility on the 15th floor and look out, you’re looking out over the city and Cook Inlet. It doesn’t get a whole lot better than that.”   The location offers other perks, too. While the hotel sits well within the boundaries of Downtown Anchorage, it’s a few blocks removed from the hustle and bustle of the main town center. Guests can reach the Egan Center or the Dena’ina Center within fifteen minutes or the Fifth Avenue Mall within ten minutes, but they won’t be awakened by noisy traffic or nightlife late in the evening.   Another perk for business travelers with rental cars—the Sheraton has over 570 parking spaces, more than any other downtown Anchorage hotel. If travelers are looking for a room outside the main city center, but still just minutes away from the city’s main commercial districts, one choice in particular combines historic Alaska charm with modern amenities in a one-of-akind location. The Millennium Alaska Hotel, located just a stone’s throw from Ted Stevens Anchorage International Airport on the shore of scenic Lake Hood, is another choice for business travelers looking for convenience combined with Alaska flair. While it’s one of the city’s older hotels, it recently invested hundreds of thousands of dollars renovating its guest rooms and conference center. From queen size beds in every guest room to the hotel’s distinctive lodgelike atmosphere, the Millennium is unlike other Anchorage hotels. The hotel’s three meeting rooms can fit anywhere from 25 to 280 people, according to General Manager Carol Fraser, and the newly renovated Spenard Conference Room was outfitted with a state-of-the-art audio/visual system. The entire renovation project took three months and $750,000, Fraser says. For those looking for a less traditional meeting locale, the hotel is also home to a restaurant and bar with up-close-and114

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personal views of the largest sea plane base in the state. Live entertainment every night of the week and “some of the coldest Alaskan Amber in Anchorage” helps tired business travelers relax after a long day of work, the hotel’s general manager says. “The Millennium is the most unique hotel in Anchorage,” Fraser says. “The location is great for business travelers who need to be close to the airport or even those who have to zip to the Kenai Peninsula.”

Other Destinations If the Kenai is your destination of choice there are plenty of business-class hotel choices there, too. The Kenai Airport Hotel—named for its close proximity to the city’s air travel hub—offers everything from a fully stocked business center to early check-in and late check-out to accommodate different schedules. At the Kenai Quality Inn, also centrally located in the heart of town, business guests can take advantage of two meeting rooms that can accommodate as many as 250 people.

Traveling north to the Golden Heart City? Fairbanks is home to a wide variety of accommodations for Alaska business travelers. The Fairbanks Princess Riverside Lodge sits on the banks of the scenic Chena River and puts a premium on connectivity: Guests can access highspeed wireless internet anywhere on the property, allowing business travelers to work online from the comfort of their rooms, the riverside deck, or the hotel’s numerous meeting rooms. Three full-service meeting rooms are capable of hosting group meetings or events, according to the hotel, and other transformable spaces offer amenities ranging from a fireplace and food-service area to a built-in media center. An overhead projector, slide projector, podium and microphone, amplifier, LCD projector, wireless microphone, and risers are also available, according to the hotel. Just down the river, Pike’s Waterfront Lodge features similar river views and a suite of services to suit any business needs. Several different meeting spaces can accommodate everything from small

board meetings with a dozen or so attendees to large gatherings of one hundred people or more. The hotel rents audio visual equipment along with its meeting rooms, and guests have access to in-room phones and projectors, among other basic items. Even farther north, the recently rebuilt Top of the World Hotel is Barrow’s largest and newest place to stay. It offers two room types as well as ADA-accessible accommodations and four different event spaces—the largest of which can fit up to forty-three occupants, according to the hotel. Audio visual equipment, catering options, and wireless internet round out the hotel’s offerings. One thing’s for certain: From the Southeast to the North Slope, while traveling Alaska on business, there are plenty of places to find a warm, comfortable bed, Wi-Fi, a conference room, and a killer view. R

Kirsten Swann is a freelance journalist based in Anchorage.

Be inspired by the light of the Aurora Borealis. Renew your energy under the Midnight Sun. Experience the warmth of Fairbanks—Alaska’s Golden Heart—and the gateway to Denali, Interior and Arctic Alaska. Call 1-877-551-1728 x3765 for your free Meeting Planner Guide. Explore your Alaskan meeting opportunities at meetfairbanks.com.

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RIGHT MOVES McDowell Group

Susan Bell re-joined McDowell Group following five years with the State of Alaska as Commissioner of the Department of Commerce, Community, and Economic Development. Bell previously worked with the Alaska-based research and consulting firm.

First National Bank Alaska

Compiled by Russ Slaten First National hired Loan Officer Jason Feeken and appointed him Assistant Vice President. With more than ten years of experience in Alaska’s financial industry, Feeken will work out of Anchorage’s Corporate Headquarters. Jennifer Matthews moved from the Wasilla Branch after being promoted to Cash Management Services Specialist in Anchorage. Matthews will work with customers to formulate the best solutions to meet their business banking needs. Diane McKee is the new Parkway Branch Manager after the board promoted her to take charge of the East Anchorage branch. McKee has worked in banking for more than seventeen years, including the last five in Deposit Services.

Stantec

Longacre

Feeken

Heinz

Jack DiMarchi, CPG, joined Stantec as its Alaska mining Sector Leader based in Fairbanks. With more than twenty-five years of industry experience, DiMarchi will develop Alaska-specific mining opportunities, while expanding the firm’s DiMarchi regional and North American wide capabilities. He is a Colorado State University graduate.

Northrim Bank

Matthews

First National Bank Alaska and its Board of Directors announced a variety of promotions and appointments. Doug Longacre will lead the bank’s commercial lending operations after being named Executive Vice President. Longacre has forty years’ McKee banking experience and has successfully worked in every aspect of lending in the bank. Vice President Karl Heinz was named the Regional Branch Manager in charge of the Glennallen, Kenai, Kodiak, and Valdez branches and will work out of the Kenai Branch. Heinz previously managed branches in Glennallen, Haines, and Eagle River.

Leathers

David

Northrim Bank announced the hiring of Bradley Leathers, Branch Manager for Northrim’s Sitka Branch, and the promotion of Leary David, Branch Manager for the bank’s Huffman Branch. Leathers began his banking career in 2007 with Wells Fargo in Ketchikan as Assistant to the District President and was most recently Branch Manager for Wells Fargo in Skagway. Leathers has a bachelor’s

degree in economics from Vanderbilt University. David has worked at Northrim Bank since 2006, where he started as a Teller at the Midtown Financial Center. He has been a Personal Banker, Branch Specialist, Branch Supervisor, and Assistant Manager during his time at Northrim. David holds a degree in Marketing Management from San Beda College, Philippines.

Ahtna, Inc.

David O’Donnell joined the Ahtna team as President of Ahtna Construction & Primary Products Corporation, or AC&PPC, based out of the Ahtna Anchorage office. He brings to Ahtna twenty-five years of experience in in various types of heavy and civil construction. O’Donnell was Vice President and General Manager over civil construction for the Bristol Alliance of Companies for the last ten years.

R&M Consultants, Inc.

Black

Germer

R&M is pleased to announce the addition of Chris Black, PE, and Jenna Germer to its Anchorage office team. Black joined R&M’s Engineering Department as a Project Engineer and brings more than twenty-two years of construction and civil engineering experience to the firm. Black has a BS in Civil Engineering from the University of Alaska Anchorage. Germer joined R&M’s Environmental Group as an Environmental Specialist and previously worked as a Geologist Technician on the North Slope. Germer has a BS in Geology from the University of Alaska Anchorage.

International Tower Hill Mines

International Tower Hill Mines appointed Karl L. Hanneman as Chief Operating Officer. He’s been

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RIGHT MOVES with the company five years and assembled the Alaska team and served as the Livengood Gold Project Manager. Hanneman has more than thirty years’ Alaska-based mining industry experience, including with the Red Dog and Pogo mines.

Compiled by Russ Slaten Visitor and Convention Bureau Interim Director for Lincoln City, Oregon.

Ukpeaġvik Iñupiat Corporation

Davis Wright Tremaine LLP

Patricia Vecera, an e x p e r i e n ce d l a b o r/ employment lawyer, joined the Anchorage office of Davis Wright Tremaine LLP as Counsel. She joins Davis Wright Tremaine after spending fif teen years at the Anchorage-based firm of Turner & Mede, P.C. Vecera Vecera earned her BS from Chapman College and her JD from Gonzaga University School of Law.

Alaska Center for the Performing Arts

Solomon

Wilson

Huna Totem Corporation

Joe Jacobson joined Huna Totem Corporation as Vice President of Business Development. He was recently Director of the State of Alaska Division of Economic Development and previously International Program Director at the Alaska Seafood Marketing Jacobson Institute. Jacobson holds a bachelor’s degree in outdoor studies from Alaska Pacific University and a master’s degree in international relations from the City College of New York.

Anchorage Chamber of Commerce

The Anchorage Chamber of Commerce board of direc tors appointed Bruce Bustamante as President. Over the past few years he has been Visit Anchorage President a n d C EO, P r i n ce s s Cruises Vice President of Community and Public Affairs, and most recently Bustamante

She was most recently Operations Director at Northwest Strategies. She brings fifteen years of experience in communications and marketing and ten years in freelance writing. Kenshalo is a life-long Alaskan and a graduate of the University of Alaska.

Cossette

Kenshalo

Greg Solomon joins UIC as its new Marketing and Communications Manager. Solomon has over twenty years of experience in the advertising and marketing fields and fifteen years in the IT industry. He attended the Interlochen Arts Academy in Michigan, the University of Texas at San Antonio, the University of Alaska Anchorage, and the University of the Incarnate Word in Texas. Roger Wilson joins UIC Oil & Gas Support as General Manager. Wilson’s career spans twentysix years in North Slope materials management and logistics, including seventeen years in management positions. He also brings strong safety culture and environmental stewardship. Wilson is a life-long Alaskan. Clyde Cossette joins UIC Design, Plan, Build as Health, Safety, Environment, and Training Manager. Most recently he’s worked at Kuparuk as a General Foreman managing seventy employees. Cossette holds a bachelor’s in business management from the College of St. Scholastica in Minnesota and has earned a number of health and safety certifications the last thirty years. Rachel Kenshalo joins UIC Design, Plan, Build as Director of Marketing and Communications.

Anne Garrett has been appointed as the new Director of Development and Marketing at the Alaska Center for the Performing Arts. Garrett brings more than twenty years of experience and earned her Bachelor of Arts in Fine Arts from Saint Olaf College. In Garrett Seattle, she earned her Master of Arts in Teaching from City University and graduated from The Film School.

Salamatof Native Association, Inc.

Christopher Monfor is the new President and Chief Executive Officer of Salamatof Native Association, Inc. Monfor was the Area Sales Manager for NC Machinery’s CAT Rental Store Division. Monfor received a BA in marketing, history, and criminology from the Monfor University of Portland.

AIDEA

The AIDEA (Alaska Industrial Development and Export Authority) Board appointed John Springsteen as Executive Director. He served as AIDEA Infrastructure Development Officer since February 2014 and was previously the National Director in the Houston, Texas, office of Grant Thornton LLP. Springsteen earned his bachelor’s from the Massachusetts Institute of Technology and holds an MBA from the Kellogg Graduate School of Management, Northwestern University. R

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INSIDE ALASKA BUSINESS

Alaska Airlines

laska Airlines will continue flying jet service to five Southeast Alaska communities for at least another two years. The federal Department of Transportation has awarded Alaska Airlines the contract to continue flying to Cordova, Gustavus, Yakutat, Petersburg, and Wrangell as part of the Essential Air Service program. Under the renewed Essential Air Service agreement, Alaska Airlines will operate daily flights to Cordova, Yakutat, Petersburg, and Wrangell and daily seasonal flights to Gustavus during the peak summer travel seasons from June 7 to August 22, 2015, and June 5 to August 20, 2016. The airline also provides twice-weekly Essential Air Service between Anchorage and Adak, Alaska.

Fairweather, LLC

airweather LLC, an affiliate of the Edison Chouest Offshore group of companies, held a grand reopening of its Fairweather Deadhorse Medical Clinic located at the Deadhorse Aviation Center on Alaska’s North Slope. Providing a wide range of memberbased medical and occupational health care services to support both onshore and offshore operations, the clinic is available to the public regardless of employer affiliation. Medical services include primary and acute care, emergency medicine, advanced cardiac life support, and ambulance services, along with a fully stocked pharmacy prescribing medications. The clinic also offers an onsite lab and X-ray department. Occupational health services include audiograms, respirator fit tests, spi-

Compiled by Russ Slaten

rometry, vision screening, and drug/ alcohol testing, plus the convenience of completing full HAZWOPER exams in a single office visit.

Alaska Power & Telephone

laska Power & Telephone, or AP&T, plans expansion of data bandwidth capacity in the Upper Lynn Canal region of Alaska via placement of new fiber optic undersea cable facilities in Southeast Alaska this year. The planned eighty-six mile cable-route will originate in Skagway, landing in the community of Haines before terminating at Lena Point near Juneau, Alaska. In tandem with AP&T’s more than three hundred-mile terrestrial Southeast Alaska Microwave Network, the new undersea fiber route is expected to exponentially expand AP&T’s bandwidth assets and positioning as a strategic partner in the rapidly expanding Alaska data transport and wireless markets segments.

leased to PETCO. The project created fifty new construction jobs and twelve new permanent positions.

Summit Fund LLC

he Alaska Industrial Development and Export Authority, or AIDEA, Board approved a loan participation for a newly constructed retail project in Wasilla. The loan, to Summit Fund LLC, is for $2,295,000, 90 percent of a $2,550,000 loan brought to AIDEA by Wells Fargo Bank. Wells Fargo originated the loan and is participating with $255,000. The purpose of this loan is for long-term financing of a new, single-story retail building located at 1801 East Palmer-Wasilla Highway. The 11,400-square-foot building is fully

FedEx

he Alaska Industrial Development and Export Authority, or AIDEA, announced in April that it completed an early extension to its ground lease at Ted Stevens Anchorage International Airport and executed a new lease with FedEx for their continued use of the Maintenance, Repair, and Overhaul Facility at the airport. This new lease with FedEx goes through 2023, with options to extend to 2043. AIDEA owns the hangar, one of the largest buildings in Alaska. The facility can accommodate a wide-body aircraft, such as a Boeing 747. The new lease includes up to $4 million of maintenance and refurbishment for the facility, including new boilers, updated fire suppression systems, and replacement of the main hangar door, expected to begin this summer.

Blood Bank of Alaska

lood Bank of Alaska has opened a new community blood center in Wasilla to serve Mat-Su Valley blood donors. The center is located at 1301 Seward Meridian Parkway. In 2009 the previous Wasilla center was closed and Valley donors began donating in Anchorage or at mobile drives. The board of directors approved the opening of the center in November 2014 to better serve the community. Mat-Su Regional Medical Center is one of the many hospitals supplied with blood and blood products by the blood bank’s volunteer donors. Blood Bank of Alaska will continue to

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.

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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

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INSIDE ALASKA BUSINESS host some mobile drives in the Valley, but will use the center to provide a more consistent donation option for donors.

Anchorage 5th Avenue Mall

nchorage 5th Avenue Mall will open three new stores this summer. Vancouver, BC-based lululemon athletica is slated to open its first large store in an approximately 3,200-squarefoot space on Level 2 later this summer. Known for its yoga-inspired athletic apparel, the brand focuses creating components for both men and women to live longer, healthier, fun lives, specializing in making technical athletic apparel for yoga, running, and many more sweaty pursuits. Shoppers can expect additional activity this season when Journeys relocates from Level 1 to Level 3, next to Aerie, to make room for sister store, Journeys Kidz. This will be the brand’s first store in Alaska. Finally, Bath & Body Works opened its first Alaska store on Level 2 of the 5th Avenue Mall, across from the future lululemon store, in May.

Alaskan Brewing Company

laskan Brewing Company began shipping cans to all seventeen states of distribution in April and added another product to their existing can selection in Alaska. The introduction of cans to the rest of the Alaskan product lineup could prove an important step in the growth of Alaskan Brewing’s footprint. In addition to Alaska,

Compiled by Russ Slaten

Alaskan Amber and Freeride APA in twelve-ounce cans are on the shelves in Arizona, California, Colorado, Idaho, Michigan, Minnesota, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Texas, Washington, Wisconsin, and Wyoming. Alaskan Brewing installed a new state-of-theart canning line in April 2014 that emphasized the importance of the quality of the beer. They first began packaging Alaskan Amber and Freeride APA for sale in Alaska only. After a very successful in-state run, Alaskan Brewing is now offering those two varieties to the rest of their markets. Additionally, Alaskan Brewing began canning Icy Bay IPA in April, with immediate sale of that variety available in Alaska only.

Corporate Travel Management

orporate Travel Management announced the sale of Explore Partners LLC, known as Explore Tours. The current Explore Tours staff moved to the new owner with the sale. However, the Explore Tours office will continue to be located at CTM’s Anchorage office, allowing a continued close relationship between CTM and Explore Tours for years to come.

Foss Maritime

he first of three Arctic Class tugs being built at the Foss Rainier, Oregon, shipyard was christened in April. The vessel, the Michele Foss, will see its first assignment on an oil field sealift this summer from South Korea to the Alaska Arctic. The vessel’s namesake

is Michele Seaver, one of the three sisters who are primary shareholders of Saltchuk, the parent company of Foss Maritime. The Michele Foss is ice class D0. This means the hulls are designed specifically for polar waters and are reinforced to maneuver in ice. The vessel complies with the requirements in the ABS Guide for Building and Classing Vessels Intended to Operate in Polar Waters, including ABS A1 standards, SOLAS, and Green Passport. The Michele Foss includes a Caterpillar C280-8 main engine, which complies with the highest federal environmental standards; a Nautican propulsion system; and Reintjes reduction gears. Markey Machinery supplied the tow winch. The tug has a bollard pull of 221,000 pounds.

Coeur Mining, Inc.

oeur Mining, Inc. updated and rescoped its mine plan and released a preliminary economic assessment for its Kensington gold mine located in Southeast Alaska in April. The new mine plan reflects the recent discovery of the high-grade Jualin zone and indicates higher overall production and significantly higher cash flows due to the contribution of higher-grade material from three nearby zones. The Jualin zone, located approximately 8,250 feet from current mining activities, continues to expand based on ongoing drilling and contains an average gold grade over three times the average reserve grade of 0.185 oz/ton. Annual gold production between 2015 and 2020 at Kensington is expected to average approximately 128,000 ounces and costs applicable to sales are expected to average $820 per

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 2015 | Alaska Business Monthly

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INSIDE ALASKA BUSINESS gold ounce. Production in 2014 was 117,823 ounces as costs applicable to sales averaged $951 per gold ounce.

Alaska Communications

laska Communications has enhanced Voice over Internet service for Alaska businesses with its new highdefinition voice capability. The new HD capability increases sound clarity to provide a better call experience for subscribers using the Voice over Internet phone product.

Nome Offshore Mining

he Alaska Division of Economic Development’s Nome Suction Dredge Study has concluded that offshore mining has financially benefited the City of Nome and its residents and will continue to play role in the region’s future. The study analyzed the impact of the offshore mining industry’s effect on the city’s economy, infrastructure, and public services. The study identifies benefits and challenges that can be balanced by the community and industry for regional economic growth. Specifically, the report recommends that the City of Nome work to upgrade and add infrastructure. The report also recommends that the mining industry work to minimize operational hazards and to ensure Nome’s public spaces are readily accessible to all residents. The study asserts that resource depletion in Nome will eventually lessen recreational interest in the offshore public mining areas, but the economically viable placer gold found in large offshore lease tracts will most likely sustain a long-term commercial mining industry.

Compiled by Russ Slaten

Pier 1 Imports

ier 1 Imports opened its newest Alaska store in April. This is the second Pier 1 Imports in Anchorage and third location in Alaska. Located at the Tikahtnu Commons shopping center at 1124 N. Muldoon Road, the new Anchorage store features Pier 1 Imports’ New Store Concept. Pier 1 Imports has one store in South Anchorage and one store in Fairbanks, which also features the new store concept. The store boasts 7,496 square feet of total retail square footage and employed between twentyfive to thirty associates to support the new store opening.

GCI

CI is partnering with wireless technology and services company Ericsson to bring advanced, highspeed fixed and mobile connections to Alaska’s North Slope. GCI began construction and installation of its new advanced, high-speed wireless data network. The network will include a total of nine sites spanning from Kuparuk to Point Thomson, stretching more than 3,738 square miles, an area larger than the size of Delaware and Rhode Island combined. The new network will use LTE technology with data download speeds in excess of thirty megabits per second. This high-speed connectivity will support advancing oil field data requirements and improve overall oilfield operations. This project is a continuation of GCI’s build out of high-speed mobile service across Alaska. In addition to North Slope, GCI already provides LTE to Anchorage, Fairbanks, and Juneau and later this year will be

turning up LTE service for the Matanuska Valley and Kenai Peninsula.

Alaska USA Federal Credit Union

laska USA Federal Credit Union selected FIS, a global leader in banking and payments technology as well as consulting and outsourcing solutions, as its partner for several strategic payment initiatives, including EMV adoption and better leveraging customer data to increase the effectiveness of its customer touch points through analytic reporting. The new deal includes EMV card personalization, debit card processing, ATM driving, fraud management services, and NYCE Network access, all while extending the bank’s existing credit card processing relationship provided by Card Services for Credit Unions. Alaska USA also extended its relationship using FIS’ ScoreCard Rewards loyalty program.

WCP/Frontier Paper

om Groves, CEO/President of WCP Solutions of Kent, Washington, and Gregory Wilcox, owner of Frontier Paper of Anchorage, merged WCP’s Alaska distribution facility and Frontier Paper to form a new business, WCP/Frontier Paper. Although both companies operate in the same industry, the combination WCP and Frontier Paper brings together a high level of expertise in different market segments that complement the customer base of each. The new company is operating as WCP/Frontier Paper. R

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

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620B East Whitney Road I Anchorage, AK 99501

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AGENDA

Compiled By Tasha Anderson June

Animal Behavior Society Annual Conference

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

Southcentral Foundation 2015 Nuka System of Care Conference

June 15-19—Southcentral Foundation Ahklun Mountains Building, Anchorage: The conference describes the entire healthcare system created, managed, and owned by Alaska Native people, with workshops and break-out sessions, evening networking, and a cultural reception. southcentralfoundation.com

Arctic Energy Summit

Alaska Fire Conference

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

July Rocky Mountain Mineral Law Institute

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

Alaska Business Week

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

Alaska Snow Symposium

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

Annual Strategic Lending Conference

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

August August 25-27—Alaska Pacific University, Anchorage: The meeting features a workshop on Generalized Additive Models by Dr. Simon Wood (University of Bath, UK). community.amstat.org/alaskachapter

September

Alaska Recreation & Park Association Conference

September 14-17—Marriott, Anchorage: CI Energy Group’s 11th annual Alaska Oil & Gas Congress will feature a focused pre-conference Summit Day, the Two-Day Conference, and a post-conference seminar. alaskaoilandgascongress.com

Chapman Conference on Magnetospheric Dynamics

September 20-25—Fairbanks: Scientific objectives of the proposed CCEMD include magnetic storms, auroral and magnetospheric substorms, dayside and tail magnetic reconnections, and new results of the MMS mission. gi.alaska.edu/2015ChapmanConference September 24-25—Hilton Anchorage, Anchorage: Meet more than two hundred human resources professionals, office managers and administrators, directors, and adult educators representing both public and private industry. This event will bring professionals from around the state to learn more about their responsibilities as HR Professionals. alaska.shrm.org

www.akbizmag.com

October 4-7—Anchorage: The annual conference of the International Economic Development Council. Join economic developers from around the world to discuss the most important issues in economic development today: “Foundational Transformations: Creating Future Growth & Prosperity.” iedcevents.org

Alaska Travel Industry Association Convention & Trade Show

October 5-8—Juneau: The 2015 “In Your Wildest Dreams” 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 8-10—Anchorage: A continuing medical education conference put on by the Alaska Academy of Physicians Assistants, providing up to 25 CMEs. akapa.org

Alaska Coalition on Housing and Homelessness Conference

n n n

October 12-14—Anchorage: Events include keynote speakers and training sessions. alaskahousing-homeless.org/conference

AAHPA Annual Conference

October 12-16—Anchorage: This is the annual conference of the Alaska Association of Harbormasters & Port Administrators. alaskaharbors.org

Alaska Chamber Policy Forum and Conference

October 13-14—Fairbanks: Open to the public, the Alaska Chamber’s Annual Conference is the state’s premier business conference. Traditionally held in the fall, the Conference draws 200-225 attendees and features keynote speakers, panel discussions and breakout sessions on issues of statewide concern to Alaska business. alaskachamber.com

Alaska Federation of Natives Annual Convention

October 15-17—Dena’ina Center, Anchorage: Annual gathering of Alaska Native peoples to discuss current news and events on a state, national and international level. nativefederation.org

Alaska Math and Science Conference

October 23-25—Sitka: Biennial conference for teachers of math and science of all grade levels. This year’s theme is “Navigating the Tides of Change.” amsc2015.org

NWPPA/APA Alaska Electric Utility Conference

Alaska State HR Conference

October 1-10—Land’s End, Homer: Celebrate the 40th Anniversary of the Alaska Recreation & Park Association as well as participate in the organization’s annual conference. alaskarpa.org

IEDC Annual Conference

Alaska Oil & Gas Congress

September 30—Dena’ina Center, Anchorage: Come honor the top Alaska-owned companies, ranked by revenue, at the annual luncheon. Contact: Melinda Schwab 907-276-4373 accounts@akbizmag.com, akbizmag.com

October

2015 Alaska Chapter of ASA Annual Conference

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

Alaska Business Monthly’s Top 49ers Luncheon

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

September 28-30—UAF Campus, Fairbanks: The Institute of the North’s 2015 Arctic Energy Summit is a multi-disciplinary event addresses energy extraction, production, and transmission in the Arctic as it relates to oil and gas exploration and production, remote heat and rural power, and the business of clean energy. institutenorth.org

October 26-29—Dena’ina Center, Anchorage: The conference provides a mix of education and networking, along with more than seventy exhibit booths. It also provides ample opportunities to learn about the latest best practices, innovations, and technology concerning utilities. nwppa.org

November Associated General Contractors of Alaska Annual Conference

November 11-14—AGC of Alaska is a non-profit construction trade association dedicated to improving the professional standards of the construction industry. agcak.org June 2015 | Alaska Business Monthly

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ALASKA THIS MONTH By Tasha Anderson

DINING

Bridge

The Bridge Seafood Restaurant. Photo by Tasha Anderson/Alaska Business Monthly

or a uniquely Alaska dining experience, the Bridge Seafood Restaurant reopened its seasonal doors May 26 and will remain open through August 31. The Bridge was purchased in 2011 by its current owners, Chefs Al Levinsohn and Patrick Hoogerhyde, both have “made Alaska home” and have had extensive culinary careers in the Pacific Northwest and Alaska. Located at 221 W. Ship Creek Avenue, the restaurant is “a bridge over an active hatchery fed salmon stream, where you can see people catching the same species of salmon that you’re having for dinner,” Hoogerhyde says. All of the seafood served at the Bridge is 100 percent Alaska-caught seafood, including the popular halibut, king salmon, and king crab. In fact, Hoogerhyde says, the restaurant’s short open season is specifically correlated to the fresh salmon season from May to August. In addition to local seafood, 80 percent of the produce served in the restaurant is sourced from the Mat-Su Valley, and all the food is “100 percent hand crafted,” he says. “Our ‘starter bar’ is our signature; it comes with every entrée and is all you can eat,” Hoogerhyde says. It includes Bering Sea tanner crab, Matanuska potato salad, summer green salad, pineapple coleslaw, roasted beet salad, watermelon salad with fresh mint, and Alaska smoked salmon and pasta salad. Hoogerhyde says, “Our company’s philosophy and culture is built on hospitality—we want guests to experience Alaska’s seafood and service like it should be.” bridgeseafood.com R 122

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ALASKA THIS MONTH By Tasha Anderson

TRAVEL

Chickenstock

“

ow many people can say they did the Chicken Dance in Chicken, Alaska, at Chickenstock?” asks Josea Busby, Chickenstock Music Festival event coordinator. Well, last year approximately seven hundred people, and Busby says she anticipates nearly one thousand guests this year as Chickenstock continues to grow. Busby, while attending a bluegrass concert in 2007, fell in love with the genre. She spoke with some of the bluegrass musicians, pitching the idea for a bluegrass music festival in Chicken. “I don’t think they thought I was serious until after we all arrived home from Nome and I started bugging them every chance I got,” she says. It paid off, as the event that had one band for one night in its first year has grown into a two-day event with fifteen groups performing. This year’s honored guest is Carl Hoffman, “who was recently recognized by the Alaska State Legislature as ‘Father of Alaskan Bluegrass’ and has been involved with Chickenstock since its inception,” Busby says. In addition to live music there’s balloon tying, unicycles, stilts, juggling, and other live entertainment. One tradition that has evolved at Chickenstock is the official Chicken Dance, “led by four human sized chickens, one human sized egg, and one human sized deviled egg,” she says, with four “Chickenettes” singing the words to the song on stage. “It is so much fun and we really try to get everyone up for the Chicken Dance— kids, moms, dads, teens, grandmas, grandpas, etc.” Mike and Lou Busby, who own and operate Chicken Gold Camp & Outpost, donate their grounds for the event each year. Because of that, the event is able to offer free dry camping with a two-day pass purchase ($45). Chickenstock is June 12 and 13 this year. “Our musicians, event flock, and festival attendees all mingle as if it were an annual family get together; the weekend is good clean friendly family fun,” Busby says. facebook.com/pages/Chickenstock-MusicFestival/354189617933639 R www.akbizmag.com

August 2014 | Alaska Business Monthly

123

EVENTS CALENDAR

Compiled by Tasha Anderson

ANCHORAGE

Alaska Paddle Fun Day

The Alaska Paddle Fun Day is a free event for the general public to learn about paddle sports including sea kayaking, stand up paddle boarding, canoeing, and pack rafting. Open to all ages and abilities. Demo boats will be available to paddle. Presentations and demonstrations will include cold water safety, rescues, trip planning, Leave No Trace camping, equipment, and more. Goose Lake, 10 a.m. to 4 p.m. aksks.org

Potter Marsh Discover Day

This family-friendly event brings you nature-related games and prizes, invertebrate sampling, birding stations along the boardwalk, captive birds from the Bird Treatment and Learning Center, educational animals from the Alaska Zoo, kid-friendly archery range, fly and spin casting practice, and more. Potter Marsh Boardwalk and Anchorage Coastal Wildlife Refuge, 11 a.m. to 4 p.m. adfg.alaska.gov

6-7 & 13-14

Three Barons Renaissance Fair

This annual fair boasts a range of activities, including singing with pirates, performances by belly dancers, swordplay demonstrations and battles, and local food and arts vendors. Tozier Sled Dog Track, Noon to 8 p.m. daily. 3barons.org

100+ Women Who Care Anchorage

Members of the 100+ Women Who Care Anchorage meet four times a year for one hour. At the meeting, a charity is selected and each woman present instantly writes a check for $100 to the charity, raising $10,000 or more quarterly for Anchorage-based nonprofits or Anchorage branches of national charities. This is the third meeting for the group, which met for the first time December 2014. Millennium Alaskan Hotel Anchorage, 5:30 registration, 6 p.m. to 7 p.m. 100wwcanchorage. org

20 Downtown Summer Solstice Festival and Hero Games

Alaskans celebrate the longest day of the year in Town Square and surrounding streets with tons of events packed into one sweet celebration. Live musical performances keep downtown hopping until the sun goes down, a tall order on a day with twenty-two hours of functional daylight. Events include the Hero Games, a friendly competition between Alaska’s first responders charging through obstacle courses, bucket brigades, and different relays and the Children’s Rainbow Factory, which includes puppet shows, a kayak pool, and giant sandbox. Fourth Avenue and Town Square, Noon to 6 p.m. anchoragedowntown.org

Mayor’s Midnight Sun Marathon & Half Marathon

FAIRBANKS

Fairbanks Summer Folk Festival

This festival is a day of free live folk, bluegrass, blues, jazz, and Celtic music. Pioneer Park 1 p.m. alaskasbest.com/fairbanksfolkfest

19-21

Great Alaskan Foodstock

The entry fee to this event is $5 or five cans of food. All profits are donated to the Fairbanks Rescue Mission. Activities include a beer garden, dancing, volleyball, horseshoes, arts and crafts, and food vendors. The musicians and organizers all volunteer their time, and local individuals and businesses donate items for a Saturday night auction. Howling Dog Saloon. greatalaskanfoodstock.com

Midnight Sun Festival

Midnight Sun Baseball Game

This is Fairbanks’ celebration of one of the longest days of the year, featuring live music, good food, and exciting vendors. downtownfairbanks.com Taking place for more than one hundred years, this game is played by the Alaska Goldpanners at 10:30 p.m. without any artificial light. Growden Memorial Park. goldpanners.pointstreaksites.com/view/ goldpanner

6-7

GIRDWOOD

Fiddlehead Music Festival

This is a celebration of the fiddlehead fern season and summer music in the mountains. The family-oriented outdoors event features live music, local arts and crafts booths, beer and wine garden, and activities for kids. Alyeska Resort, Noon to 8 p.m. alyeskaresort.com

13-14

JUNEAU

Juneau Symphony Summer Pops Concert

This concert explores music that spans the classical repertoire to the world of fantasy. Selections will be from familiar film scores, such as “Fellowship of the Ring” and “Sorcerer’s Apprentice,” and Lisa Ibias will move audience members with John Williams’ heart-wrenching theme from Schindler’s List. Two incredibly talented 2014 Youth Solo Competition winners, Tezah Haddock and James Cheng, will be features playing works by Vivaldi and Haydn. Juneau Symphony, Saturday 8 p.m. and Sunday 4 p.m. juneausymphony.org

12-14

PALMER

Colony Days

Nearly four thousand runners and walkers will travel to run the scenic trails of Anchorage at the annual summertime Mayor’s Marathon and Half Marathon. The event also has a four-person marathon relay, 5-miler, and Youth Cup. mayorsmarathon.com

This is a festival in honor of the 1935 Colonists who started the Mat-Su farming community. Events include a car rally, craft fairs, horse-drawn wagon rides, farmer’s market, kids’ games, carnival rides, bike rodeo, parade, and live entertainment. Downtown Palmer. palmerchamber.org

Alaskans serving Alaskans.

This family friendly activity will feature amateur Highland Athletes, piping, drumming, and dancing competitions, as well as live music, vendors, food, and a Scotch tasting. Alaska State Fairgrounds. alaskascottish.org

Oxford is proud to be the only gold refiner and bullion dealer to maintain two locations in Alaska for more than 30 years. BUY : SELL : TRADE • ANCHORAGE • FAIRBANKS • NOME • NEW YORK

1.800.693.6740 www.oxfordmetals.com 124

3-28

Alaska Scottish Highland Games

SITKA

Sitka Summer Music Festival

The festival week runs Tuesday through Sunday. In general, a festival week has the following events: Café concert, Bach’s lunch, evening concerts, and at least one special event; many of the concerts are free to the public. ssmf.alaskaclassics.org

VALDEZ

Kite & Summer Solstice Festival

Come celebrate the Summer Solstice with kite building, big kite flying, music, and more. This is a fundraiser event for the Valdez Convention & Visitors Bureau. valdezalaska.org

Alaska Business Monthly | August 2014 www.akbizmag.com

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125

ALASKA TRENDS

By Amy Miller

Anchorage: Then and Now

his year marks Anchorage’s 100th birthday, and the city has come a long way from its start as a shabby tent city of railroad construction workers. The State of Alaska Department of Labor and Workforce Development website is home to official US Census Bureau research dating as far back as 1880 for Alaska as a territory, and, after statehood in 1959, as a state. Anchorage makes its first appearance as a census-recognized place in 1920, when no more than the population for “Anchorage town” was recorded (1,850 at the time). The population climbed steadily through the 1930s and ‘40s and then ballooned between 1950 and 1960, following the successful statehood movement. Although the state of Alaska as a whole at times saw drastic differences between the percent of its male and female residents, this muchmythologized trend never really impacted Anchorage very much. The greatest gender disparity is seen in 1930, and it decreased to near-parity by the time Alaska became a state. Data for the early years is spotty at best, but the census reports are a treasure trove for those wishing to understand Alaska’s early history and social circumstances better. For example, in 1939, the Census Bureau released a report entitled “Census of Business: 1939, Alaska, Hawaii and Puerto Rico” that provides a snapshot into the city’s early economy. At the time, there were eighty retail establishments in Anchorage, thirty-two service providers, fifteen hotels, and four wholesalers. Most were sole proprietorships or employed fewer than a half-dozen employees. Total recorded operating receipts for all Anchorage businesses that year were $3,350,109. Clearly, Anchorage’s business community has come a long way since then.

Although Anchorage’s economy is very different from other urban areas in the United States, the Consumer Price Index for urban consumers as tracked for Anchorage and other US cities shows that inflation has affected the city in a pattern that very closely mirrors other cities. Anchorage workers have fared considerably better than their counterparts in the Lower 48, at least as gauged by the state’s minimum wage, and with recent legislation that approved additional increases in wages in 2015 and 2016, there is reason to believe Anchorage workers will continue to gain some ground. R Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

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Alaska Business Monthly | June 2015 www.akbizmag.com

ALASKA TRENDS

By Amy Miller

SOURCE: US Census Bureau Decennial Census

SOURCE: US Department of Labor, Bureau of Labor Statistics

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June 2015 | Alaska Business Monthly

127

ALASKA TRENDS

Indicator

GENERAL Personal Income—Alaska Personal Income—United States Consumer Prices—Anchorage Consumer Prices—United States Bankruptcies Alaska Total Anchorage Total Fairbanks Total EMPLOYMENT Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Sectorial Distribution—Alaska Total Nonfarm Goods Producing Services Providing Mining and Logging Mining Oil & Gas Construction Manufacturing Seafood Processing Trade/Transportation/Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information Telecommunications Financial Activities Professional & Business 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 128

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

4thQ14 4thQ14 2ndH14 2ndH14

39,218 14,941,804 216.83 237.09

38,879 14,792,775 214.78 236.38

37,179 14,251,060 213.91 233.55

5.48% 4.85% 1.37% 1.52%

Number Filed Number Filed Number Filed

February February February

28 17 8

16 14 2

28 15 4

0.00% 11.76% 50.00%

Thousands Thousands Thousands Thousands Thousands

February February February February February

334.86 190.35 43.41 32.41 34.51

336.57 192.60 43.29 32.37 34.87

334.32 187.29 42.39 33.88 35.86

0.16% 1.63% 2.41% -4.34% -3.76%

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

326.70 44.60 282.10 17.30 17.20 14.80 14.80 12.50 8.80 62.30 6.20 35.70 6.10 9.60 20.40 5.50 6.30 4.30 12.00 28.20 47.40 34.10 30.20 7.90 18.30 11.60 84.10 14.20 27.40 8.60 42.50 24.50 3.40

323.00 43.60 279.40 17.20 17.10 14.70 15.10 11.30 7.40 62.60 6.10 36.10 6.00 9.80 20.40 5.60 6.20 4.20 11.90 28.10 47.20 34.10 29.90 7.80 18.30 11.60 81.90 14.20 26.30 8.20 41.40 23.50 3.40

322.30 45.50 276.80 17.20 17.00 14.20 14.20 14.10 10.50 60.80 6.40 34.90 6.40 9.70 19.50 5.50 6.20 4.10 11.70 28.10 47.50 33.70 28.60 5.90 18.60 11.10 81.70 14.50 26.60 8.60 41.70 23.80 3.50

1.37% -1.98% 1.91% 0.58% 1.18% 4.23% 4.23% -11.35% -16.19% 2.47% -3.13% 2.29% -4.69% -1.03% 4.62% 0.00% 1.61% 4.88% 2.56% 0.36% -0.21% 1.19% 5.59% 33.90% -1.61% 4.50% 2.94% -2.07% 3.01% 0.00% 1.92% 2.94% -2.86%

Thousands Thousands Thousands Thousands Thousands

February February February February February

362.85 203.34 46.41 35.59 38.04

362.29 204.66 46.15 35.33 38.15

362.57 200.20 45.45 37.24 39.38

0.08% 1.57% 2.11% -4.43% -3.40%

Percent Percent Percent

February February February

7.6 6.4 6.5

7.1 5.9 6.2

7.8 6.4 6.7

-2.56% 0.00% -2.99%

Alaska Business Monthly | June 2015 www.akbizmag.com

ALASKA TRENDS

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

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

8.9 9.3 5.5

8.4 9.3 5.7

9.0 9.0 7.0

-1.11% 3.33% -21.43%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

February February February

13.82 7.77 53.85

15.65 8.79 48.87

14.42 7.64 106.3

-4.16% 1.70% -49.34%

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

February February February February February

10 1348 1229.15 16.84 2.10

10 1683 1250.59 17.10 2.11

13 1769 1300.97 20.83 2.04

-23.08% -23.80% -5.52% -19.16% 2.94%

32.38 7.15 18.42

34.20 7.77 14.74

61.70 8.53 28.84

-47.52% -16.18% -36.13%

Millions of $ Millions of $ Millions of $ Total Deeds Total Deeds

February February

674 169

604 134

467*GeoNorth 135

44.33% 25.19%

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

Thousands Thousands

February February

311.30 67.03

343.28 72.20

299.94 71.27

3.79% -5.95%

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

53587.40 54604.40 247.90 1198.50 -83.20 -19.70 1055.40

52358.40 53396.30 161.10 -32.80 196.10 142.80 -244.60

48585.80 49180.60 204.00 -725.40 72.90 82.40 -857.40

10.29% 11.03% 21.52% 265.22% -214.13% -123.91% 223.09%

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 $

4thQ14 4thQ14 4thQ14 4thQ14 4thQ14 4thQ14 4thQ14 4thQ14 4thQ14

3,994.74 207.48 154.35 2,313.63 10.57 3,506.48 3,340.30 1,000.84 2,327.83

5,781.68 299.37 146.66 2,742.89 18.01 5,002.29 4,346.55 1,830.26 2,516.30

5,394.16 141.17 143.34 2,543.77 17.58 4,656.83 4,046.21 1,623.39 2,422.82

-25.94% 46.97% 7.68% -9.05% -39.87% -24.70% -17.45% -38.35% -3.92%

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

118.65 1.25 0.65 0.88 6.15

118.49 1.20 0.66 0.86 6.14

102.13 1.11 0.60 0.73 6.11

16.18% 12.61% 8.33% 20.55% 0.65%

Notes: 1. Source of Anchorage Deeds of trust (GeoNorth) is cited in the data field. 2. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska

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129

ADVERTISERS INDEX Advanced Physical Therapy of Alaska..................................................31 AE Solutions Alaska LLC..........................84 Alaska Air Cargo - Alaska Airlines............9 Alaska Aviation Heritage Museum......122 Alaska Logistics.......................................... 72 Alaska Mergers & Acquisitions LLC..... 40 Alaska Railroad........................................... 58 Alaska Rubber.............................................98 Alaska Sleep Doctor...................................21 Alaska Spine Institute................................21 Alaska Traffic Company............................41 Alaska USA Federal Credit Union...........77 Alaska USA Insurance Brokers................79 Alyeska Resort.............................................15 American Marine/Penco........................ 126 Anchorage Sand & Gravel.........................97 Arctic Office Products...............................27 ASRC Energy............................................... 83 AT&T.............................................................. 29 Bering Air Inc.............................................123 Bettisworth North...................................105 Bowhead Transport Co. LLC....................59 Boyer Towing.............................................. 58 Builders Choice.........................................103

130

Business Insurance Associates Inc.........35 C&R Pipe and Steel Inc............................125 Calista Corp..................................................51 Carlile Transportation Systems ..... 25, 131 Chris Arend Photography......................130 CIRI Alaska Tourism..................................114 Construction Machinery Industrial..........2 Cook Inlet Tug & Barge Inc.......................56 Cornerstone Advisors................................33 Crowley Alaska Inc.....................................75 Cruz Construction Inc............................... 99 Delta Rental Services................................98 Diamond Airport Parking.......................110 Donlin Gold...................................................52 EDC Inc......................................................100 Everts Air Cargo Tatonduk Outfitters.............................53 Explore Fairbanks..................................... 115 Fairweather LLC..........................................81 First National Bank Alaska.........................5 GCI.........................................................78, 132 Granite Construction.................................95 Great Originals Inc......................................52 Helimax Aviation.........................................45 HDL Hattenburg Dilley & Linnell........... 87

Holmes Weddle & Barcott.......................19 Homer Marine Trades Assoc.................125 Horizon Lines...............................................74 Island Air Express.....................................122 Judy Patrick Photography.........................35 Landye Bennett Blumstein LLP...............19 Lynden Inc.....................................................61 Magtec Energy............................................88 N C Machinery............................................111 Northern Air Cargo..........................116, 117 Northrim Bank............................................. 11 NPC Energy Services.................................32 Olgoonik Corp.............................................89 Olympic Tug & Barge............................... 60 Oxford Assaying & Refining Inc........... 124 Pacific Alaska Freightways Inc................39 Pacific Coast Maritime............................ 60 Pacific Pile & Marine..............118, 119, 120 Parker Smith & Feek...................................37 PenAir.............................................................65 Personnel Plus...........................................123 Plans Room............................................... 108 Princess Lodges.........................................114 ProComm......................................................56 Ravn Alaska..................................................13

RSA Engineering Inc................................109 Ryan Air.........................................................71 Safway Group Holding LLC......................97 SeaTac Marine Service............................. 60 Shoreside Petroleum/Petro Marine.......43 Span Alaska Transportation Inc............. 69 Spenard Builders Supply........................101 STEELFAB.................................................... 94 Stellar Designs Inc....................................125 Stephl Engineering LLC..........................109 Ted Stevens International Airport..........63 Totem Ocean Trailer Express...................73 Trailercraft Inc/Freightliner of AK..........67 TriJet Precision...........................................82 Turnagain Marine Construction..........100 UIC Commercial Services........................ 78 Ukpeagvik Inupiat Corporation.............. 85 Vigor Alaska..................................................57 Visit Anchorage......................................... 113 Washington Crane & Hoist......................23 Waste Management.................................. 87 Wealth Strategies of Alaska.....................17 XTO Energy Inc.............................................3 Yukon Equipment Inc.................................91

Alaska Business Monthly | June 2015 www.akbizmag.com