October - 2012 - Alaska Business Monthly by Alaska Business

Private Commercial Construction page 28 â&#x2013; FerC & dOe LnG Primer page 54

October 2012

$4.95

the top Forty-Nine Alaskan-Owned Businesses Ranked by gross Revenue

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www.akbizmag.com • Alaska Business Monthly • October 2012

October 2012

DEPARTMENTS

TABLE OF CONTENTS ABOUT THE COVER

“Gems of the North” is the very apt theme of this year’s Top 49ers, Alaska Business Monthly’s annual salute to the Top 49 Alaskan-owned businesses ranked by gross revenues. The special section begins on page 86. Cover design by David Geiger

FEATURES

From the editor . . . . . . . . . . . . . . 7 inside alaska Business . . . . . . 8 right moves . . . . . . . . . . . . . . . 64 agenda. . . . . . . . . . . . . . . . . . . . 136 alaska this month. . . . . . . . 137 events Calendar . . . . . . . . . .140 market squares. . . . . . . . . . .142 alaska trends. . . . . . . . . . . . .143 ad index . . . . . . . . . . . . . . . . . .146

ARTICLES

VIEW FROM THE TOP

Photo by Chris Arend

Geothermal power and ground source heat pump project locations across Alaska.

12 | Ulber Ferati, Owner Fiori D’Italia Restaurant By Peg Stomierowski

Alaska Energy Authority

36 CORPORATE CITIZENSHIP 20 | Benefits of Corporate Giving Building blocks to better business By Flora Teo

REGIONAL FOCUS

Flora Teo

EDUCATION

Charlotte E. Brower Mayor, North Slope Borough

14 | alaska north slope Inclined to the Sea By Tracy Barbour

HR MATTERS

135 | stay interviews By Lynne Curry

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22 | Business Week sprouts Leaders Fairbanks program gives youth a taste of leadership in the corporate world By Gail West

CONSTRUCTION

28 | Private Commercial Construction Steady growth in Anchorage continues By Paula Cottrell

ENERGY

36 | alaska Geothermal Power Alaska Energy Authority overview of projects By Nicole A. Bonham Colby

OIL & GAS

40 | Pioneer natural resources alaska North Slope independent finds success By Vanessa Orr

44 | eye on the Prize: Petroleum Commentary by Scott Goldsmith

Scott Goldsmith

48 | alaska north slope november Oil and Gas Lease sales Bidding expected on state and federal lands By Mike Bradner 54 | FerC & dOe LnG Primer The black, the white, and the gray area By Larry Persily

www.akbizmag.com • Alaska Business Monthly • October 2012

October 2012 TA BLE OF CONTENTS ARTICLES 58 | strategies to Prepare alaska for the economic marathon Fitting Alaska into the new global ecosystem Commentary by Dr. Ashok K. Roy Dr. Ashok K. Roy

NATIVE BUSINESS

Photo by Terry Umatum, American Fast Freight

ECONOMY

74 American Fast Freight’s new facility is being undertaken through a designbuild contract with Watterson Construction Co. of Anchorage.

HEALTH & MEDICINE 70 | Behavioral Health A multi-layered matter By Susan Sommer

TRANSPORTATION 66 | alaska Federation of natives Convention Staying fresh with dynamic innovations By Mari Gallion

86 | executive summary 90 | alaska Business monthly’s 2012 top 49ers 119 | top 49ers by industry Classifications 120 | alphabetical Listing with Five-Year rank and revenue

FEATURED TOP 49ERS 122 | alaska industrial Hardware Metal and Mettle: Secrets to the unstoppable progress of AIH By Tasha Anderson

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74 | it’s Complicated Getting LTL freight to and from Alaska By Tami Beaumont and Michele White

125 | doyon Limited ‘Work hard, ask for help’ CEO Schutt hopes to inspire with success By Zaz Hollander

80 | iridium Communications inc. Network management from space By Mari Gallion

FINANCIAL SERVICES

84 | the Cost of doing Business Embrace online banking features for efficiency, safety By John Hoyt

132 | sealaska Corp. Spanning far beyond the borders of its region By Will Swagel Aaron Schutt

128 | First national Bank alaska Alaskan banking pioneer continues commitment to build Alaska By Michele White

Chris McNeil

CORRECTION

D.H. Cuddy Mike Kangas

TELECOM & TECHNOLOGY

the August article “Decontaminating Kipnuk” incorrectly referred to R & M Consultants Inc. as R&M Engineering. R & M Consultants Inc. of Anchorage is the engineering firm that worked on the Kipnuk project.

www.akbizmag.com • Alaska Business Monthly • October 2012

FROM tHe eDitOR Follow us on and

Volume 28, Number 10 Published by Alaska Business Publishing Co. Anchorage, Alaska Vern C. McCorkle, Publisher 1991~2009

EDITORIAL STAFF

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

Susan Harrington Mari Gallion Tasha Anderson David Geiger Linda Shogren Chris Arend Judy Patrick

BUSINESS STAFF

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

Jim Martin Charles Bell Anne Campbell Bill Morris Tasha Anderson Mary Schreckenghost

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com Advertising email: materials@akbizmag.com Pacific Northwest Advertising Sales 1-800-770-4373 ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2012, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/archives, www. thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfi lm: Alaska Business Monthly is available on microfi lm from University Microfi lms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

laska Business Monthly’s annual Top 49ers list of Alaskan-owned and -operated businesses, ranked by gross revenue, is an enduring and iconic feature of the magazine—we’ve been presenting these Gems of the North for 27 years. This year is no exception, though the companies on the list are exceptional. In the past we’ve been privileged to honor the people of these Alaska businesses at an awards luncheon the first week of October and we are excited to once again, finalizing preparations as this issue goes to press. This year’s luncheon, at the Dena’ina Civic and Convention Center in downtown Anchorage, is being co-hosted by the folks at the Alaska State Chamber of Commerce. We are grateful to the Alaska Chamber for its support, including the Alaska Business Monthly Top 49ers award luncheon as an item on their annual convention agenda and for loaning us their keynote speaker for the event. Honoring the Top 49ers is a great way to start off the frosty month of October and we look forward to it every year. There is so much going on in Alaska at press time and LNG is the bellwether for what could become the biggest driving force to the state’s economy other than meaningful oil tax reform, which is the single most important action for our economy. It is good to remember the world of difference between the production of natural gas and the production of oil—although any pipeline construction or LNG infrastructure built in-state would be an enormous boost to the economy. We hold high hopes the time for marketing stranded gas has arrived. It is also important to know the difference between subsidized exploration of small fields and reformed taxes for legacy field mega production, and understand how crucial this is to the Alaska economy. Next month we all have the opportunity to make an impact with votes for those who would help in the development of the Alaska economy. More on the October issue—it has a great line-up of articles for our readers. We have regular items such as View from the Top, featuring Fiori D’Italia Restaurant, and HR Matters with a most informative idea from Lynne Curry for keeping great talent, “The Stay Interview.” The Regional Focus this month looks at the Alaska North Slope, with oilfields and Barrow highlighted. The Oil & Gas section includes interesting articles about Pioneer Natural Resources Alaska, the upcoming November lease sales, the Federal Energy Regulatory Commission and the U.S. Department of Energy’s authority over liquefied natural gas facilities and sales, as well as Scott Goldsmith’s commentary on the economy: “Eye on the Prize: Petroleum.” Another view on the Alaska economy is by an author new to Alaska and to Alaska Business Monthly, Dr. Ashok K. Roy, and we’re very excited to have him on board. The rest of the magazine includes articles about corporate citizenship, recent Business Week activities in Fairbanks, online banking, behavioral health, private commercial construction in Anchorage, Less than Truck Load (LTL) freight transportation, geothermal power across the state, the Alaska Federation of Natives annual convention, and four Top 49ers are featured as well. We’ve added a new item to our Departments called Agenda, it’s a calendar of business happenings around the state, and we’d like to invite readers to send submissions to surveys@ akbizmag.com with AGENDA in the subject line. We will need those submissions at least two months prior to the month the event is to be held. Finally, I want once again to salute our Top 49ers, these Gems of the North truly make Alaska sparkle. Thanks for reading— we’ve got a really great magazine this month, enjoy! —Susan Harrington, Managing Editor

www.akbizmag.com • Alaska Business Monthly • October 2012

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iNSiDe ALASKA BUSiNeSS

Alaska Ship and Drydock

he outlook for building new ships at Alaska Ship and Drydock just got a lot brighter, warmer and drier with the opening of the Ketchikan Shipyard’s state-of-the-art assembly hall designed to build ships up to 500 feet in length. The assembly hall is 70,000 square feet with an adjacent five story production center to minimize material flow and maximize efficiency. It features all the best assets of a modern, advanced shipbuilding infrastructure. ASD has been building modules for a 136’ x 40’ new factory longliner for Alaska Longline Co., the Arctic Prowler, since March. The engine room module of the Arctic Prowler was recently moved into the new hall, marking the hall’s official opening. The engine room module measures 32’ by 40’ by 17’ and weighs 95 tons. The completed vessel is scheduled for delivery in early 2013. The next phase of improvements for the Ketchikan Shipyard includes a $10 million steel fabrication shop scheduled for completion in late summer 2013.

Deadhorse Aviation Center

airweather LLC opened its new aviation facility on Alaska’s North Slope in August. Deadhorse Aviation Center is designed to provide oil companies and their suppliers with a safe and efficient aviation command center to successfully manage onshore operations and Outer Continental Shelf exploration and production activities on the Arctic Ocean and Beaufort Sea.

Compiled by Mari Gallion

DAC is wholly owned by Offshore Support Services LLC, Fairweather LLC and the Kaktovik Inupiat Corp. DAC is located at the Deadhorse Airport with access to the Dalton Highway and the ocean. Facilities are available for lease to companies working on the North Slope in need of terminal and hangar facilities, logistics support, staging and storage, office space and accommodations for sleeping and dining. DAC offers multiple offices ready for build-out to suit tenants’ needs, along with a design for a multi-modal Incident Command Center that can be shared or utilized by a single tenant. Incorporated into DAC is a fullyequipped Fairweather Medical Services Clinic designed to facilitate MedEvac air transfers. The lower level of the terminal can accommodate smaller passenger count aircraft, while the combined first and second levels suit the needs of a Boeing 737. The cargo handling facility includes counter-to-counter package services, radio frequency identification tracking, and loading and oﬄoading of all aircraft from helicopters to 737s. The facility is also equipped to handle heavy equipment and Hazmat materials.

CRW Engineering Group LLC

RW Engineering Group LLC was named the CE News #2 Civil Engineering Firm To Work For nationwide. D. Michael Rabe, PE, CRW’s managing partner, accepted the award at the Best Firms Summit in Seattle. This prestigious ranking is based on comprehensive evaluations of firm

culture, workplace practices, employee benefits, employee retention rates, professional development and more— both from management and staff perspectives. CRW first gained national attention as a top firm to work for in 2006 and was honored with a #4 ranking in 2011. CRW takes pride in the fact that 97 percent of its clients choose to work with CRW again. CRW was founded in 1981 and offers best in class engineering, planning and surveying services.

Coastal Villages Region Fund

ishermen in Western Alaska took to the seas this past season with an added level of comfort thanks to lifesaving gear provided by Alaska’s largest Community Development Quota group, Coastal Villages Region Fund. The CVRF board of directors allocated up to $300,000 to supply US Coast Guard required safety gear for the 20 CVRF communities and their residents who commercial fish for salmon and halibut. These items include: 50 EPIRBs, 450 PLBs, 101 immersion suits, 600 personal flotation devices, 850 strobe lights, whistles and reflective tape for life-jackets. The provision of marine safety equipment was just one of a series of benefits CVRF returned to its residents over the summer. As usual, more than 1,000 Western Alaska residents were put to work by CVRF’s fishing operations. CVRF helped its neighbors in the YK region with nets for subsistence fishing—the only group to provide such assistance. CVRF is continuing its pro-

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 ■ 8

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

www.akbizmag.com • Alaska Business Monthly • October 2012

iNSiDe ALASKA BUSiNeSS gram to provide heating fuel and wood to residents as the cold fall and winter seasons approach.

ASRC Energy Services

eff Kinneeveauk, president and CEO of ASRC Energy Services, has been named 2012 Professional of the Year by the American Indian Science and Engineering Society. Kinneeveauk will be presented the award during the 34th AISES Annual National Conference, to be held Nov. 1-3 in Anchorage. Kinneeveauk took over as AES president and CEO in early 2011, and is the third Iñupiat Eskimo to receive AISES’s top award for overall leadership and technical achievement. AISES was formed in 1977 to increase American Indian and Alaska Native participation in the fields of science, technology, engineering and math. AES is a leading oil and gas service company with headquarters in Anchorage, and is the largest private employer in the state, with annual revenues of approximately $635 million. AES has earned a reputation for delivering quality products on time and in a cost-effective, safe and environmentally-sound manner.

Matanuska Electric Association

he Matanuska Electric Association board of directors approved a contract with the firm of Burns and McDonnell for engineering and design services related to the ongoing Eklutna Generation Station project. Burns and McDonnell, headquartered in Kansas

Compiled by Mari Gallion

City, Mo., is a full-service engineering, architecture, construction, environmental and consulting solutions firm with more than 3,600 employeeowners. It has been in business for 113 years, and has significant experience in designing projects for the harsh environments of Alaska. The firm also has repeatedly designed plants utilizing the Wärtsilä generation technology selected in March by MEA to power the Eklutna Generation Station. The contract, valued at $3.8 million, covers the engineering and design of both the new generation plant’s power block and its support buildings. Completion of the initial design documents is expected by the end of December 2012 to accommodate a spring 2013 construction start date. The project is slated for completion by the end of 2014.

First National Bank Alaska

irst National Bank Alaska broke ground in July for a new branch at the Army and Air Force Exchange Service Mall, better known as AAFES, on Joint Base Elmendorf-Richardson. The new 3,950-square-foot branch will have a staff of seven and include two drive-up lanes, a drive-up automated teller machine, and night drop depository. The branch will also house the first full-function customer kiosk in the First National system, where customers can handle routine banking transactions online without teller assistance. First National has a history of nearly 70 years of serving Alaska’s military,

beginning in 1943 with a facility on Adak, providing banking services to soldiers and civilian workers stationed there during World War II. Cole and Thompson Architects, headquartered in Anchorage, designed the new JBER branch. MCN Construction Inc., also of Anchorage, is the primary contractor for branch construction, scheduled for completion in late 2012. Estimated construction cost is $2.1 million.

Carlile Transportation Systems

arlile Transportation Systems is launching a new expedited overthe-road freight forwarding service between its Tacoma and Anchorage terminals, giving small businesses and online shoppers a convenient, affordable shipping solution to Alaska. The new service is called Carlile Package Express. Alaskans ordering products online traditionally pay high shipping costs compared to customers in the Lower 48. Carlile Package Express saves Alaskans money when shipping smaller and pallet-sized purchases by having their orders delivered to Carlile’s Tacoma Terminal. Carlile then transports the shipment via the Alaska Highway to its Anchorage Terminal in about three days. Carlile Package Express customers can get shipping estimates using an online calculator and will receive daily email updates. All shipments can be picked up at the Anchorage Logistics, Fairbanks, Kenai, Kodiak and Seward Terminals.

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

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

www.akbizmag.com • Alaska Business Monthly • October 2012

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iNSiDe ALASKA BUSiNeSS

Nerland Agency

erland Agency ranked No. 28 out of 100 companies in Outside Magazine’s fifth annual “Best Places to Work” list. Profiles of the top 10 performing small, medium and large companies were published in the September issue of Outside magazine. The list was compiled with the help of the Outdoor Industry Association and Best Companies Group. The yearlong selection process began with an outreach effort that identified a wide range of nonprofit and for-profit organizations with at least 15 employees working in an office in the United States. Participating companies were sent confidential employee satisfaction surveys and employer questionnaires to collect information about benefits, compensation, policies, job satisfaction, environmental initiatives and community outreach programs. The experts at the Best Companies Group then analyzed the results and selected the companies that best enable employees to pursue active lifestyles while also supporting their social and environmental contributions.

Anchorage Public Library

he Anchorage Library Foundation announced that the Anchorage Public Library’s Ready to Read Resource Center was awarded a $25,000 grant from Target Corp. The Center provides free early literacy workshops and book kits to childcare providers and parents across the state. The Library is planning an expansion of the Center with a new Early Literacy Test Lab at Loussac Library, which will of-

Compiled by Mari Gallion

fer an open-ended, flexible approach for families to learn and encourage early literacy skills for toddlers aged three and under. The grant is part of Target’s ongoing efforts to build strong, safe and healthy communities across the country. These efforts include Target’s long history of giving 5 percent of its income to communities, which today equals more than $3 million every week. As part of this commitment, Target is on track to give $1 billion for education by the end of 2015 to help kids learn, schools teach and parents and caring adults engage. The project also received a $16,000 grant from Wells Fargo earlier this spring. The new Early Literacy Test Lab at Loussac Library will open this winter.

Bristol Bay Native Association

ristol Bay Native Association in Dillingham will receive a combined USDA-RD and U.S. Economic Development Administration grant award of $405,023 to fund the Bristol Bay Jobs Accelerator Project. The national initiative seeks to support rural partnerships by identifying and leveraging local assets and strengthening linkages to industry clusters. Strong industry clusters promote robust economic ecosystems and the development of a skilled workforce, both of which are critical to long-term regional success in rural areas. The areas served will include the Bristol Bay Region in Southwestern Alaska. The BBNA will provide technical assistance to the Southwest

Alaska Vocational and Education Center to build training capacity in the Bristol Bay fisheries and seafood processing industry cluster. In addition, funds will be used to provide technical assistance services, organization and management of an industry conference event, and development of a regional fisheries business cooperative. The project will accelerate job creation in the fisheries and seafood industry through boosting workforce skills, growing seafood manufacturing and developing effective marketing linkages.

Parker Drilling Company

abor and Workforce Development Commissioner Dianne Blumer approved Parker Drilling Company Training Center for the Alaska Occupational Safety and Health Achievement Recognition Program renewal as a result of outstanding employee safety and health programs. SHARP is a federal recognition program administered by the Alaska Occupational Safety and Health Section in the department’s Labor Standards and Safety Division. Participating employers are excused from programmed AKOSH enforcement inspections during the recognition period. However, employee complaints, accident investigations or other significant incidents will result in enforcement action. Companies that partner with AKOSH and achieve SHARP status are likely to experience fewer workplace accidents and reduced workers’ compensation insurance costs. 

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

www.pacificpile.com I (907) 276-3873 ■ 10

620B East Whitney Road I Anchorage, AK 99501

www.akbizmag.com • Alaska Business Monthly • October 2012

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View from the top

Compiled By Peg Stomierowski

Ulber Ferati, Owner Fiori D’Italia Restaurant

iori D’Italia opened in 1995, and is currently located at 2502 McRae Road in Anchorage. It is rooted in the story of Ulber Ferati, who as a college economics student fled the winds of war in his native Yugoslavia and came to the United States in 1985, moving the next year to Alaska to carve out a new life in a less populated but culturally rich area. Navigating in a challenging industry helped him improve his English language skills, and he acknowledges a debt of gratitude to the support he received along the way from the late Sen. Ted Stevens. After working many years from 9 a.m. to 2 a.m., seven days a week, the family began closing their restaurant during the month of August to travel and spend time together. Ulber and his wife Urime, an accountant, have two grown sons. The restaurant has a staff of eight. VieW FROM tOP: Loyal customers have long helped us weather an uncertain economy by valuing affordable quality food. Steady growth helps assure a constant flow of customers. While for years we’ve planned an expansion to seat 300 in a banquet room and 175 in the restaurant (125 and 110 respectively now), the uncertain status of McRae Road improvements has led to certain limitations involving—for instance—snow removal and power lines. BALKAN iNFLUeNCe: Our dishes are unique, offering Italian, American and Albanian cuisine—Italian because it is a popular and familiar. Growing up in the Balkan region of Europe, our food was inspired by surrounding countries. More than tourists, at Fiori D’Italia we serve the locals, and the only advertising involves word of mouth. AUtHeNtiC itALiAN: This means using the best ingredients, while giving the dish your own twist. Take chicken parmesan: You can’t prep this dish. You have to pound the chicken breast, bread it and cook it all on an order-to-order basis. Some customers may not understand the cook-to-order method we employ, and can at times be impatient. We never compromise quality for quantity. NO StOCKiNg UP: Finding ingredients here year-round is challenging. Prices fluctuate. We do not like to stock up, and choose to purchase ingredients fresh every day from local vendors. We do not use canned food (except diced tomatoes), and make all sauces by hand. The quality of ingredients is evident in the taste of our food.

Photo by Chris Arend

StAtUS QUO: About 30 percent of our business involves catering, and we’ll continue to do both dining and catering; customers want to be able to get food and drink from the same venue.

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StAFF DRiLL: Be clean, be thorough, be polite. I tell employees to treat customers with respect and help them feel at home. It is important to create a friendly atmosphere so they’ll want to come back, and not only for the food, but for the whole experience. DigeStiNg FeeDBACK: People will reward our hospitality. If a few criticize the food or service, then I will learn. On the other hand, bad publicity is actually good advertising. In Anchorage, the people will come out and judge for themselves.  www.akbizmag.com • Alaska Business Monthly • October 2012

B US I N ESS

PROF ILE

Jewelry Cache Iconic Alaskan Jewelry with Global Perspective

ot many business owners in Alaska can claim over three decades of expertise in the same industry, but Josh Jennett and wife Tammy are the rare exception. Jennett is a Certified Gemologist Appraiser with the American Gem Society and a graduate from the Gemological Institute of America. He began his career in production and design, and as his acumen blossomed into one of the premier appraisers in the state and Pacific Northwest, with notoriety came substantial growth in his business and clientele. “It’s been a remarkable journey in the jewelry world,” said Josh Jennett. “We went from a small shop and patronage to a global presence from Europe to Asia,” added Jennett. For over eight years the Jennetts maintained an import/export branch to their business in Thailand. Offices in Asia and Alaska, and now targeted shops in Florida, have elevated Jewelry Cache into a viable competitor at the international level of jewelry design, production and sales. “Our emphasis is uniqueness, originality and contouring jewelry that truly complements the customer’s design idea,” noted Jennett.

Josh and Tammy Jennett, owners of Jewelry Cache.

The Jewelry Cache’s design team and certified gemologists have crafted high-end designer jewelry long enough that the company’s reputation is stellar in the world of custom jewelry and appraisals. The Jennetts have been community stewards in Alaska for decades. Josh Jennett is the former president of Anchorage South Rotary and Anchorage Port commissioner. Having served as trusttee on the Boys & Girls Club Board and being an Alaskan Shriner, as well as supporting

organizations like Alaska Special Olympics and Catholic Social Services, Jennett noted that “giving back to our community is what our company is all about and I know that resonates with our customers.” Josh and Tammy Jennett’s newest focal point is an expansion to structured and elegant designs at an affordable price. Jewlery Cache continues to produce for high-end customers, but the diversity in selection and design specifications has made the company a premier jewelry store in Alaska and nationally with affordable, quality jewelry.

For more information contact Jewelry Cache Josh Jennett making an adjustment on a diamond ring. PAID

341 E Benson Blvd, Ste 2 Anchorage, AK 99503 www.JoshJennett.com • (907) 272-2222

A D V E R T I S E M E N T

Regional Focus

By Tracy Barbour

Alaska North Slope

Inclined to the sea

Gilbert Leavit’s whaling crew bringing their umiaq up the beach in Barrow at the end of a successful spring whaling season. This is called Apugauti—and is the celebration of a successsfull season and safe return of the crew. At this event the whaling crew serves fermented whale (mikigaq), which is made from maktak, whale meat and tounge. They also serve goose soup, duck soup and cake.

he Alaska North Slope is one of the most intriguing and impactful regions in the world. Partially coastal, partially flat, treeless tundra, partially foothills and mountains, the North Slope occupies nearly 89,000 square miles, about 57 million acres, across the top 15 percent of Alaska, extending north from the Brooks Range to the Arctic Ocean and west from the Alaska border with Canada to the Chukchi Sea. The term “North Slope” refers to the region’s very gradual decline in elevation from the Brooks Range to the Arctic Ocean. Title is held by the federal government, the State of Alaska, the North Slope Borough, Arctic Slope Regional Corp., and the communities of Point Hope, Point Lay, Wainwright, Barrow, Atqasuk, Nuiqsuit, Kaktovik and Anaktuvuk Pass, and their respective ANCSA village corporations and federally recognized tribal organizations. Prudhoe Bay/Deadhorse, though not a Native village, is also a community of sorts. The National Petroleum Reserve-Alaska takes up 36,000 square miles, about 23 million acres, and was set aside in 1923 by President Warren Harding for the Navy. It has long since been transferred to the federal Bureau of Land Management, which holds periodic

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lease sales for oil and gas exploration and development. It is under controversy because the current administration wants to place half the petroleum reserve off limits to the petroleum industry. The North Slope is also home to portions of the Noatak National Preserve, Gates of the Arctic National Park and Preserve, and the Arctic National Wildlife Refuge.

North Slope Oil

The Alaska North Slope is synonymous with oil and gas exploration, development and production. To say that it supports the Alaska economy is an understatement. Prudhoe Bay is the largest oilfield in North America in terms of recoverable oil. The trans-Alaska oil pipeline carries the oil pumped from the various fields to Valdez where it is taken by tanker to West Coast refineries to help supply the U.S. with oil. The Prudhoe Bay Unit is owned by ExxonMobil Alaska Production Inc. (36.40%), ConocoPhillips Alaska Inc. (36.08%), BP Exploration (Alaska) Inc. (26.36%) and Chevron U.S.A. Inc. (1.16%). It is operated by BP and ConocoPhillips. Spanning approximately 15 miles by 40 miles, the main Prudhoe Bay field has a number of adjacent “satellite” oilfields.

The second largest oilfield is the Kuparuk River Unit, owned by ConocoPhillips Alaska Inc. (53.86%), BP Exploration (Alaska) Inc. (38.19%), Chevron USA Inc. (4.93%) and ExxonMobil Alaska Production Inc. (3.02%). It is operated by ConocoPhillips. Other North Slope fields in production include: Nikaitchuq Unit, owned by Eni US Operating Co. Inc. (100%); Milne Point Unit, owned by BP Exploration (Alaska) Inc. (97.03%), Eni Petroleum US LLC (1.09%), Herbaly Exploration LLC (1.02%), and two other companies with fractional interests; Oooguruk Unit, owned by Pioneer Natural Resources Alaska Inc. (72.68%), Eni Petroleum US LLC (25.97%), and three other companies with fractional interests; Colville River Unit, owned by ConocoPhillips Alaska Inc. (77.39%), Anadarko Petroleum Corp. (21.69%), and three other companies with fractional interests; Badami Unit, owned by Savant Alaska LLC (67.50%), ASRC Exploration LLC (32.50%); and Northstar Unit, owned by BP Exploration (Alaska) Inc. (98.02%), Murphy Exploration (Alaska) Inc. (1.98%). Some of the units have assignments pending. “It’s this huge oil industrial complex in a very remote place,” Neal Fried, an

www.akbizmag.com • Alaska Business Monthly • October 2012

economist with the Research and Analysis section of the Alaska Department of Labor and Workforce Development said. “There’s nothing like it anywhere else in the United States.” Various activities by CPAI/NETL, Pioneer Natural Resources, Repsol, Savant, Royale Energy, Brooks Range Petroleum, Great Bear Petroleum, Anadarko Petroleum, Shell, Statoil, Eni, ExxonMobil, ConocoPhillips and BP were detailed on an Alaska Department of Natural Resources, Division of Oil and Gas map of North Slope Oil & Gas Activity as of March, issued in July. Not many wells were being drilled, though. Prudhoe Bay’s oilfield infrastructure is physically separate from North Slope Borough communities, which are spread far apart mostly along the coast, and sits on privately controlled state land. Most of the oilfield workers come from Anchorage, the Mat-Su Borough, the Kenai Peninsula and other places in the state, according to Fried. The nearby town of Deadhorse serves as a temporary base for the workers who support the North Slope oil and gas industry. Deadhorse is unincorporated

Itta crew praying over umiaq before whaling. Photo courtesy of City of Barrow

and has lodging, a general store, a post office, and world class airport facilities and services. Because of the permanently frozen ground, most of the buildings in Deadhorse are pre-fabricated modular units resting entirely on man-made gravel pads. Deadhorse is accessible by air or via the Dalton Highway, or Haul Road, from Fairbanks, some 500 miles away. The Beaufort Sea is eight miles to the north via a controlled access road. Prudhoe Bay/Deadhorse also is technically a census-designated place (CDP) occupying approximately 560 square miles and situated 250 miles north of the

Arctic Circle, 500 miles north of Fairbanks, 850 miles north of Anchorage, and 1,200 miles from the North Pole. Historically, the Prudhoe Bay CDP has had a virtually nonexistent permanent population. But over the past decade, the US Census Bureau has skewed the area’s population estimate. The population was listed as five in the 2000 census and 2,174 in 2010. “Prior to the 2000 Census, none of the people who work in the oil fields were counted there,” Fried explained. “Now, they counted them, and the number of residents seemed to jump—it’s not an accurate trend of the population.”

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www.akbizmag.com • Alaska Business Monthly • October 2012

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Photo courtesy of City of Barrow

Ipalook Elementary School in Barrow.

North Slope Borough Opportunities

The North Slope Borough is being billed as the land of opportunity for commercial enterprises. That may be even more true once Shell’s exploration plans in the Arctic get under way, as well as Statoil and ConocoPhillips—two other companies pursuing Chukchi Sea exploration plans subsequent to winning bids in the historic 2008 OCS lease sale. Shell’s drillships set sail for the Arctic in August after delays caused by heavy ice and federal agencies. The company’s planned offshore exploration is a major development for the North Slope and Alaska; the company has spent billions and waited years. “Even if it doesn’t happen this year,

it’s the biggest potential upside event that could happen here,” Fried said. Charlotte Brower, the North Slope Borough’s mayor, says the uncertainty surrounding offshore development and the decline in throughput of the Trans-Alaska Pipeline System is worrisome. Still, she says the borough has a solid economy, offers plenty of resources and is a good place to conduct business. “There are many opportunities for entrepreneurs to start businesses in various support services,” Brower said. “We have good infrastructure, good schools, a new hospital and good people. There are a lot of positives.” Like many places in Alaska, the North Slope Borough is challenged by its remote location and workforce limi-

tations. But those factors can be solved with a good business plan, Brower says. As a positive trend, Brower has experienced better collaboration with the area’s energy companies. The borough has also been able to focus on ensuring that residents’ way of life and subsistence are sustained. “There is always room for better communications and dialogue, but the business climate is positive,” she says.

Barrow, the Borough’s Hub

Barrow, with 4,380 residents (2011 DCCED certified estimate), is the economic, service and transportation hub of the North Slope Borough. As the northernmost city in North America, many of the local businesses there provide support services to oilfield operations. Barrow also serves as an important administrative center for the North Slope Borough communities, which are not connected by roads. Next to oil and gas, government is the leading driver of Barrow’s economy. Some of the largest government employers are the city, the North Slope Borough and the North Slope Borough School District. The biggest private employer is Arctic Slope Native Association, which operates the hospital.

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www.akbizmag.com • Alaska Business Monthly • October 2012

Subsistence plays an integral part of the local economy and culture, and has for thousands of years. Barrow’s Mayor Bob Harcharek says the high cost of living and relatively low wages earned by many residents make subsistence essential to survival. In his household, for example, he says about 60 percent of the meat comes from subsistence. Research by the North Slope Borough indicates that Barrow’s cost of living is 278 percent of the average cost of living in the Lower 48 and 214 percent higher than Anchorage. “Twenty-three percent of Inupiat households fall below the federal guidelines for poverty,” Harcharek said. Harcharek characterizes the economy of the North Slope as being “on an upswing.” However, based on the borough’s figures, unemployment is relatively high in Barrow and Harcharek estimates the unemployment rate to be 28 percent of the population. According to the Alaska Department of Labor and Workforce Development, Alaska’s seasonally adjusted rate was 7.7 percent in July, the latest month for which statistics were available at press time; and although no figures were available for Barrow, the North

A Barrow legislator climbing down into an ice cellar. Photo courtesy of North Slope Borough

Slope Borough’s unemployment rate was 6.3 percent, unadjusted. Despite the high cost of living and unemployment, Harcharek says, Barrow is a great place to work, live and raise children. “I like the people and environment,” says Harcharek, who’s lived there for 35 years.

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As the area’s transportation hub, the Wiley Post-Will Rogers Memorial Airport is a key component of Barrow’s infrastructure. Barrow is served by a number of passenger and cargo airlines, including Alaska Airlines, Era Aviation and Northern

Air Cargo. Bowhead Transport, a subsidiary of Ukpeaġvik Iñupiat Corp. operates barges that supply freight, equipment and materials to coastal NSB communities. UIC is the Barrow village corporation, one of the state’s largest. Crowley Maritime Corp. supplies fuel to the region. The community also has an accredited community college, Ilisaġvik. The only tribal college in the state, it is dedicated to providing an education based on the Iñupiat culture and the workforce needs of the North Slope Borough. The most significant construction project taking place is the Barrow Re-

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North Slope Borough Demographics People QuickFacts Population, 2011 estimate Population, 2010 (April 1) estimates base Population, percent change, April 1, 2010 to July 1, 2011 Population, 2010 Persons under 5 years, percent, 2011 Persons under 18 years, percent, 2011 Persons 65 years and over, percent, 2011 Female persons, percent, 2011 White persons, percent, 2011 (a) Black persons, percent, 2011 (a) American Indian and Alaska Native persons, percent, 2011 (a) Asian persons, percent, 2011 (a) Native Hawaiian and Other Paciﬁc Islander persons, percent, 2011 (a) Persons reporting two or more races, percent, 2011 Persons of Hispanic or Latino Origin, percent, 2011 (b) White persons not Hispanic, percent, 2011 Living in same house 1 year & over, 2006-2010 Foreign born persons, percent, 2006-2010 Language other than English spoken at home, pct age 5+, 2006-2010 High school graduates, percent of persons age 25+, 2006-2010 Bachelor’s degree or higher, percent of persons age 25+, 2006-2010 Veterans, 2006-2010 Mean travel time to work (minutes), workers age 16+, 2006-2010 Housing units, 2010 Homeownership rate, 2006-2010 Housing units in multi-unit structures, percent, 2006-2010 Median value of owner-occupied housing units, 2006-2010 Households, 2006-2010 Persons per household, 2006-2010 Per capita money income in past 12 months (2010 dollars) 2006-2010 Median household income 2006-2010 Persons below poverty level, percent, 2006-2010 Business QuickFacts

North Slope Borough

Alaska

9,503 9,430 0.8% 9,430 7.8% 24.2% 4.2% 37.4% 34.1% 1.2% 53.4% 4.8% 1.2% 5.3% 3.0% 32.7% 82.9% 3.4% 48.6% 73.8% 13.5% 489 5.4 2,500 48.3% 24.9% $135,800 1,976 4.47 $22,109 $68,517 11.8%

722,718 710,231 1.8% 710,231 7.5% 26.1% 8.1% 48.1% 67.9% 3.6% 14.9% 5.6% 1.1% 7.0% 5.8% 63.7% 78.6% 7.2% 16.5% 90.7% 27.0% 71,798 18.1 306,967 64.7% 24.6% $229,100 248,248 2.68 $30,726 $66,521 9.5%

North Slope Borough

Alaska

140 2,790 42.5% 278 263 F 11.4% S F F 11.8% 0 135,221 70,105 $10,574 56,347 28

19,901 252,882 23.4% 51,137 68,728 1.5% 10.0% 3.1% 0.3% S 25.9% 8,204,030 4,563,605 9,303,387 $13,635 1,851,293 877

Private nonfarm establishments, 2009 Private nonfarm employment, 2009 Private nonfarm employment, percent change 2000-2009 Nonemployer establishments, 2009 Total number of firms, 2007 Black-owned firms, percent, 2007 American Indian and Alaska Native-owned firms, percent, 2007 Asian-owned firms, percent, 2007 Native Hawaiian and Other Pacific Islander-owned firms, percent, 2007 Hispanic-owned firms, percent, 2007 Women-owned firms, percent, 2007 Manufacturers shipments, 2007 ($1,000) Merchant wholesaler sales, 2007 ($1,000) Retail sales, 2007 ($1000) Retail sales per capita, 2007 Accommodation and food services sales, 2007 ($1,000) Building permits, 2011 Geography QuickFacts Land area in square miles, 2010 Persons per square mile, 2010 FIPS Code Metropolitan or Micropolitan Statistical Area

North Slope Borough

Alaska

88,695.41 0.1 185 None

570,640.95 1.2 2

(a) Includes persons reporting only one race. (b) Hispanics may be of any race, so also are included in applicable race categories. F: Fewer than 100 ﬁrms S: Suppressed; does not meet publication standards

placement Hospital, a joint venture between UIC and Arctic Slope Regional Corp. The new facility will encompass 100,000 square feet of patient rooms, exam rooms, a pharmacy, dental and vision facilities, as well as a laboratory and physical therapy capabilities. Construction of the $85 million facility began in 2010 and is expected to be completed this fall. The new hospital will be administered and operated by the Arctic Slope Native Association and serve the entire borough. “ASNA’s new hospital will increase the quality of health care and the number of health care jobs,” Brower says. UIC and ASRC also are installing water and sewer lines in Barrow and other NSB villages, and the city of Barrow is working on a $4.5 million project to renovate its recreation center built 30 years ago. Those funds will barely cover the foundation and shell, which means the city will need another $10.5 million to complete the building, but it is a much-needed resource for the community, according to Harcharek. “One of the greatest needs is wholesome activities for our teenagers and young adults,” he says. The recreation center will provide a place for local youth to get in shape and blow off some steam. So will the new outdoor regulation-size basketball court being built in Barrow. The project is being fueled by corporate sponsors and volunteers. Spenard Builders Supply is providing building materials at cost. Northern Air Cargo is flying everything into Barrow at cost. And employees of Baker Construction are volunteering their expertise and time to build a basketball court that will last well into the next 20 years. The court was due to be completed by the end of August. “The city is trying to make our recreation program the best in the state,” Harcharek says. To stimulate future development, the city, along with UIC, recently completed an economic development survey to gather input from residents and tribal members on four priority areas: a cooperative store, a greenhouse, a tannery and a subsistence food processing facility. Harcharek says he thinks the store has great potential, adding: “I would think that within a year, some of these will materialize.” 

Source: US Census Bureau State & County QuickFacts

Writer Tracy Barbour owns a marketing company in Tennessee. ■ 18

www.akbizmag.com • Alaska Business Monthly • October 2012

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aving celebrated their 50th anniversary just last year, Pacific Alaska Freightways has a proven track record for providing reliable transportation services to Alaskan businesses for more than half a century— and is taking steps to ensure that PAF remains the go-to resource for all modes of freight transportation to Alaska for the next 50 years and beyond. Throughout its first half-century, PAF built its foundation on providing services in all modes of transportation to Alaska—including steamship, barge, rail, air and over the road. In addition, with established inter-modal, LTL and truckload carrier services available in the Lower 48 states, PAF has traditionally offered seamless origin to destination services to all their clients throughout Alaska. Whether a client’s cargo is over-height, over-length, LTL, TL; or requires flatbeds, vans, containers, or railcars, PAF has provided costeffective on-time service to their valued clients as a matter of course, while keeping costs down by offering flexible transportation services.

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WEB TRACKING

In order to extend their reputation for excellent service into the future, PAF has added more online services, updating and improving their existing website that allows the client to establish an account to track their shipments, and even get email updates if they prefer. According to Curt Dorn, director of sales and marketing, “it’s also a great tool to have as a homepage for those who are responsible for tracking their company’s freight in and out of Alaska.”

KENAI TERMINAL IMPROVEMENTS

PAF also has made improvements to its Kenai terminal just this year, including leveling the yard to more easily and ef efficiently get freight in and out. “We extended the dock into the warehouse, which enables us to go in and out of the dock with forklifts, which we weren’t able to do before,” says Alaska Vice President Bill Meszaros. “We’ve put a couple of new doors on the end of it, added new paint, new lighting—and the ramp at the end of the warehouse added a couple of new spots for trailers to back into.” PAID

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PAF also updated its fleet with five new Peterbilt trucks, 10 new flatbed trailers, and more than 100 new 40 and 45 foot oceangoing containers. Meszaros is optimistic about Alaska’s economic future. “With all the economic uncertainty in the Lower 48 I really haven’t seen much of it in Alaska, at least from the trucking and shipping industry up here,” he says. “PAF has done a good job keeping our existing clientele happy as well as positioning ourselves to meet the requirements of the marketplace in Alaska by investing in new trucks, updating our web tracking system, and facility expansions. I’m very excited about our future going forward.”

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CORPORATE CITIZENSHIP

Benefits of Corporate Giving Building blocks to better business BY FLORA TEO

hen presenting to potential donors, perhaps the most important question an executive director of a nonprofit organization must be able to answer is, “What’s in it for my company?” Corporate philanthropy is often guided by the company’s desire to satisfy the demands of any number of groups—stockholders, managers, employees, customers, etc.— while still doing good in the world. Businesses must identify how a cause will help the mission of the company and its public relations. This makes corporate philanthropy much more interesting and challenging process than merely writing out a $1,000 check to every nonprofit in town who submits a request. While giving money to worthy causes is noble, nonprofits must be able to illustrate to corporate leadership all of the myriad ways in which businesses can also reap benefits from community giving. While it is obvious that the nonprofits and their recipients benefit, corporate philanthropy can go a long way for companies too: creating populations of future customers, attracting top talent for your workforce, and improving the company’s bottom line.

Creating Populations of Future Customers

When consumers do hear about a company’s cause commitments, research shows that this knowledge helps them make critical decisions. For example, according to the 2004 Cone Cause Evolution Study, 87 percent of Americans consider a company’s commitment to social issues when deciding what to buy or where to shop. Consumers tend to spend their dollars with the company who they feel supports the causes they hold most dear. ■ 20

Flora Teo

The goal of most sales people is to keep their customers happy, as it is more expensive to attract new customers than it is to retain a current customer base. However, the 2007 Cone Redefining Cause Study shows 87 percent of Americans are likely to switch from one brand to another brand that is about the same price and quality if the other brand is associated with a good cause. While it is paramount to preserve current customer relationships, strategic giving can create an edge over competitors.

Attracting top talent

Companies who wish to attract toplevel employees should consider highlighting the company’s involvement and support of local nonprofits. 77 percent of Americans consider a company’s commitment to social issues when deciding where to work. In the 2008 issue of the MIT Sloan Management review, C.B. Bhattacharya, Sankar Sen and Daniel Korschen wrote “in general,

corporate social initiatives reveal the values of a company and thus can be part of the ‘employee value proposition’ that recent studies indicate is the lens through which managers must view talent management today. This also humanizes the company in ways that other facets of the job cannot.” In an article in the 2008 issue of the Boston Business Journal, members of the Boston College Center for Corporate Citizenship Brad Googins and Cheryl Kiser point out, “Today’s employees want to be part of an enterprise that cares about more than its bottom line. They want to be part of a company whose values are expressed in its engagement and contributions to the community.”

improving the Company’s Bottom Line

Corporate social responsibility is the third most important driver of employee engagement. A study by Towers Perrin found that “for companies in the US, an organization’s stature in the community is the second most important driver of employee engagement. This is important because higher employee engagement levels are highly correlated with better business performances as measured by revenue, earnings and other key business metrics.” It behooves business owners to treat corporate social responsibility as a core component of the business model, rather than a charity. In this way, effective corporate giving can help improve the bottom line of the company and help boost the economy overall.  Flora Teo is the president of Junior Achievement Alaska.

www.akbizmag.com • Alaska Business Monthly • October 2012

EDUCATION

Photo courtesy of University of Alaska Fairbanks

It’s an enthusiastic cheer for the Alaska Business Week program from students and company advisers. Held on the University of Alaska Fairbanks’ campus July 14 through 21, the program drew 65 students from across the state to learn finance, ethics, leadership and other aspects of running a business.

Business Week Sprouts Leaders Fairbanks program gives youth a taste of leadership in the corporate world BY GAIL WEST

re Alaska businesses pondering the problem of knowledge transfer and the aging workforce? Are we wondering how we’ll get tomorrow’s leaders—or where they’ll come from? No need. At a summer camp on the University of Alaska Fairbanks campus, many of those future

■ 22

business leaders are getting a taste of what’s ahead and learning how to meet the challenges they’ll face. Alaska Business Week, a partnership between UAF and the Alaska State Chamber of Commerce, gives high school students the opportunity to find and use their leadership skills as well as

earning college credits. For one week each summer, students—with guidance from business advisers drawn from some of the state’s leading companies— create their own businesses, learn to deal with shareholders, understand the link between marketing and sales, and navigate the minefields of financing.

www.akbizmag.com • Alaska Business Monthly • October 2012

“It’s a life-changing experience for our students, it inspires them to step out of their comfort zones, to consider what talents they may have that they don’t even know about yet. It makes them consider their futures and all the opportunities open to them.” —Ann Ringstad UAF’s director, Office of Community Advocacy

“It’s a life-changing experience for our students,” says Ann Ringstad, UAF’s director, Office of Community Advocacy. “It inspires them to step out of their comfort zones, to consider what talents they may have that they don’t even know about yet. It makes them consider their futures and all the opportunities open to them.” Ringstad provided the spark that brought the Business Week concept to Alaska from Washington. In 2007, Ringstad says, the Alaska State Chamber board visited the program created by the Association of Washington Business and met a believer in the Washington Business Week program, Steve Hyer. “The following year, Steve came to Alaska and made a presentation to the Alaska State Chamber board. He said, ‘wouldn’t it be a great idea if Alaska got involved,’” Ringstad says. In 2009, Ringstad, at the behest of the Alaska State Chamber, participated in the Washington Business Week program as a company adviser. She says she wanted to “drive it first” before she championed it at UAF. Hyer, the executive director for the Foundation for Private Enterprise Education—the organization created to house Washington Business Week and more advanced spinoffs on the program—said Washington’s program started in 1976 at Central Washington University. Within a few years, Hyer says, the program had spread to about 24 other states—17 of those programs are still operating.

“We really had no problem generating interest among businesses,” Ringstad says. “Just by hearing about the program, they were sold on it. Many contributed funding, transportation to and from Fairbanks for students from

across the state and company executives to participate as advisers during the week. Some sent employees to serve as judges of the various competitions. It’s such a great way to show businesses that there’s a future here in Alaska.” The first Alaska Business Week was held in late 2010, Ringstad says, with 45 participants. “It was magic—just like Washington Business Week. Last year, we had 64 kids attend and this year there were 65. We have plenty of capacity for more students, so we hope to grow the program in the years to come.”

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Stepping Up

When Ringstad returned to UAF at the end of her stint with Washington Business Week, she was convinced, and during the summer of 2009 Tesoro presented the Alaska State Chamber with a $40,000 check to kick-start the Alaska program. Adding spice to the infant Alaska Business Week was UAF School of Business’ support that provided students with two college credits for completion of the Alaska program.

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www.akbizmag.com • Alaska Business Monthly • October 2012

23 ■

“I couldn’t have asked for a better group of students, from a management point of view, their style was very good. They all listened and they all contributed. By the end of the process, everyone knew what decision the CEO was going to make. At every decision, they had a number of options and the first two meetings were a bit chaotic. By the end, the group operated like a well oiled machine. They identified each other’s strengths and filled in each other’s weaknesses.” —Brad Osborne President of NANA Oilfield Services

Each business week follows a basic pattern, according to Hyer. The first step is to divide students into individual companies. “Students are selected based on the area of the state they’re from, the level of their schooling, their genders, etc.,” Ringstad says. “Each company is given the same product, the same amount of money and the same number of employees. Then each company has to select their leadership—CEO, CFO, Marketing Director—and each company has to go through eight business quarters.” Hyer adds that the companies have to make 11 business decisions each quarter during their simulated two years of business. The companies are asked how they

want to produce their products, to expand their capacity, spend their marketing money and whether they’ll need to borrow money or not. Their quarterly decisions are run through a computer simulation program, then the results go back to the student companies and become the base for the next quarter’s decisions. “It’s all about increasing profits in an ethical manner,” Hyer says. Ringstad adds that each company has to decide how much stock they should have, what type of company they’re going to be—high end or low-end—and decide pricing. They’re each given a series of ethical questions to decide during the week, as well. All of these decisions go into the computer at the

end of each quarter and the companies are told, “here’s how your company is doing this quarter and here’s how your competitors are doing this quarter,” Ringstad says. All of the work the companies perform during the week is interspersed with presentations from today’s business leaders—leaders such as Margie Brown, CEO of Cook Inlet Region Inc., Marilyn Romano, regional vice president of Alaska Airlines, and Anand Vadapalli, president of Alaska Communications Inc. “Participants receive in-depth briefings from a long roster of entrepreneurs and business leaders covering topics such as leadership, corporate ethics, marketing and finances,” Ringstad

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says. “Then after each presentation the groups return to their individual company rooms, analyze the message and figure out how to use the information to improve their companies.”

Hands-On Help

In addition to the experienced business leaders who make presentations, there is a team of business executives who work directly with the students throughout the week to advise and coach the teams in their pursuit of a winning strategy, Ringstad says. These coaches draw on their own individual backgrounds and experiences to provide guidance to their teams during the decision-making processes. This year’s coaches came from Alaska Communications, NANA Oilfield Services, State Farm, the UAF School of Management, and the Alaska State Chamber, and included a retired Boeing Company executive and a staff member of the State House of Representatives. Brad Osborne, president of NANA Oilfield Services, is a member of the Alaska State Chamber board and says he was wholly in support of starting Alaska Business Week. As an adviser this year, he had “a great mix of kids— home schooled and public schooled, from Palmer, Wasilla, Chevak, Anchorage, Juneau-Douglas, Skyview, Noatak and Chalkyitsik,” he says. “I couldn’t have asked for a better group of students,” Osborne says. “From a management point of view, their style was very good. They all listened and they all contributed. By the end of the process, everyone knew what decision the CEO was going to make. At every decision, they had a number of options and the first two meetings were a bit chaotic. By the end, the group operated like a well oiled machine. They identified each other’s strengths and filled in each other’s weaknesses.” Jon Benedict served as adviser for another group—with students from Anchorage, Fairbanks, Juneau, Noatak and Stebbins. Benedict, business underwriting specialist for State Farm, says he’d volunteered in Washington. After being promoted and moved to Alaska, he looked into volunteering again. “It’s hard to describe the experience,” Benedict says, “because it’s so fast and furious. But you really see the lights go

ing on during the week—see the gears turning and all the elements coming together. They begin to realize that every decision they make affects their business. And it’s so rewarding watching them grow beyond their comfort zones, watching them realize they have leadership qualities if they just let those talents out. “Several of the students I’ve had over the years have told me that no matter what they finally chose as a college major, they would include business classes because they recognized the ways in which business factored into just about

every career choice,” he adds. Andy Rogers, deputy director of the Alaska State Chamber, enthusiastically agreed with everything Osborne and Benedict say about Alaska Business Week. “Everyone’s response to Alaska Business Week is: WOW!” Rogers says. “What we had to learn by trial and error, these students are learning through the program. Every one of them will be better equipped to become a business leader. “We were so fortunate to have Ann (Ringstad) see the opportunity and the importance of the program, both to Alaska businesses and to UAF,” he says.

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www.akbizmag.com • Alaska Business Monthly • October 2012

25 ■

“Everyone wanted a program like this, but it took some personal commitments to make it happen.” Rogers says he was particularly impressed this year by a young woman from Saint Mary’s. “It was about mid-week,” he says, “after running about four or five quarters, something clicked for her. She really understood the “growth” part of the shareholders’ charge. She became the financier for the group. She decided how much the company needed to borrow, how much to invest. She made the math work.”

Recruiting Future Leaders

Good people make great lawyers. Phil Blumstein Alaska Native and Business Law

To be a great lawyer in Alaska, you first need to understand Alaska. We’re part of this state, and the business and public entities that work for its people. Whether it’s mergers and acquisitions, real estate, government, Native Corporations or finance, business is our business. ■ We have the talent you’re looking for in an attorney, and the experience you need to succeed. Simply put, we know Alaska.

Anchorage 907.276.5152 landye-bennett.com Simply Great Lawyers.

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Alaska

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Oregon

This year’s camp is history, but next year’s is in the planning stages. Ringstad says recruiting students is one of the biggest challenges Alaska Business Week faces. The camp accepts students who have completed their first year of high school through graduation, and it makes a big difference in the lives of the students who attend. “Coming to ABW has been a refreshing wake-up call,” says Ariana from Tsuk Taih School in Chalkyitsik. “It changed my way of seeing life and showed me how to be the best I can be with real-life decisions.” Kia, a student from Bartlett High in Anchorage, says: “ABW was about future education and it helped me to decide which path to take in life. I learned how to be respectful, confident and trustworthy.” Many businesses have stepped up to contribute, according to Ringstad. The Alaska Railroad provides train tickets, ERA has given up to 20 round-trip tickets for rural kids, Alyeska Pipeline Service Company has provided sponsorships for several Alaska Native youth and NANA helps fund all costs for at least three shareholders to attend. The Anchorage Chamber of Commerce ATHENA Society provides scholarships for Anchorage-area young women and the Palmer Chamber of Commerce provided a scholarship for a Palmer youth this year. “It takes a village to pull this off,” Ringstad says. “Will we do this again? Absolutely.”  Gail West is a freelance writer living in Anchorage.

www.akbizmag.com • Alaska Business Monthly • October 2012

AlAskA’s MArine industriAl Hub

AlAskA ship & DRYDock The largest shipbuilding and repair facility in Alaska just got better. Ketchikan Shipyard’s new state-of-the-art assembly hall and production center operated by ASD has put Alaska’s first city on the map as one of the most modern shipbuilding, modernization and repair resources in North America. ASD’s skilled workforce offers superior quality and Alaska tough results for vessels up to 500 feet.

907.225.7199

A k s H i p. c o M

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www.akbizmag.com • Alaska Business Monthly • October 2012

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Photo courtesy of kpb architects

CONSTRUCTION

Photo by Amy B. Slinker, Pfeffer Development

Main: Pfeffer Development is working with Criterion General and kpb architects to retrofit the 909 West Ninth Avenue building in Anchorage, pictured here Sept. 10. The project is scheduled for completion in October. Inset: Existing windows are replaced with high performance glass at the 909 West Ninth Avenue Building in Anchorage July 9.

Private Commercial Construction Steady growth in Anchorage continues BY PAULA COTTRELL

odest construction growth increases of 3 percent over the last few years may not be an indication of a strong, rebounding economy, but it does have Alaskan developers guardedly optimistic. “There are many projects in progress across the state that are getting completed,” says Mark Pfeffer, president of Pfeffer Development, a multidisciplinary commercial real estate development firm based in Alaska. “We may not be seeing a lot of new, large-scale commercial projects being built right now, but con-

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struction on the mid- to smaller-scale has been relatively steady.” Alaska construction spending was estimated to come in around $7.7 billion dollars this year, an increase of 3 percent over last year, according to the annual construction forecast released in February compiled by Scott Goldsmith and Mary Killorin of the Institute of Social and Economic Research at the University of Alaska Anchorage. This report, prepared for the Construction Industry Progress Fund and the Associated General Contractors of Alaska

illustrates small, steady growth in the construction industry since the national economy hit all-time lows in 2008. Of the estimated 2012 $7.7 billion, $5.1 billion will go toward private commercial projects. Of that $5.1 billion, an estimated $3.5 billion will be spent in the mining and oil and gas industries. That leaves only $1.6 billion being spent on utilities, rural, basic industry and other commercial and residential projects across Alaska in 2012. A sluggish national economy combined with uncertainty regarding the future of

www.akbizmag.com • Alaska Business Monthly • October 2012

oil and gas development in the state has caused some developers to proceed with caution. While it’s true that Alaskans haven’t endured the worst of what the recession has to offer—high unemployment, extreme crashes in the housing market and credit woes—the national economy does influence investment in commercial and residential markets. Some of that investment is in retrofits and tenant improvements, some in new builds.

Retrofit or Build

Over the last three years, Dave DeRoberts, president of Criterion General Inc., has noticed that his business has increased at a fairly steady rate. In fact, Criterion, a contractor that specializes in private construction, is on track to having its busiest year ever. “In my opinion, we’re in a good place,” DeRoberts says. “We have a proven track record with our clients and are seeing a lot of repeat business.” Criterion General is currently working with Pfeffer Development and kpb architects on a complete retrofit of the Unocal/Chevron building located at 909 West Ninth Avenue in Anchorage.

According to Pfeffer, the company that purchased the building from Chevron was in the middle of tackling the asbestos abatement issues that required a complete demolition of all of the building components down to the steel and concrete when a prospective tenant became interested in the structure. “The new tenant closed on the lease transaction in January of this year and subsequently a Pfeffer managed ownership entity closed on acquisition of the property. Construction commenced in March,” Pfeffer says. “The project is scheduled for completion in October with the tenant moving in by mid-December.” Conveniently located adjacent to the Delaney Park Strip, the six-story 55,000-square-foot building will feature high performance glass, new mechanical and electric systems and 360-degree panoramic views of the Alaska Range, Cook Inlet, midtown and downtown. “kpb architects focused on efficiently designing the space. Interior walls are clear, allowing employees to have cross views of each floor and to enjoy the natural light, and nine-foot sliding glass

doors are incorporated into the design to maximize space,” Pfeffer says. While a retrofit of this size definitely presents its challenges, it is sometimes the best option for tenants to try and fit into an existing space. “There is not a lot of vacant space in Anchorage, and the economy keeps people cautious. Expansion and construction needs are being met through creative solutions,” Pfeffer says. “It was a viable option for the client to retrofit the Ninth Avenue location to fulfill the long-term lease for the client, but sometimes there just isn’t an appropriate location and you have to build new.” The management at Stewart Title found themselves in that situation when their lease expired on the company’s current location on Denali Street. “They wanted to stay in midtown, on street level and with some road exposure,” Pfeffer says. “When they were unable to find something that would suit their needs, Stewart Title chose an option that would allow them to almost duplicate—but with significant improvements—their current location which was working very well for them.”

Natural resources continue to be the cornerstone for Alaska’s economic development and diversification. AIC is proud to provide our Alaska-based construction expertise to the resource development industries.

ALASKA I N T E R S TAT E CONSTRUCTION

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T: 907-562-2792 F: 907-562-4179

www.akbizmag.com • Alaska Business Monthly • October 2012

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A new building for Stewart Title is under construction at 480 East 36th Avenue in Anchorage, pictured here Sept. 10. Pfeffer Development is working with Criterion General and kpb architects on the 7,000-square-foot building, which will include a reception and waiting area, office space, conference room and break area. Photo by Amy B. Slinker, Pfeffer Development Artist rendering courtesy of kpb architects

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www.akbizmag.com • Alaska Business Monthly • October 2012

SUPPORT

“Caterpillar® makes a great product, but it’s the support of the local dealer that makes the difference. The bottom line is that N C Machinery product support is what keeps us in business.” Dave Cruz, President, Cruz Construction

Several machines from Cruz Construction’s extensive Cat fleet hard at work in Grayling, AK.

Industry-Leading Customer Service In Washington: 800-562-4735 In Alaska: 800-478-7000

www.akbizmag.com • Alaska Business Monthly • October 2012

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Photo by Ed Wilson

Alaska USA Federal Credit Union’s new office building on B Street off Tudor Road in Anchorage.

Stewart Title’s new location will be at 480 East 36th Avenue. The building, which broke ground in June and is expected to be completed by December, is owned by United Companies Inc., a subsidiary of Sea Lion Corp., which was established in 1972 under the terms of the Alaska Native Claims Settlement Act and is the village corporation of Hooper Bay. UCI and Pfeffer Development are strate-

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gic partners in developing nearly three acres of land on 36th Avenue and have already completed and fully leased the adjacent retail building located at 600 East 36th Avenue where Alaska Communications and Whole Family Chiropractic are located. Alaska’s first Pita Pit is scheduled to open at the building in October 2012. The design/build team of Criterion General Inc. and kpb architects have

come together again to construct a 7,000-square-foot wood frame building that brings together the spacious open design reception and waiting area that existed in Stewart Title’s previous location with updated features and modern amenities. Included in the design is a heated sidewalk and entry plaza, beautiful landscaping and a convenient parking plan specific to Stewart Title’s needs. “It can be convenient working with the same development team on several projects, but in this case, the retrofit on Ninth Avenue and the Stewart Title building are such different projects. They really present their own set of challenges,” DeRoberts says. Criterion has a reputation for tackling difficult projects and bringing them to completion on time. “When 85 percent of your business is private money work, it’s all about performing at a level that keeps business coming in the door,” DeRoberts says. “We have great employees who are professionals at what they do. Our crews have been with us for a long time and have the Criterion values down. They know how and will go the extra mile for their clients.”

www.akbizmag.com • Alaska Business Monthly • October 2012

Photo by Ed Wilson

Dan McCue, senior vice president of corporate administration at Alaska USA Federal Credit Union couldn’t agree more. Criterion General recently completed construction on two locations for Alaska’s largest credit union— a new branch office on Abbott Road near Home Depot and an office building located on B Street just off of Tudor Road, which will house administrative offices and facilitate future growth for the company. “As Alaska USA has grown, it has required a careful review of our administrative offices to ensure better utilization and efficiency of operations. The new office building on B Street is a result of trying to forecast what our growth would be relative to the needs we have for our operations,” McCue says. Alaska USA relies on statistical data and member feedback to drive that decision when deciding where and when to open a new location. “Our expansion is based on finding efficient ways to serve our members and to provide convenient locations. As traffic and transaction volume in our Abbott Fred Meyer retail location increased, we found

Alaska USA Federal Credit Union’s new branch on Abbott Road in South Anchorage.

that we could best serve our members by opening a full service branch in the area,” McCue says.

Retail Market expansion

The completion of the Alaska USA FCU branch on Abbott Road in March adds to an already increasing retail presence in Southeast Anchorage area that has seen a new Home Depot, Carrs Quality Center and several other small busi-

George Tuckness Neeser Construction Inc.

In these perilous economic times, more than ever we need to think about how to strengthen our economy; it doesn’t take long once you get involved in AGC to realize that their efforts are focused on strengthening and growing our construction industry as a whole. As contractors many times because of how competitive our industry is, we find it difficult to see beyond just what prospers our own business. I think AGC helps us come together to find ways to help each other to provide a healthy construction economy. It is an effective way to have a voice in Government whether it is State or National. When you get involved in AGC you can have your voice heard, you can see changes with positive results. AGC of Alaska has long been a positive factor in Alaska’s economic success.

ness and restaurants sprout up in the last 10 years. The next addition to the area is expected to be a Walgreens, but a final determination has not been made on whether the company will proceed with a location at 88th Avenue and Abbott Road. While there is definitely room in the business development for a new food establishment to take over the recently closed Chili’s location—it has

Roger Hickel Roger Hickel Contracting Inc.

As a member of AGC I’m able to work on many important issues that affect our business and be heard. I really enjoy working with all the professionals in AGC and many have become close friends.

Peggy Knapman Earth Stone Inc.

As a specialty contractor the greatest value to us is the mentorship and the ability to build relationships. The AGC offers so many opportunities for those of us in the construction field, access to education and training. The networking opportunities are endless. There is no price one can put on the value of having the support of others who have gone before you.

www.akbizmag.com • Alaska Business Monthly • October 2012

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Fueling the Trident Cannery in Akutan, the City of King Cove and warming the home of Tom and Annie Hume. As Alaska residents, we know what it takes to keep the home fires burning, no matter how far away they are. So we developed a barge distribution network that allows us to provide reliable, costeffective fuel and freight delivery to homes and businesses even when rivers are running low. Now folks like the Humes can count on having the fuel they need, when they need it. And knowing that Delta Western will do whatever it takes to keep Fueling Alaska Safely.

For all of your quality fuel needs, call us toll-free at 800.478.2688

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been speculated that a new restaurant will be moving in, but no official announcements have been made—additional growth in the area is expected to level out. Another retail center that has seen its growth peak and is now tapering off is Tikahtnu Commons. This regional retail and entertainment hub is located on 95 acres of land on the corner of North Muldoon Road and the Glenn Highway. CIRI Land Development Co., and its partner Browman Development put the Tikahtnu Commons on the map when it brought to Anchorage its first Target store which opened in October 2008. Since then, Kohl’s, Lowes, PetSmart, the Regal Tikahtnu Stadium 16 Theater, Sports Authority and Best Buy are some of the retail giants that have moved into this Northeast Anchorage location. Sam’s Club is the final anchor store that will be built at the Tikahtnu Commons. Construction on the 145,000-square-foot retail store began in August and is expected to be completed by fall 2013. The International House of Pancakes was the first dining establishment to open at Tikahtnu, but was quickly joined by Red Robin, Qdoba Mexican Grill, McDonald’s, Firetap Alehouse and most recently, Alaska’s first Olive Garden Italian Restaurant which opened in January. Once completed, the Tikahtnu Commons is expected to have 12 to 15 major retail stores and 60 to 75 businesses that will include small shops, restaurants and various service and entertainment businesses. While occupancy is estimated to be at about 80 percent and construction has clearly slowed down on Anchorage’s largest retail shopping center, Denali Alaskan FCU responded to the increased foot traffic by opening its 18th branch at Takahtnu Commons in March. A few short miles to the east is the Creekside Town Center. Located near the corner of Muldoon Road and Debarr Road, the commercial side of this decade-long project looks to finally be gaining traction. Pfeffer and Jerry Neeser of Neeser Construction are the principals responsible for this development effort. More than a retail center, this 160-acre project is already home to Begich Middle School and Cook Inlet

www.akbizmag.com • Alaska Business Monthly • October 2012

Photo by Ed Wilson

Olive Garden Restaurant, under construction, will be the new northwest anchor at the Dimond Center Mall in Anchorage.

Housing Authority’s Grass Creek Village and Clearwater Village, beautifully designed and landscaped mixedincome housing development built by Neeser Construction Inc. and The Peterson Group. The pedestrian friendly community has a few pieces of vacant commercial land that Pfeffer Development says is starting to get some serious interest. “I can’t say anything specific, but we have a lot of interest in the Creekside Town Center right now,” Pfeffer says. The competitive commercial real estate market combined with large scale retail customers carefully gauging their potential profitability in the Anchorage retail markets keep many developers close-lipped about projects sitting on the drawing board. With the recent opening of the Walgreens on DeBarr Road and with Ken Brady Construction beginning work on the new 176,000-square-foot WalMart, which will be located near the same intersection, new businesses for the north end of town continue to be built.

Big Hopes for a Dimond Center expansion

When the folks at Olive Garden Restaurant were looking to open a second location in Alaska, instead of building a new structure as they did at the Tikahtnu Commons location, they opted to take over the O’Brady’s Burgers and Brew location at the northwest corner of the Dimond Center mall. By add

ing an additional 2,000 square feet of space, the popular restaurant chain is expected to drive business to what is considered to be the most trafficked mall in Alaska. In addition to Olive Garden, the Dimond Center may revamp 150,000 square feet of its existing 750,000 square feet of retail space to accommodate The Outlets of Alaska as another venture at Dimond Center. This development project aims to bring more than 40 name brand outlet stores to existing space in the Dimond Center near the ice rink. Leasing Manager Hugh Ashlock says he can’t be specific on any of the potential leaseholders, although he is hopeful that the Dimond Center can begin construction by the spring 2013 so the new outlet stores can be open by fall next year— just in time for the Permanent Fund Dividend spending frenzy. After so many major restaurant and retail players have entered Anchorage’s market in the last decade, it doesn’t come as a surprise that outlet stores would be next. But with a modest economy and the potential for market saturation, outlet store bargain hunters should remain cautious about getting prematurely excited. Development can be slow and it did—after all—take 30 years for Olive Garden to finally find its way to the Last Frontier.  Paula Cottrell is an Alaskan author.

www.akbizmag.com • Alaska Business Monthly • October 2012

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ENERGY

Alaska Energy Authority overview of projects BY NICOLE A. BONHAM COLBY

Photo courtesy of Alaska Energy Authority

Exploration in the Hot Springs Valley Bay area on Akutan Island is under way. The island displays classic geothermal expressions, such as natural hot springs.

ositioned along the highly active Ring of Fire that arcs across the Pacific Rim, Alaska not surprisingly offers a landscape dotted with natural geothermal features—active and dormant volcanoes, regional hot springs, and the like. For those looking to harness such natural energy to create power and end-use heat, the 49th state is one of opportunity. The state’s geothermal resources are focused in three primary areas: first, the Ring of Fire encircling the Pacific and that includes the Aleutian chain, Alaska Peninsula and Wrangell range; second, a sweep of hot springs stretching from the Seward Peninsula to Canada; and Southeast Alaska’s collection of hot springs scattered throughout the island region. The attraction to natural heat sources—for warmth and therapeutic reasons—is a theme present throughout the state’s colorful history, fueling early tourism development last century at places as remote and far-flung as south-

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ern Southeast Alaska’s historic and now-closed Bell Island hot springs resort along Behm Canal; the much-visited wooden soaking tubs of the Chief Shakes hot springs along the Stikine River northeast of Wrangell that are now managed by the U.S. Forest Service; and the pre-World War II Bailey Bay hot springs resort north Ketchikan on the Cleveland Peninsula. Nowadays, aside from the well-known visitor hot-spot Chena Hot Springs Resort—which also captures its own natural resource to provide power via the state’s first and only geothermal powerproducing plant—much of the current interest in Alaska’s natural geothermal energy is for commercial and industrial reasons: power generation, geothermal heat pump efforts, and direct-use intent (capturing heated fluids to directly use the heat to warm a space or greenhouse). That said, the lure of warm water sources amidst the cool landscape of Alaska continues today to draw visitors, modern-

day explorers, and developers, alike. Alan Baldivieso, program manager of the Alaska Energy Authority’s Geothermal, Hydrokinetic and Emerging Energy Technologies effort, speaks to the scope of the state’s geothermal zones and current projects afoot. “Alaska’s got a tremendous amount of geothermal potential,” affirms Baldivieso. “It’s also a very big state and the resources are very spread out. The upshot is that there is a tremendous amount of exploration that needs to occur.” Of the three categories of geothermal projects—power production, heat pumps and direct use—“the more expensive projects are clearly the power generation projects,” he says.

Assessment & exploration

Chena Hot Springs is the only power producing project currently online. Other geothermal projects around the state are in various stages of assessment and exploration. The lifecycle for such

www.akbizmag.com • Alaska Business Monthly • October 2012

HELPING ALASKA GROW Since 1952, Spenard Builders Supply has been serving Alaska communities. From our first location in Anchorage, which opened with just three employees, to our 21 locations across the state today, our goal has always been to provide our neighbors with the building materials, services and local expertise they need to get the job done right. Through the boom times, when it seemed like everyone was building, to the tough times when our communities were forced to come together and rebuild, Spenard Builders Supply has remained open for business to serve you. Weâ&#x20AC;&#x2122;re proud to continue to play an important role in building Alaska, from remote cabins to big-city high rises, from schools to apartment buildings and everything in between. Thank you for allowing us to be a part of your projects for the last 60 years. We appreciate your business and we look forward to working with you for years to come.

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Two exploration wells were drilled on Akutan Island before this summer. Additional field work was done this summer to determine the island’s favorability for geothermal production.

Photo courtesy of Alaska Energy Authority

projects typically includes an assessment of the resource, drilling of test or “exploration” wells, drilling of production-level wells, and then the ultimate plant design and construction.

historic diesel generation use to that of backup and supplemental source, reducing the cost of power for the facility by an estimated 25 cents per kW hour.

The springs and seeps that flow into the Pilgrim River range in temperature between 145 and 160 degrees Fahrenheit.

Chena Hot Springs

Akutan

Exploration in the Hot Springs Valley Bay area on Akutan Island is under way, with the idea to develop a 10-megawatt power plant in the highly volcanic area. Prior to this summer, two exploration wells were drilled, with additional field work ongoing this summer, according to Baldivieso, who categorizes the island’s geothermal offerings as: “The classic surface expression of the resource, including hot springs and minerals.” The island features an active hydrothermal system located only four miles away from the town of Akutan and includes more than 10 hot springs and considerable fumaroles, which are natural openings in the earth’s crust that emit steam and gas.

Mount Spurr, located 70 air miles from Anchorage and 33 miles from Tyonek, is considered the closest potential geothermal resource to the Railbelt, according to Baldivieso. “This is targeted as a large project,” he says. Several seasons of field work and preliminary drilling have occurred, with additional field work planned again for this summer. That comes on the heels of press reports last year of disappointing results from 2011 summer drilling. “They’ve explored a little bit…and have shifted their target area over a little bit, and are determining whether they can go forward with some more exploration drilling,” says Baldivieso. The landscape itself is an active volcano with contemporary eruptions. In presentations last year to lawmakers and energy industry leaders, officials from project developer Ormat Technologies Inc. summarized the project timeline so far, with state lands leased in October 2008, non-intrusive exploration conducted in 2009 and 2010, two exploration cores drilled in September 2010, and one deep core hold drilled in the summer of 2011. The 2009 and 2010 drilling samples suggested encouraging potential results, with evidence of geologic faults that could accommodate geothermal resources at depth—and with the poten-

In the electrical production arena, the Chena Hot Springs Resort is the prime example in the state of an entity that uses its own natural geothermal resource to help meet its electrical requirements. As the state’s first and only power-producing geothermal plant, according to Baldivieso, the 400-kilowatt (kW) plant came online in 2006. “It’s fairly groundbreaking in nature,” he says, as the plant takes a low-temperature resource—in the 160-degree Fahrenheit range—and uses it to produce power. “That’s considered a pretty low temperature resource,” he explains, as such power generation efforts typically require much higher temperatures from the geothermal input. The project is innovative, in that it considered what was available and crafted a plan to make it work, including a custom-designed and manufactured turbine system. “That’s what they had to work with,” he says of the natural resource. The plant provides power to the resort to help offset its generator use. The project design included installation of two, 200 kW Organic Rankine Cycle geothermal power plants for a combined generating capacity of 400 kWs. The plant operated in the years since with 95 percent availability and moved the ■ 38

Nome Area

Exploration wells were drilled this summer at the Pilgrim Hot Springs project, located some 35 miles north of Nome, according to Baldivieso. Exploration is under the leadership of the University of Alaska-Fairbanks’s Center for Energy and Power. The Seward Peninsula project is located 80 miles south of the Arctic Circle and is accessible via a small landing strip. The geothermal features of the site include a “thaw zone” of warm soil and tree and brush foliage that stands out among the surrounding tundra.

Mount Spurr

www.akbizmag.com • Alaska Business Monthly • October 2012

tial, favorable high temperatures looked for by such projects. The 2011 deep core hole in the eastern region of the resource indicated cooler temperatures and a nonfavorable rock type. However, according to the company, the geologic data still suggested possibilities of a commerciallevel geothermal resource in the project’s central region. While the resource’s location offers the benefit of being close to the Railbelt, such development of power production would require considerable transportation and transmission infrastructure. The original potential, according to the developer, is for an estimated 50 to 100 megawatt net production; and, at 95 percent availability, 416 to 832 gigawatt hours per year. “We’re really waiting for the results of this summer’s field work,” says Baldivieso.

Southeast

Meanwhile, in Southeast, reconnaissance efforts are continuing to assess areas for potential development, according to Baldivieso. The Tenakee Inlet area near Sitka is among prime topics of ongoing discussion regarding geothermal resource. “People know there is hot water down there,” he says of the region’s array of established thermal springs.

international interest

On the national and global front, geothermal industry developers and partners planned to convene in Nevada for an annual conference September 30 through October 3. The Geothermal Energy Expo—considered the world’s largest gathering of the companies that provide services and products for geothermal resource exploration, development, production and management, according to the Geothermal Energy Association trade group—has in the past served a networking function for energy developers and buyers. A dozen countries, ranging south from Australia north to Iceland, had signed up to participate by press time. Hot topics for discussion this year include the future of energy tax credits for geothermal and political candidates’ energy agendas.  Nicole Bonham Colby writes from Ketchikan.

www.akbizmag.com • Alaska Business Monthly • October 2012

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OIL & GAS

Pioneer Natural Resources Alaska North Slope independent ﬁnds success BY VANESSA ORR

Photo by Judy Patrick Photography

The sun sets over Pioneer Natural Resources Alaska’s North Slope Nuna No. 1 appraisal well drilled early this year. Temperatures hovered close to 60 below zero during the rig setup and initial drilling.

s the first independent oil and gas operator on the North Slope, Pioneer Natural Resources has a lot on the line. According to Todd Abbott, president of Pioneer Natural Resources Alaska, recent successes at its Nuna No. 1 appraisal well and at a development well drilled into the Nuiqsut formation make a long-term stay in the state look promising. However, the lack of a cohesive oil and gas financial regime may make convincing the home office to continue investing in the state a tough sell, he says. Still, the company, which employs approximately 200 direct and indirect workers in Alaska each year and more than 3,300 people worldwide, is moving forward in its efforts to find investment-worthy projects that will keep it on the Last Frontier as long as possible. “We like Alaska—we want to stay here,” Abbott says. “My charge is to grow the asset, so as long as there are projects here that can compete for capital, we’ll be here a long time.” Pioneer Natural Resources, based

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in Irving, Texas, first moved into the Alaska oil and gas market in 2002 as part of a broader corporate strategy, according to Abbott. “At the time, the Lower 48 was viewed as fairly mature, so many companies began looking for growth opportunities elsewhere,” he explains. “Pioneer started exploring in West Africa, South Africa and Alaska, looking for new places to grow. Alaska had a prolific oil and gas basin, accessible acreage, and at the time, the ELF (economic limit factor) fiscal system, which worked well for us.” During its first five years in the state, Pioneer drilled 11 exploration wells, which resulted in the commercial discovery Oooguruk. The company’s primary project, the Oooguruk unit encompasses roughly 51,000 acres. The site is home to Pioneer’s offshore drilling site and an onshore tie-in pad where the company brings in crude oil from a sixacre gravel island in the Beaufort Sea. Pioneer has a 70 percent working interest as owner and operator at Oooguruk; Eni Petroleum is 30 percent co-owner.

“We spend 99.9 percent of our time at Oooguruk, where we just produced our 10 millionth barrel of oil,” Abbott says. “It’s quite a milestone; it took a lot of hard work to get that oil and it’s a project that we’re very proud of. Our guys have done a fantastic job: it’s a difficult place to work and a difficult industry to be in, and I don’t get to say it often enough in a public forum, but we are extremely proud of the work being done.” Recent drilling projects have shown great promise for Pioneer’s future in Alaska. In May this year, the company announced that it had recently added 50 million barrels of resource potential to the Torok formation based on results from its Nuna No. 1 well, which tested at an initial production rate of 2,000 barrels a day. “We had previously tested wells in the northeast portion of the reservoir, but decided to test areas in the southern extremities from an onshore well site this past winter,” Abbott says. “We had a very good result of 2,000 barrels a day, which could have been more, but we were constricted by our surface capabilities.”

www.akbizmag.com • Alaska Business Monthly • October 2012

Photo courtesy of Derek Helmericks

Pioneer Natural Resources Alaska’s Oooguruk island and drill site shimmer in the background five miles offshore of Harrison Bay in the Beaufort Sea while a caribou grazes along the coastline.

The company used a mechanically diverted fracture stimulation to complete the well, a technology that has been used in Lower 48 and in smaller versions on the North Slope. “Ours was the largest frack in the history of the North Slope and we were proud to apply this proven technology with such positive results,” says Abbott, adding that the

company’s main goal was to determine if it could get oil out of the ground at a high enough rate to make the project a commercial success. Pioneer’s estimate of the resource is roughly 690 million barrels of original oil in place, with the possibility of recovering as much as 25 percent using primary and enhanced recovery techniques.

According to Abbott, Pioneer will drill another appraisal well this coming winter with the goal of advancing closer to a sanctioning decision. “We can only access the area via an ice road and ice pad, so once the pad is reconstructed, we will flow the first well and get more production data from that, while drilling and flow testing a second well,” he says.

www.akbizmag.com • Alaska Business Monthly • October 2012

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Photo by Judy Patrick Photography

Pioneer Natural Resources Alaska’s North Slope Oooguruk drill site’s drilling rig operates on a frigid day in February.

“Based on all of that information, we will make our recommendations to our executive management team.” Under the terms of its agreement with the state, Pioneer must decide by June 30, 2014, whether it will sanction the project. While Nuna No. 1 showed good results, an exploratory well drilled about two miles southwest of Oooguruk did not yield such positive news. “Unfortunately, the hydrocarbons just aren’t there,” says Abbott of Sikumi No. 1, a vertical well drilled into the Ivishak formation. “There is some resource, but it is not enough to be commercial. It is disappointing, to be sure, but as the geologists say, ‘It was a good pitch to swing at.’” Pioneer plugged and abandoned the well, taking a $19 million loss. Pioneer did receive more good news in 2012 as a development well drilled into the Nuiqsut formation produced more than 4,000 barrels per day after utilizing the same mechanical diversion well completion used on Nuna. “We are so encouraged by this result that we have flipped our entire program around to use this technology on more wells at the site,” says Abbott, adding that the company’s next steps will be to drill three additional Nuiqsut wells and one additional Torok well from the island. More fracking will take place this winter. Pioneer budgeted $135 million for Alaska this year, weighted for the ■ 42

www.akbizmag.com • Alaska Business Monthly • October 2012

Without a stable tax plan, many oil and gas companies face tough decisions when determining whether or not to invest in the state. “It most affects us when we’re looking at sanctioning a new project like Nuna,” Abbott says. “Our executive management team has to decide where best to invest because we are capital constrained—we have more projects than we have investment dollars. “There is an amazing basin up here, but there are also a lot of challenges— the logistical challenges alone are very significant,” Abbott says. “Throw an aggressive and unstable fiscal structure on top of that, and your project shows worse returns and higher risks than similar projects in the Lower 48. It’s a hard sell.” Not only does the state need to get the fiscal structure right, but they need to do it soon, Abbott says. “You can see across the service industries that people are already leaving for other plays in the Lower 48; you have to arrest this flight of talent and equipment.” In the short-term, Pioneer will continue to advance Nuna toward sanctioning while working to optimize production at Oooguruk.

Photo by Judy Patrick Photography

winter season, which Abbott says they are on pace to spend. Th is is out of a total of $2.4 billion companywide that has been budgeted for drilling programs. While willing to invest in the state, unease about Alaska’s changing tax policy does cause some concern when making sanctioning decisions, he says. “The investment climate has changed quite a bit since we first entered the state,” Abbott explains. “We came into Alaska under the ELF (Economic Limit Factor) financial regime, then sanctioned Oooguruk under the PPT (Petroleum Profits Tax) regime, and then moved under ACES (Alaska’s Clear and Equitable Share) regime when we brought our first well on. “We worked with the state, governor and Legislature this past winter, and while we are disappointed that the tax change did not occur during the last legislative session, we believe that the conversation is not closed,” Abbott continues. “The governor has a good idea of the challenges he faces, and we’re supportive of his plans. We look forward to re-engaging on the subject.”

Todd Abbott, president of Pioneer Natural Resources Alaska at work on the North Slope.

“Long-term, it’s truly hard to say what our plans are,” Abbott says. “Our future in Alaska is only as certain as the projects work out and the tax debates work out.”  Vanessa Orr is a writer living in western Pennsylvania. www.efs-fire.com

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OIL & GAS

Eye on the Prize: PETROLEUM BY SCOTT GOLDSMITH

he Alaska economy has always been dependent on its abundant natural resources of wildlife, fish, timber and minerals, but none has transformed Alaska like petroleum since we became a state. Research done at the University of Alaska’s Institute of Social and Economic Research funded by Northrim Bank has estimated that two-thirds of the job growth since 1960 is attributable to petroleum and that half of today’s jobs and income can be traced back to petroleum. But the path forward is not clear. Although by standard measures the economy is strong, the decline in petroleum production represented in the “Prudhoe Curve” looks like a dark cloud on the horizon. Fortunately petroleum has the potential to continue to sustain the economy for decades to come, but only if Alaska can rise to the challenge.

need for trips Outside for shopping and health care. Generous government spending has resulted in high quality public services like education and health care delivery across the state and new roads, harbors and other infrastructure to support the Alaska life style and economic development. The economy is more diversified and less dependent on federal spending or the seasonal fishing and tourist industries. There is no better indicator of the quality of the economy than the fact that young Alaskans and senior citizens are both voting with their feet to stay in Alaska. In fact, the senior population is growing at a faster rate than any other state, both because retirees are choosing to stay and new seniors are moving in. Unfortunately many Alaskans underestimate the role that petroleum has

There is no better indicator of the quality of the economy than the fact that young Alaskans and senior citizens are both voting with their feet to stay in Alaska. In fact the senior population is growing at a faster rate than any other state, both because retirees are choosing to stay and new seniors are moving in. today’s economy

The economy is not only bigger today because of petroleum; it bears little resemblance to the Alaska of 1960. Alaskans today take home paychecks that are above the national average, enjoy a low tax burden, and collect a Permanent Fund dividend check each year. Job opportunities are readily available for young Alaskans. The cost of living in urban areas mirrors that of the rest of the U.S. The expanded availability of consumer goods and services eliminates the ■ 44

played. Unlike tourism or commercial fishing, most petroleum exploration, development and production takes place in the remote northern part of the state, far from the population centers, so we just do not see it. This is particularly the case in the rural parts of Alaska where no one can point to a neighbor who works in the oil patch or can see the headquarters building of an oil company. But a large part of the impact of petroleum on the economy has come from the $170 billion (2012 $) the state

Scott Goldsmith

has collected in royalties and taxes from petroleum production. Th is has gone out to every part of the state from Ketchikan to Barrow, fueling private and public jobs and income not readily identifiable as dependent on petroleum.

Understanding Petroleum’s Role

Furthermore most Alaskans have no memory of what Alaska was like before petroleum, so it is difficult to see the difference it has made in the economic life of the Prudhoe Bay generation. It is important that Alaskans understand the role of petroleum in this transformation because the continued prosperity of the economy depends upon the future of petroleum in the state. Our other natural resource industries will certainly make a contribution, but just as they have accounted for only a small share of our growth since Alaska became a state, they can only play a supporting role in the future. The last several years have been particularly good for the Alaska economy. After two decades of uninterrupted growth we have weathered the national recession with only a one year pause. Job growth has returned strong and the unemployment rate is below the national average. Growth is projected to continue for the next several years.

www.akbizmag.com • Alaska Business Monthly • October 2012

But this rosy picture is a distraction from the reality of the continuing fall in oil production from its peak of 2 million barrels a day in 1989 to only about 600 thousand barrels today. It was easy to ignore the slide in production when the oil price and oil patch employment were both growing and when federal dollars were pouring into the state thanks to Ted Stevens and military spending growth. But the federal dollars are drying up and the “Prudhoe Curve” has reached the point where the viability of the pipeline has come into question. The production decline can no longer be ignored. If the petroleum industry withers away, much of the prosperity Alaska has enjoyed and come to expect will disappear with it. A number of strategies have been proposed to compensate for the decline in oil production represented by the “Prudhoe Curve” and all of them have a contribution to make. These strategies include the commercialization of the vast natural gas resources on the North Slope, economic diversification, value added processing of our natural resources, and investment in transportation and energy related infrastructure. However, none are likely to generate the wealth and jobs we have gotten from oil for the simple reason that the Alaska economy remains small, remote and relatively high cost. Production of North Slope oil has been able to overcome all of those disadvantages because of the phenomenal size of the oil fields. Prudhoe Bay was the largest field discovered in North America and at its peak, North Slope production was exceeded only by six countries. Even 20 years later Prudhoe Bay has more proved reserves than any other field in the U.S. Fortunately petroleum has the potential to continue to drive the economy for generations to come and to become a truly renewable resource. The production decline reflected in the “Prudhoe Curve” only shows conventional production on state land, which indeed is driven by depletion of the giant fields discovered years ago. What that curve does not show is the potential for squeezing more oil out of these fields and their smaller

neighbors using new technologies, nor does it show the potential unconventional production from heavy oil and shale oil deposits, or the potential production from federal lands—particularly on the Outer Continental Shelf.

Realizing Opportunities

Converting the potential of these resources into reality will require hard work on two fronts. First the state will have to develop a better working relationship with the oil industry because that is where the resources of

capital and know-how reside that can get those resources to market. And it is also the industry that has the ability to take the risks necessary to make that happen. The state has always been concerned with tax policy for getting its “fair share” of the value of production and somewhat less so with maintaining incentives to attract new investment. Although tax policy is important, the time has come to consider alternative methods of partnering with the industry that produce better alignment between the interests of the state and those of the industry.

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the past. Careful stewardship of those

However, none are likely to generate the wealth and jobs we have revenues yet to be collected could more gotten from oil for the simple reason that the Alaska economy re- than double the size of this legacy. But doing so will require more discimains small, remote and relatively high cost. pline than we have shown since the oil For example, the experiences of other oil rich regimes with co-investment need to be examined to see if they could be applicable in Alaska. As the “owner state,” a more proactive role in the management of our resources might be warranted. Second, because much of the remaining reserve base is on federal lands, the state has less direct control. It has to make the case that these reserves can be developed and produced efficiently and in an environmentally sound way, and that it is in the best interests of the entire nation. Realization of the opportunities represented by these reserves could result in production, jobs and business opportunities coming from the oil patch comparable to those from Prudhoe Bay during the last 40 years. But because of the high costs associated with production of unconventional reserves and

the inability of the state to tax or share in the royalties from OCS production, this “Post Prudhoe” generation will not produce revenues for the state on a similar scale. But we can still pay for the public services we have come to expect and those that the “Post Prudhoe” petroleum generation will require because we are fortunate to have the legacy of the Prudhoe Bay generation to rely upon. That legacy is in the form of $60 billion in savings accumulated from past production deposited into the Permanent Fund as well as the Constitutional and Statutory Budget Reserves. And we are also fortunate because although most of the easy to reach conventional North Slope oil has been produced, the remaining reserves have a market value almost as high as the oil already produced because the price of oil today is so much higher than in

price boom started in 2005, driving oil revenues to record high levels and allowing us to quickly forget the previous years when we were rapidly drawing down the Constitutional Budget Reserve. Rethinking how we manage our petroleum wealth to generate the maximum sustainable yield would provide guidance for sustaining our petroleum wealth for all future generations of Alaskans. Petroleum has brought prosperity to Alaska and sustained the economy for more than a generation. If we keep our eye on the prize it can continue to do so for future generations of Alaskans as well.  Scott Goldsmith is Emeritus Professor of Economics in the Institute of Social and Economic Research (ISER) at the University of Alaska Anchorage.

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OIL & GAS

Alaska North Slope November Oil and Gas Lease Sales Bidding expected on state and federal lands BY MIKE BRADNER

he state and federal US Bureau of Land Management will hold their annual “area-wide” lease sales on the North Slope in November. These sales are held every year now, and this year the BLM will again coordinate its federal sales in the National Petroleum Reserve-Alaska with the state so that both sales are held on the same date, this year Nov. 7.

Lease Sales

The November state sale will invite bids on unleased state lands on 14.7 million acres, an area the size of Massachusetts, Vermont and Connecticut combined. Last year’s state North Slope sales netted more than 300 bids and $21 million in high bids for leases. These are “area-wide” lease sales, in that all unleased lands in certain areas are made available. The practice has been to have state and federal lease sales at approximately the same time every year so that potentially, bidders can do planning. The state holds similar annual area-wide sales in Cook Inlet and on state-owned lands on the Alaska Peninsula—traditionally held in the spring. The federal government holds offshore lease sales as well in the federally owned Outer Continental Shelf submerged lands beyond the state’s threemile territorial limit. In recent years the federal government has held lease sales in large areas of the Beaufort and Chukchi seas. Companies like Shell, ConocoPhillips, Statoil and Repsol that bid in those sales now have leases in the OCS and are making exploration plans. Lease sales are important litmus tests of industry interest, and they are watched closely by companies and government officials. They are typically ■ 48

sealed-bid competitive offers, so a company shows its hand on what it thinks of an area when it makes its bid. Where there is more than one company bidding for a tract the differences in bids are often surprising, reflecting the differences of opinion companies can have. Sometimes they are very close, even a few dollars apart. The huge bids by Shell in the 2008 Chukchi Sea lease sale—the company spent more than $2 billion—were unusual and caught worldwide attention because the bids signaled the company’s seriousness in the Arctic. New companies interested in gaining a foothold in Alaska usually show up for the first time at lease sales. A few years ago Alaskans were introduced to Great Bear Petroleum, an independent company interested in shale oil development, when Great Bear bid for half a million acres of state North Slope lands in a lease sale. In the November 2012 sale, the state will offer leases in the foothills region of the southern Slope, the central North Slope area where most of the current industry activity has been focused, and the state-owned offshore Beaufort Sea submerged tracts to the three-mile limit—Alaska’s territorial boundary. These are actually three separate lease sales and the Alaska Division of Oil and Gas will hole them sequentially Nov. 7. The BLM sale in NPR-A the same day will also be an area-wide sale, offering up all unleased acreage within the parts of NPR-A that are made available. Traditionally this has been in the northeast section of the large 23-million-acre reserve. In recent years there has been only lukewarm interest from industry in

these onshore sales. This reflects companies’ belief that only modest discoveries are likely on state-owned lands and in NPR-A, and that the economic conditions of the North Slope—high costs and high state taxes—are a barrier. It is also indicative that much of the bidding is by independent companies, usually smaller firms. The two largest North Slope producers, BP and ExxonMobil, have been largely absent from lease sales for years, reflecting their belief that the prospects are too small for their portfolios. ConocoPhillips, a third Alaska producing company, has been more active in lease sales but mostly to fill in lands around leases it already owns on state lands and in NPR-A. The company is mainly focused on the offshore OCS, where it believes there is more potential for large discoveries.

Lease Concepts

The underlying concepts of oil and gas leases are fairly straightforward. It is of a landowner making a contract for exploration and development of mineral resources. Because it is a contract, the terms of a lease cannot be changed while it is in effect unless both parties agree. Thus the royalty terms, whatever they are, are fi xed for the duration of the lease. In contrast with the royalty, which is set in a contract, the state’s oil and gas taxes can be changed at any time by the Alaska State Legislature. After Alaska became a state in 1959 it adopted land laws from other states, including oil and gas leasing procedures, which are really contracts between landowners and a company. In most other states private landowners sell leases to oil companies and these

www.akbizmag.com • Alaska Business Monthly • October 2012

are essentially negotiated. The leases have a term, during which exploration must be done or the land reverts to the landowner. The landowner typically wants a royalty—a share of production or its equivalent value— along with a work commitment, a provision in the contract that drilling or other work will be done. Sometimes there is an up-front payment, or bonus. Often there is an annual per-acre rental payment, also. Alaska has all of these provisions in its oil and gas leases. The lease terms have ranged from five to 10 years (shorter in regions that are better known, such as Cook Inlet; longer in areas that are less known, or more remote, like the North Slope.) Alaska’s royalty rates have typically been oneeighth, or 12.5 percent, which is typical in the US, but some leases, sold in areas considered more prospective, have a one-sixth royalty, or 16.67 percent. These are royalties paid on gross revenues, or the value of the oil calculated on the North Slope (minus transportation costs) but with no production or development expenses allowed. Some leases have a fi xed net-profits royalty in addition to the royalty on gross revenues. The net profits calculation includes deduction of capital and operating expenses. The complexities of administrating this make it less common today, however. Alaska has experimented with other forms of bidding in lease sales and also other mechanisms for contracting for exploration, including an explorationconcession type arrangement, called an Exploration License.

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Bidding Variety

There was also a noncompetitive form of leasing that was used by the BLM in the years just prior to Alaska statehood. This was a lottery system where names were literally drawn from a basket and leases were awarded to the winners. Most of these were individuals who paid nothing to little for their bid and mostly sold the leases to an oil and gas company for a quick profit. The state favored the competitive bonus bid approach from the beginning, and the federal government soon shifted to competitive bidding in its lease sales, too.

www.akbizmag.com • Alaska Business Monthly • October 2012

Competitive versus noncompetitive leasing became a raging controversy in the state Legislature in the late 1960s. A group of Fairbanks businessmen, interested in participating in the oil business through the lottery-type noncompetitive bidding, pushed the state Legislature to put it into state law and to hold noncompetitive state lease sales on the North Slope. The state administration opposed it, however, and the effort failed, but not without some intensive lobbying. The one argument for noncompetitive leasing is that it did provide a way for individual Alaskans to get into the oil business rather than have the Alaskan industry dominated by major out-of-state companies who have the advantage in competitive bonus sales. In other states private landowners sell leases to the companies and participate as a land and royalty owner, but in Alaska the government, state and federal, own most of the prospective oil lands. Competitive bonus bidding has arguments in its favor, too. One is that larger companies who partici-

pate will have the expertise and deep pockets to actually develop something they find. Also, having a large amount of funds invested up front as a bonus bid creates an incentive to explore quickly after having made the investment. The state also experimented with net profits bidding and discarded the practice after one lease sale in 1979. This procedure involves the bidder offering a higher net profit participation to the state in lieu of a cash bonus bid. In a 1979 state lease sale on the North Slope companies bid net profit-sharing amounts that were high to get the leases. Even though oil was found it was later determined that the prospect was uneconomic because of the high net profits bid. The prospect itself was sold, by Amerada Hess Corp. to BP, but to get it developed BP had to renegotiate the lease terms with the state. A higher gross royalty was agreed on as well as the reduced net profits-share to the state, and the resulting combination of terms allowed what is now the North Star field to be produced.

Work Commitments

Another provision that is customary in leases is a work commitment. Work commitments are sometimes changed for new leases when sales are held. The work commitment contractually obligates the lessee to pursue exploration with diligence and production if a discovery is made. The idea is to prevent “warehousing” of acreage by companies. The work commitment language in leases attracted attention recently when the state, arguing lessees had not lived up to their work commitments, moved to revoke leases held since the 1970s and 1980s by Exxon Mobil Corp. and other companies in the Point Thomson area. The lessees sued, and after several years of litigation a settlement was reached in March 2011. A limited development program is now under way in Point Thomson. The Point Thomson problem stemmed partly from the fact that the leases, which are contracts, were issued decades ago and the work commitment language was arguably not as strong as it could have been. The state has revised

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The work commitment language in leases attracted attention recently when the state, arguing lessees had not lived up to their work commitments, moved to revoke leases held since the 1970s and 1980s by Exxon Mobil Corp. and other companies in the Point Thomson area. the terms of its leases considerably in recent times, and has tightened up the work commitment language. The State of Alaska uses another procedure that involves essentially a negotiation of work commitments in areas that are remote and largely unexplored, and where conventional leasing and lease sales will not attract the desired exploration. Th is is Exploration Licensing, and it is a program for conveying an exploration right that leads to receiving a lease. Companies can apply for exploration licenses in areas where lease sales have not been held. The licenses typically cover very large areas. The company pays no up-front bonus and annual rental, unlike conventional leases, but instead must carry out an agreed-on program

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of exploration. If areas of particular interest are identified, or if discoveries are made, the state would issue more conventional, standard-size oil and gas leases with conventional royalty and rental terms. Exploration Licenses have been issued to companies interested in the Copper River, Susitna River and Nenana basins, and exploration has been done, and is continuing, in these areas. The best-known license, however, is in the Nenana Basin west of Fairbanks where Doyon Ltd. is leading an exploration program primarily focused on fi nding natural gas. Doyon and several partners drilled one well in the basin and although no commercial gas was discovered there were indications that hydrocarbons are in

the area, which was encouraging. Additional seismic was done in the 20112012 winter season, and Doyon hopes to drill another well.

Royalty Provisions

Although not connected to its lease sale program Alaska also has one other feature in its leases, a royalty “in kind” provision, which some other states have as well. This allows the royalty owner to take either the royalty in the physical form, as actual barrels of oil or the physical natural gas, or be paid for the royalty in cash, or in “value.” The state now takes nearly all of its oil royalty in kind to assure in-state refi ners, mainly Flint Hills Resources at this time, a supply of crude oil for manufacturing fuel products. However, a small amount of royalty is always left to be paid “in value” so the state has a payment from the producers to compare against the payment for royalty oil paid by a refi ner.  Mike Bradner is publisher of the Alaska Legislative Digest.

www.akbizmag.com • Alaska Business Monthly • October 2012

OIL & GAS

Photo courtesy of ConocoPhillips

ConocoPhillips exports liqueﬁed natural gas to Japan from its Kenai LNG facility.

FERC & DOE LNG Primer The black, the white, and the gray area BY L ARRY PERSILY

orget for a moment the challenges for an Alaska North Slope natural gas pipeline project— whether buyers in Japan or China will sign long-term contracts to buy the gas—whether an Alaska project can offer gas at competitive rates overseas—or maybe whether prices in North America will rebound. Forget the other hurdles —avoiding construction cost overruns, permitting delays and litigation. Cast aside the never-ending debate over oil and gas taxes in Alaska. Assume all that is resolved in favor of building a multibillion-dollar, large-diameter, large-volume North

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Slope gas pipeline. What about federal approval for moving the gas (the pipeline and possibly a gas liquefaction plant) and federal approval for selling the gas? Welcome to the Federal Energy Regulatory Commission and the U.S. Department of Energy. First, let’s talk about getting the gas to customers. That means a pipeline and, if the customers are overseas, a liquefaction plant and terminal to load the liquefied natural gas aboard tankers for delivery across the ocean. FERC will have jurisdiction over the liquefaction terminal. That is a matter of federal law. It was a bit ambiguous

until Congress passed the Energy Policy Act of 2005, which settled the issue and gave FERC jurisdiction to license onshore LNG import and export facilities nationwide. The law states that FERC “shall have the exclusive authority to approve or deny an application for the siting, construction, expansion or operation of an LNG terminal.” The law goes on to defi ne an LNG terminal as “all natural gas facilities located onshore or in state waters that are used to receive, unload, load, store, transport, gasify, liquefy or process natural gas that is imported to the United States from a foreign country, exported to a foreign

www.akbizmag.com • Alaska Business Monthly • October 2012

country from the United States, or transported in interstate commerce by waterborne vessel.” That pretty much covers everything. The only thing outside FERC jurisdiction is the LNG tanker itself. In its role under the law, FERC would take the lead on a terminal’s environmental impact statement, coordinate reviews by other federal agencies, set deadlines for environmental analysis, and maintain a consolidated record for the project application. Although FERC would take the environmental-review lead, it would not regulate the LNG facility’s rates. That’s between the private parties operating the plant and paying for the services. Step outside the LNG terminal’s perimeter, start walking the pipeline, and FERC jurisdiction is uncertain. The commission could assert jurisdiction over the pipeline or not, depending on several factors. And FERC jurisdiction will remain uncertain until the commission has an application in hand, with project details.

Hypothetical Variables

If the pipeline moves natural gas across state lines, FERC is definitely in charge under the Natural Gas Act of 1938. But the pipeline itself doesn’t have to cross state lines to come under FERC jurisdiction. (It’s important to note that FERC’s authority over a pipeline would go beyond the environmental review, routing, construction and operation. It would extend to regulating the rates charged customers that use the pipeline to ensure that the rates, or tariffs, and the pipeline owner’s profit are fair.) If the pipeline carries gas that moves into an interstate system, that’s good enough to bring in FERC oversight— such as an Alaska North Slope natural gas pipeline that runs into Canada and then connects with the North American pipeline grid. Or a pipeline that feeds a liquefaction plant at Nikiski or Valdez, where the gas is loaded aboard tankers for U.S. West Coast or even Hawaiian ports. Those are no-doubt-about-it examples. But what about a pipeline that serves only in-state customers? Or a pipeline that serves in-state buyers and connects to an LNG plant for

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overseas shipments, without sending a single molecule of methane to another state? That’s one easy question and one hard question. The easy one first: If a developer builds a pipeline that serves only Alaska customers, with no gas crossing state lines and no gas leaving the country for export, FERC would not have any jurisdiction over the pipeline. Another federal agency would take the lead on the environmental review, such as the Bureau of Land Management or Army Corps of Engineers. The builder also would need to obtain permits from federal regulatory agencies—such as the Fish and Wildlife Service—but FERC would have no role. Now the hard question: The Energy Policy Act of 2005 allows FERC to assert jurisdiction over a pipeline feeding gas into an LNG export terminal—or not. The law does not specify a minimum volume of gas, or a percentage of total flow, or size of the pipe, or provide any specific, measurable benchmarks to determine FERC’s authority. The decision, in my opinion, would come down to whether:

■The pipeline in an integral part of the LNG project. ■ The pipeline and LNG terminal are built at the same time with some of the same owners. ■ The public’s interest would be served best by a single environmental review and decision rather than separate reviews and possibly conflicting decisions. ■The project could serve interstate customers at some point in the future. ■ The combined project could affect U.S. energy markets and prices. Personally, I expect FERC would choose to take jurisdiction over a largediameter pipeline feeding into an LNG export plant. But that decision would be up to the staff and commissioners at the independent agency after they see the specifics of a project. In addition to FERC and the usual environmental and regulatory permits and authorizations, an LNG project would need two federal approvals to ship North Slope gas to overseas customers. The Department of Energy and the president would each have

to determine that Alaska gas exports would not hurt the public interest — such as by driving up domestic natural gas prices. Because Alaska is not connected to the Lower 48 gas pipeline grid, it’s hard to argue that shipping North Slope gas to Asia would affect U.S. prices. However, Alaska gas exports could get caught up in the political debate simmering over Lower 48 exports. Several congressmen have objected to any U.S. exports, fearful that it could cause price increases at home if surplus gas production leaves the market. But a lot of that political protest against exports stems from opposition to hydraulic fracturing for shale gas— not an issue for production from Prudhoe Bay, a conventional gas field and not a shale play, at this time. Some electric utilities and largevolume gas customers, such as petrochemical companies, have complained about U.S. Gulf of Mexico export projects, fearful that supply and demand would rebalance in U.S. gas markets and they would have to pay more for their supply.

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What Do We Know?

The Department of Energy has approved one export project—Cheniere Energy, at Sabine Pass, La.—but eight others are on hold while the department waits for a consultant’s report on the economic effects of U.S. LNG exports. Export authority to countries that have a free-trade agreement with the United States is just about automatic— and sort of economically meaningless for project developers. The Department of Energy quickly says yes to all applicants for free-trade-nation sales. Free-trade nations, however, are not big purchasers of LNG. The list includes Canada, Oman, Jordan, Bahrain, Australia and others. The United States does have a new free-trade agreement with South Korea, but that one market is not large enough on its own to underwrite financing for a multibillion-dollar LNG export project. It’s permission to sell to the nonfree trade nations of Japan, China and India that export terminal developers want, and that is being held up while the Energy Department awaits the economics report. Those are the sales contracts that a developer can turn into financing. As for getting the liquefied gas to market, there are several hundred tankers in operation around the world and more under construction. Pay the bill and a tanker could be yours for delivering Alaska gas to overseas customers. But moving Alaska gas to a U.S. port could be a problem. A provision known as the Jones Act—part of the Merchant Marine Act of 1920—requires use of U.S.-built, U.S.-owned, U.S.-registered and U.S.crewed ships when moving commercial cargoes between U.S. ports. The act was named for Sen. Wesley Jones of Washington state, who wanted to protect the shipyards and ports of his state. No U.S. shipyard has built an LNG tanker since the late 1970s, and those were subsidized by the federal government. Some industry estimates place the cost of a new U.S.-built LNG tanker at double the price tag from South Korean shipyards, the world leader in the trade. In addition to building a new tanker, another option would be pushing for congressional action to grant a

waiver for a specific tanker—such as a formerly U.S.-flagged tanker—and then putting together the commercial deal and regulatory approvals to reflag the vessel to operate between U.S. ports. Not impossible, but not easy. U.S. shipyards and maritime unions are protective of their jobs. But it could be an option, assuming there is enough profitable work to keep the ship busy on U.S. deliveries. The laws of economics will always apply, even with a waiver from the laws of government. 

Larry Persily is Federal Coordinator for Alaska Natural Gas Transportation Projects. Persily, who was appointed by President Barack Obama in December 2009, served almost 10 years with the Alaska Department of Revenue, governor’s ofﬁce and as a legislative aide on oil and gas issues before taking a turn at federal service. He previously worked as a newspaper reporter, editor and owner in Alaska for almost 25 years.

www.akbizmag.com • Alaska Business Monthly • October 2012

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ECONOMY

Strategies to Prepare Alaska for the Economic Marathon Fitting Alaska into the new global ecosystem COMMENTARY BY DR. ASHOK K. ROY The opinions expressed in this article are the author’s own and do not reflect the views of the University of Alaska.

he purpose of this commentary is to paint with a broad brush the new global ecosystem in which Alaska’s economy will operate in the years ahead, make some suggestions to guard against the hubris of past success and Black Swans (i.e., high impact events), and generate cognitive discourse on Alaska’s fiscal structure and economy. An effective strategy, according to Dr. Vijay Govindarajan, manages the present, selectively forgets the past and creates the future. The key to Alaska’s success in the economic marathon lies in what we will do today that will ultimately intersect with strategy twenty years from now. We are at a stra-

es. Alaska is one of five states without a state sales tax, one of seven states without a personal income tax, and the only state with neither a state sales tax nor a personal income tax. One-third of Alaska’s economy depends on federal spending, one-third on petroleum, and the remaining one-third depends on drivers such as: mining, tourism, timber, seafood, international air cargo and miscellaneous services. This is commonly known as the “threelegged stool.” Federal spending in Alaska is currently $10 billion annually which is the third highest per capita spending in the nation. The University of Alaska, which is Alaska’s fourth largest em-

Alaska is one of five states without a state sales tax, one of seven states without a personal income tax, and the only state with neither a state sales tax nor a personal income tax. tegic turning point, and have to recognize that Alaska has to make structural changes to accommodate fundamental long-term shifts in funding models. To stay ahead of the curve, we will have to model the uncertainty from strong secular economic headwinds in our paradigm shift. More than 56 percent of Alaska’s state budget and 90 percent of its general fund revenues come from oil (i.e., production tax, petroleum property tax, corporate income tax and royalties from state-owned land). Another 20 percent of the state budget comes from federal funds (Medicare, Medicaid and infrastructure). Investment income (mainly from the Permanent Fund) makes up most of the balance; however, these are not used for general government servic■ 58

ployer, also depends on federal awards (approximately $175 million without student financial aid and pass- through). These federal grants will become, obviously, much more competitive in the years ahead. Research revenue is vital, as for every dollar of state investment in the University of Alaska research; the university generated $5.60 million in additional research revenues. In other words, with federal deficits, federal spending in Alaska will be impacted. At present, according to Moody’s (moodys.com), the state of Alaska has AAA, stable credit rating but with a relatively high liability ranking based on income and population as a result of the state’s petroleum tax based revenue system. Against the pressures emanating from diminished gross domestic prod-

Dr. Ashok K. Roy

uct projections, burgeoning federal deficits which will mean reduced federal aid to Alaska, slowdown in Asian and European economies, the looming so-called “fiscal cliff,” declining oil production, rising Medicaid costs, approximately $11 billion in unfunded pension liabilities for the state of Alaska (PERS and TRS), and other macro-economic outlook bring up interesting structural challenges for the state. So, what can Alaska do so that its budget does not get too squeezed by reduced federal spending and revenues on one side, and increased expenditure pressures on the other side? What can Alaska do to mitigate the fear of a contagion effect and not be at the mercy of the vagaries of outside economic winds? In my view, if Alaska thinks strategically and has the courage and conviction to implement certain ideas contained herein, it will not just survive but will thrive in the years to come. The time to prepare for bad weather is before it hits you, not after it hits you. Resources do not constrain a state or an organization, imagination does. This is one of the gems of wisdom that I have picked up in my years in academia, local government and the private sector.

www.akbizmag.com • Alaska Business Monthly • October 2012

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Good for health. Great for business. Smokefree policies have been shown to not only improve the health and productivity of employees, but also decrease business costs for insurance, cleaning and maintenance. Research shows that smokefree laws are routinely positive or neutral in their economic impact.*

*Alaska Department of Health and Social Services, Tobacco Prevention and Control in Alaska FY08 Report

SeCOND: The state should identify

The sixty-four-dollar question is: Where do Anchorage, Fairbanks, parcels of land that can be zoned/rezoned for industrial use or brought in Juneau and other towns in Alaska want to be on this spectrum? the town boundaries as industrial land.

ten Steps to Long-term Stability

of America’s most influential management thinkers, once famously observed: “Bad decisions taken with good intentions are still bad decisions.” Airports, highways, railroad, shipping and distribution centers are important aspects of infrastructure. A potential business will also look at the employee pool as a well-educated work force can minimize startup costs. Labor unions and wage rates are also factors that will go into the calculus. Alaska has an advantage in terms of its tax structure, and a friendly government. While high transportation costs, high utility and energy costs, and harsh weather conditions are huge challenges, the key to attracting business often involves incentives such as tax exemptions, forgiveness of normally enacted impact fees, and credits. The incentive package often is the deciding factor (e.g., Mercedes-Benz factory in Alabama, Volkswagen factory in Chattanooga, Tennessee).

FiRSt: The state should have a robust strategic plan with performance metrics to capture outcomes to diversify its revenue base at the earliest. In this direction, the state should mount a big and sustained effort to attract and recruit new businesses. Any business considering Alaska will look at the price of land acquisition and infrastructure. The package becomes attractive for the prospective business if the land is cheap and improvements are already in place. The state and federal governments own 89 percent of the land in Alaska, while the U.S. average is 35 percent. This structural issue means that while the state’s potential property tax base is limited this same structural challenge can be leveraged for resource exploitation and also offering land inexpensively to potential businesses. In this context it is good to remember what Jim Collins, one

tHiRD: The state of Alaska should make a sustained effort to attract venture capitalists. Alaska will not have a Silicon Valley, but it can take a page out of New Mexico’s play book, as New Mexico has many of the same challenges as Alaska. Once the state of New Mexico decided to attract venture capitalists, it created a program in which it committed funds to venture capital fi rms with the condition that they open an office in New Mexico and invest the same amount as the state was providing. New Mexico also granted some flexibility (flexibility and incentives are the keys for any organization to succeed) whereby if it invested $15 million, the venture capitalist could put up, possibly, $12 million if it brought in other investors. The results have been encouraging thus far, and there is no reason why Alaska cannot try to duplicate something similar.

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www.akbizmag.com • Alaska Business Monthly • October 2012

Fourth: The state should examine the quality and scope of tax incentives (e.g., Film Tax Credit program). Fifth: The state should enhance the operational commercial spaceport (Alaska Aerospace Corp. in Kodiak) to attract more aerospace companies to Alaska to do business. In this context, Alaska should leverage its large land area and small population. The state should also increase incentives beyond what the Small Business Innovation Research and Small Business Technology Transfer support, equity financing and grants, etc. The development of unmanned- aerial vehicles project at the University of Alaska in Fairbanks is a step in the right direction. Sixth: Alaska should actively attempt to attract well-educated professionals to take advantage of the new knowledge/ innovation economy. Sell the notion of less pollution, shorter commute and safer schools to attract these professionals. Ultimately, Alaska has to migrate away from its low-tech extractive economy. Let me give a few examples to expound my thesis. Take Arlington County in Virginia: Arlington was facing challenges from the relocation of tens of thousands of federal government workers, decreased affordability of housing, and rising competition from surrounding areas. So, it forged partnerships with local universities, attracted the ultra-high-speed National Lambda Rail broadband network and begun construction of a fiber network to serve county government and schools. The theme is “Brainpower— Arlington’s Alternative Energy.” Or take the example of Austin, Texas, where semiconductor manufacturers and the U.S. government created a partnership called SEMATECH to solve common manufacturing problems, increasing its regional payroll by more than $6 billion in just five years. Austin put College Enrollment Managers into public schools to guide choices made by students. As a result, it has boosted the graduation rate for low-income students to 75 percent. Or, take the example of Dakota County in Minnesota which has diversified its economy to information technology, food, energy, chemicals and manufacturing. The county is speeding planned

fiber build-outs and collaborating to increase science, technology, engineering and mathematics education in kindergarten to 12th grades. All these can be replicated in Alaska in partnership with the University of Alaska. According to University of California economist Enrico Moretti, each new high-tech job in the U.S. creates—due to a multiplier effect—five additional jobs in the service economy. Just think about that. That is a public policy nugget worth noting. Dr. Moretti’s research goes on point out that “an unprecedented re-distribution of jobs, population

and wealth is under way.” He concludes that “a handful of cities with the right industries and a solid base of human capital keep attracting good employers and offering high wages, while those at the other extreme, cities with the wrong industries and a limited human capital base, are stuck with dead-end jobs and low average wages.” The sixty-four-dollar question is: Where do Anchorage, Fairbanks, Juneau and other towns in Alaska want to be on this spectrum? Seventh: Given the density and population growth projections for Alas-

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www.akbizmag.com • Alaska Business Monthly • October 2012

61 ■

ka, there should be aggressive marketing for out-of-state students. Most states actively recruit out-of-state students as they bring in significantly higher tuition revenues, and also contribute to local economic development in terms of rental housing, car sales, groceries and demand for student housing (which brings up the scope for public-private partnerships such as what the University of Alaska in Fairbanks is currently doing). Some of these out-of-state students will, after graduation, settle in Alaska and create jobs and businesses. This is why so many well-known uni-

Extractive resources, such as oil, have a greater variability of price than service or industrial products which make Alaska’s revenues more sensitive to market fluctuations... versities today such as the University of California, Indiana University, the University of Minnesota and others are actively recruiting out-of-state students. Let me give a concrete example of the magnitude of the impact of bringing in out-of-state and/or international students. According to the 2012 RKA Report to Canada’s Department of For-

eign Affairs and International Trade, the 218,200 international students in Canada paid an annual expenditure of $8 billion into the Canadian economy, which translated to 86,570 jobs. Marketing (such as promoting that the University of Alaska tuition rates are below the average tuition at public four-year institutions in the Western Interstate Commission for Higher Education region) is key to overcoming the “fear” factor about the Alaska climate. But, this can easily be accomplished if the university programs are nationally ranked in the U.S. News and World Report. (I always say that were Princeton or Harvard or Stanford located on another planet, they would still attract many thousands of applications for each slot!) The University of Alaska Scholars program and the new $400 million Alaska Performance Scholarship Endowment set aside for college scholarships are strategic steps in the right direction. Eighth: At its peak, Alaska’s North Slope was producing 2.3 million barrels a day. Since then it has declined significantly. Although Alaska has, according to the USGS, more than 5 billion barrels of discovered oil reserves and another probable 6 billion barrels in undiscovered resources, it is now losing investments (due to ACES tax) to Wyoming, Texas, North Dakota and Louisiana. The 2012 Annual Energy Outlook of the U.S. Energy Information Administration ominously observes that the Alaska North Slope oil production could shut down as early as 2035. It is reasonable to conclude, therefore, that absent a Black Swan event, the downward trajectory of Alaska’s oil production curve will begin to create a noticeable reduction in state spending. Extractive resources, such as oil, have a greater variability of price than service or industrial products which make Alaska’s revenues more sensitive to market fluctuations such as might occur over the next ten years in the U.S. demand for refined oil products like gasoline as alternative energy takes over.

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www.akbizmag.com • Alaska Business Monthly • October 2012

Furthermore, although Alaska has enormous potential for shale gas (estimated at 80 trillion cubic square feet by United States Geological Survey) in the Shublik, Kingak and Bookian rock units, the prohibitive costs of developing infrastructure in the Arctic coupled with foreseeable market prices and the now more abundant supply of natural gas in other states make it much less likely that Alaska’s natural gas will be developed for U.S. markets in the near future. Nonetheless, this could be a card Alaska can play if technology, supply and market conditions change in the future. It is estimated that there is potential for a $2 trillion positive impact on the U.S. economy from shale oil and gas developments in the Lower 48 states. However, as this could also lead to a long term drop in oil prices, once again Alaska would be adversely impacted financially according to Energy Policy Research Foundation Inc. and the Alaska Office of Management and Budget FY12 –FY22 forecast. With 90 percent of Alaska’s government funded by oil revenues, there is a “fierce urgency of now” to diversify Alaska’s revenue streams. The good news, according to Towers Watson and Co., is that the amount of capital being raised by the larger private equity firms to invest in energy, especially natural gas, has doubled in the past three years to $33 billion.

ing technology to stimulate economic growth, especially in the commodities market, are a step in the right direction.

All economics is Local

At the end of the day, all economics is local. Let us take a look in the rearview mirror, reaffirm our pioneer roots and then contemplate the pioneering economic possibilities of what we could be in the transformational decades to come. We have to stop playing checkers and start playing chess—think long term. Since dreaming small or dreaming big takes the same energy, we must dream

big. Some see things as they are and ask “Why?” Others, like me, see things as they are and ask “Why not?”  Dr. Ashok Roy is the University of Alaska system Vice President for Finance & Administration/CFO. He holds six university degrees, five professional certifications, and has authored 65 academic and trade publications. The Governor of Tennessee bestowed on Dr. Roy the state’s highest award, that of an honorific Colonel.

NiNtH: As Alaska spends a high proportion of its budget on transportation/infrastructure and energy, it might consider, much like Georgia and other states have already done, having a special-purpose local-option sales tax (SPLOST) as a funding mechanism to permit communities to tax themselves for a specific purpose. teNtH: Alaska should invest in the Polar Fiber project (which connects London and Tokyo via the Arctic Ocean and the Bering Strait) as this has the potential, due to time zone differentials, to develop Alaska as a communications and data hub. Increasing the utilization of broadband in Alaska (currently, Alaska’s average cost for broadband is higher than the national average, and the average download speed is second to last in the nation) would be a catalyst for the economy. The efforts of Connect Alaska in leverag

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RigHt MOVeS Denali Alaskan FCU

Keith moseley has been promoted to branch manager at Denali Alaskan Federal Credit Union’s City Hall branch. moseley has been with Denali Alaskan as a senior financial services officer, and has worked in the financial industry since 2003.

Moseley

Compiled by Mari Gallion Denali Alaskan Home Loans

Leonard Cullip joins Denali Alaskan Home Loans as a senior loan originator. Cullip has more than 23 years in the mortgage industry and a lifetime mortgage loan production of more than $400 million.

Landye Bennett Blumstein LLP

The law firm of Landye Bennett Blumstein LLP announced that robert H. schmidt has joined the firm’s Anchorage office. He brings his talents to the firm’s practice areas of civil litigation, banking, commercial transactions, corporate, real estate and employment law. Attorneys Joseph m. moran, Bruce a. moore and adolf v. Zeman have also joined the firm’s Anchorage office. moran received his J.D. from the University of San Francisco School of Law, moore is a graduate of the University of Puget Sound School of Law and Zeman received his J.D. from Gonzaga University School of Law, where he studied international business law.

BSNC

Bering Straits Native Corp. has added two new members to its executive team. Leslie Williams has been named chief financial officer and Kurt Hermes has been promoted to chief operating officer. Williams has been BSNC’s interim CFO since November 2011. She is a certified public accountant, a certified compliance and ethics professional, has a master’s degree in contract management, and more than 23 years professional experience in federal contracting. Hermes has been with BSNC for four years as a project estimator and in other capacities related to management and financial control. He has worked in construction and project management since he was in high school and continued as project manager while obtaining a Bachelor of Business Administration at the University of Alaska, Anchorage.

RurAL CAP

Cullip

Kazary

New York Life

SEARHC

Graceland

The Rural Alaska Community Action Program Inc. names ellen Kazary as the new development director. Kazary attended Oberlin College in Ohio where she received her bachelor’s degree in environmental studies.

Barrett

The SouthEast Alaska Regional Health Consortium has hired debra Graceland as its Juneaubased patient advocate. She holds a Bachelor of Arts and Science degree in psychology, sociology and fine arts from the University of Washington. The SEARHC S’áxt’ Hít Mt. Edgecumbe Hospital is pleased to announce the addition of mary Barrett, FNP-BC, MSN, to its medical staff as a family nurse practitioner. Barrett holds a Master of Science in Nursing degree from the University of Alaska Anchorage, a Bachelor of Science in Nursing degree from the University of Colorado Health Sciences Center in Denver, and a Bachelor of Arts degree in biology and environmental science from Wesleyan University in Middletown, Conn. SEARHC recently hired optometrist annelle G. maygren, OD, to head the SEARHC eye clinic on Prince of Wales Island. dr. maygren holds a Bachelor of Science degree in chemistry from Black Hills State University in Spearfish, S.D. She earned her Doctor of Optometry degree (OD) from the Pacific University College of Optometry in Forest Grove, Ore.

Yoshi Ogawa, LUTCF, CLTC, has been designated a Chartered Life Underwriter by The American College of Bryn Mawr, Pennsylvania. Ogawa is a member of Anchorage Estate Planning Council, Anchorage Downtown Rotary Club and Alaska District Export Council, and also serves as the president of the Japanese Society of Alaska. He received a B.S. in business from Arizona State University and a post graduate certificate from American Graduate School of International Management in Glendale, Arizona.

Yukon Equipment

morry Hollowell announced his retirement from Yukon Equipment Inc. in August. Hollowell was president of Yukon Equipment for 27 years, and worked at Yukon for more than 32 years. Yukon’s current general manager, Roy Rank, will take over as the new president.

AHFC

Jim Gurke, Alaska Housing Finance Corp. public housing director, retired after a 30-year career in Alaska’s public housing sector. Since starting work for the Alaska Department of Community and Regional Affairs in 1972, he has held Gurke the positions of resource development analyst and planner, housing services manager, resident services manager, housing programs and policy development manager and—since 2008—public housing director.

OH MY! ■ 64

www.akbizmag.com • Alaska Business Monthly • October 2012

RigHt MOVeS Moffatt & Nichol

Moffatt & Nichol recently welcomed shaun mcFarlane, P.E., who comes to the firm with 23 years of diversified experience in waterfront engineering gained on numerous waterfront projects in Alaska and along the West Coast of the United States.

Compiled by Mari Gallion of experience working for Enstar Natural Gas Co. in Anchorage, and was a member of the Anchorage Municipal Assembly from 1994 to 2004, representing the Chugiak-Eagle River area.

The Foraker Group

McFarlane

Cook Inlet Regional Citizens Advisory Council

Jonella Larson White has been hired as Foraker’s rural specialist. She is a graduate of the University of Alaska Fairbanks and holds a Master of Liberal Arts degree from Harvard University.

The Cook Inlet Regional Citizens Advisory Council has hired Lynda Giguere as director of public outreach. Giguere brings more than 30 years’ experience in public, media and government relations to the council.

R&M Consultants

Larson White Gilliand

BBNC

Ouzinkie Corp.

Gregory e. strong recently joined Ouzinkie Native Corp. as its president and CEO. strong received his education in Wisconsin with a bachelor’s degree in biology, a master’s in education, and a doctorate in administrative leadership and administration from the University of Wisconsin in 1980.

Gov. Sean Parnell

Gov. Sean Parnell app o i n te d A n c h o r a g e attorney Peter maassen to the Alaska Supreme Cour t. He earned a bachelor’s degree from Hope College and his J.D. from the University of Michigan Law School.

Maassen

Office of Mayor Dan Sullivan

susan duck has been hired as special assistant to the Mayor to organize and execute the series of events being planned to commemorate the Anchorage centennial. dan Kendall has been hired as director of intergovernmental affairs. He has more than 30 years

of July. Prior to working for BBNC, she worked for Dillingham High School, Bristol Bay Native Association, Clarks Point Village Council, and Southwest Region Schools in Bristol Bay.

Phillips

Storer

Bristol Bay Native Corp. is pleased to welcome three new employees to their corporate office: nellie Phillips, Geri storer and Catherine reamey. Phillips joined BBNC as legal assistant in July. She will be continuing her education with a Reamey focus in law alongside her employment at BBNC. storer joined BBNC in July as vice president, corporate development. She earned her bachelor’s degree in economics and Japanese studies from Wellesley College, as well as her master’s degree from Harvard Business School. reamey started in her new position of shareholder development manager at the end

Hearn

simon Gilliand, E.I.T. has joined R&M as a staff engineer in R&M’s construction administration group. Gilliand graduated from the University of Alaska Anchorage with a B.S. in civil engineering. Phillip Hearn, E.I.T. joined R&M as a staff Conducy engineer in R&M’s construction administration group. Hearn graduated from the University of Alaska Anchorage with a B.S. in civil engineering. Patrick Conducy is joining R&M as a senior engineering associate in R&M’s construction administration group. Conducy has more than 45 years of experience as an engineer and special inspector, including nearly 40 years with DOT&PF. Conducy has an A.S. in mineral and petroleum technology from the University of Alaska Fairbanks.

Congressman Don Young

alex Ortiz has been promoted to legislative assistant from scheduler. His issue portfolio will include education, Alaska Native issues, agriculture and housing issues. Ortiz was hired earlier this summer as Rep. Young’s scheduler and is a 2003 graduate of Ketchikan High School. Send news to research@akbizmag.com.

www.akbizmag.com • Alaska Business Monthly • October 2012

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NATIVE BUSINESS

2012 AFN Convention

Yupik Eskimo drummers cast shadows on drums during a performance at an Alaska Federation of Natives Annual Convention in Anchorage.

Staying fresh with dynamic innovations BY MARI GALLION

laska Federation of Natives will be holding their annual convention Oct. 18 through Oct. 20 at the Dena’ina Civic & Convention Center in Anchorage. The theme for this year’s convention is “Success Beyond Barriers,” a positive acknowledgment of the Native peoples’ repeated success at overcoming obstacles by finding ways to thrive beyond the challenges that persist, especially in rural Alaska. The event is subtitled “People, Ideas, Working Together,” and this year’s convention features various activities that ■ 66

are anticipated to bring these elements together to address today’s barriers. The AFN Convention is traditionally well-attended. The event attracts nearly 4,000 delegates and attendees from Native corporations, regional nonprofit associations and villages from across the state, as well as international guests and attendees from the Lower 48. In addition, thousands of web viewers from around the world attend the convention remotely as it streams on the AFN website. All those components working together make the AFN Convention the

largest representative annual gathering in the United States of any Native peoples. One integral part of the AFN Convention is the annual review of resolutions brought forth by AFN members, as well as possible subsequent approval of these resolutions by the AFN board of directors and the AFN resolutions committee. The mission of the AFN is to promote cultural, economic and political voice to the Alaska native community. The resolution policy is used to advocate for Alaska Native people,

www.akbizmag.com • Alaska Business Monthly • October 2012

aCtivities sCHedULe All events, unless otherwise stated will be held at the Dena’ina Civic & Convention Center, 600 West Seventh Avenue, Anchorage. monday, tuesday, Wednesday October 15-16-17

Fai elders/Youth Conference Main Line: 907-677-1700

Registration Required Visit www.ﬁrstalaskans.org for more information

Wednesday, October 17 9:00-3:00Pm Alaska Native Heritage Center

aFn-nCai tribal Conference Aurora Lehr: 907-263-1305 Email: alehr@nativefederation.org

Registration Required Open to Public

thursday, Friday, saturday October 18-19-20 8:30-5:00Pm daily Third Floor-Banquet Hall

annual Convention For Updates: www.nativefederation.org Main Line: 907-274-3611

Open to Public

thursday & Friday 7:30-4:30Pm (Closed 11:00-2:00Pm) 8:00-11:00am Saturday Ground Floor Lobby

delegate registration Gladys Charles: 907-263-1306 Email: gcharles@nativefederation.org

Membership Registration Required

12:00-1:00Pm Friday Egan Convention Center 555 W. 5th Avenue

President’s awards Honor Luncheon Judy Jaworski: 907-263-1309 Email: jjaworski@nativefederation.org

$500/table (sponsor) or $35/ticket-general admission

8:00-7:00Pm thursday & Friday 8:00-3:00Pm saturday First Floor - Exhibit Hall

aFn Customary art show Nicole James: 907-274-3611 Email: njames@nativefederation.org

Open to Public

8:00-6:00Pm thursday & Friday 8:00-3:00Pm saturday Third Floor – Lobby First Floor – Exhibit Hall

sponsors & exhibitor show Alissa Grohall: 907-263-1307 Email: agrohall@nativefederation.org

Open to Public

10:-00-4:00Pm thursday Second Floor Meeting Room

2nd annual elizabeth Peratrovich Legal Clinic Email: EPLC@alaskabar.org

By Appointment Only

8:00-6:00Pm thursday & Friday 8:00-3:00Pm saturday Second Floor – Lobby

4th annual Health Fair Email: jjwilliamson@anthc.org

Open to Public

7:00-11:00Pm thursday & Friday Third Floor – Banquet Hall

Quyana i & ii Alissa Grohall: 907-263-1307 Email: agrohall@nativefederation.org Aurora Lehr: 907-263-1305 Email: alehr@nativefederation.org

$10/ticket-general admission

dinner at 7:00Pm saturday Third Floor – Banquet Hall

aFn Banquet Judy Jaworski: 907-263-1309 Email: jjaworski@nativefederation.org

$100 General Adminission; $1,200 Silver; $1,500 Gold; $2,000 VIP

TV & Web Coverage: Blueberry Productions will produce the live gavel-to-gavel television broadcast on GCI Channel 1 and Webcast will begin on Oct. 18, 2012 at www.nativefederation.org.

AN ALASKA NATIVE CORPORATION

INCORPORATED JUNE 8, 1972

Celebrating 40 years

Fire Island Wind: Powering development for Alaska’s energy future

CIRI.COM

www.akbizmag.com • Alaska Business Monthly • October 2012

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Attendees can also anticipate the annual President’s Awards to honor members of the Native community who have demonstrated strong involvement or high integrity in a number of fields. foster and encourage preservation of Alaska native cultures, promote understanding of the communities’ economic needs, protect and enhance all Native owned lands and to promote systems that instill pride and confidence in all Alaska Natives.

Abiding Attributes

The vast majority of AFN Convention activities and forums are open to the public, although some require registration, and others—including performances, luncheons and banquets—require that the participants purchase tickets. This year’s AFN Convention will feature all of the traditionally expected events—including a wide array of speakers that includes government leaders, national representatives and Native leaders—as well as a statewide tribal leaders forum, two nights of traditional dance performances called

Quyana Alaska, an exhibit of Native corporations and pertinent organizations, an interactive health fair and three nights of the state’s largest Alaska Native arts and crafts show. Quyana Alaska will have two shows, one on Thursday night and one Friday night, both from 7 p.m. to 11 p.m. Tickets for each show are $10. Tickets can be purchased at the first floor box office in the Dena’ina Civic & Convention Center. AFN’s 2012 Customary Art Show will be located on the ground floor of the Dena’ina Civic & Convention Center in Anchorage. This year’s show will feature more than 170 artists and craftspeople. Customary art sales are on the second floor of the convention center, from 8 a.m. to 7 p.m. Thursday and Friday, and 8 a.m. to 3 p.m. on Sunday. The convention also features an annual legal clinic to help Alaska Native attendees navigate the landscape of

family law, housing, foster care licensing, consumer public benefits and estate planning—or any other legal issue. Appointments last either one or two hours depending on the material that will be covered. Those parties interested in receiving legal help from one of the volunteer lawyers must make an appointment by Oct. 18. by sending an email to EPLC@alaskabar.org. Space is limited, and appointments are made at a first come, first served basis. More information is available on the AFN website. Attendees can also anticipate the annual President’s Awards to honor members of the Native community who have demonstrated strong involvement or high integrity in a number of fields, including arts, law enforcement, parenting, education, health and healing, and leadership. Tickets to the President’s Awards banquet cost $35 for an individual, and $500 for a sponsor table. The banquet will be held on Friday, Oct. 18 between 12 p.m. and 1 p.m.

What’s New?

This year’s AFN convention will also introduce new innovations in bringing

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delegates together to participate in discussion of issues important to the Alaska Native community through workshops. This year’s work sessions include: Energy for Developing Economies, Alaska Natives’ relationship with the State of Alaska, Food Security and Management of Subsistence Resources, Education Reform and Strong Native Peoples—In Body, Spirit and Mind. Workshops will be held on the first day of the convention, and participants are asked to identify the three workshops they are most interested in attending so facilitators can prepare for attendance. The energy and subsistence workshops are already expected to be the most well-attended. Due to the fact that rural Alaskans are paying anywhere between $7 and $10 or more per gallon for gasoline and heating fuel, it is estimated that many delegates will participate in the Energy for Developing our Economies workshop to focus on finding viable alternative sources of energy. The issue of subsistence is also a consistently popular topic amongst rural Alaska Natives. In the workshop entitled Food Security and Management

of Subsistence Resources, discussions will be aimed towards ways to ensure that state and federal management decisions will allow Alaska Natives sufficient access to fish, game, marine mammals and birds to ensure their food security. Models implemented in other states in order to address these issues will be presented and discussed. The results and recommendations from these and all other workshops will be reported to the delegates and presented later Friday afternoon on the floor of the convention.

Keynote Speaker

This Year’s keynote speaker is Carol Wren, director of employment and training services at Cook Inlet Tribal Council. Wren, born in Kotzebue and raised in Dillingham in the Bristol Bay region, is of Inupiaq heritage. Wren has a bachelor’s degree in social work from Pacific Lutheran University and a master’s degree in vocational education from the University of Alaska Anchorage. Although her work at CITC focuses on various aspects of job search, orientation, support and re-entering the

workforce, her keynote address will be about success in all aspects of life.

Double-Duty

Conference attendees from out of town who are able to extend their visits can also enjoy related events before the AFN Convention. The First Alaskans Institute will hold their annual Elder and Youth Conference Oct. 15 to Oct. 17 at the Dena’ina Civic & Convention Center. Registration for elders is free, and the fee for youth and chaperones is $50 per person. Another noteworthy event is the AFN and National Congress of American Indians Tribal Conference on Oct. 17 from 9 a.m. to 3 p.m. at the Alaska Native Heritage Center. Participants are asked to arrive at 8:30 a.m. for registration. The primary purpose of this conference is to provide a forum for tribal representatives to hear reports on statewide and national issues critical to tribal governments in Alaska. Admission is free and refreshments are provided.  Mari Gallion is associate editor at Alaska Business Monthly.

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HEALTH & MEDICINE

Behavioral Health A multi-layered matter

BY SUSAN SOMMER

laska’s suicide rate is nearly double that of the nation’s. Alcohol-related deaths are three times as high. The state’s rate of adults who use illicit drugs is also significantly higher than the national rate. Clearly, Alaska faces some serious behavioral health issues. Behavioral health is a general term encompassing the prevention and treatment of mental illness, substance abuse and addiction, as well as the promotion of emotional wellbeing. Partners in Alaska’s behavioral health industry are many, and include the Alaska Dept. of Health and Social Services, The Alaska Mental Health Trust Authority, University of Alaska, Alaska Native Tribal Health Consortium and numerous local and regional organiza-

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tions. The overarching goal of all these entities combined is healthy Alaskans.

Diverse Approaches

Kate Burkhart, executive director of the Alaska Mental Health Board, emphasizes the multi-dimensional and multi-disciplinary nature of behavioral health. The basic needs of those with behavioral health challenges are often not being met—things like food, shelter and health care; economic security; personal security and dignity; access to justice; and community inclusion. Burkhart says that at the root of most of these difficulties is stigma about the person’s condition or situation. Attitudes and behaviors reflect a lack of understanding and acceptance of individuals experiencing mental

health and substance use disorders. Sufferers are assigned blame, shame or disgrace, and are often discriminated against and excluded from part or all of community life. “Stigma not only results in isolation and discrimination against people experiencing behavioral health disorders,” says Burkhart, “but also creates a barrier to accessing necessary services. Changing public attitudes and perceptions takes time and effort – and that is the first step to changing behaviors.” Several entities, including the Alaska Mental Health Board, the Advisory Board on Alcoholism and Drug Abuse, the Alaska Mental Health Trust Authority, Alaska Department of Health and Social Services, advocacy groups and community organizations, have

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banded together to create anti-stigma campaigns that include media advertising, radio spots and printed materials to address the fact that we all know someone with behavioral health issues and that finding solutions needs to be a collective effort. Workforce turnover is one of the main challenges in the behavioral health system, according to Melissa Stone, director of the state’s Division of Behavioral Health. Integrating substance abuse and mental health care into a single behavioral health system, and then integrating behavioral health into primary care is another important, ongoing issue. Efforts continue to grow community-based systems of care and reduce the need for residential care. Stone says that it’s challenging to develop and maintain a system flexible enough to accommodate all of Alaska’s different cultural groups.

Suicide

Suicide risk factors include “depression or other mental illness; a suicide attempt in the past; having been exposed to the suicide of another per-

son; needing but not receiving mental health care; increasing use of drugs or alcohol, including binge drinking; and access to a firearm or other means in the home,” according to the state health department. The national rate of suicide is 11.7 per 100,000 individuals. Alaska’s overall rate is at 20.2, with the Alaska Native suicide rate at a whopping 40.4. Geographically, suicide rates are highest in western and northwestern Alaska and lowest in Southcentral and Southeast. Chief Executive Officer Andrew Mayo, PhD, of North Star Behavioral Health, says that youth suicide is definitely an issue in Alaska. North Star provides behavioral health services for the state’s youth ages four to 17. “Alaska’s youth face many challenges and represent a diverse group of children and families,” he says. One of North Star’s closest partners is the Jason Foundation, a national youth suicide prevention foundation. Last year, the foundation opened its first affiliate office in Alaska at the North Star facility in Anchorage. It provides a wealth of youth suicide pre-

vention materials to individuals, organizations and communities at no cost. Mayo says that North Star and the Jason Foundation recently worked in tandem to support and advocate for an Alaska state bill that requires training for school personnel on youth suicide and awareness. He says the foundation also provided 425 sets of materials to the Alaska Department of Education and Early Development and that those have since been distributed to schools throughout the state. The Alaska Statewide Suicide Prevention Council lists six strategies in its plan for the next several years: 1) Alaskans accept responsibility for preventing suicide; 2) Alaskans effectively and appropriately respond to people at risk of suicide; 3) Alaskans communicate, cooperate and coordinate suicide prevention efforts; 4) Alaskans have immediate access to the prevention, treatment and recovery services they need; 5) Alaskans support survivors in healing; and 6) quality data and research is available and used for planning, implementation and evaluation of suicide prevention efforts.

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Though substance abuse, family violence and mental illness can all be intertwined with suicide, the state’s Department of Health and Social Services 2011 annual report notes that the department chose youth alcohol abuse and adult heavy and binge drinking as the most critical substance use challenges for funding purposes. Community action teams were also organized “to implement community-driven postvention (taking care of the survivors/the bereaved after a suicide loss) resources and outreach.”

Substance Abuse

Last year, more than 6,500 Alaskans were treated for substance abuse. More than 40 percent were seen for an alcohol-only dependency, while another 30 percent for alcohol with a secondary drug. Nine percent were seen for abuse of marijuana. This information comes from the national Substance Abuse and Mental Health Services Administration. Alaskans 26 to 30 years old were the largest age group treated; about 60 percent of all age groups were males. In the mid-1990s, more than half of all fatal car crashes in Alaska involved alcohol. That percentage has come down since then, but alcohol-related fatalities on the state’s highways still hover above 30 percent. According to the Alaska State Troopers 2011 Annual Drug Report, about one-third of the cases Troopers initiated involved drugs and/or alcohol. The numbers of individuals charged and/ or arrested in Alaska in 2011 related to drugs and alcohol were: alcohol, 392; cocaine, 108; heroin, 118; marijuana, 1,211; and meth, 194. Though crime prevention is not typically listed as a specific goal in behavioral health provider circles, it is certainly an important possible outcome of substance abuse treatment. Of all violent crime cases, nearly 60 percent involved drugs and/or alcohol. Burkhart, who is also in charge of the state’s Advisory Board on Alcoholism & Drug Abuse, says the need is high for increased research on behavioral health issues as they affect Arctic populations. She says she hears “from communities all over Alaska a pressing need for resources to support programs that promote positive youth

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development.” This includes support systems for youth who experience mental health and substance use disorders, especially Fetal Alcohol Spectrum Disorders, and those transitioning from residential or foster care to independence. Burkhart says the state is continually working on these and other gaps in the system.

Mental Health

Mental health conditions are many: depression, anxiety, bipolar disorders, eating disorders, schizophrenia and more. According to state records, the number of days in the past month that adults experience poor mental health is somewhat lower than the national average. About one-quarter of Alaska’s teens have experienced depression in the past year. Treatment services range from inpatient hospitals such as Alaska Psychiatric Institute in the population hub of Anchorage to rural health clinics in remote or roadless communities. “Each community has a unique behavioral health system, with its own strengths and weaknesses,” says Burkhart. “Some communities, like Anchorage, have many agencies providing mental health and substance use disorder treatment, while other communities rely on itinerant counselors who visit once or twice a month. Some communities have robust community wellness coalitions and prevention programs, while other communities struggle to incorporate basic prevention activities.” The average length of stay at Alaska Psychiatric Institute in January of this year was 10 days. The facility had 132 admissions, of which almost all were involuntary. The Alaska Mental Health Trust Authority is a state corporation whose mission is “to act as a catalyst for change and improvement in the systems that serve Trust beneficiaries.” Beneficiaries include people with mental illness, developmental disabilities, chronic alcoholism and other substance-related disorders, Alzheimer’s disease and related dementia and those with traumatic brain injury. The Trust focuses on a few key programs; one is called “Bring the Kids Home” and is intended to reform Alaska’s mental health care for

children and adolescents so they are diagnosed earlier and are treated as close to home as possible.

there is Hope

Treatment works, people get better, lives improve. This and other similar mantras are common among behavioral health specialists. Anyone struggling with depression, alcohol dependence, drug use, thoughts of suicide or other behavioral health problems can call 888-464-8920 to find a treatment provider in or close to their commu-

nity. CareLine, the statewide crisis line, is answered 24 hours a day by trained Alaskans. Call 877-266-4357 anytime for caring and confidential help. Peer support and education is available from Alaska’s National Alliance on Mental Illness affiliates by calling 800-4784462. Peer support resources can also be found through the Alaska Peer Support Consortium, 907-258-2772.  Susan Sommer is a freelance writer and editor living in Eagle River.

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TRANSPORTATION

Photo by Judy Patrick Photography

A Carlile Transportation Systems truck being driven down the Seward Highway on a daily run between the Anchorage and Kenai terminals. From Kenai, the trucks will then go to Seward, Homer and other points on the Kenai Peninsula.

It’s Complicated Getting LTL freight to and from Alaska

BY TAMI BEAUMONT AND MICHELE WHITE

t’s said that good things come in small packages. In the transportation industry, these small packages are known as Less-than-Truckload (LTL) freight and usually range from 150 to 15,000 pounds. “Anything that is less than a truckload of freight, from a small package up to whatever we would consider a full truckload, is LTL,” says Paul Friese, Alaska sales manager for Lynden Transport in Anchorage. “Depending on size, shipments are shrink-wrapped with other packages to make up a full pallet to be loaded onto a truck, barge or plane in a mixed-freight environment.” ■ 74

Although Truckload freight (TL) makes up a large share of the cargo moving to and from Alaska, the more economical LTL segment holds its own. Carlile Transportation Systems transports 1.4 billion pounds of freight per year and about half of it is LTL. Lynden Transport has been moving LTL freight to Alaska for more than 50 years, including one of the most memorable LTL loads to travel the Alcan Highway: a side of fresh beef trucked from Seattle to Carr’s Market in Fairbanks in 1954. LTL freight can be anything from fresh meat to cowboy boots.

“How Alaska’s LTL freight travels interstate and intrastate can be complicated,” Friese says. “It’s our job to understand all the options and make it easy for our customers to use and understand.” “You can’t just bring a box to us and we’ll throw it on the boat,” says John Van Treek, Operations Manager for Carlile’s Anchorage Terminal. “We need to consolidate it into one of the shipping containers.” Transportation companies design the routes of their freight to cater to their customers’ time and financial constraints. Lynden calls its unique version of this “Dynamic Routing.”

www.akbizmag.com • Alaska Business Monthly • October 2012

Consolidating Points

Both Lynden and Carlile operate LTL consolidating points in Tacoma, Wash. Nearly all of the freight coming into Alaska moves from the Lower 48 through their interline partners into these facilities. From there, the companies collect and consolidate the LTL shipments for Alaska customers into truckloads. Consolidated LTL freight is shipped on the ship or barge

Photo courtesy of Lynden Inc.

“Everybody’s working to control their costs,” says Friese, “and Lynden has the ability to move LTL freight by land, sea or air through its family of transportation companies. Our Dynamic Routing service allows customers to only pay for the speed that they need.” Lynden uses trucks, ships, barges, ferry or aircraft in any combination to balance speed and cost when shipping to any point in Alaska. The delivery chain can be slowed or accelerated depending on each customer’s specific needs, or needs that change en route. “Carlile offers customers rail service for less time-sensitive shipments,” says Van Treek. “We rail it to Tacoma and barge it up to save the customer money.”

Old 27, Lynden’s original tractor trailer to drive the Alcan.

from the Seattle-Tacoma area, driven up the Alaska-Canada (Alcan) highway or flown by airline partners of the transportation companies. “Customers mix and match ship, barge and truck on a regular basis depending on the urgency of the shipment, such as preseason inventory that will not be sold immediately. This is where our Dynamic Routing system works well,” Friese says. Typically, LTL freight takes approximately three business days to travel by ship to Anchorage from Tacoma and

arrives twice per week. Carlile and Lynden buy space and partner with Totem Ocean Trailer Express (TOTE) or Horizon Lines ship service. TOTE is a roll on-roll off ship and Lynden owns its own equipment to do the work once the freight gets to the port. Freight is rolled onto the ships in Tacoma and rolled off in the Port of Anchorage, where it is hooked to Lynden tractors and pulled in Anchorage, Fairbanks, Prudhoe Bay or other Alaska locations. LTL also moves to Alaska via Lynden’s barge company Alaska Marine

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American Fast Freight’s new facility is being undertaken through a design-build contract with Watterson Construction Co. of Anchorage and will be a true “cross dock.” This means there will be no support poles stretching from the ﬂoor to the ceiling that forklift operators have to navigate around. The absence of obstacles will add to the overall efficiency of the warehouse, which will have a covered back dock with a long low-angle ramp. It is expected to be complete in November. Photos by Terry Umatum, American Fast Freight

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Lines. Other transportation companies use Northland Services and Samson Tug and Barge for barge service into different ports in Alaska. A barge to Southcentral ports can take seven to 10 days to arrive in Alaska depending on weather. During the winter the same journey can take up to two weeks due to heavy seas and maneuvering through ice. “Alaska Marine Lines also owns and operates a railbarge that carries Alaska Railroad railcars as well as containers on racks above the deck. This vessel sails once a week from Seattle to Whittier. From Whittier, Lynden routes the freight to Anchorage by truck or rail and brings it to their service center to distribute. Most of the freight moving on Lynden’s barge is truckload,” Friese says, “but Lynden has recently started an LTL barge service from the SeattleTacoma area to Alaska.” Van Treek says most freight companies use the railroad to move full truckloads of freight only, but there are cases where LTL is transported on the Alaska Railroad. He says orchestrating the logistics is a daily decision they make depending on the workflow.

“You could name anything and I’ve probably seen it cross this dock.” —John Van Treek Operations Manager for Carlile’s Anchorage Terminal

“LTL for our package express goes to our warehouse on Whitney Road,” says Peggy Spittler, Carlile’s marketing director. “It’s really set up for a customer to walk in and pick up a box.” LTL freight leaving Alaska is sorted, consolidated and shipped out the same way. “We have several southbound shipments a week where we ship down to

Seattle, Minnesota, Edmonton and Houston,” says Van Treek. Lynden offers daily and weekly schedules between all Alaska highway points and weekly truck service between Alberta, Texas and Alaska. The company also consolidates LTL in Houston/Dallas and Calgary/Edmonton and brings it to Alaska twice a week on the Alcan Highway.

Arrival in Anchorage

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Once the freight arrives in Anchorage, transportation companies get to work bringing it to its final destination. It is either shipped directly from Anchorage to points in the state or it is cross-docked into delivery trucks that are routed via the road system to be delivered in cities like Anchorage, Fairbanks, Kenai, Seward and Prudhoe Bay, a day or two after the ship arrives. Finally, those loads are broken down and distributed to customers throughout the state. “A lot of customers and stores up here have a distribution point,” says Van Treek. “We bring it up by pallets, deliver it there and they either take it to their individual stores themselves or they have us or some other smaller crosstown-type carrier deliver it for them.” As a second option for LTL service, Carlile launched a new service Aug. 15 called Carlile Package Express for freight that is 65 pounds up to a pallet. It is tailored for the individual customer and LTL freight may be picked up at all of the Carlile terminals in Alaska, except Prudhoe Bay.

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So, what makes up the LTL freight and who uses this service? Some of the customers are small and specialty retail businesses that would never have a full truckload of freight and some are big box stores that use LTL service to distribute products within the state. “You could name anything and I’ve probably seen it cross this dock,” says Van Treek, as he surveys the freight in front of him. “I have laundry to go to Prudhoe; water, groceries to Prudhoe, I see a pallet of T-shirts to go to somebody in Seward. I’ve got vinyl windows going to Fairbanks and Kenai going to one of the big box stores… literally anything you can name, it’s been in a Carlile trailer one way or another.” Like exercise equipment for Maggie the elephant at the Alaska Zoo. “We helped move the treadmill that was built for her so she could lose some weight,” Van Treek says. Other LTL shipments are life-giving. Carlile ships live organs and transfers blood for the blood bank around the state. Both Friese and Van Treek say the majority of their LTL business is from business customers. “Maybe 10 percent is private sector freight, which is generally small products, a box of this, a box of that,” Friese says. “That is what typically goes to the villages.” Alaskans shopping in the Lower 48, or coming to Anchorage from the villages to shop, use LTL to send home personal goods. “They will often buy furniture and household goods from IKEA,” Friese says. “We will bring it up for them and deliver it in Anchorage or Fairbanks to their homes.”

Distribution to Small Communities

For some small communities in Alaska, LTL service is their lifeblood. Carlile brings a full trailer of LTL freight from Anchorage to Valdez, Monday through Friday, and distributes it without a brick and mortar terminal. “We just deliver out of a trailer,” says Van Treek. “We’ve got a couple of big customers down there, but the majority of the town is the guy needing his couch or his new washer and dryer. We serve the little companies, too.” For the residential customer, Carlile pulls up to the driveway, puts out a lift gate and delivers packages onsite. ■ 78

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Photo by Sam Amato / Courtesy of Lynden Inc.

Lynden Transport on the Haul Road near Atigun Pass.

For small southeast communities, Lynden carries LTL by truck from Anchorage to Haines where it is put on the ferry to Juneau. Freight is sorted and delivered to Southeast customers from Lynden’s service center there. Besides truck transportation, Lynden offers LTL customers other choices to move freight in and out of Alaska. Lynden International is a freight forwarding company that buys space on Alaska Airlines and other carriers to move LTL freight in and out of Alaska from points all over the world. Another Lynden company, Lynden Air Cargo, is an all-cargo airline using Hercules aircraft to provide scheduled service to Bethel, Nome and Kotzebue. The big planes can land without a runway and can carry oversized freight like construction equipment, boats and automobiles into remote areas. “In many cases, supplies or equipment won’t make the scheduled barge service to western Alaska, so they will have to be shipped or trucked into Anchorage and then flown out to a village,” Friese says. Like trucks and barges, aircraft often play a vital role in distributing LTL freight throughout Alaska by completing the last leg of the journey into remote areas. “Our remote delivery capabilities and ability to handle all sizes of freight allow us to tailor our services to our customers’ needs, no matter how challenging,” Friese says. “And they no doubt

contributed to Lynden being voted the top LTL carrier in the Western Region in “Logistics Management” magazine’s annual Quest for Quality Awards this year.” It is Lynden Transport’s 16th Quest for Quality Award. Other companies that transport LTL in Alaska include Commodity Forwarders, DHL Global Forwarding, Pacific Alaska Freightways Inc., Span Alaska Transportation Inc. and American Fast Freight Inc. “LTL is the core of our business,” says Christina Hallock, Marketing Services Manager for American Fast Freight Inc., which is building a new 30,000-squarefoot facility in Anchorage, including a drive-in refrigerated area for LTL food freight. She says the company expects to open the facility in November. These freight companies say there is no community too small or remote for them to reach. “If a village can be reached by barge, air, or truck Lynden will deliver it,” says Friese. “I can get something anywhere you need it to go, one way or another,” Van Treek says, “If there’s a way to get there, we’ll figure it out and get it there.” While the transport of LTL can be complicated, as Friese said, the system that moves it is a well-oiled machine. Tami Beaumont is a writer based in Washington state. Michele White writes from Anchorage.

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TELECOM & TECHNOLOGY

Rendering courtesy of Iridium Communications Inc.

Artist rendering of Iridium NEXT, set to launch in 2015, an entirely new system of 66 updated and more powerful satellites and some spares.

Iridium Communications Inc. Network management from space BY MARI GALLION

hat do the U.S. military, Iditarod mushers, Denali climbers and river rafting outfitters have in common with a marine vessel in the Mediterranean sailing off the coast of Turkey? The answer: They all depend heavily on satellite technology—particularly, the Iridium Communications Inc. satellite “constellation”—to make phone calls, take measurements, send messages and track people, animals and equipment.

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When Brian Richardson, owner of Alaska Raft Connection, is asked whether he owns an Iridium satellite phone, he responds, “I own several. “In terms of my use, it definitely puts the customers at ease that there is reliable communication… it’s a real phone, and it works just like anybody’s cell phone… except that it works all over the world.” Like many Alaskan business owners, Richardson depends not only on what

he calls his “sat phone” to keep in touch with his clients, but also on Iridium’s personal location devices to track his clients and equipment. While describing an incident in which his client’s rented raft drifted downriver in the night, Richardson gives praise to his personal location devices: “Of course, we knew exactly where they were, so they were easy to find.” However, according to Richardson, the raft had ended up “in the middle

www.akbizmag.com • Alaska Business Monthly • October 2012

of the river, stuck on a rock, the river was rising, was very difficult to get to, too risky to swim out to, and also all their life jackets were on board the boat too.” If it weren’t for their contact with Richardson, they would have had to either try to retrieve the raft in waders with no life jackets, or simply wait indefinitely to be deemed missing and be rescued—which would also incur the cost of a search in addition to the risk to human life. Thanks in a large part to Iridium’s many applications, Richardson “had communication with them, and so everything panned out to where I was able to put all of them in my boat, and go get their boat, and everybody finished the trip.”

iridium is Unique

“Alaska is one of our top three markets in the world,” says Matt Desch, Iridium president and chief executive officer. “And we do cover the whole world—literally 100 percent of the planet.” Using 66 orbiting satellites, there is literally always an Iridium satellite within range no matter where in the

“No other commercial satellite system communicates between satellites...” —Matt Desch President and CEO, Iridium Communications Inc.

world they are needed. Additionally, due to the fact that Iridium satellites communicate with each other, the Iridium system does not depend as heavily on Earth stations as any other satellite system would. Iridium takes network management to a much higher level. “No other commercial satellite system communicates between satellites,” Desch says. “Most other systems have ground stations all over the world, which means you have to put your ground stations where the traffic is, which requires a fair amount of expense and work on the ground.” With Iridium, by contrast, most of the work is done in space, through inter-satellite communication and cooperation. This enables Iridium to remain efficient and affordable when compared to other satellite solutions.

Iridium Communications Inc. President and CEO Matt Desch.

Not only is the satellite system unique, but the satellites themselves have varying quirks, challenges and “talents,” based upon the technology that was available and installed at the time of their launch. “Our tech partner Boeing, who manages the network on our behalf,

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has made lots of changes to the software,” Desch says. “In fact we have introduced a lot of exciting new services that have been upgraded to each new satellite as a result of each of them being different from each other—they have slightly different patches and hardware. Each one has a number, and in fact we do refer to them by number, we know them and each one of them has their own ‘personality’ to the technical people involved. We maintain them very individually in some ways.”

Alaska is Special

But Alaska, in particular, benefits greatly from the Iridium constellation, not only for the diversity of enterprise and (plentiful) wide open spaces where cell phones don’t work, but most of all from the positioning of the Iridium satellites. “Our satellites are called polar orbiting satellites,” Desch says. “So in Alaska, they really are literally overhead all the time, with a new one coming into view every eight to 10 minutes.” Additionally, “Alaska is not geographically friendly to other satellite solutions because it’s so far north,” Desch says. “Geostationary satellites are going around the planet about 23,000 miles away over the equator, at a speed and a distance to the Earth that it appears to be not moving in relation to the ground. That’s why you see those satellite dishes pointed towards the southern horizon, practically at the ground. If you have any sort of obstruction, or your business is located on the north side of a building, in many cases you’re not going to be able to make a connection.” In contrast, the Iridium satellite system consists of 66 satellites traveling north to south, south to north. “To us, Alaska is no different than Florida, Brazil or London in terms of reception. You get the same coverage in Alaska that you get anywhere else,” Desch says. As a matter of fact, due to their orbit patterns, more Iridium satellites can be viewed from Fairbanks than any other population center in the U.S., which is the reason that the entire world’s maritime traffic is routed through Iridium’s Fairbanks Earth Station—Iridium’s secondary Earth station—which was commissioned six years ago. ■ 82

Image courtesy of Iridium Communications Inc.

Iridium’s global network of 66 polar orbiting satellites.

A Tale of Two Metals

Despite Iridium’s global success, the company originated as a risky investment to “upcycle” a satellite system that was already in place due to a failed Motorola venture. The original 77 satellites were launched in 1998, and were purchased by the new Iridium company by 2000. “We thought long and hard about whether to keep the name Iridium, because that really represented the previous company, in that iridium has an atomic weight of 77, and there were originally 77 satellites,” Desch says. But the new company soon learned that they could provide the same service with only 66 satellites—and the element that has a corresponding atomic weight is dysprosium. “We didn’t think dysprosium was a very good name,” he laughs. And it would seem that Iridium’s rocky beginnings have not tarnished its esteem. “Considering how important our system has become to everyone around the world, we are glad we kept the name Iridium because it has a good connotation and a great ring to it,”

Desch says. “We are proud right now of the technology and what it is able to do.”

Applications of Iridium Satellite Technology

Iridium devices are used in many ways in many industries, but their use is most prevalent in hand-held two-way communication (telephones), aviation, maritime, military and machine-tomachine, also known as M2M. Hand-Held: Iridium likely has more than 10,000 active phones in Alaska at any given moment, according to Desch. People are also increasingly using a small accessory with their satellite phones that creates a Wi-Fi hotspot and allows people to connect through the Iridium system with their smartphones. Due to this innovation, a smartphone, computer, pad or tablet can now work in more than 90 percent of the state where wireless network service is not available. Aviation: According to Desch, many—if not most—pilots who fly out-

www.akbizmag.com • Alaska Business Monthly • October 2012

The new satellites, according to

Iridium is launching an entirely new system of 66 updated satellites Desch, will be “far more powerful. and some spares in 2015. This system will be called Iridium NEXT. They offer higher data speeds, a lot side of cities either carry Iridium phones or have other Iridium devices on board, including the new spider tracking system, which is being installed in many planes. “It provides real time two-way tracking for the airplane so as to avoid the issues of someone having any emergency and not being able to be found or connected,” Desch says. Maritime: The Iridium system is used in the maritime industries in two main ways. As mentioned earlier, Iridium equipment is installed in many fishing and particularly ocean-going vessels for the sake of crew calling, two-way communication, and so people can check their emails and get faxes. However, Iridium devices are also used to enforce regulations in the fishing industry to ensure that only the appropriate types of vessels are fishing at the appropriate times in the appropriate waters. This is called Vessel Monitoring Services or VMS, and plays a valuable role in Alaska resource management.

“One of our Australian partners, Fastwave Communications, has created devices called Ocean Gliders. They look like little airplanes that can dive under the water for any number of days to take photos, gather research, what have you,” Desh says. “And then they resurface, transfer information, and then are reprogrammed for what they are to do next. Their assignments are often contingent upon the information they have transmitted, so they are collecting, transmitting and processing data in a way and at a speed that no research crew can.”

What’s Next?

Despite Desch’s description of the satellites as “healthy” satellites with enough fuel to go another six to seven years, Iridium is launching an entirely new system of 66 updated satellites and some spares in 2015. This system will be called Iridium NEXT.

more computing power, a lot more flexibility, and are designed to last at least until 2030, if not longer. We’re very confident in our future now. That wasn’t true in the early days after we went into operation shortly after 2000. We knew we would last for 10 or 15 years, but now we know our future is secure because we’re launching our next generation systems and we know we will be able to provide service to Alaskans for many, many years to come.” And Desch is not the only one who believes that Iridium will be providing great service and keeping up with technological advancements for years to come. “You know, Iridium has an atomic weight of 77,” Richardson of Alaska Raft Connection says. “Those are my lucky numbers.”  Mari Gallion is the associate editor for Alaska Business Monthly.

Military: The U. S. Military, one of Iridium’s largest customers, makes up about 20 percent of their overall business. Applications widely used by the military are iGPS (enhanced GPS with extremely high “centimeter-level position” accuracy), asset tracking and monitoring, and force protection. M2M: Asset tracking is the main function of M2M, or machine-to-machine communication—where is your asset (a truck, for example), is the tank full, how quickly is it moving and is it hot or cold? However, M2M refers to any two-way connection from some kind of device that needs to be tracked, monitored, controlled or information needs to come from it. Iridium’s M2M devices can be built to do just about anything: There are currently M2M devices installed on oil and gas pipelines, attached to special buoys that can measure the extent and direction of oil spills, and they are tracking migration patterns of animals and lifetimes of endangered species.

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www.akbizmag.com • Alaska Business Monthly • October 2012

83 ■

FINANCIAL SERVICES

The Cost of Doing Business Embrace online banking features for efﬁciency, safety BY JOHN HOYT

or quite a while now, sitting down in front of a computer to check business or personal electronic mail messages has been part of our everyday lives. These days, we don’t think about the activity as a tiresome chore: We just do it. Whether or not we believe continued advancements in technology have improved anything, there is almost no disputing technological necessity and staying power. The use of email seems almost trivial in today’s day and age. We can hardly imagine working without it. It’s about time business owners and employees viewed business online banking the same way. Call it the cost of doing business. Today, businesses can immediately become more efficient and increase revenue by using paperless, online, mobile and integrated banking features for deposits, billing and payroll and other payables and receivables. By banking online, Alaska businesses can also reduce paper and keep track of their banking activities with precise control, real-time access and more powerful tools. Most financial institutions put everything you need right at your fingertips and with multiple layers of security that only online banking can provide. Let’s look at some of these integrated banking features a little more closely and why they should be part of your company’s financial present and future. Bill Pay—Bill Pay can play an essential role in your business’s commitment to “go green.” The feature eliminates writing paper checks, stuffi ng envelopes and buying stamps. Bill Pay allows you to make virtually any payment with a just a click of your computer’s mouse. ■ 84

Mobile Banking safe and convenient when consumers take precautions

onvenience is the driving factor in the increasing use of mobile banking. It opens the doors to consumer choice and access to banking options. But as mobile devices—like smartphones and iPads—become more popular, hackers are finding savvy ways to steal information. Consumers should be cautious when using mobile devices to do their banking. “It’s important to take a common sense approach to mobile banking,” says Don Krohn, First National Bank Alaska’s security manager. “Use caution on your phone just like you would a computer. If you’re careful, you can really enjoy mobile banking’s benefits safely and securely.” Following a few simple steps can prevent a big headache later. Follow these tips to protect your information: ■ Avoid storing sensitive information like passwords and social security numbers on your mobile device. ■ Password protect your mobile device and lock it when you’re not using it. ■ Be aware of your surroundings. Don’t type any sensitive information if others around you can see. ■ Log out completely when you complete a mobile banking session. ■ Protect your phone from viruses and malware just like you do for your computer by installing mobile security software. ■ Download the updates for your phone and mobile apps. ■ Use discretion when downloading apps. ■ If you change your phone number or lose you mobile device, let your financial institution know right away. ■ Monitor your accounts regularly and report suspicious activity to your financial institution immediately. Direct Deposit of Payroll—Reduce the cost of producing, distributing and reconciling checks for each payroll by directly depositing payroll funds into employees’ accounts on payday morning, regardless of where they bank. It’s a real convenience for your employees too. It saves them the time and hassle of depositing and/or cashing a paper check.

Collecting Funds—Work with your financial institution to get money into your account quickly and efficiently with services that collect, process and deposit funds to your accounts so you can get the payments you’re owed faster.

Check images—View the front and back of paid checks from the convenience of your computer screen, saving time and

electronic Federal tax Payments—Pay your federal taxes electronically from the comfort and convenience of your

research costs, and eliminating the storage required by paper records.

www.akbizmag.com • Alaska Business Monthly • October 2012

own office. No writing checks or worrying if your payment will be delivered on time. You authorize your financial institution to send the funds to the Internal Revenue Service. Multi-Layer Security—Enhanced online business security verifies your identity in two ways. Every time you log in, the financial institution identifies you. The second layer of security lets you identify the bank using a private image and pass phrase. Outgoing Wire transfers—Funds are electronically directed to a designated payment account immediately. This feature allows you to maximize earnings on your available balances while still paying your bills and other expenses “just in time.” Positive Pay—Employ one of the most effective anti-fraud tools available today for check disbursements from your business. Each day you transmit a file of checks issued and the bank uses this information to alert you when checks pay through that do not match. You receive an email alerting you of exceptions each day so you can review the item online and send a pay or return decision to the bank. Real-time Account information— Banking customers have never had access to as much account information in real time as they do today. Once you log-in to most bank’s online banking, you’ll see a snapshot of all your accounts with up-to-the minute balances and available funds. You can also see all transactions and check images. In a world prevalent with fraud, it is critical to review your account each day and alert your bank if there are any unauthorized items. This process can be automated.

Peace of Mind

Many business owners have postponed the inevitable transition into the world of business online banking due to fear of security breaches. Staying faithful to paper statements and paper checks gives you a false sense of protection. In reality, you are actually more secure using online tools due to the ability to monitor your accounts in real

time. Waiting for a paper statement to arrive means you could potentially be 31 days late in discovering a compromised account. By then, the perpetrator and your money will be long gone. Issuing paper checks leaves you vulnerable to altered payroll amounts or check reproductions when account and routing numbers are stolen directly from the original check. Electronic payroll gives you the power to control payroll amounts and protect your account information, all while offering your employees the benefit of faster payment. The online tools offered by most financial institutions are designed not only to save you time and money, but to offer you peace of mind as well.

Flourish each and every Day

Advances in technology have become a normal part of life, both personally and professionally. The companies and business professionals flourishing each and every day are the ones actively seeking out the improvements and advantageously using them safely and securely. When it comes business online banking, don’t get left behind. Contact your financial institution today.  John Hoyt is a senior vice president at First National Bank Alaska. Through the course of his 27-year banking career, the Alaska-born Hoyt has worked as a teller, management trainee, assistant cashier, branch loan ofﬁcer, regional market manager, electronic services manager, and ﬁnally, senior vice president. Not only has Hoyt seen the banking world from virtually every operational and/or lending area, but he’s also seen a lot of the Last Frontier. His career has taken him through Homer, Kodiak, Sitka, Wrangell, Soldotna and back around to Anchorage. Contact Hoyt at 907-777-3481 or jhoyt@ FNBAlaska.com.

www.akbizmag.com • Alaska Business Monthly • October 2012

85 ■

Gems of the north

The brilliant and multi-faceted cornerstones of the Alaska economy BY SUSAN HARRINGTON, MANAGING EDITOR laskan-owned and -operated companies are brilliant this year, that’s why we’ve themed our Top 49ers “Gems of the North.” Balance sheets for these 49 companies tallied $16.16 billion in gross revenues for 2011, a $912 million increase over 2010’s $15.24 billion bottom line. Overall these companies employed 70,497 worldwide, with 25,138 of those employees in Alaska; increases over last year’s figures, and an indication that Alaska truly is forging ahead in the national and world economies with a diversification of interests and enterprises. Sparkling the brightest are the 20 Alaska Native Corporations that made the list. These ANCSA businesses generated $11.89 billion in 2011, up $573 million over 2010. These companies, while representing 41 percent of the Top 49 Alaskan-owned and -operated businesses, took in 73.6 percent of the gross revenues reported and were responsible for 62.4 percent of the Top 49er jobs in Alaska, 83.3 percent of total Top 49er jobs worldwide. Arctic Slope Regional Corp. tops the list for the 18th consecutive year with a 9 percent increase in gross revenue for 2011—$2.55 billion. How do they do stay in the lead year after year? “As ASRC celebrates its ruby anniversary, we are reminded of the challenges the corporation has faced and overcome throughout the past 40 years. We have been successful by allowing our Iñupiaq values to guide even our most critical business decisions, and look forward to continuing our journey of growth and opportunity. Navigating through this period of economic uncertainty across the U.S. and even outside is no small task, and I certainly congratulate the other companies on this list as well,” says ASRC President and CEO Rex A. Rock, Sr. ■ 86

Alaska Native Corporations are the mother lode of Alaskan-owned and -operated businesses. Plus, if all the companies that were actually eligible for inclusion in Top 49ers had returned surveys in time the numbers might be greater across the board in revenues and jobs. ANC interests are spread across nearly all economic sectors in Alaska and the companies offer a business model for successful diversification. In reviewing the non-Native companies in the Top 49ers this year, we find nine sectors of the economy totaling $4.26 billion in reported gross revenues for 2011. The next closest category in revenue happens to be the transportation industry—a real mover in the Alaska economy. The five transportation companies making the list generated $1.26 billion in gross revenues, up $200 million from last year’s figures, and claimed 7.77 percent of the gross revenues. These companies employed 4,585 worldwide—2,850 in Alaska. Increases over last year’s 4,178 worldwide jobs (2,525 Alaska jobs) by several hundred. Five businesses in the Finance, Insurance and Real Estate category qualified this year and brought in 4.9 percent of gross revenues at $792 million, a $134 million increase over 2010 gross revenues. Last year, only three companies qualified. This sector employed 3,026— 2,651 in Alaska, big increases over last year’s worldwide total of 2,334 employees, of which 2,056 were in Alaska. Four Railbelt utilities brought in $717 million in gross revenues in 2011, $80 million more than these same four companies earned in 2010, and 4.44 percent of this year’s Top 49ers reported earnings. Employment by Top 49er utilities in 2012 is at 885 total jobs, with 862 in state. Slight changes from last year’s 860 jobs total, all of which were in Alaska.

The construction industry is represented by five companies bringing in $433 million, a decline of $70 million in this category from the previous year. Jobs for these companies remained flat in 2012—705 total, 701 in Alaska versus 706 total, 700 in Alaska. Four companies doing business in the industrial services sector brought in $427 million, an increase of $70 million over the previous year. Half a dozen Alaska jobs were added in 2012, with 1,286 overall, 1,241 in Alaska. Retail and wholesale trade’s gross revenues for 2011 equaled $250 million, a $24 million increase for these same three companies that provide 535 jobs in Alaska and an additional 44 out of state—a slight decline from 2011’s employment picture of 607 total jobs, 558 in Alaska. Travel, mining and telecommunications each had just one Alaskan-owned company qualifying for a spot on the Top 49ers again this year, and were the same three companies. The lone Top 49ers travel company saw $182 million in gross revenue pass through its accounts in 2011, a modest increase of $8 million—by Top 49er standards. Of 170 total employees, 95 are in Alaska, a change from last year’s 175 total jobs with 82 in Alaska. The one mining company making the list reported $108 million in gross revenues, a decline of $30 million over 2010 figures, but an increase in jobs from 138 in 2011 to 149 in 2012—all in Alaska. The single qualifying Alaskan-owned telecommunications carrier reported $100 million in gross revenue, a $6 million decline from the previous year. The company saw a decline in employees with 371 this year, 387 last year—all Alaska jobs. Overall, these Gems of the North are solid rocks in the Alaska economy. 

www.akbizmag.com • Alaska Business Monthly • October 2012

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Gems of the north

500

0 1,0

0 1,5

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8 11,

$11,891 Million Alaska Native Corporation $433 Million Construction $792 Million Finance, Insurance, Real Estate $427 Million Industrial Services $108 Million Mining $250 Million Retail & Wholesale Trade $100 Million Telecommunications $1,256 Million Transportation $182 Million Travel $717 Million Utility $16,155 Million Total Gross Revenue Reported

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www.akbizmag.com • Alaska Business Monthly • October 2012

1 16,

Charted results to scale Not to scale due to space

Gems of the north

Arctic Slope Regional Corporation Top Executive: Rex A. Rock Sr., President & CEO

PO Box 129, Barrow, AK 99723 Phone: 907-852-8633 Fax: 907-852-5733 www.asrc.com Worldwide Employees: 10,630 Alaska Employees: 4,380 Year Established: 1972 49er Rank in 2011: 1 Change from Last Year’s Rank: Same

Bristol Bay Native Corporation Top Executive: Jason Metrokin, President & CEO

111 W. 16th Ave., Suite 400 Anchorage, AK 99501 Phone: 907-278-3602 Fax: 907-276-3924 facebook.com/BristolBayNativeCorporation www.bbnc.net Worldwide Employees: 3,855 Alaska Employees: 375 Year Established: 1971 49er Rank in 2011: 3 Change from Last Year’s Rank: Up 1

Gross Revenue 2011 $2,549,993,000 2010 $2,331,681,000 2009 $1,945,058,000 2008 $2,297,341,000 2007 $986,322,000 Difference from 2010 Revenue: 9% Main Business: Energy services, petroleum reﬁning and marketing, engineering, construction, government services, resource development, commercial lending, tourism and communications.

Gross Revenue 2011 $1,965,507,000 2010 $1,667,200,000 2009 $1,391,571,000 2008 $1,294,854,000 2007 $993,676,000 Difference from 2010 Revenue: 18% Main Business: Petroleum distribution, construction, government, oilfield and industrial services. Principal Activities: Diversified holding company, construction, government services, oilfield and industrial services, and petroleum distribution. Subsidiaries: Badger Technical Services, Bristol Bay Corporate Services, Bristol Construction

Principal Activities: Energy support services, petroleum reﬁning and marketing, engineering, construction, government services, resource development, commercial lending, tourism, communications, various partnerships, joint ventures and more. Subsidiaries: ASRC Energy Services Inc., ASRC Federal Holding Company LLC, ASRC Construction Holding Company, SKW/Eskimos Inc., Tundra Tours Inc., Petro Star Inc., Alaska Growth Capital

Services, Bristol Design Build Services, Bristol Engineering Services Corporation, Bristol Environmental Remediation Services, Bristol Fuel Systems, Bristol General Contractors, Bristol Industries, Bristol Munitions Services, Business Resource Solutions, CCI Group, CCI Inc., CCI Solutions, Eagle Applied Sciences, Glacier Technical Solutions, Glacier Technologies, MedPro Technologies, KAM Resources Group, PetroCard Inc., SES Construction and Fuel Services, SpecPro Environmental Services, SpecPro Inc., SpecPro Technical Services, STS Systems Integration, TekPro Services, Vista International Operations, Vista Technical Services, Aerostar SES LLC, Bristol Earth Sciences LLC, CCI Industrial Services LLC, CCI Energy and Construction Services LLC, Eagle Medical Services LLC, Kakivik Asset Management LLC, Bristol Resources, SES Design/Build

What Can *Top 49er

Do For Civil Construction Demolition & Surveying Environmental Remediation Facilities Management Facilities Support Services Food Service Contractors Fuels Management Government Contracting Healthcare Environment Services Hospital Aseptic Maintenance Janitorial Services Medical Augmentation Oil & Gas Pipeline Records Management Security Guard Services Simulations Support Operations Staff Augmentation Training Range Operations Vertical Construction

Ahtna Shareholder Descendant & Employee Ray Craig

*Eligible for 8(a) & HUBZone set-aside contracting opportunities

Ahtna, Incorporated, an Alaska Native Regional Corporation and a 2012 Top 49er, is a global company providing exceptional construction and integrated services to both government and private sector clients. Simply ask - What can Ahtna do for you? Ahtna Netiye’, Inc., our wholly owned business development arm, manages all of our subsidiary operations. For more information, please visit: www.ahtna-inc.com

■ 90

Ahtna, Incorporated

AHTNA NETIYE’

406 W FIREWEED LANE, SUITE 101 ANCHORAGE, AK 99503 PH: (907) 868-8250 | FAX: (907) 868-8285

www.akbizmag.com • Alaska Business Monthly • October 2012

ALASKA IS OUR HOME

Carlile operates across the United States and Canada but our roots are planted firmly in Alaska – and that’s why we’re strong supporters of responsible resource development. Hard work and a dedication to growing our oil and gas, mining, fishing and construction industries has been at the core of Carlile’s business model since inception, ensuring these industries are backed by a transportation company that appreciates all our great state has to offer.

solutions finder.

www.carlile.biz l 1.800.478.1853 ALASKA I HAWAII I UNITED STATES I CANADA

Gems of the north

NANA Regional Corporation Inc.

Top Executive: Marie N. Greene, President & CEO

PO Box 49 Kotzebue, AK 99503 Phone: 907-442-3301 Fax: 907- 442-4161 news@nana.com www.nana.com/regional www.facebook.com/nanaregionalcorporation Worldwide Employees: 13,453 Alaska Employees: 4,734 Year Established: 1972 49er Rank in 2011: 2 Change from Last Year’s Rank: Down 1

Chenega Corporation

Top Executive: Charles W. Totemoff, President & CEO 3000 C St., Suite 301 Anchorage, AK 99503 Phone: 907-277-5706 Fax: 907-277-5700 info@chenega.com www.chenega.com

tunities at the Arctic Deposit and Bornite. NANA is the landowner at Bornite. Subsidiaries: NANA Development Corporation

Main Business: Alaska Native Corporation Principal Activities: Resource development, land management, engineering and construction, information technology and telecommunications, facilities management and logistics, real estate and hotel development. Recent Noteworthy Events: NANA Regional Corporation and NovaGold Resources have partnered on mineral exploration and development oppor-

2009 $1,077,000,000 2008 $894,000,000 2007 $768,000,000 Difference from 2010 Revenue: 0% Main Business: Government services, contracting and commercial services.

Worldwide Employees: 5,100 Alaska Employees: 362 Year Established: 1974 49er Rank in 2011: 4 Change from Last Year’s Rank: Same Gross Revenue 2011 $1,100,000,000 2010 $1,100,000,000

Gross Revenue 2011 $1,800,000,000 2010 $1,600,000,000 2009 $1,260,000,000 2008 $1,175,500,000 2007 $975,000,000 Difference from 2010 Revenue: 13%

Principal Activities: Professional services contracting for federal government, including information technology, security services, logistics, training, intel and military ops, telecommunications, environmental services, health care solutions and light manufacturing. Commercial services include tourism and electrical contracting. Recent Noteworthy Events: Invested nearly $5 million in economic, social, cultural and educational beneﬁts and programs for Shareholders,

their spouses and descendants in FY 2011. Subsidiaries: Technical & Installation Services: CTSC LLC, CASE LLC, Chenega Aerospace LLC, Chenega Integrated Systems LLC, Chenega Management LLC, Chenega Operations Services LLC; Military Intelligence & Operations Support: Chenega Federal Systems LLC, Chenega Logistics LLC, Nangwik Services LLC, Chenega Technical Innovations LLC; Security: Chenega Security & Protection Services LLC, CS3 (Chenega Security & Support Solutions LLC); Environmental & Healthcare Solutions: Chenega Global Services LLC, Chenega Support Services LLC, GTW Consultants & Associates LLC, American Hospital Services Group LLC; Professional Services: Chenega Government Consulting LLC, Time Solutions LLC; Commercial Services: Hot Wire LLC, Clarion Suites, Quality Suites, Voyager Hotel, Icy Bay Leasing

t Anchorage Me eting Champions!

Congratulations to the Alaska IRWA Chapters – Visi

International Right of Way Association THE MEETING: Annual International Education Conference June 6-16, 2017 1,000 delegates Estimated Economic Impact: $1.9 million

THE RIGHT WAY FORWARD Clearing a path – it’s what right of way professionals do. That can mean a new bike path or a road linking neighborhoods, but sometimes their connections can create much more. Alaska’s International Right of Way Association (IRWA) chapters banded together to help make the pitch for their association to meet in Anchorage, bringing new convention business to the city. That connection kept Anchorage and the International Right of Way Association right on track.

Are you a member of a national or international association? Bring your group to Anchorage. Contact Visit Anchorage: meetings@anchorage.net | 907-257-2341

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www.Anchorage.net

www.akbizmag.com • Alaska Business Monthly • October 2012

Gems of the north

Lynden Inc.

2008 $780,000,000 2007 $740,000,000 Difference from 2010 Revenue: 18%

Top Executive: Jim Jansen, Chairman 6641 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-245-1544 Fax: 907-245-1744 information@lynden.com www.lynden.com

Main Business: Multi-Modal Transportation and Logistics

Subsidiaries: Alaska Marine Lines, Alaska West Express, Bering Marine, Lynden Air Cargo, Lynden International, Lynden Logistics, Knik Construction Co. Inc., Lynden Transport Inc.

Principal Activities: Lynden capabilities include truckload, less-than-truckload, scheduled and chartered barges, air freighters, domestic and international forwarding, remote site construction, bulk commodities hauling, hovercraft and multi-modal logistics.

Worldwide Employees: 2,200 Alaska Employees: 714 Year Established: 1954 49er Rank in 2011: 7 Change from Last Year’s Rank: Up 2

Recent Noteworthy Events: Conduct business online with Lynden’s EZ Commerce Center. Customers can request pickups, generate documents, trace shipments, view delivery receipts, download activity reports and receive PDF invoices.

Gross Revenue 2011 $850,000,000 2010 $720,000,000 2009 $680,000,000

Chugach Alaska Corporation Top Executive: Sheri Buretta, Chair 3800 Centerpoint Dr. Anchorage, AK 99503 Phone: 907-563-8866 Fax: 907-563-8402 bwelty@chugach-ak.com www.chugach-ak.com

2008 $951,945,000 2007 $940,509,399 Difference from 2010 Revenue: -18% Main Business: Construction, engineering, oil and gas, manufacturing, oil spill response. Principal Activities: Core businesses of base operations and facilities maintenance, subsidiaries provide services in general construction and management, civil engineering, oil and gas, education, oil spill response, IT, mfg., telecommunications, and environmental services.

Worldwide Employees: 5,393 Alaska Employees: 671 Year Established: 1971 49er Rank in 2011: 5 Change from Last Year’s Rank: Down 1

Subsidiaries: Chugach Alaska Services Inc., Chugach Federal Solutions Inc., Chugach Government Services Inc., Chugach Industries Inc., Chugach Information Technology Inc., Chugach McKinley Inc., Chugach Management Services Inc., Chugach Support Services Inc., Chugach World Services Inc., Defense Base Services Inc., Falcon International Inc., Wolf Creek Fabrication Services Inc., Chugach Education Services Inc.

Recent Noteworthy Events: Nuchek Spirit Camp is a cultural education camp held every summer on Hinchinbrook Island. Chugach educators, Elders, and children assemble to learn traditional subsistence skills and the language.

Gross Revenue 2011 $765,805,249 2010 $936,975,000 2009 $1,105,265,000

40th year of empowering young people to own their economic success

Celebrate Junior Achievement’s Business Hall of Fame Laureates Dena’ina Center - January 24, 2013 5:30 p.m. reception, dinner/ceremony 6:30 p.m.

Honorees Mark Eliason – USTravel Byron Mallott – Alaska Air Group Rick Mystrom – Business Owner, Former Anchorage Mayor Joe Usibelli, Jr. – Usibelli Coal Mine

Call Flora Teo at (907) 344-0101 to reserve a table at this prestigious event or go to http://alaska.ja.org for more information ■ 94

Sponsorship opportunities for the gala induction ceremony on Jan. 24 at the Dena’ina Center. Platinum Sponsorship – $4,000 Gold Sponsorship – $3,000 Silver Sponsorship – $2,500 Table – $1,500

www.akbizmag.com • Alaska Business Monthly • October 2012

ONE People

People

ONE Region

ONE Future www.nana.com

Gems of the north

Afognak Native Corp./Alutiiq

Top Executive: Richard Hobbs, President & CEO 215 Mission Rd., Suite 212 Kodiak, AK 99503 Phone: 907-762-9457 Fax: 907-486-2514 info@alutiiq.com www.afognak.com

remote worksite camp leasing company, Afognak Leasing. Began commercial development of company owned property in Anchorage midtown off C Street. Subsidiaries: Community Power Corporation, Afognak Leasing, Alutiiq Oilﬁeld Solutions

Main Business: Government Contracting

Worldwide Employees: 5,000 Alaska Employees: 166 Year Established: 1977 49er Rank in 2011: 6 Change from Last Year’s Rank: Down 1

Doyon Limited

Top Executive: Aaron Schutt, President & CEO 1 Doyon Pl., Suite 300 Fairbanks, AK 99701 Phone: 907-459-2000 Fax: 907-459-2060 info@doyon.com www.doyon.com

Worldwide Employees: 2,818 Alaska Employees: 1,781 Year Established: 1972 49er Rank in 2011: 8 Change from Last Year’s Rank: Same

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Gross Revenue 2011 $711,080,000 2010 $783,000,000 2009 $766,000,000 2008 $729,800,000 2007 $515,700,000 Difference from 2010 Revenue: -9%

Principal Activities: Government contracting, construction, logistics support services, security/ law enforcement, operations/maintenance services, youth training services, IT/technical support services, oilﬁeld services and leasing. Recent Noteworthy Events: Acquired Colorado-based bio-renewable energy company, Community Power Corporation. Established

Gross Revenue 2011 $468,400,000 2010 $458,600,000 2009 $416,400,000 2008 $295,560,000 2007 $272,370,000 Difference from 2010 Revenue: 2%

Subsidiaries: Doyon Transitional Inc., Doyon Oil Field Services Inc., Doyon Government Contracting Inc., Doyon Natural Resources Development Corporation

Main Business: For-proﬁt regional Native corporation. Principal Activities: Oilﬁeld services, drilling and pipeline infrastructure construction, government services, security, utility management, natural resource development, facility and food services, remote site support, engineering, construction and tourism.

www.akbizmag.com • Alaska Business Monthly • October 2012

Gems of the north

Alaska USA Federal Credit Union

Top Executive: William Eckhardt, President PO Box 196613 Anchorage, AK 99519 Phone: 907-563-4567 Fax: 907-929-6593 www.alaskausa.org

Gross Revenue 2011 $311,000,000 2010 $302,000,000 2009 $312,000,000 2008 $311,600,000 2007 $270,300,000 Difference from 2010 Revenue: 3%

USA Foundation, providing funds for services for children, veterans, active duty military and their families. Subsidiaries: Alaska USA Mortgage Co., Alaska USA Trust Co., Alaska USA Insurance Brokers LLC, Alaska USA Title Agency

Main Business: Financial Services

Worldwide Employees: 1,705 Alaska Employees: 1,332 Year Established: 1948 49er Rank in 2011: 10 Change from Last Year’s Rank: Up 1

Principal Activities: Financial services for consumers and businesses, including: savings, checking and loans, deposits, investment and trust, mortgage and real estate, title and escrow, and insurance—personal and business. Recent Noteworthy Events: Donated to more than 200 community and service organizations statewide. Helps raise money for the Alaska

Calista Corporation

Top Executive: Andrew Guy, President & CEO 301 Calista Ct., Suite A Anchorage, AK 99518 Phone: 907-279-5516 Fax: 907-272-5060 calista@calistacorp.com www.calistacorp.com

Worldwide Employees: 1,351 Alaska Employees: 272 Year Established: 1972 49er Rank in 2011: 14 Change from Last Year’s Rank: Up 4

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Gross Revenue 2011 $300,498,000 2010 $230,574,000 2009 $203,023,390 2008 $224,090,000 2007 $138,440,000 Difference from 2010 Revenue: 30% Main Business: Construction and engineering, real estate, publishing, equipment services. Principal Activities: Government contracting, remote and camp services, resource development, construction and engineering, real estate, publishing, advertising and media, heavy equipment salesrental-service and environmental remediation.

Subsidiaries: Yulista Holding LLC, Yulista Aviation Inc., Yulista Management Services Inc., Y-Tech Services Inc., Chiulista Services Inc., Brice Incorporated, Tunista Inc., Tunista Paciﬁc Rim LLC, Tunista Construction LLC, Tunista Services LLC, Yukon Equipment Inc., Futaris (Alaska Telecom Inc.), Calista Heritage Foundation, Calista Real Estate, Solstice Advertising, Sequestered Solutions, Brice Construction, Brice Marine, Brice Equipment, Brice Environmental, Camai Printing, Calista Heritage Foundation, Tunista Services LLC, Tunista Construction LLC, Tunista Paciﬁc Rim, Yulista Management Services Inc., Yulista Aviation Inc., Y-Tech Services Inc., Chiulista Services Inc., Camai Printing Co., Calista Real Estate, Yukon Equipment Inc.

www.akbizmag.com • Alaska Business Monthly • October 2012

Gems of the north

Chugach Electric Association Inc.

Top Executive: Bradley Evans, CEO 5601 Electron Dr. Anchorage, AK 99518 Phone: 907-563-7494 Fax: 907-562-0027 info@chugachelectric.com www.chugachelectric.com

Gross Revenue 2011 $283,618,369 2010 $258,300,000 2009 $290,200,000 2008 $289,500,000 2007 $259,000,000 Difference from 2010 Revenue: 10%

Principal Activities: Through superior service, safely provide reliable and competitively priced energy. Recent Noteworthy Events: Annual membership meeting and election.

Main Business: Retail and wholesale electric service within the Railbelt.

Worldwide Employees: 313 Alaska Employees: 313 Year Established: 1948 49er Rank in 2011: 12 Change from Last Year’s Rank: Up 1

Ukpeagvik Inupiat Corporation Top Executive: Anthony E. Edwardsen, President & CEO P.O. Box 890 Barrow, AK 99723 Phone: 907-852-4460 Fax: 907-852-4459 info@ukpik.com www.ukpik.com

Main Business: Native Village Corporation for Barrow, Alaska

Worldwide Employees: 1,867 Alaska Employees: 365 Year Established: 1973 49er Rank in 2011: 11 Change from Last Year’s Rank: Down 1 Gross Revenue 2011 $278,887,000 2010 $270,612,000

2009 $292,317,000 2008 $334,300,000 2007 $291,000,000 Difference from 2010 Revenue: 3%

Principal Activities: Architecture, engineering, surveying, construction, regulatory consulting, marine operations, information technology, maintenance and manufacturing, arctic science support, car rental, and auto repair. Recent Noteworthy Events: Net income increased 31%, $5.9 million in shareholder dividends paid in less than two years, 306 jobs provided to shareholders, descendants and shareholder spouses with a value of over $11.5 million in

wages and beneﬁts, UIC Foundation distributed $115,000 in educational scholarships. Subsidiaries: Bowhead Manufacturing Company, Bowhead Support Group, Bowhead Transport Company, C-Port Marine Services, Siku Construction, UIC Construction, UIC Developments, UIC Foundation Inc., UIC Real Estate Management, UIC Science, Bowhead Information Technology Service, Bowhead Systems Management, Bowhead Science & Technology, Bowhead Logistics Solutions, Bowhead Innovative Products & Solutions, Bowhead Professional Solutions, UMIAQ, UIC Iglu Services, Kautaq Construction, Ukpik, Bowhead Manufacturing Technologies, Tavsi Marine, Bowhead Communication Services, Bowhead Total Enterprise Solutions, Bowhead Business & Technology Solutions, Pueo, Bowhead Technical and Professional Services, Rain Proof Rooﬁng, Umialik Insurance Company

The Voice of Alaska Business

Congratulations to all of the Top 49er award recipients w w w.alaskachamber.com ■ 100

www.akbizmag.com • Alaska Business Monthly • October 2012

Gross Revenue 2011 $264,900,000 2010 $436,300,000 2009 $422,900,000 2008 $281,700,000 Difference from 2010 Revenue: -39%

Top Executive: Rod Worl, CEO

360 W. Benson Blvd., Suite 210 Anchorage, AK 99503 Phone: 907-334-6971 Fax: 907-334-6973 info@eyakcorp.com www.eyakcorporation.com

Principal Activities: Investment management, energy, banking, government contracting and stafﬁng. Recent Noteworthy Events: Established a plan to diversify revenue sources.

Top Executive: Chris McNeil, President & CEO One Sealaska Plaza, Suite 400 Juneau, AK 99801 Phone: 907-586-1512 Fax: 907-463-3897 webmaster@sealaska.com www.sealaska.com

Worldwide Employees: 0 Alaska Employees: 500 Year Established: 1972 49er Rank in 2011: 15 Change from Last Year’s Rank: Up 1

Subsidiaries: Eyak Development Corporation, Eyak Services LLC, Eyak Resources LLC, Cordova Central LLC, NorthTide Group LLC, Orca International Management LLC, Eyak Technology LLC, The aEonian Group LLC

Main Business: Alaska Native Corporation.

Worldwide Employees: 309 Alaska Employees: 73 Year Established: 1973 49er Rank in 2011: 9 Change from Last Year’s Rank: Down 4

Sealaska

Gems of the north

The Eyak Corporation

Gross Revenue 2011 $259,487,000 2010 $223,823,000 2009 $196,017,000 2008 $125,774,000 2007 $193,970,000 Difference from 2010 Revenue: 16% Main Business: Natural resources, manufacturing, services, diversity solutions, and investment funds. Sealaska is committed to sustaining Southeast regional economies and looking for new business opportunities.

Principal Activities: Forest products/marketing, silviculture, land management, ﬁnancial investments, plastics injection molding/manufacturing, IT, construction aggregates, environmental remediation, consulting, construction, security services, cultural preservation. Subsidiaries: Sealaska Timber Corporation, Synergy Systems, Alaska Coastal Aggregates, Sealaska Environmental Services, Nypro Kanaak Guadalajara, Nypro Kanaak Alabama, Nypro Kanaak Iowa, Kingston Environmental, Managed Business Solutions, Sealaska Global Logistics, Sealaska Constructors, Security Alliance, Haa Aani LLC

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Gems of the north

The Wilson Agency LLC Top Executive: Lon Wilson, President 3000 A St., Suite 400 Anchorage, AK 99503 Phone: 907-277-1616 Fax: 907-274-7011 info@thewilsonagency.com www.thewilsonagency.com

Worldwide Employees: 19 Alaska Employees: 17 Year Established: 1964 49er Rank in 2011: 17 Change from Last Year’s Rank: Up 2

Golden Valley Electric Association Top Executive: Brian Newton, President & CEO PO Box 71249 Fairbanks, AK 99707 Phone: 907-452-1151 Fax: 907-458-6368 info@gvea.com www.gvea.com

Recent Noteworthy Events: Recipient of Golden Eagles Award by the National Association of Health Underwriters. President Lon Wilson elected Chair of AEDC, VP Jennifer Bundy-Cobb elected president of Anchorage Community Health Center.

Gross Revenue 2011 $244,694,207 2010 $205,440,336 2009 $205,826,042 2008 $159,900,000 2007 $147,820,000 Difference from 2010 Revenue: 19% Main Business: Strategic employee beneﬁt consultants. Principal Activities: Strategic employee beneﬁt consultants, offering advice on employee engagement, group health, life insurance and retirement options.

Recent Noteworthy Events: GVEA moved forward with construction of the Eva Creek Wind Project near Healy. This stands to the be largest wind project along the Railbelt with a fall 2012 anticipated completion.

Gross Revenue 2011 $244,149,764 2010 $220,020,165 2009 $197,421,331 2008 $214,000,000 2007 $196,000,000 Difference from 2010 Revenue: 11% Main Business: Owns and operates ﬁve power plants providing power to 100,000 Interior residents.

Worldwide Employees: 258 Alaska Employees: 258 Year Established: 1946 49er Rank in 2011: 16 Change from Last Year’s Rank: Same

Principal Activities: A member-owned electric cooperative serving 90,000 Interior residents from Cantwell north along the Parks Highway and from Fairbanks south to Alyeska’s Pump Station 9 along the Richardson Highway.

constructing alaska’s future

©KenGrahamPhotography.com

740 Bonanza Avenue Anchorage, Alaska 99518 Phone 907-562-2336 Fax 907-561-3620 davisconstructors.com ■ 102

Aeromedical / Mental Health Clinic Joint Base Elmendorf Richardson

davis constructors & engineers inc.

www.akbizmag.com • Alaska Business Monthly • October 2012

Top Executive: Gail Schubert, President & CEO 4600 Debarr Rd. Suite, 200 Anchorage, AK 99508 Phone: 907-563-3788 Fax: 907-563-2742 info@beringstraits.com www.beringstraits.com

Worldwide Employees: 997 Alaska Employees: 387 Year Established: 1972 49er Rank in 2011: 18 Change from Last Year’s Rank: Up 1

Udelhoven Oilﬁeld System Service

Top Executive: Jim Udelhoven, CEO 184 E. 53rd Ave. Anchorage, AK 99518 Phone: 907-344-1577 Fax: 907-344-5817 rfrontde@udelhoven.com www.udelhoven.com

Gross Revenue 2011 $206,000,000 2010 $190,336,771 2009 $162,300,000 2008 $113,335,070 Difference from 2010 Revenue: 8% Main Business: Government service contracts, construction, property management, IT. Principal Activities: Property management, mining support services, facilities and administration support, construction and electrical subcontractor, information technology, communications, aerospace support services, supply, logistics support, LMR maintenance, manufacturing, aircraft maintenance.

Gross Revenue 2011 $201,631,889 2010 $133,582,856 2009 $132,131,000 2008 $124,417,000 2007 $106,830,000 Difference from 2010 Revenue: 51%

Gems of the north

Bering Straits Native Corporation

Recent Noteworthy Events: Ratiﬁcation of the Salmon Lake Land Ownership and Consolidation Agreement. BSNC’s purchase of the Rock Creek Mine assets. BSNC continues to work with Federal and State agencies to monitor developments in the Arctic as they affect the region’s communities economic and environmental health. Subsidiaries: Inuit Services Inc., Bering Straits Aerospace Services LLC, Bering Straits Logistics Services LLC, Sound Quarry Inc., Eagle Electric LLC, Bering Straits Information Technologies LLC, Bering Straits Technical Services LLC, Bering Straits Aki LLC, Eagle Eye Electric LLC, Ayak LLC, Global Support Services LLC, Global Management Services LLC, Iyabak LLC, Global Asset Technology LLC, Global Management Services LLC, Global Percision Systems LLC

Principal Activities: Mechanical and electrical inspection, functional check-out, quality assurance/ quality control, plumbing, welding, modular fabrication, industrial and commercial construction. Subsidiaries: Udelhoven Inc., Houston, and Udelhoven International Inc., Houston.

Main Business: Oilﬁeld services, construction management, electrical and mechanical system installation.

Worldwide Employees: 877 Alaska Employees: 832 Year Established: 1970 49er Rank in 2011: 28 Change from Last Year’s Rank: Up 10

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Gems of the north

Cook Inlet Region Inc.

Top Executive: Margaret Brown, President & CEO P.O. Box 93330 Anchorage, AK 99509 Phone: 907-274-8638 Fax: 907-263-5183 info@ciri.com www.ciri.com

Gross Revenue 2011 $200,800,000 2010 $188,300,000 2009 $79,893,000 2008 $11,119,000 2007 $9,700,000 Difference from 2010 Revenue: 7% Main Business: CIRI is an Alaska Native regional corporation.

Worldwide Employees: 80 Alaska Employees: 80 Year Established: 1972 49er Rank in 2011: 19 Change from Last Year’s Rank: Same

Principal Activities: Diversiﬁed business portfolio includes energy and resource development, oilﬁeld and construction services, real estate development and management, environmental remediation, tourism and hospitality, telecommunications, and other investments.

Ahtna Inc.

Gross Revenue 2011 $200,000,000 2010 $243,000,000 2009 $231,000,000 2008 $196,141,378 2007 $99,848,357 Difference from 2010 Revenue: -18%

Top Executive: Bob Sandt, CEO PO Box 649 Glennallen, AK 99588 Phone: 907-822-3476 Fax: 907-822-3495 ituimalealiifano@ahtna.net www.ahtna-inc.com

Main Business: Native Organization

Worldwide Employees: 1,929 Alaska Employees: 377 Year Established: 1972 49er Rank in 2011: 13 Change from Last Year’s Rank: Down 7

Principal Activities: Construction and remediation services, oilﬁeld services, administrative and support services, technical services, security services, forestry, gravel, and land use sales.

Recent Noteworthy Events: CIRI continues to invest in and develop diverse real estate, energy, government contracting and other projects in Alaska and Outside. Subsidiaries: Alaska Interstate Construction LLC, ANC Research & Development LLC (ANC R&D), CIRI Alaska Tourism Corp. (CATC), CIRI Land Development Co. (CLDC), North Wind Group, Fire Island Wind LLC, Stone Horn Ridge LLC, Paciﬁc Tower Properties Inc., Cruz Energy Services LLC, Cruz Marine LLC, Weldin Construction LLC, North Wind Services

Subsidiaries: Ahtna Engineering Services LLC, Ahtna Development Corp., Ahtna Facility Services Inc., Ahtna Enterprises Corp., Ahtna Contractors LLC, Koht’aene Enterprises Co. LLC, Ahtna Support & Training Services LLC, Ahtna Technical Services Inc., Ahtna Government Services Corp., Ahtna Construction & Primary Product, Ahtna Design Build Inc., Ahtna Professional Services Inc., Ahtna Environmental Inc., Ahtna Technologies Inc., Ahtna Logistics Inc.

Recent Noteworthy Events: Ahtna established a permanent fund that we can use to generate dividends for future obligations.

Alaska USA Better for your business Take advantage of customized solutions, fewer fees, and local service. n n n n n n

Checking, loans, and depository services Online account management Business Visa® Check Card Insurance, bonds, and employee benefits Retirement services Investment management*

Find out what Alaska USA can do for your business. 563-4567 | (800) 525-9094 | www.alaskausa.org Member funds insured by the NCUA. * Investment services provided by Alaska USA Trust Company. Alaska USA Trust Company products are not federally insured and are not obligations of, or guaranteed by, Alaska USA Federal Credit Union or any other affiliated entity. These products involve investment risks that include possible loss of principal.

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Top Executive: Mark Eliason, President & CEO 999 E. Tudor Rd., Suite 200 Anchorage, AK 99503 Phone: 907-561-2434 Fax: 907-786-0180 info@ustravel.com www.ustravel.com

Principal Activities: Full-service travel management for corporate and leisure customers. Recent Noteworthy Events: Opening Portland, Oregon, ofﬁce in September.

Top Executive: Howard Patkotak, President 3201 C Street, Suite 700 Anchorage, AK 99503 Phone: 907-562-8728 Fax: 907-562-8751 info@olgoonik.com www.olgoonik.com

Worldwide Employees: 691 Alaska Employees: 157 Year Established: 1973 49er Rank in 2011: 29 Change from Last Year’s Rank: Up 7

Subsidiaries: Doug Fox Travel (western Washington state), Air Fulﬁllment Services (Des Moines, Iowa), Visions, Explore Tours, Alaska Exposure

Gross Revenue 2011 $181,900,000 2010 $174,300,000 2009 $166,000,000 2008 $192,000,000 2007 $191,000,000 Difference from 2010 Revenue: 4% Main Business: The largest independent travel management company in the Paciﬁc Northwest.

Worldwide Employees: 170 Alaska Employees: 95 Year Established: 1978 49er Rank in 2011: 21 Change from Last Year’s Rank: Same

Olgoonik Corporation

Gems of the north

USTravel

Gross Revenue 2011 $178,400,000 2010 $133,000,000 2009 $135,000,000 2008 $82,000,000 2007 $78,480,000 Difference from 2010 Revenue: 34%

Subsidiaries: Olgoonik Oilﬁeld Services, Olgoonik Specialty Contractors, Olgoonik Machinery and Equipment, Kuk Construction, Olgoonik Logistics, O.E.S., Olgoonik Management Services, Olgoonik Technical Services, Olgoonik Global Security, Olgoonik Diversiﬁed Services, Olgoonik Aerospace Services, Olgoonik Development

Main Business: Government/Commercial Contracting Principal Activities: Oilﬁeld support, construction, logistics/supply chain management, operations/maintenance, environmental management, and technical security services to government and commercial clients worldwide.

Our outstanding management team specializes in providing design, pre-construction and construction services on all types of civil and commercial construction projects. The $20.3 million Kodiak Police Station and Jail is just one of our many projects. For a complete listing and more information visit our website www.rogerhickelcontracting.com 11001 Calaska Circle I Anchorage, Alaska I 99515 I phone 907-279-1400 I fax 907-279-1405 www.akbizmag.com • Alaska Business Monthly • October 2012

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Gems of the north

Neeser Construction Inc. Top Executive: Jerry Neeser, President 2501 Blueberry Rd., Suite100 Anchorage, AK 99503 Phone: 907-276-1058 Fax: 907-276-8533 jerry_neeser@neeserinc.com www.neeserinc.com

Gross Revenue 2011 $160,000,000 2010 $184,000,000 2009 $110,400,000 2008 $105,200,000 2007 $130,000,000 Difference from 2010 Revenue: -13% Main Business: General contracting ﬁrm.

Worldwide Employees: 277 Alaska Employees: 274 Year Established: 1974 49er Rank in 2011: 20 Change from Last Year’s Rank: Down 3

Principal Activities: General contracting, commercial, industrial, medical, multi-family, retail and correctional. Design-build fast-track turnkey projects. Hard bid, negotiated and construction management for fee contracting methods utilized.

Carlile Transportation Systems

Gross Revenue 2011 $147,000,000 2010 $137,100,000 2009 $131,000,000 2008 $123,000,000 2007 $122,000,000 Difference from 2010 Revenue: 7%

Top Executive: Linda Leary, President 1800 E. First Ave. Anchorage, AK 99501 Phone: 907-276-7797 Fax: 907-278-7301 pspittler@carlile.biz www.carlile.biz

Recent Noteworthy Events: Completed Goose Creek Correctional Center for which we won the DBIA design build national award. Completed work on Marshall School, Salvation Army Community Center & Fisher House. Nearing completion on State of Alaska Crime Lab, Southcentral Foundation Primary Care Facility in Wasilla, and Norton Sound Hospital.

Principal Activities: Truck load and less than truck load, heavy haul, hazmat and warehousing. Subsidiaries: Carlile Logistics

Main Business: Full-service transportation company.

Worldwide Employees: 675 Alaska Employees: 500 Year Established: 1980 49er Rank in 2011: 27 Change from Last Year’s Rank: Up 3

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Top Executive: D.H. Cuddy, President & Chairman

PO Box 100720 Anchorage, AK 99510 Phone: 907-777-4362 Fax: 907-777-3406 customer.service@fnbalaska.com www.fnbalaska.com

Gross Revenue 2011 $143,375,000 2010 $150,934,000 2009 $156,210,000 2008 $170,670,000 2007 $188,800,000 Difference from 2010 Revenue: -5%

Gems of the north

First National Bank Alaska

Principal Activities: Services include: receiving and lending of money, trust banking, escrow and contract collection, BankCard services and safe deposit box facilities. Recent Noteworthy Events: Celebrating 90 years in Alaska—1922-2012.

Main Business: Full service commercial bank.

Worldwide Employees: 700 Alaska Employees: 700 Year Established: 1922 49er Rank in 2011: 23 Change from Last Year’s Rank: Down 2

Aleut Corporation

Top Executive: David Gillespie, CEO 4000 Old Seward Hwy., Suite 300 Anchorage, AK 99503 Phone: 907-561-4300 Fax: 907-563-4328 info@aleutcorp.com www.aleutcorp.com

Worldwide Employees: 450 Alaska Employees: 125 Year Established: 1972 49er Rank in 2011: 22 Change from Last Year’s Rank: Down 4

Gross Revenue 2011 $143,046,000 2010 $159,416,000 2009 $146,058,000 2008 $116,051,000 Difference from 2010 Revenue: -10% Main Business: Contracting, oil and fuel storage, real estate, etc.

Principal Activities: Commercial and residential real estate, government contracting, fuel and port services, gravel operations, water utilities, oil well testing instrumentation and testing, water testing, mechanical contracting, oil and fuel storage. Subsidiaries: Aleut Enterprises LLC, Anchorage, Alaska; Aleut Management Services, Colorado Springs, Colorado; Aleut Real Estate LLC, Anchorage, Alaska; Alaska Instrument LLC, Anchorage, Alaska; C&H Testing LLC Bakersﬁeld, California; Patrick Mechanical, Analytica Group

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Gems of the north

The Tatitlek Corporation

Top Executive: Roy Totemoff, President & CEO 561 E. 36th Ave. Anchorage, AK 99503 Phone: 907-278-4000 Fax: 907-278-4050 info@tatitlek.com www.tatitlek.com

Main Business: Alaska Native Village Corporation.

Recent Noteworthy Events: Tatitlek Corporation’s wholly owned subsidiaries continued to deliver key critical services to the US government’s important priorities and mission needs. Subsidiaries grew through new service offerings. Subsidiaries: Tatitlek Contractors Inc., Tatitlek Construction Services Inc., Tatitlek Management Inc., Tatitlek Support Services Inc., Tatitlek Technologies Inc., Tatitlek Training Services Inc., GeoNorth LLC, Tatitlek Logistics Corporation, Tatitlek Response Services Inc.

Worldwide Employees: 1,582 Alaska Employees: 251 Year Established: 1973 49er Rank in 2011: 32 Change from Last Year’s Rank: Up 5

Principal Activities: Military training support, mobile training teams, foreign culture and language training, embedded linguist, weapon training, logistics services, simulation systems O&M, program analyst, construction, facilities and equipment maintenance, installation support services, IT.

H.o.T.H. dba Era Alaska

Gross Revenue 2011 $136,000,000 2010 $120,000,000 2009 $117,000,000 2008 $124,000,000 2007 $60,000,000 Difference from 2010 Revenue: 13%

Principal Activities: Scheduled passenger services, charter, cargo and air services to nearly 100 communities in Alaska.

Main Business: Daily air carrier service to nearly 100 communities statewide.

Subsidiaries: Era Aviation Inc., Hageland Aviation Services Inc., Frontier Flying Service

Top Executive: Bob Hajdukovich, CEO 4700 Old International Airport Rd. Anchorage, AK 99502 Phone: 907-266-8394 Fax: 907-266-8391 PR@ﬂyera.com www.ﬂyera.com

Worldwide Employees: 901 Alaska Employees: 861 Year Established: 1948 49er Rank in 2011: 30 Change from Last Year’s Rank: Up 2

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Gross Revenue 2011 $137,189,354 2010 $110,700,000 2009 $107,500,000 2008 $90,000,000 2007 $81,200,000 Difference from 2010 Revenue: 24%

Recent Noteworthy Events: Expanded Dash 8 ﬂeet to six. Adding two more in late 2012. Largest air carrier based wholly in Alaska.

www.akbizmag.com • Alaska Business Monthly • October 2012

Gross Revenue 2011 $135,188,063 2010 $139,476,350 2009 $107,748,370 2008 $106,000,000 2007 $85,000,000 Difference from 2010 Revenue: -3%

Top Executive: Robert Loiselle, President & CEO 3075 Vintage Blvd., Suite 200 Juneau, AK 99801 Phone: 907-790-4990 Fax: 907-790-4999 mail.gbi@goldbelt.com www.goldbelt.com

Main Business: Government contracting, real estate development and tourism.

Worldwide Employees: 1,161 Alaska Employees: 911 Year Established: 1974 49er Rank in 2011: 26 Change from Last Year’s Rank: Down 3

Principal Activities: Tourism, government contracting, facility management, IT consulting, construction and vehicle leasing.

Koniag Inc.

Gross Revenue 2011 $131,052,000 2010 $149,550,000 2009 $115,569,000 2008 $101,266,000 2007 $90,769,000 Difference from 2010 Revenue: -12%

Top Executive: William Anderson Jr., President & CEO 194 Alimaq Dr. Kodiak, AK 99615 Phone: 907-486-2530 Fax: 907-486-3325 https://www.facebook.com/KoniagInc www.koniag.com

Worldwide Employees: 493 Alaska Employees: 73 Year Established: 1972 49er Rank in 2011: 24 Change from Last Year’s Rank: Down 6

Main Business: Alaska Regional Native Corporation Principal Activities: Koniag’s business activities include aerospace manufacturing, construction and environmental, industrial services, oilﬁeld services, technical services, real estate and technology business solutions.

Gems of the north

Goldbelt Inc.

Subsidiaries: Goldbelt Raven, Goldbelt Orca, Goldbelt Wolf, Goldbelt Glacier Health Services, Nisga’a Data Systems, LifeSource Biomedical, Goldbelt Eagle, Goldbelt Falcon, Goldbelt Hawk, Peregrine Technical Solution, Facility Support Services, Goldbelt Security Services, Goldbelt Falcon LLC, Goldbelt Hawk LLC, Nisga’a Data Systems LLC, Godlbelt Raven LLC, CP Leasing Inc., Lifesource Biomedical LLC, Goldbelt Orca LLC, Goldbelt Eagle LLC, Facility Support Services LLC, Goldbelt Security Services LLC, Goldbelt Cedar LLC, Peregrine Technical Solutions LLC, Goldbelt Glacier Health Services LLC

Subsidiaries: Angeles Composite Technologies, Inc, Angayak Construction Enterprise Inc., Clarus Technologies LLC, Ditigized Schematic Solutions LLC, Frontier Systems Integrator LLC, Koniag Development Corporation, Koniag Services Inc., Professional Computing Resources Inc., XMCO Inc., Clarus Environmental Services LLC, Clarus Fluid Intelligence LLC, Dowland-Bach Corp., Koniag Technology Solutions LLC, Koniag Technical Services LLC, PacArctic Logistics LLC, Open Systems Technologies Inc., Koniag Information Security Services LLC, Granite Cover Quarry LLC, Karluk River Cabins, Kodiak Brown Bear Center, Karluk Wilderness Adventures, LUGO-KDC, Washington Management Group

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Gems of the north

Three Bears Alaska Inc.

Top Executive: David Weisz, President & CEO 445 N. Pittman Rd., Suite B Wasilla, AK 99623 Phone: 907-357-4311 Fax: 907-357-4312 steve@threebearsalaska.com www.threebearsalaska.com

Gross Revenue 2011 $121,093,287 2010 $109,060,780 2009 $111,247,617 Difference from 2010 Revenue: 11% Main Business: Retail sales.

Worldwide Employees: 366 Alaska Employees: 322 Year Established: 1980 49er Rank in 2011: 33 Change from Last Year’s Rank: Up 2

Davis Constructors & Engineers Inc.

Top Executive: Josh Pepperd, President 740 Bonanza Ave. Anchorage, AK 99518 Phone: 907-562-2336 Fax: 907-561-3620 admin@davisconstructors.com www.davisconstructors.com

Recent Noteworthy Events: Opened third warehouse store in the Mat-Su Valley at 3950 S. Knik Goose Bay Road in Wasilla. In addition to our normal great selection of groceries and general merchandise, this store includes a full-line hunting, ﬁshing and camping sporting goods department, and a 24/7 fuel station.

Principal Activities: Retail grocery, general merchandise, sporting goods, pharmacy, and fuel.

Gross Revenue 2011 $119,000,000 2010 $120,300,000 2009 $151,500,000 2008 $178,200,000 2007 $180,380,000 Difference from 2010 Revenue: -1% Main Business: Commercial construction and design-build.

Principal Activities: Commercial construction and design build. Current Projects: Covenant House Alaska Replacement, Military Housing Privatization – JBER, UAF Life Sciences Research & Teaching Facility, and Providence Generations & Alaska Cottages. Subsidiaries: Mass Excavation Inc.

Worldwide Employees: 185 Alaska Employees: 185 Year Established: 1976 49er Rank in 2011: 31 Change from Last Year’s Rank: Down 2

Transportation Solutions For Your Business!

Interior Alaska’s Fleet Headquarters SERVING ALASKA BUSINESS FOR 35 YEARS! Complete Line of Ford Vehicles in Stock

1625 Seekins Ford Dr. Fairbanks, Alaska 99701 (907) 459-4055 ■ 110

SEEKINS.com www.akbizmag.com • Alaska Business Monthly • October 2012

1000 Lake Colleen Rd. Prudhoe Bay, Alaska 99734 (907) 659-2770

gems of the north

Usibelli Coal Mine Inc. and Alaska Afﬁliates

Top Executive: Joseph Usibelli, Chairman PO Box 1000 Healy, AK 99743 Phone: 907-452-2625 Fax: 907-451-6543 info@usibelli.com www.usibelli.com

Worldwide Employees: 149 Alaska Employees: 149 Year Established: 1942 49er Rank in 2011: 35 Change from Last Year’s Rank: Up 2 Gross Revenue 2011 $107,878,996 2010 $96,753,015 2009 $91,458,640 2008 $73,120,000 2007 $66,230,000 Difference from 2010 Revenue: 11% Main Business: Coal mining. Principal Activities: Coal mining and coal marketing. Wholesale power and retail district heating, investments, real estate and vineyards. Recent Noteworthy Events: Exportation of coal to Chile, Korea and Japan. Subsidiaries: Aurora Energy, Usibelli Investments, Usibelli Vineyards

T H E E YA K C O R P O R AT I O N

Providing cultural, educational and financial benefits to our shareholders

360 W. Benson Blvd., Suite 210 . Anchorage, Alaska 99503 WWW.EYAKCORPORATION.COm

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gems of the north

Where you want to be in Fairbanks …for a day, a week, or a month.

Matanuska Electric Association Inc.

Top Executive: Joe Grifﬁth, General Manager 163 E. Industrial Way Palmer, AK 99645 Phone: 907-745-3231 Fax: 907-761-9368 contact@matanuska.com www.mea.coop

Worldwide Employees: 168 Alaska Employees: 145 Year Established: 1941 49er Rank in 2011: 37 Change from Last Year’s Rank: Up 3

Sophie Station Suites Your First Choice! And Best Choice! All Suite!

Gross Revenue 2011 $105,000,000 2010 $94,000,000 2009 $110,000,000 Difference from 2010 Revenue: 12%

A place where the staff treats you like you matter - constantly creating an atmosphere where guest service is the ultimate amenity.

Main Business: Rural Electric Cooperative Principal Activities: Member owned cooperative providing electric power to 56,000 customers from Eagle River up to Talkeetna and over to the Matanuska Glacier. Recent Noteworthy Events: Launched Round Up, a program to assist those in need in our communities. Groundbreaking for the 171 megawatt Eklutna Generation Station power plant was held June 26, and the plant will be online Jan. 1, 2015.

Separate bedroom Zach’s Restaurant Express Room Lounge Fitness Room

• • • •

Airport Shuttle Fully appointed kitchens Free WiFi and data ports Room Service

Business Meetings catered by Zach’s Restaurant FountainheadHotels.com Locally Owned in Fairbanks Reservations 800.528.4916

“Commitment to Quality Through Pride of Employee Ownership.” The Superior Group is committed to becoming the best mechanical and electrical contractor in Alaska... to do this we pledge to meet and exceed our customers’ requirements every time by providing services of the highest quality.

Superior Plumbing and Heating 349.6572 Alaska Sheet Metal 279.6009 Haakenson Electric 346.3043 Superior Mechanical Service 349.6550 Support Services of Alaska 278.8212 ©Ken Graham Photography

907.344.5011

www.superiorpnh.com • P.O. Box 230387 • Anchorage, Alaska 99523 ■ 112

www.akbizmag.com • Alaska Business Monthly • October 2012

gems of the north

MTA Inc.

Top Executive: Greg Berberich, CEO 1740 S. Chugach St. Palmer, AK 99645 Phone: 907-745-3211 Fax: 907-761-2481 www.mtasolutions.com

Worldwide Employees: 371 Alaska Employees: 371 Year Established: 1953 49er Rank in 2011: 34 Change from Last Year’s Rank: Down 1 Gross Revenue 2011 $100,000,000 2010 $106,000,000 2009 $109,000,000 2008 $103,290,000 2007 $95,800,000 Difference from 2010 Revenue: -6% Main Business: Telecommunications co-op providing services to Alaskans. Principal Activities: Alaskan owned co-op delivering advanced communications products including 3G wireless, high-deﬁnition digital television with video-on-demand, high-speed Internet, local and long-distance, online directory, IT business support, directory and television advertising and local community content. Recent Noteworthy Events: Now selling the iPhone; only carrier to provide Rolling Gigs; support more than 140 nonproﬁt organizations, groups and events; 59 years locally owned and operated in 2012. Subsidiaries: MTA Communications

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gems of the north

UAA Health Sciences Building Photos © Chris Arend Photography

The Kuskokwim Corporation Top Executive: Maver Carey, President & CEO 4300 B St. Anchorage, AK 99503 Phone: 907-243-2944 Fax: 907-243-2984 www.kuskokwim.com

Worldwide Employees: 144 Alaska Employees: 40 Year Established: 1977 49er Rank in 2011: 25 Change from Last Year’s Rank: Down 9 Gross Revenue 2011 $95,000,000 2010 $149,000,000 2009 $86,700,000 Difference from 2010 Revenue: -36% Main Business: Government services, construction, aerospace and real estate. Principal Activities: Aerospace, land management, real estate property management, civil engineering/ construction, initial outﬁtting/transition management. Subsidiaries: TKCA, Kuskokwim Properties LLC, TKCD

A L ASK A NS BU I L DI NG F OR A L ASK A NS 5050 Cordova Street, Anchorage, AK 99503 (907) 561-1993 P (907) 561-7899 F

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gems of the north

Construction Machinery Industrial

Top Executive: Ken Gerondale, President & CEO 5400 Homer Dr. Anchorage, AK 99518 Phone: 907-563-3822 Fax: 907-563-1381 o.prestwick@cmiak.com www.cmiak.com

Worldwide Employees: 102 Alaska Employees: 102 Year Established: 1985 49er Rank in 2011: 38 Change from Last Year’s Rank: Up 1 Gross Revenue 2011 $91,630,000 2010 $90,000,000 2009 $87,000,000 2008 $124,000,000 2007 $91,000,000 Difference from 2010 Revenue: 2% Main Business: CMI sells, rents and services heavy equipment. Principal Activities: Distributor of construction, mining and logging heavy equipment in Alaska. Representative for Volvo, Hitachi, Atlas Copco, Doosan, Metso, and Link-Belt. Recent Noteworthy Events: The highest market share for construction and mining equipment in North America for Volvo and Hitachi.

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gems of the north

Homer Electric Association Inc.

Top Executive: Bradley Janorschke, General Manager 3977 Lake St. Homer, AK 99603 Phone: 907-235-8551 Fax: 907-235-3313 www.homerelectric.com

Gross Revenue 2011 $84,000,000 2010 $72,000,000 2009 $87,283,352 2007 $70,000,000 Difference from 2010 Revenue: 17% Main Business: Member owned electric cooperative serving the western Kenai Peninsula.

Worldwide Employees: 146 Alaska Employees: 146 Year Established: 1945 49er Rank in 2011: 44 Change from Last Year’s Rank: Up 6

Colville Inc.

Principal Activities: Electric utility provider for most of the western Kenai Peninsula, from Sterling to Kachemak Bay. The company also operates and maintains the state-owned Bradley Lake hydroelectric project.

Recent Noteworthy Events: Independent Light generation plan is under way and will result in two generation plants on line by 2014. The primary generation facility will be the Nikiski Combined Cycle Conversion Project. There will also be a generation facility in Soldotna that will have a 48 megawatt capacity. Subsidiaries: Alaska Energy and Electric Cooperative Inc., Kenai Hydro LLC

Recent Noteworthy Events: Development of an Aviation Fuel Distribution Center on the North Slope. Retaining and renewing current market share, successfully made clients competitive in a changing market place.

Pouch 340012 Prudhoe Bay, AK 99734 Phone: 907-563-1080 Fax: 907-659-3190

Gross Revenue 2011 $81,000,000 2010 $78,000,000 2009 $75,900,000 2008 $64,400,000 2007 $49,700,000 Difference from 2010 Revenue: 4%

info@colvilleinc.com www.colvilleinc.com

Main Business: Arctic fuel logistics contractor, solid waste services, industrial supply.

Worldwide Employees: 125 Alaska Employees: 125 Year Established: 1981 49er Rank in 2011: 39 Change from Last Year’s Rank: Same

Principal Activities: Oil and gas industry and aviation support services, fuel industry supply and solid waste utility and logistics.

PenAir

Gross Revenue 2011 $72,100,000 2010 $72,300,000 2009 $70,100,000 2008 $70,100,000 2007 $70,300,000 Difference from 2010 Revenue: 0%

Main Business: Air transportation.

Gross Revenue 2011 $64,546,162 2010 $52,300,000 2008 $51,610,000 2007 $54,100,000 Difference from 2010 Revenue: 23%

Main Business: New and used auto sales, service and parts sales.

Top Executive: Eric Helzer, President & CEO

Top Executive: Danny Seybert, CEO 6100 Boeing Ave. Anchorage, AK 99502 Phone: 907-771-2500 Fax: 907-771-2665 missya@penair.com www.penair.com

Subsidiaries: Colville Inc, Colville Transport LLC, Brooks Range Supply Inc

Principal Activities: Regional airline serving 42 communities in Western Alaska, the Aleutians and Pribilofs.

Worldwide Employees: 530 Alaska Employees: 500 Year Established: 1955 49er Rank in 2011: 41 Change from Last Year’s Rank: Up 1

Anchorage Chrysler Dodge Center

Top Executive: Rodney Udd, President & CEO 2601 E. Fifth Ave. Anchorage, AK 99501 Phone: 907-276-1331 Fax: 907-264-2202 anchoragechryslerdodge.com www.anchoragechrysler.com

Principal Activities: Chrysler, Jeep and Dodge new and used vehicle sales and service. Your hometown dealer for 47 years.

Worldwide Employees: 95 Alaska Employees: 95 Year Established: 1963 49er Rank in 2011: 48 Change from Last Year’s Rank: Up 7

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www.akbizmag.com • Alaska Business Monthly • October 2012

Top Executive: Ralph Seekins, President 1625 Seekins Ford Dr. Fairbanks, AK 99701 Phone: 907-459-4000 Fax: 907-459-4057 sales@seekins.com www.seekins.com

Gross Revenue 2011 $63,993,582 2010 $65,520,021 2008 $60,400,000 2007 $64,300,000 Difference from 2010 Revenue: -2%

Main Business: Auto Dealership

Gross Revenue 2011 $63,000,000 2010 $75,000,000 2009 $90,000,000 2008 $78,000,000 2007 $86,000,000 Difference from 2010 Revenue: -16%

Principal Activities: Fort Richardson - COF, Fort Wainwright - FTW348A Hangar, FTW357 GSAB Hangar, ANTCH Ofﬁce Building Anchorage, UAA Renovation, Fred Meyer Dimond Renovation, American Fast Freight - Cross Dock Facility,

gems of the north

Seekins Ford Lincoln Inc.

Principal Activities: New and used auto sales, parts, service and body shop.

Worldwide Employees: 118 Alaska Employees: 118 Year Established: 1977 49er Rank in 2011: 43 Change from Last Year’s Rank: Up 1

Watterson Construction Co. Top Executive: Bill Watterson, President 6500 Interstate Cir. Anchorage, AK 99518 Phone: 907-563-7441 Fax: 907-563-7222 info@wattersonsconstruction.com wattersonconstruction.com

Main Business: General building contractor.

Worldwide Employees: 101 Alaska Employees: 100 Year Established: 1981 49er Rank in 2011: 40 Change from Last Year’s Rank: Down 3

Alaska Industrial Hardware Inc.

Gross Revenue 2011 $52,500,000 2010 $50,430,000 2008 $53,200,000 2007 $50,700,000 Difference from 2010 Revenue: 4%

Top Executive: Mike Kangas, President & General Manager 2192 Viking Dr. Anchorage, AK 99501 Phone: 907-276-7201 Fax: 907-258-3054 info@aih.com www.aih.com

Main Business: Retail, tools, hardware and construction supplies.

Recent Noteworthy Events: CHASE award with SOA OSHA, 2 LEED Gold and 2 LEED Silver Projects for Corps of Engineers, LEED Silver for ANTHC.

Principal Activities: Retail sale and industrial sale of tools, industrial supplies, hardware, fasteners, construction supplies, small equipment, pumps, generators and pressure washers. Recent Noteworthy Events: AIH opened a new 53,000 square foot store at 5655 Old Seward Highway in Anchorage. Subsidiaries: General Hardware Distributors

Worldwide Employees: 182 Alaska Employees: 182 Year Established: 1959 49er Rank in 2011: 49 Change from Last Year’s Rank: Up 5

Tatonduk Outﬁtters Ltd.

Top Executive: Robert Everts CEO & Owner 5525 Airport Industrial Rd. Fairbanks, AK 99709 Phone: 907-450-2300 Fax: 907-450-2320 shoshaw@evertsair.com www.evertsair.com

Gross Revenue 2011 $50,500,000 Difference from 2010 Revenue: 8% Main Business: Schedule and charter air transportation.

Principal Activities: Schedule and charter air freight services using DC-9, DC-6, C-46 and EMB 120 aircraft. Passenger charter service using Embraer 30 seat aircraft. Passenger and freight service from Fairbanks to interior Alaska destinations using PC12 and Caravan. Subsidiaries: Everts Air Cargo, Everts Air Alaska

Worldwide Employees: 279 Alaska Employees: 275 Year Established: 1978 Change from Last Year’s Rank: New

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gems of the north

Roger Hickel Contracting Inc.

Top Executive: Mike Shaw, President 11001 Calaska Cir. Anchorage, AK 99515 Phone: 907-279-1400 Fax: 907-279-1405 contact@rhcak.com www.rogerhickelcontracting.com

Gross Revenue 2011 $50,000,000 2010 $57,958,000 2009 $67,438,000 2008 $58,050,000 2007 $44,810,000 Difference from 2010 Revenue: -14%

Main Business: General contractor, commercial and road work.

Gross Revenue 2011 $47,630,000 Difference from 2010 Revenue: 1%

Principal Activities: Credit Union 1 is a full-service financial institution that provides a unique member rewards program, low-cost loans, free checking accounts, financial education and a wide variety of money management tools to help members achieve their financial goals.

Principal Activities: General contractor of civil and commercial projects. Union contractor and member of the Associated General Contractors of America.

Worldwide Employees: 45 Alaska Employees: 45 Year Established: 1995 49er Rank in 2011: 46 Change from Last Year’s Rank: Same

Credit Union 1

Top Executive: Leslie Ellis, President & CEO 1941 Abbott Road Anchorage, AK 99507 Phone: 907-339-9485 Fax: 907-339-8522 service@cu1.org www.cu1.org

Main Business: Full-service ﬁnancial institution.

Recent Noteworthy Events: Each year, Credit Union 1 employees volunteer more than 1,000 hours of community service across Alaska.

Worldwide Employees: 295 Alaska Employees: 295 Year Established: 1952 Change from Last Year’s Rank: New

Denali Alaskan Federal Credit Union Top Executive: Robert Teachworth, President & CEO 440 E. 36th Ave. Anchorage, AK 99503 Phone: 907-257-7200 Fax: 907-222-5806 info@denalifcu.com www.denalifcu.org

Cornerstone General Contractors Inc.

Top Executive: C. John Eng, President 5050 Cordova St. Anchorage, AK 99503 Phone: 907-561-1993 Fax: 907-561-7899 jmathiesen@cornerstoneak.com www.cornerstoneak.com

Worldwide Employees: 97 Alaska Employees: 97 Year Established: 1993 Change from Last Year’s Rank: New

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Worldwide Employees: 307 Alaska Employees: 307 Year Established: 1948 Change from Last Year’s Rank: New Gross Revenue 2011 $45,414,920 Difference from 2010 Revenue: 1%

Principal Activities: Savings, lending and investments. Alaska’s ﬁnancial technology leader, Denali Alaskan introduced Internet banking to Alaska in 1996, offers 24-hour lending and Internet bill-paying. Recent Noteworthy Events: Serving Alaska with 17 statewide branches and complete on-line services for 24/7 account access.

Main Business: Complete ﬁnancial services center for Alaskans.

Subsidiaries: Denali Alaskan Insurance

Gross Revenue 2011 $41,100,000 Difference from 2010 Revenue: 19%

Recent Noteworthy Events: Completion of UAA Health Sciences Building, Verizon Phase 1, FAA Air Trafﬁc Control Towers, Providence Emergency Power Supply System, Mertarvik Evacuation Center, Johnson Youth Center in Juneau, FAA Air Trafﬁc Boniface Center Renovation.

Main Business: Construction of commercial and industrial buildings and structures. Principal Activities: General contractor for medical, industrial, institutional, and education buildings. UAA Sports Arena, Boney Courthouse Renovation, Kodiak City Library, AVTEC Dormitory Replacement, ANTHC Hospital Renovation, McLaughlin Youth Center Addition and Remodel, NeighborWorks Residential Facilities, Service High School.

www.akbizmag.com • Alaska Business Monthly • October 2012

Company 2012 Name Rank Arctic Slope Regional Corporation 1 Bristol Bay Native Corporation 2 NANA Regional Corporation Inc. 3 Chenega Corporation 4 Chugach Alaska Corporation 6 Afognak Native Corporation/Alutiiq 7 Doyon Limited 8 Calista Corporation 10 Ukpeagvik Inupiat Corporation 12 The Eyak Corporation 13 Sealaska 14 Bering Straits Native Corporation 17 Cook Inlet Region Inc. 19 Ahtna Inc. 20 Olgoonik Corporation 22 Aleut Corporation 26 The Tatitlek Corporation 27 Goldbelt Inc. 29 Koniag Inc. 30 The Kuskokwim Corporation 36 Alaska Native Corporation Total

Alaska Total 2012 Rev. Jobs Jobs $ Million 4,380 10,630 2,550 375 3,855 1,966 4,734 13,453 1,800 362 5,100 1,100 671 5,393 766 166 5,000 711 1,781 2,818 468 272 1,351 300 365 1,867 279 73 309 265 103 1,438 259 387 997 206 80 80 201 377 1,929 200 157 691 178 125 450 143 251 1,582 137 911 1,161 135 73 493 131 40 144 95 15,683 58,741 11,891

CONSTRUCTION Company 2012 Alaska Name Rank Jobs Neeser Construction Inc. 23 274 Davis Constructors & Engineers Inc. 32 185 Watterson Construction Co. 43 100 Roger Hickel Contracting Inc. 46 45 Cornerstone General Contractors Inc. 49 97 Construction Total 701

Total 2012 Rev. Jobs $ Million 277 160 185 119 101 63 45 50 97 41 705 433

FINANCE, INSURANCE, REAL ESTATE Company 2012 Name Rank Alaska USA Federal Credit Union 9 The Wilson Agency LLC 15 First National Bank Alaska 25 Credit Union 1 47 Denali Alaskan Federal Credit Union 48 Finance, Insurance, Real Estate Total

Alaska Jobs 1,332 17 700 295 307 2,651

Total 2012 Rev. Jobs $ Million 1,705 311 19 245 700 143 295 48 307 45 3,026 792

INDUSTRIAL SERVICES Company 2012 Alaska Name Rank Jobs Udelhoven Oilﬁeld System Service 18 832 Construction Machinery Industrial 37 102 Colville Inc. 39 125 Alaska Industrial Hardware Inc. 44 182 Industrial Services Total 1,241

Total 2012 Rev. Jobs $ Million 877 202 102 92 125 81 182 53 1,286 427

MINING Company Name Usibelli Coal Mine Inc. and Alaska Afﬁliates Mining Total

2012 Alaska Rank Jobs 33

Total 2012 Rev. Jobs $ Million

149 149

108 108

RETAIL & WHOLESALE TRADE Company 2012 Alaska Name Rank Jobs Three Bears Alaska Inc. 31 322 Anchorage Chrysler Dodge Center 41 95 Seekins Ford Lincoln Inc. 42 118 Retail & Wholesale Trade Total 535

Total 2012 Rev. Jobs $ Million 366 121 95 65 118 64 579 250

TELECOMMUNICATIONS Company Name MTA Inc. Telecommunications Total

2012 Alaska Rank Jobs 35 371 371

Total 2012 Rev. Jobs $ Million 371 100 371 100

TRANSPORTATION Company Name Lynden Inc. Carlile Transportation Systems H.o.T.H. dba Era Alaska PenAir Tatonduk Outﬁtters Ltd. Transportation Total

2012 Alaska Rank Jobs 5 714 24 500 28 861 40 500 45 275 2,850

Total 2012 Rev. Jobs $ Million 2,200 850 675 147 901 136 530 72 279 51 4,585 1,256

TRAVEL Company Name USTravel Travel Total

2012 Alaska Rank Jobs 21 95 95

Total 2012 Rev. Jobs $ Million 170 182 170 182

UTILITY Company Name Chugach Electric Association Inc. Golden Valley Electric Association Matanuska Electric Association Inc. Homer Electric Association Inc. Utility Total

2012 Alaska Rank Jobs 11 313 16 258 34 145 38 146 862

Total Revenue & Employees Reported

www.akbizmag.com • Alaska Business Monthly • October 2012

Total 2012 Rev. Jobs $ Million 313 284 258 244 168 105 146 84 885 717

25,138 70,497 16,155

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gems of the north

ALASKA NATIVE CORPORATION

gems of the north

Company 2012 Name Rank Afognak Native Corp./Alutiiq 7 Ahtna Inc. 20 Alaska Industrial Hardware Inc. 44 Alaska USA Federal Credit Union 9 Aleut Corp. 26 Anchorage Chrysler Dodge Center 41 Arctic Slope Regional Corp. 1 Bering Straits Native Corp. 17 Bristol Bay Native Corp. 2 Calista Corp. 10 Carlile Transportation Systems 24 Chenega Corp. 4 Chugach Alaska Corp. 6 Chugach Electric Association Inc. 11 Colville Inc. 39 Construction Machinery Industrial 37 Cook Inlet Region Inc. 19 Cornerstone General Contractors Inc. 49 Credit Union 1 47 Davis Constructors & Engineers Inc. 32 Denali Alaskan Federal Credit Union 48 Doyon Limited 8 First National Bank Alaska 25 Goldbelt, Inc. 29 Golden Valley Electric Association 16 H.o.T.H. dba Era Alaska 28 Homer Electric Association Inc. 38 Koniag Inc. 30 Lynden Inc. 5 Matanuska Electric Association Inc. 34 MTA Inc. 35 NANA Regional Corporation Inc. 3 Neeser Construction Inc. 23 Olgoonik Corp. 22 PenAir 40 Roger Hickel Contracting Inc. 46 Sealaska 14 Seekins Ford Lincoln Inc. 42 Tatonduk Outfitters Ltd. 45 The Eyak Corp. 13 The Kuskokwim Corp. 36 The Tatitlek Corp. 27 The Wilson Agency LLC 15 Three Bears Alaska Inc. 31 Udelhoven Oilfield System Service 18 Ukpeagvik Inupiat Corp. 12 Usibelli Coal Mine Inc. and Alaska Affiliates 33 USTravel 21 Watterson Construction Co. 43 Top 49er Revenue Threshold 49 Total Top 49er Gross Annual Revenues in $ Millions Note: Not all Top 49ers displayed for previous years ■ 120

2011 Revenue 711 200 53 311 143 65 2,550 206 1,966 300 147 1,100 766 284 81 92 201 41 48 119 45 468 143 135 244 136 84 131 850 105 100 1,800 160 178 72 50 259 64 51 265 95 137 245 121 202 279

2011 Rank 6 13 49 10 22 48 1 18 3 14 27 4 5 12 39 38 19 31 8 23 26 16 30 44 24 7 37 34 2 20 29 41 46 15 43 9 25 32 17 33 28 11

2010 Revenue 783 243 50 302 159 52 2,332 190 1,667 231 137 1,100 937 258 78 90 188 120 459 151 139 220 120 72 150 720 94 106 1,600 184 133 72 58 224 66 436 149 111 205 109 134 271

2010 Rank 6 14 11 24 1 21 2 16 28 5 4 12 44 40 43 23 10 22 35 18 30 39 31 7 34 37 3 33 26 45 46 17 8 41 36 15 32 27 9

2009 Revenue 766 231 312 146 1,945 162 1,392 203 131 1,077 1,105 290 76 87 80 152 416 156 108 197 116 87 116 680 110 109 1,260 110 135 70 67 196 423 87 108 206 111 132 292

2009 Rank 7 16 47 9 30 48 1 31 2 14 29 5 4 11 41 25 22 18 10 19 33 15 26 35 6 34 3 32 37 40 44 24 42 12 36 20 27 8

2008 Revenue 730 196 53 312 116 52 2,297 113 1,295 224 123 894 952 290 64 124 11 178 296 171 106 214 101 101 780 103 1,176 105 82 70 58 126 60 282 90 160 124 334

2008 Rank 7 20 46 11 45 1 2 19 26 5 4 10 38 30 21 17 9 16 32 14 42 36 23 6 29 3 22 34 35 48 13 41 33 18 27 8

2007 Revenue 516 100 51 270 54 986 994 138 122 768 941 259 50 91 10 180 272 189 85 196 91 70 91 740 96 975 130 78 70 45 194 64 81 148 107 291

108 182 63 41

35 21 40 49

97 174 75 50

38 20 42 49

91 166 90 55

39 17 38 49

73 192 78 51

37 15 31 49

66 191 86 43

16,155

15,243

14,546

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13,984

11,788

gems of the north

Alaska Industrial Hardware

Mike Kangas

BY TASHA ANDERSON

n many ways, the history of Alaska Industrial Hardware is the history of Alaska: AIH saw its humble beginning in 1959, the same year that Alaska achieved statehood. Since that time, both AIH and Alaska have made incredible progress as they have managed difficult terrain, trying weather, the busts of poor economies, and the booms of game-changing infrastructure. AIH began in a small quonset hut, where original owner James Thompson sold re-packaged surplus nuts and bolts. As of April this year, AIH opened a 53,000 square-foot store on the Old Seward Highway in Anchorage, bringing its total number of Alaska locations to eight, including stores in Eagle River, Wasilla, Kenai, Fairbanks and Juneau, and brought in revenue of $52.5 million, ranking at No. 44 in Alaska Business Monthly’s Annual Top 49ers.

A Turbulent History

During more than 50 years of operation, AIH has managed to turn adversity into opportunity. In March 1964, Alaska was devastated by the Good Friday Earthquake. AIH was quick to take the opportunity to supply contractors and homeowners with the necessary tools and materials to construct businesses and homes, simultaneously stimulating an Alaska-born company and the Alaskan community. A decade later in 1974, construction began on the trans Alaska pipeline system, a massive project that, as President Mike Kangas said in his November 2011 address to Specialty Tools and Fasteners Distribu■ 122

tors Association, “Gave AIH more business than we could handle at the time, and gave us the opportunity to expand through the state.” Shortly thereafter in the 1980’s, oil prices dropped to less than $9 a barrel. An oil-dependent Alaska economy fell into recession and AIH struggled to stay afloat. In 1989, the Exxon Valdez ran aground in Prince William Sound, flooding the area with 250,000 barrels of oil. Much like its experience with the earthquake 25 years prior, AIH was able to work vigorously with the state to rebuild and restore—only this time it was the Alaska coastline instead of its infrastructure.

AIH and the Community

Today, AIH is still going strong, which Kangas says is due to the support of the Alaskan community. “I think the community embraced us over the 54 years we’ve been in business. We feel we have a strong reputation for taking care of our customers’ needs—and at the end of the day I think most people are happy with the goods and services that come from AIH. We owe alot of our success to Alaska and Alaskans for continuing to shop Alaskan, where the profits stay in the state.” AIH knows Alaska and bases its inventory on Alaska’s needs as a unique construction area with long winters, frozen work sites and remote areas. AIH specializes in helping build Alaska; the quality materials that AIH keeps in stock to sell to contractors or hardware vendors around the state are those specifically used in an Alaska environment—and AIH does its best to keep everyone supplied.

www.akbizmag.com • Alaska Business Monthly • October 2012

Gems of the north

“We have our hands in a lot of different things,” Kangas says. “We have a wholesale division that sells to lumber yards around the state, the mom and pop stores on the highway system and the general stores in the Bush; so if there’s hardware in a store, chances are AIH or General Hardware, our subsidiary, has put it there.” Furthermore, AIH has the systems in place to get these materials to the right place at the right time. Alaska was somewhat sheltered from the recent economic downturn that wreaked havoc in most of the country, but no one can truly escape the effects of the recession. “When things started going south down in the Lower 48, we were a little bit more prepared,” Kangas says, due to AIH’s experience with Alaska’s similar economic environment in the 1980s. “We anticipated tough times and adjusted our inventory accordingly: We looked at all of our overhead expenses and cut as many corners as we could.” Kangas is happy to say that AIH didn’t experience those tough times—that rather, they’ve been doing well the last couple of years, which has resulted in greater profits. According to Kangas, not only is AIH holding steady, but it’s expanding. Improvements include the expansion to over 100,000 square feet to its distribution center on Old Seward Highway, purchasing and remodeling the old Pay-N-Pack building in Fairbanks, the new 30,000 square foot store in Kenai, and the 10,000 square foot facelift to the Commercial Drive location in Anchorage and also expanding the Wasilla location by 10,000 square feet. AIH has been planning for the newly opened store on Old Seward for the last 10 years. It took six years to open, including the permitting process and two years spent re-purposing the building site. “We had some environmental concerns at the present location. It was an old junkyard that we had to spend two years cleaning up before we could even begin construction,” Kangas says. Despite setbacks, the building opened a mere 15 days after the original projected opening date, though slightly over budget. “We obviously did incur some extra expense with the remediation, but I will say we turned an ugly eyesore into a nice looking store.”

Our histOry Aerospace & technology services

Yulista Management Services, Inc. Y-Tech Services, Inc. Yulista Aviation, Inc.

Construction & engineering

Brice Companies Tunista Services, LLC Tunista, Inc. Tunista Construction, LLC Yukon Equipment, Inc.

environmental services

Brice Environmental

telecommunications

Alaska Telecom, Inc. Sequestered Solutions

hospitality & support services

Chiulista Services, Inc.

Marketing & Communications Solstice Advertising

yOur Future CAlistA COrpOrAtiON is dediCAted tO buildiNg the leAders OF tOMOrrOw. On the court and in the classroom, students in every school across the state deserve support and recognition. Calista supports students in the following ways: • With more than $2.3 million donated to our scholarship program since 2009 • The Calista Heritage Foundation awarded financial aid to over 250 Calista Shareholders and Descendants in 2011 • More than $1 million dedicated in 2011 to cultural preservation and education

real estate

Calista Real Estate

Nonprofit

Calista Heritage Foundation

301 Calista Court, Ste. A, Anchorage, AK 99518 ★ t: (907) 279-5516 ★ f: (907) 272-5060 ★ calista@calistacorp.com

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Gems of the north

DON’T BE LEFT OUT OF THE 2013 POWER LIST! ■ 124

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CEO Mike Kangas

AIH is intrinsically connected with the Alaskan community, and the company’s current president and general manager certainly shares those ties. Mike Kangas has spent most of his career working for AIH. He moved to Alaska in 1970 with his family. Six years later his family moved down to Seattle, but Kangas stayed. “My family never felt the draw to Alaska as I did and many others do. Mom’s idea of the ‘great outdoors’ was the parking garage at Nordstrom’s. For me, as soon as I stepped off the plane over 40 years ago, I knew this was my home and I would never leave.” His career at AIH began in 1980 as an outside salesman. “The only other real job I had was working for my father and uncle selling fireplaces and wood stoves,” he says. “I had a genuine interest in tools and hardware and construction, so naturally I gravitated toward AIH.” He’s spent the last 20 years working mainly at the Viking Drive “Office/’Distribution Center” location in a variety of roles such as the purchasing director, operations manager and vice president, and for the last eight years as the president and general manager. Kangas is a “hands-on guy.” He tries not to micromanage, but his personal management style dictates a more direct approach than limiting himself to reading reports and directing sub-managers. “No one is going to learn with me doing their job for them, but I want to make sure they’re headed in the right direction.” His blend of directing while relying on his employees is a natural extension of his belief that AIH’s employees are vital its success: “There are 200 other employees—I’m just one of many.”

AIH ESOP

AIH believes that employees are not part of—or even vital to—a successful company; but rather, they are the company. AIH participates in an employee stock option plan, which provides its workers with ownership interest in the company. “We’re an employee-owned company. Each employee has a stake in the company and that’s very helpful.” AIH makes a contribution on the behalf of every qualified employee ev-

ery year based on profitability either into a 401K plan or an ESOP. Eligibility and the maximum contributions are based off government guidelines: there is a vesting period and one must be a full-time employee. Outside of those qualifications, every employee has equal opportunity to profit as the company profits. “Everybody’s an owner and everybody takes pride in ownership, and that is why I feel we’ve been able to become as successful as we have over the years. It’s not just a few principals watching the bottom line—it’s everybody watching the bottom line. ESOP is the key to our success: being able to hang on to good employees and compensate them through profits,” Kangas says.

What Happens Next

Looking to the future, AIH continues to see a lot of potential for growth for the state and as a business. For now, its eight locations statewide are probably enough to supply Alaskans with what they need. “I believe our stores right now are ready for another 10 years’ worth of growth based on the last 10 years,” Kangas says. But AIH is excited to see growth in other areas. Kangas “commends” Gov. Sean Parnell as he plans to build roads to remote locations of Alaska, such as the proposed road to Nome. It’s a multi-billion dollar project, and “it would open up a whole lot of area for new development—probably expand mining—and it would create jobs.” Most of Alaska is largely inaccessible, and valuable resources are unavailable in many instances for that reason. “To expand into other parts of the state sensibly, environmentally and safely is a great thing to do, and it would in turn create jobs and the need for the products that AIH provides,” Kangas says. He recognizes that there is still a lot of potential for growth in Alaska, and as Alaska continues to grow, Kangass hopes AIH follows the state’s lead.  Tasha Anderson is the Editorial Assistant at Alaska Business Monthly.

www.akbizmag.com • Alaska Business Monthly • October 2012

CEO Schutt hopes to inspire with success BY ZAZ HOLLANDER

aron Schutt serves as president and chief executive officer of Doyon Limited. Schutt started working at Doyon six years ago, moved to senior vice president and chief operation officer in 2008, and became CEO last year. He has seen the corporation double its shareholders and its revenues, expand operations into the Lower 48, and become one of the state’s dominant players in the oil and defense industries—and Schutt hasn’t even turned 40 yet. Fueling such early success, the 39-year-old Koyukon Athabascan learned quickly that hard work only gets you so far. “I was always a successful student,” Schutt says by phone while getting ready for one of his near-constant trips between his Anchorage hometown and Fairbanks, where Doyon is headquartered. “The hardest thing I ever had to do was acknowledge I needed help and then go find it.” That’s a lesson he takes with him on his regular visits into villages in the Interior region, within which about a quarter of Doyon’s shareholders live. Schutt reflects upon Doyon’s past leaders, such as former president and CEO Morris Thompson, coming to speak at the school in Tok where he grew up. The leaders spoke about opportunities and life lessons. Their visits proved so meaningful that Schutt remembers them to this day. Now he makes a point to visit villages in hopes of having the same impact. He hopes to address some of the social problems afflicting shareholders, such as unemployment and the resulting hopelessness.

“You don’t necessarily have the level of preparation that someone going to private school in New York City gets,” he says. “You’ve got to overcome that. The only way you can do that is hard work, and finding the resources to help you out.” —Aaron Schutt President and Chief Executive Officer, Doyon Limited

“I really try to focus on the young people to offer a sense of hope with some real encouragement on hard work and dedication,” he says. Children growing up in rural Alaska have a lot of gifts, including ample fish and game, adventure and family ties—but those gifts don’t necessarily make for an easy transition to college, particularly to large public universities. That’s a lesson Schutt knows personally: He attended Washington State and Stanford universities. “You don’t necessarily have the level of preparation that someone going to private school in New York City gets,” he says. “You’ve got to overcome that. The only way you can do that is hard work, and finding the resources to help you out.”

Aaron Schutt

The Benefits of Youth

Schutt demurs when asked if he’s really the state’s youngest CEO heading up an Alaska Native Corporation, as he’s known. Well, he says, Jason Metrokin is about the same age.

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Doyon Limited

gems of the north

Doyon’s mission is “to continually enhance our position as a financially strong Native corporation in order to promote the economic and social well-being of our shareholders and future shareholders, to strengthen our Native way of life, and to protect and enhance our land and resources.” For the record, Bristol Bay Native Corp. leader Metrokin is older by a year or so, but the exchange illustrates a nononsense aspect of Schutt’s style when it comes to running Doyon. He’d rather talk about how his relative youth allows him to better lead a Native corporation and move on to the issues facing Doyon in the big picture. “I guess it helps me connect with our very large population of Class C shareholders,” Schutt says of his age. “Maybe I have a little bit more energy now than I will 20 years from now. I’m hoping that’s not the case but it might be.” Schutt was the first CEO-holder of the stock issued to younger Doyon shareholders after the Native corporation became one of just five that decided to admit new shareholders. The others were Ahtna Inc., Sealaska, Arctic Slope Regional Corp. and NANA. All five opted to allow so-called “Class C Stock” to eligible children born on or after Dec. 18, 1971. Doyon’s original enrollment count when it formed under the Alaska Native Claims Settlement Act in 1971 resulted in just over 9,000 shareholders, making it the third largest regional Native corporation in terms of shareholder numbers. In 2007, when Doyon shareholders voted to open enrollment to “born-afters” like Schutt, shareholder numbers increased to more than 18,000. “The idea was inclusiveness of our children and the affiliation they feel with our company,” Schutt says. “They don’t just hear their parents talk about being shareholders but they are shareholders themselves.”

Help Wanted

Schutt says his academic success started when he was still in school in Tok. He studied hard. He worked hard. He went on to graduate from Washington State University with a Bachelor of Science in Civil Engineering, and from ■ 126

Stanford University with a Master if Science in Civil Engineering—but the hardest lesson he learned, he says, was to acknowledge that he needed help and needed to go find it. That lesson was reinforced during his time at Stanford, when he spent an academic quarter as a tutor to students in engineering school. “Most students that came to me were not the bottom of the class,” Schutt says. “They were the ones that wanted to assure they got A’s.” Schutt went on to attend law school at Stanford. He clerked for Alaska Supreme Court Justice Alexander Bryner. He worked as an attorney at the Anchorage offices of national law firms

hour later, spend the day in the office, go hunting for a few days, spend a day in the office, then drive back to Anchorage. “Really what you have to do is prioritize and be pretty disciplined about what you commit to,” he says. “You have to have a good family life to perform as a professional, and vice versa. That means a lot of early-morning and late-night flights for me.”

Charting Doyon’s Course

Schutt is guiding Doyon through an interesting time, a period of tremendous growth—but one bounded by some anticipated challenges. Doyon’s mission is “to continually enhance our position as a financially strong Native corporation in order to promote the economic and social well-being of our shareholders and future shareholders, to strengthen our Native way of life, and to protect and enhance our land and resources.” The corporation is the largest private landowner in Alaska, with more than 12.5 million acres. It employs 2,800 people in Alaska, but also in Florida,

“Really what you have to do is prioritize and be pretty disciplined about what you commit to, you have to have a good family life to perform as a professional, and vice versa. That means a lot of earlymorning and late-night flights for me.” —Aaron Schutt President and Chief Executive Officer, Doyon Limited

Sonosky, Chambers, Sachse, Miller & Munson LLP and Heller Ehrman LLP. He represented tribal and ANSCA corporation clients. He’s the father of two young boys, he coaches youth hockey and serves as a director of Akeela Inc. He also serves as a member of the Rasmuson Foundation’s grant-selection committee. Prioritizing where to spend time and how to juggle his professional and personal commitments remains a “daily and weekly and monthly and yearly challenge,” Schutt says. He tries to be in Anchorage as often as he can; his family lives there, but a number of Doyon’s business operations are based there as well. On one day in late August, Schutt said he planned to drive to Fairbanks an

Montana, Oregon, Texas, Virginia, Washington state and Oregon. Doyon operates more than a dozen for-profit businesses: oil field services, utility management, security, engineering management, land and natural resource development, facility management, construction and tourism. For the last five years, Doyon’s most significant growth has come in the form of federal contracts. Federal contracts account for nearly half of the corporation’s revenues, according to Schutt. Most of the federal work is outside Alaska. Examples include construction work across the country and the operation two large detention centers for US Immigrations and Customs Enforcement. Doyon runs the Krome Service Processing

www.akbizmag.com • Alaska Business Monthly • October 2012

some advantages in terms of having modest expectations.

Homegrown Promise

Doyon’s Alaska operations make significant money from the corporation’s tremendous land holdings, which cover an area the size of France. Oil and gas operations also account for a large share of Doyon’s revenues—most of the corporation’s growth in Alaska is in the oil fields. The corporation also has a security contract with Alyeska Pipeline Service Co. to guard the Trans-Alaska Pipeline System. Doyon’s land holdings include “historical placer gold mining districts and geologically attractive environments such as the Tintina Gold Belt, favorable for world-class gold deposits (Pogo, Fort Knox, True North, Vinasale, Donlin Gold, Shotgun), the Ambler Schist Belt, favorable for world-class base metal deposits (Bornite, Arctic and Chandalar Copper Belt), and sedimentary basins favorable for oil and gas deposits (Kandik, Yukon Flats, Nenana),” according to the corporation’s website. Doyon started running its own seis-

mic research, necessary in advance of oil and gas exploration. Doyon’s seismic work includes programs in places like Stevens Village, Minto and the Nenana area. “That’s something we wouldn’t even have tried five years ago,” Schutt says. “We have more staff, more experienced staff, a bigger balance sheet. That makes us more tolerant of certain risks and just (gives us) more history in oil and gas exploration.” Schutt describes himself as “super excited about where Doyon is, the opportunities that lay before us.” In late August, Doyon’s board of directors approved more than $37 million in plans for several large gas exploration projects in the Nenana Basin and Yukon Flats areas. If successful, Schutt says, the projects could bring benefits not only to Doyon shareholders but to Alaska’s residents in the form of jobs and energy to alleviate the crisis in Interior Alaska.  Zaz Hollander is a journalist living in Palmer.

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Center in Miami as well as the El Paso Processing Center in Texas. Doyon also operates utility systems on three military installations in Alaska, including at Joint Base ElmendorfRichardson. Doyon just held a ribboncutting for a landfill gas plant that converts methane to electricity at JBER. Doyon’s military contracts were worth nearly $57 million in 2009, according to an “Alaska Economic Trends” report released earlier this year by the Alaska Department of Labor and Workforce Development. That pales in comparison to the more than $150 million earned by Arctic Slope Regional Corp., but represents a significant revenue stream for Doyon nevertheless. Doyon, like all federal contractors, is facing declining defense spending as wars in Iraq and Afghanistan wind down. Federal spending in general is expected to decline across all agencies. Schutt points out that Doyon’s federal clients will have less money to spend, making for fewer contract opportunities and tighter markets. But Doyon is a “very small player in the federal market,” he says, and that could provide

gems of the north

First National Bank Alaska

BY MICHELE WHITE

efore Alaska became the 49th State, First National Bank Alaska, then First National Bank of Anchorage, was founded. It survived the Great Depression of 1931 and the collapse of many other fi nancial institutions in the 1980s. In 1922, it served the businesses and people of Anchorage. Today, in its 90th year, it serves the businesses and people of Alaska.

D.H. Cuddy

“You can call me up—or any of the other senior vice presidents—on any other given day and speak to us directly. You can call and reach Mr. Cuddy. You can walk in and see him at his desk between 8 a.m. and 5 p.m. on any working weekday.” —Cheri Gillian Senior vice presidents of FNBA

Its mission has not changed since 1951, when D.H. Cuddy stepped into banking as FNBA’s president and established its mission statement. His goal for FNBA was simple: to provide all the banking services that the community requires and to take care of the bank’s employees. “And if all those things are done well,” says Cheri Gillian, one of the senior vice presidents of FNBA, “then the shareholders will reap the benefits.” How the bank accomplishes that goal ■ 128

has changed over the decades. FNBA has grown to have a greater network of physical locations with more employees to provide all the banking services required today—and, of course, the tools it uses to deliver financial services have become much more sophisticated. What hasn’t changed is the personal customer service, “with feet on the ground, shoulder to shoulder, eye-toeye customer service from Alaskans who live here and have a vested interest in the success of all the communities in Alaska,” Gillian says.

Personal & Decisive Service

Gillian says the key is staffing 30 physical locations with Alaskans who live in those communities, each with a decision-maker on the premises who can provide answers more quickly than a bank headquartered outside of Alaska. “You can call me up—or any of the other senior vice presidents—on any other given day and speak to us directly,” she says. “You can call and reach Mr. Cuddy. You can walk in and see him at his desk between 8 a.m. and 5 p.m. on any working weekday.” Gillian says Cuddy continues to greet customers, leads the loan committee meeting, and works right up until five o’clock. “He’s still making loans and handling customers’ deposits,” she says, “He’s a hands-on guy.” His daughter, Betsy Lawer, as vice chair, is second-in-command. Gillian says Lawer learned banking as a child on her father’s knee, flying with him in

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gems of the north

his small airplane to visit customers in rural Alaska. “She has a passion for Alaska that, I must say, in my experience of 40 plus years is unmatched,” says Gillian.

Modern Decisions Continue Commitment to Rebuild

After the 1964 earthquake, D.H. Cuddy began to help rebuild Alaska with reconstructing FNBA’s building and putting additional loan funds into rebuilding the area devastated by the earthquake. Today, new projects continue to demonstrate “confidence in Alaska.” In the late 1990s, FNBA built its fourstory service center between Gambell and Ingra in Anchorage, with all Alaskan help. “We hired Alaskans for all of the support jobs, all of the contactors—we made a point to do that. That was a big investment,” Gillian says. Another building project—FNBA’s headquarters building at the corner of 36th and A streets in Anchorage—was also built by Alaskans. Gillian says the bank paid a premium to have local contractors do the glazing on the building. FNBA’s most far-reaching contribution to building Alaska is its ThreeLegged Stool Campaign, which has been put into action over the last 24 months. The company highlighted the research of UAA’s Institute of Social and Economic Research, Gillian says, to spread the message of what greases the wheels of Alaska’s economy, in order to equip Alaskans with the information and understanding they need to make financial decisions; it’s not exclusively for FNBA’s customers. “We try to do business with those people who do business with us, our interest is in serving all Alaskans so we don’t draw a line or anything,” Gillian says. “We work with folks and we hope by demonstration of our commitment to their success that they might choose to bank with us at some time—but that’s not a hard fast rule.” Gillian says First National not only survived the bank failures of the late 1980s, but it also became one of the safest and strongest banks in the nation because it understood the economy and foresaw a recession coming to Alaska.

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FNBA took the lead and developed, published and financed a brochure series and a website, based on ISER’s research, to educate its customers and all Alaskans. Gillain says, “We put them in our statements and we send out some 60,000 statements per month, and we’ve published it on our website: alaskaseconomy.org.” The site is sponsored by the bank and features information and other helpful links. “We’re the first really to stick our nose out and say ‘here’s what’s going on in the economy, here’s how it works, everyone needs to be aware of that, and be conscious about the decisions we make from here forward,’” she says. The bank predominantly communicates this information through relationships with business owners, many of whom are long-standing customers of the bank, in the hopes that the knowledge they provide will trickle down to the employees of those businesses. “We’ve had a traveling PowerPoint presentation and speech that’s based on the work of Professor Scott Goldsmith at ISER that bank office techs have delivered to their churches, their industry groups, trade groups, their chambers of commerce, all across Alaska at any of our locations and communities (in and outside of) Anchorage,” she says. Now, FNBA is producing a new brochure based on ISER’s latest report that will feature a map of what’s driving Alaska’s economy. The three legs of Alaska’s economy are: dollars from the federal government, dollars from resource development and everything else. Tourism, fishing, retirement income brought into the state from Outside companies all play into the third leg of the stool. “That’s another way the bank has demonstrated that team awareness of what’s going on in Alaska,” Gillian says. “The pioneer spirit of stepping out and being a leader, trying to guide and ensure the success and future success of Alaska and Alaskans.” Another continuation from FNBA’s rich history is its plan to build a new branch building on Joint Base Elmendorf-Richardson. In 1943, First National opened a bank ■ 130

“We’re the first really to stick our nose out and say ‘here’s what’s going on in the economy, here’s how it works, everyone needs to be aware of that, and be conscious about the decisions we make from here forward.’” —Cheri Gillian Senior vice presidents of FNBA

in Adak to meet the needs of the U.S. Naval base there. It was the westernmost bank branch in the United States. Today, the bank is continuing its commitment to serve the military. “We just broke ground about July 24 for a new branch building on JBER at the AAFES commissary area,” Gillian says. The $2 million building will be called the North Star branch. By the end of the year, FNBA expects to launch a mobile banking application for iPhone and Android users. “There will be a browser, we’ll have an app at the app store, and we’ll have text banking,” says Gillian, chuckling at the juxtaposition of the mission in modern times. “So, we’ve got the guy who’s been here since 1951 all the way out to—by the end of the year—we’ll have our app in our 90th year of serving Alaskans.”

Consistent Top 49er

What earned First National Bank Alaska its long-time status as a Top 49er? Chairman D.H. Cuddy explains it best: “One of the reasons our bank is listed in the Top 49 Alaska businesses each year is our mission: 1) to safe keep our depositors’ money, 2) to provide all legitimate banking services and serve the communities in which we have branches, and 3) to pay our employees reasonable salaries and provide them with a good working environment. Because we adhere to those three items, First National Bank continues to grow and prosper, giving Alaskans good service, and providing a reasonable return to its stockholders.”  Michele White writes from Anchorage.

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gems of the north

Sealaska Corp.

BY WILL SWAGEL

Chris McNeil

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ost every American is familiar with the blue plastic tops on bottles of Liquid Tide laundry detergent. These caps are made for Proctor and Gamble by Nypro Kánaak, a full-service plastic manufacturing company with facilities in Alabama, Iowa and Guadalajara, Mexico. Nypro Kánaak happens to be a subsidiary of Sealaska Corp., the regional ANCSA corporation for Southeast Alaska. This June, executives of Proctor and Gamble and Kraft Foods accepted an invitation to Celebration 2012, a huge gathering of Tlingit and other Southeast tribes held every two years in Juneau. There, the Fortune 100 company reps were introduced to—and had the chance to meet—some of Sealaska’s shareholders who attended Celebration. Afterward, the executives were flown around to various Southeast villages to meet even more. “We wanted them to understand us better as a supplier,” says Sealaska’s chief executive officer and president Chris McNeil. “It was important for them to understand the broader heritage of Alaska Native Corporations and show them what we actually do with the profits that we make from their products. “Their reaction was overwhelmingly positive,” he says. “They did not expect both the breadth and the intensity of the cultural experience. Their feedback made it all the way back into the corporate communications of these companies.” Sealaska is involved in forest products, silviculture, land management, financial investment, plastic mold-

“The Board of Directors wanted to make sure there was intergenerational ownership, participation and identity with the Sealaska Corp. and the ownership of our land.” —Chris McNeil President and Chief Executive Officer Sealaska

ing and manufacturing, information technology, construction aggregates, environmental remediation, consulting, construction, security services and cultural preservation. Its $259.49 million in revenues in 2011 ($223.8 million in 2010) ranked it 14th on ABM’s Top 49ers for 2012. Sealaska has more than 20,000 tribal/ member shareholders. About 4,000 new shareholders were added to the rolls in 2007 (with life estate stock), including those who had missed the original 1971 enrollment because of military service or other reasons, and those who were born after 1971. Sealaska is one of only four regional corporations to open the doors to descendants. “The Board of Directors wanted to make sure there was intergenerational ownership, participation and identity with the Sealaska Corp. and the ownership of our land,” McNeil says. “And now we see it everywhere,” he says. “When we have meetings in the communities, whether in a village or Seattle or Anchorage—that connection with the land from a cultural standpoint is there.”

www.akbizmag.com • Alaska Business Monthly • October 2012

working with the USDA Forest Service and scientists from the Oregon State to study ways to save the dwindling Southeast cedar resource. However, due to its being such a large regional timber harvester and landowner, Sealaska has occasionally run afoul of environmental groups and other land users. To ask for support for federal lands legislation presently in Congress, Sealaska executives have spent the last several years negotiating with various villagebased Native and non-Native groups over the rules that will govern the areas where locals hunt and fish, should that land be transferred to Sealaska ownership. If their efforts are successful, Sealaska’s holdings would rise from the present 290,000 acres to about 365,000 acres, completing the corporation’s ANCSA land transfer from the U.S. government.

Haa Aani LLC

In 2009, the Sealaska Board of Directors granted $500,000 to help set up and seed a regional economic development organization that could access federal grants through the Commu-

nity Development Financial Institution program. Haa Aani LLC was the result. The money was to be used in a revolving loan fund for village-based start-up businesses that would otherwise have problems qualifying for a loan or making do with conventional loan terms. Haa Aani LLC’s efforts include working with Kake Tribal to revitalize a fish processing and cold storage plant and providing oyster seed to oyster farms being operated in Yakutat. Sealaska also helped the Yakutat farmers market their world-class product to two restaurants in Juneau. “Our purpose is to be a participant and catalyst of more economic development in the villages,” McNeil says. “We really feel this kind of partnership with individual tribal member entrepreneurs, and with village corporations, and also with tribes is something we need to develop currently and in the future.” While Sealaska does not derive any profit from the new businesses, the general economy does get a boost—and it gets an even bigger boost from Sealaska’s timbering, construction and rock extraction operations. A number of vil-

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Haa Aani

The term Haa Aani literally means “Our Land,” but in Tlingit has a more complex meaning, that can be difficult to translate into English. Sealaska’s website describes the term as “the basis of our collective identity and culture and touches on sustained use and protecting the resource for future generations.” Haa Aani is one of four “Values in Action,” cultural tenets that are being used to inspire and direct Sealaska’s corporate culture, outlining a mission that is broader than maximizing dividends. Sealaska, for instance, owns about 290,000 acres of land—but none of it is ever to be put up for sale. “This land is our homeland, not real estate to be bought or sold,” says McNeil. “Since we will not sell the land, there is a very special relationship which is very different (from regular corporations).” Over four decades, Sealaska has derived much of its revenue from timber, through Sealaska Timber Corp. McNeil says that long-term sustainability is always a focus in the way that land is managed. For instance, Sealaska is

gems of the north

Corporate Council on the Environment

lages suffer from stagnant economies and few jobs. Harris says Sealaska’s spending on fishing tenders, air taxis and hotels helps counter that. “Once we stimulate the economy, it benefits everyone in the region,” says Sealaska executive vice-president Rick Harris. “We’re a source of cash flowing through the communities.” In a 2009 report from The McDowell Group for Sealaska, the corporation was gauged to have spent $45 million on goods and services in 2008. They had 490 direct and indirect employees, with a combined payroll of $21 million. The report noted that numbers like these made Sealaska one of the largest private-sector, for-profit employers in Southeast Alaska.

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Sealaska’s land legislation was being negotiated this summer as two bills S 881 and HR bill 2099. Harris says the bills will be probably be considered after the November elections, probably as part of an omnibus bill on various lands issues. Another challenge from Washington, D.C., is some congressional skepticism as to whether Alaska Native Corporations (along with Hawaiian Natives and some tribal entities) should continue to receive advantages in securing lucrative federal contracts under the government’s Small Business Administration 8(a) program. The program has been criticized for the benefits not getting through to shareholders. Sealaska’s best response to congressional criticism might be the same as that which so impressed the Proctor and Gamble and Kraft representatives at Celebration 2012 this summer. The consumer products company representatives were told about Sealaska’s efforts to spur economic development in the villages so that its tribal member/shareholders could find jobs at home. They were told about Sealaska’s scholarship and intern program and its support to the Sealaska Heritage Institute. They heard about Haa Aani LLC. The talked to the tribal member/shareholders face to face. “They (the consumer products company reps) regard diversity as very important,” O’Neil says. “And they really liked it that we have operations that look like America.”  Will Swagel is an author living in Sitka.

www.akbizmag.com • Alaska Business Monthly • October 2012

HR Matters

By Dr. Lynne Curry

BY DR. LYNNE CURRY

f you’ve ever been blindsided by a valuable employee’s resignation and conducted an exit interview, you may have asked the right questions six months too late. Like autopsies, exit interviews detail why employees leave your organization. In contrast, stay interviews, which are rarely done, provide a valuable tool for retaining valued employees. Stay interviews uncover what really matters for each key employee— whether it be a raise, dental as well as health benefits, decision-making autonomy, knowing their supervisor cares, challenging work or something you might not realize. You may learn your employees are looking for opportunities to grow faster or beyond what they see as achievable within your company, while you have viable ideas for letting them gain additional skill and authority while remaining with your company. Stay interview responses give managers the ability to address factors that significantly increase employee discretionary effort and retention—before the employees hit the exit ramp.

Start Today

Interested? You can start today, by calling in a consultant or handling the interviews yourself. If you conduct the interviews yourself, begin the interview by saying, “I want to talk with you today about the key reasons you stay with us, because we want our organization to have a great and satisfying work environment. My goal is to learn what I can do to make us an employer of choice for you in areas we can control.” For best results, you need to ask easily answered questions on hard topics. Employees may not honestly answer a question about whether they have ever thought of leaving the company

More Questions for the Stay Interview ■ What do you like best and least about your job? ■ What makes for a great day at work? ■ What is something new you want to learn this year? ■ Is there anything you’d like to change about your job or department? ■ What is one thing that would make your job more satisfying and rewarding? ■ What kind of recognition would be meaningful for you? ■ When you travel to work each day, what are you looking forward to? ■ How can I best support you? ■ How does working here compare to what you thought it would be like? ■ What leads you to stay with us? ■ Is there one person in the organization who has really been helpful to you of late (so we can thank them appropriately)? for fear it may make them seem less dedicated or result in other ramifications. Instead ask: “If you won Publishers Clearinghouse and decided to leave us, what would you miss most and least?” Also ask: “If you can imagine your dream job, or your job here could be enhanced, what would you be doing?” During the stay interview, really listen and don’t attempt to either guide the conversation toward what you want to hear or defend the status quo. Although you’ll want to followup each stay interview with strategies that meet your employee’s needs, don’t turn the interview into a negotiating session. For best results, you’ll want to conduct the stay interview as a separate event. If you couple it with a performance or salary review, you’ll muddy the waters.

What if you learn you can’t give an employee what the employee most desires? Be honest. Stay interviewees produce good results even when all you can do is demonstrate you care and will do what you can to explore options. Finally, expect to spend 30 minutes on each stay interview, a minor investment given the results they produce.  Dr. Lynne Curry is a management/ employee trainer and owner of the consulting ﬁrm The Growth Company Inc. She consults with individuals and organizations and can be contacted via thegrowthcompany.com.

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October 2012

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Alaska Native Brotherhood/ Alaska Native Sisterhood 100th Grand Camp Meeting October 2-7 — ANB Hall, Harrigan Centennial Hall, other Sitka locations

■

Contact: Gerry Hope 907-747-7290 or 907-738-3377

Alaska Business Monthly’s Top 49ers Luncheon October 3, 11:30 a.m. to 1 p.m. — Dena’ina Civic & Convention Center, Anchorage: An annual luncheon recognizing the “Top 49ers,” Alaskan-owned companies ranked by gross revenue.

■

Contact: Tasha Anderson: akbizmag.com, surveys@akbizmag. com or 907-276-4373

Alaska Travel Industry Association Convention & Trade Show

■

October 9-11 — Dena’ina Civic & Convention Center, Anchorage: Gathering for Alaska’s tourism industry leaders with delegates from tour operators, wholesalers, Alaska vendors, destination marketing organizations and elected officials. Registration required.

■

October 10, 6 p.m. to 8 p.m. — Anchorage Museum Auditorium, Anchorage: Free monthly forum. Speakers: John Weddleton, owner of Bosco’s Comics; Amber McDonough, energy & environmental solutions business solutions manager, Siemens Industry Inc.

■

October 11, 12 p.m. to 1 p.m. — Hilton Hotel, Anchorage: John Torinus explains how his company, Serigraph, “solved the health care riddle” and offers his blueprint for controlling costs while improving care. Registration required.

■

Contact: Joshua Wilson: commonwealthnorth.org, events@commonwealthnorth.org or 907-258-9522

Native Knowledge: Respecting and Owning our Living Culture October 15-17 — Dena’ina Civic & Convention Center, Anchorage: Sponsored by the First

■ 136

October 18-20 — Dena’ina Civic & Convention Center, Anchorage: Annual convention of Native peoples to discuss current news and events on a state, national and international level.

■

■ ■

■

Contact: Amber Reed: alaskaapaconference.org or 907-631-2617

University of Alaska, Anchorage College & Career Fair

ASBDC Seminar: 5 C’s of Credit

■

October 30, 2 p.m. to 4 p.m. — Alaska Small Business Development Center Office, Anchorage: Workshops are designed to help new and established small businesses improve business practices. Pre-registration required.

November 2012

■

ASBDC Seminar: Pursuing Government Contracting November 1, 1:30 p.m. to 3 p.m. — Alaska Small Business Development Center Office, Anchorage: Workshops are designed to help new and established small businesses improve business practices. Pre-registration required. aksbdc.org or 907-274-7232

American Indian Science and Engineering Society National Conference: Adaptability November 1-3 — Dena’ina and Egan Centers: Annual con-

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alaskaminers.org

Associated General Contractors of Alaska Annual Conference

■

U.S. and Canada Northern Oil and Gas Research Forum November 13-15 — Hilton Hotel, Anchorage: The forum provides an opportunity to discuss current technical, scientific, and engineering research and future directions for northern oil and gas activities.

Contact: Katie Marquette: alaskarenewableenergy.org, katie@realaska.org or 907-929-7770

ASBCD Seminar: Exporting — Is Your Company Ready?

ASBCD Seminar: Methods and Channels to Exporting November 21, 9 a.m. to 11 a.m. — Alaska Small Business Development Center Office, Anchorage: Workshops are designed to help new and established small businesses improve business practices. Pre-registration required. aksbdc.org or 907-274-7232

ASBCD Seminar: Healthcare Reform- The Impact on Our Small Business

aksbdc.org or 907-274-7232

December 2012

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ASBDC Seminar: What You Should Know About Credit Card Services December 6, 2 p.m. to 4 p.m. — Alaska Small Business Development Center Office, Anchorage: Workshops are designed to help new and established small businesses improve business practices. Pre-registration required.

Contact John Payne: northslope.org, jpayne@blm.gov or 907-271-3431

Renewable Energy Alaska Project Forum: The Power of Water—Tidal and Hydrokinetic Energy in Alaska

akrdc.org

November 29, 2 p.m. to 4 p.m. — Alaska Small Business Development Center Office, Anchorage: Workshops are designed to help new and established small businesses improve business practices. Pre-registration required.

agcak.org

November 14, 6 p.m. to 8 p.m. — Anchorage Museum Auditorium, Anchorage: Free monthly forum. Speakers: Doug Johnson, director of business development, Ocean Renewable Power Company Alaska; Jerome B. Johnson, research professor, Alaska Center for Energy and Power.

aksbdc.org or 907-274-7232

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Alaska Miners Association Annual Convention and Trade Show

Resource Development Council’s Annual Conference: Alaska Resources November 14-15 — Dena’ina Civic & Convention Center, Anchorage

Contact: Sheryl Wilkeson: aises.org, Sheryl@aises.org or 505-765-1052 x 108.

November 7-10 — Hotel Captain Cook, Anchorage: The Parker Smith and Feek Management Symposium speaker for 2012 is Ron Black, who has a lifetime of experience guiding individuals and companies to enhance leadership skills and improve business practices.

Alaska Statewide Payroll Conference: The Great Land of Payroll

uaa.alaska.edu

■

November 5-11, 8 a.m. to 5 p.m. — Sheraton Hotel, Anchorage

Contact: Alissa Grohall: nativefederation.org, agrohall@nativefederation.org or 907-263-1307

October 21-22 — Dena’ina Civic & Convention Center, Anchorage

Contact: Katie Marquette: alaskarenewableenergy.org, katie@realaska.org or 907-929-7770

The Company that Solved Health Care: The Serigraph Prescription

2012 Alaska Federation of Natives Convention

October 19, 8 a.m. to 4:45 p.m. — The Alaska Native Heritage Center, Anchorage: Payroll training and networking event; payroll and finance vendor fair. Speakers: Joe Dunham, AK DOL; Irene Chapman, APA.

alaskatia.org

Renewable Energy Alaska Project Forum: Saving Energy and Money in Commercial Buildings

firstalaskans.org, info@firstalaskans.org or 907-677-1700

ference includes professional development, networking opportunities, student presentations, career fair, awards, and traditional events.

■

aksbdc.org or 907-274-7232

Renewable Energy Alaska Project Forum: Energy Policy for Alaskans December 12, 6 p.m. to 8 p.m. — Anchorage Museum Auditorium, Anchorage: Free monthly forum. Speakers: Chris Rose, executive director, REAP.

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November 14, 9 a.m. to 11 a.m. — Alaska Small Business Development Center Office, Anchorage: Workshops are designed to help new and established small businesses improve business practices. Pre-registration required. aksbdc.org or 907-274-7232

Contact: Katie Marquette: alaskarenewableenergy.org, katie@realaska.org or 907-929-7770

ASBCD Seminar: 40 Years of Lessons in Principled Leadership December 12, 1:30 p.m. to 4:30 p.m. — Alaska Small Business Development Center Office, Anchorage: Workshops are designed to help new and established small businesses improve business practices. Pre-registration required. aksbdc.org or 907-274-7232

Send business happenings to Tasha at surveys@akbizmag.com two months prior to event.

www.akbizmag.com • Alaska Business Monthly • October 2012

ALASKA THIS MONTH Compiled By Nancy Pounds

Dining

Wine Tasting Supports Area Service Groups

Photo courtesy of Bean’s Cafe

The Pour is Bean’s Cafe and the Children’s Lunchbox second largest fundraiser of the year. No. 1 is Empty Bowl.

fter a frenetic Alaska summer, fall affords an opportunity to savor moments and events. The Pour is set for 6:30-10 p.m. Oct. 19 at the Alaska Railroad Depot in Ted Stevens Anchorage International Airport. It is a chance to relish different fine wines and raise funds to support Anchorage service organizations. The wine tasting benefits Bean’s Café of Anchorage and The Children’s Lunchbox, which provides healthy meals for needy children during weekends and school vacations. Bean’s Café provides meals and daytime shelter for homeless people. “This is our second largest fundraiser,” says Katherine Jernstrom, Bean’s Café’s community outreach director. The springtime Empty Bowl project, which features a soup meal in locally crafted pottery, is No. 1, she adds. The Pour will match up two merlots, for example, for attendees to compare. Other wine varieties will also be offered. A wine auction is also planned. Experts from La Bodega, a beer and wine retailer in Anchorage, helped select wines, Jernstrom says. The Pour traces its roots to the Beans and Jeans fundraiser begun nearly 17 years ago, Jernstrom says. The event was “jazzed up” for 2010 and introduced as The Pour, she says. Last year about 350 people attended The Pour. Event organizers aim to educate people about the Bean’s Café and The Children’s Lunchbox programs to secure ongoing donors. The Pour will feature a professional video, created by Fine Point of Anchorage, spotlighting Bean’s Café and The Children’s Lunchbox. Tickets to the event cost $60. (beanscafe.org) 

www.akbizmag.com • Alaska Business Monthly • October 2012

137 ■

ALASKA THIS MONTH Compiled By Nancy Pounds

TrAVeL

Photo courtesy of Ridgewood Wilderness Lodge

Halibut Cove Lodge Offers Year-Round Destination

Ridgewood Wilderness Lodge guests.

getaway to Alaska’s Ridgewood Wilderness Lodge at Halibut Cove features quiet adventure with gourmet menus and eco-friendly practices. The lodge, open year-round, is located across from Homer and adjacent to Kachemak Bay State Park. Water taxi from Homer or float planes deliver guests to the lodge. “We’re small and accommodate just small groups so we can offer very personalized service into Kachemak Bay and the Kachemak Bay State Park, which are stunningly beautiful and filled with wildlife,” says Lucinda Sidelinger, who owns and operates the lodge with her husband, Kevin. Halibut Cove is also known for its art galleries and The Saltry Restaurant. The lodge subscribes to environmentally friendly practices, including using energy-efficient appliances, avoiding harmful cleaning chemicals and using local produce, seafood and home-baked goods for special menus prepared for guests. Lodge operators offer eco-tours in summer, including kayaking at a glacier’s lake, fishing, hiking, tide pool visits, a brown bear photography tour, and a Kachemak Bay boat tour. The Sidelingers met while working at a wilderness lodge in Kachemak Bay in 1975. They began building the lodge in 1984 and opened in 2006. They have lived at Halibut Cove for more than 30 years. Kevin Sidelinger designed and built the distinctive lodge, which features several A-frame peaks and a large deck. The Sidelingers also raise oysters. (ridgewoodlodge.com) 

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www.akbizmag.com • Alaska Business Monthly • October 2012

ALASKA THIS MONTH Compiled By Nancy Pounds

enTerTAinMenT

Photo courtesy of Anchorage Concert Association

Shrek Enlivens Stage for All Ages

Shrek, Donkey and Princess Fiona will entertain Alaskans at this month in Anchorage.

he sassy and brusque green ogre of animated movie fame will take the stage this month in Anchorage in the Broadway version, “Shrek the Musical.” The production runs Oct. 5-14 at the Alaska Center for the Performing Arts Atwood Concert Hall. The production company, NETworks Presentations Inc., begins its national tour in Anchorage, and will spend a few extra days in Anchorage preparing for the run, says Jason Hodges, executive director of the Anchorage Concert Association. Production companies typically end their U.S. tours in Anchorage. The Anchorage Concert Association chose to bring “Shrek the Musical” to Anchorage to appeal to family oriented audiences, and it will have a longer run in Anchorage due to its appeal to all ages. “We’ve found in recent seasons that family shows are very popular,” Hodges says. For example, he says the production of “Beauty and the Beast,” which had a January run in Anchorage, sold 25,000 tickets. The Broadway version of the upturned fairy tale features dynamic costumes and makeup to bring the movie to life on the stage, he says. Several new songs were written for the stage version, which is based on the 2001 movie and opened on Broadway in 2008. (alaskapac.centertix.net) 

www.akbizmag.com • Alaska Business Monthly • October 2012

139 ■

EVENTS CALENDAR

Compiled By Tasha Anderson

Anchorage 5 & 7

10/19-11/11 Mrs. President

Based on true events, this Anchorage Opera production relates the story of Victoria Woodhull, who attempted to run for president in 1872 before women even had the right to vote. Her public image was more than just political, as she was also a clairvoyant, publisher, jailbird, stockbroker and proponent of free love. Discovery Theater, 8 p.m. on the 5th and 4 p.m. on the 7th. anchorageopera.org

5-7

Make it Alaskan Festival

First established in 1989 as Display Alaska, this a premier festival for purchasing unique Alaskan made authentic products. Events include live music, food, and the prizes won through participation in the Alaskan Food Safari! Sullivan Arena, various times. miafestival.com

14th Annual Harvest of Wines

Sponsored by KAKM Channel 7, this annual event features more than 250 wines from around the world, light hors ‘d oeuvres, and a live and silent auction. Proceeds benefit Alaska Public Telecommunications. $65 advance, $75 at the door. Egan Center, 5:30 p.m. to 8 p.m. alaskapublic.org

16-17

Pamyua: CD Release Concert

Anchorage quartet PAMYUA brings Inuit music to the world. The group’s music mixes Inuit drumsongs with R&B, world music, gospel, reggae and jazz, and includes vocal harmonies and a cappella arrangements of Yup’ik and Greenlandic drumsongs. Alaska Center for the Performing Arts, 7:30 p.m. alaskapac.org

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Bruckner’s Last Finale

Written and directed by Dick Reichman, this play explores the life of “the fourth B”: Bach, Beethoven, Brahms and Bruckner. Cyrano’s, 7 p.m. cyranos.org

26-27

Dancing Queen: The Music of ABBA

Presented by the Anchorage Symphony Orchestra, this “ultimate guilty pleasure” features many of ABBA’s greatest hits including Mamma Mia, Knowing Me Knowing You, Fernando, Take a Chance on Me, and Dancing Queen. Alaska Center for the Performing Arts, 8 p.m. alaskapac.org

Fairbanks 12

International Sled Dog Symposium

Highlights of the symposium include a best invention contest, the great cooker cook-off, the ADMA fund-raising auction and a working dog trade fair. Presentations include the History of the Traditional Use of Dogs in Native Alaskan Culture, Mushing 101 and Vet Panel Q&A. The keynote speaker is Dr. Donna Gigliotti, an animal chiropractor. Pioneer Park Civic Center, various times. sleddog.org

13-14

Go Winter!

This community event is focused on winter and how to get through it healthy, safely and sanely while having some fun. Events include outdoor activities such as snow machines and dog mushing, and inside attractions and activities like arts and crafts, car care, auto starts, winterization information, and travel ideas. Carlson

www.akbizmag.com • Alaska Business Monthly • October 2012

Center, Friday 10 a.m. to 6 p.m. and Saturday 11 a.m. to 5 p.m. fairbanksevents.com

Fairbanks International Friendship Day

“When the food is fabulous they remember the occasion. If the food is terrible they only remember the food.”

This all-volunteer event features more than 20 groups with roots in Japan, Thailand, India, Germany, Korea, Norway, Alaska, Hawaii, etc. and includes dance performances, an international clothing pageant, local music, informational booths and ethnic food. Free admission. Pioneer Park Centennial Center. 12 a.m. to 5 p.m. Call 907-474-0928

Creepy Critters Halloween Program

This annual spooky program is intended for children to have an opportunity to learn about feared and often misunderstood creatures through educational activities, expert consultation, and crafts. $3 suggested donation. Creamer’s Field Farmhouse Visitor Center, 12 p.m. to 4 p.m. creamersfield.org

Leslie Pruett • 907 688-2005 • platterscatering@me.com

girDWooD 3-28

‘Party Crashers’ Art Show

A collection of rascally ravens are on exhibit, featuring the etchings of Amanda Brannon and presented by the Girdwood Center for Visual Arts. Opening reception is Saturday Oct. 6, 6 p.m. to 8 p.m.

JUneAU 13

Walk a Mile in Her Shoes

This annual race takes place on Douglas island and raises money for the AWARE shelter. Walk 1 mile or run 5K, and have a chance to win door prizes. $15 in advance or $20 on race day. Sandy Beach Log Shelter, 10 a.m. southeastroadrunners.org

siTkA 10-18

Alaska Day Festival

This festival commemorates the purchase transfer of Russian claim of Alaska to the United States at Sitka on October 18, 1867. Events include interpretive programs at museums and parks, aircraft displays, film showings, historic site and building tours, food, and special exhibits. Various locations and times. alaskadayfestival.org

VALDeZ 9

Patrick Ball

Three of the premier Celtic harpists in the world take you deep into the myths, magic and fabled history of this most captivating instrument. The concert features Patrick Ball performing the Celtic harp and spoken word; Lisa Lynne on the Celtic harp, Irish bouzouki and mandolin; and Aryeh Frankfurter on Celtic harp, cittern and nyckelharpa. Valdez Civic Center, 7 p.m. valdezartscouncil.org

WAsiLLA 9/7-10/3

3rd Annual Brassieres to Nowhere Exhibit

In recognition of Breast Cancer Awareness Month, the museum houses an exhibit of bra-inspired art; categories include mixedmedia, fiber arts, painting, photography and sculpture. Artists can opt to include their work in the bra auction on Oct. 13th. All proceeds support the local breast cancer support group Casting for Recovery. Dorothy G. Page Museum, 6 p.m. to 8 p.m. cityofwasilla.com 

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www.akbizmag.com • Alaska Business Monthly • October 2012

ALASKA TRENDS

By Paul Davidson

Alaska’s Transportation and Warehousing

Employment: Climbing Higher

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

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

ransportation and WareTransportation and Warehouse Employment house Employment consists 1991-2012 of those employed in rail, air, pipeline, road and water based transportation. This sector also includes those employed in the stor30% age of goods and supportive opera20% tions of transportation. Preliminary data shows Transportation and 10% Warehousing Employment as 6.44 Price of Gas percent of Alaska’s total non-farm 0% employment for July 2012. Alaska’s Alaska Transportation and Warehousing -10% U.S. Employment has gained 38 percent from 1990-2012, 53.82 percent -20% greater than the overall U.S. gain of 25 percent during the same period. -30% Retail automotive fuel prices have seen significant variability with effects on Transportation and Warehouse Employment, according to the U.S. Energy Information Administration, as illustrated tinued employment growth and recovery from the slump in by the chart. The chart shows some correlation between U.S. 2009-2010. In light of receding Arctic sea ice, this employment and Alaska Transportation and Warehouse Employment with sector may see additional growth through increased resource Alaska enjoying more growth and smaller declines than that extraction and trade route development, according to the U.S. of the United States as a whole. Transportation and Warehous- Bureau of Labor Statistics and a report on Alaska Regional Cliing employment statistics for the first half of 2012 show con- mate Impacts from the University of Alaska Fairbanks.  Source: State of Alaska Department of Labor and Workforce Development: labor.alaska.gov/research

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN MARINE/PENCO

www.akbizmag.com • Alaska Business Monthly • October 2012

143 ■

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 Services Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Services & 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

■ 144

By Paul Davidson Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

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

1st Q12 1st Q12 2nd H11 2nd H11

33,808 13,194,047 202.58 226.28

33,474 13,084,207 200.28 223.60

32,480 12,823,267 200.278 223.598

4.09% 2.89% 1.15% 1.20%

Number Filed Number Filed Number Filed

June June June

54 36 12

71 52 10

77 52 17

-29.87% -30.77% -29.41%

Thousands Thousands Thousands Thousands Thousands

June June June June June

346.51 186.32 44.00 39.97 38.95

341.50 186.40 44.56 38.91 37.31

330.04 184.34 42.72 34.81 33.66

4.99% 1.08% 3.00% 14.82% 15.72%

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

June June June June June June June June June June June June June June June June June June June June June June June June June June June June June June June June June

350.3 49.1 301.2 17.3 16.8 13.5 15.2 16.6 12.6 68.2 6.4 37.0 6.5 10.6 24.8 6.5 6.5 4.2 15.4 29.9 46.5 32.3 38.9 9.7 23.0 11.4 84.4 17.1 25.0 6.3 42.3 23.8 4.1

330.0 39.7 290.3 16.6 16.1 13.3 13.1 10.0 6.6 65.6 6.1 36.3 6.4 10.1 23.2 6.0 6.4 4.1 14.7 28.3 46.4 32.3 33.3 7.1 20.9 11.1 84.5 16.6 25.7 7.4 42.2 24.7 3.8

348.5 51.3 297.2 16.4 16.0 13.1 18.1 16.8 13.0 67.3 6.5 37.2 6.5 10.1 23.6 6.2 6.4 4.1 15.1 28.6 44.4 31.6 38.2 10.3 22.1 11.6 85.6 17.9 25.7 6.4 42.0 23.5 4.0

0.52% -4.29% 1.35% 5.49% 5.00% 3.05% -16.02% -1.19% -3.08% 1.34% -1.54% -0.54% 0.00% 4.95% 5.08% 4.84% 1.56% 2.44% 1.99% 4.55% 4.73% 2.22% 1.83% -5.83% 4.07% -1.72% -1.40% -4.47% -2.72% -1.56% 0.71% 1.28% 2.50%

Thousands Thousands Thousands Thousands Thousands

June June June June June

375.40 200.19 47.27 42.87 42.44

367.28 198.65 47.48 41.51 40.42

372.70 199.82 46.92 42.07 42.51

0.72% 0.19% 0.74% 1.90% -0.16%

Percent Percent Percent

June June June

7.7 6.9 6.9

7 6.2 6.1

7.7 7.1 6.9

0.00% -2.82% 0.00%

www.akbizmag.com • Alaska Business Monthly • October 2012

ALASKA TRENDS

By Paul Davidson Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

Percent Percent Percent

June June June

6.8 8.2 8.4

6.3 7.7 7.9

6.8 8.2 9.3

0.00% 0.00% -9.68%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

June June June

14.79 8.71 98.06

16.96 8.99 110.55

17.11 11.55 111.08

-13.58% -24.59% -11.72%

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

June June June June June

7 1972 1,596.16 28.05 0.93

6 1977 1,585.31 28.67 0.96

7 1718 1,511.31 30.78 1.23

0.00% 14.78% 5.61% -8.87% -24.70%

Millions of $ Millions of $ Millions of $

June June June

34.50 17.33 17.17

47.93 21.16 26.77

40.60 4.94 35.66

-15.03% 251.00% -51.85%

Total Deeds

June

1074

973

630

70.48%

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

Thousands Thousands

June June

544.28 101.27

414.76 83.35

559.88 64.88

-2.79% 56.08%

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 $

June June June June June June June

40,333.10 41,708.30 (45.7) 1,568.0 24.7 51.50 732.9

40,082.70 40,687.60 145.7 1,613.8 (16.2) (19.10) (1,700.0)

39,654.10 40,336.30 330.4 690.0 27.4 10.8 508.1

1.71% 3.40% -113.83% 127.25% -9.85% 376.85% 44.24%

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 $

1st Q12 1st Q12 1st Q12 1st Q12 1st Q12 1st Q12 1st Q12 1st Q12 1st Q12

2,085.52 38.36 138.30 1,124.51 7.98 1,820.76 1,775.89 509.26 1,266.63

2,088.25 46.12 151.97 1,119.55 6.26 1,827.29 1,783.65 550.20 1,233.44

2,098.95 43.60 155.42 1,123.90 12.37 1,849.81 1,809.77 528.42 1,281.35

-0.64% -12.03% -11.01% 0.05% -35.51% -1.57% -1.87% -3.63% -1.15%

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

June June June June June

79.24 1.03 0.64 0.80 6.32

79.75 1.01 0.63 0.78 6.32

82.61 0.99 0.62 0.73 6.58

-4.08% 4.06% 3.70% 8.87% -3.85%

Indicator

Southeast Gulf Coast United States PETROLEUM/MINING Crude Oil Production – Alaska Natural Gas Field Production – Alaska ANS West Cost 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

Previous Report Period (revised)

www.akbizmag.com • Alaska Business Monthly • October 2012

145 ■

ADVerTisers inDeX AES Alaska Executive Search.................................. 130 Ahtna Inc..................................................................................90 Alaska Air Cargo-Alaska Airlines..............................87 Alaska Air Transit..............................................................138 Alaska Aviation Heritage Museum....................... 139 Alaska Boat Brokers .......................................................142 Alaska Enterprise Solutions ..............................61, 129 Alaska Housing Finance Corp. .......................................3 Alaska Industrial Hardware ....................................... 111 Alaska Interstate Construction LLC...................... 29 Alaska Miners Association – Fairbanks Branch..39 Alaska Pacific University................................................23 Alaska Public Telecommunications Inc. ...............25 Alaska Rubber .......................................................................41 Alaska Ship & Drydock.....................................................27 Alaska State Chamber of Commerce................100 Alaska Traffic Company ..................................................79 Alaska USA Federal Credit Union ........................104 Allen Marine ........................................................................... 96 American Fast Freight ......................................................75 American Indian Science & Engineering Society ..................................................52 American Marine / PENCO .......................................143 Anchorage Chrysler Dodge ........................................24 Arctic Controls .....................................................................42 Arctic Office Products (Machines)........................113 Arctic Slope Regional Corp..........................................88 Arctic Slope Telephone Association.......................83 Associated General Contractors..............................33 AT&T ..............................................................................................11 Bering Shai Rock & Gravel ........................................... 34 Bering Straits Native Corp. ........................ 103 Bristol Bay Native Corp. ................................................89

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Calista Corp..........................................................................123 Capture the Fun Alaska LLC......................................142 Carlile Transportation Systems .................................91 Central Environmental Inc. ..........................................53 Chris Arend Photography...........................................146 Chugach Alaska Corp. ......................................................97 CIRI ................................................................................................67 City Electric Inc.....................................................................32 Clarion Suites Downtown / Quality Suites Near Convention Center..138 Construction Machinery Industrial LLC ............... 2 Cornerstone General Contractors .......................114 Cruz Contruction Inc. ....................................................... 15 Davis Constructors & Engineers Inc. ................102 Delta Western ...................................................................... 34 Dimond Center Hotel .................................................... 139 Dimond Center Mall ........................................................141 Donlin Gold ............................................................................. 26 Dowland-Bach Corp.........................................................42 Engineered Fire & Safety ...............................................43 ERA Helicopters ..................................................................46 ESS Support Services / ESS Labor Services .....50 Fairweather LLC ..................................................................45 First National Bank Alaska...............................................5 Fountainhead Hotels.......................................................112 GCI ..............................................................................49, 55, 81, Granite Construction .......................................................35 Great Originals Inc. ..........................................................114 Green Star Inc. ....................................................................142 Hawk Consultants LLC ...................................................46 Horizon Lines..........................................................................56 Hotel Captain Cook......................................................... 127 IMPLUS Footcare LLC ......................................................78

Jewelry Cache .......................................................................13 Judy Patrick Photography .............................................16 Juneau Convention & Visitors Bureau .................72 Junior Achievement..........................................................94 Kendall Ford Wasilla......................................................106 Kinross Fort Knox ...........................................................108 Koniag Inc. .............................................................................101 Landye Bennet Blumstein LLP .................................. 26 Leemar Manufacturing, Inc.........................................30 Linc Energy............................................................................... 17 Little Caesar Enterprises Inc. ..................................142 Lynden Inc. ............................................................................121 MatSu Business Alliance Inc. ......................................47 Medical Park Family Care Inc. ....................................72 Mikunda Cottrell & Co. .................................................115 Millennium Hotel ...............................................................137 MTA Communications ...................................................60 N C Machinery....................................................................... 31 NANA Regional Corp........................................................95 Nature Conservancy ......................................................134 Neeser Construction Inc. ..............................................93 New York Life .........................................................................21 North Star Behavioral Health ..................................... 71 Northern Air Cargo..................................................64, 65 Northrim Bank.......................................................................57 Olgoonik Development Corp....................................133 PacArctic Logistics .............................................................78 Pacific Alaska Freightways ...........................................19 Pacific Pile & Marine.............................................8, 9, 10 Pacific Rim Media/ Smart Phone Creative ........63 Pacific Tower Properties ...............................................68 Paramount Supply ...........................................................142 Parker, Smith & Feek ......................................................147

Pen Air .......................................................................................113 Personnel Plus .....................................................................137 Platters Catering................................................................141 ProComm Alaska ................................................................62 Resource Development Council ...............................39 Roger Hickel Contracting ..........................................105 Rotary District 5010 .....................................................140 RSA Engineering Inc. ......................................................129 Ryan Air .....................................................................................98 Seekins Ford Lincoln Fleet .........................................110 Shred Alaska............................................................................73 SOS Employment Group................................................50 Span Alaska Consolidators ...........................................76 Spenard Builders Supply ................................................37 Stellar Designs Inc. ..........................................................142 Superior Group, The ........................................................112 The Eyak Corp...................................................................... 111 The Growth Company......................................................73 The Historic Anchorage Hotel................................140 The Tatitlek Corp. ..............................................................115 Tobacco Prevention Control........................................59 Totem Ocean Trailer Express ......................................77 Trailercraft Inc. Freightliner of Alaska .............. 107 Udelhoven Oilfield Systems .....................................109 Ukpeagvik Inupiat Corp................................................. 99 UMIAQ ......................................................................................131 Usibelli Coal Mine Inc. ...................................................123 Valdez CVB ..............................................................................69 Visit Anchorage ................................................................... 92 Washington Crane & Hoist ........................................... 51 Waste Management ..........................................................85 Wells Fargo ..........................................................................148 World Trade Center Alaska ..........................................55

www.akbizmag.com • Alaska Business Monthly • October 2012

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