February 2012 - Alaska Business Monthly by Alaska Business

Engineering & Architecture Special Section | Upgrading the Grid

FEBRUARY 2012

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● UAA-AFOC Connection ● North Slope Pipeline Integrity ● Reality of Retirement Funding

Special Section International Trade Alaska seafood top export

On Expertise Air Compressors Generators Light Towers Light Compaction

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FEBRUARY 2012 TA B L E O F C O N T E N T S

ABOUT THE COVER

D E PA R T M E N T S

International trade is the focus of the World Trade Center Alaska 25th Anniversary Special Section (beginning on page 92), and seafood accounts for nearly half of Alaska’s $5 billion in annual export commodities. Cover photo: Commercial purse seine fishers haul their net while fishing for pink and chum salmon, Chatham Strait, Admiralty Island, Southeast Alaska (management unit 12), pursed net with salmon visible underwater. ©2012 John Hyde/AlaskaStock.com

From the Editor . . . . . . . . . . . . . . 7 Inside Alaska Business . . . . . . . . 8 Market Squares . . . . . . . . . . . . . 67 Right Moves . . . . . . . . . . . . . . . . 68 Alaska This Month . . . . . . . . . . . 86 Events Calendar . . . . . . . . . . . . 89 Alaska Trends . . . . . . . . . . . . . . 111 Ad Index . . . . . . . . . . . . . . . . . . 114

R E G U L A R F E AT U R E S

ARTICLES

View from the Top 11 | Kyle Ryan & Jeremy Loyer Bare Distillery Alaska LLC By Peg Stomierowski

Health & Medicine 12 | The UAA-AFOC Connection Seawolf doctors extraordinaire By Tracy Kalytiak Tourism 22 | Destination Alaska Marketing to emerging economies By David Tobenkin Native Business 24 | Alaska Native Corporations Develop Opportunity Growing shareholder employment through partnerships By Gail West Construction 62 | Upgrading the Grid Keeping electricity flowing across Alaska By Gail West Transportation 70 | Port of Tacoma Primary port for goods moving to Alaska By Dianne O’Connell

Oil & Gas 76 | BP Exploration (Alaska) Inc. Building on more than 50 years of success By Vanessa Orr Oil & Gas 80 | North Slope Pipeline Integrity Revamping aging infrastructure By Mike Bradner

16 Regional Focus 16 | Bethel Census Area Heart and soul of Western Alaska By Tracy Barbour HR Matters 30 | Managing Different Employees Perplexing protected class rules By Richard Birdsall

Health & Medicine 90 | U-Med District Expanding from within By Jody Ellis-Knapp

75 Transportation SIDEBAR 75 | Port of Seattle Impacts Alaska By Dianne O’Connell

Banking & Finance 110 | Reality of Retirement Funding Sharing responsibility with your employees By Rod Shipley

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

(continued on page 6)

FEBRUARY 2012 TA B L E O F C O N T E N T S

special section

special section CORRECTIONS

Engineering & Architecture

In the January issue of Alaska Business Monthly we inadvertently left out two photo credits. ABM sincerely regrets the omission.

World Trade Center Alaska

25th Anniversary

31 92

31 | Engineer’s Week 2012 32 | Engineer of the Year 2012 Nominees Compiled by Lorie Dilley

96 | Working with China Alaska’s growing export partner By Alex Salov

36 | Engineering Mertarvik Moving Newtok across the river, away from the sea By Nichelle Seely 40 | LEED Standard Changing building industry for the better By Vanessa Orr

106 | Foreign Mining Investments ‘Crucial’ to industry in Alaska By Stephanie Jaeger

48 | Notable Buildings, Notable Architects Designing for community involvement By Tracy Kalytiak

102 | Testimonials from WTCAK Members 104 | KORUS Free Trade Agreement Opening possibilities for increased exports By Tracy Kalytiak

44 | Google Earth 3D Modeling Providing business benefits By Vanessa Orr

54 | ABM’s 2012 Architects & Engineers Directory

92 | Q&A with Greg Wolf

108 | Rare Earth Elements at Bokan Mountain Mining a fortune in Southeast By Stephanie Jaeger

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

FROM THE EDITOR Follow us on

Another Year of Growth

and

Volume 28, Number 2 Published by Alaska Business Publishing Co. Anchorage, Alaska Vern C. McCorkle, Publisher 1991~2009

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Jim Martin Charles Bell Anne Campbell Bill Morris Ann Doss Mary Schreckenghost

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ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., PO Box 241288, Anchorage, Alaska 99524; 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. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

n the January issue of Alaska Economic Trends, Alaska Department of Labor and Workforce Development Research & Analysis Section Economists Dan Robinson, Neal Fried, Alyssa Shanks and Mali Abrahamson forecast a 1.2 percent growth in 2012 Alaska employment—3,900 jobs. This is good news for Alaska businesses for the third consecutive year. The largest area of growth is expected in the health care industry, a sector that saw an 8.3 percent increase from 2008 to 2010, according to the economists. Overall, they anticipate statewide growth to be fairly modest this year, with increases of 0.6 percent in Anchorage, 0.5 percent in Fairbanks and 0.4 percent in Southeast. One important observation by the economists, “What Alaska has, the world needs,” speaks to the importance of international trade to the state’s economy. We focus on this very issue in a special section this month celebrating World Trade Center Alaska’s 25th anniversary. In fact, 2011 turned out to be a record year for international trade when Alaska topped $5 billion in exports for the first time. That number would increase substantially if we built a natural gas pipeline and exported LNG. What better way to move the economy along toward a bigger better Alaska than the intense infrastructure development of a natural gas pipeline? It’s time for the Legislature to spend some quality time in Juneau and pass legislation essential for economic growth—instead of inaction—enact. Getting back to international trade, what made up the more than $5 billion in exports last year? According to Governor Sean Parnell’s office, “Alaska’s seafood exports posted the largest year-to-year increase for this period: nearly 34 percent to $2.4 billion.

Mineral ore exports rose 31.4 percent to $1.7 billion. The export of energy declined 6.6 percent to $348.3 million with the change at the Kenai liquefied natural gas plant. In addition to liquefied natural gas, the energy category also includes refined petroleum products which more than tripled in value to $73.2 million, and coal, up 14.6 percent to $27.3 million. Precious metals rose 28.3 percent to $243.4 million.” And where did it all go? Again, we turn to the governor’s office for details: “China emerged as the top market for Alaska’s 2011 exports through November. It’s the first time China held that spot. The remaining top 20 markets for Alaska’s 2011 exports for this period are: Japan, South Korea, Canada, Germany, Switzerland, Spain, the Netherlands, Australia, Finland, Mexico, France, Thailand, Belgium, Portugal, Taiwan, Chile, the United Kingdom, Denmark and Ukraine.” Expanding exports, especially in the Pacific Rim, equals expanding the economy. We can salute the folks at World Trade Center Alaska for helping make that happen. We’ve got a really great magazine for you this month—two special sections and a dozen other features and articles. Our Engineering & Architecture special section has some very interesting articles, including bios of the nominees for the 2012 Engineer of the Year, a first person account about creating a place for the people of Newtok to relocate to, the directory, a piece about how the LEED Building Standard is changing the industry, a look at Google Earth 3D modeling, and an article about buildings and architects that we’ve had to abbreviate for the magazine, but which appears in full on the website this month. Be sure to read both accounts. –Susan Harrington, Managing Editor

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

INSIDE ALASKA BUSINESS By Nancy Pounds

AIDEA Bonds Fund Providence Projects

he Alaska Industrial Development and Export Authority issued $122.7 million in conduit revenue bonds for Providence Health & Services. The bonds will help finance construction of Providence Alaska Cottages, a 96bed nursing home consisting of eight cottages and a commons building. The facility is being built at 1101 Boniface Parkway in Anchorage. Bond funds will also help finance capital improvements at Providence Alaska Medical Center, also in Anchorage. Improvements include renovating existing facilities and adding 85,782 square feet of space. The project includes renovations and expansion of a Newborn Intensive Care Unit, an obstetrical unit, two open-heart surgery suites, expansion of the pharmacy service, sterile processing and materials management. The nursing-home facility and PAMC upgrades are expected to create 85 new permanent positions, according to AIDEA officials.

Paintings Donated to North Slope Museum

he son and daughter of artist Jeffries Wyman donated high-quality watercolor paintings to Simon Paneak Memorial Museum at Anaktuvuk Pass. The originals are housed at the University of Alaska Museum of the North in Fairbanks. Anne Wyman and her brother Jeffries Wyman Jr. donated 17 of their father’s watercolors and drawings to the University of Alaska Museum of the North and provided the

funds for reproductions to be framed and shipped to Anaktuvuk Pass. Jeffries Wyman painted the pieces in the 1950s during a trip to the Brooks Range. Wyman helped discover a new branch of biochemistry and traveled worldwide, journeying to the UAF weather station at Anaktuvuk Pass for a painting retreat. Mareca Guthrie, the UA Museum of the North’s fine arts curator, said watercolors are delicate pieces, and the Wyman originals will be kept in the climate-controlled Fairbanks museum.

DOT&PF Aims to Reduce Equipment Idling

he Alaska Department of Transportation and Public Facilities has implemented a policy to reduce vehicle idling for its equipment fleet, in an effort to save funds and improve air quality. Long periods of heavyvehicle idling contribute to poor air quality and can be harmful to engines, DOT&PF officials said. As of Nov. 1, 2011, DOT&PF mandated that all 8-yard dump trucks and tractors with programmable on-board computers be set to a 10-minute idle time. It is now department policy to minimize idle time on all vehicles to the minimum required to safely and efficiently perform the required duties. “This mandate is estimated to save over $959,000 in a single year on a single class of equipment,” said Mike Coffey, state maintenance and operations chief. Exceptions to the policy include emergencies or airport ground support, Coffey said.

ACVB Has New Moniker: Visit Anchorage

fficials from the Anchorage Convention & Visitors Bureau have changed the group’s name to Visit Anchorage. The move, announced in December, aims to improve potential visitors ability to locate information about travel to the city, especially online, Visit Anchorage officials said. Similar U.S. organizations have also changed their names. For example, the former San Francisco Convention & Visitors Bureau is now known as San Francisco Travel. The Municipality of Anchorage created the Anchorage Convention & Visitors Bureau in 1975 to promote the tourism industry. “Visit Anchorage instantly identifies our industry and business,” said Julie Saupe, Visit Anchorage president and chief executive. “It ranks high in searches for Alaska attractions, events and tourism businesses, making it simple for people to find travel information on Anchorage and Alaska. Although our Web properties are already very search-friendly, this is an additional boost. Anchorage Convention & Visitors Bureau is a mouthful – Visit Anchorage saves seven syllables and is much easier to say.”

Sealaska Signs Village to Manage Sacred Sites

ealaska Corp. and a Southeast Alaska recognized tribal organization have signed the first memorandum of agreement to manage sacred sited on Sealaska land. Sealaska Heritage

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

INSIDE ALASKA BUSINESS Institute inked the agreement with the Organized Village of Kasaan. The agreement defines the cooperative management for Native historical and cultural properties that have been conveyed to Sealaska through the Alaska Native Claims Settlement Act and are within the aboriginal territory of Kasaan Haida people on Prince of Wales Island. ANCSA is the only means by which title to these culturally significant, aboriginal properties can be returned to Native ownership, Sealaska officials said. Sealaska has worked since 1975 to secure the transfer of these properties from the federal government. Sealaska has obtained 84 sites. Four other sites are still pending final conveyance.

SEARHC Programs Earn Accreditation

he SouthEast Alaska Regional Health Consortium Behavioral Health Division received a three-year accreditation from an international industry accrediting organization. CARF International, originally known as the Commission on Accreditation of Rehabilitation Facilities, is an independent nonprofit organization. The accreditation assessed SEARHC’s behavioral health programs including Yéil Jeeyáx-Raven’s Way, a residential substance abuse treatment program for Alaska youth based in Sitka; Gunaanastí-Bill Brady Healing Center/Déilee Hít-Safe Harbor House, two aligned regional residential substance abuse treatment programs in Sitka for Native American adults; the Community Family Services program, a village-based outpatient and preven-

tion program with centers in Angoon, Haines, Hoonah, Hydaburg, Juneau, Kake, Klawock, Klukwan, Pelican, Petersburg and Sitka; and the Haa Toowóo Náakw Hít-House for Healing Your Inner Being, an outpatient mental health clinic in Sitka and the consortium’s center for telebehavioral health. The accreditation marks the first time the Juneau Behavioral Health Clinic and Haa Toowóo Náakw Hít outpatient behavioral health clinic have been through the accreditation process. CARF previously certified the three substance-abuse treatment programs and Community Family Services.

PDC Inc. Engineers Ranked in Industry List

DC Inc. Engineers was included in the Zweig White Hot Firm List for 2011. The list recognizes the fastest-growing architecture, engineering, planning and environmental firms in the United States and Canada. Firms are ranked according to their threeyear growth rate in gross revenue. Half of the ranking is based on percentage of growth and the other half is based on dollar growth. The listing is the first time PDC was included in Zweig White’s list. PDC was ranked 127th out of 150 firms.

Solstice Advertising Earns Award

olstice Advertising received a Summit Emerging Media Award at the Summit International Awards. The Anchorage advertising firm was honored for its work designing and creation Cook Inlet Housing’s Web site. Solstice Advertising received a Leader

level Emerging Media Award in the nonprofit Web site category. The firm has received two other Summit International Awards since 2008.

Security Aviation Adds New Jet

ecurity Aviation, a Part 135 charter operator located in Anchorage, announced today that it has added an eighth aircraft to its fleet. The Astra 1125 jet can fly from Anchorage to Seattle in three hours, and is the only charter jet in Alaska that can fly to Hawaii. The Astra also offers service from Anchorage to the U.S. East Coast with a single fuel stop. The jet’s primary use will be for expedited passenger and light cargo transportation, as well as emergency response services throughout Alaska, Canada and the Lower 48. Security Aviation is currently the only charter operator in the state of Alaska to offer charter jet service. The Astra is available for charter 24/7, cruises at 525 mph and seats up to nine passengers.

Wells Fargo Supports Fairbanks Cultural Center

ells Fargo donated $50,000 to the Morris Thompson Cultural and Visitors Center in Fairbanks in December. The funds will help complete the final phase of the center’s exhibits. In 2010, Wells Fargo donated $5,000 to support the creation and growth of Alaska Native Cultural programs within the center. The most recent donation demonstrates support for the continued growth of the programs that celebrate and preserve the Athabascan

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

INSIDE ALASKA BUSINESS heritage of Interior Alaskans. The majority of the centerâ&#x20AC;&#x2122;s exhibits opened in 2009, but one section was put on hold due to lack of funding. The Wells Fargo donation helped complete work on the exhibits. The Morris Thompson Cultural and Visitors Center is a partnership between the Alaska Public Lands Information Center, Fairbanks Convention and Visitors Bureau, Tanana Chiefs Conference Cultural Programs, Alaska Geographic, and Denakkanaaga, an Alaska Native elders association.

Alaska Regional Earns Top Rankings

laska Regional Hospital was ranked No. 1 for spine surgery in Alaska, according to a report released by HealthGrades, a leading independent healthcare ratings company. HealthGrades also rated the hospital No. 1 in Alaska for overall orthopedic services for the fourth year in a row, and No. 1 for joint replacement for the sixth year in a row. Each year, HealthGrades releases a comprehensive evaluation of hospital care using 40 million hospital records obtained from the Centers for Medicare and Medicaid Services. This study, the largest of its kind, establishes quality ratings for each hospital based on risk-adjusted rates of mortality and inhospital complications in 27 procedures and diagnoses. For each procedure and diagnosis, hospitals are assigned a 5-star (best), 3-star (as expected), or 1-star (poor) rating.

GCI Begins 4G Service in Fairbanks

eneral Communication Inc. launched 4G wireless service in the Fairbanks area in December. GCI began offering the technology in Anchorage in September. According to GCI officials, GCIâ&#x20AC;&#x2122;s 4G, or fourth generation wireless technology, allows Alaskans to surf the Internet, watch videos, social network and work without the delays experienced on competing networks. The new 4G service is capable of download speeds rated up to 21 megabits per second, with typical speeds more than 10 times faster than current network speeds.

UA Obtains Funds for Grant

include First National Bank of Alaska, The Chariot Group, Alaska Communications and the Usibelli Foundation, as well as personal support in much smaller amounts from Foundation trustees, University of Alaska staff and others who support the teacher mentor program. The five-year grant will assist first- and second-year teachers in the Anchorage, Fairbanks, Mat-Su and Kenai school districts. The Statewide Mentor Project already helps 320 teachers in 48, mostly rural, school districts each year. The grant expands that program to the four new urban regions beginning in January 2012 with mentors in place for the start of the school year in August. The mentor projectâ&#x20AC;&#x2122;s goals are to reduce teacher turnover and improve student achievement.

he University of Alaska secured $1.5 million in private matching money required to receive a $15 million grant from the U.S. Department of Education to expand early career teacher mentoring. The Alaska Statewide Mentor Project is a partnership between the University of Alaska and the State Department of Education and Early Development. UA officials estimate that an additional 850 early career teachers and 46,000 students over the course of the grant will benefit from the program. Carla Beam, vice president for university relations and president of the non-profit UA Foundation, announced today that private matching funds, a mixture of cash and in-kind donations, have been secured to meet the grant requirements. Donors

AT&T Opens New Fairbanks Store

T&T opened a new retail store in Fairbanks in December. AT&T operates two other companyowned stores in Fairbanks. The new 2,500-square-foot store is located at 407 Merhar Ave. With the addition of the new store, AT&T hired more than a dozen new customer service representatives in Fairbanks. â&#x20AC;&#x153;AT&T opened this new store to accommodate the growing consumer and small business demand for advanced wireless products and services in Fairbanks,â&#x20AC;? said Mike Maxwell, vice president and general manager for AT&T Pacific Northwest. â?&#x2018;

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ February 2012

VIEW

FROM THE

TOP

Compiled By Peg Stomierowski

Kyle Ryan & Jeremy Loyer

Bare Distillery Alaska LLC

are Distillery is a premium spirits manufacturer founded by life-long Alaskans Kyle Ryan and Jeremy Loyer. Ryan’s passion for the food and beverage industry led him in 2003 to the restaurant business program at Le Cordon Bleu in Portland, Ore., where he learned from sommeliers, winemakers, distillers, consultants, brewers, and restaurant and bar owners. He then moved to Adelaide, South Australia, to pursue a related degree in international hospitality. “I saw firsthand how passion drives dreams,” Ryan says, “and how people tend to rally around inspiration.” Loyer, meanwhile, had been spending his time working for Bardenay in Boise, Idaho, the first distillery grill in the country. Soon after he returned home to Alaska in 2004, he and Ryan met at the Glacier Brewhouse and, through lengthy conversations, created a shared a vision of producing their own high-end, locally sourced vodka. LONG ROAD: Creating a company and a brand are fraught with challenge. It’s been a long journey. Luckily, we happen to be the perfect match of complimentary skill sets, with me primarily managing the business and Jeremy the production. Our biggest challenges have to do with 24-hour workdays, but we managed to introduce Truuli Peak Vodka with a launch party in October at Alyeska Resort’s Seven Glaciers Restaurant. ALASKA MADE: We named our vodka to reflect its Alaska roots. Truuli Peak vodka, named after the highest point in the Kenai range, is made here with premium local ingredients—including Delta Junction barley, Chugiak wildflower honey and natural glacier waters—and distributed by Alaska’s Odom-Southern. These ingredients give Truuli a silky smooth finish and light floral bouquet. We aimed to create a true sipping vodka that pairs well with standard and exotic cocktail mixers. ANGELS AMONG US: The Small Business Administration pointed us toward Al Hermann at the University of Alaska Anchorage College of Business and Public Policy. Through Al, a relationship with Alaska Angel Investors was formed. He put us in touch with investors who support our vision for Bare Distillery. GOOD POSITIONING: First we needed to create a brand that could thrive in a competitive marketplace. We wanted our vodka to be proudly Alaskan and authentically American, with unique positioning capabilities.

MARKETING CHALLENGE: After a search, we partnered with Foundations Marketing Group (FMG) of New York. Initial efforts were with Alaska-based creative and marketing agencies, but we quickly understood the need for industry specific expertise and global opportunities for our brand. We searched the Web and interviewed several companies. When we heard FMG’s branding approach and saw its creative strategy, we felt we had a winning situation with a world-class firm in the wine and spirits industry.

Jeremy Loyer, left, and Kyle Ryan.

PITCHING ARM: Our advice to other entrepreneurs is to stay true to your vision. Keep your goals in sight and your feet on the ground. At Bare Distillery, we emphasize authenticity and excellence; our goal is to be sure our brand overdelivers on quality and value. We are currently rolling out Truuli Peak and creating our digital presence, so this is a big year for Bare Distillery. We are always focused on providing the best for Alaskans, in a way that can be appreciated globally. ❑

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

Photo by Azimuth Adventure Photography/www.azimuthadventure.com

HEALTH & MEDICINE

Seawolf medical team on the ice with UAA Director of Athletics; from left, Greg Zaporzan, PA; Thomas Vasileff, M.D.; Leslie Dean, M.D.; Steve Cobb, PhD. UAA; and Richard McEvoy, M.D.

The UAA-AFOC Connection Seawolf doctors extraordinaire BY TRACY KALYTIAK

thletes who hurtle down mountains on skis or slam into the boards at hockey rinks while competing at University of Alaska Anchorage sporting events have volunteer medical expertise nearby when injuries occur. Anchorage Fracture and Orthopedic Clinic doctors have, combined, accumulated more than 70 years experience caring for UAA’s student-athletes. Last spring, UAA’s Department of Athletics gave extraordinary contribution awards to two of those physicians— AFOC’s Thomas Vasileff and Richard McEvoy—to honor their contributions to the university’s sports medicine program. “They’re just a joy to work with,” said Christine Volk, UAA’s head athletic trainer. “They were actually helping us before I even started at UAA 18 years ago.” There are approximately 180 student-athletes enrolled at UAA, Volk

said, and 25 team physicians. Four of those physicians—Vasileff, McEvoy, Leslie Dean and Douglas Prevost—practice at AFOC. Dean arrived 15 years ago and Prevost started practicing at AFOC in 2008.

FORGING A COMMITMENT AFOC physicians assist with pre-season orthopedic evaluations, cover home games of the UAA hockey team, expedite scheduling of appointments and diagnostic tests for student-athletes, provide physical therapy and perform surgeries. Volk, one of UAA’s three certified athletic trainers, says the orthopedic evaluations are conducted the Sunday before school starts. The evaluations are part of the preparticipation examination process, with the objective of making sure UAA student-athletes are medically safe to participate in their sport.

“It’s a requirement for all our studentathletes,” she said. “It’s a basic head to toe, from an orthopedic standpoint. If the student-athlete has any ongoing bone or joint issues, they bring that up to the physician to be addressed. If the physician sees anything orthopedic in nature wrong with one of these studentathletes, they’re going to let the athletic trainers know so we can follow up with the appropriate rehabilitation or obtain the necessary diagnostic testing.” In addition, the physicians at AFOC provide medical coverage at the Carrs/ Safeway Great Alaska Shootout, Kendall Hockey Classic and NCAA tournaments UAA hosts. The AFOC physicians who help UAA have each forged a solid commitment to the health and safety of athletes in Alaska. Adventure and the outdoors drew Thomas Vasileff to Anchorage from St.

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

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Louis in 1981 after he had completed his orthopedic training in Oklahoma. William Mills Jr. approached Vasileff to help out with UAA’s alpine and Nordic ski teams. “That’s primarily all I’ve done, though sometimes I’ve worked with hockey and basketball players,” Vasileff said. Usually Vasileff cares for broken legs, knee injuries and dislocated shoulders, though he never forgets how dangerous a sport skiing can be. The possibility of disaster always looms—an athlete could suffer a broken neck, end up paralyzed, or worse. In March, an orthopedic surgeon in Anchorage—Mills’ 53-year-old son, William Mills III—lost his life while skiing in Girdwood, he said. “UAA’s been pretty lucky, its athletes haven’t had devastating injuries,” he said. “The gratifying thing about the athletes, they seem to have different genetics than the rest of us. If they need surgery or treatment, they respond quicker. It’s like taking care of a different kind of person, they’re so motivated and healthy.”

TRUE STUDENT-ATHLETES Vasileff says his experience with athletes is different in Alaska than it was while he was doing his residency. “The University of Oklahoma is a big football school, which is huge business,” Vasileff said. “Coaches there interacted with orthopedic surgeons very differently. Here at UAA, there’s a different focus, these are really student-athletes. The coaches here, they have a big focus on education, getting these student-athletes through school, having fun.” When an injury occurs to a studentathlete, a UAA athletic trainer may contact the Anchorage Fracture and Orthopedic Clinic and Vasileff or one of the other doctors in the practice will launch a treatment plan right away. During the winter, he might receive two or three such calls a month and perform one or two surgeries a year. “I’m more or less on call,” Vasileff said. “During the NCAA finals [which UAA hosted in the past, I was] there at the mountain for a couple of days.”

VIKINGS LOSS IS SEAWOLVES GAIN The outcome of a 1977 Super Bowl placed Richard McEvoy on the path

to becoming a “hockey doctor” for the University of Alaska Anchorage. He was working as an on-call intern for Stanford Hospital in California when the Minnesota Vikings lost their fourth Super Bowl in seven years. “I was going to return to Minnesota, but I couldn’t take it,” joked McEvoy, a native of White Bear, Minn. “The guy next to me said, ‘Come up to Alaska. It’s a great place, beautiful. You should come check it out.’” So he did. And he stayed. “This is where I wanted to be,” he said. McEvoy worked in other jobs in Anchorage before returning briefly to Minnesota to complete his residency in orthopedics. McEvoy felt drawn to the field because, he said, “it’s straightforward and it’s mechanical.” McEvoy played in a senior men’s recreational hockey league and some of the people in that league knew that the University of Alaska Anchorage’s hockey program needed a doctor since the program’s longtime physician was retiring. “Dr. Mills asked if I’d do it,” McEvoy said. “I said yes and have been doing it ever since.” That was in 1989. “They thought I would know about the injuries and they knew I was interested in hockey,” he said. “Just about every boy in Minnesota knows how to play hockey because that’s what they do there.” Shoulder and knee injuries are the most common injuries Dr. McEvoy sees in the course of his work, followed by ankle injuries, shoulder separations and dislocations. “From the coaching standpoint, making sure the game is played cleanly prevents injuries,” McEvoy said. “Some of the injuries are preventable by conditioning – a player who has good muscle tone or is quick can get out of the way of injuries. A strong player is able to withstand them. Other injuries are just going to happen. A 180-, 200-pound player who falls and slides head first into the concrete side of an enclosed pen while going 25 miles per hour, it’s like diving into a swimming pool with no water.” McEvoy quit playing hockey a couple of years ago. “I broke both my wrists and broke

my ankle once,” he said. “I can’t work when I have a broken wrist. Those are expensive things, they put me out of commission. Surgery is what I like to do, but I can’t do that with a broken wrist.”

HOME TEAM DOCTOR ADVANTAGE Dr. Leslie Dean has been providing care for the hands and wrists of UAA athletes for the past 16 years. “It’s more for hockey,” she said. The typical injuries Dean sees in her work include those caused by players slashing each other with their sticks or crashing into the boards. Injuries to wrist bones can be particularly troublesome. “It’s a bad injury because there’s tenuous blood supply, it takes a long time to heal and often it requires surgery,” Dean said. Dean sees a lot of contusions, as well as finger fractures and tendonitis. “The players are great, young, enthusiastic, fun to work with,” she said. Christine Volk says having physicians right there at UAA’s home hockey games provides huge benefits to the athletes and to the university. The games usually take place on Friday and Saturday nights. If an injury occurs, an AFOC doctor at the game can do things like assess an injury’s severity and schedule a prompt follow-up appointment at the clinic. “They get us in very quickly,” Volk said. “They provide many medical services at discounted fees. Usually we only pay for a portion of the service, which is very much appreciated.” Getting the athletes in quickly for a follow-up evaluation enables Volk and other trainers to get started on a rehabilitation plan and know how long it may be before they can return to play. “We can get that information back to the coach in a very timely fashion,” Volk said. Volk says the biggest service AFOC physicians provide is attending UAA events. “[Other schools] may send a PA or athletic trainer to a game to do coverage,” Volk said. “Our physicians come in person, and they’re medical doctors. Having that higher level of care is a big bonus. Doctors are busy and a lot of them don’t want to give up their weekend nights as well. We really appreciate

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they’re giving up their personal time to come help us.” Volk says an athletic trainer’s job is to provide medical coverage at athletic events, practices and competitions, and take care of student-athletes when they get injured. They assess an injury, do the initial management of the injury, follow up with a rehabilitation plan and try to return the athletes to competition as quickly and safely as possible. “That is our main job, but we’re not doctors. We cannot diagnose,” she said. “Having medical physicians present at competitions to do the initial evaluation helps us immensely. It provides reassurance for us that we’re providing the best and safest care possible.”

GAME DAY PRESENCE It’s not uncommon for the AFOC physicians covering hockey games to sew up a facial laceration at least once during a weekend of hockey games they’re covering. “We can’t suture,” Volk said. “Having them there between periods or after game to do those sutures, get the player

back in the game quickly and safely, that’s great. They can do it right away instead of us having to Steri-Strip it and take them to the emergency room later that evening.” The physicians’ presence at games saves money as well as time. “Financially, they’ve made it so much more cost-efficient, you can’t imagine,” Volk said. “If I took a studentathlete to the emergency room for a facial laceration every week, it’s going to be at least $1,000 each time.” Having a contingent of orthopedic doctors with decades of experience working with UAA athletes is key to providing continuity of care to those athletes, Volk said. The fact that those doctors actually enjoy hockey and skiing and sometimes even participate in those sports themselves further enhances the benefits they provide UAA athletes, she added. “When you see a team physician who can talk to you about your sport, who knows your position and knows what you mean when you say, ‘Hey, I got boarded,’ it does make a difference,” Volk said.

Doctors who are familiar with the sport the athlete plays can understand the mechanism of the injury better and make a more informed decision if the student-athlete can safely return to play with that injury. “The kids really appreciate them, enjoy going back to the same doctors all the time,” Volk said. “They feel comfortable, and the athletes believe in those physicians.” That appreciation goes far beyond the students. “The service rendered to our student-athletes by the physicians and staff at Anchorage Fracture and Orthopedic Clinic over many years has been exemplary,” said Dr. Steve Cobb, UAA director of athletics. “We are particularly indebted to Dr. Vasileff and Dr. McEvoy for their longtime service as members of our group of team physicians. Between them, they represent many years of service to our student-athletes—a testament to their commitment and one for which we are very grateful. They have been an integral part of the Seawolf family for many years and we hope for years ❑ to come.”

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

REGIONAL FOCUS

By Tracy Barbour

Aerial of Western Alaska town of Bethel on Kuskokwim River Delta in summer.

Heart and soul of Western Alaska

he Bethel Census Area stretches across nearly 42,000 square miles in Western Alaska, has more than 30 villages, and is one of the state’s most highly populated rural regions. The City of Bethel is about 40 miles inland from the Bering Sea—400 air miles west of Anchorage. Bethel is the regional hub for transportation, retail trade, and medical and government services for 56 surrounding Alaska Native communities. It is also the main port on the 700-mile-long Kuskokwim River in the Yukon Kuskokwim Delta, a large coastal plain Yup’ik Eskimos have inhabited for thousands of years. The old Bethel town site was on the other side of the meandering and shifting Kuskokwim River.

COMMUNICATION Terrestrial broadband services came online for Bethel and 64 other communities in the Y-K and Bristol Bay region Jan. 12, when General Communications Inc. (GCI) flipped the switch on its TERRA-Southwest project, an $88 million terrestrial broadband “middle mile” project. GCI wholly owned subsidiary, United Utilities Inc. used federal broadband stimulus funding provided by the United States Department of Agriculture’s Rural Utilities Service for project construction. History was made Jan. 12 when Alaska Governor Sean Parnell hosted the first live terrestrial videoconference between Juneau and Bethel with Yukon-Kuskokwim Health Corp. President and CEO Gene Peltola.

After a two-week test phase, services were to be available to 9,000 households and nearly 750 public, nonprofit and private community institutions, including regional health care providers, school districts and Alaska Native organizations, according to GCI, opening up a new world of opportunity for the region.

TRANSPORTATION Goods coming into the Bethel area often travel by multiple forms of transportation, including barge, air, truck—even four wheeler, hovercraft and dog sleds— before reaching final destinations. Building materials for outlying villages might be barged to Bethel, trucked from the city dock to the airport, flown by

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

Photo courtesy of City of Bethel

An Alaskan Leader

Bethel Mayor Dr. Joseph Klejka

small cargo plane to the village airport and then transported by a four wheeler and trailer to a project worksite. Barges are a crucial component of Bethel’s transportation system. Getting goods in and out of the remote area can be a logistical challenge, and barging equipment, containers and even houses down the river is often the most feasible solution. Each summer, more than a dozen ocean-going barges from Seattle and Anchorage carry building materials, fuel, bulk food and other supplies to Bethel’s port. Much of this freight remains in Bethel; the rest is transferred to small barges that deliver items to the surrounding villages. Bethel operates the only mediumdraft port for ocean-going vessels in Western Alaska. The maximum ship/ barge length for the port is 400 feet. The Port of Bethel is the receiving and transshipment center for petroleum products and barged freight for the Y-K Delta. The Kuskokwim area’s commercial salmon industry also relies on the port for most of its infrastructure and processing needs. The Bethel port serves more communities and delivers more goods than any other mainland port in Western Alaska. The port’s cargo dock is a nine-acre facility used for off loading, storing and distributing cargo destined for Bethel and other communities in the Y-K Delta, none of which are connected to any other community by road or rail. The city’s general cargo dock and

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

People QuickFacts Bethel Census Area Population, 2010 17,013 Population, percent change, 2000 to 2010 6.3% Population, 2000 16,006 Persons under 5 years, percent, 2010 10.6% Persons under 18 years, percent, 2010 36.5% Persons 65 years and over, percent, 2010 6.1% Female persons, percent, 2010 47.7% White persons, percent, 2010 (a) 11.1% Black persons, percent, 2010 (a) 0.4% American Indian and Alaska Native persons, percent, 2010 (a) 82.9% Asian persons, percent, 2010 (a) 0.9% Native Hawaiian and Other Pacific Islander, percent, 2010 (a) 0.2% Persons reporting two or more races, percent, 2010 4.2% Persons of Hispanic or Latino origin, percent, 2010 (b) 1.1% White persons not Hispanic, percent, 2010 10.9% Living in same house 1 year & over, 2005-2009 82.5% Foreign born persons, percent, 2005-2009 0.6% Language other than English spoken at home, pct age 5+, 2005-2009 70.6% High school graduates, percent of persons age 25+, 2005-2009 79.1% Bachelor’s degree or higher, pct of persons age 25+, 2005-2009 14.4% Veterans, 2005-2009 818 Mean travel time to work (minutes), workers age 16+, 2005-2009 6.7 Housing units, 2010 5,919 Homeownership rate, 2005-2009 61.1% Housing units in multi-unit structures, percent, 2005-2009 13.7% Median value of owner-occupied housing units, 2005-2009 $119,200$221,300 Households, 2005-2009 4,178 Persons per household, 2005-2009 4.07 Per capita money income in past 12 months (2009 dollars) 2005-2009 $18,169 Median household income, 2009 $41,810 Persons below poverty level, percent, 2009 20.7% Business QuickFacts Bethel Census Area Private nonfarm establishments, 2009 202 Private nonfarm employment, 2009 3,471 Private nonfarm employment, percent change 2000-2009 -0.1% Nonemployer establishments, 2009 984 Total number of firms, 2007 1,238 Black-owned firms, percent, 2007 F American Indian and Alaska Native owned firms, percent, 2007 54.7% Asian-owned firms, percent, 2007 S Native Hawaiian and Other Pacific Islander owned firms, percent, 2007 F Hispanic-owned firms, percent, 2007 S Women-owned firms, percent, 2007 20.8% Manufacturers shipments, 2007 ($1000) 0 Merchant wholesaler sales, 2007 ($1000) 3,454 Retail sales, 2007 ($1000) 96,755 Retail sales per capita, 2007 $5,658 Accommodation and food services sales, 2007 ($1000) 4,091 Building permits, 2010 10 Federal spending, 2009 340,871 Geography QuickFacts Bethel Census Area Land area in square miles, 2010 40,570.00 Persons per square mile, 2010 0.4 FIPS Code 050 Metropolitan or Micropolitan Statistical Area None NOTES (a) Includes persons reporting only one race. (b) Hispanics may be of any race, so also are included in applicable race categories. FN: Footnote on this item for this area in place of data NA: Not available D: Suppressed to avoid disclosure of confidential information X: Not applicable S: Suppressed; does not meet publication standards Z: Value greater than zero but less than half unit of measure shown F: Fewer than 100 firms Source: US Census Bureau State & County QuickFacts

Alaska 710,231 13.3% 626,932 7.6% 26.4% 7.7% 48.0% 66.7% 3.3% 14.8% 5.4% 1.0% 7.3% 5.5% 64.1% 77.9% 6.6% 15.5% 90.7% 26.5% 72,494 17.9 306,967 63.8% 26.4% 234,779 2.82 $29,382 $66,712 9.1% Alaska 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 1,851,293 904 11,922,341 Alaska 570,640.95 1.2 02

staging area are critical to the shipment of freight to the region. Bethel also maintains a small boat harbor that consists of several floating docks, a turning channel and a passageway to the Kuskokwim River. The harbor has the capacity for approximately 400 small boats and serves hundreds of boats daily. In addition, regional residents can moor boats at Brown Slough, which is adjacent to the cargo dock. As the focal point for passenger and cargo flights to and from Y-K Delta villages, the Bethel Airport is very important to the local and regional economy. It is Alaska’s third-busiest airport for total number of flights and has a 6,400-foot-long paved runway. The state-owned Bethel Airport is served by more than a dozen passenger carriers, cargo operators and air taxis, comprised of both jet and propeller aircraft. In addition, the area also has several float plane bases nearby at Hangar Lake, H-Marker Lake and the Kuskokwim River. Trucking is another integral part of Bethel’s transportation system. After the Kuskokwim River freezes, a 150-mile ice road is plowed and trucking companies use it to deliver goods to villages up and down the river. Private citizens travel the ice road to get between communities, as well as an extensive network of snow machine trails. Bethel has about 16 miles of graded roads and 20 miles of asphalt roads maintained by the city and the state, respectively. The road system is welltraveled by locals along with a large taxicab industry and the Bethel Public Transit System, which began offering services in 2008 in a collaboration between the City of Bethel and Orutsararmiut Native Council.

HEALTH & EDUCATION FACILITIES The infrastructure of Bethel includes a variety of public and private resources to serve the needs of its residents. The Yukon-Kuskokwim Delta Regional Hospital provides acute care to patients in the region. The 50-bed, 100,000-square-foot facility offers several medical services, including an emergency room, surgical, pediatric and obstetric wards, a pharmacy, lab, x-rays and specialty clinics.

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In addition, villagers in the Bethel Census Area can utilize regional clinics in Aniak and Toksook Bay. Also, the YKHC operates Community Health Aid Programs in nearly 50 village clinics in the Y-K Delta, 30 of which are in the Bethel Census Area. Additionally, there is a sobering facility in Bethel—a collaboration among the City of Bethel, YKHC and the community. The Bethel Census Area is part of the Lower Kuskokwim School District—one of Alaska’s largest rural school districts— serving 3,900 K-12 students through 345 teachers and numerous paraprofessionals and support staff. People seeking higher education in the region can attend the Kuskokwim Campus of the University of Alaska Fairbanks in Bethel. Yuut Elitnaurviat, also known as the People’s Learning Center, is a residential vocational/technical facility, also in Bethel.

HOUSING Housing continues to be in short supply in the Bethel area. As the city has grown, there has been a shift in demand from higher-density apartment buildings to single-family homes. Ron Hoffman, president and chief executive officer of AVCP Regional Housing Authority is helping to fill that demand. He says there is a definite need for housing and estimates the region needs more than 3,000 housing units to close the gap. As for amenities, Bethel has a 50/50 water/wastewater system. Roughly half of the city is on a piped water and sewer system and half has hauled water and sewer—trucks in the city’s public works department deliver potable water to holding tanks as well as other trucks pump wastewater from septic tanks. Much like Fairbanks.

LOCAL INDUSTRY A significant portion of Bethel’s development can be credited to the Bethel Native Corp. (BNC). With approximately 1,800 shareholders, BNC is the largest village corporation in the Y-K Delta. Since its 1973 inception, the for-profit village corporation has built businesses locally by constructing and managing real estate developments in Bethel to lease commercial office space and apartment units. These operations remain sustainable today. BNC has consequently grown to provide construction, www.akbizmag.com • Alaska Business Monthly • February 2012

environmental assessment and remediation services, logistics management and other services to clients throughout Alaska and the Pacific coast. Based in Bethel, it maintains subsidiary offices in Anchorage, Washington and California. Over the years, BNC has been very adept at developing its operations. In 2010, the company generated nearly $100 million in revenue and achieved the highest increase in shareholder equity to date. “This growth continues to be accomplished while the corporation proudly remains headquartered in Bethel,” said President and Chief Executive Officer Ana Hoffman. “This local presence and continual focus on achieving the corporate mission is a large part of the corporation’s success.” BNC concentrates primarily on maintaining sustainable operations, increasing equity, managing resources and providing shareholder benefits, according to Hoffman.

RECENT AND UPCOMING CITY PROJECTS A number of projects are taking place within the City of Bethel to improve its infrastructure for residents. YKHC is undertaking several building projects to enhance housing in the city. The corporation is in the process of building an assisted living facility—which will be a welcome addition since there’s no nursing home currently in Bethel. Later this year, YKHC will start building a new facility to replace the aging Bethel Pre-Maternal Home. AVCP Regional Housing Authority is also constructing a replacement office building in Bethel. The company, which now operates under three separate facilities, is building a new regional office complex to house its administrative staff under one roof. The old office will be renovated and repurposed to accommodate the company’s pilot training program. “We’re looking toward finishing the facility here in several months,” Hoffman said in a November interview. “We’re basically ready; all of our planning is done. Now we have to work on a state legislative request.” As an upcoming development, Bethel’s city council has voted to build an indoor swimming pool. The issue has been under consideration for several years, and now the city will need to

RESOURCE DEVELOPMENT

up to 1,000 year-round positions during operations and production. The Bethel Census Area experienced slight growth in natural resources last year due to the Community Development Quota (CDQ) program, according to Abrahamson. In fact, the last decade has been more profitable for the area’s CDQ group, the Coastal Villages Region Fund (CVRF). Begun in 1992, the western Alaska CDQ Program is a federal fisheries program that allocates a percentage of all Bering Sea and Aleutian Islands quotas for pollock, halibut, Pacific cod, and crab and bycatch species to eligible communities. Its goal is to generate income to promote fisheries-related economic development in western Alaska. CVRF is the largest seafood owner/operator headquartered in Alaska. There are six CDQ groups that include 65 communities within 50 miles of the Bering Sea coastline. Seventeen of the 20 communities that comprise the CVRF lie within the Bethel Census Area. During the 2009 season, for example, CVRF reported that 500 permit holders delivered four million pounds of salmon to its subsidiary—Coastal Villages Seafoods—earning $1.8 million, according to the Alaska Department of Labor. One hundred and seventy permit holders delivered 310,000 pounds of halibut and earned $750,000. These earnings represent dollars that might otherwise not have been generated by the permit holders on behalf of their communities.

A major ongoing development in the region is the Donlin Gold project located about 120 miles from the City of Bethel. The proposed project is one of the largest known undeveloped gold deposits in the world and is expected to produce 1.3 million ounces of gold annually during its anticipated 25-year span of operations. Kuskokwim Corp. owns the surface rights to the land and Calista Corp. owns the subsurface rights. NovaGold and Barrick Gold Corp., project owners based in Canada, have estimated a mine could be operational by 2015. Reported project plans include a power generation plant, water treatment plant, access road, housing, two ports, a natural gas pipeline and a 5,000-foot airstrip, with 3,000 employed during construction and

Some in the region are developing tourism to diversify their economies. The Kuskokwim 300 Sled Dog Race, an Iditarod qualifier with a $100,000 purse, held each year in late January, is increasingly attracting winter travelers joining in the festivities from Bethel to Aniak and back. Every spring thousands attend the Camai Dance Festival in Bethel, one of the largest Native Arts festivals in the country. In addition, more and more people are coming from all over the world to partake in bird watching, river rafting, sport fishing and tundra camping expeditions during fair weather. These visitors need transportation, lodging, provisions and souvenirs. ❑

secure major funding to make it happen. “It’s what the voters of Bethel want, and we’re trying to go forward,” Klejka said.

EMPLOYMENT The Bethel Census Area represents a cash-subsistence economy whose employment is largely reliant on government funding or government supported private enterprise. In terms of employment, Bethel is the major employment center for the area with 65 percent of the area’s jobs in 2010. The area’s unemployment rates have been steadily rising since at least 1990, according to Alaska Department of Labor Economist Mali Abrahamson. “The most recent published rate for October 2011 was 13 percent, and the rates tend to be higher in the early part of the year and summer and then decline in the fall and winter,” she said. In 2010, there were 6,793 jobs in all industries in the Bethel Census Area. Local government positions—in city and tribal government as well as public schools—made up 45 percent or 3,089 of those jobs. “About half of local government jobs are in the school districts, and 771 of local government jobs are in tribal governments,” Abrahamson said. The largest private employer in Bethel is the Yukon-Kuskokwim Health Corp. In 2010, YKHC supplied more than 1,000 jobs to the area. Retail is the census area’s second-largest private industry, followed by transportation.

EMERGING INDUSTRIES

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TOURISM

Destination Alaska Marketing to emerging economies

past three summers, we have observed greater numbers of visitors from some of these countries. Certainly India has gained quite a bit of ground. Working with emerging countries and making sure they are recognized as sources of tourism is extremely important.” Specialty tour operators serving visitors from those markets confirm growing interest in Alaska as a destination.

LATIN AMERICA

ACVB Chinese language brochure cover.

hina, India and Brazil: Alaska tourism experts have few doubts these and other emerging economic powerhouses will prove to be sources of future tourists. While a formal study of visitors to Alaska from these and other countries has not been conducted since 2006, when many of these markets were statistical hash marks, there are signs of increased tourism. The rise of South Korea as a major source of tourists for the state in recent years offers a clear roadmap for increased tourism from countries with emerging economies. “We think that the number of visitors from these countries has gone up dramatically from 2006 based upon subsequent annual estimates,” says Ron Peck, president and chief operating officer of the Alaska Tourism Industry Association (ATIA). “As of 2006, 15 percent of visitors to Alaska are from another country. We think that when the new study is completed in February 2012, the number will be greater. “ “I really think (tourism from emerging economies) is becoming more significant,” says Julie Saupe, president and chief executive officer of the Anchorage Convention and Visitors Bureau (ACVB). “Anecdotally, over the

Photo courtesy of Alaska Latin Tours LLC

Image courtesy of Anchorage Convention & Visitors Bureau

BY DAVID TOBENKIN

“Latin Americans’ interest in Alaska has been increasing every year since we began working in this market 12 years ago,” says Arturo Herrera, president of Anchorage-based Alaska Latin Tours LLC, a receptive tour operator that provides an array of services to Spanish- and Portuguese-speaking visitors. Herrera attributes the increased interest from Latin Americans to two specific factors: technology and politics. “Several programs broadcast about Alaska on cable TV have showcased Alaska and triggered interest in coming to experience its natural wonders, such as ‘Deadly Catch’ and ‘Ice Roads,’” Herrera says. “And in politics, Sarah Palin funneled the eyes of the entire world on Alaska when she ran for vice president during the last national election. That was big-time exposure and promotion for Alaska, as has been her reality TV show. In addition, the Internet is increasing interest in Alaska, as any kind of information about Alaska is now available there. People search and view pictures of Alaska and then picture themselves in Alaska.” Business from some emerging economic markets is up, agrees Ruth Rosewarne Kimerer, sales manager at Anchorage-based Alaska Railroad Corp., which offers daily summer rail service from Seward to Fairbanks, with stops at Denali National Park, as well as day tours that package rail with day activities, and rail vacations along rail belts. “There’s been a definite increase,

Arturo Herrera President Alaska Latin Tours LLC

with a lot more visitors from certain areas, such as South America, over the past three years.”

SOUTH KOREA Many Alaska tourism experts point to South Korea as an emerging economic powerhouse whose increasing affluence is resulting in increased visits to Alaska. This past summer, Korean Airlines and South Korean tour operators began nonstop charter flights for tour groups from Seoul to Alaska. A total of six resulting charter flights with over 90 percent load factor added up to 1,500 South Korean visitors to the state in July and August, says Jillian Simpson, ATIA’s director of travel trade and international marketing. “The economy in South Korea is substantially better there than here and the U.S. federal government identified South Korea as having visa waiver status. We’ve had discussions with South Korean airline officials and we are hopeful they are interested in expanding this service [in 2012]. South Korea will be hugely important to us.”

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

As a result, ATIA is building a foreign language website in Korean similar to existing ATIA websites in German and Japanese. In addition, last year ATIA produced a Korean guidebook for Korean tour operators targeted at the interests and needs of their clientele in Alaska.

INTERNATIONAL MARKETING Another market that is increasing in prominence is India, Saupe says. “The year 2012 will be the first time that we will have a budget to market Anchorage to India,” Saupe says. “We are targeting them because our members are seeing many visitors from India and Indians are starting to travel more as a country.” Saupe also says that ACVB staff will travel to Brazil to reach out to the tourism industry there for the first time in 2012. Marketing to Latin America and some other emerging economy markets is on the rise, if challenged due to budgetary limitations. ATIA has conducted targeted marketing in Taiwan and mainland China and attended some travel shows there, says Simpson: “We’re working with them to establish an Alaskan product and drive consumer interest in Alaska as a destination.” For the second year in a row, ACVB this year conducted an Alaskan Familiarization Tour for Latin American tour operators in which they were taken up to Alaska for brief tours to familiarize them with the region’s attractions. That has been done in conjunction with La Cumbre, a major trade show for travel suppliers from Latin American countries that is held in the United States. A measure of Latin American interest in Alaska is that 70 percent of suppliers at the 2010 La Cumbre show requested meetings with Alaska-based operators, says ACVB spokesman Jack Bonney. ACVB also recently assisted the crew of “Resto del Mundo,” a travel program that airs in South America, when they visited Anchorage last May. The resulting episode aired in midAugust last year in Argentina, Brazil, Chile, Uruguay and Paraguay.

DIRECT ACCESS “Direct access is key,” says Deb Hickok, president and CEO of the Fairbanks

Convention and Visitors Bureau. “We and others in the state are talking to carriers in South Korea and mainland China. If one of them begins offering direct access that would be a huge opportunity.” Flights to nearby states could help, too, says Ethan Tyler, owner of Alaska Tourism Solutions, an Anchorage-based independent contractor representing several different tourism companies in the state. He notes that Emirates Air recently announced direct flights from the Middle East to Seattle beginning March 1. “That will provide a link for

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Alaska to the Middle East and India,” Tyler says. International visitors coming to Alaska come for many of the same reasons as visitors from the Lower 48. “They are interested in the classic, iconic things: mountains, glaciers, Northern Lights and wildlife,” Peck says, adding that that is a compelling selling point in marketing to countries such as China and Japan that have a high population density. “They are looking to experience the vastness ❑ and wilderness.”

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NATIVE BUSINESS

Alaska Native Corporations Develop Opportunity

Oyster farm near Kake, Alaska, is a partnership between Pearl of Alaska and Haa Aani LLC.

Photo courtesy of Sealaska

Growing shareholder employment through partnerships BY GAIL WEST

question that has puzzled America for years also confronts Alaska—how can people live in the smaller communities when jobs are scarce, money is tight and the cost of living is high? Alaska Native regional corporations are tackling that thorny question of rural sustainability across the state.

Southeast Alaska’s regional corporation, Sealaska, has created a subsidiary to focus on helping its villages and its region improve their economic conditions. Haa Aani LLC’s President and Chief Executive Officer Russell Dick said Sealaska mandated the Haa Aani’s management to help stimulate the region’s economy.

To do that, Dick said Sealaska capitalized Haa Aani with $5 million and expected him and his team to leverage those funds and form partnerships to shore up the rural economy. “We wanted to bring in business, philanthropic, state and federal partners,” Dick said. One partnership Haa Aani entered into was with the Yakutat Village Corp.

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

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to create a small oyster farm. “Now, they have farming expertise to meet the requirements and have access to the U.S. Department of Agriculture’s Farm Services Program and its benefits,” Dick said. “This is one example of the mariculture work under Haa Aani. Other communities we’ve worked with include Kake, which has reopened the community’s fish plant. We helped bring more management expertise and provide market access on a very small scale. We don’t go in on a scale that isn’t sustainable.” Additional business opportunities Haa Aani is pursuing include an expansion of alternative energy sources such as tidal, wave and wind energy. “In 2008 we began investigating woody biomass and saw an opportunity to take it into the communities on the residential level. Sealaska converted its building to wood-pellet heat a year ago—the first commercial building in the state to be heated by a renewable energy source. “Since then,” he added, “GSA and the U.S. Forest Service have converted their buildings in Ketchikan and the Coast Guard is in the process of converting its building in Sitka. Now, we’ve shown it can be done—the demand has been created and we’ve demonstrated that we can provide a consistent supply of wood pellets quickly.” Haa Aani is also working to become a Community Development Financial Institution through the U.S. Department of the Treasury, giving them even more access to capital, technical assistance and expertise. As for success? Dick said that comes when the community no longer needs Haa Aani’s help.

REGIONAL ECONOMIC FOCUS Farther north, NANA Regional Corp. works with its tribes, regional and nonprofit organizations, and state and federal partners to develop the regional economy as a whole. Through the Northwest Arctic Leadership Team, NANA works with the borough, Maniilaq Association and the school district to collectively advocate for projects and funds for its region. NANA also directly provides jobs to shareholders. Currently, NANA companies provide shareholder jobs

in the hospital in Kotzebue and in health centers and schools in each of the villages. NANA also has the Red Dog zinc and lead mine 90 miles north of Kotzebue, and its partnership with Teck Alaska spells out provisions for shareholder hire. “In fiscal year 2010 NANA received $146.3 million in net proceeds from the Red Dog Mine,” said Shelly Wozniak, NANA’s Corporate Communications manager. “Of that, $82 million was distributed to other Alaska Native corporations under the 7(i) sharing provisions of ANCSA. More than 340 NANA shareholders were employed at the mine—approximately 58 percent of the mine’s total workforce,” she added. “We have about 12 NANA companies operating at the mine, all those employ shareholders, as well,” said Chuck Greene, vice president of Community and Government Affairs. Elizabeth Qualluq Moore, Community and Government Affairs manager, said NANA Management Services provides both jobs and training for many shareholders through janitorial and cafeteria contracts in schools across the district. “NANA has a new hotel and restaurant in Kotzebue and we employ many of our shareholders in Anchorage, as well,” she said. According to NANA, approximately 1,315 of its shareholders were employed by its family of companies in 2010, earning about $48.1 million in total wages. The corporation also contributes to a trust that provides shareholder scholarships. In addition to employing and developing shareholders, Greene added that NANA promotes the development of Cape Blossom as a deep-water port and the Star of the Northwest Magnet School as a residential high school program offering focused programs in academic and vocational areas for careers in Alaska occupations. He also said NANA is addressing the high cost of energy through investigating alternative energy sources such as hydro and natural gas and is working to improve broadband Internet availability. Dean Westlake, the director of Village Economic Development for NANA, said the region has actually grown in population, but villages con-

tinue to face the problem of economics. “We try to help people access the broader Alaska economy through resource technicians in every village,” he said, “and we’re working to build multipurpose community buildings in each village in the most energy-efficient way possible.” Other potential economic engines in Northwest Alaska include the Upper Kobuk Mineral Project. NANA recently signed an exploration agreement with NovaCopper to explore in the Ambler District. “Even though this project is in the exploration phase, it’s already providing jobs for our shareholders,” Wozniak said. Whatever NANA does to increase economic activity in the region, however, it does with Inupiat values in mind, added Elizabeth Saagulik Hensley, NANA’s Public Policy liaison. “One of those values is cooperation.”

NORTHERN SEA ROUTE POSSIBILITIES On Alaska’s western coast, Bering Straits Native Corp. is setting its sights on commerce through the Northern Sea Route and Northwest Passage to help build the region’s economy. As climate change progresses, the sea ice that locks the waterway during winter is lessening. Today, only ships strengthened against ice can ply those waters and only during the summer. Soon, though, there may be more ice-capable ships traveling the shorter distance between Asia and Europe carrying commercial trade items, and the Bering Straits region is right on the route. Matt Ganley, vice president of Land and Resources for BSNC, said he thinks there will be a dramatic increase in traffic with the opening of the passage, particularly with the current exploration and development of oil and gas resources in Russia. “Our region lies on the chokepoint of the strait, the narrowest part, with Diomede Island on the Russian-American border,” Ganley said. “So we’re watching developments there and preparing for it as much as we can. We have property interests we’d like to see developed and infrastructure is vital to that development. I’m sure we’ll see expansion of our infrastructure in conjunction with the sea opening.”

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

Otherwise, Ganley said there isn’t much industry in his region—no largescale energy production, no highway or railroad infrastructure. “Prices for everything just skyrocket when there’s no infrastructure,” he said. BSNC’s President and CEO Gail Schubert said a subsidiary, Bering Straits Development Co., operates in Nome and specializes in building construction and renovation. “Last year, the development company employed 50 shareholders building teacher housing and other projects,” she said. “We also have a trucking operation that employs shareholders and a hotel in Nome. “We are currently evaluating the possibility of reopening Rock Creek Mine,” Schubert added. “It employed about 156 shareholders and other residents in 2008, but it never really went into production.” Schubert and Ganley both talked of investment in wind energy. “Three years ago,” Schubert said, “Sitnasauk (the Nome village corporation) and BSNC made a several-million-dollar investment and installed 18 turbines that add power to the Nome grid.” In addition to the regional corporation itself, regional nonprofit Kawerak Inc. helps to provide jobs and educate shareholders for jobs both within and outside the region. Together with the Bering Strait School District and Nome Public Schools, Kawerak helped develop the Northwestern Alaska Career and Technical Center to help prepare students with career and technical skills, career exploration, life skills and workreadiness skills. Ganley added that airlines—particularly Era and Bering Air—employ quite a few shareholders in the BSNC region, as does the State of Alaska and some federal agencies. “There’s new housing construction, roads, airports and schools,” he said. “We’re also catching up to the rest of the world with high speed cable,” Schubert said.

ALYESKA CONTRACT PROVIDES JOBS One of the Southcentral corporations, Chugach Alaska Corp., holds regional summits to help bring its shareholders together and to provide a forum for communication. In addition to www.akbizmag.com • Alaska Business Monthly • February 2012

economic issues, Sheri Buretta, chair of the board for Chugach, said the corporation has included energy, transportation, communication and education issues, as well. â&#x20AC;&#x153;Communication is a major issue,â&#x20AC;? Buretta said, â&#x20AC;&#x153;so weâ&#x20AC;&#x2122;ve come up with a shareholder and regional portal to get information out to the region, to talk about projects, what other regions are doing and about ways in which we can work together.â&#x20AC;? There are several ways in which Chugach helps shareholders in its villages earn a living â&#x20AC;&#x201C; one, Buretta said, is through a contract with Alyeska Pipeline Service Co. in which shareholders provide oil spill response and maintenance services through Tatitlek Chenega Chugach LLC, a joint venture. â&#x20AC;&#x153;This contract has been in place since 1994,â&#x20AC;? Buretta said, â&#x20AC;&#x153;and we have the largest number of Alaska Natives working under that contract. It allows all the communities within our region to be able to have jobs and many shifts allow workers to return to their communities when they have time off.â&#x20AC;? Buretta added that Chugach also has

been seeking construction contracts in Cordova, and is working with tribal councils in Nanwalek/English Bay and Port Graham to identify economic opportunities when a new runway is built. They are creating a 20-year plan for training and employment at the airport and the cannery. â&#x20AC;&#x153;We focus a lot of our efforts on academic and vocational education,â&#x20AC;? she said, â&#x20AC;&#x153;providing scholarships and internships to further our shareholdersâ&#x20AC;&#x2122; educations. We also have a small business assistance program and entrepreneurs in villages can apply for grants to help them start or grow their businesses.â&#x20AC;? Other employers in the Chugach region include nonprofits, the State of Alaska and the federal government. â&#x20AC;&#x153;The state has jobs to keep runways clear,â&#x20AC;? Buretta said, â&#x20AC;&#x153;There are post office jobs and village corporation jobs. The real challenge is to balance the lifestyle and culture with economic opportunities. We donâ&#x20AC;&#x2122;t want to take a quantity of a resource out of the region. We have to keep in mind the needs of the people, too.â&#x20AC;?

Buretta also pointed out that, although Alaska Native regional corporations can and do help their shareholders, the State of Alaska and the federal government both have a responsibility to them, as well. D C C E D Commissioner Bell agreed. Bell said the state provides economic opportunities in all regions through four key agencies: the Division of Community and Regional Affairs, the Alaska Energy Authority, the Alaska Industrial Development and Export Authority, and the Division of Economic Development. DCCED has many assistance programs and grant opportunities for tribal governments, communities and entrepreneurs, and is working to help bring energy costs down to rural Alaskans, Bell said. â&#x20AC;&#x153;Marketing Alaskaâ&#x20AC;&#x2122;s products and services is one of DCCEDâ&#x20AC;&#x2122;s strongest functions,â&#x20AC;? she said, â&#x20AC;&#x153;from fish and seafood to tourism, minerals, film and timber products. Weâ&#x20AC;&#x2122;re also helping strengthen Alaskaâ&#x20AC;&#x2122;s broadband services through the Connect Alaska project and the statewide broadband â?&#x2018; task force.â&#x20AC;?

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ February 2012

H R M AT T E R S

By Richard Birdsall

Managing Different Employees Perplexing protected class rules

COMPLICATED SUPERVISION Take for example employee “A.” Employee “A” is a high producer who is hard working and self-motivated with little job guidance needed. However, employee “A” cuts the occasional corner and makes an occasional error. Employee “B” is more methodical, produces less, but makes fewer errors. Employee “B” needs more guidance, instruction and monitoring to make sure assignments get done in a timely manner. Do you supervise employees “A” and “B” the same way? Of course not. But, in accordance with Murphy’s Law, the situation becomes more complicated. What if either employee “A” or employee “B” is a member of a protected class? This is a special legal standing based on race, age, sex and other

identified bases. Federal, state and local law, while promoting diversity, also forbids discrimination for protected individuals. On its face it would seem that in one breath we acknowledge and appreciate the differences that make us human and in the other breath we are asked to treat all people, even though different, the same. How do you reconcile these differing dynamics?

KEEP YOUR MOTIVES LEGAL Let’s view the dynamics in a legal setting. One method used to support an allegation of discrimination is to show disparate treatment. In other words, circumstantial evidence can be presented to show the “protected” employee was treated differently. Such evidence can establish a presumption of a discriminatory motive which the employer may rebut by articulating a legitimate nondiscriminatory reason for its action. Yet, good management practices dictate differing management styles modeled to your individual employees. Catch 22? Choosing wrong has consequences. An employer who zealously seeks equal treatment may discipline an employee simply because it had been done in the past to a different employee for similar reasons. The employee senses a negative environment, feels ambushed and leaves. The fact that people are different and may respond differently doesn’t even enter the equation. An employer who is haphazard and reckless while treating employees differently risks a complaint for discrimination based on disparate treatment. The true motives behind the differential treatment, even though pure, may be difficult to show if documentation is not there.

atch 22. A conundrum like the closed loop in a computer glitch leaving us watching that little time clock spinning around waiting for nothing to happen. Not an enjoyable place to be. Like the computer “glitch,” managers can be presented with apparent conflicts that can be difficult to reconcile. In the United States, we celebrate our human differences. We are a melting pot and, for the most part, respect one another and what makes us different. As the French would say: “Vive la difference.” Effective managers recognize this fact. Management training emphasizes different approaches for differing employee personalities. The ultimate goal is to run the operation efficiently and smoothly. However, the law suggests that, although we are all different, we should all be treated the same.

Richard Birdsall

So what’s the secret? The key word is motive. Before you take an action consider your motivation. Is it possibly anger, frustration or bias? If so, you need to take a deep breath and seriously reconsider. However, if you goal is to genuinely help the employee succeed you are on solid ground. Gauge your decision making with the desire for the ❑ employee’s success in mind. About the Author Richard Birdsall, B.A., J.D., is a senior consultant for The Growth Company. Birdsall uses his broad experience conducting training in legal compliance, investigation, risk assessment, team building, mediation and alternative dispute resolution. He is particularly adept at ferreting out troublesome HR problems and then finding creative ways to solve them.

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

Engineering and Architecture Special Section

Inside this special section ■ ■ ■ ■ ■ ■

2012 Engineer of the Year Nominees Engineering Mertarvik LEED Standard Google Earth 3D Modeling Notable Buildings, Notable Architects Architects & Engineers Directory

special section ENGINEERING & ARCHITECTURE

Engineer of the Year Nominees COMPILED BY LORIE DILLEY

Melissa (Mormilo) Branch, PE

MELISSA (MORMILO) BRANCH, PE Nominated by the Society of Women Engineers (SWE) Melissa Branch’s favorite part of being an engineer? Being part of the growth and development of her community through both her work and volunteer activities. Anchorage is home to Melissa, despite having grown up as an Air Force brat. She graduated from Bartlett High School and obtained her civil engineering degree from the University of Alaska Anchorage. Branch is currently a project manager in the Civil Department at Enterprise Engineering Inc. She prefers site design, working with a team of architects and other engineers to design sites that complement the building use and connect the site to the community. Branch brings connection, accomplishment and integrity with her as an engineer and an active member of the community. Branch’s greatest leadership achievements have been as the Society of Women Engineers (SWE) Greatland Section President and as Region J Lieutenant Governor. In these two roles, Branch has done an exemplary job of motivating, informing and organizing members. She has participated in almost every SWE Greatland event in the past seven years. Besides SWE, she volunteers with Junior Achievement, helping prepare young people for the real world

by teaching them how to generate and manage wealth. Branch also serves as co-chair of the United Way Emerging Leaders Advisory Council (UWELAC), helping cultivate the next generation of philanthropists, advocates and volunteers in Anchorage through personal leadership development and community involvement. She was honored by the Anchorage Chamber of Commerce as one of 2009’s Top 40 Under 40. ■

including coil tubing interventions and fracking. He next provided engineering support for the Endicott and Milne Point assets, focusing on improving well production. In 2001 he was posted to Argentina as a technical advisor and subsequently to Azerbaijan where he led a team that coordinated start up of 4 production platforms in the Caspian Sea. Collins returned to Alaska in 2007 as PE adviser. He enjoys the Alaska outdoors, hiking, skiing, rafting and kayaking. ■

CAPTAIN DAN FOX, PE

Pat Collins, PE

PAT COLLINS, PE Nominated by the Society of Petroleum Engineers (SPE) Pat Collins is the Petroleum Engineering Discipline Advisor for BP in Alaska. His career spans 29 years. Born in Cork, Ireland, Collins received a BS in Civil Engineering from University College Cork and an MS in Petroleum Engineering from Heriot-Watt University in Scotland in 1982. He started with BP and worked North Sea fields in London, Holland and Scotland, conducting well testing of exploration wells and developing depletion plans for oil and gas discoveries. In 1990, Collins was posted to Alaska as a production engineering team leader, responsible for management of subsurface issues in Prudhoe. He then worked on the North Slope, supervising wellsite activities that improved oil production,

Nominated by the Society of American Military Engineers (SAME) Captain Dan Fox was commissioned in the United States Army Corps of Engineers in May 2004. His previous assignments include platoon leader of 2nd Platoon, C Company, 14th Combat Engineer Battalion, Fort Lewis, Wash., platoon leader of Support Platoon, HHC, 14th Combat Engineer Battalion, executive officer of 570th Sapper company, 14th Engineer Battalion. Fox deployed to Iraq as part of Operation Iraqi Freedom 05-07. As part of Task Force Trailblazer he conducted route clearance patrols and combat logistic patrols throughout northern Iraq. Following graduation from the Engineer Captains Career Course he moved to Alaska and in February 2009 assumed command of C/864th EN BN (HVY). In October 2009, he deactivated C/864th EN BN (HVY) and activated the 84th Engineer Support Company (Airborne). Since October 2010, he has worked for the U.S. Army Corp of Engineers, Alaska District. He serves as a project manager in the District’s Humanitarian Assistance Program managing

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

PEOPLE

ENERGY

IDEAS

Captain Dan Fox, PE

resources, manpower, projects, budgets and staff actions for nine projects in two Southeast Asian countries through the project cycle of procurement, design and construction. Fox earned a Bachelor of Science in Mechanical Engineering from the U.S. Military Academy, West Point, NY and a Master of Science in Engineering Management from the Missouri University of Science and Technology, Rolla, MO. His military education includes the Engineer Officers Basic and Advance Courses, Fort Leonard Wood, MO. Fox’s military awards include the Bronze Star Medal, the Army Commendation Medal, Army Achievement Medal (1OLC), National Defense Service Medal, Iraqi Campaign Medal, Global War on Terrorism Medal, Army Service Ribbon, Oversees Service Ribbon, Combat Action Badge, Air Assault Badge, Parachutist Badge and Sapper Tab. He is married to the former Amanda Lyn Prall of Golden, Colo., and the couple have an 11-month-old daughter named Ella. ■

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MIKAL K. HENDEE, PE Nominated by the American Society of Civil Engineers (ASCE) Mike Hendee is a 23-year Alaska resident with more than 15 years of civil, structural and geotechnical engineering experience. He is currently working for Alyeska Pipeline Service Co. as a project engineer, managing a range of projects that focus on the challenges associated with low oil temperature and flow rate. Originally from Colorado, Hendee worked as a commercial fisherman and pilot in Alaska before earning a Bachelor of Science in Civil Engineering from the University of Alaska Anchorage, where he was actively involved in the ASCE Student Chapter. After graduwww.akbizmag.com • Alaska Business Monthly • February 2012

Alaska Huts Association and is a former President of the Glen Alps Community Council. Hendeee is married to his wonderful and patient wife, Jarlath. They both love skiing, hiking and sailing throughout Alaska. ■

GARY KATSION, PE Mikal K. Hendee, PE

ation, he continued his involvement with ASCE, holding board seats with the Anchorage Branch and the Alaska Section, of which he is a past president. Hendee began his engineering career with Duane Miller & Associates as a geotechnical engineer and obtained professional registration in 2000. He worked for LCMF LLC (now UMIAQ), Michael Baker Jr. Inc. and CRW Engineering Group before joining Alyeska Pipeline. Most of Hendee’s career has been with projects in rural Alaska, ranging from small health clinics to major infrastructure projects; such as bulk fuel facilities, water and wastewater improvements and coastal erosion mitigation. In 2005, he began work with Dr. Orson Smith at UAA as a co-author of a book titled, “Coastal Erosion Responses for Alaska,” which discusses causes of coastal erosion, nonstructural responses, and construction of erosion control alternatives. Previous books on the subject targeted areas in the Lower 48, but none addressed problems specific to Alaska, such as seasonal ice flows, eroding permafrost and difficult logistics. The book was scheduled for publication by Alaska Sea Grant before the end of 2011. Hendee obtained a Master of Science in Civil Engineering in 2008, as well as a graduate certificate in Port and Coastal Engineering. He has taught the “Small and Decentralized Wastewater Engineering” graduate course as an adjunct professor at UAA as well as the soil mechanics short course for the ASCE PE Refresher for the past eight years. Hendee has been actively involved with the Alaska Professional Design Council (APDC) and is the current president. He is also a committee member of the Technical Council for Cold Regions Engineering (TCCRE). He is currently on the board of the

Nominated by the Institute of Transportation Engineers (ITE) Katsion is the Anchorage office manager for Kittelson & Associates Inc. and has provided comprehensive transportation planning and design consulting services to state, local and private clients for a wide variety of transportation projects for more than 36 years. He started his consulting career in Chicago after graduating from the University of Illinois-Urbana Campus in 1975.

Gary Katsion, PE

From 1979 until 2002 he worked in Portland, Oregon, for W&H Pacific and Kittelson & Associates Inc. He moved to Clam Gulch in 2002, and to Anchorage in 2010 to open Kittelson’s office. His Alaska project experience includes the AMATS 2035 Metropolitan Transportation Plan, the Eagle River CBD and Residential Core Transportation Study, and the transportation element of the Willoughby District Master Plan in Juneau. He is a registered civil engineer in Alaska, Oregon and Washington. He has two grown children and three granddaughters. ■

GREGORY LATREILLE, PE Nominated by the Alaska Society of Professional Engineers (ASPE) Gregory Latreille holds both a Bachelor of Science and Master of Science in Civil Engineering from Rensselaer Polytechnic Institute, located in his native state of New York. He moved to Alaska in 2005 and has worked as a structural engineer for BBFM

Gregory Latreille, PE

Engineers Inc. since. Latreille has designed and analyzed structures of various construction types and materials, including wood, steel, concrete and masonry and he is familiar with the special design constraints and demands of Arctic structures. Notable projects he has worked on in Alaska include the South Anchorage Home Depot, the new Thunder Mountain High School in Juneau, the Fairbanks International Airport Terminal renovation and expansion, the Providence Alaska Medical Center Generations Project, and the Kennecott Mine Mill Building stabilization and revitalization. He is a licensed professional engineer in the state of Alaska. Latreille is a member of various engineering societies, including the National Society of Professional Engineers (NSPE), the American Society of Civil Engineers (ASCE), Chi Epsilon, the Structural Engineers Association of Alaska, and the Alaska Society of Professional Engineers (ASPE). He has been a member of the ASPE state board of directors since 2006, serving as statewide treasurer and president and is currently Alaska’s representative in the NSPE House of Delegates. He regularly donates a considerable amount of time, effort and energy to this society. In his time away from his career, Latreille is an avid outdoorsman. ■

MARTY SMITH, EE Nominated by the Institute of Electrical and Electronics Engineers (IEEE) Marty Smith grew up in Anchorage and graduated in 1992 from the University of Alaska Fairbanks with his BSEE degree. He is a registered professional electrical engineer in the State of Alaska. Marty has been employed by Anchorage Municipal Light & Power (AML&P) for seven years. Current responsibilities include management and

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

Marty Smith, EE

supervision of distribution and transmission system design; construction and material standards; and geographical information system (GIS) quality assurance. Prior to 2005, Smith served as a lead project engineer with Dryden & LaRue Inc., where he was responsible for multiple 12.5 kV relocation/conversion projects, as well as 69 kV and 138 kV transmission relocation projects. Marty is a highly active member of the electrical engineering community. He currently serves as the general chair of 2013 Alaska Electric Utility Conference, following service as a vice chair for that biennial conference in 2009 and 2011 and engineering section chair in 2007. Smith is an active member of IEEE and a member of IEEE’s Power and Energy Society. He also developed and co-presented “Case Study: How the Design Through Asset Management Workflow Was Streamlined at Anchorage ML&P” in conjunction with Autodesk University. A very active member of the Anchorage community, Smith serves with Trinity Presbyterian Church as the Love INC’s church ministry coordinator; furniture delivery team coordinator; and linen gap ministry coordinator. He is a board memeber of the Anchorage West Little League, and also devotes his time as a Little League Baseball coach and assistant coach. Smith has long been recognized for contributions to his profession and community. As part of AML&P’s GIS implementation team, he was nominated for Best Work Unit of the Year in 2010. Most recently, he received the IEEE Alaska Section 2011 Individual Achievement Award and has been nominated for the Individual Achievement Award in IEEE’s Region 6 Northwest Area, which represents electrical engineers in Alaska, Wash❑ ington, Oregon and Idaho. www.akbizmag.com • Alaska Business Monthly • February 2012

special section ENGINEERING & ARCHITECTURE

Map courtesy of U.S. Army Corps of Engineers – Alaska District

Engineering Mertarvik Moving Newtok across the river, away from the sea BY NICHELLE SEELY

he northeast edge of Nelson Island doesn’t look like much from the air. Tents belonging to the Innovative Readiness Team

cluster near the barge landing, which is a simple tongue of piles and gravel jutting out into the Ningaluk River. Our yellow float plane splashes into

the water and nudges into the rocky shoreline, and I walk into the townsite of Mertarvik, the replacement site for Newtok.

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

The village of Newtok has been in the news for months; we’ve heard about the ocean encroaching from one side and the river from the other. Moving the village is an inevitable, albeit difficult, solution. Mertarvik is across the river, southeast from the village, accessible only by floatplane or fishing skiff. This area is known to the villagers as ‘the place we go for water.’ A clear spring bubbles out of the ground not far from the shoreline, and the grasses and sedges are rich and green. It’s taken years of planning, but the first building has finally been erected—at least partially.

ENGINEERING A COMMUNITY Engineering is the art of problem solving. What does it take to construct a community from the ground up? Like much of rural Alaska, Mertarvik is off the road system. Engineers and contractors are familiar with this state of affairs, and know how to solve the problems of logistics and transportation of materials. What makes Mertarvik unique and especially challenging is that it is essentially virgin territory. There’s none of the infrastructure enjoyed by even the remotest village—no utilities, no roads, no landfill—nothing. The first obstacle was actually getting materials to the building site. The barge is the best and obvious answer, so the first project in establishing the new community was to construct a barge landing. Completed in 2009, it was the first necessary foothold for the chain of events to follow. It’s an accepted fact that moving Newtok will take years. Unfortunately, the rate of erosion is increasing due to the growing severity of winter storms, and exacerbated by the reduced coverage of sea ice that historically has protected the village from the worst of the storm surge. In reality, Newtok may not have the luxury of years. In view of this implicit threat, the first planned structure at Mertarvik is an evacuation center: a building which can shelter 300 residents if the worst happens and Newtok is destroyed before the new town can be fully established. Mindful of the future, village leaders planned to convert the shelter into a community center once all the residents have been safely housed. www.akbizmag.com • Alaska Business Monthly • February 2012

The Newtok Planning Group contracted with the Alaska Department of Transportation and Public Facilities to help with the planning. DOT&PF initiated a competitive request for proposal process to choose the design team. The successful proposal came from Bezek Durst Seiser Architects, where I am employed as an architect, and PDC Inc. Engineering. Both firms are Anchorage-based with deep experience in rural Alaska. How did we go about sheltering 300 people for a month, our worstcase design parameters? We had to think about heating, lighting, water, wastewater, food preparation and material storage, in addition to the area requirements for that many people. Also, the building had to be able to “go cold,” that is, to remain completely closed, unheated and unmaintained, for months or years if necessary, and yet be ready at a moment’s notice. The shelter had to be self-sustaining with its own power source, water supply and sewage treatment facility. Finally, we had to think about the later use as a community center.

ADDRESSING THE ISSUES Working closely with DOT&PF, the design team began to address the issues. To solve the problem of power, we first looked at sustainable options. Solar was a nonstarter—what if the emergency happened during the winter? Wind was unreliable (it doesn’t blow all the time), and thus would require a battery bank to store generated power. With the expectation that the building would endure subzero temperatures and no maintenance for extended periods of time, engineers fell back on the tried and true: a 500 kilowatt diesel generator housed in a module with a smaller start-up generator beside it. Water and wastewater became the next priority. At first, we explored using a self-contained wastewater treatment module; unfortunately that solution proved to be impractical. The bacteria that break down the sewage take a week or more to become viable, especially at cooler temperatures, and died without regular feeding. This wasn’t an acceptable solution when an emergency could happen at any time and the need could be immediate. In addition, the bacteria

couldn’t survive the subzero cold. The same problem prohibited the use of composting toilets, ditto a treatment lagoon (which can resist being frozen but needs a relatively constant influx). The soil wasn’t suitable to incorporate a drain field big enough to handle the usage of 300 people. The problem seemed insoluble. Back to the drawing board: if no viable solution exists, then check the premises. The 300-person scenario was worst-case. A more likely occurrence would be a smaller number of people. Could the soil support a drain field for less than 100 people? Engineers recalculated: yes, it could. Slowly an answer emerged: a septic system designed to handle a small load if only a few people were displaced, with the option to shunt a larger load into a subterranean storage tank for gradual release over time, and as a very last resort wastewater could be diverted into the river. No one was entirely happy with this solution, certainly not the State of Alaska, but there are legal provisions in place for temporary emergency use that allowed the design. DOT&PF and the Newtok Planning Group agreed that taking care of the people was the first priority, and once the village was established with its own infrastructure, the shelter would be tied into the city system and the short-term solution could be abandoned. As I explored the area in the company of David Longtin, an engineer from Village Safe Water, we came upon the spring, flowing clear and cold through the tundra. I took a long swig of sweet fresh water. The problem of providing water had seemed to be an easy solve: we knew a source historically used by Alaska Natives was available on-site. However, once again reality proved to be more complicated. The spring was too small to support the demands of 300 people. With no lake or river nearby (the Nigaluk River is saline here), all that remained was to drill a well. Some core sampling had already taken place in the initial site exploration. At one point, the chosen site for the shelter had been inland, and a temporary well had been drilled nearby. Things had changed, the building site was now closer to the water (although still a distance from the shoreline), and

the temporary well was more than a mile away. Once again, engineers had to make a difficult choice: develop the temporary well and build a pipeline, risking the complications of shifting ground and no maintenance; or drill a new well closer to the building. Another complication was the lack of a road, meaning no access to the well during the summer. The necessity for building a longer road was one of the main reasons for abandoning the inland building site, although we had chosen the area because of the availability of near-surface bedrock. We decided to drill a new well. It seemed there was a very good chance of encountering potable water near the surface, given the evidence of the spring.

DESIGNING THE SHELTER Water, power, sewer—with the basics taken care of, the architects at Bezek Durst Seiser worked to design the actual shelter. Once again, the structure had to balance competing demands. It had to be super-insulated to minimize energy usage and be made of durable materials. However, the meager materials budget limited our choices. In addition, we had to conform to the requirements of the building code and install a large number of plumbing fixtures to accommodate the design load of 300 people, plus a communal kitchen for preparing meals. We wanted the form of the building to encourage wind flow and mitigate snow drifting. The project gradually took shape, utilizing materials that were readily available and a building system that could be erected in the narrow time window available for construction. The form had a wide curving roof—conceptually related to that of a Quonset hut. The exterior of the building was to be covered with super-efficient foam insulation, with a protective coating similar to what is used in pickup truck beds. The interior contained a large open space spanned with curving glulams—laminated wooden beams—enough room for a large number of people to bed down in relative comfort. Storage cupboards lined the walls and a long perimeter bench housed the ducts that provided fresh air. An overhead mezzanine added sleeping space and made use of the volume provided by the arching glulams. Finishes were durable, simple and

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cheap: solid surface counters, drywall, rubber flooring and painted plywood. Soils at the new building site were too unstable for a gravel pad foundation, a relatively cheap solution we had hoped to implement. The team therefore defaulted to a typical rural Alaska design. PDC designed a pile system and elevated deck of steel joists to support the curving building. Piles allow the wind to scour beneath the building, preventing the formation of snowdrifts. The shelter was nestled against the hillside at one end to allow easy access; the other end was almost 20 feet in the air. This meant that although there was only one point where the building would be accessible, there would be additional protection against vandals or animals that might seek to invade the building while it was not in use. It all looks possible on paper, but the true test is during construction, where builders must contest with difficult and exacting conditions. A Department of Defense Innovative Readiness Training (IRT) team was building the project as a training exercise, a solution to the lack of funds and an example of agency cooperation. All along, the team had been working from offices in Anchorage, and my first and only site visit coincided with the end of the first phase of construction. As I walked from the barge landing up the road to the structure, I marveled at the stark beauty of the landscape. The rolling hillside, a flock of ptarmigan with patches of white, the immense sky and the curving blue of the river. Here in this isolated place the architects and engineers had helped to pull off the nearly impossible. The evidence stood on the hillside, the sturdy steel piles and the deck, awaiting the shelter that was slated to be built the following summer. I smelled the perfume of sawdust and the tang of tar and diesel fuel. The well had been dug, the septic system installed, a narrow roadbed snaked upward to the building. PDC Fairbanks was designing the new airport. A small house, the first one of the village, was under construction nearby. Thanks to the ingenuity of the design team, the facilitation of the state, and the visioning of the Newtok Planning Group, the dream of Mertarvik had ❑ begun to unfold.

Architecture • Planning • Roof Technology

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

special section ENGINEERING & ARCHITECTURE

Photos courtesy of MRV Architects

An interior view of the Evergreen Building in Juneau shows MRV offices, main conference room and entry. The project, a renovation and addition to an existing older building and certified LEED Silver, was designed by MRV Architects.

LEED Standard Changing building industry for the better BY VANESSA ORR

hen the Leadership in Energy and Environmental Design (LEED) building standard was first introduced, it was hoped that it would create a demand for better-performing buildings that would be sustainable in the long-term. And while it has met this goal, it has also spawned a change in mindset across

the building industry that has resulted in dramatic market change. “I believe that we’ve seen a huge industry shift in the last five to six years, with virtually everybody looking at using some aspect of LEED sustainable or green building concepts in all of their projects,” said MRV Architects President Paul Voelckers, AIA, LEED-AP.

“There has been a tectonic shift.” With buildings using about 40 percent of the nation’s primary energy, and about 70 percent of its electricity, LEED-certified buildings make sense when looking at energy conservation. Add to that the fact that LEED-certified buildings are designed to lower operating costs and increase asset value;

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reduce waste sent to landfills; conserve energy and water; be healthier and safer for occupants; reduce harmful greenhouse gas emissions; and qualify for tax rebates, zoning allowances and other incentives in a number of cities, and it’s not surprising that states across the nation, including Alaska, are embracing the concept.

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WHAT LEED REQUIRES According to the U.S. Green Building website, LEED certification provides independent, third-party verification that a building or community was designed and built using strategies aimed at achieving high performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. Certification occurs through the Green Building Certification Institute, an independent nonprofit established in 2008. “I think the main reason that the LEED program has been successful is because it is not doctrinaire-specific; there are five broad categories, and you need to do enough right in each area to reach certain levels for certification,” Voelckers said. “Each level is more difficult to achieve. “The LEED certification also results in positive branding,” he added. “A LEED-building is an exemplary building; it’s a step up from other facilities.” LEED points are awarded on a 100-point scale, and credits are weighted to reflect potential environmental impacts. Additionally, 10 bonus credits are available, four of which address regionally specific environmental issues. A project must satisfy all prerequisites and earn a minimum number of points to be certified. Rankings include basic certification (40+ points); silver (50 + points); gold (60+ points) and platinum (80+ points). In Alaska, there are currently 23 LEED-certified projects statewide, with 76 projects registered to undergo the LEED process. “These numbers are very good for the state’s size and geography and its relatively new exposure to LEED-certification,” said Jason Gamache, AIA, NCARB, LEED-AP BD+C, a sustainability consultant with McCool Carson Green Inc. “There has been a lot of

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Paul Voelckers, AIA, LEED-AP, President, MRV Architects.

success with LEEDs, particularly in rural areas. The Mat-Su Borough, for example, is a leader in sustainability in Alaska. It had the first two LEED-certified schools, the first LEED-certified project in the state (the NOAA West Coast and Alaska Tsunami Warning Center), and was the first municipality to introduce the requirement that public projects be certified under LEED.” Gamache visualizes LEED as a three-legged stool with energy performance, strategies to improve the indoor environment and strategies to improve the outdoor environment as its legs. “Sometimes more weight may be placed on one leg than another, but at the end of the day, they all need to balance out,” he said.

IMPROVING INDOOR ENVIRONMENTS While the goal in LEED design is to reduce energy consumption and lower operation and maintenance costs for the lifespan of the building, Gamache adds that these savings may not always be realized immediately. “Some of these savings take longer to be fruitful; the goal is to reduce the burden of building ownership in the long-term, and this includes the burden on communities when designing public projects,” he explained. There are a number of ways in which indoor environments can be improved.

“Day lighting is a bit of a balance in Alaska; the more ‘holes’ you have in the envelope of a building, the more susceptible it is to lower energy performance,” Gamache said, adding that studies have shown that humans are more energized and perform better when exposed to natural light. “This is especially critical in schools and office buildings,” he added. “A lack of natural light and poor ventilation diverts a person’s ability to concentrate and makes the person feel tired.” In addition to bringing in natural light, a visual connection to the outdoors is considered important for maximizing human performance. “Being locked up in a ‘box’ makes people agitated,” Gamache said. “In fact, in Germany they actually have a law in their building code that requires all spaces to have a direct line of sight to the outdoors.” LEED-certified facilities also focus on the acoustic environment and thermal comfort. “People are much happier if they are in direct control of the amount of fresh air and how hot or cold it is,” Voelckers said. “It seems like common sense, but these are issues that LEED pushed. The human comfort factor is extremely important.” “In schools especially, we do a lot of measures to improve acoustic performance,” Gamache said. “We make sure

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that classrooms are not built by auditoriums, gymnasiums or mechanical rooms and we use specific materials to deflect or absorb sound.” In addition to helping children hear better, Gamache said these types of considerations prevent teachers from experiencing vocal strain, in turn reducing class disruption and the cost of hiring substitute teachers.

HEALTHIER INSIDE AND OUT Materials selection is extremely important in the LEED process. LEED designers and builders are required to use materials that don’t emit offgassing, such as paints and glues containing volatile organic compounds (VOCs), particle board and products containing formaldehyde. “One of most amazing things that I’ve seen in the last five to eight years is that these products have virtually been replaced in buildings whether they are LEED-certified or not,” Voelckers said. “LEED had long coattails; it pushed the materials that builders use to get healthier across the industry.” The outdoor environment is also important; not just around the immediate building, but in how the building fits within the community as a whole. LEED designers work to reduce the ‘heat island’ effect, which is the buildup of heat from the building, as well as to introduce native vegetation on-site which is often less water intensive than imported plants and better retains rainwater, reducing runoff into municipal storm sewers. “On a macro-scale, we look for synergies in energy reduction, materials use, recycling and more that will benefit the community outside the building, which is its ‘outdoor environment,’” Gamache said. “For example, when we are looking at recycled or rapidly renewable materials to use, bamboo from China may not be the best choice. Cottonwood from Wasilla may be more sustainable to buy because it not only supports the local community but requires much less embodied energy to transport.”

NEW ‘STANDARD OF PRACTICE’ While every building is different, the cost of building a LEED-certified property is far lower than in the past. “There is still a perception that LEED costs

more, and I think in some cases, this is true,” Voelckers said. “But a lot of the penalties that people paid for using sustainable materials have changed in the last six to eight years. Still, there may be a slight increase in price as a result of increased levels of insulation or improved ventilation, but these are typically recovered in a few years.” Because LEED-certified projects require significantly more energy modeling before a project gets underway, there can be a cost for more extensive documentation at the onset, and there is a cost for commissioning at the end of the project. “I tell clients that they may see a 2 to 3 percent direct cost increase, but in aggregate, national industry studies show that there is a pretty strong payback period. LEED-certified buildings see increased marketability; the rental market likes LEED buildings for the cachet and the higher quality interior space.” “The expense has changed dramatically on several fronts,” Gamache said. “Many designers, engineers and contractors originally added start-up costs to learn the system and to learn how to implement LEED concepts into designs. There was a cost to changing ‘business as usual.’ But now, most LEED teams have figured out how to holistically integrate LEED into how they do business. “When LEED first came out, it was also very hard to find materials; those that were available came at a premium,” he added. “It is almost impossible now to find materials that don’t contribute to LEED and the cost has come down dramatically. In fact, if you’re a manufacturer who doesn’t contribute to LEED, you may go out of business.” While many may have jumped on the LEED bandwagon as the latest trend, it looks like the building format is here to stay. “Everyone is interested in the principle of a better performing building; we needed to make changes in the way that we built things, and now we have a new benchmark that is here to stay,” Voelckers said. “In the past, people worked with the information they had at the time, but now we know better,” Gamache said. “LEED was a vehicle to encourage change, and now it is the standard ❑ of practice.”

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

special section ENGINEERING & ARCHITECTURE

Models on Google Earth of midtown Anchorage include one of Jeff Harrist’s first 3D modeling projects, the ASRC office building where he works.

Google Earth 3D Modeling Providing business benefits BY VANESSA ORR

s new technologies evolve, so do opportunities for businesses to find innovative ways to reach more customers. A number of companies within Alaska are now using 3D modeling on Google Earth to not only target their locations for prospective users, but to provide a visible representation of their buildings. “I call this ‘navigational hospitality,’ which is especially important

for businesses in Alaska,” explained Katya E. Kean, owner of Stray Kat Studio and a 3D modeler. “Most of my clients thus far have been in the tourist industry, and they are using this technology to help their clients find them more easily.” While many buildings in states across the Lower 48 and across the world are already “modeled” on Google Earth, the technology is just gaining ground on the Last Frontier.

In fact, many of the modelers who create Alaska buildings simply do it as a hobby. “As far as I know, mine is the only business which has made models for Alaska,” Kean said. “But 3D is an emerging field, so I anticipate an increase in demand for these skills.” Kean was recently hired to travel to Arizona to teach a classroom of college professors, city planners and economic developers about 3D modeling.

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

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Photo courtesy of Katya Kean

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ALASKA’S SELF-TAUGHT MODELERS In order to create 3D models, photos must first be taken of the building that will be created, which are then loaded into Google’s SketchUp program. Kean, who taught herself to create models using free online tutorials and the advice of other modelers, usually takes a minimum of 30 photos of a building, which she then puts together using the software. “The amount of time it takes really depends on what you’re modeling,” Kean said. “My first model of a bookstore took about two months because I was still learning; a recent model of the Yuma International Airport took about three weeks, and a model of a parking shade in Arizona took me a day. It depends on the complexity of the building.” Much like the construction of a building in Alaska, 3D models can also be dependent on the weather. “You really need good photos to do a good model, so you have to wait until spring or fall for the best shots to avoid tree cover and snow,” Kean said. Jeff Harrist, an engineer in Anchorage who has received recognition as one of Google’s “Featured Modelers,” began making 3D models as a hobby. “I work in midtown Anchorage in the ASRC office building, and when I came across Google Earth in 2009, I thought it would be neat to make a model of the building I work in,” he

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said. “Google accepted my model, and I started doing other buildings; it just blossomed from there.” Harrist estimates that about half of the buildings on the Anchorage Google Earth site were made by him, with another four or five people creating the rest. “One of the biggest benefits for companies who have a building model is the exposure that they get on Google Earth; the buildings really pop out,” he added. “If a person is looking at the map and sees a 3D building, they are more likely to click on it than on something that isn’t represented three-dimensionally. Most people navigate in the real world visually, and a 3D model helps them to get information more quickly. For example, if a person is looking for a nice hotel, they can actually see the building on the map, as well as see how close it is to the mountains, or a beach or a grocery store; a flat map and a street address don’t show you these things.”

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While 3D models make finding locations much easier, they have other uses as well. “3D modeling on Google Earth has fantastic engineering applications,” Kean said. “Last year, I met with the owner of an oil company in Anchorage about possibly modeling some of the oil platforms and pipelines in Cook Inlet; this could aid in logistics and operations planning, disaster response, transparency and marketing. “An independent film producer also approached me in Homer about using 3D Google Earth modeling to aid in pre-production of movies being filmed in the area,” she added. “My ultimate dream is to be able to model facilities on the North Slope; most people will never be able to see these areas, but with 3D modeling and added features like Panoramio on Google Earth, we can bring Alaska to the world in a way that translates into any language, culture or age group.” Companies who have models on Google Earth can choose to have Google host their models for free, which can be shared with the world, or they can keep the models private and host them within their own companies for use in planning and resource management. If cities will donate elevation data, Google will host that information

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for free, which gives modelers more accurate terrain to deal with.

TECHNOLOGY WITH PERSONALITY According to Harrist, different modelers have different styles, which give each 3D model a unique personality. “Microsoft just released their own version of 3D Earth, which uses laser and radar imaging to create each model,” he said. “They don’t have actual people doing the models, and I think that Google’s models still look better.” While some cities on Google Earth, such as San Francisco, New York, Tokyo and Paris are already heavily populated by 3D models, Alaska has much further to go before its major cities are fully rendered. Business owners who want to hire local talent to create their buildings may pay between $300 and $1,000, depending on the building’s degree of difficulty. Some modelers, such as Kean and Harrist, also donate their time to make models for nonprofits. “It’s nice to get a little more recognition for landmarks,” Harrist said. “For example, the Alaska Veterans Memorial is off the

“It’s a little like having Peter Pan sprinkle fairy dust on you; flying around is fun, but it takes a little practice to do it well.” – Katya Kean, Owner Stray Kat Studio Parks Highway, out in the middle of nowhere. It’s a really neat memorial, but a lot of people don’t know that it’s there. 3D Google Earth models can help provide a little more exposure for our cities and state.” As Google Earth continues to grow in popularity, the number of those interested in 3D modeling is expected

to grow as well. Google offers its 3D modeling program free to schools for children in kindergarten through 12th grade, and is even starting to make video games that interact in these 3D environments. “This generation grew up on video games, so navigating in a 3D world is second nature to them,” Kean said. “It is definitely a technology that is becoming more and more familiar to the next generation of consumers. “If a picture is worth 1,000 words, then a 3D model is worth at least a million,” she continued. “Add that model to a virtual contextual multi-layer setting, and the informative value goes up exponentially.” To see some of Alaska’s Google Earth 3D models, go to www.google. com/earth/index.html and download the latest version. Make sure to check the 3D layer in the lower left sidebar. “Learn to fly around!” said Kean. “It’s a little like having Peter Pan sprinkle fairy dust on you; flying around is fun, but it takes a little practice to do it well. It’ll change the way you plan your travels, and it’s an incredibly addicting way to explore the ‘real’ world.” ❑

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

special section ENGINEERING & ARCHITECTURE

Alutiiq Center, designed by kpb architects, is the Anchorage office for the Afognak Native Corp. and its subsidiary, Alutiiq LLC.

Notable Buildings, Notable Architects Designing for community involvement BY TRACY KALYTIAK

lutiiq Center is the Anchorage office for the Afognak Native Corp. and its subsidiary, Alutiiq LLC. The 71,000 square-foot building and site design draw their inspiration from images of Afognak Island and the region of the Alutiiq people. There is a 51,000 square-foot parking structure and two exterior deck areas for office workers’ use. Inside, a small museum exhibits displays of historic and cultural materials of the Alutiiq people, in addition to modern artwork integrated throughout the lobby and upper levels of the office building. kpb architects collaborated with the owner’s cultural

committee to effectively weave artwork into the building design, rather than incorporated afterward. A projecting glass wall above the entry contains the images of four ancient petroglyphs found in the Alutiiq region; these petroglyphs are images carved into stone on Afognak Island. Providing a unique identity for the building, the exterior uses a granite facing and aluminum composite panels for the building’s skin. Principal Landscape Architect Tamás Deák said, “During a visit to Afognak Island in the conceptual phase, we were inspired by the ocean and the shore. This led to the

use of ornamental grasses, driftwood, large rocks and pebbles into the site that reflect the close and indelible bond the Alutiiq feel with their homeland.” The Alutiiq Center is one of many notable buildings designed by notable architects in Alaska. A small sampling follows and readers are encouraged to read the larger, online version of the story with more photos of notable structures at www.akbizmag.com.

DOWNTOWN ANCHORAGE As winter clutches the city of Anchorage, there is an area downtown where the street and sidewalks are free of snow

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and ice, fabric canopies shield pedestrians from inclement weather and even a parking garage shows aesthetic flair. The $8.5 million F Street Connectivity and $40.5 million Linny Pacillo Parking Garage are components of a system kpb architects put together to open a clear path for people who wish to park their vehicles and move on foot between several of the city’s key structures: the Atwood State Office Building, Alaska Center for the Performing Arts, Dena’ina Civic and Convention Center, Town Square Park and Egan Center. Construction began in March 2007. The parking garage was completed in September 2008, and the F Street Connectivity was finished in 2009. “This is based on the notion of calmed traffic, narrowed intersections, pedestrian bubbles at the intersection, elevated pavement,” said kpb architect Richard Reed, who worked with landscape architect Tamás Deák on the project. “There’s a different texture, motif, in the brick pavers based upon Alaska’s Native heritage. Pedestrians walk freely. It’s like a European city.” The main pedestrian connectivity is intended to relate the new Dena’ina Civic and Convention Center to the existing Egan C enter on 5th Avenue, two blocks away, passing the front of the performing arts center en route. “That was the idea of connecting those two convention centers so conventions that are huge would have clearly defined pedestrian routes— through a public park, past a very fine performing arts center,” Reed said. Fabric canopies with angled pylons punctuate the passage. “It really creates a lot of energy on that street,” Reed said. “These two projects are doing their part and we hope to do more.”

year. Children in Alakanuk three years ago shot a video about how they needed a new school and presented the video to legislators in Juneau. “Alakanuk ended up number one on the list for funding,” Strauss said. Strauss said kpb has built approximately 15 schools in the firm’s history. “The founders of our firm got their start in designing rural schools,” she said. Classrooms will face south, allowing the sun to provide day lighting. The school will reflect the cultural character of the village, Strauss said.

“We asked them what they wanted,” Strauss said. “The community will use it after hours for cultural events, including teaching the children how to skin animals.” Strauss strives to use local materials. “We try to incorporate the local artwork into the project somehow, make it a piece of the building, part of the building envelope,” she said. The bilingual room is an important space, as much as the library. “It’s really important for the school to have some of the areas used after hours while

ALAKANUK SCHOOL In rural Alaska, schools are more than places where children learn reading and math. They are places where people go to be with their neighbors, watch basketball games, share a meal. “They’re the community center, hotel, gymnasium, fitness center— really the center of the town,” said kpb architects’ Lauri Strauss. Strauss designed Alakanuk’s new $30 million, 53,900-square-foot K-12 school, where construction began last www.akbizmag.com • Alaska Business Monthly • February 2012

One of many reading nooks in the Homer Public Library, designed by ECI/Heyer Architects for the City of Homer and Friends of the Library nonprofit.

other areas are locked off and secure,” Strauss said. Basketball is huge, Strauss said, so the high-school-sized gym features bleachers for almost 1,000 people. Outside, the building was designed to be durable and require little maintenance. kpb included natural linoleum, low VOC paint and LED lights, and found ways to reduce dependence on diesel. The new school is expected to open in August 2013. “The kids are so friendly and love visitors coming to see them,” Strauss said. “They’re pretty excited about their new school.”

HOMER LIBRARY Above the Safeway store in Homer stands an odd structure with a glass entry resembling a spyglass. Brian Meissner of ECI/Hyer Architecture worked on the design for that building, Homer’s public library, a 17,115-square-foot structure that replaced the town’s old 3,000-squarefoot library. “I think the words they used were

that they wanted a vibrant, modern library,” Meissner said of the involvement of the City of Homer and Friends of the Library nonprofit in the genesis of the $6.3 million project. “It’s the most fun I’ve ever had with a building committee; they were so engaged in the process. Homer’s a great place, there’s a very diverse community and they love their library, use the heck out of it.” The design of the building incorporated the work of 13 Homer-area artists who crafted door pulls, a colorful concrete countertop, fireplace, different styles of study carrels and driftwood steps. Wood from a Kenai high school gym floor was intercepted on the way to the dump and used for casework. Jay-Brant General Contractors built the library, which was the first municipal building in the state to become LEED-Silver certified. Construction began in 2003 and was finished in 2006, Meissner said. The project had its challenges. Homer is built on a series of terrain “benches” and “there’s just a ton of

underground water, springs that pop up all over Homer,” Meissner said. “This site has one of those springs. Runoff from everyone’s yard above it ended up at our site.” Landscape architects and civil engineers devised a system of basins to catch that water, filter it and direct it into storm drains. The site also features a Zen garden, parking areas, green space, amphitheater and bike trails. Visitors cross a bridge to enter the structure. Inside, to the right, children have their own separate-but-connected library space, punctuated with window nooks and three “trees” defining the edge of the story hour space. The main interior of the library is designed as one great big room with individual reading carrels (which Meissner refers to as confessionals), a reading bar, group study rooms, a reading lounge with fireplace, and other reading opportunities around the perimeter. “My favorite thing to do in that library is to watch people come in and see where they will go to read,” Meissner said.

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

OCEAN VISITORS CENTER The U.S. Fish and Wildlife Service’s Alaska Maritime National Wildlife Refuge spans a 3.4 million-acre coastal area from Southeast to the Chukchi Sea. Forty million seabirds live in the refuge, along with marine mammals, other migratory birds and marine resources they need to survive. “It’s a huge coastal geographic area that for some reason is headquartered in Homer,” said RIM Architects’ James Dougherty. High above Kachemak Bay in Homer is the Alaska Islands and Ocean Visitors Center, headquarters for scientists, researchers and others who work for the refuge. RIM Architects designed the 35,000-square-foot, $10.5 million center, which features $1.5 million in exhibits. It was completed in 2003. The center was designed to bring together the community of federal and state agencies that study and protect the birds, creatures and habitat of the refuge—the U.S. Fish and Wildlife Service, Kachemak Bay Research Reserve, Alaska Department of Fish and Game, University of Alaska and National

Oceanic and Atmospheric Administration—as well as laboratories and spaces for presenting educational programs and events such as the Kachemak Bay Shorebird Festival. “Part of the mission from a design standpoint was to bring the refuge to the people, so they can see how remote it is but how they’re connected to it,” Dougherty said. The building not only houses scientists, its museum educates the public. Including the people of Homer and their art in the development of the center project was key. The entrance door features hammered bronze bull kelp. Brass driftwood and seabirds flying in a brushed steel sky adorn the elevator. The step-down lobby resembles a tidepool, complete with ceramic barnacles, seaweed, kelp and shells. “There are surprises around every corner,” Dougherty said. “This puts a human face on government, what government does.”

BARROW HOSPITAL Seven years ago, Arctic Slope Native Association awarded RIM Architects the

task of building a new 100,000-squarefoot hospital that would serve the city of Barrow and five nearby villages. RIM’s Matt Vogel immediately saw two major opportunities. “One is cultural, the other is Arctic architecture,” said Vogel, the project’s architect. “There were a broad variety of items we had to tackle and solve.” Michael Fredericks, president of RIM First People, bridged the cultural crevasse—reaching out through Arctic Slope Native Association to learn what the Inupiat community wanted in a hospital. Fredericks’ research took place through community forums, with the aid of an ASNA community liaison who spoke the Native language. Forum participants answered questions: Who goes with you when you go to the hospital? Who stays? Who stays in the room with you? Prospective users wanted rooms with space for patients’ families. They wanted rooms designed to promote eye contact between a patient and a health care provider. “By talking firsthand to people using

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

Eielson Visitor Center at Denali National Park, designed by RIM Architects for the National Park Service.

the facility, we could understand what it needed to be,” Fredericks said. The design team transformed the ideas into larger patient rooms and exam rooms that facilitate face-to-face communication between the provider, patient and family through strategic placement of equipment. They also included small but meaningful features: hooks for bulky Arctic winter parkas, cubbies for boots and areas where people could cook the food they brought. Building a hospital in Barrow meant it needed exterior finishes able to withstand the scour of storms, and lights and other devices that could be repaired locally. It had to be elevated so snow could blow through. The hospital’s opening is set for January 2013. The Arctic conditions and environment strongly tie in to the culture of people living in and near Barrow, RIM’s Molly Logelin said. “The building is transparent, glowing from the inside,” Logelin said. “You can see it from far away. It feels like a warm place to be.”

EIELSON CENTER Deep in Denali National Park stands a structure that seems to grow out of the rock and tundra of the landscape. When Denali’s shroud of clouds drifts aside, it’s a place that offers bused-in tourists an unimpeded view of North America’s highest peak, as well as a warm shelter where they can rest, eat and view interpretive displays. “With this building we tried to complement the rugged architecture of the mountains and get man’s presence out of the way completely,” said James Dougherty of RIM Architects. The Eielson center is one of a growing number of architectural works in Alaska designed in recent years to function as more than just a building—they are designed to embrace the needs and conserve the resources of the larger community in which they’re located. The National Park Service gave RIM its first design contract for the $9.2 million, 8,500-square-foot structure in 2002, it opened in August 2008. The structure reflects forward

thinking about conservation and preservation of resources. It had to be durable, because maintenance would be impossible once the park road closed for the winter. “It buries over with snow and is allowed to go cold,” Dougherty said. Designers had to triple the capacity of the old visitor center because of projections. “We didn’t want to triple the footprint, enlarge septic, water systems. We relied heavily on conservation measures—water-saving toilet fixtures, sinks,” Dougherty said.The center achieved Leadership in Energy and Environmental Design (LEED) platinum certification—the U.S. Green Building Council’s highest rating level, the first LEED platinum rating awarded in Alaska. “We want to be responsible with the buildings we build and not burden taxpayers with ownership and maintenance costs,” Dougherty said. “This structure is durable and doesn’t have high recurring costs. We spent a little bit more to build something that ❑ would last.”

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

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UAF photo by Todd Paris.

Photo by C. Hiemstra

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ABMâ&#x20AC;&#x2122;s 2012 Architects & Engineers Directory Engineering Firms Company

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ABMâ&#x20AC;&#x2122;s 2012 Architects & Engineers Directory Engineering Firms Company

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www.akbizmag.com â&#x20AC;¢ Alaska Business Monthly â&#x20AC;¢ February 2012

ABMâ&#x20AC;&#x2122;s 2012 Architects & Engineers Directory Engineering Firms Top Executive

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CONSTRUCTION

Photo courtesy of Homer Electric Association

Homer Electric Association’s Nikiski Combined Cycle Conversion project work site, shown in mid-December 2011, is scheduled for completion in fall 2012.

Keeping electricity flowing across Alaska BY GAIL WEST

laska’s power grid is getting some needed upgrades and at least one new source of power in the near future—wind. While hydro power is still a twinkle in the governor’s eye, wind energy will soon begin to add its kilowatt hours to help keep the lights on in both rural and urban Alaska. In Southcentral, Cook Inlet Region Inc. is nearing the power-up date for its new wind farm on Fire Island. Three miles west of Anchorage, Fire Island Wind LLC, a subsidiary of CIRI, has begun pre-construction of an 11-turbine wind field that is anticipated to supply about 51,000 megawatt

hours of power to Chugach Electric Association every year. “We’ve closed with our lender, done all the predevelopment and development activities—been approved by the Regulatory Commission of Alaska, by Chugach—we have all our significant permits,” said Ethan Schutt, senior vice president of Land and Energy Development for CIRI. “We have all our project contracts and have ordered the turbines.” CIRI’s general contractor, Delaney Group, is the same company that built the Kodiak wind farm, according to Schutt, and Delaney will be

doing the on-island work. Although a large, national firm, Delaney has a long list of local subcontractors. Other local contractors have already begun transmission-line construction and additional transmission-line work will occur over the winter when frozen ground helps protect some of the more sensitive land areas. “The biggest push on construction should begin in April,” Schutt said. “The transmission line is well under way and the turbines will arrive by ship and be erected over the summer. We should have our first commercial power by late 2012.”

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

Chugach will be the sole purchaser of the wind-farm power, Schutt said, and the two have signed a 25-year, fixed-rate contract. The Fire Island project will supply about 4 percent of Chugach’s load, or enough electricity to power 6,000 Southcentral households. “The cool thing,” added Jim Jager, CIRI’s director of Corporate Communications, “is that it doesn’t run out after 25 years.” Jager said the cost of wind-generated power is free from fuel-price fluctuations from market conditions or supply disruptions, unlike power generated from natural gas. The anticipated price tag for CIRI’s wind farm is about $65 million, with more than $18 million coming from American Recovery and Reinvestment Tax Act of 2009 tax credits and $25 million coming from a state appropriation for submarine and mainland transmission infrastructure.

SEEKING ALTERNATIVE SUPPLIES CIRI also has its eye on a larger energy product, although it’s much further down the road. It’s an underground

coal gasification project across Cook Inlet from Anchorage. Another subsidiary of CIRI, Stone Horn Ridge LLC, is working to develop the project as early as 2015, and geologic and hydrologic studies are under way. “We’re finishing the first of the predevelopment phases now,” Schutt said in late 2011. “Our next phase is to more closely refine the data. Sometime next year, we should start the potential project design and permitting. “If and when it’s built,” Schutt added, “it will be one of the first underground coal-gasification projects in North America. When you’re the first of anything, everything takes longer, but we think our coal has worldclass potential.” Another wind farm project is moving forward southwest of Fairbanks at Eva Creek, near Healy. Golden Valley Electric Association anticipates it could be the largest wind project in Alaska as well as the first built by any Railbelt utility. As currently envisioned, Eva Creek will produce 24 MW of power from 12 turbines – meeting the utility’s goal of generating 20 percent of its peak load

from renewable resources by 2014. It’s also forecast to save members money on their electricity bills. According to the utility, it could save $13.6 million over the next 20 years, assuming oil prices of $90 per barrel. GVEA said the wind farm should displace 76,686 MW hours of oil energy annually and would be owned and operated by the utility itself. Capital costs for the wind farm are projected to be less than $90 million, and GVEA anticipated construction to begin in May and come online in the fall. A second project under GVEA’s belt now is the restart of its Healy Clean Coal Plant, which could save the utility more than $2 million per month in fuel costs. When operational—GVEA officials said they hope that will happen in 2012—the plant could provide 50 MW of competitively priced power to the Railbelt.

FINDING ENERGY SAVINGS While Chugach Electric is anticipating some additional electricity from the CIRI wind farm this fall, it isn’t counting on that alone to help its customers.

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

The utility has teamed up with the Municipality of Anchorage’s Municipal Light & Power to build a new, more energy-efficient power plant. “We began looking at configurations of power plants that might be beneficial back in 2004,” said Paul Risse, Chugach’s senior vice president for Power Supply. “We had the option of doing upgrades to existing units that were in the tens of millions of dollars or of building a new power plant. The economics won out, and we chose to build the new plant,” Risse said. Chugach and ML&P jointly performed a siting study in 2007, initially looking at six potential sites. These were narrowed down to two—Chugach’s main headquarters or ML&P’s Plant 2. Chugach’s main headquarters plan won the call, and the project began moving forward. “Once the site was chosen, Chugach also began participant negotiation,” Risse said. “We negotiated with ML&P, Matanuska Electric and Homer Electric associations, but MEA and Homer both decided to pursue other options.” The two power plant owners contracted with SNC-Lavalin Constructors Inc., based in Bothel, Wash., to provide engineering, procurement and construction services for a 183-MW, natural gas-fired, combined-cycle thermal power plant. In late March 2011, Chugach and ML&P broke ground for the new Southcentral Power Project adjacent to Chugach’s main plant near International Airport Road and Minnesota Drive in Anchorage, and have dozens of local subcontractors working on the project. At the project’s peak, Chugach estimated that there would be about 250 construction jobs. The new power plant will be built at a cost of $369 million, which will be shared between the two owners—70 percent by Chugach and 30 percent by ML&P. “The SPP will have three gas turbines and one steam turbine,” Risse said. The steam turbine can utilize the hot exhaust from one, two or all three of the gas turbines—thus recycling waste heat produced by the gas turbines and putting the energy back into the grid. When operational, the SPP will use only about three-fourths of the natural gas needed to make a kilowatt hour of

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

The addition of the steam turbine and generator will nearly double the current output of the plant, providing Homer Electric with 80 megawatts of power. energy compared to the best units on the Chugach system today, said Phil Steyer, director of Government Relations & Corporate Communications for Chugach. Risse also pointed out that the new plant will reduce emissions—the production of both nitrogen oxides and carbon dioxide will be substantially less from the combined-cycle plant than they are from current generation. Anticipated completion date for the SPP is Dec. 1 of this year, when the plant will be handed over to its two owners and placed into service. “It will reduce the generation of power from Beluga,” said Risse. “We’re not getting rid of the generating units we already have, but we will use the more energy-efficient units

first. Then, as we need more power, we’ll go to the less-efficient units. They will simply run less.” In terms of electric bills, customers see two primary kilowatt-hour components, Steyer added. “We charge customers for the fuel to make power in one portion of the bill and the other portion covers everything else. The ‘everything else’ part of the bill will go up because that’s the portion that pays for the cost of the new plant, but the portion for fuel will go down. We’re hopeful that these two things will largely offset each other but we really won’t know until later in 2012. In part,” he said, “it will depend on the price of gas when the new power plant comes online. Based on gas prices today, we would expect to save about $27 million in its first full year of operation from avoided fuel costs.” Risse also added that Chugach and ML&P have sized and designed flexibility into the new power plant to more readily accommodate additional hydro or other types of generation in the future.

NIKISKI UPGRADES UNDER CONSTRUCTION Homer Electric Association provided an update on its Independent Light Project and reported that the Nikiski site is being readied for turbine and generator installation. The utility’s Independent Light power generation plan is in full swing with progress being made on several fronts. The focus right now is on the Nikiski Combined Cycle Conversion (NCCC) Project. The key component of the project is the addition of a steam turbine and generator at the current HEA generation plant, adjacent to the inactive Agrium facility in Nikiski. The addition of the steam turbine and generator will nearly double the current output of the plant, providing Homer Electric with 80 megawatts of power. Currently, NORCON crews and subcontractors are on site constructing both the air cooled condenser and the building for the steam turbine and generator. The steam turbine and generator were delivered to the site in November 2011. Power Constructors Inc. completed

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

work on the plantâ&#x20AC;&#x2122;s new substation components and it will undergo final commissioning later in 2012 when the steam turbine is ready to start up. The NCCC Project is scheduled to be completed in the fall of 2012.

MOVING ELECTRICAL ENERGY After an electrical utility produces the power, it has to move through transmission lines to arrive at homes and businesses across the state. Gabriel Marian, president of City Electric, said his company has worked to upgrade transmission lines at a variety of sites in Alaska. Currently, City Electric is working for MEA on the Teeland-Reddington transmission line and has a subcontract to bury the overhead transmission lines as a part of the West Dowling Road, Phase II project. City Electric is an Anchorage-based company with offices in Fairbanks and Snohomish, Wash. The company provides electrical construction; outside plant telephone and installation services; fiber optic systems installation, splicing and testing; outside plant power systems for distribution and transmission, both overhead and

underground; and directional drilling. Two City Electric department managers, Marvin Pickens and Sean Wilson, talked about the two projects. â&#x20AC;&#x153;MEA is upgrading from 34.5 kV to 115 kV lines,â&#x20AC;? Pickens, City Electricâ&#x20AC;&#x2122;s lineman department manager said, â&#x20AC;&#x153;and thatâ&#x20AC;&#x2122;s partially driven by the new prison. We finished that job in November. â&#x20AC;&#x153;It was interesting because we had to keep the 34.5 kV lines energized from the Point McKenzie Road south because thereâ&#x20AC;&#x2122;s only one feed into the homes in that area,â&#x20AC;? he added. â&#x20AC;&#x153;So we got the new poles in, pulled the new 115 kV wire and energized the new line. When the Reddington Substation is complete in the early spring, weâ&#x20AC;&#x2122;ll go back to finish the job. Weâ&#x20AC;&#x2122;ll swap the remaining 34.5 kV lines onto the 115 kV lines.â&#x20AC;? Pickett also said City Electric recently completed a job in Juneau, putting seven breakaways into the lines from the Snettisham Hydroelectric Project to help avoid damage from avalanches. Another job the company is

currently working is one for the new Southcentral Power Project at Chugach Electric. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a little piece of the joint power house for Chugach and ML&P. The transmission will come from the new switch yard at Chugach. Weâ&#x20AC;&#x2122;re putting in transmission poles and building a short double circuit out to pick up the ML&P line,â&#x20AC;? Pickett said. On the Dowling Road job, Pickens said the company began in January moving overhead lines to under ground and out of the way of the new road projects. Wilson, City Electricâ&#x20AC;&#x2122;s inside wireman department manager, said his current jobs include all the electrical work on the high tower lighting, parking-lot lighting, electrical and communications underground work with ductbanks and manholes under a subcontract to G2 Construction for the Joint Base Elmendorf-Richardson rail yard. â&#x20AC;&#x153;We anticipate this job to finish by the end of August,â&#x20AC;? he said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve installed the high tower foundations and will go into a winter shutdown until spring. It will be completed â?&#x2018; next summer.

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ February 2012

RIGHT MOVES Compiled by Nancy Pounds ALASKA MUSIC EDUCATORS ASSOCIATION

The Alaska Music Educators Association chose Barbara Nore of North Pole Middle School as Alaska Music Educator of the Year. Nore began her career at the Fairbanks North Star Borough School District in 1984 and joined North Pole Middle School in 1992. She has taught various classes besides orchestra and band, including French, technology and math. She also has led students on various trips to Juneau, New York City and Washington, D.C.

USIBELLI COAL MINE INC.

Robert Brown was chosen the new vice president for Usibelli Coal Mine Inc.’s Southcentral operations. Brown previously served three years as project manager for the company’s Wishbone Hill coal mining project north of Palmer.

KEYBANK

Ryan Edwards joined Ke y B a n k ’s p r i va t e banking group based in Anchorage. He previously served as a business banking relationship manager with KeyBank. He has more than 10 years of experience in the financial s e r v i c e s i n d u s t r y. Edwards Travis Frisk earned the Certified Wealth Strategist designation from Cannon Financial Institute. Frisk is senior vice president and market manager for Key Private Bank in Alaska. Frisk joined KeyBank in 1997 as the branch manager of the Benson Center and was promoted to Key Private Bank in 1998. He has held several posts in the past 13 years, culminating in his promotion to market manager in 2005. Bart Nikoniuk was hired as business banking relationship manager in Anchorage. He has seven years of banking and management experience, including business banking and branch management for JP Morgan Chase in Chicago.

GEONORTH LLC

Dave Bush earned the Project Management Professional designation given by Project Management Institute. Bush is senior software architect at GeoNorth LLC.

FIRST NATIONAL BANK ALASKA

YWCA WOMEN OF ACHIEVEMENT

The YWCA of Anchorage honored several Alaskans at the annual BP-YWCA Women of Achievement Awards in December 2011. Honorees are Janet-Carr Campbell, Barbara Dubovich, Charlotte Fox, Kari Hall, Laurie Herman, Chanda Mines, Sophie Minich, Leslie Nerland, Sompan Reinhardt and Janice Tower.

B2 NETWORKS LLC

Paul Rieland was hired as marketing director for B2 Networks LLC. Rieland has more than 20 years of sales and marketing experience.

CALISTA CORP.

Teresa Peterson was chosen controller for Calista Corp. Peterson most recently worked for General Communication Inc. Helen Bush was hired as tax director. Bush served as vice president of finance for the Association of Village Council Presidents and ran her own company in Anchorage, Bush Professional Services LLC.

SOUTHEAST ALASKA REGIONAL HEALTH CONSORTIUM

Cal Curt joined the medical staff at SouthEast Alaska Regional Health Consortium’s Hoonah Health Center. Curt is a family nurse practitioner. He previously served 22 years in rural clinics in northern New Mexico. He most recently worked for the El Centro Family Health-Dunham Clinic in Chama, N.M. Ken Hoyt was hired to manage SEARHC’s WISEFAMILIES Through Customary and Traditional Living program in Wrangell. Hoyt is finishing a bachelor’s degree in Native American studies from Evergreen State College in Olympia, Wash.

Morlan

Diana Morlan and Louis Ulmer were appointed senior business development officers at First National Bank Alaska. Morlan has worked for the bank since 2000. She supervises the business development group in the cash management services unit. Ulmer is also part of the business development unit. He has more than nine years of banking experience.

ANCHORAGE ECONOMIC DEVELOPMENT CORP.

G Glenn

Ruth Glenn was appointed development director for the Anchorage Economic Development Corp. Glenn previously ran her own company, G&N Creative. She has also served as executive director of Alaska Dance Theatre.

ANCHORAGE CHAMBER OF COMMERCE

Harrier

WORK TEGEATHM ER WE TO GET THE JOB DONE

Ul Ulmer

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

J.J. Harrier was promoted to vice president of the Anchorage Chamber of Commerce. Harrier joined the Chamber in 2008 as communications coordinator. He most recently served as communications director.

RIGHT MOVES

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DENALI ALASKAN FEDERAL CREDIT UNION

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RIM ARCHITECTS

Melissa Falcone joined Denali Alaskan Federal Credit Union as marketing officer. Falcone has more than two years of financial industry experience. She previously served as a personal banker at Wells Fargo Bank in Alaska.

ASRC FEDERAL HOLDING CO.

Ridenour

UNIVERSITY OF ALASKA FOUNDATION

The University of Alaska Foundation elected new officers at its annual meeting. Anchorage businesswoman Jo Michalski was elected vice chairwoman. Eric Wohlforth, attorney and senior partner of Wohlforth, Brecht, Carltledge & Brooking in Anchorage, was elected vice chairman of the board. Susan Anderson of Anchorage, president and chief executive of The CIRI Foundation, was elected secretary. They will serve until November. New trustees are Scott Jepsen of Anchorage, vice president for external affairs, ConocoPhillips Alaska Inc.; Jim Johnsen of Fairbanks, senior vice president of human resources, Alaska Communications; Frank Paskvan of Anchorage, viscous oil renewal team leader, BP Exploration (Alaska) Inc.; Marilyn Romano of Anchorage, regional vice president for Alaska Airlines; and Anand Vadapalli of Anchorage, president and chief executive, Alaska Communications. Longtime Fairbanks resident Carolyne Wallace was re-elected for a third term.

KPMG LLP

Julie Schrecengost was promoted to director in the tax practice at KPMG LLP’s Anchorage office. Schrecengost serves publicly held and privately held clients, and focuses on Alaska Native corporations and nonprofit organizations. Teresa Newins was chosen as a partner for the firm. Newins is a member of Anchorage office’s tax practice. She specializes in U.S. corporate, partnership and exempt organization taxation.

master’s degree in civil engineering in 2008 from the University of Colorado. He is a project engineer and superintendent for the company. Walton Crowell was promoted to construction manager for Brice. He has worked as a superintendent for the company since 2008.

L Logelin li

Tim Ridenour and Molly Logelin earned the Revit Architecture 2012 Certified Professionals designation. The designation recognizes industry professionals’ skills using Autodesk Revit 2012, architectural building information modeling software. Ridenour and Logelin work for RIM Architects.

ASRC Federal Holding Co. appointed William Hassler as senior vice president of business development. ASRC Federal, based in Greenbelt, Md., is a subsidiary of Arctic Slope Regional Corp. Hassler previously served as vice Hassler president of business development for ASRC Management Services, an ASRC Federal subsidiary.

PDC INC. ENGINEERS

Patrick Cotter earned the Certified Planner designation from the American Institute of Certified Planners. Cotter is a transportation planner for PDC Inc. Engineers in Fairbanks. The American Planning Association’s Professional Institute offers the certification.

USKH INC.

Will Webb earned certification as a Professional Traffic Operations Engineer. Webb is an associate at USKH Inc., where he has worked since 2004. His current projects are Safe Routes to School Study for the Cordova School District, and projects for the Alaska Department of Transportation and Public Facilities, including installing flashing yellow arrows at traffic signals in Anchorage and designing a new roundabout on Glacier Highway in Juneau.

BRICE INC.

Marcus Trivette and Jeff Oshnack earned their professional engineer’s registration for Alaska. They work at Brice Inc. Trivette is a project manager who has worked for Brice since 2004. He earned a bachelor’s degree in civil engineering from the University of Alaska Fairbanks in 2010. Oshnack earned a

WHPACIFIC

Julia Hanson and Sterling Strait earned the state civil engineering professional registration. Hanson, who works for WHPacific in Anchorage, has designed several rural roadways in Alaska. Strait earned a master’s degree in civil engiS i Strait neering from the University of Alaska Anchorage. Strait recently provided structural design and construction inspection for the new four-story Nullagvik Hotel in Kotzebue.

ARCTIC SLOPE REGIONAL CORP.

Crawford Patkotak of Barrow was elected chairman of the Arctic Slope Regional Corp. board of directors. He replaced longtime board chairman Jacob Adams, who resigned after being appointed chief administrative officer of the North Slope Borough. Patkotak is vice president of shareholder and community programs for ASRC. ❑

YOU CAN ALWAYS COUNT ON OUR TEAMWORK FOR FAST, RELIABLE, SHIPPING SERVICE. As a proud sponsor of the 2012 Iditarod and champion John Baker, we wish all mushers a safe and successful race.

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

TRANSPORTATION

Port of Tacoma Primary port for goods moving to Alaska

Photo courtesy of the Port of Tacoma

BY DIANNE O’CONNELL

Alaska-bound cargo on a Horizon Lines barge at the Port of Tacoma.

he Port of Tacoma is not only the point of departure for the vast majority of the goods entering the state of Alaska by sea, it is also key to a vital and vibrant sup-

ply chain relationship that flows both ways. In fact, Alaska is the Port of Tacoma’s third largest trading partner in terms of dollar value, after China and Japan, accounting for t $3 billion worth

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

of trade annually out of $31 billion of total trade in 2010. “Alaska cargo moving through our port can be two or three times more valuable to our local economy than international containers and cargoes,” says Port of Tacoma Commissioner Don Meyer, “because of the local jobs created when the goods are loaded and offloaded, the trucking and other services required and the deep roots many of the employees have in the Tacoma area.” Meyer served as deputy executive director for the Port of Tacoma from 1985 to mid-1999. From 1999 to 2010, he was executive director of the Foss Waterway Development Authority and in 2010 he was elected to the port commission. The Port of Tacoma is an independent municipal corporation created in 1918 by the citizens of Pierce County, Wash. It is governed by a five-member commission elected at-large by county voters.

ALE ALLEGORY In his capacity as commissioner, Meyer visited Alaska last September to speak at the Alaska State Chamber of Commerce Annual Conference in Talkeetna. As an example of Alaska-Tacoma interrelatedness, he told Alaska State Chamber members the story of how the Port of Tacoma played a key role in getting Ice Axe Ale beer served at the West Rib Pub in Talkeetna and into their hands the evening before. True, the beer was brewed at Glacier Brewhouse in Anchorage, but the brewery ordered the hops from Yakima, Wash. Pacific Alaska Freightways put them on a truck in Eastern Washington and sent them to the Port of Tacoma. The brewer also ordered honey from Wisconsin for the specialty beer. At the Port, those hops, honey and lots of other things, from food and medical supplies to building materials and cars, were loaded onto a ship for transport to Alaska. Horizon Lines and Totem Ocean Trailer Express (TOTE) have multiple sailings a week between Tacoma and Anchorage. Much of what Alaskans eat, wear and drive comes in on those ships. The trip took about three days from Tacoma to Anchorage, where the cargoes were unloaded. It’s all part of a remarkable year-round “supply chain choreography,” Meyer says. Once www.akbizmag.com • Alaska Business Monthly • February 2012

Tacoma and Alaska not only share goods and services, but they also share many of the same challenges in terms of today’s economy. “Tacoma never takes its relationship with Alaska for granted,” Meyer says. “We agree with Alaska Governor Sean Parnell when he said, ‘When Alaska prospers, Tacoma prospers.’ The success of the Tacoma-Alaska relationship is also

The Alaskan trade factor and exchange of information between the two communities is so important to the Port of Tacoma it has had a special Alaska consultant on contract since 1986. Shari Gross Teeple held the position for 25 years before retirement. The port se-

MUTUALLY BENEFICIAL RELATIONSHIP

based on understanding each other’s needs. For instance, it is important to support policies which stand to improve the logistics chain at both ends. It is one thing to improve the efficiency at the Port of Tacoma, for instance, but it is also important for the Port of Anchorage facilities to be efficient and reliable if we really want to make it all work together.” Parnell visited the Port of Tacoma last September and led an informal discussion with many of the local businesses involved in Alaska trade and transportation: Carlile, Horizon, Lynden, The NorthWest Co., Schnitzer Steel, TOTE and others. On the same visit, Parnell spoke to the Transportation Club of Tacoma’s luncheon Sept. 12, 2011, drawing more than 270 attendees, the club’s largest turnout ever.

Port of Tacoma With Mount Rainier In background at dusk.

the hops made the Yakima-TacomaAnchorage journey, a truck delivered them to the Glacier Brewhouse where the brewer proceeded to make the beer. Once the beer is produced, kegs of Ice Axe Ale, and other types of beer, are sent all over the state. Alaska Air flies the kegs as far as Nome; Horizon ships them to Kodiak; and many trucking companies deliver them all over Southcentral and the Interior. Glacier Brewhouse reports they have beer on 400 to 500 taps around the state. “The Port of Tacoma is proud to play a key part in the overall supply chain

that helps ensure that Alaskans can both make and drink excellent beer,” Meyer grins.

SPECIAL ALASKA CONSULTANT

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

lected Karen Matthias last summer to take over that assignment. Matthias is based in Anchorage and brings to the position considerable experience and visibility with the Alaska business and government communities. She was the Consul at the Consulate of Canada in Anchorage from 2004 to 2009 and had previously worked for 10 years with the Canadian Department of Foreign Affairs and International Trade. The Alaska consultant’s job is to promote the value of Tacoma within the Alaska business community and to provide the Port of Tacoma with an Alaska perspective on economic and transportation issues.

BUSINESS CONNECTIONS Thanks to at least two major shipping lines and allied companies, it is the Port of Tacoma, not Seattle that has more trade with Alaska. “Totem Ocean Trailer Express (TOTE) started its Seattle to Anchorage service in 1975 out of the Port of Seattle,” Meyer explains. “But in 1976, TOTE moved its operations to the Port of Tacoma. With that move, our port

emerged as a ‘Gateway to Alaska’ and that supply chain and business connections have continued to grow over the years.” Much of the credit for this switch goes to the energetic leadership of Tacoma’s longshore work force, Local 23 of the International Longshore Workers Union. “They understood the importance of growth for both the port and the union,” Meyer says, “and it was they who approached TOTE and said, ‘If you come to Tacoma, we can commit to a highly trained and productive work force to make it profitable.’ “The port corporate strategy was to develop its international side, but to never lose sight of the importance of its relationship with Alaska,” Meyer adds. “The port had a lot to offer potential partners, the diversified business activity in the area, the abundance of industrialzoned land for expansion and staging operations, the skilled, committed labor force, easy highway and rail access, and the capital to develop facilities.” In 1985, a second major shipping line relocated its operations to Tacoma—what was then Sea-Land and now Horizon

Lines. The two large shipping lines (TOTE and Horizon) have served as a magnet for many other companies involved in Alaska business, trade and logistics to migrate to the Tacoma/Pierce County area around the port. Key companies include Americold, American Fast Freight, Carlile, Lynden, The NorthWest Co., Odom Corp. and Trident Seafoods, which has a vessel maintenance and repair facility at the port.

ABUNDANT LAND Availability of land was a key factor, especially for the oil and gas field operations during the trans-Alaska oil pipeline construction and North Slope development days. The port has 2,400 acres of land, and more than 400 still available for development. The land is used for shipping terminal activity and warehouse, distributing, and manufacturing. For example, during the pipeline construction era, space was needed to assemble large module buildings for use on Alaska’s North Slope. More than 300 modules were built for this project in the ‘70s and ‘80s on land in the port area. The

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

finished modules, some weighing more than 2,000 tons and standing 10 stories high, were welded to barges and shipped to Prudhoe Bay. One of the more recent companies to relocate to the Tacoma/Pierce County area is the NorthWest Co., which operates the Alaska Commercial (AC) stores in rural Alaska. The company leases warehouse space at the port for its staging and packaging operations for goods going to various destinations throughout rural Alaska.

INTERMODAL ACCESS Tacoma’s port offers on-dock and neardock rail service from all port terminals via BNSF Railway and Union Pacific Railroad to key Midwest and East Coast destinations. The port also offers a highvelocity domestic intermodal yard located next to the port terminals and a designated heavy-haul truck corridor designed to expedite movement of overweight containers between port terminals and transload facilities, of which there are more than 20. Outstanding intermodal operations, connections to two transcontinental

railroads and easy access to interstates 5 and 90, and state roads 509 and 167 make the port an ideal location for warehouse and distribution activities. More than 60 percent of the port’s international import container cargo heads east via rail to major markets, such as Chicago, Indianapolis, New York and Boston.

PRODUCTIVE UNION WORK FORCE But again, it’s the work force and positive labor relations that make a major difference. “The Port of Tacoma has one of the most productive longshore labor forces on the U.S. West Coast,” says Rod Koon, Port of Tacoma senior manager of communications. “We could not maintain the efficient and reliable operations that we have without the skilled longshore workers of Local 23.” Over the years, many longshore workers have also served as port commissioners. One of the port’s current commissioners, Dick Marzano, has worked as a Tacoma longshore worker for more than 36 years and served as president of Local 23 for six years. He

was elected to the port commission in 1995, ensuring even stronger communication and cooperation. “Productivity and speed of delivery and turnaround is a key to our success,” Koon added. “Since Tacoma is south of Seattle, it takes a ship one-anda-half hours longer to travel to Tacoma, true, but it is not sailing time that tells the whole story. It is the ship’s time at the port, terminal efficiency and longshore productivity that makes the difference between getting the fresh milk on the shelves in Alaska in a timely fashion or not.”

TIDES AND TIMING “Alaska provides special challenges, which require special knowledge and skill,” Koon continued. “Take the tides in Alaska’s Cook Inlet, which are some of the most extreme in the world. Shipping lines have to schedule arrival of the ships to match those tides. The timing is critical. The longshore workers have to get the cargo on and off the ships fast enough so that they can arrive and depart during the right window of time for the tides.” ❑

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

Port of Seattle Impacts Alaska

Photo by Don Wilson

BY DIANNE O’CONNELL

Delivering Your Construction Needs

Port of Seattle

eattle has served Alaska’s supply needs since before it was a territory and the Port of Seattle continues to be the departure point for a respectable share of Alaska’s shipping tonnage. In 2007 (the year of the most recently published impact study), 22 million metric tons of cargo moved over marine facilities owned by the Port of Seattle, of that total, 1.9 million tons of containerized cargo moved to and from Alaska, plus about 1.2 million tons of petroleum products. The Port of Seattle is homeport for Alaska Marine Line, Northland Services and other companies focused on Alaska.

CRUISING ALASKA “One hundred ninety-five vessels, with 885,949 passengers, left Seattle bound for Alaska in 2010,” says Linda Styrk, managing director at the Seattle Seaport. “We estimate 201 vessels with 880,918 passengers for 2012. Most of those head for the Inside Passage where the economic impact is felt in communities like Ketchikan, Sitka, Juneau and Petersburg. That’s quite an increase from 1999, when six vessels carried 6,615 passengers to your state.” The Bell Street Pier Cruise Terminal at Pier 66 anchors an 11-acre complex along Seattle’s downtown waterfront. It is home to Celebrity Cruises and Norwegian Cruise Line, which offer weekly sailings to Alaska. Seattle’s new cruise terminal at Pier 91 is located at Smith Cove and is home to Carnival, Disney, Holland America Line, Princess Cruises and Royal Caribbean International. The Seaport Division encompasses the port’s four container terminals, two cruise ship terminals, one grain terminal, container support facilities and commercial moorage.

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WHERE FISHING BOATS GO “In addition to the cruise industry,” Styrk says, “the Port of Seattle is homeport for 90 percent of the commercial fishing vessels working Alaska waters, and for the Alaska factory trawler league.” More than 250 fishing boats are moored at Fisherman’s Terminal at Pier 91, including purse seine vessels, gillnet boats, trollers, longline vessels, crab boats, catcher trawlers, factory trawlers, processors and tenders. The terminal is owned and operated by the Port of Seattle. While tied up there, crews make use of nearby shipyard repair services, maritime facilities and supply outlets. Similar purchases are made by the 58 fishing vessels homeported at Terminal 91, of which 43 are catcher/processor vessels. There are also three factory trawlers/processors moored at the Maritime Industrial Center. “The fishing fleet and the cruise ship business are extremely complimentary,” Styrk says. “The months when the catcher/processors are out fishing are the months when the cruise ships are in. When the cruise ships are out the fishermen are back. It works well. Tour companies have started taking visitors to see the vessels from the “Deadliest Catch” television series when they are in port, too.” ❑

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

OIL & GAS

BP Exploration (Alaska) Inc.

Photos courtesy of BP

Prudhoe Bay drill site and landscape.

Building on more than 50 years of success BY VANESSA ORR

products and petrochemicals; transportation and marketing of natural gas; and a growing business in renewable and low-carbon power and next-generation energy technologies. In 2010, BP Exploration (Alaska) Inc. invested approximately $2.1 billion in the state. “Our capital investment was about $810 million and the operating budget was approximately $1.3 billion,” said Steve Rinehart, spokesman for BP Alaska. “We spent almost $1.7 billion with Alaska companies that year.” This investment includes supporting a local work force, with BP consistently employing Alaskans as more than 80 percent of its staff over the

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

n 1959, BP opened its first Alaska office in Anchorage and its first team of geologists and engineers arrived the following year. Over the next half-century, the company continued to thrive and now employs approximately 2,100 people in Alaska between its downtown headquarters in Anchorage and operations on the North Slope. With operations in more than 100 countries across six continents, including significant operations in Alaska and the Lower 48, BP is one of the world’s largest energy companies. Its main businesses include exploration and production of oil and gas; refining, manufacturing and marketing of oil

last five years. “It makes all kinds of business sense to hire locally and employ locally rather than bring in people from Outside,” said Phil Cochrane, vice president, External Affairs, BP Alaska. “If the skill sets that we need can’t be found in the state, we invest in training; we invest heavily, for example, in the University of Alaska.” By providing significant training opportunities for Alaskans through scholarships, internships and direct support to the university, BP and the state’s work force come out ahead. “We recruit more graduates from the University of Alaska than from any other school,” Cochrane said.

DEVELOPING RESOURCES While the company is headquartered in Anchorage, the majority of its resource base is found on the North Slope. BP operates 15 North Slope oil fields, four North Slope pipelines, and owns a significant interest in six other producing fields. In 2010, the company’s gross production rate from these fields was approximately 520,000 barrels of oil equivalent (BOE) per day; net production equaled approximately 166,000 BOE a day. “The good Lord blessed this area with abundant resources, and from BP’s perspective, it is one of the most promising areas in our portfolio,” said Cochrane. “There are still about 6.5 billion barrels of known resource on the North Slope; unfortunately it will be very expensive and technically challenging to get to.” BP is exploring new ways to develop these remaining resources, which include heavy and viscous oil, light oil from smaller, more remote fields, and natural gas. “Our primary focus in Alaska is finding ways to develop the significant oil and natural gas resources we have already discovered on the North Slope,” Rinehart said. “While not exploration in the conventional sense, this is challenging and exciting work that incorporates new and adaptive technologies, and it is paying off. An example of this would be our worldclass oil recovery rates at Prudhoe Bay, which are headed toward 60 percent.” When production first started at the Prudhoe Bay field, the recovery rate for the 25 billion barrels of oil in place was only expected to reach 40 percent. In 2010, the Greater Prudhoe Bay Area produced more than 350,000 barrels of oil equivalent per day; net production equaled approximately 73,000 BOE per day. The company is using a number of new and innovative technologies to reach these resources, including 3-D seismic imaging; innovative drilling techniques; using carbon dioxide for enhanced oil recovery; and LoSal and Brightwater polymer technology, both trademarked by BP. LoSal is a new way to “waterflood” oil fields based on BP’s discovery that lowering the salinity of the water injected into a reservoir can better displace oil. Brightwater works www.akbizmag.com • Alaska Business Monthly • February 2012

BP Heavy Oil pilot project facility at Milne Point.

with a polymer that is injected into the reservoir, expanding into the rock and sweeping out the remaining oil. Innovative drilling techniques, which include coiled tubing drilling,

extended reach drilling and ultra extended reach drilling (UERD) are also helping the company to recover more of the resource. In 2010, BP Alaska set a world record in coiled tubing drilling

with a measured depth of 22,461 feet at its Milne Point field on the North Slope. “Alaska has a reputation within BP, and in the business more broadly, as an incubator for new ideas and oilfield technologies,” Rinehart said. According to Cochrane, while the use of new technologies may provide a way to get more difficult resources out of the ground, it is not the only catalyst needed. “We have really significant opportunities in the state, but also really significant challenges,” he said. “Ideally, we need the right policy environment in place to encourage the development of these resources. The investment climate in this state is discouraging. We are not able to go after the resource because it is not competitive in our portfolio.” Cochrane likens the process to a conveyor belt. “First you explore, then you discover and then you produce,” he said. “And while Alaska provides great incentives to explore, there needs to be more meaningful tools in place to push these finds into production.” Cochrane credits Governor Sean Parnell for working to change oil

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

production taxes in the state, and the state House for passing legislation to provide what he considers a more competitive tax regime that will encourage investment. “Working together, I believe these significant resources in the ground can be produced, providing Alaska with revenue and jobs, and giving state government the ability to invest in the infrastructure of the state,” he said. “Exploration is important, but achieving an economic environment where the resource can be produced with a solid business case is crucial,” added Rinehart. “We’ve done a lot of exploration and identified a lot of opportunities; we’d like the state to help us open the doors needed to get these resources into production.”

CORPORATE CITIZENSHIP In addition to researching better ways to develop resources, BP is also finding new ways to improve safety and performance at its facilities. “Over the past few years, we have adopted a company-wide operating management system based on principles of

risk reduction and continuous improvement,” explained Rinehart. “We have also applied more resources— staff and capital investment—toward the renewal of our North Slope infrastructure. This includes inspections, equipment replacements and major facility upgrades.” A more than $1 billion investment in four double-hulled Alaska-class tankers has been made to ensure North Slope oil is transported to West Coast locations in the safest way possible. The largest double-hulled tankers ever built in the United States, these ships set new standards in technology and environmental performance, including complete redundancy in the propulsion, navigation and communications systems. Diesel electric engines reduce emissions, and seawater is used to lubricate the propeller shafts in order to eliminate the risk of an oil release into the environment. In conjunction with its commitment to preserving Alaska’s environment, BP is also investing in improvements within the communities it serves. “BP really wants to be a part of the fabric of

these communities,” Cochrane said. “In 2011, the company contributed somewhere north of $7 million to causes large and small across the state.” Last year, BP employees also volunteered more than 6,000 hours of their time to community causes. The BP Foundation oversees a matching funds program for employees who make contributions of money, gifts and time to charitable organizations. “Through our Fabric of America Fund, every BP employee is allocated $300 that they can give to any charity that they want,” Cochran said. “Though this program is available across the country, in Alaska, it is one of the most used.” For more than 50 years, BP has played a large part in the development of the Last Frontier, and this shows no signs of changing. “It all comes back to partnership—industry, government and communities working together to solve issues for a common purpose; to meet common goals,” Cochrane said. “Given this environment, I see another 10, 20, 30, 40, 50-plus years of opportunities available here; we have ❑ a very bright future.”

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

OIL & GAS

North Slope Pipeline Integrity Revamping aging infrastructure BY MIKE BRADNER

n 2006 the reality that the North Slope oilfields are aging hit Alaskans with a shock. A series of spills in the Prudhoe Bay field, caused by corrosion of infield pipelines, caused a partial shutdown of the state’s largest oil field for several weeks as the field operator, BP Exploration (Alaska) Inc. scrambled to build a temporary pipe bypass system to get the field running again. Aerial view of oil gathering lines alongside a dirt road at Prudhoe Bay's Kuparuk Field. ©2012 Chris Arend/AlaskaStock.com

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

Alaska depends on North Slope oil for about 90 percent of its state revenue and the shutdown caused a dent in income to the treasury. This was an immediate concern to then-Governor Frank Murkowski and the Legislature, but it also brought home the dependence of the state’s finances, and a good part of its economy, on aging decadesold infrastructure used to produce and transport crude oil. The quick reconfiguration of the piping to get Prudhoe Bay oil flowing again was an outstanding engineering achievement by BP, as was the large pipe replacement system that came in the months that followed, but these achievements were overshadowed by the fact that the accidents had occurred in the first place.

UNEXPECTED CORROSION The spills caught the North Slope oil producers off guard, too. The source of the corrosion was unexpected, mainly sediment that had accumulated because of the low velocity of oil in the pipe. The sediments created an environment for bacteria and the cre-

ation of acids, resulting in corrosion. Critics argued later, in hindsight, that these should have been foreseen. There was finger-pointing by politicians and claims that years of industry budget-cutting at times of very low oil prices had starved oilfield operators’ maintenance budgets. Still, the fact that highly-trained engineers did not anticipate the unusual mix of conditions that led to the corrosion happening in places where it wasn’t expected. BP is the Prudhoe Bay field operator and took the brunt of the criticism in 2006 along with federal criminal penalties, but the blame can be spread more widely. Prudhoe Bay is owned by all of the major companies with interests on the North Slope, and technical committees of all the owner companies closely monitor actions of the operating company and approve budgets. If spending cuts on maintenance set the stage for the corrosion, all the owners share blame. In reaction to the spills the Legislature took a punitive step in disallowing 30 cents per barrel in operating cost reductions from the state’s production

tax, which is a net-income type tax. Lawmakers argue that the 30 cents per barrel represents maintenance costs, although there is no evidence that the amount is correct. Legislators did not want to allow maintenance as a deduction in determining the amount of production tax due to the state. However, in the aftermath of the spills it became apparent that government agencies should increase their maintenance oversight. For example, federal pipeline agencies that oversee large pipelines like TAPS had no authority over in-field pipelines, like the ones that leaked, or the flow lines from wells to the field processing plants. As a consequence of the spills, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration, or PHMSA, moved to extend its authority and rules over in-field pipelines. The state Department of Environmental Conservation has authority to regulate oil spills but prior to 2006 its efforts were focused on preventing spills themselves, not overseeing maintenance. However, DEC had been

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

concerned about increasing numbers of spills from the smaller flow lines and had proposed a set of new regulations when the 2006 spills occurred. These were subsequently put in place.

PIPELINE IMPROVEMENTS Meanwhile, when BP developed its plan in 2006 to replace the infield pipelines the company also moved to install a range of technology and equipment improvements. The pipe itself was improved with the use of carbon steel with a special external epoxy coating. Most important, the pipe is sized correctly for the reduced volume of oil that will be produced in Prudhoe. Smaller diameter pipes, much of it 18-inches in diameter, were installed that will keep the oil fluids flowing at higher velocity, preventing a buildup of solids or other debris that create an environment for bacteria and corrosion. It was the slow movement of oil through the larger 34-inch older pipe that had led to the buildup of sediments. The pipelines were also built at higher levels off the tundra to enhance inspection and maintenance. In some

places the pipelines were elevated to seven feet above the tundra, and Vertical Support Members, or VSMs, were driven deeper into the ground to increase stability. There were also new facilities installed to inspect the pipelines. New “pig launchers” were installed to insert maintenance and inspection devices, or pigs, into the pipe, along with facilities to retrieve them. Pigs are capsule-shaped devices sent through pipelines for cleaning or to measure pipe wall thickness. Prior to the 2006 spills many of the field pipelines did not have pigging facilities and could not be inspected with pigs. Other facilities were installed, including new equipment to inject corrosion-control fluids. The North Slope operators have also developed new tools, some involving laser technology, for inspecting pipe in places previously considered “uninspectable,” such as where there are sharp bends or pipeline buried for road crossings. An element of judgment is needed to assess risks, however. The measure of pipe wall thickness, and for the loss

of thickness due to corrosion, may or may not create a dangerous situation, for example. “If a pipe wall thickness is less than it was originally, it has to be evaluated. If the pipe was designed to operate at a certain pressure but if there is wall thickness loss and the pipe is operating at half the original pressure, there may not be a hazard,” said Betty Schorr, director of DEC’s Industry Preparedness Program, the state agency with primary responsibility for industry oversight.

PSIO CREATION A lot of lessons were learned with the 2006 spills. BP and other North Slope operators have sharply stepped up maintenance activities. The state and federal agencies have also revamped the regulatory framework and now provide closer oversight of the companies’ maintenance programs. Not only were new DEC rules implemented but the Legislature approved new technical staff positions so the agency could carry out its new responsibilities. The 2006 spill incidents also brought the creation of a new state

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www.akbizmag.com • Alaska Business Monthly • August 2010

agency, the Petroleum Systems Integrity Office, or PSIO, to function within the Division of Oil and Gas in the Department of Natural Resources. PSIO was proposed by the governor in the heat of the aftermath of the 2006 spills, and originally it was to be a fairly robust agency established along the lines of the federal-state JPO but involving state agencies, mainly DNR itself and DEC. There were concerns that it would be complex and cumbersome, and a possible over-reaction to the spills and corrosion incidents. When Murkowski left office in late 2006 and Sarah Palin became governor, one of her early actions was to revamp the PSIO, scaling it down and streamlining its functions. The agency operates today with a lean three-person staff (at one time there were six staff) and focuses mainly on the review of the oil field operatorsâ&#x20AC;&#x2122; maintenance programs, along with any maintenancerelated incidents, of which there have been some. Administrative Order 234 established PSIO, in its present configuration, in April 2007. Its purpose,

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Contact General Manager Matt Atkins @ 907-263-7115 or Sales Manager Don Hopkins @ 907-263-7112

www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ February 2012

“Our mission is to focus more on systemic issues to ensure that when an incident occurs it is not repeated. We want to understand the root causes.” – Melanie Myles Acting Coordinator PSIO outlined in the order, was to coordinate state, local and federal regulation of the petroleum industry; to identify gaps and overlaps in state statutes and regulations and recommend ways to mitigate them, and to introduce quality management principles and practices to state oversight of the industry. PSIO does not do field inspections, unlike the DEC, although it has participated with other agencies in field inspections following incidents. The agency does not currently have the authority to impose penalties, leaving

that to other agencies like the DEC and the Department of Law. Melanie Myles is PSIO’s acting coordinator, replacing Allison Iversen, who moved to the State Pipeline Coordinator’s Office after heading PSIO for a number of years. Myles is a mechanical engineer who has been with PSIO for about three years, and prior to that was a project manager that has worked with local oil field services engineering companies. There are two other staff in PSIO, a quality manager, also a mechanical engineer, with extensive experience in rotating equipment and project management, and a structural engineer with experience in DEC’s tank and facility regulatory programs. After the immediate moves to cover regulatory gaps after the 2006 pipeline spills, PSIO moved on a major project to do a “gap analysis” of state agency regulatory authority over oil production and transportation systems. At about the same time the Department of Environmental Conservation meanwhile initiated a parallel “risk assessment,” focusing on the risk of oil spills on the North Slope.

“Our mission is to focus more on systemic issues to ensure that when an incident occurs it is not repeated. We want to understand the root causes,” Myles said. PSIO also investigates employee concerns that are raised on technical issues. One employee with an operating company raised concerns last year, for instance, and they were given a review. “We worked with the company involved to address those concerns,” Myles said. Citing confidentiality, Myles could not give further details.

INFRASTRUCTURE INTEGRITY At the Department of Environmental Conservation there are two groups under Schorr’s Industry Preparedness Program that deal with industry infrastructure integrity, a pipeline and tank integrity section staffed by engineers who deal directly with inspections and oversight, and an exploration, production and refining section which approves the spill contingency plans industry operators file. The engineers working for Schorr are mechanical, materials and civil engineers.

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

An engineering degree is not required for contingency plan reviewers but most of the people in the section have long tenures in DEC and since each is assigned to work on a specific field, over the years a bank of institutional history is acquired. Unlike the PSIO, which performs physical inspections when necessary, DEC performs inspections of facilities on a routine basis. Agency staff visit the Slope periodically for periods of three to five days to observe companies doing inspections. They have walked the pipelines with company staff, looking at the physical condition of the pipe. As the new flow-line regulations were implemented Schorr’s groups focused in 2008 and 2009 on reviewing the operators’ maintenance records and prevention programs. In 2010 the reviews included physical inspections on the slope. “Over 300 miles of flow-lines were ‘walked’ over two years,” Schorr said. The new DEC flow line regulations require inspections of all flow lines every five years, and DEC has authority to require records and

reports on maintenance to be submitted. The department is looking now at whether to request these. “We have to consider how best to use our resources. Walking these pipelines was very educational for our staff, but it was also very time consuming. We’re looking at whether there is a better way to do this,” Schorr said. Despite the progress and stepped-up inspections, problems still continue. In late 2009 an out-of-service flow line near the Lisburne Processing Center in Prudhoe Bay froze and ruptured, spilling a mixture of water with minor amounts of crude oil. BP had received a conviction and paid fines for violating federal environmental laws after the 2006 spills. The company was released from its probation last December. BP isn’t alone in having problems with aging infrastructure. ConocoPhillips experienced a failure of a 12-inch gas pipeline in late 2010 in the Kuparuk field. The pipe was replaced but the cause of the failure was corrosion in a section of pipe where it was not detected in a radiographic inspection in 2007.

BP experienced two Prudhoe Bay field incidents in 2011, one a small leak from a flow line in July that occurred after the pipe had been inspected with an instrument “pig” in April. Corrosion is suspected, although the investigation is not complete. Also in July there was a leak from a pipe in a flare pit at Flow Station 2 caused by corrosion in a low section of the pipe. BP is still investigating this. Despite this, state officials are still encouraged over a gradual improvement in maintenance and spill prevention in recent years. “We have seen a downward trend (in field level spills from flow lines) but we still have a small data set, but we want to ensure the data is meaningful, and that it’s not a blip,” said DEC’s Schorr. Myles, of PSIO, is also encouraged. “I’m happy to say that things have been relatively quiet in the last several months with no major incidents for us ❑ to investigate,” she said. Mike Bradner is publisher of the Alaska Legislative Digest.

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

ALASKA THIS MONTH Compiled By Nancy Pounds

DINING â&#x20AC;˘â&#x20AC;˘â&#x20AC;˘ Symphony of Seafood

ÂŠ2011 Jim Lavrakas/AlaskaStock.com

,WÂˇV HDV\ WR MRLQ RXU HPDLO OLVW -XVW VHQG \RXU HPDLO DGGUHVV E\ WH[W PHVVDJH 7H[W $%0 WR WR JHW VWDUWHG Close up view of Cioppino fish stew containing fresh Alaskan Tanner crab, smoked king salmon, halibut and rockfish, Alaska.

he 19th annual Alaska Symphony of Seafood will showcase a bevy of flavorful seafood creations this month. The Alaska Fisheries Development Foundation organizes the event. The Symphony of Seafood includes a new products contest judged by top chefs, manufacturers and buyers in Seattle on Feb. 2. The Gala SoirĂŠe and Awards Ceremony is Feb. 10 in Anchorage. Winners from the Seattle invite-only event are revealed in Anchorage at the awards ceremony. The two locations for the Symphony of Seafood provide opportunities for participants to introduce new products from Alaska fisheries to culinary experts, seafood distributors and national media, foundation officials said. Entries are classified into three categories: retail, foodservice and smoked products. Entries can be crafted from salmon, whitefish or shellfish. Judges evaluate entries based on packaging and presentation, the overall eating experience, price and potential for commercial success. Winners from each category receive booth space and roundtrip airfare at the International Boston Seafood Show in March. Last yearâ&#x20AC;&#x2122;s grand prize winner was wild Alaska smoked sockeye salmon by Seattle-based Trident Seafoods Corp., which also won the foodservice and smoked categories, as well as the Seattle Peopleâ&#x20AC;&#x2122;s Choice award; Orca Bay Seafoods of Renton, Wash., won the retail category. Last yearâ&#x20AC;&#x2122;s Peopleâ&#x20AC;&#x2122;s Choice winner at the Anchorage event was Candysmoke by Wayne Carpenter of Delta Junction. Tickets are available at www.centertix.net. â&#x20AC;˘â&#x20AC;˘â&#x20AC;˘

www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ February 2012

ALASKA THIS MONTH

TRAVEL •••

Photo courtesy of Salmon Berry Tours

Salmon Berry Tours

Salmon Berry Tours dog mushing experiences are very popular.

isitors to Alaska in winter with even a half-day to play can nab a quick adventure before jetting home. Anchorage-based Salmon Berry Tours offers several winter tours, including snowmachining, helicopter trips and dog sledding experiences. “Dog sledding is our most popular winter tour,” said Candice McDonald, owner of Salmon Berry Tours. The company offers two dog sledding tours, a four-hour Anchorage-based tour and a six-hour tour at Iditarod musher Dallas Seavey’s Willow kennel. Both include about 45-minutes of dog-mushing, McDonald said. McDonald started Salmon Berry Tours in 2005 with one tour van and herself as the guide, and has grown to 12 employees and five vans. Most clients are out-of-state visitors, although some Alaskans who have recently moved here accompany their friends and family on tours, McDonald said. Salmon Berry Tours has added trips as the company has grown, including unexpected destinations requested by visitors, such as the two-hour Chocolate City Tour. Visitors asked for stops at Alaska Wild Berry Products in Anchorage, so McDonald created a chocolate-themed trip and it’s become the second most popular wintertime tour. The first hour includes a historical tour of Anchorage with visits to Ship Creek, Earthquake Park and Lake Hood. The second hour features stops at Alaska Wild Berry Products and Modern Dwellers Chocolate Lounge, where tour participants receive a handmade truffle. Another seasonal favorite is the four-hour tour to the Alaska Wildlife Conservation Center. Visit www.salmonberrytours.com to book a tour. •••

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

ALASKA THIS MONTH

NERLAND AGENCY

ENTERTAINMENT ••• Shakespeare’s Macbeth

Photo courtesy of Anchorage Opera

presents

Compiled By Nancy Pounds

Todd Thomas and Brenda Harris.

POSTER SHOW + SNOW CITY CAFE

Anchorage, Alaska Celebrating 20 local artists February 3 - March 1, 2012 Opening: First Friday, February 3, 5:30 PM /nerlandagency (visit our events page)

Proceeds beneﬁt United Way Walk for Warmth helping at-risk families stay housed and warm.

his month the Anchorage Opera is staging the Alaska premiere of Guiseppe Verdi’s “Macbeth,” based on William Shakespeare’s tragic play. Shows are set for Feb. 18, 22, 24 and 26 at the Alaska Center for the Performing Arts’ Discovery Theatre. “Macbeth” features a Scottish warrior’s ambition for power, blood-thirsty actions and the subsequent inner turmoil for the characters. Shakespeare includes some supernatural elements to advance the drama. The opera will be sung in Italian with English subtitles. Yoshi Tanakura designed the sets for “Macbeth,” said Kate Schwarzer, Anchorage Opera’s patron services manager and marketing and education coordinator. Tanakura also designed the sets for Anchorage Opera’s “La Boheme,” “Eugene Onegin,” “Don Pasquale, “Madame Butterfly” and other Anchorage Opera productions. Schwarzer described Tanakura’s scenic design as “creatively efficient.” The cast includes performers renowned for these Macbeth roles, she said. Baritone Todd Thomas will play Macbeth, and soprano Brenda Harris will perform the role of Lady Macbeth. Cynthia Edwards of the New York City Opera will direct the production. The Anchorage Opera offers a 30-minute Before-the-Opera Chat one hour before the performance begins. The presentation provides details about the production. Tickets range from $45 to $105 and are available at www. alaskapac.centertix.net. •••

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

EVENTS CALENDAR ANCHORAGE Alaska Ski for Women Come watch the Alaska Ski for Women as it takes over Kincaid Park in an annual event held on Super Bowl Sunday. Participants don elaborate, colorful costumes for there race, making it an amazing spectator event as well. Ski for Women has a twofold mission: encourage women of all ages and abilities to take part in an organized Nordic skiing event, and raise money to support local nonprofit organizations that provide safe harbor and support services for women and children affected by domestic abuse. Held at Kincaid Park Time: 8:00 a.m. Contact: 907-276-7609. 2/5

Fur Rendezvous Celebrate winter like nowhere else. Alaska’s largest and oldest winter festival features tons of fun events. Last year Yukigassen joined fan favorites and zany events that include outhouse races, snowshoe softball and the Running of the Reindeer, a mass dash down Fourth Avenue with sprinting caribou giving chase. These are just a few of the delights in store at Rondy in 2012. Contact: 907-274-1177. 2/24 – 3/4

The Capitol Steps Have a laugh with one-time congressional staffers who have since turned comedians, the Capitol Steps now travel the country satirizing the very people and places that once employed them. Their production is riproaring political fun, one constantly updated to reflect today’s political headlines, with new costumes, props and music. In no way mean-spirited, their hilarious musical satire takes potshots at the outrageous goings-on in Washington, unafraid to say in public what most of us are thinking! Held at the Alaska Center for the Performing Arts at 7:30 p.m. Contact: 907-263-ARTS. 2/3-4

New Shanghai Circus Considered to be China’s most celebrated acrobatic company, the performers of the New Shanghai Circus have stunned audiences everywhere they perform. Celebrating the exotic wonders of China while showcasing dramatic interpretation of ancient dances, the show combines extraordinary and inventive feats of strength and skill, control and balance. Family show includes acts such as Diablo (Chinese Yo-Yo), Bicycle Tricks, Pole Climbing and Plate Spinning at the Alaska Center for the Performing Arts, Friday, 7:30 p.m.; Saturday. 2:00 p.m. and 7:30 p.m. Contact: 907-263-ARTS. 2/24-25

The Three Little Pigs Little Pig, Little Pig, Let me in! -Not by the hair of my chinny-chin-chin! You know the story, but you’ve never seen it like this! The three little pigs and their fairy tale friends must figure out how to protect themselves from the Big Bad Wolf in this physical comedy extravaganza. Alaska Pacific University, Friday and Saturday, 7:00 p.m.; Saturday and Sunday, 3:00 p.m. Contact: 907-677-PLAY.

FAIRBANKS World Ice Art Championships The largest annual ice art competitions and exhibitions worldwide, now in its 23rd year, has grown to a month long attraction with more than 70 teams from all over the world. New location is a mile farther down Phillips Field Road at the new George Horner Ice Park from 10 a.m. to 10 p.m. daily. Contact: 907-451-8250. 2/28-3/25

A Taste of Arrrt Pirate-themed Fairbanks Counseling and Adoption’s fundraiser includes silent and oral auctions, door prizes, entertainment and a showcase of Alaskan artwork. Doors open at 6 p.m., “Grub and Grog” at 7 p.m., auction begins at 8 p.m. To reserve tickets: 907-456-4729 2/18

Picasso at the Lapin Agile By Steve Martin, directed by Michael Shaeffer. Held at the Riverfront Theater, Fraiday and Saturday, 8:15 p.m.; Sunday, 1 p.m. Contact: 907-456-7529. 2/3

Tesoro Iron Dog Finish One TOUGH race! Race begins Feb. 19 at Big Lake, with two-man teams racing to Nome and back to Fairbanks in the longest, toughest snowmobile race in the world. Check local media for ETA on the Chena River. Contact: 907-563-4414. 2/??

GIRDWOOD North Face Vertical Challenge Check out the skiers and snowboarders as they compete to see who can do the most laps, on the longest continuous double black diamond ski run in North America, the North Face, in a single day. Alyeska Resort. Contact: 907-754-1111. 2/24

JUNEAU “Fusion” Wearable Arts Extravaganza Two fun-filled events celebrating creativity and wearable works of art at Centennial Hall, Saturday, auction preview, 7 p.m., runway show, 8 p.m.; Sunday, auction preview, 2 p.m., runway show, 3 p.m. Contact: 907-586-2787. 2/11-12

2/24 –3/4

BIG LAKE

Gospel Choir Workshop and Concert Reverend Bobby Lewis and pianist Eustace Johnson offer a week-long gospel singing workshop to the community that concludes with a celebration of music performed by the choir in concert at the Juneau Arts & Culture Center at 2 p.m. Tickets available at the Juneau Arts & Culture Center, Hearthside Books locations and online at www.jahc.org. 2/14-19

SEWARD

Tesoro Iron Dog Start 2/4 Rotary Wine Tasting Event Come watch the start of the 29th annual race where two-man teams Have a taste at this charity event where the arts and culture proceeds have top speeds of more than 100 miles per hour in the world’s longest are used 100 percent locally. Breeze Inn lobby, 7 p.m. to 9 p.m. Must be and toughest snowmobile race. The competition spans 2,000 miles from ❑ 21 or older to attend. Contact: 907-224-5272. Big Lake to Nome to Fairbanks. Contact: 907-563-4414. www.akbizmag.com • Alaska Business Monthly • February 2012 89 2/19

HEALTH & MEDICINE

U-Med District Expanding from within

Map courtesy of State of Alaska Department of Transportation & Public Facilities

BY JODY ELLIS-KNAPP

Anchorage’s U-Med District.

As Anchorage continues to grow, so will the U-Med District. Both the city and the district try to anticipate the potential concerns and problems that may arise.

the University of Alaska Anchorage over to the Alaska Native Medical Center. U-Med includes UAA, Providence Alaska Medical Center, Alaska Psychiatric Institute, McLaughlin Youth Center, Alaska Pacific University, Alaska

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

n a city of more than 291,000 people, it’s hard to believe a substantial percentage of Anchorage’s employees exist in a fairly tight niche of space. That space, known as the U-Med District, includes the area from

Native Medical Center, as well as a host of health care providers and facilities along with other businesses both within the district and in outlying vicinities. U-Med is an active hub, employing about 16,000 people—11 percent of the

Anchorage work force—the highest employment density in the Municipality of Anchorage, according to a recent DOWL HKM study. And there are the thousands of students attending UAA and APU plus the thousands of people seeking health care in the 1,130 acres of U-Med. UAA and Providence are two of the main players, providing a large percentage of the area’s employment and consistently working together to ensure the district continues to grow in a way that is beneficial to the public, clients and work groups. Bill Spindle, vice chancellor for administrative services at UAA, says UAA strives to maintain close relationships with all members of the U-Med District. “We have a very close relationship with Providence.” He says “We have regular meetings about mutual concerns such as parking, construction and medical education, and have been long-time partners in improving medical education around the state. We also have varying degrees of interaction with other members of the U-Med District, including Alaska Pacific University and the Anchorage School District, which is not directly in the district but has some schools that fall within our perimeter.”

TRAFFIC & PARKING WOES Parking and traffic are two big concerns for U-Med, with the district continuing to grow and more people accessing the facilities and services each year. The possibility of a new road being punched through UAA and APU land to connect the campuses with Northern Lights Boulevard has been raised, with DOWL HKM conducting a reconnaissance study report for the city that provided an overview of various concepts to improve traffic congestion. While a road may be inevitable, many of the members of the district are concerned about preservation of the campuses. “We have lots of wetlands, skiing and hiking trails that we do not want to disturb,” Spindle says. “Yet at the same time, we understand the need to get people in and out of here efficiently.” According to the study, there are several proposed improvements, including connecting Elmore to Bragaw at Northern Lights, different versions of a road being put through the undeveloped part of the UAA campus, building

up perimeter roads or creating a large park-and-ride lot to encourage less vehicle traffic. The study had a total of 12 recommendations, three of which were thought to be a consideration for the future. During the creation of the study, DOWL accepted public comments on the proposed road changes and noted there were many concerns about fragmenting university campuses, issues such as wildlife habitat and recreation areas being disrupted, and a desire to keep the character of the U-Med District intact. At this time, there are no plans in place to move forward with any of the recommendations.

GROWING THE PROVIDENCE PRESENCE Providence Hospital has been a big part of the growth and development of the district over the years, expanding its campus and services to include Providence Health Park on Piper Street, which houses the Providence Cancer Center, Creekside Surgery Center, Providence Sleep Center and other medical offices. They also acquired the Providence Region Building on Piper Street, housing administration offices. Providence Alaska Medical Center is currently modernizing and expanding the main hospital building by adding a new mother-baby tower and power plant. Crystal Bailey, communications specialist with Providence, says Providence supports increased access to the U-Med District. “We do not have a preference among the proposals,” she says “we support increased access in cooperation with all our community partners.” Providence has actually helped increase access to the district with construction and rebuilding of several roads, including Piper Street, and Health, Wellness and Spirit drives.

A GREEN VISION While economic growth and development is a primary concern for the U-Med District members, issues such as sustainability are also a part of the district’s overall plan. In 2008, the institutions of the district came together as a group, with a commitment to become the city’s first “Green District.” Since then, all involved have implemented energy improvement projects, recy-

cling and the creation of committees such as the Reduce, Reuse and Recycle Committee, the Active Transportation Committee and the Energy Use Committee. The vision of the Green District is “Leading economically and environmentally sustainable and healthy practices for our employees, students, neighbors and community.” Their committees meet to identify priorities and activities within the district, addressing issues such as climate change, reduction of carbon emissions and other sustainability practices. “We’ve spend a lot of time discussing sustainability, transportation and a better coordination of people coming in and out of the district.” Spindle says. “From energy improvement projects to recycling, we have worked together as a district.” “Providence Alaska has been involved with the U-Med Green District since its inception,” Bailey said. “Our primary focus has been sharing of ideas and information among the facilities. Ideas garnered through these collaborative efforts have led Providence to employ curbside recycling in medical office buildings, expand facility communications about green efforts, increase awareness of our “lights off “ campaign and improve transportation to include bus service, ride-sharing and bike commuters.” Other participants in the Green District program include Alaska Native Tribal Health Consortium, Alaska Pacific University, McLaughlin Youth Center, Southcentral Foundation and the Anchorage School District. Their continued efforts toward a greener district include green purchasing policies, reduction of waste in landfills, learning new tools for energy use reduction and active transportation reduction. As Anchorage continues to grow, so will the U-Med District. Both the city and the district try to anticipate the potential concerns and problems that may arise. “This is a growing district and a major player in this city,” Spindle says. “We are always looking for ways to improve our relationship between ourselves as well as those businesses and areas bordering us. We are always working together to be good ❑ neighbors.”

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

special section WORLD TRADE CENTER ALASKA 25th Anniversary

Editor’s Note To help the World Trade Center Alaska celebrate 25 years, Alaska Business Monthly presents a special section devoted to international trade. Opening the section is a Q&A with World Trade Center Alaska Executive Director Greg Wolf. We hope you find his answers and the rest of the special section as interesting and informative as we did. –Susan Harrington, Managing Editor

Q& A

ABM: Who are our largest trading partners? What are the top exports?

WOLF: Alaska’s major trading partners are Pacific Rim countries, primarily in Asia. Consider our top four exports markets: Japan, China, Korea and Canada. Taken together, these four markets alone account for 70 percent of the state’s total overseas exports. There are several reasons for this concentration of exports to Asia: first, many countries in the region are resource-poor, while Alaska is resource- rich. In other words,

Greg Wolf Executive Director World Trade Center Alaska

with Greg Wolf

we have what they need. Secondly, there is geographic proximity. Alaska is a neighbor, relatively speaking, and there are well-established transportation links by sea and air. Finally, and often overlooked, Alaska, as part of the United States, offers political stability that is very important for countries that rely on stable supplies of much needed commodities. In addition to the countries already mentioned, five European countries, namely, Switzerland, Germany, Spain, Netherlands and Belgium are members of our Top 10 export markets. Australia rounds out the grouping. What distinguishes the major Pacific Rim customers from those in Europe is that the former are comparatively much larger customers and they typically buy a wider variety of commodities from Alaska. Seafood has been and remains the state’s top export commodity. In 2010, seafood accounted for 44 percent of the state’s total exports. At 32 percent, minerals, primarily zinc and lead concentrates, are the second-largest category, followed by energy (10 percent). This category includes liquid natural gas, coal and refined fuel products. Precious metals and here, of course, we’re talking about gold and silver, is the fourth major sector, followed by forest products.

Clearly, we are an exporter of natural resources. This has served us very well during recent years and all of the trends indicate that there is a lot more growth possible for Alaska, if we are allowed to responsibly develop our vast reserves of natural resources that are in so much demand from both developed and emerging markets. ABM: How has this changed in the last five years? WOLF: Actually, not that much. Then, as now, Japan, Korea, China and Canada are Alaska’s four top markets. The specific rankings of these four have alternated from year to year, but these have been our top markets for a long time. Japan has always been our No. 1 market, but that is about to change as China assumes the role of Alaska’s largest export market. 2011 will be the year the Middle Kingdom moves up to the No. 1 spot. This represents the culmination of 10 years of consistent and dramatic growth by China as a customer of Alaskan exports. Exports to China have grown from just over $100 million in 2000 to $923 million in 2010. That’s a nine-fold increase in 10 years. For 2011, we project that exports from Alaska to China will exceed $1 billion. I’ve been in this business

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

for 24 years and we have never seen a major market grow so fast for Alaskan exports. For Alaska’s international trade community, China has been the headline story for a number of years. Our state has clearly benefited from China’s rise to economic prominence. ABM: How much are Alaska’s exports worth? What does it mean to the economy? WOLF: We don’t have full-year figures available for 2011 yet, but looking at the first 10 months (January through October) data, the total has already reached $4.7 billion. Once the final numbers are reported, we anticipate it will be an all-time record year for the value of Alaskan exports. We expect exports to top $5 billion, surpassing the $4.2 billion total in 2010, until now the previous record. Exports are important because they bring new money into our economy, create diversification and sustain thousands of jobs for Alaskans across the state. In a nutshell, when you consider exports and what they mean for us, you should think three things: revenues, expanded economic opportunities and employment.

and significant as they are today. In some cases, virtually 100 percent of the production generated by these companies is exported to customers overseas. In other words, but not for the existence of overseas markets, these companies would either not be in Alaska or their operations would, at least, be considerably smaller. For example, so far, the only natural gas to leave Alaska has been the LNG exports to Japan. The only coal to leave the state has

been to overseas markets like Korea and Chile. Virtually all of the minerals and metals go overseas and about 50 percent of Alaska’s annual seafood catch is destined for foreign markets. International trade is also a major source of employment for Alaskans. According to a recent study conducted by Northern Economics, exports are directly responsible for nearly 15,000 jobs and almost another 10,000 jobs

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ABM: What would ha ppen to Alaska if we didn’t have a healthy trade market? WOLF: Well, we would certainly have a much smaller economic base and fewer high paying jobs. Certainly, some of the biggest players in our economy would not be active in Alaska were it not for overseas exports markets. We must remember that Alaska itself is a very small market. Our population is around 700,000. That’s like a suburb of a lot of major cities around the world. To attract resources industries to our state, export markets are a necessity. Exports enable some of our major industries to be as large

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

on an indirect or induced basis. Taken together then, trade accounts for about 25,000 jobs in Alaska. I think that is significant. We also know many of these jobs are relatively high paying ones versus jobs found elsewhere in the economy. ABM: How many companies are involved with exports from Alaska? Are they mainly large organizations? WOLF: According to the most recent information available from the U.S. Department of Commerce, there are 340 companies who export from locations in Alaska. If you include companies that export Alaskan commodities, but do so from a location outside of the state, such as a seafood processor in Seattle, then that number would be higher. They report that 76 percent of the state’s exporting firms have fewer than 500 employees and are thus considered small- or mediumsized companies. Further, their research indicates approximately 50 percent of the state’s export dollars are generated by the small- and medium-sized enterprises, while the other half results from the export operations of the large companies, such as the multinational corporations operating in Alaska. ABM: What is the role of World Trade Center Alaska? How do you help companies and promote trade? WOLF: We work directly with Alaska companies, mainly small- and medium-sized firms seeking to grow their businesses though exports. Some of these companies are “new to export,” meaning they will be selling to an overseas customer for the first time—others already have some overseas customers and are looking to expand their sales, sometimes to a new market.

One of our key roles is serving as a bridge between Alaska sellers and overseas buyers. This is the matchmaking role to help Alaskans find customers overseas. But there is typically a lot of other important work that must take place before we get to that point with a company. We normally work with companies that are export ready, meaning they already have a product or service to export and have the capacity to adequately respond to customers’ orders. We help these companies to research potential markets, to understand the distribution channels, regulations and other market requirements that pertain to their specific business. These issues can differ substantially from one country to the next. Of course, there are language and cultural barriers to contend with and business practices can be much different than our own. Through trade leads, trade missions, conferences, research reports and one-on-one counseling, we work to expand Alaska’s export capacity. With our full-time staff and interns, we have many years of international experience and the ability to provide assistance in a variety of languages. We are also fortunate to have strong, long-standing partnerships with the State of Alaska, the U.S. Department of Commerce and the University of Alaska that enable us to provide Alaskans with a high level of service.

of their growing economies and populations. A rising standard of living in these countries is leading to higher consumer expectations. More disposable income can help boost sales of our high-quality, wild-caught seafood products. A growing number of people around the world are seeking out Alaska seafood for its healthy attributes and sustainability. We are currently researching several emerging markets to see how their import needs match up with our export capabilities. One of those countries in India. At present, Alaska does very little trade with India, but that country, like China, is on a rapid growth trajectory. They, too, have a population of more than 1 billion people. Their economy is growing 8 percent to 9 percent annually. As their economy grows and modernizes, this could represent the next big opportunity for Alaska. Some of our work to get to know this market better and for India to know Alaska better, has been an Alaska-India Business Conference conducted in Anchorage in 2006 and a trade mission of private and public sector officials to New Delhi in 2010. A much smaller, but potentially lucrative niche market is Singapore. We are also keeping an eye on Vietnam and some other markets around the world that may present opportunities.

ABM: Wrapping it up, are there any new markets we expect to see in the future?

WOLF: I believe Alaska has a bright future. We are fortunate to be at the right time in history, in the right place geographically, and with the right type of exports—valuable natural resources—that the world so badly needs for growth and prosperity. If we can develop our vast supply of resources, our best days may still lie ahead of us. ❑

WOLF: It’s no secret that most of the world’s economic growth continues to occur in Asia. That’s good news for Alaska; as a Pacific Rim neighbor, we can supply the natural resources these countries need to meet the requirements

ABM: Anything else you would like to add?

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

special section WORLD TRADE CENTER ALASKA 25th Anniversary

Working with China Alaska’s growing export partner

BY ALEX SALOV

or decades, China was considered an underdeveloped, closed-command economy, but since the 1990s it turned into a market-oriented economy that cur96

rently plays a major role in the global market. In 2010, China became the world’s second largest economy and the largest exporter with the world’s largest labor force (five times that of

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the United States). It is the world’s leader in gross value of industrial output and its insatiable demand for natural resources continues to grow. One important factor is the growth of the emerging markets within China that have become very lucrative markets for the imported goods. By the “emerging markets” within China we mean so called “second-tier” cities (large cities other than Beijing, Hong Kong, Shanghai and Guangzhou). Second-tier cities include places like Tianjin, Wuhan, Chongqing, Shenzhen and others. The growth of the second-tier markets is driven by China’s rapid urbanization. According to McKinsey Global Institute, by 2025 more than 400 million Chinese will migrate from rural areas to cities. Already there are more than 160 cities in China with populations of more than 1 million people. According to the U.S. Department of Commerce, China’s top 15 second-tier cities account for 60 percent of U.S. products imported to China. These cities are growing economically and are less filled with imported goods.

Growing middle class is another factor that influences growth of Alaska’s exports to China. According to China’s National Bureau of Statistics, the country’s middle class will expand from 5 percent of the population in 2009 to 45 percent in 2020. Naturally, as the people have more disposable income, they have an increased demand for higher quality goods. U.S. products have a good reputation among the Chinese consumers and are successfully competing with other foreign products. Chinese buyers also prefer the products packaged in the country of origin rather than China to avoid possible counterfeits. Also, in 2005, Chinese government has made the decision that moved yuan (RMB) away from fixed U.S. dollar (USD) peg. As a result, between 2005 and 2011, the yuan rate has risen by about 28 percent (Forex), thus making Chinese exports to the U.S. more costly, but also making U.S. goods more affordable in the Chinese market. For Alaska’s exports, China has been a very dynamic market that grew almost 9 times in value during the last

10 years—from $102 million in 2001 to $923 million in 2010 (see graph). Due to the impact of the Great Recession (2008-2009), the value of Alaska’s exports to China decreased to $568 million in 2009. In 2010, however, it rebounded strongly and set the record of $923 million.

SEAFOOD IS TOP EXPORT Seafood is Alaska’s largest export category and currently represents 56 percent of the total exports to China. Seafood export to China totaled $517 million in 2010 and only rivals to those to Japan ($523 million). If fish meal export is taken into account, then China is actually Alaska’s largest seafood customer (larger than Japan) with a little more than $550 million in total exports value. According to Alaska Seafood Marketing Institute, in 2010, 37 percent of Alaska’s seafood exports to China were pink, chum and sockeye salmon; 28 percent groundfish (cod and pollock); 22 percent flatfish and 6 percent snow crab. Some of the seafood exported to China is being consumed within the

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domestic market and some of it is being processed and then re-exported to other countries. With the growth of the middle class and their disposable income there is an opportunity to sell larger amounts of seafood from Alaska every year. Chinese seafood market differs from the U.S. seafood market in the way the fish is consumed. Chinese customers use the whole fish literally from head to tail. Many times fish is cooked intact. At the same time, parts that are traditionally considered waste in the U.S.

trade mission to China last December, we visited several upscale supermarkets that sell seafood products from all over the world. Customers buying seafood at those supermarkets pay a lot of attention to the quality of the products and prefer the seafood to be fresh rather than frozen.

MINED RESOURCES EXPORTS Minerals and precious metals are another important category of exports from Alaska to China. In 2010, $308 million worth of minerals and precious

Seafood is Alaska’s largest export category and currently represents 56 percent of the total exports to China. Seafood export to China totaled $517 million in 2010 and only rivals to those to Japan ($523 million). are also used in the various dishes. For example, heads and fins are commonly used in soups and stews. During World Trade Center Alaska’s

metals was exported to China, this represents 33 percent of Alaska’s total exports. This export is mainly represented by zinc and lead concentrates,

and, also gold. In 2011 final numbers, we will see an increase in the precious metal exports (gold), as a result of the June 2010 contract between Coeur Alaska Inc. (a subsidiary of Coeur d’Alene Mines Corp.) and China National Gold Group Corp. (China’s largest gold producer). The contract is for purchasing and processing gold concentrates produced by the newly opened Kensington gold mine in Southeast Alaska. China National Gold has agreed to purchase approximately half of the concentrates to be produced at Kensington. According to Coeur, this agreement is the first of its kind between a state-owned corporation of China and a U.S. precious metals mine. Kensington mine began commercial production in July 2010.

LOGGING Forest products’ exports to China counted for $58.7 million in 2010. China is currently the largest importer of logs from Alaska, accounting for approximately 50 percent of the total forest products exports from the state.

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THE CHINA ERA World Trade Center Alaska has made China a major area of work for almost 10 years. We established a trade development program “China Calling” in

2006 to assist Alaskans to identify and pursue business opportunities in China. China has been the fastest-growing export destination in our state’s history. The products Alaska offers are of high demand in China and, considering the trends discussed, we can predict Alaska’s exports to China will exceed $1 billion and, thus, China will become Alaska’s No. 1 trading partner as of the end of 2011, surpassing Japan. Since 2005, we have conducted the Annual Alaska-China Business Conference. This event brings together experts from the private and public sectors, both Chinese and American, and provides the attendees with the latest information and ideas on business opportunities with China. Since 2005, we’ve also conducted three trade missions to China, taking Alaskan business and government leaders to the country, familiarizing them with the local business environment, and getting them closer to signing deals with Chinese partners. We are looking forward to working more with China and seeing the continuing ❑ growth of the China era.

TRANSPORTATION CONNECTION Another important aspect of relations between Alaska and China is the ongoing transportation connection via Ted Stevens Anchorage International Airport. Currently, there are seven mainland China cargo airlines that are customers of Ted Stevens Anchorage International Airport: Air China, China Cargo Airlines, China Southern Airlines, Great Wall Airlines, Jade Cargo, Shanghai Airlines Cargo International and Yangtze River Airlines. Cathay Pacific Cargo from Hong Kong has also been using Anchorage Airport for a number of years. Together, the Chinese cargo airlines operate more than 100 flights a week. The number of cargo flights might increase with the growth of exports of the commodities that can be shipped by air, fresh seafood can be a good example.

About the Author Alex Salov is the business operations manager at World Trade Center Alaska and has been working there since 2004. He has a master’s degree in global supply chain management from the University of Alaska Anchorage. Also, since 2005, Salov works as an adjunct instructor of Japanese language at the University of Alaska Anchorage.

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special section WORLD TRADE CENTER ALASKA 25th Anniversary

Dear Alaskan Executive: I am proud to serve as the chairman of the World Trade Center Alaska (WTCAK) board of directors during 2012, the organization’s 25th anniversary year. It’s an exciting time to be involved with the Center. Alaska’s international trade economy continues to grow and the state, despite significant headwinds as a result of a sluggish global economy, achieved a new record for exports to markets around the world over the last year. These export activities support thousands of high-paying jobs, generate significant investments in our natural resource industries, and help to diversify the state’s economic base. For the past quarter century, WTCAK has worked with its members and community partners to explore and pursue international trade opportunities. On a daily basis, we are involved with companies from across the state, small and large, that share an interest in building their businesses by exporting products or services to customers overseas. In addition, companies that provide services to the exporting community, such as banks, freight forwarders, law firms and customs brokers, also benefit from Trade Center membership. Over the years, we have helped introduce Alaskans to new markets, such the Russian Far East and, more recently, to China—Alaska’s fastest growing, and now largest, trading partner. With an eye toward the future, the Center has recently made initial forays into high-potential emerging markets, including India and Vietnam. To carry out our mission of assisting Alaskans to succeed in the global marketplace, WTCAK has fostered a skilled staff and important partnerships. Led by Greg Wolf, our long-time executive director, the hard-working staff at WTCAK has years of international experience, passion, and a strong commitment to serve our membership at a very high level. We have also forged partnerships with the State of Alaska, the U.S. Department of Commerce, and the University of Alaska. In a unique and effective way, these relationships bring together the resources of the private and public sectors to bring focus and coordination to Alaskan trade promotion. I am confident the next 25 years will see more successes for the World Trade Center Alaska and its partners. I encourage you to join with us as we work to build a strong international trade economy for Alaska. Sincerely,

Rick Pollock Chairman, Board of Directors World Trade Center Alaska

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special section WORLD TRADE CENTER ALASKA 25th Anniversary

TESTIMONIALS ■ Bill Brophy • Vice President, Customer Relations • Usibelli Coal Mine Inc. Usibelli Coal Mine (UCM) is proud to have been a member of World Trade Center Alaska (WTCAK) for many years. Over the years, UCM and WTCAK have successfully partnered to market Alaska coal to a variety of international customers on the Pacific Rim. The management team at WTCAK possesses the talent and expertise to prosper business relationships for international trade missions abroad. They continue to develop strategic plans and conduct market surveys that foster great relationships with allied countries. It is a great pleasure to applaud the great work at WTCAK as we celebrate their 25th Anniversary. ■ Dennis L. Mitchell, Vice President Oil and Gas • Lynden International Lynden International has been a member of the World Trade Center for 25 years. They provide timely and relevant information regarding Alaska’s role in international trade and assist many companies in finding the right path when navigating this arena. Our involvement has led to many valuable business contacts both in Alaska and internationally, which has enhanced our opportunities. We encourage businesses with an interest in expanding to international markets to become a member of WTC and discover the benefits of being a part of this dynamic group. ■ Samuel Pelant • Managing Director • PolyEarth Construction International LLC PolyEarth Construction International is a small, Alaska-based company and has successfully prosecuted projects in the Middle East and Mediterranean regions. With an interest in finding available opportunities in South Asia, PolyEarth approached World Trade Center Alaska for help. With World Trade Center Alaska’s help, and through their excellent South Asian regional network connections, we have developed key relationships that we are using to create some new and very exciting export items from Alaska to South Asia. We could not have done this efficiently and effectively without the support we received from World Trade Center Alaska. When it comes to supporting the export of Alaskan goods and services, World Trade Center Alaska is truly a world class organization! ■ Angelina Skowronski • Marketing Development • The Auction Block Co. The Auction Block Co., a locally owned, Homer-based seafood company, had worked with WTCAK for a number of years. This last year was my first personal experience with the organization and I was delightedly impressed with their work. Our goal was to expand our markets to Europe and it could not have been so smoothly attained if not for the aid of Alex Salov and the WTCAK team. They helped us in every corner of the process—from linking us with the appropriate contacts abroad to answering my many travel and visa questions. They were effective communicators, professional, and met every interaction with great enthusiasm and genuine care. It was a true pleasure working with them. We are greatly appreciative for their hard work put forth. ■ Richard Strutz • Regional President • Wells Fargo Bank Alaska Understanding our customers’ international trade needs is of paramount importance to Wells Fargo, and World Trade Center Alaska connects us with the resources to stay well informed about pertinent economic trade issues impacting Alaska. World Trade Center Alaska has helped us develop long-term relationships with Alaskan businesses that are just entering the global marketplace or expanding their horizons. We look forward to continuing our membership with WTC Alaska and working with them to advocate for Alaskan businesses. Congratulations to World Trade Center Alaska for 25 years of connecting Alaskan businesses with the global marketplace!

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special section WORLD TRADE CENTER ALASKA 25th Anniversary

KORUS Free Trade Agreement Opening possibilities for increased exports BY TRACY KALYTIAK

laska and South Korea for years have nurtured a fruitful climate for business, with the East Asian nation growing to become the state’s third-largest trading partner. Now that South Korea and the United States have forged a free-trade agreement that eliminates most tariffs on agricultural and other goods between the two countries, their $90 billion relationship will become even more productive—it is expected to grow another 10 percent within five years. The agreement is expected to boost export opportunities for Alaskans. U.S. Sen. Mark Begich lauded the so-called KORUS agreement, saying, “South Korea is a customer of many Alaska goods, including seafood, timber, oil and gas, and minerals. From 2007-2009, Alaska exported a yearly average of $509 million to South Korea. The South Korea Free Trade Agreement will eliminate duties on crucial exports such as liquefied propane, liquefied natural gas and most agricultural products, boosting Alaska’s exports.” Other free-trade agreements had been negotiated, between the U.S. and the South American nations of Colombia and Panama, and President Barack Obama in October signed into law legislation establishing those agreements. Begich says he viewed those agreements differently than the one established with South Korea. “I opposed the free trade agreements with Colombia and Panama,”

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Begich said. “I believe all trade agreements should include fully enforceable consumer, labor, environmental and human rights protections. I gave these proposals careful and thoughtful consideration. I even met personally with the Ambassador of Colombia to discuss this proposal. Ultimately, because they did not contain strong enough protections for American jobs and labor standards, I voted against these agreements.” The South Korea-U.S. agreement, Begich said, proved to be different because of the longstanding close ties between South Korea and Alaska. “Alaska was one of the first states to establish a trade office in Korea,” Begich said. “As mayor of Anchorage, I visited our sister city of Incheon to advance business and cultural ties and I hosted the Incheon mayor to Anchorage. As a U.S. senator, I have met with the Korean president and ambassador to the U.S. Alaska is proud to call about 10,000 Korean-Americans residents of our state.”

INCREASED EXPORTS Alaska exports to Korea totaled $576.4 million for the first 10 months of 2011, up 29.6 percent from $444.7 million for the same period of 2010. Exports of all major Alaska commodities—including seafood, mineral ores and forest products—increased in 2011, according to the export data. The KORUS agreement immediately eliminates duties on nearly two-thirds of current U.S. agricultural

exports to Korea and improves U.S. exporters’ access to the Korean market for many products that have been highly protected. The U.S. International Trade Commission estimates annual U.S. agricultural exports to Korea will increase by a minimum of $1.9 billion once the agreement is fully implemented. The agreement eliminates tariffs and dashes barriers on most agricultural products, increasing export opportunities for Alaska beef, dairy products and other agricultural products. Alaska’s farm economy took in a total of $31 million in cash receipts in 2010, according to U.S. Department of Agriculture statistics. Alaska’s agricultural exports to all countries totaled approximately $5 million that year. The tariff for beef “muscle meats” had been 40 percent. The KORUS agreement will implement a straightline 15-year phase-out of that tariff and a similar phase-out of the 18-percent tariff on beef products known as offal and variety meats. The United States and the Republic of Korea signed the KORUS agreement on June 30, 2007, according to information from the Office of the U.S. Trade Representative. On Dec. 3, 2010, the U.S. and Korea concluded new agreements, reflected in letters signed Feb. 10, 2011, that provide new market access and level the playing field for U.S. auto manufacturers and workers. “Once it enters into force, the Agreement will be the United States’

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most commercially significant free trade agreement in more than 16 years,” according to trade representative information.

DECREASED TARIFFS The U.S. International Trade Commission estimates the reduction of Korean tariffs and tariff-rate quotas on goods alone will add $10 billion to $12 billion to the annual U.S. gross domestic product and around $10 billion to annual merchandise exports to Korea. Under the agreement, nearly 95 percent of bilateral trade in consumer and industrial products will become duty free within five years of the date the agreement enters into force, and most remaining tariffs would be eliminated within 10 years. For agricultural products, the FTA will immediately eliminate or phase out tariffs and quotas on a broad range of products, with almost two-thirds (by value) of Korea’s agriculture imports from the United States becoming duty free. For services, the agreement will

provide meaningful market access commitments that extend across virtually all major service sectors, including greater and more secure access for international delivery services and the opening up of the Korean market for foreign legal consulting services, according to the trade representative’s office. In the area of financial services, the agreement will increase access to the Korean market and ensure greater transparency and fair treatment for U.S. suppliers of financial services. The agreement will address nontariff barriers in a wide range of sectors and includes strong provisions on competition policy, labor and environment, and transparency and regulatory due process.

MODEL FTA The agreement will also provide U.S. suppliers with greater access to the Korean government procurement market. “In addition to strengthening our economic partnership, the KORUS FTA would help to solidify

the two countries’ long-standing geostrategic alliance,” the trade representative information stated. “As the first U.S. FTA with a North Asian partner, the KORUS FTA is a model for trade agreements for the rest of the region, and underscores the U.S. commitment to, and engagement in, the Asia-Pacific region.” South Korea’s National Assembly ratified the U.S.-Korea trade agreement Nov. 22, 2011. South Korea has much higher tariffs than the U.S. and will see bigger changes in the variety and cost of goods after the trade deal takes effect, according to the Wall Street Journal’s article in November about the National Assembly’s action. “South Korea also has long had a surplus in the trade relationship with the U.S., a cushion that, over the past five years, amounted to an average of $12 billion annually,” the WSJ account stated. “Analysts estimate that the South Korea’s surplus will continue but will become smaller, chiefly because it is likely to sharply increase its imports of ❑ U.S. agricultural products.”

ALASKANS AT WORK

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special section WORLD TRADE CENTER ALASKA 25th Anniversary

Foreign Mining Investments ‘Crucial’ to industry in Alaska BY STEPHANIE JAEGER

he majority of investment in Alaska’s mines comes from foreign companies. Most often geologists exploring or developing mines look for investors in Canada and Great Britain, but a few companies are based in the U.S., Australia, South America and Asia. Three large mines currently operating in Alaska are U.S. owned— Usibelli Coal Mine, Greens Creek polymetallic mine and Kensington Gold Mine. But an immigrant from Italy founded Usibelli, Greens Creek was started by British and U.S. companies, and Kensington had foreign investors and explorers until it was bought by a U.S. company in 1995. “Mines in Alaska are usually traded on the Canadian stock exchanges because the U.S. Security Exchange Commission’s rules make it very hard to raise money for high risk investments,” said Steve Borell, former executive director of the Alaska Miners Association. “In the U.S. the mindset has been against resource development because of the environmentalist movement. In Canada, they have the business, financial and technical expertise needed to invest in and develop mining companies.”

FOREIGN INVESTMENTS Canada-based companies provide about 70 percent of the money spent on the exploration and development of Alaska’s mining industry. In 2010, Canada-based companies funded $207 million of exploration and $130 million in mining development in Alaska and employed about 1,000 Alaskans with an average yearly salary of $97,000— twice the average Alaska wage. Among the 42 Canada companies operating in Alaska, the Fort Knox Mine near Fairbanks is the largest surface gold mine. The second largest private-sector employer in the

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Fairbanks North Star Borough, it employs 500 people and pays $45 million in wages and benefits annually. The Red Dog Mine, located 90 miles north of Kotzebue, employs 550 workers and pays $52 million in wages each year. NANA Regional Corp. shareholders hold 56 percent of Red Dog jobs. In terms of payroll, Red Dog is the largest employer in the Northwest Arctic Borough. Alaska’s newest gold mine, Nixon Fork Gold Mine near McGrath, employs 70 people. The Pebble Project, a partnership between London-based Anglo American and Vancouver, British Columbiabased Northern Dynasty, has invested more than $400 million so far in engineering, exploration and environmental studies. If Pebble is developed, it could provide 800 to 1,000 jobs in Southwest Alaska. In addition to the wages paid to local workers, Canadabased mining companies have become large investors in lands owned by Alaska Native corporations and provide employment to their shareholders. Between 1989 and 2010, Vancouver, British Columbia-based Teck Resources Ltd, operator of the Red Dog Mine, has paid $596 million in royalties to NANA, and NANA has distributed $341 million of this to other Alaska Native corporations. Two other companies based in Canada, NovaGold and Barrick Gold, are partners in the Donlin Gold project and lease property from Calista Corp. and Kuskokwim Corp. In 2010, Calista shareholders and their descendants held 83 percent of Donlin Gold’s local jobs. Calista received $500,000 in royalties in the year ending April 30, 2010, for mineral rights agreements from Donlin Gold. Royalties paid to Calista are expected to increase to $1 million per year each

year from 2015 to 2024 inclusive and to $2 million per year for each year from 2025 through 2030.

BENEFITS TO BOROUGHS Mines owned by companies based in Canada also pay large amounts of property taxes to Alaska boroughs. In 2010, Fort Knox Mine paid $4.6 million to the Fairbanks North Star Borough. “Fort Knox is the largest property tax payer in the Fairbanks North Star Borough,” said Bob Loeffler, a visiting professor at the University of Alaska Anchorage Institute of Social and Economic Research. “The Red Dog Mine is the biggest source of tax revenue in the Northwest Arctic Borough. In 2010, Red Dog paid $6.7 million to this borough in a payment in lieu of taxes agreement. These mining companies also pay large amounts to local utilities. In Fairbanks, Fort Knox paid $36 million for electricity in 2010.” British contributions to the Alaska mining industry and economy are much more difficult to estimate. Many Alaska mines were owned by British companies at some time during their history and are now owned and operated by companies from other countries. One example is the Greens Creek silver, zinc, lead and gold mine on Admiralty Island. Originally owned by Rio Tinto, a British mining company, Greens Creek is now owned by Hecla Mining, an American company. Rio Tinto is also connected to Alaska mining through the Kennecott Mining Co., which originally owned and developed the historic Kennecott copper mine near McCarthy. “Greens Creek is Juneau’s largest property tax payer,” Loeffler said. It is also the Southeast’s largest for-profit employer and has 340 workers and 12 full-time contractors on its payroll. Japan’s only Alaska mine also began

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as a joint venture. State-owned Japan Oil, Gas and Metals Corp. ( JOGMEC) began exploration for gold at Pogo, southeast of Fairbanks, in 1994 and discovered a vein of gold ore. JOGMEC turned the exploration over to a Japanese private corporation, Sumitomo Metal Mining, which later partnered with Teck Resources Ltd., a company with extensive experience permitting and operating mines in Alaska. Following the worldwide economic collapse of 2008, Sumitomo Metal Mining Co. and Sumitomo Corp. bought out Teck’s 40 percent interest in the project, giving Japanese companies 100 percent ownership. By 2009, these two Japanese firms had invested $350 million in Alaska mining. Pogo also made a payment in lieu of property taxes agreement with Delta Junction and will pay $1.25 million a year under this agreement. Pogo employed 300 people and 100 contractors in 2010, paid more than $36 million in wages, and spent more than $10 million in capital development projects. Another Japanese company, Itochu Corp., has partnered with Pure Nickel, based in Canada, to explore its platinum, nickel and copper M.A.N. property south of the Alaska Range. Itochu has agreed to invest up to $40 million in this exploration and will be spending $31 million on this project over the next three years.

pany based in Santiago, Chile, and is exploring Aleut Corp. lands on the Alaska Peninsula. This project is also in initial exploration. In addition to the amounts listed above, foreign mining companies also pay millions each year to the State of Alaska in royalties, rents, fees and taxes. According to the Alaska Miners Association, the Alaska Railroad Corp. and the Alaska Industrial Development and Export Authority receive millions of dollars each year for the use of their facilities and services. The Alaska Mental

Health Trust receives rents and royalties and sells mines sand and gravel construction materials. The employees of these companies buy goods and services and pay sales and property taxes to their Alaska boroughs. A large part of these payments comes from money invested in Alaska mines by foreign corporations, although no exact breakdown is available. “Without foreign investments, there would be much less mining in Alaska,” Borell said. “Outside invest❑ ments are crucial.”

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EXPLORATION & DEVELOPMENT As mentioned in the November 2011 issue of Alaska Business Monthly, Australian owned Linc Energy is interested in underground coal-gasification and a gas-to-liquids plant to produce highquality diesel and aviation fuel. Linc has an office in Anchorage and has bought onshore oil and gas leases in Cook Inlet, controlling interests in oil and gas leases at Umiat on the North Slope, and 181,500 acres of coal exploration licenses in Southcentral and the Interior. This company is in the earliest stage of development. Also mentioned in the same ABM issue, Full Metal Minerals, a junior exploration company based in Canada, is exploring Doyon lands near Chicken, where there is a significant concentration of zinc, lead and silver. The company recently entered into a joint venture with Antafagasta, a comwww.akbizmag.com • Alaska Business Monthly • February 2012

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Photo courtesy of Ucore Rare Metals

special section WORLD TRADE CENTER ALASKA 25th Anniversary

Drilling for core samples at Bokan Mountain near Ketchikan on Prince of Wales Island in Southeast Alaska.

Mining a fortune in Southeast BY STEPHANIE JAEGER

overheating. Laser materials and infrared devices also contain dysprosium. Currently, China controls 97 percent of the mining and production of dysprosium and other REEs. In 2010, China announced it would be cutting its REE exports over the next six years. China has cut its exports in half during the last five years and levied a 25 percent tax on the most expensive REEs, which include dysprosium, and a 15 percent tax on the less expensive ones. “Due to increasing demand as well as actions by China to restrict exports, it is critical that we develop domestic rare earth supplies, processing and manufacturing,” said Sen. Mark Begich.

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n November 2011, the price of dysprosium skyrocketed to $2,900 per kilogram (2.2 pounds). Dysprosium, a rare earth element (REE), is indispensable to our country’s defense and green technologies. The world’s strongest and lightest magnets, which power hybrid and electric motors in automobiles and operate gears in wind turbines, are manufactured from a combination of dysprosium and another REE, neodymium. These magnets enable the miniaturization of hard disk drives and other electronic devices. Dysprosium, an important component in nuclear fuel rods, captures neutrons and prevents the rods from

In 2006, Jim McKenzie, a Canadian entrepreneur, bought Bokan Mountain, the site of Alaska’s first and only uranium mine, the Ross Adams mine, in Southeast. Prospector Bob Dotson originally owned the mineral rights to this mine. Initially, McKenzie paid Dotson and his family $520,000 and a 2 percent royalty on the value of any ore extracted from their claims. Later, Ucore Rare Metals, a Canadian company, paid $995,000 for the entire site and McKenzie invested $500,000 (Canadian) of his own money in the project. McKenzie became chief executive officer of the company and his geologist friend, Herman Keyser, became vice president.

Over a three-year period, a mine exploration crew drilled holes thousands of feet into the bedrock under the mine. Core samples, smooth cylinders of mineral-laden rock taken from each hole, showed large concentrations of REEs next to the uranium veins until they got to an area called the I&L zone, named after former claimholders Irma and Lester Hollenback. In this area, the uranium deposits, which usually are found in association with REEs, continued up the mountain while the REE deposits diverged toward the southeast. Because China announced they were cutting exports of REEs to the U.S., Ucore decided to pursue its REE deposits instead of the uranium. Aurora Geosciences, Ucore’s exploration consultants, estimates there are 3.7 million metric tons of REEs under Bokan Mountain. (One metric ton is 2,200 pounds.) Although the deposit appears to be small, it is believed to be one of the purest in the U.S., containing up to 21 percent dysprosium. Because of the rapidly increasing price of REEs, the value of Bokan Mountain’s deposits cannot be accurately determined.

Bokan Mountain, located about 31 miles southwest of Ketchikan and 81 miles north of Prince Rupert, stands on the southern end of Prince of Wales Island in Southeast Alaska. Ucore’s project at Bokan Mountain totals 19 square miles and is surrounded by the Tongass National Forest. Ucore has been able to obtain a secure mineral title with no claim issues, because no indigenous or residential populations occupy the land. Bokan has significant infrastructure remaining from when it was an active uranium mine, including an access road system, and is located in close proximity to Kendrick Bay, which is deep enough for barge traffic. Prior permits for mining in the area are still intact and current permits have recently been acquired. The mine lies near the Alaska Marine Highway, the Pacific Ocean and the U.S. West Coast. McKenzie hopes to be able to begin production in 2015. Ucore still needs to build a mill, a conveyor belt to the shore, camps for the miners, and a dock to load mineral-containing rock onto the barges.

Ucore has enjoyed political support from Alaska Governor Sean Parnell and Begich. When the U.S. Forest Service tried to hold up road permits during the drilling process, Parnell intervened and sped up the permitting process. Possibilities for employment opportunities in Southeast bolster this strong support. The State of Alaska is considering underwriting a REE separation plant on Gravina Island near the Ketchikan airport. In August 2011, McKenzie and Begich met at Bokan. “Identified as one of the most concentrated heavy rare earth deposits in the world, Bokan has the potential to provide rare earth elements needed for our national defense as well as for everyday use in products from cell phones to smart cars,” Begich said after the meeting. “In addition, the Bokan project would help diversify the economy of communities throughout Southeast Alaska by creating a significant number of year-round jobs. I look forward to the project making a transition from ❑ exploration to production.”

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BANKING & FINANCE

Reality of Retirement Funding Sharing responsibility with your employees Photos courtesy of Escopeta Oil & Gas

ecades ago, Americans could depend on what’s been called a three-legged stool—a stable pension plan, Social Security and a 401(k) plan. Today, many pension plans have been discontinued, frozen or eliminated, impacting one of the key pillars of the retirement system. Social Security is not as strong either; the funding needs to be shored up, and for many, the benefits represent a lower percentage of their living expenses. The evolution of retirement toward individual responsibility and ownership is putting more importance on the 401(k). We need to do all we can to maximize the full potential of 401(k) plans. Employers need to be proactive partners in this effort, with their employees, in building a solid retirement system.

NEW RETIREMENT REALITY How are Americans doing with building up their 401(k) plans? Our research shows the average amount saved for retirement is only $25,000. People predict they’ll need a median savings of $350,000, according to results in the 2011 Wells Fargo Retirement Survey. They also estimate they’ll need to live on that money for 20 years, but intend to spend 10 percent of it each year. The numbers don’t add up to a financially secure retirement. Nearly three out of four Americans also plan to keep working in their retirement years, based on responses to the same 2011 retirement survey. However, those plans may not work out for many because of health issues or lack of employment opportunities. Help employees save with a 401(k) plan Helping today’s work force build adequate savings to generate a paycheck for retirement is important for the broader society and for the individual

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BY ROD SHIPLEY workplace. Employees who know they can retire on their terms are likely to be more motivated and more productive. With a 401(k) plan, employees can control their own participation, rate of savings, and allocation of investments inside the plan. Measuring whether employees are actively contributing and managing their investments is critical to determine if a 401(k) plan is doing a good job preparing people for retirement.

MEASURE YOUR PLAN Employers can measure the health of their plan by evaluating the number of employees that are maximizing the use of the plan. A successful 401(k) plan measures engagement on three levels: participation rate; contribution rate, ideally saving 10 percent or more annually; and adequate diversification, based on retirement age and income. The participation rate reveals the number of employees contributing to the employer-sponsored retirement plan as compared with the number of employees eligible. The contribution rate is the percentage of the employee salary set aside annually. A related issue is whether the contribution rate is growing as the employee progresses through his or her career with promotions or salary increases. Investment diversification addresses having a mixture of low-risk and higher-risk investments fitting an employee’s age, and factoring in whether he or she can ride out the ups and downs of the stock market. Employers who contribute a match to retirement savings in the plan can also create a big incentive for employees to participate. After setting up the match, adjust it to boost the percentage saved if your employees seem to have hit a plateau. For example, for the same dollars, you could introduce a 25-cent match on the first 10 percent of pay

rather than a 50-cent match on the first 5 percent of pay. Auto programs, such as enrollment and escalating salary deferral increases annually, combined with age-appropriate investment solutions such as target date funds, go a long way to help employees achieve retirement security. Education sessions, both at enrollment time and throughout the year, are critical to increase contribution rates over time. Consider reaching out to employees who don’t participate to address their objections and emphasize the benefits of enrollment.

PLAY AN ACTIVE ROLE Employers need to play an active role in helping their employees take a disciplined, long-range approach to saving for retirement through a 401(k) plan. Americans have told us they want this kind of shared model. In the Wells Fargo Retirement Survey, 62 percent said employers should automatically enroll employees in a 401(k) or similar plan, and 61 percent said 401(k) plans should automatically increase the employee contribution rate by 1 percent each year. Also, 79 percent said they wanted employers to provide personal advice to help them manage a 401(k) plan. Finally, encourage your employees to develop a written plan to achieve 80 percent pay replacement. Establishing whether the employee is on track to replace 80 percent pay and providing educational resources can go a long way to help your employees realize ❑ their retirement dreams.

About the Author Rod Shipley is Alaska regional director for Wells Fargo’s Institutional Retirement and Trust division. Contact him at 907-265-2841 or shiplerr@wellsfargo.com.

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

ALASKA TRENDS By Paul Davidson Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

Alaska’s Seafood Processing Employment

laska’s seafood processing industry consists of more than 500 processors, of which more than half are ocean vessels. Of the more than 200 shore-side processors, 30 process the bulk of seafood. Most seafood processors in Alaska do primary processing such as gutting, heading and freezing. Secondary seafood processing is mostly done outside Alaska. The number of fishermen in Alaska who catch, process and sell directly to consumers is on the rise, according to the State of Alaska, Office of Fisheries Development. Seafood processing represents, on average, 69.08 percent of Alaska’s manufacturing employment of the last decade, as evidenced by Alaska Department of Labor and Workforce Development, Research and Analysis Section monthly employment statistics. The chart illustrates the correlation Alaska manufacturing employment has with seafood processing employment. There is a trend of employment decline in seafood processing and

in overall manufacturing from the years 2003 to 2007. Manufacturing and seafood processing employment diverge in 2011 with growth in seafood processing employment and loss in overall manufacturing employment in 2011. The divergence in employment is unusual and could potentially be explained through a decrease in other Alaska manufacturing employment and through potential slight discrepancies in some preliminary data. At this time we can only surmise the real cause of the ❑ employment divergence.

Chart Data from the State of Alaska – Monthly employment statistics: http://labor.alaska.gov/research/ces/ces.htm

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN MARINE/PENCO

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

111

ALASKA TRENDS

Indicator

Units

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 Sectoral 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 Truck 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

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Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

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

2nd Q11 2nd Q11 1st H11 1st H11

32,862 12,975,924 200.28 223.60

32,433 12,828,663 195.46 218.58

31,153 12,462,673 194.834 217.535

5.49% 4.12% 2.79% 2.79%

Number Filed Number Filed Number Filed

October October October

98 74 16

78 56 14

95 74 11

3.16% 0.00% 45.45%

Thousands Thousands Thousands Thousands Thousands

October October October October October

341.49 189.16 44.92 39.66 37.46

344.34 185.26 45.02 39.91 37.62

333.77 186.47 43.41 36.01 34.72

2.31% 1.44% 3.48% 10.15% 7.91%

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 Thousands

October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October

327.1 43.8 283.3 16.8 16.3 13.6 17.5 9.5 4.8 63.3 6.1 35.8 6.2 10.6 21.4 5.7 3.5 6.5 4.4 15.1 26.9 43.9 31.9 30.7 5.3 20.2 11.3 85.6 16.2 26.6 8.6 42.8 25.1 3.9

343.3 49.8 293.5 17.1 16.6 13.7 18.6 14.1 8.5 67.0 6.4 36.9 6.3 10.4 23.7 6.1 3.7 6.5 4.5 14.8 28.3 43.3 31.9 372.0 7.2 22.6 11.1 85.3 17.2 26.7 8.5 41.4 23.7 4.0

324.8 43.6 281.2 16.3 15.8 13.3 17.6 9.7 6.8 62.2 6.1 34.9 6.2 9.7 21.2 5.8 3.1 6.4 4.3 15.5 26.3 42.2 30.2 29.9 6.4 18.0 11.9 86.8 16.7 26.5 8.5 43.6 25.2 4.0

0.71% 0.46% 0.75% 3.07% 3.16% 2.26% -0.57% -2.06% -29.41% 1.77% 0.00% 2.58% 0.00% 9.28% 0.94% -1.72% 12.90% 1.56% 2.33% -2.58% 2.28% 4.03% 5.63% 2.68% -17.19% 12.22% -5.04% -1.38% -2.99% 0.38% 1.18% -1.83% -0.40% -2.50%

Thousands Thousands Thousands Thousands Thousands

October October October October October

366.67 201.37 47.79 39.54 38.88

369.00 197.73 47.79 42.36 40.61

359.76 199.33 46.71 38.73 37.79

1.92% 1.02% 2.31% 2.09% 2.88%

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

ALASKA TRENDS

Indicator

Units

Unemployment Rate Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast United States

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Percent Percent Percent Percent Percent Percent

October October October October October October

6.9 6.1 6 6.8 8.1 8.5

6.7 6.2 5.8 5.8 7.4 8.8

7.3 6.6 6.3 7.1 8.8 9.0

-5.48% -7.58% -4.76% -4.23% -7.95% -5.56%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

October October October

17.54 9.17 110.85

17.54 8.60 113.76

19.17 11.02 82.41

-8.52% -16.84% 34.51%

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

October October October October October

9 2017 1,666.55 31.97 0.93

7 1978 1,776.25 38.15 1.04

6 1668 1,377.00 23.39 1.19

50.00% 20.92% 21.03% 36.68% -21.63%

REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Deeds of Trust Recorded Anchorage – Recording District

Millions of $ Millions of $ Millions of $

October October October

17.41 7.36 10.05

45.60 8.76 36.84

92.21 5.95 86.26

-81.12% 23.79% -88.35%

Total Deeds

October

1059

999

1,166

-9.18%

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

Thousands Thousands

October October

363.12 66.04

435.91 83.53

421.23 75.11

-13.80% -12.07%

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

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

October October October October October October October

39,002.20 39,513.90 87.3 1,962.4 122.4 71.5 1,677.3

36,971.70 37,537.60 56.3 (1,989.0) (114.2) 21.5 (1,719.0)

37,287.90 37,740.50 174.8 $892.0 44.7 43.7 651.2

4.60% 4.70% -50.06% 120.00% 173.83% 63.62% 157.57%

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 $

3rd Q11 3rd Q11 3rd Q11 3rd Q11 3rd Q11 3rd Q11 3rd Q11 3rd Q11 3rd Q11

2,105.62 49.64 156.23 1,097.05 7.05 1,847.06 1,800.05 543.72 1,256.33

2,050.03 51.85 158.58 1,098.51 6.21 1,796.24 1,756.69 643.96 1,114.74

2,068.99 37.35 131.40 1,110.96 15.76 1,823.80 1,785.53 479.89 1,305.64

1.77% 32.91% 18.90% -1.25% -55.26% 1.28% 0.81% 13.30% -3.78%

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

October October October October October

76.62 1.02 0.63 0.73 6.38

76.84 1.00 0.63 0.72 6.39

81.86 1.02 0.63 0.72 6.67

-6.40% 0.38% 0.69% 1.44% -4.36%

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

Data compiled by University of Alaska Center for Economic Development.

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

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ADVERTISING INDEX AES Alaska Executive Search . . . . . . . . . . . . . . . . . 43 Alaska Air Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Alaska Housing Finance Corp. . . . . . . . . . . . . . . . . . 3 Alaska Media Directory . . . . . . . . . . . . . . . . . . . . . . 67 Alaska Miners Association—Fairbanks . . . . . . . . . . 67 Alaska Photobooth . . . . . . . . . . . . . . . . . . . . . . . . . 67 Alaska Rubber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Alaska Traffic Co. . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Alaska USA Federal Credit Union . . . . . . . . . . . . . . 63 Allure Hair Design & Day Spa . . . . . . . . . . . . . . . . . 86 Ameresco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 American Marine/PENCO. . . . . . . . . . . . . . . . . . . . 111 Amerigas Propane . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Anchorage Opera . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Arctic Foundations Inc. . . . . . . . . . . . . . . . . . . . . . . . 47 Arctic Office Products (Machines) . . . . . . . . . . . . . 107 Azimuth Adventure Photography . . . . . . . . . . . . . . . 27 Bell Tech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Bethel Native Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 17 Bezek Durst Seiser . . . . . . . . . . . . . . . . . . . . . . . . . 39 Bristol Bay Native Corp. . . . . . . . . . . . . . . . . . . . . . . 25 Business Insurance Associates Inc. . . . . . . . . . . . . 41 Canadian Mat Systems Inc. . . . . . . . . . . . . . . . . . . . 84 Carlile Transportation Systems . . . . . . . . . . . . . . . . 13 CCI Industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Chris Arend Photography . . . . . . . . . . . . . . . . . . . . 114 City Electric Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Clarion Suites Downtown . . . . . . . . . . . . . . . . . . . . . 87 Cloud49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Construction Machinery Industrial LLC . . . . . . . . . . . 2 Crowley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Cruz Construction Inc. . . . . . . . . . . . . . . . . . . . . . . . 85 Davis Constructors & Engineers Inc. . . . . . . . . . . . 55

114

Design Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Donlin Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Dowland-Bach Corp. . . . . . . . . . . . . . . . . . . . . . . . . 77 Doyon Emerald . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 EDC Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Eklutna Native Corp. . . . . . . . . . . . . . . . . . . . . . . . . 59 Engineered Fire & Safety . . . . . . . . . . . . . . . . . . . . . 83 ERA Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 ESS Support Services/ ESS Labor Services . . . . . . . . . . . . . . . . . . . . . . 82 Fairbanks Memorial Hospital . . . . . . . . . . . . . . . . . . 99 First National Bank Alaska . . . . . . . . . . . . . . . . . . . . . 5 GCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Golden Valley Electric Association . . . . . . . . . . . . . . 66 Golder & Associates Inc. . . . . . . . . . . . . . . . . . . . . . 33 Great Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Haight & Associates Inc. . . . . . . . . . . . . . . . . . . . . . 41 Hawk Consultants LLC . . . . . . . . . . . . . . . . . . . . . . 82 Horizon Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Homer Electric Association . . . . . . . . . . . . . . . . . . . 64 Hotel Captain Cook . . . . . . . . . . . . . . . . . . . . . . . . . 23 Integrated Concepts & Research Corp. . . . . . . . . . . 72 Judy Patrick Photography . . . . . . . . . . . . . . . . . . . . . 83 Kakivik Asset Management LLC . . . . . . . . . . . . . . . 79 Kendall Ford Wasilla . . . . . . . . . . . . . . . . . . . . . . . 109 Lounsbury and Associates . . . . . . . . . . . . . . . . . . . . 60 Lynden Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 NALCO Energy Services . . . . . . . . . . . . . . . . . . . . . 77 Northern Air Cargo . . . . . . . . . . . . . . . . . . . . . . 68, 69 Northrim Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Pacific Alaska Freightways . . . . . . . . . . . . . . . . . . . . 75 Pacific Pile & Marine . . . . . . . . . . . . . . . . . . . . 8, 9,10 Paramount Supply . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Parker Smith & Feek . . . . . . . . . . . . . . . . . . . . . . . . 21 PDC Engineers Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 42 Pebble Partnership . . . . . . . . . . . . . . . . . . . . . . . . . 105 Pen Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Personnel Plus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 PND Engineers Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 46 Polar Supply Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Procomm Alaska. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Pyramid Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Quality Suites near Convention Center. . . . . . . . . . . 87 R&M Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Rodeway Inn Voyager Hotel . . . . . . . . . . . . . . . . . . . 87 Rosie’s Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 RSA Engineering Inc. . . . . . . . . . . . . . . . . . . . . . . . . 39 Seekins Ford Lincoln Fleet . . . . . . . . . . . . . . . . . . . 83 Shaw Environmental & Infrastructure Group . . . . . . . . . . . . . . . . . . . . . . . 46 Sitka Economic Development Association . . . . . . . . 95 Span Alaska Consolidators . . . . . . . . . . . . . . . . . . . 74 Spenard Builders Supply . . . . . . . . . . . . . . . . . . . . . 53 Stellar Designs Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 67 Ted Stevens Anchorage International Airport . . . . . 98 The Growth Company . . . . . . . . . . . . . . . . . . . . . . 107 University of Alaska Fairbanks College of Engineering & Mining . . . . . . . . . . . . . 57 Udelhoven Oilfield Systems . . . . . . . . . . . . . . . . . . . 97 UMIAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 United Way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Usibelli Coal Mine Inc. . . . . . . . . . . . . . . . . . . . . . . . 35 Washington Crane & Hoist . . . . . . . . . . . . . . . . . . . . 15 Waste Management . . . . . . . . . . . . . . . . . . . . . . . . . 19 Wells Fargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 WHPacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

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

RESPONSE

RECOVERY

RESTORATION

Bell Tech Inc. specializes in spill response and eco-recovery. Our services include the response, recovery and restoration as it relates to marine and land based oil spill decontamination. With over 24 years of experience ranging from the Exxon Valdez to the Deepwater Horizon Incidents Bell Tech has cleaned more contaminated vessels than anyone in the world. The patented Bell-Vac System that is used to facilitate the decontamination is unlike any other process as it is capable of 100% contaminant capture and recovery.

OUR ECO-FRIENDLY SERVICES INCLUDE BUT ARE NOT LIMITED TO:

Consulting and Contracting Phase I and II Environmental Assessment On-site Marine, HAZMAT and OSHA Training Arctic Ice and Frozen Tundra Recovery River & Stream Spill Recovery and Restoration

VESSELS

DOCKS

RIVER BANKS

BERTHS

VEGETATION

BARGES

BEACHES

SALMON STREAMS

Bell Tech received the Green award in 2009, 2010 and 2011 for designing environmentally safe procedures for use during all phases of oil spill cleanup.

belltechconsultants.com 1-800-537-6949 Bell Tech Inc.

537 Egan St.

P.O. Box 3467

Valdez, AK 99686

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