Alaska Business Monthly August 2014

ENERGY & POWER | SUSTAINABLE DEVELOPMENT | ENVIRONMENTAL SERVICES WORKSITE COMMUNICATIONS | TRANSPORTING HAZARDOUS WASTE

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August 2014

DIVER DOWN, DIVER DRONE Industrial-strength mariners Page 96

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CONTENTS ABOUT THE COVER DSV Sand Island standing by to provide dive support in Cook Inlet is a prime example of the industrial-strength mariners at work in Alaska waters. “Diver Down, Diver Drone” explores what it takes to take care of marine infrastructure, story begins on page 96.

DEPARTMENTS From the Editor Editor. . . . . . . . . . . . . . . . . . . . . . . . . 7 Right Moves . . . . . . . . . . . . . . . . . . . . . . . . .116 Inside Alaska Business . . . . . . . . . . . . . . . 118 Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Alaska This Month . . . . . . . . . . . . . . . . . . . 122 Events Calendar . . . . . . . . . . . . . . . . . . . . . 125 Market Squares . . . . . . . . . . . . . . . . . . . . . 126 What’s Next . . . . . . . . . . . . . . . . . . . . . . . . 126 Alaska Trends . . . . . . . . . . . . . . . . . . . . . . . 127 Ad Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

Cover photo courtesy of Global Diving & Salvage, Inc.

ARTICLES

TRANSPORTATION

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88 | Hazardous Waste Transportation Trucking the muck

By Tom Anderson 92 | Tugging Along What the mighty tugboats accomplish

By Kirsten Swann

OIL & GAS

96 | Diver Down, Diver Drone Industrial-strength mariners

By Vanessa Orr

Graphic courtesy of ECI/Hyer Architecture

What the $138.9 million State Library Archives Museum in Juneau will look like.

ARCTIC IDEAS

8 | Tall stack of authorizations await Alaska LNG project

By Bill White

VISITORS INDUSTRY

20 | Ziplines in Alaska Flying high over the Last Frontier

By Tasha Anderson

FINANCIAL SERVICES

24 | Surety Bonds, an Important Tool for Securing Financing and Maintaining a Business

By Tracy Barbour

NATURAL RESOURCES

58 | Tongass Timber Program Rational, economic transition needed

By Owen Graham 62 | Tongass Bellwether: Dargon Point Timber Sale Sustainable young-growth timber industry shows early promise

By Dustin Solberg

CONSTRUCTION

26 | Public Projects Review A billion dollar summer

By Rindi White

TELECOM & TECHNOLOGY

54 | Leveraging Worksite Telecom Tools Enhancing connectivity, collaboration, and productivity

By Tracy Barbour

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Alaska Business Monthly | August 2014

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102 | Insights on Filling the Pipeline Better technology, techniques, and public policy

By Kirsten Swann 107 | Allocating Liability Risk While Doing Business in Alaska

By Renea Saade

Good Faith Lumber, of Thorne Bay, Alaska, is a new generation of sawmill that has been successful in finding new markets for valueadded wood products. © Bethany Goodrich

www.akbizmag.com

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CONTENTS

special section Energy & Power 36 | Railbelt Electric Grid Status check on projects

By Susan Sommer

46 Photo courtesy of Kodiak Electric Association

42 | ML&P’s New Plant Under Construction Efficient energy for Anchorage’s oldest neighborhoods

By Russ Slaten 46 | Commercial Wind Farm Development Energy generation for the next generation

By Gail West 50 | The Efficiency Factor in the Energy Equation Or how to save hundreds of millions of dollars every year

By Julie Stricker

Six Pillar Mountain turbines above St. Herman’s Boat Harbor.

ARTICLES

special section

112

Environmental Services 66 | Valley Community for Recycling Solutions Facility grows with population and interest in recycling

By Rindi White

© BP

68

BP heavy oil test facility, Milne Point field.

68 | Recycle, Reuse, Recover Emerald Alaska gets down to the business of sustainability

By Rindi White

108 | Foreign Fuel for Western Alaska Economies of scale, ocean transfers save money

By Mike Bradner Photo courtesy of Emerald Alaska

112 | Heavy Opportunity ConocoPhillips, BP plan major projects to produce more viscous oil

By Wesley Loy

Correction In the 2014 Mid-Year Economic Outlook published in July, we incorrectly stated the title of Janet Weiss, President of BP (Exploration) Alaska, Inc. AKA BP Alaska.

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Emerald Alaska employee.

Alaska Business Monthly | August 2014

72 | NPR-A Legacy Wells Targeted for Cleanup Funding for BLM resulted in strategic plan

By Margaret Sharpe 75 | Mitigating Contamination on Alaska Native Lands Hundreds of sites, very little funding to get work done

By Will Swagel 81 | Alaska Business Monthly’s 2014 Environmental Services Directory www.akbizmag.com

FROM THE EDITOR Follow us on and

Volume 30, Number 8 Published by Alaska Business Publishing Co. Anchorage, Alaska Jim Martin, Publisher 1989~2014

EDITORIAL STAFF

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

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

BUSINESS STAFF

President General Mgr. VP Sales & Mktg.

Senior Account Mgr. Account Mgr. Survey Administrator Accountant & Circulation

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

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com Advertising email: materials@akbizmag.com Pacific Northwest Advertising Sales 1-800-770-4373 ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2014, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each.

Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing.

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Party Time B

Pick a ballot and vote

y now I had hoped all those thirty-five thousand unregistered voters would have registered because it’s about time to vote. At press time, only about four thousand had, with less than two weeks left before the deadline on July 20 for the August 19 Alaska Primary Election. Much will be decided that day. There are eleven candidates for United States Senator; seven candidates for United States Representative; seven candidates for Governor; five candidates for Lieutenant Governor; and one Ballot Measure.

Additionally there are more than one hundred candidates for State Legislature, 25 percent Senate and the rest for the House of Representatives, though many of these races are not races, yet. The majority of them have just one or two candidates, many with two who are either a Democrat or a Republican, so when voters get their ballots, they will see only one person to vote for—not much of an incentive to mark the oval.

What if you wrote in the candidate that isn’t on your ballot, but is on another ballot? Will that vote count? No. There are no write-ins on the Primary Ballot. What you see is what you get. So, if you wanted to cross party lines and vote for the person not the party, there’s no way it can be done; it won’t count. No mix and match in the primary, which might be one reason for the low voter turnout. It has not always been this way.

Time for a little history lesson. Alaska used to have a Blanket Primary, one ballot with all the candidates, and voters could actually vote for whomever they wanted to. After a 1947 referendum, Alaskans enacted a Blanket Primary; however, in 1960 the First State Legislature replaced the Blanket Primary with a Single Ballot Open Primary, which wasn’t really open at all. There was still one ballot with all the candidates, but voters had to choose to vote either Democrat or Republican. If a voter voted for candidates from both parties the ballot was thrown out—invalidated.

This remained until 1967 when Governor Walter J. Hickel asked the first session of the Fifth State Legislature to go back to the Blanket Primary. The Legislature obliged. Then, twenty-five years later in 1992, the Republican Party of Alaska sued the state in federal court and won. Alaska then had a Party-Rule Republican Ballot for Republican, nonpartisan, and undeclared voters and a Statutory Ballot for everyone else. This was challenged in 1993 but did not change. The State of Alaska took the issue of the constitutionality of the Blanket Primary to the Alaska Supreme Court, which ruled it did not infringe on a party’s right of free association; however, in 2000 the US Supreme Court ruled California’s Blanket Primary unconstitutional and Alaska went back to the Party-Rule Ballot Primary, then passed a law for every political party to have their own ballot—there were six ballots in the 2002 Primary Election. The next year, after more litigation, a Combined Party Ballot concept took hold, with the parties deciding who could be on their ballot and who could vote on their ballot. That is how we came to have the current system for the last ten years—anybody Republican; anybody else; or nobody, just the measures—somewhat of a trifecta.

Another win-win-win is the August issue of Alaska Business Monthly.

The team has put together another really great magazine, enjoy! And by all means, pick a ballot and vote!

—Susan Harrington, Managing Editor August 2014 | Alaska Business Monthly

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ARCTIC IDEAS

Tall stack of authorizations await Alaska LNG project

By Bill White

T

he multibillion-dollar Alaska LNG project aims not only to tap the North Slope’s bounty of natural gas, pipe it to tidewater and superchill the vapors into a condensed liquid for export to Asia markets.

The project also aims to tap a bounty of public resources: land, wetlands, gravel, lakes and ponds, streams and rivers, possibly even the ocean itself. And to tap them, the project sponsors would need a stack of permits and authorizations from a variety of government agencies.

During construction and operations, the system’s machinery, like any industrial activity, would create emissions that would alter air quality. Public soils and vegetation would be disturbed, at least temporarily. The project would cross paths with threatened and endangered species, and other fauna under public protection.

The project’s sponsors cannot use the public’s land, water and other resources without permission. It can’t change the air quality or water quality without a public process finding that such changes would be acceptable, findings that likely would come with strings attached.

The project’s pipeline can cross the Yukon, Tanana or Susitna rivers only after demonstrating this won’t impair the navigability of those waterways.

The gas liquefaction plant cannot start production without a determination that it can be run safely.

The gas itself cannot be shipped away from the United States without consideration of whether the export would harm U.S. consumers.

Even the president, under a 1976 law, would have a special say on the export of North Slope gas, a unique feature of the Alaska project that doesn’t exist for Lower 48 liquefied natural gas projects.

To say that the Alaska LNG project would need federal paperwork is to understate the matter, like saying the Pentagon is roomy or monsoon season is damp.

The sponsors know the task ahead to receive the authorizations needed

8

for their project. And they have begun gathering the environmental data regulatory agencies will want to see.

Permits Before Construction More than a half dozen federal agencies would issue major authorizations for the Alaska LNG project before construction could begin. These include: ■ Federal Energy Regulatory Commission—to authorize siting, construction and operation of the LNG plant and likely the 800-mile pipeline from the North Slope to the plant. FERC also would take the lead on a consolidated environmental impact statement researched and written on behalf of itself and other federal agencies.

■ Bureau of Land Management—to grant use of federal land for the pipeline, construction camps, staging yards, gravel mining and water extraction.

■ U.S. Army Corps of Engineers—to issue dredge and fill permits pertaining to wetlands, rivers and offshore areas.

■ Environmental Protection Agency— to permit disposal of sediment dredged from the Beaufort Sea if needed to create a deeper shipping channel for sealifts to deliver construction materials and equipment to the North Slope.

■ Fish and Wildlife Service and National Marine Fisheries Services—to authorize isolated incidents of harm or death of marine mammals, endangered species or other protected animals.

■ Pipeline and Hazardous Materials Safety Administration—to ensure the gas pipeline would be built and operated to federal safety standards.

■ Coast Guard—to ensure any bridging of rivers would not impair the waterway’s navigability, document the suitability of Cook Inlet to handle LNG tanker traffic, consult with the project sponsor on the LNG terminal’s emergency response plan and approve the terminal’s security plan.

Alaska Business Monthly | August 2014

■ Department of Energy—to authorize gas exports.

Other federal agencies could lay their fingerprints on the project, too. For example, the Federal Communications Commission for radio communications, the Federal Aviation Administration for building or altering airstrips, Homeland Security for the vulnerability of facilities to attacks, or the Bureau of Indian Affairs for rights-of-way on any Alaska Native allotments the pipeline could cross.

State of Alaska agencies would have the lead on air, water and wastewater permits, under authority delegated from the EPA, as well as use of state land.

Federal agencies and the project sponsors also must consult with the Alaska Historic Preservation Office on any historic or archeological sites the project would encounter during construction. Part of the project’s fieldseason work in past years has been to identify such sites so the pipeline route and other land use can skirt them. Encountering them during construction could involve delays while preservation officers decipher a site’s significance.

Déjà Vu, And Then Some Federal agencies have seen Alaska North Slope gas projects before. Over the years, quite a few of them have burst into headlines like supernovas, before eventually flaming out.

For the most recent proposal to pipe North Slope gas through Canada to North American consumers, about two dozen federal agencies had lined up for permitting work before the pipeline sponsors shelved the project in 2012.

The Alaska LNG export project would engage many of these same agencies. A substantial portion of it is essentially identical to the project to serve North America: A huge plant at Prudhoe Bay to cleanse produced gas of impurities, and half of the pipeline route—as far as the Fairbanks area. www.akbizmag.com

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Alaska LNG proposes a $45 billion to $65 billion venture that would be one of the world’s largest LNG projects.

The 800-mile pipeline would carry up to 3 billion to 3.5 billion cubic feet of natural gas per day. After Alaskans, the pipeline compressor stations and LNG plant at Nikiski consume some gas, the plant would have the capacity to make 17 million to 18 million metric tons a year of LNG, about 2.2 billion to 2.4 billion cubic feet of gas a day.

The sponsors are the main North Slope producers—ExxonMobil, ConocoPhillips and BP—as well as pipeline company TransCanada and the state of Alaska. (TransCanada and ExxonMobil sponsored the 2012-shelved pipeline to Canada. ConocoPhillips and BP also sponsored a project to move North Slope gas through Canada that couldn’t pass the economics test and was dropped in 2011.) They are in the pre-front-end engineering and design phase, or pre-FEED, which is expected to be completed in late 2015 or 2016. If the project looks financially viable, next would be FEED of perhaps two years or so, when many of the pre-construction federal authorizations would be obtained. Construction could start toward the end of this decade if the project keeps progressing.

Below is a brief guide to the federal agencies that would be involved with the major Alaska LNG authorizations.

Federal Energy Regulatory Commission This commission would do some of the heaviest lifting in overseeing the Alaska LNG project.

It would authorize the siting, construction and operation of the LNG plant and related facilities and take the lead in crafting the environmental impact statement that multiple agencies require for their authorizations.

It’s likely that FERC would consider the 800-mile pipeline and the gas treatment plant at Prudhoe Bay as “related facilities” to the LNG plant in preparing a single environmental impact statement.

The argument would be strong that these would exist primarily to feed gas to the LNG plant, making them integral to the plant’s function. FERC won’t consider and decide whether they’re related facilities until the Alaska LNG sponsors ask the commission for permission to pur10

Federal Energy Regulatory Commission Oversight

Authorizes siting, construction, operation of LNG plant and related facilities, likely including 800-mile pipeline and Prudhoe Bay gas treatment plant; lead agency on environmental impact statement.

Key laws

Natural Gas Act of 1938; Energy Policy Act of 2005; National Environmental Policy Act of 1969

Website

http://www.ferc.gov/industries/gas/indus-act/lng.asp

sue the LNG project. FERC would have to interpret the legal definition of “LNG terminal,” which was broadly written by Congress in a 2005 law.

If FERC declines the pipeline and treatment plant oversight, another federal agency or agencies with substantial jurisdiction, such as the Corps of Engineers or Bureau of Land Management, likely would lead separate environmental impact statement(s) for those pieces.

For the LNG plant, FERC would review design and engineering of the three big LNG production lines, called trains, that chill incoming gas to minus 260 so that the vapors liquefy and condense; cryogenic piping and insulation; refrigerant tanks; LNG storage tanks; pumps; meters; boil-off-gas compressors; a pier for two tankers; utilities. That’s just a sampling.

FERC would evaluate how construction could affect geology, soils, water and air quality, noise levels, wetlands, vegetation, wildlife, threatened or endangered species, essential fish habitat, land use and recreation, among other possibilities.

For the pipeline, gas treatment plant and other related facilities, the breadth of oversight would be just as vast. The environmental impact statement could cover temporary and permanent roads, bridges and water-body crossings, material sites, pipe-storage yards, contractor yards, worker camps, compressor and metering stations, control rooms, regulating stations, helipads, dredge channels, ocean-disposal sites, ice/snow pads, pipeline trenching—to name some.

FERC requires project sponsors to pre-file with the commission ahead of formally filing for authority to build an

Alaska Business Monthly | August 2014

LNG plant. During the months-long prefile period, the sponsor compiles specific baseline information on the project and the surrounding environment. The energy commission and other regulatory agencies can then verify and use that baseline information for the environmental-impact analysis. The sponsors compile this information in dense public documents called “resource reports.”

For the unsuccessful North Slope-toCanada gas pipeline project, the TransCanada-ExxonMobil team filed 11 draft resource reports in January 2012. They tallied about 4,500 pages. Much of this information likely can be used for the Alaska LNG project. More info will need to be gathered for other parts of the pipeline route and the LNG plant site.

The environmental analysis is a key stepping stone to getting FERC approval. When FERC approved construction of Cheniere Energy’s Sabine Pass, La., LNG export plant in 2012, its 57-page order finding the project is “not inconsistent with the public interest” largely discussed the environment-impact analysis. That plant now is getting built, and Cheniere says it will make its first LNG in late 2015.

Such analyses are mandated in the National Environmental Policy Act, which became law in 1970. It requires federal agencies understand and disclose the environmental consequences of their decisions. The law gave birth to the phrase “environmental impact statement” ... and the big industry that since has built up around that mandate.

Many federal agencies besides FERC would have their own NEPA roles related to Alaska LNG. They likely would www.akbizmag.com

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Separately, BLM permits the purchase and extraction of construction gravel from federal land under the Materials Act. BLM would need to consider environmental impacts before acting on any of these permits.

Bureau of Land Management Oversight

Authorizes use of federal land for pipelines, compressor stations, construction activities, gravel extraction, etc.

Key laws

Mineral Leasing Act of 1920; Materials Act of 1947; National Environmental Policy Act of 1969

Website

http://www.blm.gov/ak/st/en.html

sign on as cooperating agencies for the impact statement.

FERC would try to make sure the EIS is comprehensive enough to serve as BLM’s NEPA document, as well as the document needed by the Corps of Engineers, Fish and Wildlife Service, National Marine Fisheries Service, Coast Guard and others for the permits and authorizations they issue.

FERC and other agencies have been collaborating on NEPA reviews of proposed Lower 48 LNG export plants for several years. But the scale of Alaska LNG would be far grander than, for example, the roughly $10 billion Cameron LNG project in Louisiana or the $4 billion Dominion Cove Point LNG project in Maryland. Each of those had four cooperating federal agencies for their FERC-led environmental reviews completed in spring 2014.

Alaska LNG would have far more complexity. Greater footprint. Bigger potential environmental impact. FERC likely would be juggling the permitting interests of many more federal agencies. For the recently shelved gaspipeline project from Prudhoe Bay to Canada, FERC was working with nine cooperating federal agencies on the EIS. Many of FERC’s non-environmental requirements for interstate gas pipelines might not apply to an Alaska LNG export project if the pipeline and treatment plant are not deemed interstate facilities under federal law. These include FERC’s rules and policies on customer access (open seasons), rate regulation, tariff provisions and eminent domain.

Bureau Of Land Management The gas pipeline would cross hundreds of miles of federal land. BLM would grant the permit allowing use of this public land.

12

The Alaska LNG project sponsors would apply to use federal land for the pipeline corridor as well as for pipeline compressor stations, work camps, contractor and material yards, helipads, roads and the like related to construction.

In advance of construction, the sponsors would apply to use federal land temporarily for field work to study the route, ice and snow pads, and temporary roads, camps, contractor yards and pipe-storage areas.

BLM would work with other federal agencies if the pipeline route crosses land they oversee. The route likely would skirt two wildlife refuges and two national parks without entering them and completely bypass the big military bases by Fairbanks. It’s unclear how close the route would come to the Clear Air Force Station southwest of Fairbanks, but if the route penetrates that land, the Air Force would need to sign off on BLM’s right-of-way grant.

Army Corps Of Engineers The project would touch a variety of wetlands in the 800-mile span between the Nikiski port in southern Alaska and Point Thomson/Prudhoe Bay on the Arctic Coast: ■ Forested wetlands whose disruption could affect nutrients, stream flows and water quality.

■ Scrub-and-shrub wetlands that serve a similar function as forested wetlands, but also support bird nests and animal browse.

■ Emergent wetlands of sedges, grasses and scattered shrubs that buffer floodwaters, moderate stream flows and are home to juvenile fish, waterfowl and other wildlife.

■ Miscellaneous other wetlands, which include ponds, small lakes and streams.

Within these types of wetlands lie many nuances and subtleties—such as those slaked by groundwater; those fed by rain, snow and overland flow; and those watered by both, to cite one example.

This is where the Corps of Engineers comes in. It regulates the discharge of dredged or fill material into U.S. wa-

Army Corps of Engineers Oversight

Authorizes placement or discharge of dredged or fill material into U.S. waters or wetlands, which would apply to gas pipeline burial as well as other construction activities. Permits pipeline crossings of navigable water bodies. Would permit transport of dredged sediment to Beaufort Sea disposal site if North Slope shipping channel needs to be dredged to bring in construction materials.

Key laws

Clean Water Act of 1972; Rivers and Harbors Act of 1899; Marine Protection, Research and Sanctuaries Act of 1972; National Environmental Policy Act of 1969

Website

http://www.poa.usace.army.mil/

Alaska Business Monthly | August 2014

www.akbizmag.com

ters or wetlands. Trenching the pipeline through wetlands would disturb them and would need Corps approval.

The Corps would consider not only the trench, but on how the buried pipeline would affect the function of surrounding wetlands. Or it would direct the sponsors to avoid particular wetlands.

The same goes for any wetlands affected by constructing the LNG plant, pipeline compressor stations, pipeline construction camps and the like, as well as the gas treatment plant at Prudhoe.

The Corps also would permit the pipeline crossing of rivers and other navigable water bodies, whether the pipe spans the river or tunnels under it.

This permit stems from one of the nation’s oldest environmental laws: the Rivers and Harbors Act of 1899. Section 10 basically aims to avoid the chaos of anybody putting anything they want in waters that other people use.

A Section 10 permit aims to protect the navigable integrity of the water body from new structures, dredging or disposed material.

The Corps has a third permitting authority that could apply to the Alaska LNG project. If the project sponsors need to deepen the shipping channel to Prudhoe Bay’s West Dock so that sealifts of deeper-draft barges could deliver construction materials, the Corps would permit transport of dredged sediment to an offshore disposal site in the Beaufort Sea. The Corps or the Environmental Protection Agency separately would permit the offshore disposal site, as discussed in the next section.

Environmental Protection Agency Alaska LNG would need to build a huge plant at Prudhoe Bay to remove carbon dioxide and other impurities from the produced gas. This would be a megaproject all by itself, likely costing more than $10 billion.

LNG buyers don’t want CO2 in the gas. LNG sellers don’t want it either.

CO2 doesn’t burn, it becomes corrosive when mixed with water, and it would solidify during liquefaction (think dry ice), clunking up the machinery.

So the project sponsors would build a gas treatment plant to remove about 500 million cubic feet a day of CO2 from the produced gas stream and in14

Environmental Protection Agency Oversight

Could be involved in designating and developing a management plan for a Beaufort Sea site that would receive dredged material if a deeper shipping channel is needed to transport construction material to the North Slope. Would also have oversight of state air-emissions and wastewater-discharge permits.

Key laws

Marine Protection, Research and Sanctuaries Act of 1972; National Environmental Policy Act of 1969

Websites

http://water.epa.gov/type/oceb/oceandumping/ http://www2.epa.gov/laws-regulations/summary-marineprotection-research-and-sanctuaries-act

ject it back underground to help pressure more Prudhoe oil to the surface.

The gas treatment plant mainly would be built outside Alaska, hauled to the North Slope aboard sealifts during three or four summers, then assembled.

These would be the biggest sealifts there in many years. An approach channel might need to be deepened to get the mega-barges into Prudhoe’s West Dock.

If so, the sponsors would need a Corps of Engineers permit before depositing dredged material in the ocean. The EPA would need to concur on the permit. Either the Corps or the EPA would identify a Beaufort Sea disposal site. If the EPA designates the site, the EPA and the Corps would develop a site-management plan and revise it every 10 years. If the Corps picks an alternative site, the EPA must approve it.

Any dredging that might be needed in upper Cook Inlet for LNG plant construction at Nikiski or operations would follow a simpler process. The project sponsors would need a Corps permit and disposal site. EPA wouldn’t need to OK the permit but would maintain oversight of the permit and disposal site.

EPA could play several other roles in the Alaska LNG project.

It would review and have oversight of Corps’ permits to place construction fill material in wetlands, streams, rivers and lakes.

The Alaska Department of Environmental Conservation has been delegated responsibility to issue permits on air emissions—from the gas treatment plant, the LNG plant, pipeline compressor stations and elsewhere—and wastewater

Alaska Business Monthly | August 2014

disposal. The EPA has authority to step in if it finds the state permits are inconsistent with applicable laws and regulations.

EPA also would be a cooperating agency and would review the adequacy of the Alaska LNG environmental impact statement.

Fish And Wildlife Service / National Marine Fisheries Service Congress has split oversight of endangered and threatened species, and marine mammals. It assigned some to the Fish and Wildlife Service. The National Marine Fisheries Service oversees others.

Polar bears, walruses and sea otters, among others—Fish and Wildlife Service.

Whales, seals and sea lions, among others—National Marine Fisheries Service.

The Alaska LNG sponsors would need authorizations from both agencies. The processes are similar and rigorous under the variety of federal laws that apply, principally the Marine Mammal Protection Act of 1972 and the Endangered Species Act of 1973.

Other laws are important, too, such as the Migratory Bird Treaty Act, Bald and Golden Eagle Protection Act, Fur Seal Act, Magnuson-Stevens Fisheries Conservation Act’s essential fish habitat provisions and, of course, the National Environmental Policy Act, which mandates that agencies describe and disclose the environmental implications of their decisions.

To account for the incidental take of marine mammals—unintentional harassment, injuries or deaths—each agency www.akbizmag.com

would issue an “incidental take authorization.” These come in two forms: A oneyear incidental harassment authorization, or a letter of authorization valid for up to five years and supported by specific regulations. The authorization would govern the do’s and don’ts of Alaska LNG activities pertaining to the marine mammals.

The public process needed to obtain these can take months to more than a year, depending on the type of authorization requested.

As for endangered or threatened species, the gas project could encounter perhaps 10 or more of them. Ten were listed in the October 2012 environmental impact statement for the smaller, 737-mile state-sponsored gas-pipeline project from Prudhoe Bay to near Anchorage.

These were bowhead, fin, humpback and Cook Inlet beluga whales, Steller sea lions, Eskimo Curlews, polar bears, spectacled and Steller’s eiders, and the Southwest stock of Northern sea otters.

The endangered Cook Inlet belugas were named even though the state-sponsored gas pipeline would stop short of Cook Inlet. The belugas were noted because the project might need to deliver

www.akbizmag.com

Fish and Wildlife Service Oversight

Ensures that endangered or threatened species are not further imperiled. Preserves populations of polar bears, walruses, sea otters and certain other marine mammals. Protects migratory birds and the taking or molesting of bald and golden eagles or their nests. In all cases, authorizes isolated cases of harassment, injury or even death under certain circumstances.

Key laws

Marine Mammal Protection Act of 1972; Endangered Species Act of 1973; Migratory Bird Treaty Act of 1918; Bald and Golden Eagle Protection Act of 1940; National Environmental Policy Act of 1969

Websites

http://www.fws.gov/alaska/fisheries/endangered/ http://www.fws.gov/alaska/eaglepermit/index.htm

construction materials to the Port of Anchorage, which could disturb whales and their critical habitat. Pipeline construction also could cross salmon streams that flow to Cook Inlet, possibly reducing the food available to belugas, the EIS said, although both risks could be miti-

gated to minimize the chances of a problem. The Alaska LNG project plans to lay its pipeline across Cook Inlet, through beluga habitat, though sponsors haven’t selected their preferred route yet.

The Alaska LNG list of affected endangered or threatened species could

August 2014 | Alaska Business Monthly

15

exceed 10. For example, the project could affect Beaufort Sea bearded and ringed seals, which were listed as threatened in December 2012.

Then again, humpback whales could come off the endangered list. Their count is up and biologists are considering whether to delist them.

Under the Endangered Species Act, if the Fish and Wildlife Service or National Marine Fisheries Service determines the project is likely to harm a species or its critical habitat, the agency would study the situation and issue a “biological opinion” discussing it and an incidental take statement, if appropriate, allowing construction to proceed under strict conditions.

Bald and golden eagles, and their nests, are protected under a separate law. Killing obviously is a no-no. But so are noises that can be avoided. Construction projects make plenty of noise. Project sponsors would identify the nests along the route and avoid them. A Fish and Wildlife Service permit would be needed for any incidental harm to the eagles or their nests.

Winter construction, when fewer birds are around, is one way to avoid the eagles, endangered birds and migratory birds protected by other federal laws.

Seasonal construction also could mitigate damage to salmon streams and other “essential fish habitat” recognized under the Magnuson-Stevens Act. Federal biologists would be consulted for their recommendations on ways to minimize or eliminate harm from any project work in such habitat.

Pipeline and Hazardous Materials Safety Administration Oversight

Ensures the pipeline is built and operated to meet the objectives of federal safety standards even if different methods and materials are used because of Alaska’s unusual soils and terrain.

Key laws

Natural Gas Pipeline Safety Act of 1968; National Environmental Policy Act of 1969

Websites

http://www.phmsa.dot.gov/regulations http://primis.phmsa.dot.gov/matrix/PrjHome.rdm?prj=361

Pipeline And Hazardous Materials Safety Administration The 800-mile pipeline would endure extraordinary stresses and strains due to the terrain and soils it would traverse.

One potential problem: Slopes that could slump, taking the buried pipe with it.

Or these: Frost-heaving ground that could lift the pipe, or thawing frozen soils that cause the pipe to sag.

Or this: Abrupt ground shifts during earthquakes.

Pipeline engineers have devised techniques called strain-based design to combat such stresses and strains.

The Pipeline and Hazardous Materials Safety Administration is charged with ensuring the pipeline would be built and operated to meet the objectives of federal safety standards.

National Marine Fisheries Service Oversight

Ensures that endangered or threatened species, or their habitat, are not further imperiled. Preserves populations of whales, seals, sea lions and certain other marine mammals. In all cases, authorizes isolated cases of harassment, injury or even death under certain circumstances.

Key laws

Marine Mammal Protection Act of 1972; Endangered Species Act of 1973; Magnuson-Stevens Fishery Conservation and Management Act of 1996; National Environmental Policy Act of 1969

Websites

http://www.nmfs.noaa.gov/pr/permits/incidental.htm http://alaskafisheries.noaa.gov/protectedresources/esa/

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Alaska Business Monthly | August 2014

The regulations don’t really speak directly to the kind of severe longitudinal strain peculiar to Alaska. It’s possible, if not likely, the Alaska LNG sponsors would propose to use new or different construction materials or methods— such as in the properties of the steel pipe or the pipe coating—or strainbased design elements that regulations don’t specifically cover.

PHMSA would consider issuing a special permit for each deviation from the regulations, as long as the proposed methods or materials meet the standards’ objectives.

Coast Guard The Coast Guard would play two roles, one reviewing applications for bridges across navigable waterways and another for the LNG plant.

Bridges. Any bridges for the project would be subject to various laws that aim to ensure that the reasonable needs of navigation are maintained on all of the nation’s navigable waters.

If the pipeline needed to bridge a navigable waterway, such as the Yukon River, the sponsors would apply for a permit. The Coast Guard would analyze potential navigation impacts as well as environmental, historical and/or socioeconomic impacts covered under NEPA and related laws and regulations.

LNG plant. The Alaska LNG plant operating at full capacity would load about five tankers a week. The Coast Guard would assess the suitability of Cook Inlet to handle LNG tanker traffic.

Under a passel of laws as well as an executive order from President Harry Truman in the feverish early days of the Cold www.akbizmag.com

War, the Coast Guard has responsibility for the safety and security of waterways, ports and other facilities along waterways, such as LNG plants. This extends to LNG carrier operations in transit and at berth.

The Coast Guard would require project sponsors to submit a “water suitability assessment” of the channel that tankers would sail to and from the LNG plant. The assessment would cover water depths; tidal range; other traffic in the channel; bridges; underwater pipelines and cables; maneuvers required to berth; where people live nearby and other details.

The Coast Guard also would send to FERC its recommendation and analysis to assist the commission with its decision whether to approve the LNG facility.

Beyond this, the Coast Guard generally would support FERC’s overall environmental-impact analysis work, providing information on tanker and port operations, potential hazards and ways to mitigate them. Coast Guard regulations detail the fire and earthquake codes, emergency communications and systems, safety training and procedures that the Alaska LNG sponsors would need to follow for their Nikiski terminal.

Before the plant starts up, the owner or operator would need the Coast Guard to approve its facility security plan, and would submit its operations and emergency manuals.

Department Of Energy Congress has barred any natural gas from leaving U.S. borders without Department of Energy approval.

Alaska LNG sponsors likely would apply to the department for two authorizations. That has been the practice among prospective LNG exporters in recent years.

One application would seek permission to export to any of the 18 nations with which the United States has a free-trade agreement covering natural gas. Getting Energy Department approval of these applications is automatic because such trade is deemed to be in the nation’s interest.

The other application would cover exports elsewhere in the world. This would apply to almost all LNG importing nations, including such biggies as Japan, China, India and Taiwan. Getting these applications approved can be much more difficult, time consuming and political.

The national interest is key. Federal law says permission to export gas to non-freewww.akbizmag.com

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Coast Guard Oversight

Authorizes bridges over navigable waterways. Ensures safety and security of waterways, ports and facilities.

Key laws

General Bridge Act of 1946; Rivers and Harbors Appropriations Act of 1899; Magnuson Act of 1950; Ports and Waterways Safety Act of 1972; Maritime Transportation Security Act of 2002; National Environmental Policy Act of 1969

Websites

http://www.uscg.mil/hq/cg5/cg551/BPAG_Page.asp http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/ Title33/33cfr127_main_02.tpl http://www.uscg.mil/top/missions/MaritimeSecurity.asp

trade destinations will be granted unless, after a hearing and public process, the government “finds that the proposed exportation ... will not be consistent with the public interest.” Opponents of a proposal must make a persuasive case that exports would be bad for the United States—or the gas can go overseas.

Energy Department officials have said they consider adequacy of U.S. gas supply, energy security, price, job creation, gross domestic product, balance of trade, the environment and other factors in weighing the national interest.

For proposed Lower 48 U.S. LNG exports, opponents have included some gas-consuming petrochemical businesses and utilities, environmentalists and some people who live near the proposed plants.

The Energy Department had approved seven applications for exports to non-free-trade partners as of spring 2014, conditioned on the projects also getting FERC sanctioning. The agency determined opponents did not make strong enough cases against exports.

The average time from application to

conditional approval was 23 months.

As of spring 2014, the Energy Department had 26 other applications pending.

The department also proposed a new approach: To act on applications only after FERC—or other federal agency in charge of environmental assessment—has sanctioned a project for construction, rather than issue conditional approvals while FERC considered the project.

The President In 1976, Congress said that if North Slope gas gets exported, the president must specifically say the exports won’t hurt the United States.

This presidential involvement applies only to North Slope gas, not to any of the Lower 48 LNG export projects under way or proposed.

Here’s what was up back then.

In 1976, the United States was amid an energy crisis.

Oil—U.S. oil production and reserves were shrinking. Imports were rising.

Gasoline prices soaring. An Arab oil embargo—the OPEC Age had dawned.

Department of Energy Oversight

Authorizes natural gas exports.

Key laws

Natural Gas Act of 1938

Website

http://energy.gov/fe/services/natural-gas-regulation

18

Alaska Business Monthly | August 2014

Natural gas—production and reserves sagging, shortages looming.

Inflation pounded consumers—up 11 percent in 1974; another 9.1 percent in 1975.

Americans were mad, worried, apprehensive.

In 1976, Congress passed the Alaska Natural Gas Transportation Act to help spur development of a pipeline system that would flow North Slope gas to the rescue through Canada down into Lower 48 markets.

To ensure Alaska gas helped North Americans, Section 719j says that if North Slope gas exports exceed 1 million cubic feet a day to somewhere other than Canada or Mexico, “the President must make and publish an express finding that such exports will not diminish the total quantity or quality nor increase the total price of energy available to the United States.”

How much is 1 million cubic feet per day? Not much—the furnaces of roughly 1,600 Anchorage homes burn through that amount on a typical January day. A pretty low threshold to trigger the presidential finding. The law remains active.

On Jan. 12, 1988, LNG exports of North Slope gas got such a presidential finding. The now-shelved Yukon Pacific LNG export project was pending then, but President Ronald Reagan’s finding doesn’t specifically mention that project. It simply declares generically that it’s OK to export the gas.

It’s unclear whether this 1988 finding would still apply to an export project 30 or more years later, or whether the finding would need to be revisited. U.S. natural gas markets have evolved considerably since the 1980s.

R Bill White is a researcher and writer for the Office of the Federal Coordinator for the Alaska Natural Gas Transportation Projects. bwhite@arcticgas.gov Used with permission, this article first appeared online at arcticgas.gov, on the website of the Office of the Federal Coordinator for the Alaska Natural Gas Transportation Projects. www.akbizmag.com

VISITOR INDUSTRY

Ziplines in Alaska An Alaska Zipline Adventures tourist glides down the zipline at Juneau. Š Don Pitcher/AlaskaStock.com

20

Alaska Business Monthly | August 2014

www.akbizmag.com

Flying high over the Last Frontier

By Tasha Anderson

A

laska’s tourism industry is anything but stagnant. While much of Alaska’s draw is in its ageless natural features—glaciers, mountains, rivers, and lakes—the lure of the Last Frontier doesn’t end there. To the delight of residents and guests alike, several ziplines have been established in Alaska, offering amazing views and an affordable rush of adrenaline.

Mat-Su In the valley, it may be about the Matanuska Glacier, which is about four miles upstream from the Nitro, a zipline experience offered by Mica Guides. Don Wray, owner of Mica Guides, says “Our zipline is about adrenaline. It’s one big, fast zipline… The total length of cable might be the same as other ziplines around, but it’s all done at once.”

The Nitro is 1,500 feet long, and guests climb a three-story tower to begin their

www.akbizmag.com

adventure. Guests may barely be able to see the end of the zipline, being almost a quarter of a mile away, but they’ll have no trouble viewing the surrounding mountains and river nearly 200 feet below.

Wray anticipates that their new zipline, which at press time was unnamed, will have been completed by late July. “The one we’re planning, we won’t know until we test it, but it’s probably going to be the fastest zipline in Alaska,” Wray says.

The new zipline will be taller, longer, and faster, beginning at the top of cliffs 250 feet above the river and stretching 2,200 feet.

Wray says, “I’ve been happily surprised at the local response to our zipline.

We get a lot of locals out to ride it.” The zipline being close to the major population center of Anchorage certainly helps.

“It can just be a good day trip,” Wray says.

Talkeetna Moving farther north down the highway to Talkeetna, Denali Zipline Tours offers a different experience. Instead of one zipline, Denali Zipline Tours offers a three-hour canopy adventure, according to Riley Foster, marketing manager. “We

have nine ziplines [and] three suspension bridges; [guests] repel about fifteen feet from one platform to another, [and] there’s spiral staircase from one platform to another.” The last leg of the adventure is the longest zip, about six hundred feet, and travels right over a lake.

Before guests actually climb to the first platform, they participate in Ground School, where guides make sure all of the zipliners are comfortable with what’s going to happen and familiar with hand signals used during the adventure.

“The cool thing is that it’s an active tour, so we get a lot of people that really like to be involved and out and about in nature.

[They’re] getting this adrenaline rush, this thrill, but on top of that [they’re] up in the tops of the trees, overlooking these beautiful valleys with all these rivers, and the Alaska Range is right there. It’s a really cool way for people to experience the outdoors,” Foster says.

Seward Managed by the same owners as Denali Zipline Tours, Stoney Creek Canopy Adventures opened in June of this year,

August 2014 | Alaska Business Monthly

21

anywhere from 60 to 120 feet in the air.

“We get a lot of people where [ziplining] is a huge bucket list thing for them.

They’re afraid of heights or something, and they’re really pushing their limits, and they come back and they just have the biggest smile on their face because they’ve conquered it,” Foster says.

Foster, like Wray, emphasizes that this isn’t just a tourist attraction and doesn’t require a long weekend or days off work. “We’re really excited about this Seward location: now we have one that’s two and half hours north of Anchorage and two and a half hours south of Anchorage. We have something for the tourists, but we also have something cool for the Alaskans to go play on.”

Photo by Davy Anderson

Leap of Faith is the name of the first zipline platform on Alaska Zipline Adventures’ tour.

offering eight separate zip rides, three suspension bridges, and two rappels.

“It’s [also] a three hour trip,” Foster says, “just a little bit bigger.” The highest point of the Stoney Creek Canopy Ad-

ventures zipline is 120 feet, as the Sitka Spruce in the area are a bit taller than the trees in the Denali area. Several of the individual ziplines end at platforms actually built into the towering trees,

Dyea Located approximately twenty-five minutes outside of Skagway is Dyea, Alaska, the location of Grizzly Falls Ziplining Expedition. Erica Simpson, Director of Sales and Marketing for Alaska Excursions, says that the highest platform on this zipline is 50 feet.

Grizzly Falls Ziplining Expedition is comprised of eleven ziplines of varying

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Alaska Business Monthly | August 2014

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length, the longest of which is 750 feet.

“We put a lot of energy into making sure our guests have a one-of-a-kind experience at a great value. We keep our groups small and give a lot of individual attention,” Simpson says.

The zipline overlooks the rainforest of the Dyea valley, including numerous waterfalls.

Simpson says, “We use an auto-braking system which allows our guests to zip ‘hands-free.’ This really opens up a lot of opportunity for our clients to challenge themselves and not feel like they are putting themselves at risk for having fun.”

Juneau Gin Anderson, co-owner of Alaska Zipline Adventures in Juneau, says: “For some [of our guests] it’s about conquering their fear of heights or getting to experience flying through the trees in a stunning Alaska rainforest; for others, it is enjoying being outdoors or sharing memories with family and friends. It’s just a great excursion for whole families and people of all ages.”

This zipline expedition, which is a little more than three hours long, features seven ziplines, which counted together cover a little more than a mile. The highest point of the tour is one hundred feet in the air, and the longest of the lines is around eight hundred feet. The zipline is located on Douglas Island, at Eagle Crest, a city owned ski area.

“Our course is designed to be a handsfree experience allowing our guests to sit back and enjoy the ride while our guides take care of all the braking and equipment,” Anderson says.

Guests will also cross one aerial suspension bridge, enjoying majestic mountain views and traveling over rushing streams.

“At the end of the tour, our guests enjoy embracing their inner lumber jack with an axe throw, which is part of our tour,” Anderson says, a great way for guests to participate in a Southeast Alaska tradition.

Wherever Alaskans and guests may travel this summer, a zipline option is nearby, ready to fit into any travel itinerary.

R Tasha Anderson is the Editorial Assistant at Alaska Business Monthly. www.akbizmag.com

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FINANCIAL SERVICES

Surety Bonds, an Important Tool for Securing Financing and Maintaining a Business

T

By Tracy Barbour

hough commonly considered to be a form of insurance, surety bonds are a financial instrument that many companies rely on to secure funding and acquire new business.

Essentially, a surety bond is a promise or contract to pay one party (the obligee or project owner) a certain amount if another party (the principal) fails to meet some obligation, such as satisfying the terms of a contract. Surety bonds differ from traditional insurance policies in a number of ways. Insurance is a two-party contract between the insured (the buyer) and the insurance company that provides protection for covered losses, according to Ted Baran, surety manager at Alaska USA Insurance Brokers. Surety, on the other hand, is a three-party contract involving the principal, the obligee, and the surety company. “Unlike an insurance policy that can be cancelled by either party, a contract bond cannot be cancelled,” Baran says.

“A bond remains in force until all terms of the underlying contract are fulfilled.”

As another area of dissimilarity, surety companies underwrite to the expectation that they will have no losses, Baran says. And when there is a loss, the surety company has the right of recovery from the defaulting principal, rather than indemnifying them the way an insurance company would. But in the world of property and casualty insurance, carriers expect a certain level of losses to be incurred. “While they may not be able to predict the frequency, severity, or value of losses, they understand that losses are part of their business,” Baran says.

Ultimately, those losses are recovered from the principal or contractor that purchases the bond. So if there is a loss, the surety bond will pay out on it and then seek reimbursement from the principal. Often, informal steps can be taken to rectify problems before a claim is

24

filed, according to Chris Pobieglo, president of Business Insurance Associates, an independent commercial insurance and surety brokerage located in Anchorage. In most cases, the principal will be contacted by the surety company and told to correct the situation, Pobieglo explains. “It’s better if you self-correct and be responsible before the bond pays it out,” he says. “In most cases, a call from the surety company is enough to move the process forward and get it resolved.”

Most principals want to avoid a claim—which can involve expensive legal fees and a considerable amount of time—so they address project-related complications on their own. “Nobody wants it to go into a claims situation,” Pobieglo says.

If a lack of money is the issue, the surety may be able to help. Sometimes the company can step in and assist the principal with securing a line of credit so they can fulfil their obligations.

Types of Bonds There are three main categories of surety bonds: contract, commercial, and fidelity. Contract bonds, which are very common in the construction industry, are a guaranty from a surety to a project’s owner that a general contractor will comply with the terms of a contract.

The typical types of contract bonds are bid, performance, and payment.

Bid bonds discourage contractors from increasing their project bids after being awarded a contract. Performance bonds are designed to ensure contractors complete projects according to the contract.

Payment bonds guarantee that contractors will pay for all services—particularly subcontractors—and materials used on a project. Payment bonds are particularly important for public-sector projects that don’t allow claims to be filed against the property for unpaid debts.

Commercial surety bonds are typically issued in four areas: license and

Alaska Business Monthly | August 2014

permit, court, public official, and miscellaneous. Fidelity bonds, also referred to as employee dishonesty coverage, cover theft of an employer’s property by its own employees. This type of surety bond, which functions more like a conventional insurance product, is a popular product in Alaska, according to Pobieglo. “It provides a layer of protection for the owner, so that if anything gets stolen, the company has someone to go after,” he says.

In Alaska, surety bonds are employed by a wide range of entities, including auto dealers, janitorial companies, and public notaries. Contract surety bonds are normally required for most public construction projects, as well as many large private-sector projects.

The cost for surety bonds in Alaska varies and is often based on the company the bonds are placed with and the underwriter’s perceived risk. Premiums for contract surety bonds, for example, are generally between 1 and 3 percent of the total contract value, Pobieglo says. Usually, there’s a 3-percent rate for beginning contractors or small contractors. But clients that are very well capitalized and have a lot of revenue may have a rate under 1 percent. On the commercial bond side, there’s a tiered system with merit (1 percent), preferred (3 percent), and base rates (5 percent).

Surety Bonds Often the Key to Getting Financing The need for surety bonds is sometimes driven by a financial institution as a condition of loan approval. The requirement for bonding depends on the type, size, and complexity of the project, as well as the borrower’s financial position and relationship with the lender, according to Bill Inscho, a senior vice president with First National Bank Alaska.

However, a myriad of factors can come into play. For example, if the financing is for a very large project or if www.akbizmag.com

Photo courtesy of Alaska USA Insurance Brokers

Photo courtesy of First National Bank Alaska

Photo courtesy of Denali Alaskan Insurance

Denali Alaskan Insurance President Mike Gordon

Bill Inscho, a Senior Vice President with First National Bank Alaska

Ted Baran, Surety Manager at Alaska USA Insurance Brokers

the bank isn’t familiar with the general contractor, a bond might be a requirement of the commitment to lend. And the bank would not disperse the loan until it receives proof that the surety bond has been secured. “If the company doesn’t have the capacity for a project, the loan will not be approved,” he says.

When it comes to requiring surety bonds for financing, contract bonds for payment and performance are about 90 percent of what is involved, Inscho says.

Surety bonds provide additional assurance that the project will get built on time with no liens (for nonpayment of vendors and suppliers). “The surety company is essentially underwriting that contractor for their financial position and expertise in the field,” Inscho says.

General contractors typically have already established bonding limits (per project and in aggregate) with their bonding company, Inscho says. So the bonding aspect may be viewed as a routine part of the loan underwriting process. Those that lack the necessary bonding capacity must work with a surety company to meet the financing requirement. “We don’t tell them where to go for a surety bond,” Inscho says. “We make that credit decision that this project has to be bonded. So there are no ifs, ands, or buts about it, and the project gets done on time and everyone gets paid.”

Process of Securing a Bond For many principals, obtaining a surety bond can be a challenge that includes underwriting very similar to what’s required for commercial lending. Surety companies look at the credit, capacity, and character (the Three C’s) of their contractors, as well as collateral in certain cases, Baran says. In addition to credit history, surety companies analyze the financial statements of their contractors to determine the amount of working capital and net worth of their clients. The stronger the working capital position, the more comfortable the surety will be in extending credit. “Surety companies prefer that contractors have a solid net worth and manage debt in a way that allows the company to grow without being burdened with large principal and interest payments,” Baran says.

Generally, the paperwork required to underwrite a contractor includes financial statements and two to three years’ worth of business tax returns, according to Denali Alaskan Insurance President Mike Gordon. Requested financial statements can encompass balance sheets, profit and loss statements, and bank account statements.

For bonding programs under $1 million, “reviewed” financials (those prepared in-house and reviewed by a CPA) are generally acceptable. Bonding pro-

grams over $1 million typically require more formality, such as financial statements audited by a certified public accountant. “The surety company wants to know that these financial records are following GAP [Generally Accepted Principles], they are correct, and a thirdparty has looked at them,” Gordon says.

However, underwriters might request audited records based on more than the dollar value of the project involved.

They could collect audited financials for principals with a questionable reputation or a limited access to capital. Or they could settle for reviewed financials from a principal with a substantial amount of capital available.

Ideally, contractors should have a surety program created in advance— before a bond is needed, Gordon says.

“You get a surety to agree to an aggregate limit and a per job limit. You get that in stone up front. At that point, they [principals] know what their rate is and what their limits are,” Gordon explains. “In a perfect world, this is how it would be done—but in an imperfect world, contractors will come to you the week before, and you have to start from scratch and scramble.”

R

www.akbizmag.com

Tracy Barbour is a former Alaskan.

August 2014 | Alaska Business Monthly

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CONSTRUCTION

A

A billion dollar summer

By Rindi White

26

ccording to the state of Alaska, about $800 million worth of vertical construction projects are underway this year. The 172 projects around the state are in various levels of completion, from the initial planning stages to final close-out and include construction of new buildings, renovation of existing buildings, and energy efficiency projects for existing public buildings.

And that’s just the state projects. Municipal, federal, and nonprofit projects add millions more to the tally.

Construction Spending Reportedly Up Scott Goldsmith, Mary Killorin, and Linda Leask, of the University of Alas-

Alaska Business Monthly | August 2014

ka Anchorage’s Institute of Social and Economic Research, compiled the 2014 Alaska’s Construction Spending Forecast this year. It’s a report prepared yearly for the Construction Industry Progress Fund and Associated General Contractors of Alaska. This year’s report estimated that construction spending this season would be up 18 percent over last year, at $9.2 billion.

While the report states that much of the increase comes from increased activity in the oil and gas sector, public construction spending alone is estimated to be up by 6 percent, to $2.9 billion. That number includes roads and highways, ports and harbors, and other non-vertical construction. Splitting out construction www.akbizmag.com

UAF photo by Todd Paris

Iron Workers on the UAF engineering building in Fairbanks.

spending for public buildings alone is difficult because the various municipalities, nonprofits, and other public entities receive funding from multiple sources, making tracking projects difficult.

Archives Museum Tops State Project List The largest facility on the list for the state of Alaska is the $138.9 million State Library Archives Museum, or SLAM building, located in Juneau. A 160,000-square-foot building, the facility will consolidate three existing state facilities: the State Division of Libraries, Archives and Museums. PCL Construcwww.akbizmag.com

August 2014 | Alaska Business Monthly

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tion Services, Inc. is the general contractor on the project.

The new building is in the middle of its construction timeline; the thirty-two thousand-piece collection at the State Museum was transferred this spring and early summer to a two-story vault in the new building through a specially built tunnel between the two facilities. The vault was the first major piece of the building built.

Project manager Kim Mahoney says the next step, which began in June, will be to remove hazardous materials and demolish the old State Museum so the rest of the new building can be built in the space.

The consolidation was needed to protect irreplaceable state artifacts, as well as provide more exhibition space. Previously, the three arms of the division were housed in five different offices and warehouses.

“At its heart, SLAM is about protecting the existing collections. Many of our treasures, if damaged, are irreplaceable, yet they are housed in buildings that can no longer adequately protect them.

Existing hazards to the collections include: overcrowding; flooding; water damage; friable asbestos; insect infestations; and uncontrolled or inadequate systems for humidity, fire protection, heating, and lighting,” says a project synopsis on the state Museum’s website.

According to the state, the new building will have double the exhibition space as the old state museum, and it will triple the

Alaska Business Monthly | August 2014

museum’s collection storage area. It also roughly doubles the amount of space previously allocated for the whole division.

Mahoney says the project includes both operating and energy related efficiencies. Although the new building has roughly double the existing space for the division, energy-efficient features will keep energy consumption flat. The facility will also have built-in seawater wells for dehumidification and desiccant cooling. Essentially, that means the building will be cooled and dehumidified by using seawater.

Construction is ongoing—the project is midway through a four-year phased project, and this year and next mark the most significant portions of the project, building the core and shell of the building. Also on the project task sheet this summer is demolition of the existing state museum building to allow continued construction of the new facility.

The new building should be certified for occupancy in May 2016. The State Museum collection is expected to be back on public view at that time.

UAA Alaska Airlines Sports Center Wrapping Up The 197,000-square-foot UAA Alaska Airlines Center, which broke ground in 2012, is nearing completion. The $110 million facility has a 5,500 seat performance gymnasium for basketball and volleyball, as well as commencements, concerts, and www.akbizmag.com

Photo courtesy of UAA

community events. Space is also available for athletes to practice, performance space for the gymnastics program, fitness and training rooms for all university sports, and administrative and coaching offices, laundry, locker rooms, and team rooms for multiple university sports.

And, according to Mark Palmatier, an owner of Cornerstone General Contracting, the contractor on the project, the sports arena will also have a restaurant with an unmatched view of the mountains and of whatever is happening on the main floor. The Varsity Sports Grill will seat about one hundred and Palmatier says it includes an open, south-facing patio. The university plans to keep the restaurant open year-round and, according to the Sports Center Facebook page, the grill will have food, local beers, and wine available daily for lunch and dinner.

One of the more unique features of the building is its heating and cooling system, Palmatier says. As part of the project, his crew tapped the aquifer below the building site and will rob the well water of ten degrees of heat before re-injecting it into the aquifer. The recirculation system will mean a significant cost savings to the university in utility consumption.

A grand-opening celebration is scheduled for September 5-14.

Spotlight on Engineering at UAA and UAF As part of a University of Alaska-wide effort to increase the number of engineering graduates, both University of Alaska www.akbizmag.com

Anchorage and University of Alaska Fairbanks campuses will soon have expanded space for engineering and industrial students.

The UAA Engineering and Industry Building is set to open in August 2015.

The $123.2 million project will provide space for teaching “everything from arctic engineering to the classic mechanical, electrical, and civil engineering, to geomatics (surveying and mapmaking), GIS, and computer systems engineering,” stated a January 2014 University of Alaska Anchorage “Green and Gold News” story about the project.

The facility, built by Neeser Construction, will be about 120,000 square feet, of which about 80,000 square feet is new and 40,000 square feet refurbished from the previous engineering building.

The building includes interesting features, such as a 900-square-foot snowless sidewalk that was designed by UAA Civil Engineering professor Joey Yang.

Other design components and building features will be on display for students to observe and study.

On a similar track, the UAF engineering building broke ground in March 2013 and, depending on available funding, could be complete in 2017. Its overall cost is $108.6 million, but funding delays have slowed the project schedule. The university requested $33 million from the state legislature this year, enough to finish the project, but it received $5 million.

“That gets us through the end of April next year,” says UAF senior project manager Cameron Wohlford.

The 119,000-square-foot space includes 23,000 square feet of renovated space. It will have five stories above ground and one below. Wohlford says that, like the Anchorage engineering building, the Fairbanks facility will have “engineering on display.”

“We integrated the building engineering techniques so engineers can learn just by walking in the building,” he says. Mechanical and electrical systems are among the features on display.

Wohlford says the building, being built

by Davis Constructors & Engineers, includes two kinds of engineering labs not currently available to students. One is a high bay test lab large enough to house a one hundred-foot bridge girder so stu-

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29

dents can test its features. Another lab space includes cold chambers, ranging in temperature from zero degrees to negative sixty-four degrees Fahrenheit, where engineers can test soil properties, for example.

All that cooling takes a lot of energy, and Wohlford says energy efficiency is another interesting feature of the building.

The building includes a unitized curtain wall—essentially a structure wrapping around the building that was specially designed with superior thermal, air, and filtration performance. The curtain wall

was manufactured by Fairbanks glass contractor Bucher Glass, a company that recently went from a “decent-size glazing contractor to a factory,” Wohlford says.

Another fascinating energy feature of the building is the water recirculation system. The University of Alaska Fairbanks uses a co-generation heat and power plant. University buildings use the steam, a byproduct of electricity production, as a heat source. A new power plant, with a price tag of $245 million, is planned.

“We’ve taken it a step further,” Wohlford says of the engineering building’s

heating system. When the steam condenses and returns as wastewater to the power plant, the roughly one hundred degree water will first run through the engineering building and be used to heat the building via radiant floor heating.

“It’s free heat,” Wohlford says.

However, that free heat source is partially responsible for the funding delay.

The new engineering building might have to tap into the University’s limited steam heat if the wastewater heating system doesn’t function as well as planned on cold days. Legislators suggested delaying full funding for the building until after the power plant was complete.

A new power plant at the University is planned to be open by 2018. If the engineering building opened in January or February 2017, Wohlford says the building could use more heat than the current power plant could produce.

“If we were using waste heat, we wouldn’t use that much extra steam. If the waste heat turns off and we have to go back on the full steam heat, then we run that risk,” Wohlford says.

The engineering project is currently funded through April 2015. After that point, the building may have to be temporarily shut down until more construction funding is available.

New Maternity Center and Operating Room Updates at Providence Providence Health and Services Alaska, a nonprofit Catholic healthcare organization, is in the final stages of its Generations project, a $150 million project that will add more than 85,000 square feet to the facility and renovate more than 67,000 square feet. This project also included ancillary remodels and additions to bring the total to 100,800 square feet. Built by Davis Constructors, the multi-phase project that began in 2011 is expected to be complete in December.

Most of the project deals with the hospital’s labor and delivery department.

The new square footage is a maternity center, which includes an expansion and update of its Newborn Intensive Care Unit, or NICU, with sixty-six bassinets, as well as a larger prenatal unit with seven beds and a mother-baby unit with thirty-one beds.

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Alaska Business Monthly | August 2014 www.akbizmag.com

The project also includes a new hybrid operating room with an imaging system that will allow physicians to perform minimally invasive, catheterbased procedures to treat clinical problems such as coronary artery disease.

The less-invasive procedures generally mean shorter hospital stays, faster recovery time with less pain, and less visible scarring, according to Providence.

Updated Courthouse Project to Finish This Year Cornerstone General Contractors is wrapping up a seven-year full renovation of Boney Courthouse in downtown Anchorage.

According to Cornerstone, the project includes a new detention holding cell area, updated control room, three new courtrooms, and updates to judges’ chambers, offices, public lobbies, a law library, and new space for therapeutic courts and the Anchorage Police Department. Along with the renovations, the project will upgrade the bones of the 1974 building—a seismic structural upgrade to the concrete structure was added and building mechanical sys-

tems were upgraded throughout.

“The whole inside is being modernized,” Palmatier says.

Because the state couldn’t afford to shut down a courthouse while a renovation was completed, Palmatier says work continued with the courthouse open. Scaffolding ran throughout the first floor, he says, and courthouse users were directed safely through the work zone. The crew sometimes had to stop work while trial proceedings were recorded, for example.

The interior work at the courthouse should be substantially complete in July, Palmatier says, and the last piece of the project, a remodel of the entryway, should be complete by the end of the year.

Two Anchorage High School Renovations Underway Cornerstone is also working on a $23 million project to renovate Service High School in Anchorage. The school houses 1,700 students, who will be attending school while the project continues. The project will remove hazardous materials from the existing building, renovate the existing building, and add

a new mechanical penthouse and new mechanical systems.

“It’s a total renovation, basically gutting [the building] and rebuilding,” Palmatier says. “It’s going to be a lot cleaner and more efficient.”

He says the project should be complete in spring 2016.

Cornerstone is also renovating West High School and Romig Middle School, a nearly $13 million project. The project includes a two-story addition to West High School aimed at increasing space for its Career and Technical Education program. Romig is also getting an addition, geared toward the CTE program.

Groundwork on the project began in July and it is expected to be complete next fall.

Building a Decades-Long Dream in Kenai The Dena’ina Wellness Center in Kenai opened in June, marking the end of a long-held goal of Kenaitze Indian Tribe members to serve tribal members and other Alaska Native and American Indian people in their home community. The facility was designed in collaboration with

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© Ken Graham Photography.com

The entrance to the Dena’ina Wellness Center in Old Town Kenai.

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Interior of the Dena’ina Wellness Center in Old Town Kenai.

Architects Alaska, Inc. and Klauder and Company; the Director of Design is John Crittenden with Architects Alaska, Inc. The $36 million, fifty-two thousandsquare-foot facility is built in Old Town Kenai and will replace the tribe’s Dena’ina Medical Clinic, Dena’ina Dental Clinic, and Nakenu Family Center, all of which operated in rented space in downtown Kenai. In addition to the roughly eighty

jobs held at the three locations, the tribe planned to add another twenty-four positions to round out its offerings.

Using the Dene’ model of care, the wellness center “integrates medical, dental, behavioral health, chemical dependency, wellness, physical therapy, pharmacy support, and traditional healing services” under one roof, according to an overview provided by Kenaitze tribal leaders.

The project was funded as a joint venture with the Indian Health System through a competitive grant process.

Kenaitze was one of three entities in the nation to receive joint funding in fiscal 2011. The project also received funding from the state of Alaska, Cook Inlet Region, Inc., the M. J. Murdock Charitable Trust, the Rasmuson Foundation, and the Alaska Mental Health Trust.

Neeser Construction, Inc. built the wellness center, and the design includes many elements that remind visitors of the building’s cultural heritage. A structure similar to a traditional Dena’ina fish drying rack is at the entryway, using century-old wood from a Wards Cove Cannery building. Tribal members collected agates, which were inset in the flooring bordering a large open area called the Gathering Space. Tile work inside was influenced by traditional Dena’ina beadwork designs.

Helping Solve a Housing Shortage One Step at a Time Cook Inlet Housing Authority started construction this year on a multi-phase housing project that will add single-

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33

family and multi-family housing in Anchorage’s Mountain View neighborhood, with an eye toward brightening and revitalizing the area.

Sezy Gerow-Hanson, director of Cook Inlet’s public and resident relations, says the project is a “scattered site” development, meaning construction will be happening on several parcels, not one large chunk of land. The project is part of a neighborhood revitalization plan developed with the Mountain View Community Council and other interested groups, she says. “[People in] the neighborhood wanted

to see better quality homes, more owner-occupied homes. Not huge multifamily buildings,” Gerow-Hanson says.

“We worked to try to figure out what works financially and aesthetically for the neighborhood.”

Much of the area was first developed in the 1940s and 1950s, she says, so Cook Inlet picked projects that were smaller in profile–houses and smaller multi-family buildings. But those desires were balanced by a well-known affordable housing shortage in Anchorage. The end result: a $13.6 million project that will add

forty-four units of new residential housing. Two buildings will be four-bedroom single-family rental homes, and the project includes fifteen duplexes, a tri-plex, a four-plex, and a five-plex.

The project is being built one site at a time, so projects will finish in a staggered fashion, Gerow-Hanson says.

Contractor Davis Constructors is expected to wrap buildings up between January and June 2015.

Cook Inlet Housing is also working on two senior housing projects, one in Anchorage and one in Eagle River.

The Anchorage project, a thirty-fourunit building in its Centennial Village off Muldoon Avenue and Peck Street, is expected to be complete in July 2015.

It’s the seventh and final building on the senior housing campus at Centennial Village, Gerow-Hanson says.

The Eagle River project adds fifty-six units of senior housing to Cook Inlet’s Coronado Park community, located just off the Glenn Highway near downtown Eagle River. Gerow-Hanson says Coronado Park already offers low- and moderate-income townhomes, as well as owner-occupied condos. The senior housing project makes the space intentionally multi-generational, and responds to requests from seniors to provide affordable housing in Eagle River, where many have relatives.

Built by Neeser Construction, Inc., the Coronado Park Senior Village is a $16.5 million project that will offer oneand two-bedroom apartments. It’s set to open at the end of July.

Gerow-Hanson says the project also includes the largest residential solar array in Alaska. The array uses three one-thousand-gallon water tanks with solar-heated water for domestic use.

Work Continues Around the State These projects are just a sampling of what’s going on around the state. Schools are being built in Mat-Su, a new performing arts center is being added to the University of Alaska’s Mat-Su College, and many other building renovations are under way this summer. Look for more in upcoming editions about these and other public projects.

R Rindi White is a freelance journalist living in Palmer.

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Alaska Business Monthly | August 2014

www.akbizmag.com

BusinessPROFILE

Florcraft Carpet One

FLORCRAFT CARPET ONE Photo courtesy of Neumuth Advertising

FLOOR & HOME

Your one-stop, full-service home remodel store Proud new owners of Florcraft Carpet One Floor & Home: Aaron Lautaret, Patrice Case and Evan Hall.

W

hen customers step into a Florcraft Carpet One Floor & Home location, they’ll encounter well more than the average big-box store products and customer service. The family-owned business, which started in Fairbanks in 1962 and added an Anchorage location in 1986, has the distinction of carrying Alaska’s largest in-stock inventory of carpets, rugs and other flooring options.

Recently, Florcraft Carpet One added three cabinet lines, including US-made, eco-sensitive Bellmont Cabinets. The welcomed new additions enable the company to create an environment that customers can walk into and be inspired to complete all their home remodel and commercial building needs.

“We have the resources to take you anywhere from your pins on Pinterest, ideas in your head, and architect drawings to full completion of your project,” says Chief Executive Officer Patrice Hanson Case. “We are more than just floors; we are a full-service home and business improvement headquarters.”

Florcraft’s broadened inventory plays a key role in its plans to become a complete home improvement center.

The company is well on its way there, with its extensive flooring, cabinet and design solutions. Customers can find thousands of carpets, hundreds of rugs and hundreds of other flooring

solutions in the company’s statewide inventory. In addition, Florcraft offers the added benefit—through its Carpet One Floor & Home affiliation—of having the buying power of more than 900 stores nationally, which translates into competitively-priced products for its customers.

EXCELLING IN SERVICE AND EXPERTISE With more than 50 years of experience doing business throughout the state, Florcraft is dedicated to offering the best in customer service and expertise.

Its staff is constantly being educated and trained in the latest technology in flooring, cabinets and design. They can handle almost any project, whether it’s an installation in rural Alaska or a large commercial building in downtown Anchorage. Florcraft genuinely cares about and is committed to its customers, and this distinguishes the company within the industry. “We know this is one of the largest purchases our customers will make for their home or business,” Case says. “We take that seriously and will be there for our customers from the start to finish of their project.”

NEW OWNERSHIP, SAME MISSION As another recent development, Florcraft has gained new owners.

The company was acquired by Patrice Case of Fairbanks, and Evan

Hall and Aaron Lautaret of Anchorage, partners in BHAG, LLC. Actually, the principals are hardly newcomers to the business. Case—whose father, the late Robert Hanson, and his partner, Richard Wien, were the most recent owners of the company—had served as Florcraft’s president for the past eight years.

Hall, the new chief organizational officer, had been Florcraft’s vice president and Anchorage store manager since 2011. And Lautaret had been a longtime Florcraft customer throughout his 20 years in the construction and commercial property management industries.

Case says she felt it was important to carry on her family’s legacy. And although the ownership has changed, the mission of Florcraft Carpet One Floor & Home remains the same.

“We want to deliver the highest quality products at an affordable price with the highest level of service,” Case explains.

Patrice Hanson Case, Chief Executive Officer 1991 Fox Avenue 145 East 5th Avenue Fairbanks, Alaska 99701 Anchorage, Alaska 99501 Ph (907) 452-1423 Ph (907) 258-4910 Fax (907) 451-8424 Fax (907) 258-1900 Toll Free (800) 478-3567 Toll Free (800) 478-8258

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special section

Energy & Power

RAILBELT ELECTRIC GRID

Status check on projects

By Susan Sommer

Aerial view of the Chugach Electric Association’s natural gas power generator on the west side of Cook Inlet.

A

laska’s Railbelt stretches from the Kenai Peninsula north to Fairbanks, more than five hundred miles. Seventy percent of the state’s population lives along this corridor and requires safe, efficient electricity. Six utilities provide electric power in this region. A status check along the Railbelt grid is revealing.

Matanuska Electric Association Matanuska Electric Association is poised to become a vertically integrated utility—generating, transmitting, and 36

distributing its own power. Scheduled to come online by the end of 2014, the co-op’s Eklutna Generation Station (EGS) is a turning point after having purchased its power from Chugach Electric Association (CEA) since 1950.

“EGS is MEA’s largest infrastructure project by far,” said MEA’s General Manager Joe Griffith at the annual meeting in April. The generation plant houses ten massive dual-fuel Wartsila engines that burn natural gas but can switch seamlessly to burning diesel should that ever be necessary. MEA expects the generation

Alaska Business Monthly | August 2014

station to provide power to Southcentral Alaska for the next several decades.

Also speaking at the annual meeting was MEA Board President Lois Lester, who said, “EGS means a lot to the Railbelt electrical system, providing additional capacity from efficient natural gasfueled engines that can be economically dispatched throughout the entire system.

This adds to grid reliability and the bottom line of all our Railbelt colleagues.”

This past summer, MEA signed a contract with Hilcorp to supply natural gas to EGS until March 2018. www.akbizmag.com

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K R O W T E N R U O S

R E V I DEL

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MEA sits at the center of Alaska’s Railbelt system, which stretches from Homer to Fairbanks and provides electricity to the majority of Alaska’s population.

MEA alone serves more than fifty-nine thousand customers. “While we think of the Railbelt as a large system,” said Griffith, “compared to the interconnected grid in the Lower 48 and Europe, it is small, isolated, and fragile. The majority of our infrastructure was built between 1940 and 1960, when Alaska’s load was significantly less…Numerous upgrades are required to bring this system up to www.akbizmag.com

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L ASKA. NWIDE. A S I E M OUR NA RVICE IS NATIO OUR SE August 2014 | Alaska Business Monthly

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“The Railbelt utilities recognize the issues with the system and the need to work together towards common solutions, especially in light of the additional generation being built throughout the system.”

Photo courtesy of MEA

—Joe Griffith General Manager, MEA

Four Wärtsillä generators located in the northern hall of MEA’s Eklutna Generation Station. The duel-fuel engines will be powered by natural gas but can also run on diesel fuel if there is an interruption in the gas supply.

the level required today.” Transmission line and substation upgrades are just two ways MEA is addressing aging infrastructure.

MEA also has two small hydroelectric facilities and is a one-third owner of Eklutna Hydroelectric along with Anchorage Municipal Light & Power (ML&P) and CEA. But there’s a larger picture, too, for all of the electric utilities to consider. “The Railbelt utilities recognize the issues with the system,” said Griffith, “and the need to work together towards common solutions, especially in light of the additional generation being built throughout the system.”

To address this, in 2011 the Railbelt utilities formed ARCTEC, the Alaska Railbelt Cooperative Transmission and Electric Company. Banding together provides a forum for them to discuss challenges and find solutions that will benefit all Alaskans, not just their own customers. The intent is for ARCTEC to oversee planning, operation, and maintenance of a Railbelt transmission system; a single operator would make the whole process more efficient and cost-effective.

Current members of ARCTEC are CEA, MEA, Seward Electric System (SES), and Golden Valley Electric Association (GVEA). Anchorage’s ML&P and Homer Electric Association are not

ARCTEC members but support its current projects.

Securing state funding for ARCTEC projects continues to be a challenge.

One of the consortium’s priorities is to “Unconstrain Bradley Lake,” meaning improve the transmission system between Anchorage and Kenai to take full advantage of the energy created by the Bradley Lake Hydroelectric Project.

According to the state-owned Alaska Energy Authority (AEA), the Bradley Lake project at the head of Kachemak Bay currently provides 5 to 10 percent of annual Railbelt electric power needs and is the cheapest power on the Railbelt. ARCTEC says Bradley Lake could provide more power if the transmission system was upgraded. More water equals more potential power, and engineering design is nearing completion for a proposed project to divert glacial water from Battle Creek Glacier to Bradley Lake, making a modern trans-

Eklutna Generation Station April 2014. Contractors continue to make progress on the 170 mW power plant. The ten, 17 mW generators will allow MEA to more closely follow its load for efficient operations and increase the Railbelt’s capacity to absorb fluctuating loads from variable power sources like wind. © Northern Powerline Constructors

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Alaska Business Monthly | August 2014

www.akbizmag.com

Photo courtesy of MEA

New transmission towers will bring additional power to the growing demand centers in Wasilla and Palmer. MEA’s load has grown significantly since its infrastructure was initially built.

mission system leading north from Bradley even more important.

Chugach Electric Association MEA isn’t the only utility in town with a new power plant. CEA’s new naturalgas-fired, 183-megawatt Southcentral Power Project in Anchorage was listed in POWER magazine’s top five plants in 2013 for fuel efficiency and reduced air emissions.

CEA’s Beluga Power Plant on the west side of Cook Inlet has been providing gas-fired power to Anchorage residents since 1968.

As required by the Anchorage Municipal Code, CEA (as well as MEA) must dedicate resources to move a portion of its municipal overhead lines underground. Several projects to accomplish this are scheduled starting this year through 2018.

CEA also continues to operate its Cooper Lake Hydroelectric Project near Cooper Landing on the Kenai Peninsula, as well as make improvements along its line going to Hope.

CEA purchases all of the wind power generated by the Fire Island Wind farm, operated by Fire Island Wind, LLC, a subsidiary of Cook Inlet Region, Inc. Wind energy reduces CEA’s long-term annual gas requirements by about three percent. www.akbizmag.com

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SOURCE: GVEA

O

Healy Unit 2 Plant Project Breaks Ground

n June 27, Golden Valley Electric Association and local officials held a ground breaking ceremony for the restart of the Healy 2 power plant.

Healy 2 will put fifty megawatts of coal-fired power into GVEA’s grid. Adding more coal will help stabilize electric rates in the Interior, which have risen with the oil market over the past decade. The restart will also boost the Healy economy by creating at least twenty permanent jobs over the next forty years.

GVEA will begin test-firing the plant with oil in the spring of 2015, according to Lynn Thompson, Golden Valley’s Vice President for Power Supply. “We anticipate the first fire on coal will be next June. Additional environmental controls will be added within eighteen months.”

The total cost of the restart and environmental controls is expected to approach $187 million—but the plant is expected to save about $21 million a year in fuel costs.

Work has already begun inside the plant. Obsolete electronics have been removed and existing systems are being checked. Foundation work has begun for a new building that will house the emission control system.

The plant operated briefly in 1999

Golden Valley Electric Association GVEA lost a main source of fuel recently when Flint Hills Resources ceased refining crude oil. GVEA’s new source is Petro Star, Inc. Flint Hills was also one of GVEA’s largest customers, but the utility has filled that gap with a new one: Clear Air Force Station. The coal-fired power plant that’s been generating electricity for the station since it was built in 1959 will be shut down, and GVEA will build a substation and distribution line to the military station from its main transmission line along the Parks Highway.

GVEA also bought a coal-fired power plant in Healy and is refurbishing it; it’s expected to be up and running sometime next year.

A member-owned cooperative that provides power to about one hundred thousand Interior residents, GVEA also 40

Photo courtesy of GVEA

Ground breaking ceremony for Healy Unit 2, pictured from left: Usibelli Coal Mine President Joe Usibelli Jr.; GVEA Board Chairman Bill Nordmark; GVEA President & CEO, Cory Borgeson; Denali Borough Mayor Clay Walker; GVEA VP of Power Supply Lynn Thompson; Project Director Black & Veach Energy Steve Stark; and Project Manager Black & Veach Energy Mark Chapin.

and has been kept in warm layup status ever since. GVEA purchased the plant from the Alaska Industrial Development and Export Authority (AIEDA) December 4, 2013.

Attending the restart ceremony were the Hon. Clay Walker, Mayor of the Denali Borough; Cory Borgeson, supports a liquefied natural gas trucking operation from the North Slope.

The utility’s varied fuel sources consist mainly of natural gas, coal, and oil, but it also uses water from the Bradley Lake Hydroelectric Project and wind from its own Eva Creek Wind Project near Healy. Eva Creek began generating at full power early last year and supplies 20 percent of the cooperative’s peak load. It’s the largest wind project in Alaska.

Homer Electric Association HEA is now a vertically integrated utility and generates all of its own power.

Its newest plant is in Nikiski and features a new steam turbine and generator that uses waste heat to create additional power. HEA also has a natural gas plant in Soldotna as well as a backup plant at Bernice Lake in Nikiski.

A portion of the Bradley Lake Hydro-

Alaska Business Monthly | August 2014

President and CEO of GVEA; and Joe Usibelli Jr. President of Usibelli Coal Mine, which will supply fuel for the plant; Steve Stark, Project Director and Mark Chapin, Project Manager for Black & Veach Energy, the contractor providing engineering, procurement, and construction for this project. R electric Project also supplies electricity during peak periods.

HEA is studying the feasibility of building its own small hydroelectric plant near Moose Pass. It’s also investigating opportunities to help develop tidal power in Cook Inlet.

Seward Electric System The City of Seward operates an electric utility and buys its power from Chugach Electric Association. It recently moved forward on allowing residents or businesses to interconnect small renewable energy sources such as wind, solar, biomass, geothermal, or water (hydro or tidal) to the city’s distribution system. Customers that meet certain requirements can also receive compensation for producing their own alternative electricity.

The Alaska Vocational Technical Center wind turbine was the first nonfossil-fuel source to be connected to www.akbizmag.com

Seward’s grid and provides power for many of the center’s own buildings.

Susitna-Watana Hydro Project The proposed Susitna-Watana Hydro project in Southcentral would, according to the AEA, provide about half of the electricity needed along the Railbelt. A 735-foot dam above Devil’s Canyon on the Susitna River, a reservoir, and related facilities are part of the project, currently in the pre-application and feasibility study stage. Transmission lines from the project to the existing network as well as an access road would have to be built.

The project recently got a boost from $20 million included in the state capital budget. AEA is approved to use the funding for filing a license application with the Federal Energy Regulatory Commission.

A land-use deal was also recently agreed to between AEA, six Cook Inlet village corporations, and Cook Inlet Region, Inc. The permit should protect landowners while allowing AEA to conduct environmental assessments.

Various incarnations of a hydroelectric project in this area have been in the works since the 1960s.

Coalition Considered Many Railbelt utilities agree that joining together in some kind of coalition for operational efficiencies and increased buying power is a good idea. Try as they might to incorporate alternative, sustainable energy sources into the mix, each utility on its own nevertheless still uses mostly natural gas for generating power—about 75 percent according to the AEA. Large renewable power projects such as Susitna-Watana Hydro could be more affordable for everyone, from the builder to the consumer, if more players pooled their resources.

ARCTEC’s member utilities, which focus on improving and standardizing the regional power grid, are working with others on several fronts, including with AEA to review grid issues, make recommendations, and seek funds to improve Railbelt power generation and distribution, and with the Alaska Legislature to fund projects such as the Battle Creek diversion project at Bradley Lake.

R Susan Sommer writes from Eagle River. www.akbizmag.com

August 2014 | Alaska Business Monthly

41

special section

Energy & Power

ML&P’s New Plant Under Construction Efficient energy for Anchorage’s oldest neighborhoods

By Russ Slaten

Image courtesy of ML&P

Artist rendering of Municipal Light & Power’s George M. Sullivan Plant expansion project in Anchorage.

F

ive years ago, Municipal Light and Power (ML&P) began the process of considering, evaluating, and deciding whether or not they should build a new power plant.

About two years from now, on June 16, 2016 at exactly 12:01 a.m., ML&P General Manager Jim Trent says the utility will fire up the engines and commission the George M. Sullivan Plant 2A expansion project into service.

ML&P provides power to over thirty thousand people living in the Municipality of Anchorage, covering areas north of Tudor Road and west of Boniface Parkway. Operating revenue comes from 14 percent residential users and 61 percent commercial users, spanning businesses in the U-Med District, downtown Anchorage, and midtown.

Initial Concerns “We considered the ramifications of how, when, and why—and the dollars—and decided that the best interest for our customers here in Anchorage was an additional power plant to provide continuous uninterrupted service to our customers, who really think that any time they turn on a switch, they should have power, and we adhere to that strategy,” Trent says.

Concerns for a steady natural gas supply 42

of the partially owned Beluga gas field in Cook Inlet spurred the idea to build a new power plant, Trent says. Gas diminishing is no longer an issue after ample natural gas reserves were discovered in the area.

“The primary reason we decided to build the plant was to make sure that we had sufficient power for the growth of Anchorage and to prepare for any major outages that may occur, so we had redundancy and equipment,” Trent says. “We also have dual fuel power plants running. So if there’s a disruption in natural gas, we have diesel fuel tanks to support the continued power production. When everything goes to hell in a hand basket, we plan to be up and running.”

Centered on Efficiency ML&P chose Quanta Services out of twelve companies to handle engineering, procurement, and construction for the project.

“Leveraging our local Alaskan expertise and resources will play a critical role in performing this project safely, on time, and on budget. We look forward to bringing jobs and economic benefits to the area and being part of the local community over the next several years as we build this project,” says Randall Wisenbaker, Quanta Services executive vice president of operations.

Alaska Business Monthly | August 2014

The new plant, next to the George M. Sullivan Plant 2 in east Anchorage, is a highly efficient, 120-megawatt thermal generation power plant. It is installed with two GE jet-engine combustion turbine generators and one steam unit.

ML&P estimates emissions at 97 percent less nitrogen oxides, 80 percent less carbon monoxide, and about 30 percent less carbon dioxide compared to its eight existing power turbines.

Trent attributes the overall efficiency of plant design to the improvements of the newest GE turbines over the old generators, due to technological advances centered on the engine’s carburetor.

Fuel efficiency is estimated to average a 15 percent reduction in overall natural gas use, equal to more than $13 million annual savings at $5 per 1,000 cubic feet bulk rate. The new Plant 2A is measured to run 35 percent more efficient than ML&P’s current turbines in use.

Byproduct Benefits Anchorage Water and Wastewater Utility, or AWWU, is less than a mile away. Its location will allow the plant to send steam to heat the city’s water supply. Supervisory Control and Data Acquisition, or the SCADA system, allows ML&P to digitally control the temperature of the water, www.akbizmag.com

along with the entire plant operation.

“The hot water to [AWWU] has to be at a specific temperature to avoid parasitic degradation. If we give them water that’s too hot, they have to add chlorine to the water to offset the parasites,” Trent says. “So the engineering is very strict in terms of the degree of hot water we can deliver. It has to be seventy-five degrees, no hotter and no cooler, which means the engineering efficiency is critical to the overall success of the plant.”

The average age of the gas turbines run

by ML&P is thirty-four years old, with exclusion of the Southcentral Power Project which began commercial operations in January 2013. Even with the fifty-four megawatts from its share of the Southcentral Power Project, there is still a need to replace the equipment that exceeds its thirty-year design life, Trent says.

“Out of all eight of the other plants, some of them will be retired when [the new Plant 2A] comes online, which adds to our overall efficiency,” Trent says. “This plant on its own merits will be the single most efficient [thermal generation] plant in North America.”

Groundbreaking To kick-off the construction phase, ML&P, city, and state officials, along with project engineers and others involved, came together to break ground on the George M. Sullivan Plant 2A expansion project on April 23. More than three hundred people are involved in the project, with peak construction expected to employ two hundred workers.

Anchorage Mayor Dan Sullivan spoke of the importance of the new ML&P power plant for Southcentral Alaska.

“This will be integral to the power system in the railbelt from Homer to Fairbanks, the expansion of the plant built back in 1975. [The legacy plant] served our community well over the years, and it’ll continue to play a critical role as a backup plant for many years to come,” Sullivan says. “We know that [the new plant expansion] will play a vital part in Anchorage being a well-maintained and financially sound city. A key component to that is having a reliable power and certainly power that uses less gas than the plant we had before.”

ML&P Commission Chair Judy Brady looked back over the last five years, mentioning the creation of an energy transiwww.akbizmag.com

© Russ Slaten

ML&P ground breaking on April 23. From Left to Right: Jim Trent, ML&P General Manager; George Vakalis, Municipal Manager; Judith Brady, ML&P Commission Chair; Anchorage Mayor Dan Sullivan; Lieutenant Governor Mead Treadwell; Randall Wisenbaker, Quanta Services Executive VP of Operations; and Dick Traini, Anchorage Assembly Vice Chair.

tion team appointed by Mayor Sullivan.

The energy team addressed the need to incentivize new gas production, the need to invest in modern power generation, encourage conservation, and in the short term, plan for emergency energy outages, which was realized with the development of the new plant and more natural gas production in the Cook Inlet.

“In five years that all happened. The mayor’s office sat down with legislators, assembly members, with other utilities, with other communities, and with the governor’s office. It was an amazing coming together, and one of the most amazing things I think I’ve ever seen in a five year period,” Brady says.

Lieutenant Governor Mead Treadwell spoke of various projects around Alaska, but gave a special thanks to the parties involved in ML&P’s expansion project.

“We are doing a lot in the state in terms of geothermal, hydro, wind diesel, and kite power,” Treadwell says.“There’s a lot of exciting

things going on in power generation, and I tell people from around the country, ‘If you want your project to have efficiency and to have conservation improved, come to Alaska.’ We are really honored to see this project move forward.”

Internal Investment Trent says ML&P was not looking for partners in funding the project, and the $295 million in capital costs comes from ML&P’s internal reserves, setting aside the appropriate amount of dollars to stay on budget.

Construction worker for Roger Hickel Construction, Inc. preparing basement concrete wall by securing ties. © Russ Slaten

August 2014 | Alaska Business Monthly

43

Photos © Russ Slaten

Above: ML&P contractors working on the base of the new George M. Sullivan Plant 2A. Inset: Photo Inspection team looking over approved drawings for George M. Sullivan Plant 2A. From Left to Right: Floyd Lindbloom of Agate Construction, Inc.; Phil Calhoun, MOA Inspector; Robert Wilson, Special Inspector from DOWL HKM; and Tom Gibbs of Roger Hickel Construction, Inc.

“[ML&P] will begin thinking about that number and how to impact our rate payers as minimally as possible to make sure they are not harmed unnecessarily, but we do expect to recover our costs through the rate base,” Trent says.

Due to Regulatory Commission of Alaska regulations, ML&P cannot propose a rate increase until the plant is operational in 2016. ML&P will begin considering how to approach the Regulatory Commission of Alaska in 2015 on how to recover their investment over a certain period of time.

As construction continues on the promising new plant, and the details on its operation and use are settled, Trent looks forward to the startup.

“It’s an amazing sight to take something from nothing, bear ground, build a project, and then finally go in and literally turn a key,” Trent says. “I’ve built forty-six power plants across the Lower 48, and the thrill is always the same with the forty-sixth power plant as it was with the first.”

R Russ Slaten is the Associate Editor for Alaska Business Monthly.

44

Alaska Business Monthly | August 2014

www.akbizmag.com

special section

Energy & Power

Commercial Wind Farm Development

Energy generation for the next generation

By Gail West

Altaeros Energies has partnered with Tanadgusix Corporation’s TDX Power to launch the Buoyant Airborne Turbine nearly one thousand feet into the air south of Fairbanks in 2015. It is expected to produce enough energy to power twelve homes. © Altaeros Energies

I

s Alaska on the cusp of hosting the highest wind turbine in the world? Altaeros Energies says it’s so. Adam Rein, who co-founded Altaeros (a small, startup company) with an aeronautical engineer in 2010 at the Massachusetts Institute of Technology, says they’ve partnered with TDX Power, a subsidiary of Tanadgusix Corporation, to launch a high altitude floating 46

wind turbine south of Fairbanks—the Buoyant Airborne Turbine (BAT). The BAT is an inflatable, helium-filled ring with a wind turbine suspended inside and will float nearly one thousand feet above the ground. Rein says the winds at that elevation tend to be far stronger and more stable.

According to Altaeros, the airborne turbine is not intended to supply power

Alaska Business Monthly | August 2014

for large electric grids but for remote communities and facilities. It has a power capacity of 30 kilowatts at $0.18 per kilowatt-hour and would create enough energy to power twelve homes.

“We’re first doing an initial pilot deployment on the road system south of Fairbanks,” Rein says, “then we’ll deploy at remote off-road villages. We’re really excited about this.” Rein adds that the BAT won www.akbizmag.com

a ConocoPhillips Energy prize in 2011 for promising new energy technology.

The project is currently awaiting permits from the Federal Aviation Administration (a permit for airspace), from the US Fish and Wildlife Service, and permits from the State of Alaska before it can proceed, Rein says, “but we anticipate putting it into the air in 2015.”

Once the BAT is in the air, it will be held steady by high strength tethers that allow the electricity to be sent back to the ground. A power station on the ground controls the winches that hold the tethers and pulls the power from the turbine before sending it on to a grid connection.

Altaeros also hopes to lift communications equipment such as cellular transceivers or meteorological devices and other sensing equipment for customers.

“More than $1 million of government funding has gone into developing the technology,” Rein says, including $750,000 in financing from Alaska Energy Authority’s Emerging Energy Technology Fund.

Quickly Developing Production of wind energy in Alaska is relatively recent but is developing quick-

ly. Over the past seven years, the State’s renewable energy fund has put $86 million of grant funds into wind projects, and Sean Skaling, deputy director of Program Development for the State’s Alaska Energy Authority, a division of the Alaska Industrial Development and Export Authority, says results of those projects have already saved $22 million.

“There are twenty-six locations across the state with wind-energy capabilities, and those savings are increasing rapidly,” he adds. “There are the larger wind farms such as Eva Creek and Fire Island. Kodiak has six wind turbines, Kotzebue has nineteen, and Delta has two. There are a lot of smaller communities with a small number or just a single turbine,” Skaling says.

Of course, there are differing sizes of turbines which produce differing amounts of power—and, Skaling adds, wind is unpredictable.

Golden Valley Electric Association currently has twelve turbines at 2.1 megawatts each at Eva Creek, near Healy, and Lynn Thompson, vice president of Power Supply for GVEA, says the utility has about a 35 percent capacity factor from it—the ratio of the farm’s

actual output over a period of time.

“That’s 8 megawatts on a full time basis around the clock,” Thompson adds.

“That’s pretty good for a wind farm.”

With the current load on GVEA’s system, Thompson says the utility has no current plans to expand Eva Creek, although, he adds, it does purchase output from a wind farm at Delta as well.

“We’re looking more to buying power from independent wind-power producers,” Thompson says, “such as Alaska Environmental Power [owner of the Delta wind farm] and Fire Island [owned by Cook Inlet Region, Inc.]. One of our biggest criteria is that it not raise rates for our members.”

Integrating Power The issue to adding wind power to many of the state’s electricity-producing utilities is one of integrating it with power from other sources. “Wind is fickle,” says Matanuska Electric Association’s General Manager Joe Griffith, and every bit of alternative energy has to be dealt with differently. “You have to produce power in a nice level method, so you have to provide some regulating backup for wind power, something that balances the load.”

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14-06-20 August 2014 | Alaska Business Monthly

10:33 AM 47

Photo by Joe Earsley, HATCH Associates Consultants, Inc.

The third turbine being installed at the powerhouse at Terror Lake in Kodiak.

With two small hydro projects selling energy to MEA now, the utility is also in conversation with Cook Inlet Region, Inc. (CIRI) about purchasing wind power from a potential Fire Island expansion.

While MEA is preparing to produce power from wind and other sources, Chugach Electric is already on board buying all the wind energy produced by Fire Island.

According to CIRI’s Senior Director of Energy Development Suzanne Gibson, the first phase of Fire Island has been integrated into the system suc-

48

cessfully, and CIRI is now looking to expand the wind farm.

“We have eleven turbines on the island now at 1.6 megawatts each producing 50,000 megawatt hours annually,” Gibson says. “We would like to double the size of the project in 2015 so we would produce 100,000 megawatt hours. At that capacity we could meet about the needs of about thirteen thousand average households annually. For the second phase, we’re talking with MEA, Homer Electric, and GVEA in addition to Chugach about buying the energy we would produce.”

Gibson adds that CIRI has been satisfied with the energy production of Fire Island. “It’s just where we expected it to be,” she says, “but every year will be different. We have a twenty-five-year power-purchase agreement with Chugach, and that long-term agreement gives us confidence to move forward.”

The second phase of Fire Island would need an additional $50 million dollar investment and would result in about 150 construction jobs in 2015, Gibson estimates. Two long-term jobs would also be created.

Alaska Business Monthly | August 2014

“The transmission line we built last year is sufficient,” Gibson says. “It was built to accommodate the second phase.

We hope to have a contract with a utility or a group of utilities in the next few months with a power-purchase agreement approved by the regulatory commission by October. Then we can begin construction by May of 2015.” Gibson adds the new turbines will be the same size as the current ones.

In addition to Fire Island, CIRI is involved in wind-power production in Washington state, Texas, Wyoming, and Nebraska, although Fire Island is the only wind farm at which CIRI is the operator. The organization is also exploring other sources of renewable energy. “It doesn’t seem prudent to remain dependent on natural gas and diesel when we have other options for green energy,” Gibson says.

Renewable Kodiak Kodiak’s utility, Kodiak Electric Association, has been working diligently to switch from the costly diesel to renewable energy sources and is a success story to be envied.

www.akbizmag.com

“In 2007 the utility crafted a vision statement that said Kodiak Electric would endeavor to reach 95 percent renewable power by 2020,” says the utility’s President and CEO Darron Scott.

“We started the first phase of our conversion in 2009 by adding three 1.5 megawatt turbines and completed the second phase in the fall of 2012 by adding three more and a 3 megawatt battery energy storage system.”

With the addition of hydropower and a recent hydro plant expansion, Scott says, “we’re now, for the first quarter of 2014, producing energy from 99.4 percent renewable energy sources. We’re basically 100 percent renewable and our electric rates have been flat. It’s been very cost-effective and great for our membership.”

Scott adds that not only is the air cleaner, but there are secondary benefits that help fish processors and the National Guard base. “We can share our energy credits with our customers,” Scott says. “Kodiak has the nation’s largest Coast Guard base and they can use some of our credits to help meet US renewable energy goals.

A Kodiak Electric Association battery energy storage system.

Photo courtesy of KEA

“We’re really proud of this—the wind has been integral part of solution to keep rates flat and the air clean. We’re not subject to the volatility of the world fuel market,” he says.

Mainstream Alaska The rest of Alaska is working more slowly to reach the State’s stated goal of producing 50 percent of its electricity needs from alternative or renewable sources.

“That’s a goal that has resonated with people,” says Chris Rose, executive director of the Renewable Energy

Alaska Project, “but how we implement this vision isn’t clear yet. Wind projects around the state range from small, wind-diesel hybrid projects to large-scale projects such as Fire Island.

Renewable energy is mainstream in Alaska now and Legislators understand the value of diverse sources of power.

They continue to fund the Alaska Energy Authority so it can continue to support renewable energy projects.” R Gail West writes from Anchorage.

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August 2014 | Alaska Business Monthly

49

special section

Energy & Power

Photos courtesy of Bettisworth North

The Efficiency Factor in the Energy Equation

The thermal images show where the heat leaks from the structure, providing clues on where best to reinsulate.

Or how to save hundreds of millions of dollars every year

L

By Julie Stricker

ined up like beads on a string along a windy sandpit on the shore of Kotzebue Sound, Deering is an Iñupiat community at the mouth of the Inmachuk River. Its 123 residents haul water, but a central power plant provides electricity and hot water for the local washeteria. Like most remote, rural Alaska villages, energy costs are high.

In a community that small, however, even small improvements can pay big dividends. In 2013, the Alaska Rural Util-

ity Collaborative (ARUC) oversaw the installation of a new pump and controls on the village’s heat recovery system.

Combined with other efficiency efforts, the project saved the washer and water plant about $5,000 monthly in fuel costs, according to John Nichols, manager of ARUC, a program within the Alaska Native Tribal Health Consortium (ANTHC) that was created to manage, operate, and maintain water and sewer systems in rural Alaska.

That may not sound like much, but that means about $154 a month in savings for each of the thirty-six households, or about 5 percent of their mean income.

Rural Alaska Priority Reducing energy costs is a priority in rural Alaska, where some residents pay

Priority List — Energy Efficiency Measures

Source: Bettisworth North

Rank

50

Feature

Improvement Description

Annual Energy Savings

Installed Cost1

Savings to Investment Ratio, SIR2

Simple Payback (w/Maint.

Savings)3

1

Refrigeration: Chest Add new Seasonal Shutdown Freezer

$128

$1

2459.25

0.0 (N/A)

2

Refrigeration: Milk Refrigerator

Add new Seasonal Shutdown

$32

$1

615.00

0.0 (N/A)

3

Cooking and Clothes Turn off pilot lights in kitchen Drying – Cooking during summer (Seasonal Equipment Shutdown)

$1

$1

15.50

0.8 (N/A)

4

Refrigeration: Vend- Add new Seasonal Shutdown ing Machine

$282

$600

5.51

2.1 (N/A)

5

Other Electrical: Electric Heat Trace

Add new Clock Timer or Other Scheduling Control

$1,220

$5,000

2.87

4.1 (N/A)

6

Lighting: Exterior Pole Lights

Replace with 10 LED 100W Module StdElectronic and Add new Occupancy Sensor

$5,034

$22,000

2.80

4.4 (4.2)

7

Lighting: Misc Incandescent

Replace with 30 FLUOR CFL, A Lamp 15W

$267

$1,500

2.02

5.6 (N/A)

8

Lighting: Exterior Wall Lights

Replace with 30 LED 50W Module StdElectronic and Add new Manual Switching, Occupancy Sensor

$5,924

$66,000

1.16

11.1 (10.1)

Alaska Business Monthly | August 2014

more than ninety cents per kilowatt hour for electricity and eight to ten dollars for a gallon of diesel fuel, compared with fourteen cents per kilowatt hour and four dollars per gallon in Anchorage.

According to Commonwealth North in 2012, “The poorest Alaskan households spend up to 47 percent of their income on energy, more than five times their urban neighbors.”

Some villages are teetering on the brink of sustainability, Nichols says.

“The ANTHC energy program is really about the sustainability of entire communities in rural Alaska,” he says. “If we can’t bring down the cost of energy in rural villages, it will kill the whole community.”

Efficiency is the first step in reducing energy costs, and maintenance is key, says Nichols.

“The number one thing you can do is make sure your boiler system has been maintained regularly, is clean, and is a newer style high-efficiency model,” he says. “I really think with a well-maintained or new boiler, you’re going to save from 20 to 30 percent in energy costs.”

ARUC, which is comprised of twentyseven villages, estimates energy costs make up 39 percent of village water/ sewer expenses.

According to ANTHC energy audits, northern water/sewer systems have the capacity for 50 percent in energy savings. ARUC is working with villages to lower costs by increasing operational efficiencies. For instance, it installed smaller, more efficient boilers in Sleetmute, Chevak, and St. Michael. It also constructed systems that use waste heat from the power plant to heat water in www.akbizmag.com

clinics across the state could benefit from similar retrofits, according to ANTHC audits.

Modeled Building Energy Cost Breakdown Existing Building Energy Cost Breakdown Total Cost $123,319 Clothes Drying $206 0%

Cooking $2,013 2%

Envelope Air Losses $17,476 14%

Source: Bettisworth North

Other Electrical $29,732 24%

Clothes Drying $206 0% Ceiling $3,927 3% Window $5,703 5%

Refrigeration $4,023 3%

Wall/Door $9,706 8% Lighting $30,435 25%

Exhaust Fans $1,296 1%

Water Heating $12,421 10%

Retrofit Building Energy Cost Breakdown Total Cost $112,179

Floor $6,380 5%

Maint. Savings $2,380 2%

Cooking $2,013 2%

EEM Savings $13,520 Envelope Air Losses 11% $19,129 15% Ceiling $4,298 3% Window $6,021 5%

Other Electrical $29,732 23%

Wall/Door $10,589 8% Floor $6,984 5%

Refrigeration $4,023 3% Lighting $16,216 13%

Exhaust Fans $1,296 1%

Water Heating $11,672 9%

Typical information found in a commercial energy audit.

villages such as Ambler and Shungnak, saving thousands of gallons of fuel oil each year. Similar projects are underway or planned in Savoonga, Russian Mission, Noorvik, and Quinhagak.

Eighteen rural health clinics around Alaska received energy efficiency retrofits as part of ANTHC’s Rural Energy Initiative. The retrofits and upgrades, such as LED lights, control systems, programmable thermostats, and circulation pumps to lower energy use, will save nearly $68,000

in operations costs annually.

In a news release, project manager Gavin Dixon notes that most of the upgrades were small and inexpensive but carried immediate savings.

“Most of this technology was not available when these facilities were built in the ’80s, ’90s, and even in the early 2000s,” Dixon says. “Most of these materials come at a low cost, but you get a lot of direct, quick savings from them for the communities.”

An estimated forty additional health

Maintenance Training Needed Bigger solutions may be needed in some cases. Most infrastructure in rural Alaska is thirty to forty years old, Nichols notes, so the installation of a new boiler system pays off immediately. The next step is to keep it maintained and managed properly.

“What we find is even with the newer boilers, often they’re not well-maintained and well-managed,” Nichols says.

“If there was a program to properly maintain all the boilers in rural Alaska, I think we’d see a 20 percent reduction in energy usage statewide.”

The ANTHC Energy Program reports that 10 to 35 percent of energy used in northern Alaska communities is for water and sewer. A state study in 2012 backs up Nichols’ observation that operations and maintenance have more of an effect on energy efficiency than design and construction.

To address that issue, Nichols says he would like to see a training program set up to train people in each village to

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51

Energy Efficiency Resources Residential

■ Alaska Housing Finance Corporation’s (AHFC) Home Energy Rebate program: ahfc.us/efficiency/energyprograms/home-energy-rebate/

Commercial

■ Alaska Energy Authority’s (AEA) Village Energy Efficiency Program (VEEP): akenergyauthority.org/ programsalternativeVEEP.html ■ AEA’s Commercial Building Energy Audit Program (CBEA): akenergyauthority.org/ efficiencyaudits.html ■ AHFC’s Alaska Energy Efficiency Revolving Loan Fund (AEERLP): ahfc.us/efficiency/energy-programs/ energy-efficiency-revolving-loanfund-aeerlp/ ■ A comprehensive resource for energy efficiency in Alaska is akenergyefficiency.org/

maintain the systems.

Now, if a boiler has problems in Deering, for instance, a lot of agencies will send someone out from Anchorage to fix it.

“It would be cheaper to call someone from Seattle to work on my boiler,” Nichols says. “If we had one guy who was well-trained and well-paid from each community, just think of the enormous savings. Of course that would save a ton of money that we’re paying, including travel time and travel costs.”

The same goes with buildings. Good construction is ideal, but it isn’t the only important aspect, he says.

“In rural Alaska, operations and maintenance impacts energy efficiency more than design or construction,” Nichols says. “A poorly designed, poorly constructed building, if it’s managed well, can still be more energy efficient than a poorly managed one.”

Northern Innovations In northern Alaska, high costs associated with village water and sewer systems have resulted in some innovations.

Most buildings in the north that are connected to the local water line have an “Arctic box” on the outside where the water enters the house. If the box isn’t tightly sealed, cold air can enter and freeze the waterline. According to ARUC’s 2013 overview, accelerating warming in the 52

north is increasing ground movement due to the freeze/thaw cycle. This began to pull the Arctic box away from the building. So ANTHC is testing flexible water lines designs in Savoonga and Selawik.

In community water tanks, a pressure transducer measures the water levels, signaling when a pump is needed to add water and to stop pumping when the desired water pressure is met. In most places, transducers are hung from a wire at the top of the tank. In Alaska, ice often forms at the top of the tank, so many communities install the transducers in the pipes instead. But water circulation in the pipes can falsely signal water level changes, starting and stopping the pump, which can wear it out and wastes electricity.

ARUC developed a transducer that can be placed at the bottom of the tank, which eliminated false signals and saved electricity. It worked so well in tests, ARUC is using it in tanks in non-ARUC sites.

Public Building Audits Alaska’s public buildings, such as tribal halls and schools, are also fertile ground for energy efficiency projects.

In 2012, the Alaska Housing Finance Corporation conducted energy audits on 327 public buildings throughout the state. It released a “White Paper on Energy Use in Alaska Public Facilities” that concluded many buildings have significant energy savings potential at relatively low costs. The report also contained the following findings.

■ Buildings in Anchorage and southeast Alaska outside of Juneau appeared to be less energy efficient than anywhere else in the state, with the exception of the North Slope.

■ Design and policy decisions affect energy use, as well as the importance of a commitment to efficient buildings.

■ Overall, efforts to track and manage energy use in some facilities are lacking in accountability.

The bottom line was that Alaska’s approximately five thousand publicly owned buildings cost the public about $641.2 million each year in energy costs. But, efficiency measures could reduce those costs by approximately 20 percent, or $125 million.

Dena Strait, an architect and LEED Green associate and energy specialist

Alaska Business Monthly | August 2014

with Bettisworth North, worked on the AHFC audit. She says one of the biggest problems she noted with older facilities was inefficient ventilation systems.

“They’re supplying too much air for the number of people in the building,” Strait says. “You’re bringing in a lot of really cold air and warming it up and sometimes pushing it right out of the side.”

A heat recovery system could help, but the biggest issue is that many buildings are not being used the way they were designed decades ago. For one thing, many are too big, Strait says.

“There was a lot more money to do capital projects thirty or forty years ago,” she says. “I think Alaska has gone through a pretty luxurious period of capital activity when Ted Stevens was in power. A lot of buildings were built bigger than they needed to be.”

When a building is designed, architects and engineers must design the ventilation system to accommodate the building when it’s full. Another problem is that the lights, heating, and ventilation systems are running, even when the building is not occupied. The efficiency solutions for each building will be different.

“It’s not a one-size-fits-all,” she says.

“Even in the same community, you can have two buildings side by side. One can be a home, one can be a school. The solutions for both of those buildings are different, even if they’re side by side.”

Automation and Modeling Strait notes a couple of options.

One is to automate the systems and adjust them to run according to the actual use of the building. Carbon dioxide sensors can prompt the ventilation system to provide only what’s needed for the building occupants instead of a constant volume of air.

“One of the big things I would do differently now is to do energy modeling,” Strait says. “It allows the design team to try out solutions without actually constructing them. It’s a lot easier to figure them out on a computer.”

With modeling, Strait can figure out the best orientation on the building site and the proper mechanical systems and build in energy efficiency from the ground up.

ANTHC did just that. In 2012, the nonprofit completed construction on its 84,403-square-foot Healthy Communities Building in Anchorage. The www.akbizmag.com

building’s extensive energy efficiency measures such as advanced lighting, occupancy sensors, and a white-painted roof as well as a robust recycling program and commitments to fostering healthy lifestyles led to it receiving LEED Silver certification from the US Green Building Council, according to a news release.

The building includes locker rooms and a bike corral and is near public transportation to encourage employees to use alternative transportation. The entire Alaska Native Health Campus is also smokefree. Janitorial supplies must meet indoor environmental quality standards.

Over a ten-month period, the HCB used 46 percent less electricity and natural gas per square foot than the ANTHC’s Consortium Office Building, according to ANTHC Campus Projects Manager Paul Morrison in a news release. Those savings added up to about $180,000.

“Every dollar we save in the operation of this building goes back into helping operate our company,” Morrison says.

Energy Options Homeowners and small business owners have no shortage of options on ways to save energy. That in itself can be daunting, Strait says.

“I think the first step for most entities, if they don’t know where to start, is to get an audit,” she says. Audits are available from many nonprofit, government, and commercial entities. All will provide a professional analysis of a building, with a list of energy efficiency suggestions.

“Sometimes you really just don’t know where to start until you have the audit.”

Both residential and commercial audits can be reimbursed or paid for through existing, ongoing programs, she says.

Strait notes Bettisworth North can help individuals and communities write grants and find funding for energy projects, with energy use analysis to reduce energy costs, and with energy efficiency renovation work to turn energy costs into program and business opportunities.

“There are a lot of resources,” Strait says. “It is just finding them and knowing which ones apply to which types of projects.”

R Julie Stricker is a journalist living near Fairbanks. www.akbizmag.com

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www.PortofAlaska.com August 2014 | Alaska Business Monthly

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TELECOM & TECHNOLOGY

Leveraging Worksite Telecom Tools Enhancing connectivity, collaboration, and productivity

By Tracy Barbour

I

ncreasingly, Alaska businesses are leveraging a combination of technical solutions to enhance worksite communications, allowing employees to perform their duties anywhere and anytime.

Companies across all industries are using communication tools “in the field” to enable workers to conduct business whether they’re in a conference room down the hall, across town, or in a remote region of the state.

Increasing Productivity GCI, Alaska’s largest telecommunications system, offers an array of products to help workers stay connected while on the job. These solutions range from basic cellphones, smartphones, and tablets to mobile broadband devices like air cards and hotspots.

As an integrated communications provider, GCI offers the expertise to

© Alaska Communications

Alaska Communications Field Technician Jake Herman installs, repairs, and troubleshoots the company’s network for customers in Fairbanks.

pull together solutions that fit customers’ specific needs, says Senior Manager Commercial Product Marketing Gregory Schlabaugh. “Our specialists can find that perfect solution—whether it’s software, hardware, a GCI-hosted solution, or a third-party solution,” he explains.

Some businesses are still providing workers with basic cellphones, but that practice is becoming less common the more they realize the benefits of smartphones and tablets, Schlabaugh says.

They’re taking processes that are extremely paper-intensive, such as handwriting paper forms and filing them with a clerk, and replacing them with forms that can be submitted through apps. These apps allow mobile workers to enter the data electronically, so the business can act instantly on the information. Smartphones and tablets are cool tools, Schlabaugh says, but the

“Our specialists can find that perfect solution— whether it’s software, hardware, a GCI-hosted solution, or a third-party solution.”

—Gregory Schlabaugh Senior Manager Commercial Product Marketing GCI

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Alaska Business Monthly | August 2014

bottom line is their ability to increase productivity: “The end goal is to make customers more productive.”

In Alaska, in-the-field communications are frequently employed by transportation, construction, and utilities companies. But if more companies were to redefine what it means to be “in the field” (whether it’s working outside or simply away from a desk), they would realize how technology could work for them, Schlabaugh says. Office workers meeting in a conference room still need the same processes and communication tools, such as email, as they do at their desk. Hospitality workers roaming throughout their facility to check on rooms need access to data to improve the customer experience. Likewise, healthcare workers must be able to communicate efficiently as they move from patient to patient. “It’s about enabling that worker to be productive when they’re not at a physical work station,” he says.

Time management is also a major factor in how technology is being used to enhance worksite communications. Plumbers, for example, are using smartphones to log in when they arrive at the job site, and GPS records help track the work being billed. They’re also using camera phones for quality assurance purposes by www.akbizmag.com

taking photos at the beginning and end of each job to document their work.

Alaska businesses are also implementing fleet management solutions to keep track of drivers, vehicle logs, and vehicle maintenance, which can help with industry compliance.

While there are significant benefits of using technology to enhance worksite communications, some businesses are shortsighted by the costs involved.

However, Schlabaugh says, companies should look at the bigger picture and consider how mobile technology can have a positive impact on their bottom line in terms of improved productivity, safety, and compliance.

Working Whenever and Wherever Mobility, collaboration, and the use of information are key areas that Alaska Communications considers when evaluating a company’s need for communications in the field. Alaska Communications provides high-speed wireless, mobile broadband, Internet, voice, and other services that make it possible for people to work wherever and whenever

they want. “Today’s workers, increasingly, want to be able to do the same things that they can do at their desk anywhere else,” says Business General Manager for Wireless Chris Reaburn.

Workers also want to be able to collaborate with their cohorts and customers throughout the world. They expect to have access to information on their desktop computer whenever they need it. As such, Alaska Communications offers smartphones and tablets that let workers patch into their company’s intranets and other capabilities.

But worksite communications can also involve less obvious tactics, such as using a 4G LTE wireless router to create a popup office. For instance, if a remote team needed a worksite to have office-based connectivity, they could combine a wireless 4G router (or hotspot) with a portable computer and VOIP phone that runs off a wireless data connection. That would effectively create a mobile version of their office. “You have all the stuff you usually use to conduct business,” Reaburn says. “And if you have your four-digit desk number for your VOIP phone, you can do business virtually like you’re at your desk.”

The increasingly-mobile business environment is driving more remote collaboration, Reaburn says. “Collaboration used to mean we get together in a room and work together,” Reaburn says. “Now it means we get together in a variety of spaces with technology and share information and work together.”

However, remote collaboration doesn’t just encompass people sharing information; it also involves machines. More and more, smart sensors are being used to monitor systems and networks at a distance, thanks to the availability of wireless data. The technology is so intriguing that some Alaska businesses are looking at using drones, wireless routers, and cameras to capture information remotely. The use of drones—which could be especially helpful in Alaska’s isolated areas, could be a real possibility within a year, Reaburn says.

While the types of worksite communications may vary among businesses, most industries are using wireless technology to give their employees greater flexibility to conduct business anywhere, Reaburn says. And now with cloud communications, small companies have ac-

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cess to some of the same technology as large companies. He says: “In the old days, you had to take on a lot of infrastructure costs. Now with cloud communications, the cost is distributed, and small companies can compete in ways they couldn’t before. When you pair cloud communications with wireless devices and business done in a mobile sense, you’ve got something powerful.”

Mobile Technology When it comes to providing worksite communications, AT&T focuses on building a solid mobility infrastructure foundation for companies to manage, optimize, and control mobile endpoints, critical communications, usage, and applications, according to Anchoragebased Shawn Uschmann, sales director, Business Integrated Solutions, AT&T. AT&T provides a range of products and solutions to help Alaska businesses innovate their processes, increase productivity, and generate new revenue.

“These solutions help businesses increase their efficiency by managing assets, employees, schedules, forms, customer information, etc., ultimately saving them time and money and having a tangible impact on business revenue and operations,” Uschmann says.

Most businesses with workers who are in the field, travel, or leave the office are relying on mobile communication, Uschmann says. Businesses with a sales team, for instance, can benefit from AT&T Sales Force Automation products, which provide mobile access to customer relationship management tools, collateral, order status, inventory, reporting, collaboration tools, enterprise class messaging, mobile point of sale, and marketing applications. Having this

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information at hand in real time can increase productivity, lessen travel time, and increase customer satisfaction.

As another example, almost any business can use AT&T Mobile Workforce to keep workers connected and more productive on the go. Its cloudbased solution lets businesses access and share content with their coworkers and teams across multiple devices.

Examples of Alaska companies that have recently implemented mobile applications for communications in the field include a large mining operation that is using AT&T Remote Mobile Zone to provide cellular service at mining locations; an Anchorage-based social services company that deployed AT&T’s cloud based remote access service; and a provider of portable restrooms, trailers, and wash stations that implemented a tracking solution to maintain complete visibility to its assets.

Instant Communication Two-way radios remain an increasingly popular option for worksite communications, although many people don’t realize that they still exist, according to Gary Peters, president and CEO of ProComm Alaska. In fact, Anchorage-based ProComm Alaska sells a variety of solutions to support one-to-one and one-to-many instant communications, including local on-site radio systems, wide-area digital radio systems, hands-free headsets for high noise environments, and digital data applications using two-way (text) messaging.

High-powered two-way radios give users an effective and convenient method for reaching out to coworkers at one or multiple locations. Peters explains: “You can pick up the radio, hit a talk button, and speak to up to fifteen

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Alaska Business Monthly | August 2014

people at one time. It’s an instant way to get communications to all your people.”

Communicating by radio allows workers to avoid hearing a busy signal, wasting time playing phone tag, or getting stuck in “voicemail jail,” Peters says. As another advantage, users can talk on a radio without requiring a repeater or cellular system. This can be a major advantage in remote areas of the state where no cellular coverage exists.

Two-way digital radio systems support mobile data terminals as well as various applications, so mobile employees can use their laptop, tablet, or vehicle to have their corporate information within reach. And through private data systems, employees can research items in their inventory; complete job and purchase orders; take and send pictures; and transmit real-time video from the field. GPS applications help companies keep track of their assets and personnel, which can be critical in situations where employees have become unresponsive or injured.

Peters says people are starting to realize the value that a digital radio system offers. Many businesses are going beyond using “walkie-talkie” style, one-to-one service in a single local area. Companies are taking advantage of data features to communicate with employees simultaneously in multiple locations around the state, Peters says. “The digital two-way radio world will continue to remain parallel with cellular to do the heavy lifting, as there is no replacement for one-to-many instant communications for industrial-safety and mission-critical users.”

Meeting the Demand Alaska’s communications providers are meeting the demand for in-the-field communications in varying ways. Mobile radio systems, laptop computers, smartphones, and tablets are popular facilitators of worksite communications, while satellite phones, smartphone watches, and solar battery chargers are less common. The use of two-way radios, mobile and cloud technology, and time-saving applications is helping workers connect with others, complete various tasks, and increase productivity while they’re in the field.

R Tracy Barbour is a former Alaskan. www.akbizmag.com

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NATURAL RESOURCES Tongass National Forest in Southeast Alaska. Š R.E. Johnson/AlaskaStock.com

Tongass Timber Program Rational, economic transition needed

By Owen Graham

W

e need a rational, economic transition to a young-growth timber program on the Tongass.

Many private timberland owners use a net present value calculation to identify the optimal economic age to harvest their timber. Some long-term assumptions must be made to do the analysis—future interest rates, future timber values, future management costs, etc., but this is a good method of determining when to most profitably harvest private timber.

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www.akbizmag.com

In 1980 and 1990, Congress also passed legislation specific to Alaska, designating vast new wilderness areas and promising to supply sufficient timber to preserve the existing timber industry. Unfortunately, after 1990 the promised supply of timber was not made available, causing the timber industry to decline to about a tenth of its former size.

The issue is more complex on public lands, especially national forest lands.

Public timber can be managed profitably to maximize timber harvest opportunities, and many State forests are managed this way, but our national forests must be managed in compliance with the laws and the intent of Congress.

The Forest Reserve Act of 1891 allowed the US President to set aside lands as national forests. In 1897, Congress passed the Forest Management Act, which specified the purpose of the reserves was to preserve a water supply, preserve the forests, and provide a continuous supply of timber “for the use and necessities of the citizens of the United States.”

The Tongass National Forest was established in 1908, and by 1934 government foresters had completed the first growth and yield tables for the Tongass.

These yield tables allowed foresters to measure the potential sustained-yield of timber from the forest, after which the agency began planning a timber sale program that would foster a permanent, year-round timber manufacturing economy for the people in Southeast Alaska.

The transition to young-growth harvesting has always been part of the timber sale program—it just takes time to get there. Initially the Forest Service planned to manage most of the better growing sites for timber production while still maintaining stream buffers, research areas, and a few wilderness reserves. Some of the timber mills in the Pacific Northwest viewed the Tongass as

Each time the agency has revised its management plan for the Tongass, it has increased its emphasis on non-timber amenities and reduced the amount of land available to grow and harvest timber.

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a potential wood-basket for their mills, but Southeast Alaska communities wanted the timber to remain in Alaska to support local timber manufacturing.

The agency thus began selling timber with the stipulation that the timber be processed locally. The agency collected stumpage payments for the timber and used some of those receipts to insure prompt regeneration of the harvested areas. The Forest Service plan included a transition to young-growth after about one hundred years because that would maximize the growth potential of the land, which is a smart thing to do.

In 1960, as many people began to place greater value on other amenities that the forests provide, Congress enacted the Multiple-Use Sustained-Yield Act “to authorize and direct that the national forests be managed under principles of multiple use and to produce a sustained yield of products and services, and for other purposes.” These include clean water, recreation, fishing and hunting opportunities, and fish and wildlife habitat. These additional amenities don’t provide much direct revenue, but they are important values from the forest. In addition, the Multiple-Use Sustained-Yield Act made crystal clear that the additional uses of the forest are “supplemental to, but not in derogation of, the purposes for which the national forests were established as set forth in the Act of June 4, 1897.”

In 1969, Congress enacted the National Environmental Policy Act, followed in 1976 by the National Forest Management Act (NFMA). These laws direct the Forest Service to periodically prepare management plans for each national forest and concurrently to prepare environmental impact statements to look at the environmental consequences and reasonable alternatives for those management plans. In 1980 and 1990, Congress also passed legislation specific to Alaska, designating vast new wilderness areas and promising to supply sufficient timber to preserve the existing timber industry. Unfortunately, after 1990 the

promised supply of timber was not made available, causing the timber industry to decline to about a tenth of its former size.

Each time the agency has revised its management plan for the Tongass, it has increased its emphasis on non-timber amenities and reduced the amount of land available to grow and harvest timber. Prior to 1976, the agency was managing 5 million acres for timber production. After 1980, the agency planned to utilize only about 3 million acres primarily for timber production. Currently, the 2008 Tongass plan allows potential harvest on only 663,000 acres, about half of which is young-growth currently too young to harvest responsibly. Yet the current Administration is now discussing restricting the timber sale program to only the young-growth stands that are not in reserves, which total about 300,000 acres—1 percent of the acreage that was managed for timber production prior to 1990. This Administration’s young-growth transition proposal is all about politics; it is not about a balanced, multiple-use plan for the Tongass.

In order to support a viable timber manufacturing industry, there must be sufficient timber supply to allow each manufacturing facility (e.g. sawmill, veneer mill, fiberboard plant, etc.) to amortize the cost of the facility and make a profit.

There must also be sufficient economy of scale (supply of timber) to allow a group of manufacturing facilities to specialize and capture the highest value from the diverse timber that grows in the region; otherwise the industry would not be able to compete in the wood products markets.

The current federal Administration has proposed accelerating the transition to young-growth with a goal of ending all old-growth harvesting over the next ten to fifteen years, but the current younggrowth acreage is simply insufficient to sustain a timber supply for a viable younggrowth manufacturing industry. Both Washington and Oregon do have viable young-growth industries, but they also have 8 and 10 million acres of State and

Alaska Business Monthly | August 2014 www.akbizmag.com

private timber respectively, most of which is young-growth. These two states also contain about 20 million acres of national forest timberland. Further, if the younggrowth trees are cut twenty to thirty years prior to maturity as the current Administration is proposing, then the amount of volume harvested from each acre will be half or less than of what it will be at maturity, thus making the prospect of transitioning to young-growth manufacturing even more improbable and imprudently wasting a natural resource that belongs to the American people. The Forest Service invested our tax dollars in the younggrowth forest, and harvesting the trees before they reach maturity would preclude us from achieving our anticipated return on investment.

A typical mid-size, old-growth sawmill utilizes about 2,000 acres of timber annually and employs about a hundred people in the mill and a similar number of people in the woods. The high-value lumber that is produced from old-growth trees is necessary to cover the cost of constructing access roads into these remote, mountainous areas as well as the cost of harvesting and manufacturing and shipping finished products to market.

In contrast, young-growth timber is coarse-grain wood fiber that is not suitable for the higher-value products that can be produced from old-growth timber. In order to be profitable, small-log mills (spaghetti mills in sawmill lingo) must be highly mechanized (fewer jobs) and, even in areas where the road systems are already in place, these mills must process much larger volumes of lumber to compensate for the lower lumber values. These modern small-log mills are also very costly ($75 to $100 million).

It is doubtful if any private investors would make such an investment without an adequate long-term timber contract to insure they could operate long enough to amortize their investment.

NFMA prohibits the harvest of national forest timber prior to the timber reaching 95 percent of its maximum growth potential (about ninety to one hundred years on the Tongass). The bulk of the young-growth timber in Southeast Alaska is less than sixty years old, so compliance with the NFMA prohibition on premature harvest of young-growth means a significant transition to young-growth would take at least another thirty years. www.akbizmag.com

The good news is that by complying with NFMA and honoring the promises Congress made to sustain our communities and our industry, we can have viable timber manufacturing businesses for the next thirty years, at which time there will be more young-growth acreage, the existing young-growth stands will have doubled or tripled in volume, and the young-growth trees will be much larger and more valuable for the sawmills than they are now.

This plan would leave more than 80 percent of the old-growth timber un-

touched (90 percent if we count the 4 million acres of non-commercial, oldgrowth timberlands on the forest). That would be a rational, economic plan for the Tongass, one that is more consistent with the intent of Congress for our public lands. Multiple use management is, after all, the law on the Tongass, as it is on all national forests.

R Owen Graham is the Executive Director of the Alaska Forest Association.

Gateway to the Arctic

beringstraits.com August 2014 | Alaska Business Monthly

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NATURAL RESOURCES

Tongass Bellwether: Dargon Point Timber Sale Sustainable young-growth timber industry shows early promise

By Dustin Solberg

D

argon Point lies on the west coast of Prince of Wales Island at the southernmost tip of Alaska. In recent months, a stand of trees near this isolated rainforest coastline has become a bellwether on the Tongass National Forest.

The US Forest Service first stipulated its plans to develop a young-growth forest industry on the Tongass as far back as twenty-five years ago. But the matter of precisely when the Tongass National Forest should begin its shift away from logging old-growth forests has been a hotly contested question.

So when federal foresters marked out a first-of-its-kind fift y-eight-acre timber sale in a young-growth forest on Dargon Point, it drew more than a little curiosity from timber industry observers.

Most timber watchers seemed to expect little interest from an industry that has remained—unique among the world’s softwood-producing regions—dependent on old-growth trees.

If the industry’s enthusiasm for the Dargon Point timber sale is any indication, those early doubts appear to have been turned on their head.

“I’m amazed that it attracted the bids that it did,” says Forrest Cole, supervisor for the Tongass National Forest. “It definitely shows the promise for second growth.”

The 4.5 million board-foot Dargon Point sale sparked an entrepreneurial buzz, drawing four bids instead of the normal one or two.

“We went conservative on the appraisal because we weren’t sure how people would value the second growth,” says Stan McCoy, the supervisory forester for the Thorne Bay and Craig timber zones.

That incentive appears to have been unnecessary: the high bid of nearly $800,000 came in at 81 percent over appraisal.

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‘Great quality wood’ Clarence Maxey began working in the woods on Alaska’s Afognak Island when he was still a teen. Today he owns Frontier, Inc., the firm that put up the winning bid at Dargon Point. (As of press time, the contract was still under routine review and wasn’t officially awarded.) When Maxey first walked the forest at Dargon Point, he liked what he discovered there.

“I was just amazed at the uniformity of the trees, the height; the volume per acre is just amazing. That’s a quality stand of timber that just grew back naturally,” he says by phone from his office in Idaho. “It probably has five times the volume per acre as what they took off in old-growth back seventy years ago. We’re talking maybe 2 percent defect, versus old-growth being closer to 60 to 70 percent defect.”

While the strength of the domestic market for young-growth wood may still hold some uncertainty, he welcomes the shift.

“We’re interested in all timber, whether it’s young growth or old growth,” he says.

“We prefer the size of the timber in the second growth because it’s easier to manage and handle. I’ve cut old-growth timber and people have got misconceptions about oldgrowth timber. I’ll just be honest with you: old-growth timber is not a six-foot in diameter spruce every other tree. I mean it’s a bunch of punky, rotten hemlock, broken off red cedar snags, and every once in a while you’re going to run across a nice big Sitka spruce. The majority of the timber is rotted and over mature.”

Maxey’s business has built secure export markets in Asia. Under the terms of the sale, half of the harvest is eligible for export to such markets as raw logs. Terms call for local processing on the remainder. www.akbizmag.com

When Maxey walked the forest at Dargon Point, a grandson engaged in the family business joined him. While Maxey’s company is interested in current prospects like Dargon Point, he knows the best opportunity on the Tongass lies with his grandson’s generation.

“He’s thirty-three, so by the time a lot of this big volume comes on line it will be perfect for him,” he says.

Local Mill Ideas The Good Faith Lumber mill at Thorne Bay, a logging camp-turned-town on Prince of Wales Island, represents a new generation sawmill. Purchased in 2012, it’s tailored to fit the era of the Tongass forest’s transition toward more environmentally sustainable young-growth logging.

“The notion that we’re going to be able to cut old-growth here forever is fictitious. We’ve accepted that,” says Greg Boyd, a partner in the mill from nearby Craig, Alaska. “We’re actually gearing ourselves for young growth being a big component.”

Good Faith’s bid on the Dargon Point sale came in second. Bids from Sealaska, the Southeast Alaska regional Native Corporation, and Klawock’s Viking Lumber, the region’s largest sawmill, were third and fourth, respectively.

Boyd remains optimistic about opportunities for smaller mills like Good Faith Lumber as the forest shifts to offering more young growth timber sales.

“We don’t feel we could ever satisfy the demand.

There’s plenty of opportunity for everybody,” Boyd says.

He maintains that the young growth industry won’t reach its potential immediately, nor will it attain the scale of the region’s earlier © John Hyde/ timber era.

AlaskaStock.com www.akbizmag.com

“We won’t be able to cut it in the amounts that we have in the past,” says Boyd, who’s more concerned with a sustainable future for Prince of Wales Island, where he’s a long-term resident.

“I want to see all the small little mills have wood available. I think it’s better for our economy to have a lot of small mills operating because generally speaking the money stays in the community and that’s good for everybody,” he says.

This differs from the economic model under which timber was first developed in the Tongass.

“I have to say it was very short-sighted thinking. Unfortunately a lot of really beautiful timber got turned into pulp,” he says.

Good Faith Lumber expects most of its future timber supply to come from the Tongass National Forest, which comprises 80 percent of the land base in Southeast Alaska. Products such as house logs, molding, beveled siding, D-log siding, and cedar for custom hot tubs have been well received by a range of customers, Boyd says.

A future industry tailored to a younggrowth harvest will require some mill retooling and new efficiencies. A traditional sawmill saw blade cuts a kerf measuring as much as five-sixteenths of an inch.

“That makes for a lot of sawdust, a lot of wasted wood,” Boyd says. “Today, you can take a lot thinner blade and get the same result.”

Ultimately, Boyd says Good Faith has an optimistic outlook on the future of the region’s transformed timber industry.

“We believe that when we look at jobs, high-value-added is the way to go,” he adds. “Anytime we put wood in a kiln or do any tooling, the price goes up. You end up putting more people to work on the same wood. That’s the beauty of it.”

Guiding a ‘Tongass Transition’ Last summer, US Secretary of Agriculture Tom Vilsack announced the federal government’s official policy on the longdebated “Tongass Transition.” While short on specifics, the memo called for a ten to fifteen year transition away from old-growth timber harvest and “towards a forest industry that utilizes second-growth—or young-growth—forests. Moreover, we must do this in a way that preserves a viable timber industry that provides jobs and opportunities for residents of Southeast Alaska.”

The official memo also stated that at the end of this timeframe, the vast majority of timber sold by the Tongass would be young growth. Meanwhile, the Department of Agriculture has invested in a range of alternative economic development opportunities including recreation, tourism, and fishing. (The region’s seventeen thousand miles of salmon streams supply 30 percent of the state’s commercial salmon harvest.)

These economic opportunities include habitat restoration. The agency has been working with partners such as The Nature Conservancy to restore salmon streams and forests.

“An exciting story in the transition is the fact that there is an opportunity to improve fish and wildlife habitat and grow a second-growth industry,” says Keith Rush, the Conservancy’s conservation forester.

The harvest of young-growth trees can help benefit fish and wildlife by creating openings in unnaturally dense forest canopies. This allows light to reach the forest floor and ushers a cascade of regeneration: plants such as blueberries can return to the forest, followed by foraging deer.

Since last summer’s memo, the Tongass National Forest has determined that the current forest plan would need to be amended in order to meet the secretary’s transition timeline. Revising the plan is important because it dictates where future timber harvests, among other forest uses, can occur—allowing for a more swift transition to young growth.

Tongass supervisor Forrest Cole reports the forest’s acreage includes 450,000 acres of harvested stands —many of these acres on highly productive and quickly regenerating sites. When young growth forests on all private and state lands are factored in, the total will be considerably larger. Stands of young growth on more remote Heceta Island and Kosiusko Island are next in line.

“They are looking and having similar characteristics as Dargon Point,” Cole says. “We’re going to have a few thousand acres show up immediately.”

The pace of the original timber harvest can be charted in a perfect boomand-bust bell curve—the challenge for forest managers is to avoid replicating that trajectory as the young-growth forest industry develops.

“There’s this huge bubble that occurs.

In order to keep a sustained supply, you’re going to need to flatten out that bubble,” Cole says.

August 2014 | Alaska Business Monthly

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The future of the Tongass is not completely scripted. To help guide the forest’s transition, the Tongass recently sought applicants for its Tongass Advisory Committee. Its newly named members represent four forest user groups: the Alaska Native community, timber industry, conservation, and government. The committee’s first session is scheduled for August 6-8 in Ketchikan.

Cole said he hopes the citizens’ advisory committee can reach agreements that help guide the Tongass transition, adding: “I think the future of the industry is upon us as long as we can make it socially acceptable to make it happen.”

R

Erika Nortemann/TNC

As the Tongass National Forest transitions toward more management of its lands and waters, it is restoring key salmon streams, such as Twelvemile Creek on Prince of Wales Island.

T

Restoring Habitat in the Tongass

welvemile Creek on Prince of Wales Island is a salmon stream with a future. It’s an example of how, fueled by its transition toward sustainability, the Tongass National Forest is restoring streams.

When big old-growth trees along the banks of salmon streams such as Twelvemile Creek die and fall into the creek, they provide

64

Dustin Solberg writes from Cordova.

the logs that help create the deep pools and eddies for young salmon.

These big trees are now missing from the banks of Twelvemile Creek, decades after extensive timber harvest here, and so the time to replenish the stream’s structure is now.

On the Twelvemile Creek project, crews harvested more than six hundred trees,

Alaska Business Monthly | August 2014

mostly young-growth and some with root wads still attached, from nearby areas (away from the recovering streamside forests) that were flown by helicopter to remote staging sites along the stream. Heavy equipment contractors who typically work in the timber industry conduct much of the on-the-ground work with Forest Service biologists.

R

www.akbizmag.com

VALUES IN ACTION

Balance, Reciprocity and Respect Wooch.Yax | Gu dlúu | Ama Mackshm Red and yellow cedar provide financial and cultural assets to Southeast communities. Sealaska’s forester and manager, Brian Kleinhenz, is collaborating with the U.S. Forest Service and Oregon State University to identify the best ways to protect cedar seedlings from deer. Partnerships like this are an important part of Sealaska’s natural resource management.

Visit www.sealaska.com to read about this partnership and research.

MORE ABOUT OUR VALUES: www.SEALASKA.com | Twitter @SEALASKA | Visit us on Facebook | YouTube @SEALASKAKWAAN

special section

Environmental Services

Valley Community for Recycling Solutions

New in-floor conveyor and Badger baler (behind conveyor, on left) next to the Barracuda baler (on right, in operation 2005-2014).

Facility grows with population and interest in recycling

By Rindi White

Photo courtesy of VCRS

B

usinesses seeking to achieve a “zero waste” goal may soon be able to reach that goal, thanks to important upgrades at Valley Community for Recycling Solutions’ (VCRS) facility near Palmer.

VCRS this year installed a Harris Badger, two-ram, horizontal, auto-tie baler, an important piece of equipment that will allow the group to handle more waste and recovered resources faster and with the same number of staff. The nonprofit also added an enclosed area where residential customers can drive through and drop off their recycled goods.

An in-floor conveyor feeds the baler; VCRS staff put sorted materials onto the conveyor, and the materials are carried up into a hopper, where they’re crushed together into a giant brick shape, then automatically tied and pushed out of the machine. The nonprofit previously used a single-stroke, manual-tie baler that didn’t work as efficiently as the new equipment, VCRS Executive Director Mollie Boyer says.

“We can handle five times the amount of material with this equipment,” she says.

“We quite doing outreach for eight years because we couldn’t handle more than our natural growth [with the previous baler].”

Growing Fast to Meet Growing Demand Mat-Su continues to be the fastest growing area of the state. In the last ten years, the popu66

lation has nearly doubled to more than ninetysix thousand people, according to the Alaska Division of Community and Regional Affairs.

People moving to the Valley, and those who already live there, want to be able to recycle their waste. After much planning, a small group of people began holding recycling opportunities in the Valley sixteen years ago. People drove up with cars jammed full of tin cans, plastic bottles, newspapers, and cardboard (among other things), and volunteers stood out in the weather in windy parking lots to help people sort their recyclables into the right bins.

The demand for recycling opportunities grew and the group expanded from seasonal to monthly to twice-weekly and then five-day-a-week recycling opportunities.

Meanwhile, organizers set a goal of having a recycling facility where people could easily drop off their newspapers and aluminum cans any day of the week, a place that would make curbside recycling an option and allow businesses and government entities to make recycling part of their daily operations.

A large portion of that goal was reached in 2010 when VCRS opened its new recycling center adjacent to the Mat-Su Borough Landfill on North 49th State Street near Palmer. But the facility wasn’t 100-percent complete—because of a limited funding stream, key pieces such as the Harris Badger baler, in-floor conveyor, and

Alaska Business Monthly | August 2014

an enclosed space for residential customers to drop off their recycled goods had to wait.

“The building alone didn’t increase our capacity,” she says. “It made some things easier, but it’s the equipment that we needed. It was planned with the new building— we had a hole in the floor and had built an isolated pad for it already.”

A Long, Heavy Haul

VCRS contracted with Anchorage building company Pinnacle Construction, Inc. to provide and install the baler, a project that cost nearly $460,000.

The baler came from Georgia and had to be sent up in two parts, says Pinnacle Project Manager Kirk Gothard. It’s a big machine— Gothard says it’s about forty feet long and weighs sixty-five thousand pounds.

The main body of the baler was shipped on a flatbed truck from Georgia to Fife, Washington, where it was shipped to Alaska. The rest of the baler—the handrails, stairs, platforms, hopper unit, wire-tie units, hydraulic hoses, and other pieces—required shipping in a large open car by train. Finding an open car for rail shipping isn’t easy, Gothard says.

“It was a rare container,” he says. The necessary car was located and it arrived in Alaska too—a week later than the rest of the machine, he says.

While installation wasn’t too difficult, Gothard says the size of the machine made it a www.akbizmag.com

complex task. Getting the forty-foot behemoth into the building required setting up a crane outside to lift it off the trailer, put it on rollers, and roll it into the building. Then the crane lifted it onto the waiting pad.

Boyer says her crew wrapped up training in mid-May to run the new baler, just in time for work on the $700,000 addition to begin.

Residential Recycling Finally Out of the Weather VCRS seems to be a wind magnet—wherever they held recycling events, or where previous facilities have existed, volunteers and staff battled wind. Adjacent to the MatSu Borough Landfill, the new recycling center is still buffeted by wind.

A nod to its windy nature, the nonprofit in 2012 installed a Kestrel e300i wind generator, which is helping offset the facility’s energy costs. It also has twenty-four solar panels. Boyer says any unused power generated is fed back into the Matanuska Electric Association power grid. According to its online monitoring system, the two renewable power sources, funded through a grant, have saved the nonprofit more than $1,800 in power costs so far this year.

When the new recycling center was built, the intent was to have a covered drivethrough spot for individual recyclers to offload their recyclables, but there wasn’t quite enough funding to build an enclosed area. So residential recyclers drove into a canopy, customized with vinyl walls along the side, and dropped their goods off. It was a step up, but not what the group envisioned.

The new residential drop-off space, built

by Wirtanen, Inc. this summer, has a twolane drive-thru with garage doors that can be closed behind users, blocking wind. It also has some other useful features, Boyer says.

“We’ll be able to have an area where, if the Knik Glacier wind comes, we can open and shut [the doors] behind traffic. It also has a concrete pad now and in-floor heat so there’s no ice development,” she says.

The drive-through spot also has a drain line running down the middle of the space, so any runoff can be collected.

Boyer says the addition project also included a few repairs that make it easier to work at the facility year-round. A windbreak was added to the office entrance area so snow doesn’t drift against the entrance, she says, and a covered space was added outside the facility’s break room door. A drip line to stop water from seeping into the building was also added, she says.

Boyer says the drive-through makes it easier to accommodate residential customers and should cut down on wait times. www.akbizmag.com

Focusing On Zero Waste Goal, Helping Other Businesses In 2006, years before the new recycling center was built, Boyer and other VCRS supporters lobbied the Mat-Su Borough and the Mat-Su Borough School District to pass “zero waste” resolutions—essentially a measure recognizing that roughly 90 percent of the waste generated in Mat-Su each year ends up in the landfill—pledging to work toward a goal of waste prevention and recycling, promoting products and materials that are durable and recyclable, and turning discarded items into new products.

The measure passed unanimously at the time and the borough and some individual schools have instituted recycling programs, but Boyer says she hasn’t pushed for more movement toward the goal because the recycling center was operating at capacity.

Two businesses already offer curbside recycling in the Mat-Su: Valley Recycle PickUp and Ready Recycles. Alaska Waste also brings business cardboard to the recycling center, Boyer says.

Now, she says, she hopes to return the focus to that “zero waste” goal.

“We didn’t push the school district,” she says. ““We’re going to be working closely with them and partnering more, now that our capacity is up.”

She hopes to see the district initiate a recycling program that is used in every school and school district office across the district. Likewise for the Mat-Su Borough, she says.

Kurt Dawkins, who with his wife owns Ready Recycles, says he’s eager to put the recycling center’s new, more efficient baler to use by expanding his company’s contracts.

“We’re looking to expand quite a bit here, hopefully before the snow flies,” he says.

His company already picks up recyclables at the Mat-Su Borough Administration building in Palmer and at a few schools during the school year, as well as curbside for many residential customers.

Dawkins said prior to running Ready Recycles, he wasn’t a huge believer in recycling. But it makes practical sense, he says, and he’d like to see more people understand that recycling can be simple and convenient. His Wasilla-based business offers weekly pick-up of unsorted recyclables starting at twenty dollars a month.

“It can go to the recycle center [and be used again] or it can go into the trash and that’s the end of it,” he says. “We only have a limited amount of resources—why plunder them when you don’t need to?”

R Rindi White is a freelance journalist living in Palmer.

August 2014 | Alaska Business Monthly

67

special section

Environmental Services

Recycle, Reuse, Recover

Photo courtesy of Emerald Alaska

Cleaning up hazardous waste.

Emerald Alaska gets down to the business of sustainability

By Rindi White

E

merald Alaska, a multi-faceted waste management company celebrating fourteen years of working in Alaska, started simply, with one guy driving a truck and picking up used motor oil and other fluids for processing and recycling.

Their environmental waste business is growing—last year they processed 3.5 millions of gallons of oil/fuel, water, antifreeze, sludges, and solids at the company’s Viking Drive facility in Anchorage. The company also manufactures several products for automotive maintenance and recently added another manufacturing line—diesel exhaust fluid, or DEF, which is used in newer diesel engines to reduce harmful emissions.

68

A Man, a Truck, and a Mission The company was originally called Energy Recovery Services, owned and operated by Alaska resident Blake Hillis.

Emerald Alaska, Inc. was formed as the Alaska arm of Emerald Services, Inc. when the four hundred-employee family-owned company based in Seattle merged with Hillis’s company in 2000 and kept him on as company president.

Today, nearly one hundred people work for the company in seven facilities throughout the entire state of Alaska.

Company officials say Emerald Alaska is the largest locally operated full-service industrial and environmental services company in the state.

Alaska Business Monthly | August 2014

Emerald has a staggering list of services, from hazardous waste transportation and disposal and twenty-four-hour emergency spill cleanup to packing and shipping multiple laboratory chemicals to recycling and reusing petroleum oil, oily water, or mixed fuels for industrial burner fuel and other custom-blended fuel products to wastewater treatment.

The company also manufactures and sells Magnum antifreeze and Sub Zero windshield washer fluids, as well as their new product, ArcticBlu DEF.

Locally Operated The “locally operated” tag is something Emerald Alaska wears proudly. The company serves all sizes of business, www.akbizmag.com

from Fortune 500 companies to momand-pop businesses. But they place a big emphasis on customer service and finding solutions for customers.

“We’ve always based our business on the fact that we are local—you’re not dealing with a national brand, we are your neighbors,” says company director of sales and marketing Paul Nielsen.

Emerald serves companies of all sizes, as well as the federal, state, and municipal governments. It has term contracts with several federal agencies, including the DLA Disposition Services division of the Defense Logistics Agency, according to the company resume. It also works with the Alaska Department of Environmental Conservation and the Alaska Department of Transportation and manages household hazardous waste collection and disposal programs with the Municipality of Anchorage, Fairbanks North Star Borough, and Kenai Peninsula Borough.

According to information from Emerald, since 2000 the company has operated a multiple-year contract to collect, package, transport, and dispose of hazardous waste and used oil generated by the US Air Force, Army, and Coast Guard in Alaska. Since the contract began, the company reports that it has shipped over 30 million pounds of hazardous waste from various locations in the state to EPA-approved disposal facilities in the Lower 48 without incident.

Although most of the work the company does is on the road system, the company also does significant work on the North Slope and in rural Alaska.

Emerald does contractual site-cleanup of spills, but it also acts as partners with companies that need regular cleanup or disposal services to keep their business running smoothly.

Meeting Industrial Needs Industrial services are an important part of the company’s business. Tank cleaning, lagoon dredging and cleaning, and high pressure water blast cleaning are all key service offerings in this business line.

Emerald has worked since 2004 with Flint Hills Resources Alaska LLC at the company’s North Pole refinery to provide vacuum truck services, tank cleanout, and spill response.

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manager, says an Emerald Alaska vacuum truck is typically on site at Flint Hills to help safely transfer hydrocarbons, water, or other liquids from point to point in the refinery. Emerald is one of the company’s primary points of contact for an environmental incident, he says.

As Flint Hills works through its transition from a refinery to a terminal, Horst says additional Emerald employees are on site to help decommission equipment and make the transition.

“The thing I feel they offer is good equipment and the ability to respond and meet our needs,” Horst says. “Their reliability and their availability has been what has kept us with them over the years.”

James Bateman, safety and environmental manager at Vigor Industrial, a ship repair and manufacturing company located in Ketchikan, says his company relies on Emerald to transport hazardous waste and used oil to recycling and disposal facilities out of state.

Bateman says his company has been using Emerald for used oil shipping for a while, but he recently expanded the partnership to include other waste fluids after being impressed with Emerald’s customer service.

Vigor repairs and maintains a range of vessels, from fishing vessels to Alaska Marine Highway ferries. Dealing with used oil and hazardous materials on an island can be problematic—disposal at the local landfill is not an option. Waste must be packaged up and shipped through Canadian waters to Seattle, with documentation outlining what materials are being shipped. The process can be complex, he says, but Emerald provides efficient and timely service.

“Everything is done properly the first time,” he says. “They have good communication and they are always accessible.”

Alaska-Made Emission Reducer In January, Emerald became the first Alaskan company to manufacture DEF (diesel exhaust fluid), a chemical solution that is injected into the exhaust stream of diesel vehicles to break down environmentally harmful nitrous oxide emissions into harmless nitrogen and water.

The market for DEF is growing; ac70

The ArcticBlu diesel exhaust fluid facility in Palmer. The silver tank is from the old Matanuska Maid dairy.

Photo courtesy of Emerald Alaska

cording to the federal US Environmental Protection Agency, all on-highway diesel engines made since 2010 must meet new emissions standards. Installing a DEF system is the primary way companies are meeting the new standards. Off-highway vehicles must meet the new standards by 2014, diesels used in the rail industry will do so by 2015, and marine diesel engines will meet the new standards by 2016.

A 2012 study by Integer Research estimates that by 2018, North America will be using 650 million gallons of DEF per year, more than triple the DEF use projected for 2013.

“Every new diesel powered truck has this system in it. Every new diesel powered school bus has this system in it.

We’re seeing more and more new diesel engines being introduced and every one of those new vehicles that come out have, or needs to have, this product in its emissions control system,” Nielsen says.

DEF usage in vehicles varies, but it typically runs between 2 and 3 percent of fuel consumption. So if a semi-truck driver puts 100 gallons in the fuel tanks, he or she will likely have to put two or three gallons in the separate DEF tank.

Alaska Business Monthly | August 2014

John Cooney, Emerald Alaska’s chemical process engineer and project manager for its DEF operations, approached the company president, Hillis, in January 2013 to begin discussions to consider developing a marketing plan for the production of diesel exhaust fluids at Emerald Alaska. By December 2013 the company was certified through the American Petroleum Institute to produce DEF, which it does at its Palmer facility.

In keeping with the company’s focus on recycling, Cooney made use of a large stainless steel mixing tank that used to be part of now-defunct Matanuska Creamery’s processing line.

Cooney says he attended an auction of the creamery’s equipment before the DEF plan was solidified, but knew he would be able to make use of the tank.

“I wanted it for this [production line], but I wasn’t sure what I was going to do with it,” he says.

He says the tank was the foundation of his production line. He built everything else around it.

Nielsen says the tank is the star of the production line—ultra pure urea and water is mixed in it, then stored and distribwww.akbizmag.com

uted in plastic tanks, totes, and drums.

“The moral of the story is, we are manufacturing a brand new product for the Alaska market, using tanks that were from the Matanuska Creamery. It falls right in line with what we do: finding value in reuse and recycling and, in this case, repurposing some very nice equipment,” Nielsen says.

Planning for Likely Growth Cooney says the company has already begun planning for growth with the installation of two ten thousand-gallon storage tanks to compliment his existing capacity. He estimates his production will be increasing dramatically over the next several years, especially as the requirements for low emissions kick in for marine diesel engines.

“It could grow exponentially,” he says.

Emerald retooled its Palmer site to accommodate the manufacturing line and added two employees to focus on making the product. It doesn’t take a lot of extra space, so it didn’t require a new building or eliminating any existing equipment at the site, he says. But if the projected growth happens, he says the company could reconfigure its property to make room.

“We could reconfigure and continue to manufacture in the Mat-Su. It’s the best location of all our locations,” Cooney says.

ArcticBlu is currently available at trucking maintenance and supply stores, but Cooney says it will soon be more available at fueling stations.

And like the Alaska Grown “fresher by far” motto, Nielsen says ArcticBlu has an advantage over imported DEF. The product typically has a two-year shelf life, so locally produced DEF will last longer.

“Emerald Alaska offers sustainability for a greener tomorrow,” he says.

Perhaps due in part to the company’s ability to make DEF in-state at a lower cost than importing, Nielsen says Emerald was recently awarded a contract to supply DEF to the whole fleet of Municipality of Anchorage vehicles—from fire trucks and PeopleMover buses to utility trucks and heavy equipment. R

Rindi White is a freelance journalist living in Palmer. www.akbizmag.com

August 2014 | Alaska Business Monthly

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Environmental Services

special section

NPR-A Legacy Wells Targeted for Cleanup Ar

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BLM Map of NPR-A legacy wells.

Funding for BLM resulted in strategic plan

By Margaret Sharpe

T

his summer the Bureau of Land Management (BLM) is targeting surface cleanup of high priority legacy wells in the National Petroleum Reserve-Alaska (NPR-A), with the majority of the remediation work to be contracted for winter. Of these 136 abandoned exploratory and scientific wells drilled by the federal government between 1944 and 1982, only 16 have been properly plugged and remediated to Alaska standards.

BLM became responsible for managing the NPR-A in 1976 and in 1982 inher72

ited the responsibility to assess, plug, and clean up the abandoned wells. Today 18 wells are still being used by US Geological Survey for monitoring climate change.

Some of the remaining wells are in various conditions of non-compliance with state law and require BLM remediation.

Cathy Foerster, Commissioner for the Alaska Oil and Gas Conservation Commission (AOGCC), has been working to get BLM to take responsibility for the cleanup since joining AOGCC in 2005. BLM told Foerster the agency had remediated the

Alaska Business Monthly | August 2014

worst of the wells and had no money and no plans to do anything further.

“I pointed out to them that the wells were in violation of several Alaska regulations—and probably just as many federal regulations,” Foerster says.

“The then-coordinator told me that since we were both regulatory bodies, the AOGCC shouldn’t hold the BLM to the same standards we hold industry to. My response was, if we held them [BLM] to a different standard, it should be a higher one. www.akbizmag.com

Umiat #7 NPR-A legacy well during plug and abandonment work in 2012 winter.

Inset shows the marker plate identifying the well.

“What most surprised me about the issue were the federal government’s cavalier attitude and hypocrisy,” Foerster says. “They turned their backs on wells leaking hydrocarbon liquids and gases and on sites littered with all kinds of hazardous and non-hazardous debris.

Meanwhile they took steps to prohibit responsible oil and gas companies from developing any of ANWR and most of the NPR-A to ‘protect’ those areas from exactly the sort of thing the government has done and is allowing to continue in exactly the same areas.” Excuses given to Foerster ranged from “it’s too expensive” to “they’re in the middle of nowhere and not hurting anyone.”

Raising Awareness Realizing that there was no way to get BLM to take responsibility for the cleanup, Foerster decided to put the issue up for public scrutiny by taking it to the Alaska State Legislature, crossing paths with Representative Charisse Millett. “I wanted to know how to help BLM,” Millett says. “Cathy thought a resolution to point out the problem would be the best approach. Because Senator Murkowski’s office was also involved, the three of us wrote up a resolution raising awareness of the wells, and it passed unanimously.”

“Alaskans, myself included, have known about the legacy wells since the 1980s,” US Senator Lisa Murkowski says. “The last exploratory well the federal government actually drilled in the NPR-A was in 1981, and since then they’ve properly plugged 16 of 136 wells… If it were a private operator, and not the federal government, that was responsible for these abandoned wells, they’d owe the state of Alaska millions of dollars in environmental fines. It’s disappointing. It’s unacceptable.”

Millett carried two resolutions in 2012 and 2013, respectively, urging BLM to properly plug the legacy wells as soon as possible in order to protect the environment in the Arctic region. The 2013 resolution further urged BLM to open new areas of the NPR-A for environmentally responsible oil and gas development. In 2013, the resolution also replaced the term “legacy” with “travesty” to make it clear nothing about the wells qualifies them for historic site designation and to prevent any misconception that the wells were harmless. www.akbizmag.com

Photos courtesy of BLM

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August 2014 | Alaska Business Monthly

73

Funding Mechanism At the state level, BLM has planned potential timeframes to approach the cleanup, but several factors made even starting a path extremely difficult: the remoteness of the sites, procuring the necessary equipment and proper staff with expertise to plug wells or perform site remediation—often in competition with industry—and the funding.

“Legacy wells have been a priority for us for quite some time,” says Erin Curtis, public affairs chief at BLM in Alaska. “It’s a matter of having only a certain amount of funding provided to us per year to clean up. The good news is that Senator Murkowski and Congress were able to find a much larger funding stream—a big chunk—that will allow us to make serious headway in a much quicker timeframe. It’s always been a priority for us.

We’re glad that we have the funding now so that we can go out and make a big difference in a much shorter time.”

Robert Brumbaugh, BLM Geologist, elaborated by adding, “In the past, we’ve only been given money for emer74

BLM photo

At the urging of Murkowski, a full committee hearing was called by the US Senate Energy and Natural Resources Committee, of which she is a ranking member. Millett and Foerster both testified. “We brought pictures of some of the wells and core wells from the sites—trash, barrels, piping, the worst of the worst,” Millett says. “The travesty is that folks in the North Slope live in proximity to these wells.”

After the energy hearing, AOGCC and BLM began coordinating and categorizing the wells to get agreement on how to move forward. The result was BLM’s 2013 Legacy Well Summary Report, which took all existing information from industry and other publications and combined it to rank each site according to specific criteria.

“That hearing proved to be the crucial step in putting the spotlight back on these abandoned legacy wells and putting us on the path toward real resolution,” Murkowski says. “Representative Millett and Cathy Foerster have been championing the legacy well issue for a long time. They were both instrumental in keeping it on the radar at home in Alaska, and I was able to do the same here in Washington.”

Umiat #7 NPR-A legacy well sticking up from the tundra before it was plugged in 2012.

gency-type funding for a situation. This is first time that we’ve really had a large dollar amount to plan for five years out.

So we are going to see a lot of headway with this funding. This will be the biggest legacy well effort ever.”

That “big chunk” came last year when Murkowski included a $50 million rider in the Responsible Helium Administration and Stewardship Act. “We had been looking for ways to come up with the funding BLM said they were lacking—that was the excuse they were giving Alaskans as to why those legacy wells weren’t being addressed,” Murkowski says. “The opportunity to include a legacy well funding mechanism within the Helium Act was an idea I had and, thankfully, was able to see through. My hope is that the funding takes away any excuse BLM had for not cleaning up the wells.”

Strategic Plan Infused with the funding and inspired

by Murkowski’s creative thinking to obtain it, BLM developed their 2013 Strategic Plan from the 2013 Legacy Well Summary Report; the Strategic Plan is the basis of this summer’s cleanup approach. “The effort that we put forth in 2013 was probably the most all-encompassing of anything that we’ve done to date for legacy wells. There’s a lot of data that went into those [two reports],” Brumbaugh says. The Strategic Plan assesses the surface and subsurface risks, as well as risks to public health, safety, and the environment, and identifies the highest priority wells in need of action.

“We plan to initiate our effort with the highest priority wells, clustering with other nearby wells to maximize our spending dollars,” Brumbaugh says. “We have three primary clusters:

Alaska Business Monthly | August 2014

the Umiat cluster that includes six wells, the Barrow cluster that includes seven wells, and a Simpson Peninsula cluster of seven wells. Assuming we take care of those clusters first, we will have twenty wells that will be handled this summer.” BLM will also coordinate with the North Slope Borough to assess opportunities for equipment sharing to further reduce costs.

The BLM is in the process of putting together an acquisition team to determine the best approach to streamline the cleanup process. For this summer, BLM has three wells with high surface risk targeted for cleanup. “One is the poster child of all legacy wells,” Brumbaugh says. “Simpson core test #26. It’s an oil seep with some drums. We will remove the surface debris and conduct sampling at Simpson core test #26, #30, and #30a. All three wells are within a mile of each other.” Due to the sensitivity of the tundra, the ideal time for subsurface cleanup work is during winter using ice roads. The BLM will coordinate with the North Slope Borough to assess opportunities for equipment sharing to reduce costs.

“Completing the strategic plan has given us the opportunity to really think through how best to tackle these [sites] in as efficient a path as possible given their remoteness and the unique situations at each well,” Curtis says. “Folks like Rob [Brumbaugh] were able to prioritize, working hand in hand with the state of Alaska, making sure that our priorities were synced up as much as possible and then setting the path forward. I think it’s all going to be good news.”

R Margaret Sharpe writes from Palmer. www.akbizmag.com

Environmental Services special section

Mitigating Contamination on Alaska Native Lands Hundreds of sites, very little funding to get work done

By Will Swagel

Photos courtesy of US Army Corps of Engineers-Alaska District

Above: A helicopter transports a sixpassenger vehicle on Tanaga Island, the site of a $20 million FUDS cleanup.

Right: The base camp at Tanaga Island on a rare sunny day.

T

he modern history of Alaska is one of massive transfers of land from one government entity to another.

Prior to statehood, the federal government owned nearly all the land in Alaska.

In 1959, the new state of Alaska got the right to select 104 million acres. As part of the 1971 Alaska Native Claims Settlement Act, Alaska Natives were granted title to 44 million acres—and about $1 billion— in return for relinquishing aboriginal rights to their land in order to permit construction of the trans-Alaska oil pipeline.

The newly formed Native corporations made some of their selections based on the cultural or subsistence importance of the land, and they chose other propwww.akbizmag.com

erties because of their potential for economic development. But some of that land was contaminated by chemicals and debris from facilities once used by the federal government.

During World War II and the Cold War, the US military had a heavy presence in Alaska. Besides at front line combat areas in the western Aleutians, the thenterritory was peppered with hundreds of sites, such as giant highway construction “mancamps,” heavily used airports, fuel

depots, and defensive gun emplacements along the Alaska coast. Left behind by the military were fuel-soaked land, dilapidated quonset huts, untold numbers of spent oil drums, and other debris.

In Cold War Alaska, White Alice communication sites relayed signals from Distant Early Warning defense sites to the Alaskan Air Command. In addition to leaving a legacy of debris and petroleum leaks and spills, Cold War defense sites utilized electronic equipment that contained

August 2014 | Alaska Business Monthly

75

NPR-A legacy well Umiat #9 PCB cleanup. © Alaska DEC

polychlorinated biphenyls (PCBs)—later found to be a potential carcinogen.

But the military was in no way the only polluter. Facilities of the Federal Aviation Administration, the Bureau of Indian Affairs, and the US Public Health Service were among the raft of government facilities built well before today’s environmental awareness. These facilities and properties may still contain contamination for years after they have last been used. Privately-owned mines have also contributed to the problem.

Oil Spill Legacy Another important year in this story is 1989—when the reality of dealing with the oil-soaked beaches of Prince William Sound prompted Alaska environmental officials to begin considering state regulations for cleaning up contaminated sites.

Today, Alaska Department of Environmental Conservation (ADEC) regulations are used as the standard by both federal and state officials when cleaning up contaminated sites. But there were no specific state cleanup regulations before the Exxon Valdez oil spill, says ADEC Contaminated Sites Program Manager Jennifer Roberts.

“The [ADEC] Contaminated Sites Program grew out of the response to the 1989 oil spill,” Roberts says. “My program was formed in 1992. We didn’t have contaminated sites regulations until 1999.”

The federal government has been cleaning up contaminated sites in Alaska since before the 1980s, and the state regulations broadly mirror the federal standards.

Roberts says the work being proposed at the Bureau of Indian Affairs/ 76

Indian Health Service compound in Kotzebue presents a good example of the complexity of an environmental investigation and cleanup. The Kotzebue site is only one of a number of BIA schools that ADEC is recommending be investigated for contaminants.

Roberts says the Maniilaq Association would like to build on the site, but before that can happen there needs to be an investigation and possible cleanup. ADEC estimates that the soil is contaminated with between twenty thousand to forty thousand gallons of fuel.

“Ultimately what we want is to have these [contaminated] sites be investigated and for us to be able to say that these sites are not causing damage to public health and subsistence foods,” she says. “We are either actively managing [sites] because we have put institutional controls on, or we have actively cleaned them up and they are safe.”

Formerly Used Defense Sites There are more than five hundred sites in Alaska where the US Department of Defense (DOD) owned, leased, or used prop-

Alaska Business Monthly | August 2014

erty that was transferred out of DOD control before October 17, 1986. This qualifies the properties for the Formerly Used Defense Sites (FUDS) program, a federal program which funds environmental cleanups. The implementation date corresponds with the Superfund Amendments Re-Authorization Act, which made changes to the federal Superfund act. The environmental cleanup under FUDS is expected to continue beyond 2020 with more than $1 billion in cleanup work yet to be completed.

The US Army Corps of Engineers administers the FUDS program for former US Navy, Air Force, and Army sites.

Of the more than 500 eligible sites in Alaska, 137 have been found to contain identified hazards, says Ken Andraschko, FUDS program manager with the Corps of Engineers in Alaska. These hazards may be petroleum products, PCBs, lead, demolition or other debris, and, in some cases, munitions.

Andraschko says 67 of the 137 prioritized sites have been cleaned up—about halfway through the list. Between 1984 and 2014, the Department of Defense has invested $813 million in environmental restoration at these Alaska FUDS sites.

Two examples of FUDS sites are the Umiat test oil well on the North Slope and a former Air Force station on St. Lawrence Island.

“We have spent the last four or five years pulling out thousands of tons of PCB-contaminated soil and petroleumimpacted soil,” Andraschko says.

And there may be more work still to do.

“We clean up to Alaska Department of Environmental Conservation standards,” he says. “We try to clean things up to an unrestricted use, unlimited-exposure risk scenario. Where that is technically not practical, we have to monitor and continue Asphalt released from drums on a hill behind a roadhouse. © Alaska DEC

www.akbizmag.com

Cape Pole LTF APC cleanup. © Alaska DEC

© Alaska DEC

Warning sign and fence.

monitoring until we achieve those levels.”

Andraschko says ADEC regulations can be more stringent than federal standards, but they usually match.

Poorly Funded Mitigation Since 1993, Congress has appropriated a separate $8 million to $12 million per year to fund the Native American Lands Environmental Mitigation Program (NALEMP) and to be used to clean up Native lands across the United States that were contaminated by the military.

Annually, about half of that money, $4 million to $6 million, comes to Alaska.

“The program is meant to address en-

www.akbizmag.com

vironmental impacts that the DOD left on Indian lands that aren’t being addressed by other programs,” says Andrea Elconin, the US Army Corps of Engineers program manager for NALEMP. Lands transferred from DOD prior to the 1986 FUDS deadline may be eligible, for instance.

Elconin explains that NALEMP offers Native tribes the opportunity to enter into a cooperative agreement with DOD for cleanups. Elconin’s office administers the program for the Secretary of Defense. DOD inspects the property and, if the property is selected, DOD supplies the funds. The actual cleanup

is accomplished by the tribe themselves or their contractors.

While the FUDS program tends to prioritize projects partly on the basis of population, NALEMP can address more rural concerns such as the effects on subsistence.

Under FUDS, “risks in highly-populated areas rise to the top,” Elconin says, “but under NALEMP they don’t prioritize the high-population areas as much, so that it can address problems in rural areas where population is low.”

Eight cooperative agreements were signed last summer, Elconin says, and she expects about the same number to

August 2014 | Alaska Business Monthly

77

A White Alice Communications Systems tower at Northeast Cape on St. Lawrence Island tumbles down during cleanup of the former Air Force site in July 2003.

Photo courtesy of U.S. Army Corps of Engineers-Alaska District

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be signed before the end of the 2014 fiscal year in September. Overall, NALEMP administers twenty-five to thirty different cooperative agreements.

The Native Village of Gakona, the ANCSA village corporation, has been working with NALEMP for about five years to clean up an Air Force radio relay site, or RSS, which operated from 1960 to 1983.

“NALEMP funded the cleanup of twenty-eight fifty-five-gallon drum tops, five grounding posts, one hundred pieces of metal strapping, one Army truck tailgate, and one rusted metal stove, among other debris from 5.62 acres of Ahtna [Corporation] land adjacent to the RRS site. In addition, analysis of samples collected and tested confirmed earlier findings that neither soil nor groundwater on affected Ahtna land were contaminated by petroleum products,” according to a US Army Corps of Engineers report, which further states that the removal and disposal of the debris has made it possible for tribal members to resume subsistence hunting and gathering activities in the area without risk of injury.

Data Control Greg DuBois is a geologist and manager for APC Services LLC, an Alaska Native-owned company and a subsidiary of the Alaska Peninsula Corporation.

Their company offers environmental consulting services, including the remediation of contaminated sites.

DuBois described work APC Services has performed for the Native Village of Port Heiden at another former radio relay site, which has contamination from PCBs and petroleum. The Port Heiden Tribe has a cooperative agreement with the Corps of Engineers.

The mitigation process involves set-

Alaska Business Monthly | August 2014 www.akbizmag.com

ting out a grid over the suspect property, and then taking samples from each grid.

Soil containing too high a presence of PCBs must be excavated and temporarily stored in lined stockpiles, and then the ground is tested again until the grid area is below the cleanup level. Since there are no permitted hazardous waste disposal facilities in Alaska, the contaminated soil must be barged to the Lower 48 for disposal in a permitted landfill.

DuBois says diesel-contaminated soil can sometimes be treated by a process known as “land farming.” The contaminated soil is spread out a foot or two thick and then turned over bi-weekly or so. The tilling allows oxygen to reach microbes in the soil which consume the contaminants.

APC Services was formed in 2006 in order to perform environmental work in connection with the Pebble Mine Project, says DuBois. Alaska Peninsula Corporation owns land adjacent to the mine project claim block.

DuBois says APC Services has performed important water quality and fisheries baseline studies and that Alaska Peninsula Corporation co-owns the water quality data that is collected within Alaska Peninsula Corporation lands. Baseline studies set the “starting point” for use by officials in granting mine permits and for gauging future potential effects on the environment. “[Co-owning the water quality data on Alaska Peninsula Corporation land] protects the parent corporation,” DuBois says.

“If there is a mine, the parent corporation has the data related to their own land and waterways. It gives the board some confidence, and it helps the shareholders know their parent corporation has the information to protect their resources.”

Devil of a Problem Maver Carey is the president and CEO of the Kuskokwim Corporation, a village corporation composed of ten villages located along the upper Kuskokwim River.

She is also the founder and chairman of the Alaska Native Village CEO Association, which provides advocacy and training for Alaska Native village corporations.

Carey has been testifying before various state officials, including Governor Sean Parnell, urging them to help Native tribes and corporations deal with contaminated lands which have or will be conveyed to Native groups. She supportwww.akbizmag.com

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ed the passage of state resolution HJR 15, which asks the state to help Native groups persuade the federal government to act.

“It’s going to take a lot of work to get all those sites cleaned up, so we asked the state to help us prioritize the ten most contaminated sites,” Carey says.

“So, when we go back to [Washington] DC we can go with a plan of action.”

In her own area, the Red Devil Mine— an old, unused mercury and cinnabar mine—is leaking contaminants into the Kuskokwim River. The problem is so acute, Carey says, that Alaska Department of Fish and Game officials issued guidelines restricting the consumption of fish harvested in the middle Kuskokwim.

“Tests showed elevated levels of mercury in pike, lush, Dolly Varden, Arctic grayling, and other subsistence fish,” she says.

The Bureau of Land Management has already spent $10 million in cleanup efforts, and the problems persist, Carey says. There are liability issues associated with the property, Carey says. An effort to get the site listed as a Superfund site failed.

“We have not been conveyed the land at Red Devil because it is contaminated and have asked that the land be cleaned up first,” Carey says. “We’re one of the lucky ones. There were several other corporations who were conveyed land that they didn’t know was contaminated.” R Author and journalist Will Swagel writes from Sitka.

80

Alaska Business Monthly | August 2014

www.akbizmag.com

ALASKA BUSINESS MONTHLY’S

ENVIRONMENTAL SERVICES DIRECTORY

ENVIRONMENTAL SERVICES Company Company

Top Executive Top Executive

3M Alaska 11151 Calaska Cir. Anchorage, AK 99515 Phone: 907-522-5200 Fax: 907-522-1645

Julie Morman, Gen. Mgr.

ABR, Inc. PO Box 80410 Fairbanks, AK 99708 Phone: 907-455-6777 Fax: 907-455-6781

Stephen Murphy, President

Acuren USA 600 E. 57th Pl., Suite B Anchorage, AK 99518 Phone: 907-569-5000 Fax: 907-569-5005

Dennis Lee, Mng. Dir.

AECOM 1835 S. Bragaw St. Anchorage, AK 99508-3439 Phone: 907-561-5700 Fax: 907-273-4555

Mark Hodges, Operations Manager

Agnew::Beck Consulting 441 W. Fifth Ave., Suite 202 Anchorage, AK 99501 Phone: 907-222-5424 Fax: 907-222-5426

Thea Agnew Bemben, Mng. Principal

Alaska Analytical Laboratory 1956 Richardson Hwy. North Pole, AK 99705 Phone: 907-488-1271 Fax: 907-488-0772

Stefan Mack, PE/Pres.

Alaska Chadux Corporation 2347 Azurite Ct. Anchorage, AK 99507 Phone: 907-348-2365 Fax: 907-348-2330

Matthew Melton, General Manager

Alaska Clean Seas 4720 Business Park Blvd., Suite G42 Anchorage, AK 99503 Phone: 907-743-8989 Fax: 907-743-8988

Barkley Lloyd, Gen. Mgr.

Alaska Soil Recycling 1040 O'Malley Rd. Anchorage, AK 99515 Phone: 907-348-6700 Fax: 907-344-2844

Brad Quade, Operations Mgr.

Alaska Waste 6301 Rosewood St. Anchorage, AK 99518 Phone: 907-563-3717 Fax: 907-273-2797

Craig Gales, Sales Mgr.

Analytica Group 4307 Arctic Blvd.

Anchorage, AK 99503 Phone: 907-375-8977 Fax: 907-258-6634

Elizabeth Rensch, Business Dev. Mgr.

Anchorage Soil & Water Conserv. Dist.

PO Box 110309 Anchorage, AK 99511-0309 Phone: 907-677-7645 Fax: 907-345-5012

Bret Burroughs, Chair

APC Services LLC 4241 B St., Suite 100 Anchorage, AK 99503 Phone: 907-677-9451 Fax: 907-677-9452

Ralph Angasan Sr., Pres.

ARCADIS 880 H St., Suite 101 Anchorage, AK 99501 Phone: 907-276-8095 Fax: 907-276-8609

Roe Sturgulewski, AK Ops Leader

ARCTOS LLC 130 Int'l Airport Rd., Suite R Anchorage, AK 99518 Phone: 907-632-1006 Fax: 866-532-3915

Kirsten Ballard, CEO

www.akbizmag.com

AK AK Estab.

Estab. Empls.

Empls.

1976

15

3M manufactures a wide range of products covering many markets in Alaska. In the area of natural resources, we provide products and services which support the oil/gas and mining industries in worker safety, electrical and communications, welding protection, fire and corrosion protection.

1976

63

Environmental research and services, including marine and terrestrial wildlife, fisheries and aquatic science, landscape ecology and vegetation science, wetland mapping and permitting, re-vegetation and ecological restoration, endangered species expertise, NEPA documentation, and GIS services.

2002

240

Materials engineering, nondestructive examination and integrity management for the oil and gas, power, mining, transportation and construction industries.

1977

16

Full services in environmental and energy development, environmental compliance monitoring and permitting for air, water, soils and solid waste, planning and integrated site closure.

2002

22

Energy planning, energy efficiency, energy conservation, energy policy, environmental assessment, energy supply, housing, FERC licensing, hydroelectric, sustainable recreation, utility assessment, impact studies, sustainable communities, and transportation choices.

2008

3

ADEC certified environmental testing laboratory. Soil and water analysis for methods 8021B, AK101, AK102 and AK103.

1993

14

Alaska Chadux Corporation (Chadux) is a member-funded, 501(c)(4) not-for-profit oil spill response organization headquartered in Anchorage, Alaska.

1979

93

We protect the environment by providing response services to the Alaska North Slope crude oil explorers and producers and the first 167 miles of the Trans Alaska Pipeline System in accordance with oil spill response agreements and plans.

1988

15

Remediation of petroleum-impacted soils by thermal desorption. Our process is capable of off-site and on-site remediation projects. Results are quick and guaranteed. Soils are recycled into beneficial products after treatment; thereby complying with green and sustainable recycling (GSR) practices.

2003

225

Providing residential and commercial refuse and recycling services. Offering curbside co-mingled recycling to households in Anchorage and Eagle River, office and dumpster recycling to commercial users. The roll-off containers can be used on industrial projects for C&D recycling.

1991

20

Analytica is the largest state certified laboratory in Alaska, specializing in drinking water, wastewater and general water quality testing. Locations in Anchorage, Fairbanks, and Wasilla, Alaska. Analytica is a wholly owned subsidiary of The Aleut Corporation. www.aleutcorp.com.

1997

2

Anchorage Woodlot, property owner and development support and services, BMP and development planning, confidential assistance to property owners, land managers, and development industry.

2007

6

Environmental consulting; environmental assessments; contaminated land evaluation & remediation, geochemistry, baseline environmental studies; mining and exploration services.

1994 (in Alaska)

30

ARCADIS is a leading global environmental, remediation and built asset design and consultancy firm working in partnership with our clients to deliver exceptional and sustainable outcomes through environmental and remediation services, design, engineering, project and construction mangement

2007

8

ODPCP plans, oil spill prevention and response planning services. API certified tank and piping inspections, QA/QC, incident management team training, HSE programs, imaging and mapping. Compliance assistance with state, federal regulations and response planning for oil and gas industry in Alaska.

innovation.3malaska@mmm.com 3m.com

info@abrinc.com abrinc.com

acuren.com

AECOM-AK@aecom.com aecom.com

admin@agnewbeck.com agnewbeck.com

klovejoy@alaska-analytical.com alaska-analytical.com

chadux.com

gm@alaskacleanseas.org alaskacleanseas.org

anchsand.com

customerservice@akwaste.com alaskawaste.com

er@analyticagroup.com analyticagroup.com

aswcd@aswcd.org aswcd.org

info@apcservicesllc.com apcservicesllc.com

cynthia.oistad@arcadis-us.com arcadis-us.com

arctosak.com

Services Services

August 2014 | Alaska Business Monthly

81

ALASKA BUSINESS MONTHLY’S 2014 ENVIRONMENTAL SERVICES DIRECTORY

ENVIRONMENTAL SERVICES Company Company

Top Executive Top Executive

Argon, Inc. 6618 Lakeway Dr. Anchorage, AK 99502 Phone: 907-223-0393 Fax: 111-111-1111

Jane Whitsett, President

Arrowhead Environmental Services Inc. PO Box 872707 Wasilla, AK 99687 Phone: 907-376-8848 Fax: 907-376-8876

Terry Webb, Pres./CEO

B.C. Excavating LLC 2251 Cinnabar Lp. Anchorage, AK 99507 Phone: 907-344-4490 Fax: 907-344-4492

Gordon Bartel, Pres.

Bell Tech, Inc. PO Box 3467 Valdez, AK 99686 Phone: 800-537-6949 Fax: 907-835-4535

Randy Bell, CEO

Blue Skies Solutions LLC 3312 Robin St. Anchorage, AK 99504 Phone: 907-230-4372

Michael Knapp, Principal

Brice Environmental Services Corp.

PO Box 73520 Fairbanks, AK 99707 Phone: 907-456-1955 Fax: 907-452-1067

Craig Jones, Pres.

Bristol Engineering Services Corporation 111 W. 16th Ave., Third Floor Anchorage, AK 99501 Phone: 800-563-0013 Fax: 907-563-6713

Traviw Woods, Pres./CEO

Bristol Environmental Remediation Svcs.

111 W. 16th Ave., Third Floor Anchorage, AK 99501 Phone: 907-563-0013 Fax: 907-563-6713

William Burke, CEO

CampWater Industries LLC 2550 Hayes St./PO Box 309 Delta Junction, AK 99737 Phone: 907-895-4309

Jon Dufendach, Pres.

CCI Industrial Services, LLC 560 E. 34th Ave., Suite 200 Anchorage, AK 99503-4161 Phone: 907-258-5755 Fax: 907-770-9452

A. Ben Schoffmann, Pres./CEO

Central Environmental, Inc. 311 N. Sitka Anchorage, AK 99501 Phone: 907-561-0125 Fax: 907-561-0178

Stuart Jacques, Pres.

CH2M HILL 949 E. 36th Ave., Suite 500 Anchorage, AK 99508 Phone: 907-762-1500 Fax: 907-762-1600

Terry Bailey, Sr. VP, AK Regional Mgr.

ChemTrack Alaska, Inc. 11711 S. Gambell St. Anchorage, AK 99515 Phone: 907-349-2511 Fax: 907-522-3150

Carrie Lindow, Pres.

Colville, Inc. Pouch 340012 Prudhoe Bay, AK 99734 Phone: 907-659-3198 Fax: 907-659-3190

Eric Helzer, Pres./CEO

Cook Inlet Spill Prevention & Response PO Box 7314 Nikiski, AK 99635 Phone: 907-776-5129 Fax: 907-776-2190

Todd Paxton, Gen. Mgr.

CRW Engineering Group, LLC 3940 Arctic Blvd., Suite 300 Anchorage, AK 99503 Phone: 907-562-3252 Fax: 907-561-2273

D. Michael Rabe, Mng. Principal

Design Alaska, Inc. 601 College Rd. Fairbanks, AK 99701 Phone: 907-452-1241 Fax: 907-456-6883

Chris Miller, President

82

AK AK Estab.

Estab. Empls.

Empls.

Services Services

2008

3

Argon, Inc. is a well-respected small, woman-owned environmental consulting business.

A wide range of clients in Alaska utilize our core services of large project management, field sample and data management, quality assurance and control, data validation, and chemistry consultation.

1999

8

Environmental remediation, asbestos/lead abatement, PCBs, mercury and demolition, civil, renewable energy systems. Notable clients: U.S. Air Force 3rd Contracting, MWH, Roger Hickel Contracting, North Pacific Erectors and CH2MHill.

1982

40

Remediation services, soil farming, site cleanup for PCB, TCE, diesel/gasoline contamination, etc.

1990

16

We specialize in ecological management as it relates to the recovery & restoration of spill response activities. With over 24 years of experience, Bell Tech has developed successful procedures addressing the recovery of contamination from any surface including vessels, shoreline & frozen tundra.

2003

3

Blue Skies specializes in geographic information systems (GIS) training and consulting.

Our instructor is an Esri Certified Trainer and also a Certified Technical Trainer (CTT+).

We work with state, federal, local, non-profit, and private companies; helping them to create and manage their GIS data.

jane.whitsett@argonalaska.com argonalaska.com

info@arrowheadenviro.com arrowheadenviro.com

admin@bcxllc.net bcxllc.net

Randybell@belltech,org belltechconsultants.com

info2@blueskiessolutions.net blueskiessolutions.net 1991

craigj@briceenvironmental.com briceenvironmental.com

10-30 Brice Environmental is an 8(a) and DBE certified Native owned small business specializing in remediation of heavy metal contaminated soils, remote site demolition, environmental construction and remediation. Project history throughout Alaska and the Lower 48 states and Hawaii.

1994

18

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

2006

90

Providing environmental consulting, environmental remediation, and waste characterization/disposal services to private and public sector. Services include remediation and cleanup of contaminated sites, as well as preparation of remedial action plans and reports to support our cleanup projects. 8(a).

2009

2

Design/build portable/ emergency drinking water plants. NSF61- approved models to meet USEPA drinking water standards available off-the-shelf.

1989

300

Corrosion-under-insulation refurbishment; asbestos and lead surveys and abatement; specialty coatings; sandblasting; tank and vessel cleaning; fire proofing; demolition and hazardous waste removal; operations, maintenance and construction; oil spill response; heat treat services.

1983

100

Provides civil/environmental construction services including: contaminated soils handling, excavation and site restoration, asbestos abatement, lead abatement, hazardous materials abatement, handling, and demolition.

www.bristol-companies.com

reception@bristol-companies.com bristol-companies.com

jondufendach@gmail.com campwater.com

info@cciindustrial.com cciindustrial.com

cei@cei-alaska.com cei-alaska.com 1946

2,275 Premier Alaskan oil & gas contractor; offering consulting, engineering, procurement, logistics, fabrication, construction, construction management, operations and maintenance service all under one roof; supporting oil & gas, mining, environmental, water, power, transportation and government.

1973

8-25 Please check out our Statement of Qualifications at chemtrack.net/about_us.htm.

1981

200

Colville's group of oilfield companies provide a full compliment of Arctic Logistics capabilities. Our services include fuel, aviation, waste management, transport, industrial supply and camp services.

1991

22

Provides oil-spill response services to member companies in the greater Cook Inlet area.

Registered with the U.S. Coast Guard, (OSRO) and ADEC (PRAC).

1981

62

Engineering, surveying, planning, permitting, and construction management.

1957

55

Design Alaska provides architecture; civil, structural, mechanical, fire protection, electrical, and environmental engineering; landscape architecture; and surveying. The firm also offers planning, condition assessments, energy modeling, LEED, construction administration and commissioning.

bclemenz@ch2m.com ch2m.com/alaska

info@chemtrack.net chemtrack.net

info@colvilleinc.com colvilleinc.com

cispri.org

mrabe@crweng.com crweng.com

mail@designalaska.com designalaska.com

Alaska Business Monthly | August 2014

www.akbizmag.com

Company Company

Top Executive Top Executive

DOWL HKM 4041 B Street Anchorage, AK 99503 Phone: 907-562-2000 Fax: 907-563-3953

Stewart Osgood, President

Eco-Land, LLC PO Box 1444 Nome, AK 99762 Phone: 907-443-6068 Fax: 907-443-6068

R McClintock, Sr., President/Member

EHS - Alaska Inc. 11901 Business Blvd., Suite 208 Eagle River, AK 99577 Phone: 907-694-1383 Fax: 907-694-1382

Robert French, PE,, Principal in Chg.

Emerald Alaska Inc. 425 Outer Springer Lp. Palmer, AK 99645 Phone: 907-258-1558 Fax: 907-746-3651

Blake Hillis, Pres.

ENVIRON International Corp.

3909 Arctic Blvd., Suite 101 Anchorage, AK 99503 Phone: 907-563-0515 Fax: 907-563-0520

Laura Noland, Sr. Mgr./Sr. Env. Scnst.

Environmental Compliance Consultants 1500 Post Rd. Anchorage, AK 99501 Phone: 907-644-0428 Fax: 907-677-9328

Mark Goodwin, CEO

Environmental Management, Inc. 206 E. Fireweed Ln., Suite 201 Anchorage, AK 99503 Phone: 907-272-9336 Fax: 907-272-4159

Larry Helgeson, Principal Eng.

Golder Associates, Inc. 2121 Abbott Rd., Suite 100 Anchorage, AK 99507 Phone: 907-344-6001 Fax: 907-344-6011

Mitchells Richard, Mgr. AK Operations

www.akbizmag.com

AK AK Estab.

Estab. Empls.

Empls.

1962

130

DOWL HKM provides public involvement; land use planning; environmental services and permitting; civil, geotechnical, transportation, and geotechnical engineering; landscape architecture; land surveying; GIS; construction administration; and materials testing, and construction inspection.

1922

6

Full service land surveying and mapping firm specializing in environmental investigations, remediation and mapping. Featuring 3D laser scanning, coastal/riparian hydrographic surveys and ROV high resolution multi-spectrial aerial photography as well as full GPS and conventional surveying capability.

1986

7

Hazardous building materials identification and project design. Code compliance and plans review. Industrial hygiene and worker safety, health and safety plans, air monitoring.

2002

75

Hazardous/non-hazardous waste disposal, petroleum product recycling, industrial cleaning services, vacuum truck services, emergency spill response, automotive fluids recycling and sales, environmentally friendly cleaners/degreasers, site clean-up and remediation. Anchorage/Kenai/Prudhoe/Fairbanks

2011

6

Environmental consulting; health sciences; natural resource management services; air quality management; NEPA; ecology and sediment management; environmental compliance and permitting; contaminated sites solutions; water resources; sustainability; and green infrastructure.

1999

55

A full-service environmental company dedicated to providing clients with quality environmental services. Experienced in the disciplines of hazardous waste, materials management, transportation, environmental consulting, assessment, remediation, demolition, recycling of metals, oils and electronics.

1988

12

Environmental & civil engineering, compliance & consulting such as Phase I, Phase II, asbestos mgmt. & design, HUD lead paint activities, UST removals, SWPPPs, SPCCs, & related contamination remediation services & training. A team of dedicated professionals working to make Alaska cleaner & safer.

1980

44

Arctic and geotechnical engineering, groundwater resource development, environmental sciences and remedial investigation.

jpayne@dowlhkm.com dowlhkm.com

nomesurveyor@gmail.com eco-land-llc.com

ehsak@ehs-alaska.com ehs-alaska.com

pauln@emeraldnw.com emeraldnw.com

lnoland@environcorp.com environcorp.com

rod@eccalaska.com eccalaska.com

lhelgeson@emi-alaska.com emi-alaska.com

golder.com

Services Services

August 2014 | Alaska Business Monthly

83

ALASKA BUSINESS MONTHLY’S 2014 ENVIRONMENTAL SERVICES DIRECTORY

ENVIRONMENTAL SERVICES

ALASKA BUSINESS MONTHLY’S 2014 ENVIRONMENTAL SERVICES DIRECTORY

ENVIRONMENTAL SERVICES Company Company

Top Executive Top Executive

Green Star, Inc. 333 W. Fourth Ave., Suite 310 Anchorage, AK 99501 Phone: 907-278-7827 Fax: 907-279-5868

Kim Kovol, Executive Director

Hart Crowser 310 K St., Suite 243 Anchorage, AK 99501 Phone: 907-276-7475 Fax: 425-778-9417

Jason Stutes, AK Office Mgr.

HDR 2525 C St., Suite 305 Anchorage, AK 99503 Phone: 907-644-2000 Fax: 907-644-2022

Duane Hippe, Sr. VP/PE

HMH Consulting LLC 200 W. 34th Ave., PMB 253 Anchorage, AK 99503 Phone: 907-562-8100 Fax: 907-338-0070

Erik Haas, Principal

Jacobs 4300 B St., Suite 600 Anchorage, AK 99503 Phone: 907-563-3322 Fax: 907-563-3320

Terry Heikkila, Dir. AK Ops

Kakivik Asset Management, LLC 560 E. 34th Ave., Suite 200 Anchorage, AK 99503-4161 Phone: 907-770-9400 Fax: 907-770-9450

A. Ben Schoffmann, Pres./CEO

Lifewater Engineering Company 1936 Donald Ave. Fairbanks, AK 99701 Phone: 907-458-7024 Fax: 907-458-7025

Bob Tsigonis, Pres./PE

Marsh Creek LLC 2000 E. 88th Ave. Anchorage, AK 99507 Phone: 907-258-0050 Fax: 907-279-5710

Mick McKay, CEO

Michael Baker Jr., Inc. 3900 C St., Suite 900 Anchorage, AK 99503 Phone: 907-273-1600 Fax: 907-273-1699

Shawn Snisarenko, Alaska Office Exec./VP

Michael L. Foster & Associates, Inc. 13135 Old Glenn Hwy., Suite 200 Eagle River, AK 99577 Phone: 907-696-6200 Fax: 907-696-6202

Michael Foster, PE/Owner

MWH 1835 S. Bragaw St., Suite 350 Anchorage, AK 99508 Phone: 907-248-8883 Fax: 907-248-8884

Chris Brown, Alaska Reg. Mgr.

New Horizons Telecom, Inc. 901 Cope Industrial Way Palmer, AK 99645 Phone: 907-761-6000 Fax: 907-761-6001

Nate Morton, CEO

NORTECH, Inc. 2400 College Rd. Fairbanks, AK 99709-3754 Phone: 907-452-5688 Fax: 907-452-5694

John Hargesheimer, President

North Wind Group 7910 King St. Anchorage, AK 99518 Phone: 907-277-5488 Fax: 907-277-5422

Greg Razo, CEO

Northern Ecological Services 211 Morey Ln. Bellingham, WA 98225 Phone: 360-592-4267 Fax: 360-592-4267

John Morsell, Principal/Sr. Biologist

Northern Land Use Research Alaska LLC 234 Front St. Fairbanks, AK 99701 Phone: 907-474-9684 Fax: 907-474-8370

Burr Neely, Gen. Mgr.

O.E.S. 3201 C St., Suite 700 Anchorage, AK 99503 Phone: 907-562-8738 Fax: 907-562-8751

Pat McCormick, GM

84

AK AK Estab.

Estab. Empls.

Empls.

Services Services

1996

3

Green Star, Inc., is a green business certification program that assists, certifies, and recognizes Alaska businesses that are committed to fully integrating resource efficiency and environmental leadership initiatives into their business plans and practices.

1974

2

Providing natural resources; environmental and geotechnical engineering; and hydrogeology support. Includes NEPA services, environmental permitting, baseline surveys (biological and chemical), fisheries, Endangered Species Act compliance, wetlands, and shoreline and in-water restoration.

1979

140

Engineering services cover civil and structural engineering for transportation, water/ wastewater, solid waste, federal, military, and oil & gas infrastructure. Specialty services in design-build. Engineering supported by full range of environmental/planning staff, and 8,500 HDR employees nationwide.

1997

2

Air quality permitting, compliance support; SPCC Plans, emission-control design, professional training, industrial air-quality compliance evaluations.

1947

70

Professional services provider to federal and energy clients. AK services include environmental permitting, compliance, investigation & remediation; energy conservation; logistics; upstream design; feasibility analysis & construction management.

1999

200

Kakivik is a full service industrial asset integrity management company specializing in Nondestructive Testing (NDT), External and Internal Corrosion Investigations, Quality Program Management and Field Chemical and Corrosion Management including chemical laboratory and coupon/probe operations.

1998

10

Sewage treatment plant and drinking water treatment plants, Commercial and Residential. Specializing in design, permitting, fabrication, training, and operation. Plants built to work in the most extreme environments and most remote places. Plastic tank fabrication.

2004

140

Energy systems, environmental, construction, telecommunications.

1942

75

Regulatory and permit applications and compliance support; wetlands delineation; Section 10 and 404(b)(1) compliance and evaluation; field hydrological assessments & geotechnical investigations; NEPA documents; public involvement; agency coordination.

1998

30

Environmental planning documents (EA/EIS), environmental remediation, and fullservice A/E firm with design/build, construction management, and general contracting capabilities.

1977

30

Water, wastewater, environmental remediation, permitting and power.

1978

75

Services include program management of remediation designs, surveys, sampling, contamination delineation and environmental remediation.

1979

28

A multidisciplined consulting firm with registered engineers and certified industrial hygienists on staff providing environmental, engineering, energy auditing, industrial hygiene, and health and safety professional services throughout Alaska.

1997

12

Environmental investigation, restoration & remediation; engineering; natural & cultural resources; NEPA services; GIS services; construction; demolition; abatement; waste mngmt.; regulatory support; mine reclamation. We own & operate 2 direct push rigs & a UVOST soil screening system.

1987

0

Fish and aquatic habitat surveys for Pogo and Donlin Creek mine projects. Fish research and mitigation planning for Bradley Lake, Mahoney Lake and Cooper Lake hydroelectric projects.

1991

15+

National Historic Preservation Act Sec. 106 assessments; identification, evaluation, mitigation services-prehistoric/historic archaeology, historic architecture, cultural landscapes, and subsistence investigations; documents to satisfy NEPA and permitting requirements; reg compliance; consultation.

1997

23

A wide range of environmental management and remediation; construction; oilfield support; environmental training, tank and pipeline cleaning, inspection and related services. Experienced working in remote and Arctic regions, O.E.S. is a subsidiary of Olgoonik Corp.

info@greenstarinc.org greenstarinc.org

jason.stutes@hartcrowser.com hartcrowser.com

info@hdrinc.com hdrinc.com

erik@hmhconsulting.org hmhconsulting.org

jacobs.com

info@kakivik.com kakivik.com

Bob@LifewaterEngineering.com LifewaterEngineering.com

gina.heath@marshcreekllc.com marshcreekllc.com

mbakercorp.com

hlm@mlfaalaska.com mlfalaaska.com

chris.brown@mwhglobal.com mwhglobal.com

info@nhtiusa.com nhtiusa.com

hargy@nortechengr.com nortechengr.com

mwelker@northwindgrp.com northwindgrp.com

jmorsell@northernecological.com

nlur@northernlanduse.com northernlanduse.com

oesinfo@olgoonik.com oesinc.org

Alaska Business Monthly | August 2014

www.akbizmag.com

Company Company

Top Executive Top Executive

Pacific Environmental Corp. (PENCO) 6000 A St. Anchorage, AK 99518 Phone: 907-562-5420 Fax: 907-562-5426

Brent Porter, Alaska Reg. Mgr.

PDC Inc. Engineers 1028 Aurora Dr. Fairbanks, AK 99709 Phone: 907-452-1414 Fax: 907-456-2707

Royce Conlon, Pres./Principal

Pollen Environmental, LLC 3536 International St. Fairbanks, AK 99701 Phone: 907-479-8368 Fax: 907-452-6853

Jerry Pollen, President

Restoration Science & Engineering LLC 911 W. Eighth Ave., Suite 100 Anchorage, AK 99501 Phone: 907-278-1023 Fax: 907-277-5718

David Nyman, PE/Principal

Satori Group 1310 E. 66th Ave., Suite 2 Anchorage, AK 99518 Phone: 907-332-0456 Fax: 907-332-0457

Jill Lucas , Pres.

SGS North America Inc. 200 W. Potter Dr. Anchorage, AK 99518-1605 Phone: 907-562-2343 Fax: 907-562-0119

Chuck Homestead, Gen. Mgr.

Shannon & Wilson Inc. 5430 Fairbanks St., Suite 3 Anchorage, AK 99518-1263 Phone: 907-561-2120 Fax: 907-561-4483

Stafford Glashan, VP/Anch. Ofc. Mgr.

Shannon & Wilson, Inc. 2355 Hill Rd. Fairbanks, AK 99709-5326 Phone: 907-479-0600 Fax: 907-479-5691

Chris Darrah, Assoc/Fairbanks Ofc. Mgr.

www.akbizmag.com

AK AK Estab.

Estab. Empls.

Empls.

1973

150

Pacific Environmental Corporation (PENCO) specializes in land and marine spill response, environmental cleanup and remediation, and marine vessel remediation.

PENCO's array of environmental services includes supplying teams of highly skilled spill response technicians for emergency response.

1975

76

PDC is a 100% employee-owned multi-disciplined engineering firm with over 75 employees. We specialize in designing for the ever changing Arctic environment with expertise in Civil, Electrical, Environmental, Fire Protection, Mechanical & Structural engineering as well as Land Survey & Planning.

2009

1

Pollen Environmental, LLC. is an Alaskan owned small business. We are proud to be a minority owned and woman owned enterprise, with analytical laboratories in Fairbanks and Prudhoe Bay. Both laboratories are ADEC certified. The Pollen family and staff have over 75 years of combined experience.

1992

11

Environmental science and engineering firm specializing in environmental engineering and permitting, environmental remediation and reporting, phase I&II site assessments, waste water engineering, fuel system design and compliance, SPCC plans, SWPPP including CGP and MSGP work, project management.

2001

10

Hazardous materials building surveys, asbestos & lead remediation, whole/interior building demolition, health & safety training, groundwater services, Phase I & II ESA's.

1964

65

Environmental Services: Providing full-service environmental testing since 1964. The Alaska division has branches in Anchorage and Fairbanks. Extensive experience in DoD, oil industry, NPDES, and mining.

1974

65

Shannon & Wilson is a nationally renowned engineering & applied earth sciences firm with offices in Anchorage, Fairbanks & the Lower 48. Our services include geotechnical analysis and design; frozen ground engineering; environmental compliance, assessments & remediation; earthquake analysis; etc.

1974

30

Environmental site assessments; soil/water sampling; hazardous materials surveys; regulatory compliance; remediation design; storm water management. Also geotechnical analysis/design; frozen ground engineering; earthquake analysis; AASHTO-accredited testing lab. Working throughout Alaska since 1974.

alaska@penco.org penco.org

pdceng.com

pollenenv.com

restorsci.com

info@gosatori.com gosatori.com

charles.homestead@sgs.com us.sgs.com

info-anchorage@shanwil.com shannonwilson.com

info-fairbanks@shanwil.com shannonwilson.com

Services Services

August 2014 | Alaska Business Monthly

85

ALASKA BUSINESS MONTHLY’S 2014 ENVIRONMENTAL SERVICES DIRECTORY

ENVIRONMENTAL SERVICES

ALASKA BUSINESS MONTHLY’S 2014 ENVIRONMENTAL SERVICES DIRECTORY

ENVIRONMENTAL SERVICES Company Company

Top Executive Top Executive

SLR International Corporation 2700 Gambell St., Suite 200 Anchorage, AK 99503 Phone: 907-222-1112 Fax: 907-222-1113

Brian Hoefler, AK Mgr.

Spill Shield, Inc. 2000 W. International Airport Rd, #D-2 Anchorage, AK 99502 Phone: 907-561-6033 Fax: 907-561-4504

Ken Bauer, Ops & Sales Mgr.

Susitna Energy Systems 2507 Fairbanks St. Anchorage, AK 99503 Phone: 907-337-1300 Fax: 907-644-4120

Kirk Garoutte, Owner

Sustainable Design Group 247 S. Alaska St. Palmer, AK 99645 Phone: 907-745-3500 Fax: 907-622-1505

Eric Morey, Principal

Taiga Ventures 2700 S. Cushman St. Fairbanks, AK 99701 Phone: 907-452-6631 Fax: 907-451-8632

Mike Tolbert, Pres.

TELLUS, Ltd. 2551 Susitna Dr. Anchorage, AK 99517-1148 Phone: 907-248-8055 Fax: 907-248-8055

Scott Erdmann, Pres./Prof. Geologist

TestAmerica 2000 W. Int'l Airport Rd., Ste. A-10 Anchorage, AK 99502 Phone: 907-563-9200 Fax: 907-563-9210

Michael Priebe, Account Exec.

Tetra Tech 310 K St., Suite 200 Anchorage, AK 99501 Phone: 907-264-6714 Fax: 907-264-6602

Dan Batrack, CEO/Pres.

Three Parameters Plus, Inc. 3520 International St. Fairbanks, AK 99701 Phone: 907-458-8089 Fax: 907-458-8090

Cheryl Moody, Pres./CEO

AK AK Estab.

Estab. Empls.

Empls.

Services Services

2000

81

Air permitting and measurements, acoustics, project permitting, environmental compliance, site investigation, remediation, risk assessment and oil spill contingency planning

1992

4

Supplier for Smart Ash, Oil Away, Drug Terminator and MediBurn incinerators.

Absorbents, water scrubbers, oil spill response kits, Super Sacks, harbor boom, nitrile gloves, MicroBlaze ,absorbent pads, rolls, boom, sock, duck ponds, spill kits. and related oil spill cleanup and prevention products.

1986

4

Susitna Energy Systems is dedicated to energy independence. We provide renewable energy and off grid solutions such as solar and wind systems statewide as well as offer reliable and affordable heating alternatives. We also provide installation and repair services for many of our products.

2009

4

Sustainable Design Group, LLC (SDG) is a woman-owned and veteran-owned, small business, design firm offering full landscape architecture and land planning services, with a focus on Community and Economic Development specializing in environmental planning, site development and sustainable design.

1979

20

Taiga Ventures provides remote camps and logistics services (expediting, resupply, catering, fuel systems, vehicle & equip. rentals) for exploration, drilling, mining, clean-up & disaster relief projects Statewide. Drill mud, PVC well pipe & supplies in stock. In Anchorage @ 351 92nd Ave, 245-3123

1997

1

Project management, environmental assessment and compliance, corrective action programs.

2002

10

Full-service environmental testing laboratory network. Our local laboratory in Anchorage provides rush organic testing, and mobile lab services for Alaska, Hawaii and Pacific islands. Local and network labs certified for ADEC, DOD, EPA, NELAC, NPDES, RCRA and DW. .

1966

8

Water, energy, environment, infrastructure, and natural resources.

1992

11

Natural resource consulting firm specializing in: wetland determinations, delineations & functional assessments; wetland compensatory mitigation; regulatory assistance; mineral exploration & mine permitting; habitat evaluations & impact assessments; aquatic & hydrologic investigations.

Travis/Peterson Environmental Consulting Larry Peterson, Ops Mgr. 3305 Arctic Blvd., Suite 102 Anchorage, AK 99503 mtravis@tpeci.com Phone: 907-522-4337 Fax: 907-522-4313 tpeci.com

1998

10

TPECI: Services include Storm Water Management, Environmental Site Assessments (Phases I and II), LUST remediation, hazardous material management, facility compliance audits, engineering analysis and design, field sampling, surface water/ groundwater evaluations, NEPA, and wetlands delineations.

TTT Environmental Instruments & Supplies Deborah Tompkins, Owner 4201 B St. Anchorage, AK 99503 info@tttenviro.com Phone: 907-770-9041 Fax: 907-770-9046 tttenviro.com

2003

10

Portable gas detection, health and safety monitoring, environmental equipment. Rentals, sales, service and supplies. Warranty center. Alaskan owned small business.

Tutka LLC (Wasilla) 5825 E. Mayflower Ct., Suite B Wasilla, AK 99654 Phone: 907-357-2238 Fax: 907-357-2215

Amie Sommer, Member

1999

40

WBE/DBE (SOA), EDWOSB/WOSB, HUBZone, SAM/ORCA registered. General Contractor, heavy civil construction, environmental cleanup and consulting, oil water separator maintenance, cleaning & repair.

Unitech of Alaska 7600 King St. Anchorage, AK 99518 Phone: 907-349-5142 Fax: 907-349-2733

Karl "Curly" Arndt, Sales

1985

6

Unitech of Alaska offers a wide range of environmental supplies, with extensive experience in oil spill response world-wide, a knowledgeable staff, prompt service and extensive product lines.

URS 700 G St., Suite 500 Anchorage, AK 99501 Phone: 907-562-3366 Fax: 907-562-1297

Joe Hegna, Alaska Ops Mgr./VP

1904

350

URS Alaska is a team of 350 engineers, scientists, planners, and support staff located primarily in offices in Anchorage and Fairbanks. URS provides Òarctic-smartÓ engineering & environmental services for the complete project life-cycle from permitting & design through production & closure.

USKH Inc. 2515 A St. Anchorage, AK 99503 Phone: 907-276-4245 Fax: 907-258-4653

Timothy Vig, Pres./Principal

1972

95

USKH is a full-service, multidiscipline architectural and engineering firm with offices in eight locations. Services include: architecture; civil, structural, transportation, mechanical & electrical engineering; surveying & GIS; landscape architecture; planning; & environmental services.

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

Mike Holzschuh, Territory Mgr./N.Am.

1969

3

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

Wild North Resources, LLC PO Box 91223 Anchorage, AK 99509 Phone: 907-952-2121 Fax: 907-952-2121

Melissa Cunningham, Principal Mgr.

2009

20

WNR provides biological and environmental consulting services and wilderness safety specialist support to the public and private sectors. Our expertise includes regulatory compliance, environmental monitoring, permitting, GIS analysis, site assessments, technical writing, and client support.

86

bhoefler@slrconsulting.com slrconsulting.com

spillshield@ak.net spillshield.com

we.care@susitnaenergy.com susitnaenergy.com

info@sdg-ak.com sdg-ak.com

taiga@taigaventures.com taigaventures.com

tellus@acsalaska.net

testamericainc.com

tim.reeves@tetratech.com tetratech.com

info@3ppi.com 3ppi.com

amie@tutkallc.com tutkallc.com

carndt@unitechofalaska.com unitechofalaska.com

urs.com

marketing@uskh.com uskh.com

mholzschuh@wm.com wm.com

info@wildnorthresources.com wildnorthresources.com

Alaska Business Monthly | August 2014

www.akbizmag.com

Company Company

Top Executive Top Executive

Alaska Car Crushing and Recycling PO Box 875188 Wasilla, AK 99687 Phone: 907-892-5865 Fax: 907-357-2123

Gary Jacobsen, Owner

Alaska Soil Recycling 1040 O'Malley Rd. Anchorage, AK 99515 Phone: 907-348-6700 Fax: 907-344-2844

Brad Quade, Operations Mgr.

Alaska Waste 6301 Rosewood St. Anchorage, AK 99518 Phone: 907-563-3717 Fax: 907-273-2797

Craig Gales, Sales Mgr.

Anchorage Soil & Water Conserv. Dist.

PO Box 110309 Anchorage, AK 99511-0309 Phone: 907-677-7645 Fax: 907-345-5012

Bret Burroughs, Chair

Central Recycling Services Inc. 2400 Railroad Ave. Anchorage, AK 99501 Phone: 907-748-7400 Fax: 907-561-0178

Stuart Jacques, Pres.

Emerald Alaska Inc. 425 Outer Springer Lp. Palmer, AK 99645 Phone: 907-258-1558 Fax: 907-746-3651

Blake Hillis, Pres.

Environmental Compliance Consultants 1500 Post Rd. Anchorage, AK 99501 Phone: 907-644-0428 Fax: 907-677-9328

Mark Goodwin, CEO

Interior Alaska Green Star PO Box 82391 Fairbanks, AK 99708 Phone: 907-452-4152

Kalee Meurlott, Exec. Dir.

K & K Recycling PO Box 58055 Fairbanks, AK 99711 Phone: 907-488-1409 Fax: 907-488-4058

AK AK Estab.

Estab. Empls.

Empls.

Services Services

1998

6

Recycling of all kinds of scrap metal including appliances, junk vehicles, batteries, copper, aluminum & catalytic converters. We are a full service company; we have a fleet of tow trucks picking up cars and trucks, we have crushers and balers; we can do remote jobs. We are licensed & insured.

1988

15

Remediation of petroleum-impacted soils by thermal desorption. Our process is capable of off-site and on-site remediation projects. Results are quick and guaranteed. Soils are recycled into beneficial products after treatment; thereby complying with green and sustainable recycling (GSR) practices.

2003

225

Providing residential and commercial refuse and recycling services. Offering curbside co-mingled recycling to households in Anchorage and Eagle River, office and dumpster recycling to commercial users. The roll-off containers can be used on industrial projects for C&D recycling.

1997

2

Anchorage Woodlot, property owner and development support and services, BMP and development planning, confidential assistance to property owners, land managers, and development industry.

2009

30

Inert debris recycling facility. Accepts separated and mixed loads of recyclable debris including wood, plastic, metals, concrete, asphalt, cardboard, tires, sheetrock, etc.

Waste Management Plans and LEED consulting. Sales of salvaged and recycled building materials.

2002

75

Hazardous/non-hazardous waste disposal, petroleum product recycling, industrial cleaning services, vacuum truck services, emergency spill response, automotive fluids recycling and sales, environmentally friendly cleaners/degreasers, site clean-up and remediation. Anchorage/Kenai/Prudhoe/Fairbanks

1999

55

A full-service environmental company dedicated to providing clients with quality environmental services. Experienced in the disciplines of hazardous waste, materials management, transportation, environmental consulting, assessment, remediation, demolition, recycling of metals, oils and electronics.

1998

1

Interior Alaska Green Star, along with the North Star Borough, sponsors monthly electronics recycling collections every month, along with ongoing education and outreach for recycling options in Fairbanks and publishes Fairbanks Recycling Guide.

Bernie Karl, Pres./Owner

1984

125

Recycling Solutions of Alaska PO Box 110015 Anchorage, AK 99516 Phone: 907-242-9587

Sarah Robinson, Owner

2008

2

We provide office, business, and residential recycling services. Paper, cardboard, aluminum, glass, electronics and more!

Richmond Steel Recycling 11760 Mitchell Rd. Richmond, BC V6V1V8 Phone: 907-280-8180 Fax: 604-324-8617

Harbinder Dhillon, Gen. Mgr.

1970

1

Auto hulk shredding, mobile car crusher, industrial steel accounts including full-container service, mobile shears, dock facilities and confidential shredding/destruction.

RockTenn Recycling 6161 Rosewood St. Anchorage, AK 99518 Phone: 907-562-2267 Fax: 907-565-4459

Randy Virgin, Gen. Mgr.

1999

12

Recycling services for general public and commercial sector. Leading metals buyer, also accepts cardboard, newspaper, mixed paper, office paper, aluminum cans, and #1 and #2 plastic bottles.

Shred Alaska, Inc. 801 E. 82nd Ave., Suite B-1 Anchorage, AK 99518 Phone: 907-929-1154 Fax: 907-929-8042

Robyn Forbes, Pres./Gen. Mgr.

2000

12

On-site and drop-off document shredding services to all customers throughout South central Alaska.

Threshold Services, Inc. PO Box 8709 Kodiak, AK 99615 Phone: 907-486-6551 Fax: 907-486-8554

Kenneth Reinke, Executive Director

1989

15

We are a non-profit corporation which provides employment and training to people with physical disabilities and other barriers to employment. We do this by operating Kodiak's recycling facility.

Total Reclaim Environmental Services 12101 Industry Way, Unit C4 Anchorage, AK 99515 Phone: 907-561-0544 Fax: 907-222-6306

Larry Zirkle, General Manager

2005

9

Recycler for electronics, fluorescent lights, household batteries and refrigerants.

Community resource regarding information on recycling matters. Also Non-Ferrous Metal Buyer.

1998

8

VCRS operates a community recycling center receiving and processing material kept out of the landfill into bales/feedstock to make new products. We also provide fieldtrips, recycling curriculum kits, and booths at events for people of all ages to learn how recycled resources rise again and again.

akcarcrushing@gmail.com alaskacarcrushing.com

anchsand.com

customerservice@akwaste.com alaskawaste.com

aswcd@aswcd.org aswcd.org

crs@crs-alaska.com centralrecyclingservices.com

pauln@emeraldnw.com emeraldnw.com

rod@eccalaska.com eccalaska.com

info@iagreenstar.org iagreenstar.org

sarah@rsalaska.net rsalaska.net

shirah.pierce@simsmm.com simsmm.com

info@shredalaska.com shredalaska.com

ken.threshold@gci.net thresholdkodiak.org

Facebook totalreclaim.com

Valley Community For Recycling Solutions Mollie Boyer, Exec. Dir. (VCRS) PO Box 876464 community@valleyrecycling.org Wasilla, AK 99687 valleyrecycling.org Phone: 907-745-5544 Fax: 907-745-5569

www.akbizmag.com

Recycling Centers (Wholesale); Municipal Recycling Programs; Large Facility Recycling Programs.

August 2014 | Alaska Business Monthly

87

ALASKA BUSINESS MONTHLY’S 2014 ENVIRONMENTAL SERVICES DIRECTORY

RECYCLING SERVICES

TRANSPORTATION

Hazardous Waste Transportation Trucking the muck

By Tom Anderson

O

n the list of careers and jobs that people find the most prestigious, transportation of hazardous waste is likely not in the top tier of preferences.

Hazardous waste can be dangerous, messy, difficult to move, and burdensome because of an abundance of state statutes and federal codes and regulations, all of which transporters are obligated to comply with to avoid delays. Further, certain wastes must be shipped from Alaska to special landfills and deposit sites in the Lower 48 per federal regulations.

In Alaska—with the sheer size of our state, diversity in construction and resource development industries, and geographic limitations—hazardous waste transportation is a critically important and necessary part of commerce that benefits the environment and inhabitants alike.

Who determines what is hazardous waste and how it should be transported?

The layers of regulatory bureaucracy are complicated in most remediation and hazardous material removal projects, and the transportation of hazardous waste is no exception. Movement of waste defined as “hazardous” occurs by four methods: rail, air, ship, and, most commonly, by vehicle on road and highway systems. For each mode of transportation, state and federal laws apply, government agencies are in place, and program administrators with a cadre of staff oversee the process to enforce compliance and safety protocols.

James Simmons is the Hazardous Materials Program Manager for the Federal Motor Carrier Safety Division within the US Department of Transportation. Simmons is headquartered in Denver, Colorado, and oversees the service center for the Western Region, which includes Alaska. There are four regional service centers (Denver, Illinois, Georgia, and Maryland) and the headquarters for the Federal Motor Carrier Safety Division is in Washington DC. 88

Simmons’ oversight is of the transportation of hazardous materials, within which hazardous waste is a category. Vehicular and road system transportation is the primary means through which hazardous waste is relocated. His program partners with Alaska law enforcement officials and works integrally with the Environmental Protection Agency (EPA) to keep the transportation process safe and without complication. Simmons noted that the layers of code and regulations are important for the companies working in the hazardous waste fields. 49 CFR Parts 390 to 399 covers commercial driving, while Parts 100 to 177 covers hazardous materials and waste. Cargo tank safety, rollover prevention, spill reporting and prevention, and training are just a few of the subject categories dictating the movement of hazardous waste under regulation which companies must abide by during operations.

Who dares truck in the muck?

Recognizing hazardous materials and waste transportation are inextricably linked to voluminous rules and requirements, it makes sense the companies engaging in such commerce would have their act together.

Emerald Alaska, Inc. handles and transports hazardous waste, materials, and products containing hazardous substances. Emerald operations include chemical waste management, marine and industrial cleaning, waste and source reduction services, automotive fluids recycling, and a variety of industrial service applications.

The logistics of Emerald’s waste transport can get complicated, so a comprehensive security plan that includes background checks, safety training, and security reporting of movement of the waste is integral to the process.

The company has more than twentyfive years’ experience in hazardous waste transportation and owns a fleet of 250 specialized vehicles that operate across the state and provide daily drum and bulk pick-up services. It also has bulk liquid tankers and solid roll-offs for specialized tank and industrial cleaning projects.

Alaska Business Monthly | August 2014

When it comes to tenure in the hazardous waste transportation industry and partnering with area transportation companies, Paul Nielsen, director for Sales & Marketing, notes, “We have existing, long-standing, and strong working relationships with a large number of the region’s largest transportation companies, in all methods and modes of transportation. It is a wellknown fact that logistics are the key to a successful Alaskan project of any type.”

On February 11, 2,200 gallons of fuel was released at Mile 309.5 on the Dalton Highway, 104 miles south of Deadhorse when a fuel truck rolled over. Emerald’s response crews were there within four hours in negative forty-nine degree temperatures with winds at thirty miles per hour. From three feet of snow to two feet of tundra, a special loader-mounted soil trimmer was used to loosen the surface and ultimately load the fuels and contaminated snow into vehicles and transport off-site for melting, product recovery, and water treatment in Deadhorse.

Similarly, on June 7, a fuel tanker truck approximately 114 miles south of Prudhoe Bay lost control on a slippery Dalton Highway because of heavy rain. The accident resulted in the leaking of 2,500 gallons of ultra-low-sulfur diesel into the tundra. Emerald expedited response teams from Kenai, Anchorage, and Palmer offices and implemented a twenty-four-hour per day flushing operation involving shore seal boom and absorbent pads, mindful of delicate tundra and building plywood walkways to reduce tracks. The response took ten days, and the transportation of 576 oily waste bags (with pads) and absorbent boom was successfully made to Emerald’s Viking Drive facility for recycling and disposal.

Nielsen adds that partnerships matter in a state like Alaska with a vibrant economy and where companies specialize in different services tied to hazardous waste management and transportation.

Nielsen distinguished that Emerald will only “partner with and utilize the services from well-established companies with long track records of regulatory and environmental compliance. Most of the www.akbizmag.com

transporters of hazardous materials and waste in and out of Alaska have chosen to partner with us as well, to provide response and cleanup services in the case of an accidental release or spill. These companies are customers to Emerald Alaska as well as vendors, which shows the mutual respect and confidence that exists between our companies.”

Emerald has locations in Kenai, Palmer, Fairbanks, and Prudhoe Bay as well as three locations in Anchorage, with more than one hundred full-time employees and ten-day hazardous waste transfer facilities at all of its locations. The company has an extensive fleet of vacuum trucks, tankers, and support equipment and services clients such as Shell, Alyeska Pipeline, Flint Hills, Tesoro, Hilcorp, XTO Energy, BP, ConocoPhillips, the state of Alaska, and local municipalities like the Kenai and Fairbanks boroughs and the Municipality of Anchorage.

Beyond Emerald Alaska, there are other companies that handle comparable services. Carlile Transportation Systems offers hazardous materials transportation, including all nine DOT hazard classes in both bulk and nonbulk. The company’s experience includes specialty services for hazardous waste, bulk fuel, and munitions. The company website states that “Carlile employees are trained in an expanse of high level skills that include handling and transporting multimodal hazardous materials, multilevel security, and safe transportation procedures.” The company supports shipments through an Operations Support Center, which provides continuous communication and shipment monitoring with Carlile’s OmniTracs technology.

Marsh Creek is an Alaska Native company jointly owned by Kaktovik Iñupiat Corporation and SolstenXP. The company has operations in Anchorage, Alaska, as well as in California, Idaho, and Utah.

The company also has project offices in Deadhorse and Kaktovik. Marsh’s broad services list includes contaminated soil removal, transportation, and disposal. From oily waste water to petroleum hydrocarbon contaminated soil excavation, removal, and treatment, the company has projects with the Bureau of Land Management, United States Air Force, ChevronTexaco, and many other private and public sector clients.

Transporting hazardous materials rewww.akbizmag.com

quires experience and knowledge. Alaska Marine Lines, Alaska West Express, Bering Marine Corporation, Lynden Air Cargo, and Lynden Transport, all part of the Lynden family of companies, are experienced at shipping all types of hazardous cargo. Lynden is also an EPA-certified waste transporter, capable of transporting contaminated soils, oily waste, and toxic Polychlorinated Biphenyls (PCB). LTI, Inc. is registered with the US Environmental Protection Agency and the Washington Department of Ecology to transport industrial waste materials.

All Aboard—Shipping the Waste Outside Alaska A recent joint-venture with Bowhead Transport, a subsidiary to Barrow Alaska Native Village Corporation’s Ukpeagvik Iñupiat Corporation (UIC), and Crowley has blossomed into a full-service of remediation and transportation of hazardous waste and materials, says Crowley’s Geoff Baker, manager of Business Development in Alaska.

The joint-venture performed a project last summer in 2013 at a remediation center at Camp Lonely on the North Slope.

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The prime contractor was Olgoonik and Bowhead-Crowley was a subcontractor.

Bowhead-Crowley transported contaminated soil and equipment from a Distant Early Warning site. The hazardous waste was transported by truck and loaded on a barge at West Dock in Prudhoe Bay. Crowley is global company with corporate headquarters in Jacksonville, Florida, and regional offices in Houston, Seattle, and Anchorage.

The idea of the joint-venture surfaced and later came to fruition because Crowley has operated in Alaska over sixty years and performs a lot of in-state work, says Baker. The collaboration with Bowhead is intended to provide a greater suite of hazardous waste transportation services.

“We value our relationship with Bowhead, which brings us closer to the native communities of Alaska,” says Baker.

Alaskan transport companies handle hundreds of different cargo commodity items and many are hazardous materials, from chlorine for swimming pools and water treatment to propane, says Jim Dwight, general manager of UIC Marine and Bowhead Transport. When a hazardous material runs out of useful life, or is spilled, including materials like PCBs, lead based paint, asbestos, and thousands of other products, categories have been designated to cover over and under parts per millions of contaminate, which is regulated by the Resource Conservation and Recovery Act, or RCRA. The RCRA was enacted in 1976 and covers record keeping and labeling from “cradle to grave,” tracking hazardous waste from the time it’s generated to the final disposal. Proper handling of hazardous waste is important because it can be ignitable, corrosive, reactive, and toxic.

Subtitle C of the RCRA creates the management system for hazardous waste. Under RCRA Section 3004(a), Congress authorized the EPA to promulgate regulations establishing design and operating requirements for land disposal units to “minimize pollution resulting from the disposal of hazardous waste in or on the land.” In the United States there are twenty-one facilities categorized as Subtitle C hazardous waste landfills, and Alaska and Washington state use Chemical Waste Management of the Northwest located in Arlington, Oregon.

For hazardous waste transportation, Bowhead provides the containers and 90

flats for asbestos, scrapped steel, and other waste materials. The company also provides oversight on packaging and labeling and lighterage services through shallow draft 150 foot landing crafts and 200 foot ramp barges that can maneuver into and out of remote sites where remediation is occurring for Corps of Engineers, US Air Force, and other State and Federal projects.

The joint-venture provides shallow access to remote sites—between West Dock and remote sites within several hundred miles of the dock, adds Dwight. Bowhead barges then carry the waste to Seattle and the client works with the Oregon facility thereafter, transporting either by rail or truck from Seattle-Tacoma to Arlington.

Dwight notes that this year the jointventure will have three to four clients on the North Slope at Camp Lonely, Point Lonely, and Nuvagapak Point, for whom the companies will mobilize and demobilize heavy equipment and then transport hazardous waste southbound. He adds that scrapped steel doesn’t go to Arlington’s facility but instead to a recycler in Seattle, typically Seattle Iron & Metals Corporation or Schnitzer Steel Recycling in Tacoma.

Environmental Services— Genesis of the Transportation Process Bob French, Principal-in-Charge at EHS Alaska, is a senior project manager and mechanical design engineer with more than twenty-five years’ experience in hazardous material identification and abatement. EHS has a team of hazardous building material consultants. The company’s list of services includes hazardous materials project management for housing complexes, schools, hospitals, industrial facilities, spill Prevention, control and countermeasure plans for drilling rigs at Prudhoe Bay, and the renovation of complex mechanical systems.

French explains that there are many Alaska firms that deal with contaminated soil, but in addition exists numerous other hazardous material that haven’t reached the “waste” designation but still require transportation. Asbestos, mercury, and lead paints are examples during renovations or modification of older buildings.

EHS offers chemist services as well as a certified industrial hygienist who han-

Alaska Business Monthly | August 2014

dle exposure analysis such as in welding environments. Before hazardous materials and waste get transported, the workers handling and exposed to them face injury without defined rules and standards. Take welding for example: whether welding on galvanized steel with the potential of cadmium exposure or working with stainless steel and requiring specific ventilation to avoid hexavalent chromium, EHS addresses environmental concerns tied to hazardous materials as they accumulate and require removal.

French adds that gym floors in rural Alaska, sometime made with rubber substrate, may contain mercury. The project planning and renovation requires an environmental services company to map out details on how to dispose of the hazardous materials. Typically this means filling a conex container with the rubber flooring until a barge is contracted from Seattle to remove the container and bring it back to Washington state and then to a federal certified landfill.

Recently EHS has had a mix of hazardous material-related projects including demolition of a small tri-plex owned by US Fish and Wildlife in Kodiak; renovation and repairs of schools in Emmonak and Kotlik managed through the REAA and contracted through an Alaskan architect firm; waste testing (and possible removal and transportation thereafter) for Copper Valley Electric Association in Glennallen and Valdez; addressing lead exposure and spent shell analysis at firing ranges in Anchorage, Tok, and Sitka; and the clean-up of an abandoned fish processing facility in Southeast where ammonia was used in fish refrigeration systems which soaked into sheet rock, ultimately involving vapor extraction and recovery and removal of the contamination from the oils in the compressors.

This is a very big year for Eagle River headquartered EHS because the company has several hundred projects in progress throughout the state. “As the economy continues to recover, it’s rewarding to help Alaskans thread their way through the regulatory quagmires of dealing with potentially hazardous materials,” adds French.

R Tom Anderson writes from Palmer. www.akbizmag.com

TRANSPORTATION

Tugging Along What the mighty tugboats accomplish

By Kirsten Swann

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very year, roughly 1.2 million tons of ore move out of the Red Dog Mine and south to market.

Millions of tons of cargo pass through the Port of Anchorage. At the Port of Valdez—the southern terminus of the trans-Alaska oil pipeline—supertankers handle more than 1.5 million barrels of crude oil annually.

All of those endeavors depend on the same crucial element: Alaska’s marine transportation companies, powered by tugs. In a state where vast distances separate communities and businesses and other methods of transportation can prove prohibitively expensive or impossible, tugs and barges provide key support for major Alaska industries like mining, oil, and gas production.

Whether they’re assisting ships in Cook Inlet or transporting fuel through shallow water along the coast of Western Alaska, tugs and barges are vital pieces in a multibillion-dollar puzzle.

Foss Maritime For Foss Maritime, which provides tug and 92

barge services for Red Dog Mine and celebrated its 125th anniversary this year, it’s about finding solutions for the transportation needs of Alaska businesses. Because of Red Dog’s Arctic location, more than eighty miles north of Kotzebue, the window of opportunity for barge transport is brief. Gary Faber, president of the Seattlebased maritime transport company, says Foss began its mine transport work May 30 this year and will work continuously until freezing conditions end the shipping season, usually around October.

Transporting the ore involves using specially designed self-loading barges, and Faber says Foss developed the world’s first roadstead loading of dry bulk cargo in order to make the most of the short shipping season. Despite the limited window, the tug and barge work at Red Dog Mine contributes to a major economic boost for the region.

The mine itself provides 550 full-time jobs, with NANA shareholders making up the majority of employees. Faber says Foss also prioritizes local hire.

“It’s a major business,” he says.

Alaska Business Monthly | August 2014

It’s not the only major business dependent on reliable tugs and barges.

Faber says Foss is looking forward toward a developing oil and gas industry.

Like mining, the industry often moves by tug and barge.

From front-end engineering support for North Slope producers to resupply, Faber says his company sees growing opportunities doing business with the industry that provides more than a third of Alaska wage and salary jobs.

“We kind of cover the gamut,” he says.

“We think we have a good niche.”

Cook Inlet Tug & Barge In Cook Inlet, a maritime company with deep Alaska roots has also carved out a niche.

While Cook Inlet Tug & Barge was acquired by Foss Marine Holdings, Inc. in 2011, it was founded in 1924 by the Andersen family and remained a family-owned institution for decades.

“We’ve been around for quite some time,” says Brad Kroon, the company’s general manager. www.akbizmag.com

Far left & left: The Justine Foss and two other tugs moving the Spartan 151 jackup rig to Cook Inlet for Furie.

Photos courtesy of Foss Maritime

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August 2014 | Alaska Business Monthly

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SOURCE: Lynden

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Lynden’s Tugs Busy in Alaska

s a full-service marine transportation company, Alaska Marine Lines moves all types of freight to and from Alaska—from necessities like groceries and cars to oversized cranes and other bulky materials for diverse projects in the mining, oil, and construction industries. Alaska Marine Lines is one of the Lynden family of companies and serves the communities of Juneau, Ketchikan, Wrangell, Sitka, Petersburg, Haines, Skagway, Kake, and Prince of Wales Island.

Alaska Marine Lines tugs and barges leave Seattle twice a week loaded with containers and other cargo, powered

by Western Towboat tugboats, a Lynden partner since 1982. The tug and barge combo also provides twice a week freight service to Central Alaska points of Anchorage, Fairbanks, Whittier, Kenai, Seward, and Cordova by both container and railcar barge for rolling stock. Alaska Marine Lines is the only carrier to Southeast Alaska offering twice a week service.

Considered a pioneer of highly efficient equipment designs, Alaska

Marine Lines recently introduced the world’s first 53-foot-long by 102-inchwide by 10-foot-high ISO-rated dry and refrigerated containers. Its fleet of 53-foot containers is the largest in Alaska. Container sizes range among 20 foot, 24 foot, 40 foot, and 48 foot for dry and refrigerated, oversize, hazardous, less-than-container or full-container cargo. Customers can choose from a wide variety of equipment, including platforms, bulk tank and wheeled, and all pieces may be rented for specific needs.

Lynden also provides marine charters and highly specialized services to reach water-locked villages and other remote Alaska locations through its company Bering Marine Corporation.

Bering Marine’s fleet of shallow-draft and landing craft equipment supports construction of docks, roads and airstrips in Alaska communities as well are providing emergency response services throughout the state. In 2005, the company introduced the integrated tug and barge, or ITB, Krystal Sea, into the Cordova market.

The company provides harbor assists at the Port of Anchorage. According to port officials, about 90 percent of the goods used by the vast majority of Alaskans pass through the Anchorage port. Cook Inlet Tug & Barge is there to smooth the passage.

“We pretty much touch everything that comes into the Port of Anchorage,” Kroon says. “They don’t always need a tug, but we’re kind of that insurance, if you will.”

Cook Inlet provides pilot runs for cruise ships and breaks ice for oil barges in the winter, the company’s general manager says. Most assists require two tugs in and two tugs out, and Kroon says the small tug business keeps busy with steady traffic from major cargo lines like Horizon and Tote. The work provides steady employment for more than twenty people, Kroon says, mostly Alaskans.

In the tricky tides and rapid currents of Cook Inlet, a tug equipped with local knowledge can be invaluable. Kroon says the work at the port helps protect millions of dollars in infrastructure as well as the Cook Inlet environment, home to

beluga whales and other wildlife.

“If you think about an airport, the most tricky or difficult or dangerous time is when you’re taking off,” he says.

In order to head problems off at the pass, Kroon says Cook Inlet employees consider a variety of weather factors. Is there strong wind? What about ice? Above all, Kroon says, the work is about considering safety above economic factors.

The security offered by tugs allows maritime cargo businesses to keep moving. It may not be the quickest method of transportation, but with barges capable of carrying thousands of tons of cargo and tugs able to guide them through difficult waters, Kroon says maritime transport is, hands down, the most efficient.

“Providing access via the waterways is just a very economical way to do it,” Kroon says.

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Crowley At Crowley Maritime Corporation, Vice President Bruce Harland knows all about the economics of marine transport.

The company uses tugs and barges to

Alaska Business Monthly | August 2014

help deliver fuel to hundreds of Alaska communities, often in remote locations unreachable by road or rail.

To power Point Lay, the company regularly transports fuel from a tanker to a barge, where it’s then transferred to another barge that delivers it to a tank truck on the beach. From the tank truck on the beach, Harland says the fuel is transferred back on to another barge to make the trip across the Kasegeluk Lagoon, the final leg of the journey.

Harland says Crowley delivers a half million gallons of fuel per year to the North Slope Borough community of about two hundred people. He says his company often fields complaints about high fuel prices, but there are few other options.

“Their alternative is not pretty,” Harland says.

In the past, he says, Crowley has had to resort to flying in fuel shipments to meet its obligations when sea ice made tug and barge transport impossible. It’s an exponentially more expensive endeavor, Harland says.

He says Crowley, which has done business in Alaska for more than sixty years, has discovered ways to work around the Last Frontier’s numerous environmental hurdles. In Western Alaska, Commercial Operations Director Walt Tague says there are only a handful of developed ports. Places like Bethel, Nome, and Dillingham provide basic infrastructure.

“Everywhere else is largely undeveloped with very shallow approaches,” Tague says.

So, he says, Crowley has adapted to the challenges of fueling some of Alaska’s most remote communities.

“You’re either tying up at a mud bank or maybe a small sheet pile wall,” Tague says. “Some of those you can’t stay afloat in at all stages of the tide, so you’ll actually sit on the bottom, or maybe you have to leave the dock if there’s not good ground there.”

Crowley has developed a book of procedures about a foot thick, Tague says. Harland says it was written by the school of hard knocks. It’s experience that allows Crowley to deliver to places otherwise unreachable.

But the tug and barge work is crucial statewide—not just in far-flung communities along the coast or river system. www.akbizmag.com

Besides work in Western Alaska, Crowley provides ship assists at the busy Port of Valdez, where millions of barrels of crude oil flow through the trans-Alaska oil pipeline to the terminus. Harland says his company holds the contract to dock and undock tankers at the port and operates twenty-five boats that employ about two hundred mariners.

“It’s a fairly significant operation,” he says.

Like Crowley’s tug and barge work elsewhere in the state, he says it’s closely tied to Alaska’s oil and gas industry.

While decreasing pipeline throughput increases the pressure on cost for Crowley operations in Valdez, Harland says the company is working to facilitate new projects in other parts of the state.

Crowley is contracted with Texasbased Furie Operating Alaska LLC, to transport the oil company’s new monopod from the Gulf of Mexico to Cook Inlet. It’s the first Cook Inlet platform since Forest Oil installed Osprey in 2000, and Harland says Crowley is moving the 124-foot monopod, shipped upright, on a 400-by-105-foot barge.

“It’s pretty impressive,” he says.

It’s not just the transport: Harland says Crowley will also build a sixteenmile underwater transmission line to the platform. He says the operation involves building the pipe in segments and using a 125-ton stinger to support the pipe over the stern of the barge and into the inlet.

“We’re building a purpose-built barge—we’re building it in Portland right now—to handle the currents in Cook Inlet and lay the pipe,” Harland says.

Like countless other projects across Alaska, tugs and barges play a crucial role in plans to install the new monopod and pipeline. They’re key forces behind some of the state’s largest economic drivers.

At Foss, Faber says he aimed to build on that legacy and hoped to see the company increase its impact on Alaska’s smallest communities. He says it’s part of the philosophy of “in early, stay late” so crucial to success in the tug business.

“We want to be the guys that put in more than they take out,” Faber says.R Journalist Kirsten Swann writes from Anchorage. www.akbizmag.com

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email: info@seatacmarine.com August 2014 | Alaska Business Monthly

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OIL & GAS

Diver Down, Diver Drone Industrial-strength mariners

By Vanessa Orr

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Photo courtesy of AMI

orking in the oil and gas industry in Alaska often means working in remote and inhospitable conditions, especially when the projects are located offshore. For the companies that provide installation, inspection, repair, and maintenance of marine infrastructure, a day’s work can mean dealing with extreme tides, working by touch in silt-filled

An AMC diver performing underwater welding operations in Valdez.

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Photo courtesy of OMSI

waters, and even avoiding some of the state’s largest predators.

In order to do these jobs, crews must be highly trained, extremely skilled, and exceptionally safety-conscious.

Whether the job requires constructing platforms, laying fiber optic cable, cleaning up after an oil spill, or performing underwater inspections, knowledge is key when it comes to navigating Alaskan waters.

From Blackwater to Bears “The conditions in Cook Inlet are some of the most challenging diving conditions in the world,” says Tom Ulrich, regional manager for Alaska operations for American Marine Corporation (AMC). “In addition to dealing with thirty-plus-foot tidal fluctuations and extreme currents, divers are only able to dive at slack tide, which gives them a very narrow operational window. Because there is very little visibility—they are diving in blackwater conditions— divers have to operate by feel; high intensity light just reflects off of the water.

They have to be very competent at performing each task; otherwise, they’d never be able to finish their jobs in the time allowed.”

A privately owned specialty marine contractor, AMC has been working in

Alaska Business Monthly | August 2014

The OSV Discovery working alongside the Spartan Rig in Cook Inlet.

Alaska since 1993. The company provides marine construction, pipeline and platform installation and repair, dredging, marine salvage, underwater certified welding, underwater inspections and photography, and vessel support. AMC also provides shoreside construction and the deployment of fiber optic cables as well as emergency marine vessel repair.

While extremely cold water and air temperatures, along with rapidly changing weather conditions, can affect divers’ progress, according to Ulrich, there are also challenges when supporting remote site operations on land. “Our employees operate in fairly close proximity to everything from bears to volcanos,” he says. “In remote areas, there are wildlife challenges. We deal with black bears and grizzly bears in areas around Anchorage and polar bears on the North Slope. When you open a hole in the ice in winter, it attracts bears from miles around because they smell the open water and equate it with seals, their primary food source.

And you don’t want your divers being mistaken for seals.”

According to Deirdre Gross of Global www.akbizmag.com

Diving & Salvage, Inc., just getting to some of the more remote project locations in the state is a challenge. The company, which has been working in Alaska on projects since the 1980s, made their presence in the state permanent in 2009 with the purchase of Offshore Divers. Global’s Alaska office provides commercial diving services for the offshore oil and gas industry, marine facilities, vessel operations, and casualty response projects. Global has extensive experience working in Alaska’s challenging environment, including Cook Inlet’s zero visibility blackwater, excessive tidal variations, extreme weather, and remote locations.

Global also has divers available with both topside and underwater welding certifications, allowing on-site design and fabrication with no need to bring additional crews to remote areas.

“Alaska can be a logistical nightmare—it’s tough to get to locations and incredibly expensive to move people and equipment around the state,” Gross says. “You’re working in weather that is hard on your crews and equipment.

The short daylight hours, cold tempera-

www.akbizmag.com

Photo courtesy of AMI

An AMC dive team preparing for North Slope inspection operations.

tures, and dealing with local wildlife all promote challenges to the work.”

While Global Diving & Salvage, Inc. operates all over the state, the majority of its work is done in Cook Inlet. Proj-

ects currently underway include installation of cathodic protection systems and inspections on oil and gas platforms, along with support of a pipeline installation.

August 2014 | Alaska Business Monthly

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continues to grow, and that’s why we’ve brought another vessel to our fleet.”

The Titan was set to join the fleet in Cook Inlet this summer after completion of a retrofit, which includes ice strengthening, outfitting power for tides and ice, and retrofitting the water and fuel configuration to ease in transfers to the rigs that the company supports. Like OMSI’s other vessels, the Titan has been specially designed to withstand Alaska’s tough winters to provide year-round services to customers.

Photo courtesy of AMI

Alaska’s weather conditions are just one challenge that divers face. Here, Blue Lake in Sitka shows ice-up conditions in May.

According to Joey Willis, president of Ocean Marine Services, Inc. (OMSI) in Nikiski and Kirkland, Washington, it takes a really skilled crew to be able to work in Alaska’s harshest conditions, especially when constrained by extremely tight schedules. The company, which owns and operates four offshore supply vessels, a landing craft, and a research catamaran, works with partner companies Offshore Systems, Inc. and Aleutian Fuel Services in Dutch Harbor, Offshore Systems Kena, Nikiski Fuel Services, and underwater diving contractor Blackwater Marine to make sure that clients’ needs are met around the clock.

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“The increased activity has allowed us to add an additional crane and longshore crew at OSK,” says OMSI Vice President Kelly McNeil. “This provides us with the opportunity to work multiple clients and vessels at the same time.”

To continue this positive growth, OMSI recently added a 165-foot vessel, the Titan, to its fleet of four offshore support vessels. “Cook Inlet has seen some ups and downs over the years, but we have seen nothing but growth,” says Willis of the new addition. “The challenge for us has been keeping up with the demand. Our presence in the Inlet

Alaska Business Monthly | August 2014

Safety First In order to meet the demands of working in such harsh environments, marine service crews must be properly trained and have access to the tools that they need. Divers, for example, undergo rigorous on-the-job training before ever being allowed to work in blackwater conditions.

“After graduating from commercial diving schools, divers enter our apprenticeship program, where they start as tenders for the more experienced divers, working on deck,” explains Ulrich. “They are gradually allowed to do more diving in stable conditions, and eventually they gain more responsibility and can take on more challenging assignments.”

In addition to being closely monitored during the apprenticeship program, divers at AMC are also assigned mentors who guide them as they develop skills and gain competency.

“For the seventh year, we’ve claimed a perfect safety record with no OSHArecordable injuries,” adds Ulrich. “Our mission is to excel in operations: to exceed clients’ quality expectations, while also causing no harm to our people or the environment.”

This summer, AMC is performing underwater pipeline inspections and anode replacement and repair, as well as installing and repairing fiber optic cable in Cook Inlet. The company is also working at BP’s Northstar production island, where they are replacing and repairing the armored blocks that make up the protective skirting around the island.

Divers who work at Global Diving & Salvage, Inc. also receive on-the-job training through apprenticeships; dive school is just the beginning. Of Global’s four hundred employees worldwide, www.akbizmag.com

Photo courtesy of OMSI

The OSV Sovereign is one of OMSI’s five oil support vessels working in Cook Inlet this summer.

about twenty-five are employed in Alaska and sixteen of those are divers.

“They all start out as tenders and work their way up to becoming divers with mentors guiding them,” says Gross. “It is not an overnight process to become a diver; it takes time, training, and experience.

“The safety of our employees is and always will be our number one concern; we want our employees to go to work and come home safely to their families,” Gross continues. “Our safety philosophy emphasizes working with each other and our clients to ensure the safest work environment possible. Our TEAM [Together Everyone Achieves More] program encourages participation from our employees and clients to ensure that safety is maintained for current projects and improved for future projects.” The company’s approach to safety also includes company-wide employee training, ongoing observations and suggestions, daily meetings with job hazard analysis, proactive dive safety and general safety committees, tracking and addressing trends, job safety kickoffs, and frequent job safety audits.

OMSI reinforces safety through training, special skills, and experience.

“As a company that understands the nuances of working in Cook Inlet, we have been able to provide vessel services safely and efficiently since the early 1980s,” Willis says. “This is due in large part to the experience of our vessel crews who have the special skills and experience necessary to navigate in Cook Inlet’s challenging waters.”

“The challenges always come back to Mother Nature,” adds McNeil. “We’re constantly dealing with changing www.akbizmag.com

Marine Construction

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weather, extreme weather conditions, and severe tide changes. What sets us apart is that we have so many experienced vessel operators and crewmembers. All of our mariners are trained to recognize the dynamic conditions of Cook Inlet; it takes a lot of skill to get boats alongside the platforms and maintain position while active cargo operations are performed with these tides. We rely on the experience of our officers and crew as our best defense against Mother Nature.”

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Priority service code: 916AX01

Technology Glides In In some cases, technology keeps people safe by keeping them out of the water. Liquid Robotics Oil & Gas, a joint venture with Schlumberger, has introduced a product called the Wave Glider, which has been in use in Alaska waters for the past year. The remote controlled, autonomous marine vehicle technology was developed to integrate a variety of sensors that collect and send offshore data in real-time via satellite communications. The METOC glider conducts detailed meteorological and oceanographic surveys across vast distances and under extreme conditions.

“From a health, safety, environmental, and security perspective, the less people in the ocean, the better,” says Sudhir Pai, vice president, Operations and Technology, Liquid Robotics Oil & Gas-Schlumberger JV. “The Wave Glider doesn’t need people to man it as it is completely autonomous; it also enables companies to avoid using expensive vessels to do this research, which greatly cuts down on costs.”

Meteorological and oceanographic data—especially the height of waves and period of swells, speed and direction of wind, and surface or subsurface currents—provide crucial input when oil and gas companies plan rig movements and placement. The Wave Glider replaces conventional sensor platforms such as buoys, ships, aircraft, and satellites, as well as the need for personnel to support these platforms.

“All that the Wave Glider needs to work is at least ten meters of water depth, sunlight, and waves,” says Pai of the wave-powered marine vehicle.

The glider is capable of crossing thousands of miles of ocean to gather data and can also take meteorological read-

Alaska Business Monthly | August 2014 www.akbizmag.com

ings while maintaining a stationary position or circle a rig at a pre-set distance to provide early warning of security or environmental threats. Operating individually or in fleets, it can also perform background seep monitoring and spill detection.

While the Wave Glider is fairly new to Alaska waters, Pai says that its abilities

have been tested in hundreds of missions around the world, clocking more than fourteen thousand glider days at sea.

R Vanessa Orr is the former editor of the Capital City Weekly in Juneau.

Photo courtesy of Liquid Robotics

Photo courtesy of AMI

An AMC diver setting up to access underwater rigging during North Slope dive inspection operations.

A Wave Glider integrated with an Acoustic Doppler Current Profiler, gathering and sending meteorological data in real-time via satellite communications.

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Visit www.offshoresystemsinc.com/support Call us at 800-733-6434 August 2014 | Alaska Business Monthly

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OIL & GAS

Insights on Filling the Pipeline Better technology, techniques, and public policy

By Kirsten Swann

S

ince 2002, the amount of oil flowing through the trans-Alaska oil pipeline has decreased by millions of barrels per year without even the slightest annual uptick in production.

The downward trend began long before that. From a high of more than 744 million barrels produced in 1988, the year 2013 saw around 195 million barrels of oil travel through the pipeline. According to data maintained by Alyeska Pipeline Service Company, the pipeline’s operator, the average daily throughput also continues to decline.

When it comes to boosting the number of barrels flowing down the pipeline, Alaska petroleum businesses and industry groups alike say it takes both geological and political science.

More Production On its face, it seems simple. Alaska Oil and Gas Association President Kara Moriarty says filling the pipeline requires more production—there’s no two ways about it.

“It sounds simplistic, but it really is that basic,” Moriarty says. “Of course, companies need the right framework to spend

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the additional money required to bring more oil online, so the investment climate in Alaska needs to be competitive and attractive in order to keep limited investment dollars in Alaska instead of other places across the globe.”

But if pipeline throughput is any indication, creating the right framework has been a daunting task.

Between 1990 and 2000, according to Alyeska Pipeline Service Company data, annual pipeline throughput decreased by nearly 45 percent. Between 2000 and 2010, it decreased by another 38 percent. The pipeline’s operator says throughput continues to decline by about 5 percent annually, and, today, it’s about two-thirds empty.

New Technologies and Techniques Alaska’s producers and industry insiders are turning to a handful of solutions in a bid to ramp up pipeline flow.

Some companies, like BP, are working to produce more oil from existing fields

Alaska Business Monthly | August 2014

via specially developed systems. A trademarked polymer injection technology known as BrightWater helps BP improve on reserve recovery rates. The company says directional technology and horizontal drilling also improve production at existing sites.

New technologies and techniques are paying off.

When Prudhoe Bay was first discovered in 1968, it was estimated to hold about 9.6 billion barrels of recoverable oil.

In 2012, the fields produced their 12 billionth barrel, and they didn’t stop there.

But as the oil left in existing North Slope wells becomes increasingly difficult to reach, a boost in pipeline throughput

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requires new developments altogether.

That’s where the political science comes into play, Moriarty says.

“When companies evaluate where to invest their dollars, they tend to avoid oil regions that arbitrarily change the rules on a regular basis. In just the last eight years, Alaska has made four changes to its oil tax structure. This sends a negative signal to the industry that long-range planning, which is necessary in the oil and gas industry,

is risky in Alaska where the laws and tax rates may change from one year to the next,” the industry group president writes in an email. “Our tax structure needs to be durable, stable, and predictable so oil companies and Alaskans know what to expect in the long-term.”

Uncertain and Instable Tax Structure AOGA sees uncertainty and instability within the state’s tax structure as the primary obstacle to increased production, Moriarty says. When it comes to overcoming that obstacle, some of Alaska’s largest oil and gas companies point to recent new legislation as a symbol of good things ahead.

“We believe Senate Bill 21 makes significant progress toward making Alaska’s investment environment more globally competitive and could lead to additional investment and production,” says Aaron Stryk, a commu-

Trans-Alaska oil pipeline as it winds through the foothills north of the Brook Range north of the Arctic Circle.

nications and media advisor for ExxonMobil Corporation. “ExxonMobil is committed to Alaska and will continue to actively pursue attractive investment opportunities.”

The company, a 20-percent owner of the Trans Alaska Pipeline System (TAPS), is currently working to develop infrastructure and production facilities at Point Thomson. That site is estimated to hold about 25 percent of the North Slope’s known natural gas reserves, and Exxon says it expects to initially put about ten thousand barrels of light oil daily into the pipeline beginning in the winter of 2015-16. A transmission line with a capacity of seventy thousand barrels per day would connect the Point Thomson development, about sixty miles east of Prudhoe Bay, to TAPS. Other Alaska producers are also announcing new development plans, pointing specifically to the state’s latest tax policy as the catalyst for increased investment.

ConocoPhillips, the state’s largest producer, is following that trend. The company owns a 29 percent stake in TAPS and says new development plans at several North Slope sites total about $2 billion. According to ConocoPhillips, the plans involve two new rigs, a new drill site, and a new viscous oil development at Kuparuk. The company says these projects,

© Brian M. Guzzetti/AlaskaStock.com

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August 2014 | Alaska Business Monthly

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including a new satellite field at Alpine, are expected to add an additional forty thousand barrels of oil per day by 2018.

Conoco says a new project in the National Petroleum Reserve-Alaska, the first of its kind, is also expected to put sixteen thousand barrels of oil into the pipeline daily beginning in 2015.

BP, which owns a majority 48 percent share in TAPS, says it’s also pursuing new investments on the North Slope.

“Alaska oil tax reform has had a positive impact on the pace and scale of oil development,” says Janet Weiss, president of BP Alaska. “The Alaska North Slope has new players, new investment, and new projects.”

The company accounts for about twothirds of Alaska oil production from its North Slope fields. After announcing the sale of interests in four of those North Slope assets to Hilcorp in April, Weiss says BP would be able to focus on increased production from its Prudhoe Bay fields.

“Thanks to tax reform, Alaska is now on course for increased investment and production,” Weiss said at the time of the Hilcorp sale.

That course calls for an estimated $1 billion in new investment over the next five years, and BP has announced plans to add two new rigs in 2015 and 2016.

The oil giant says it is also working with other Prudhoe Bay owners to evaluate an additional $3 billion worth of new projects and plans to move forward with a development plan for an as-yet undeveloped field adjacent to Prudhoe Bay. While a 50 percent stake in the Liberty field was among the interests sold to Hilcorp earlier this year, BP says it still expects to submit a development plan for the field by the end of 2014.

“We’re increasing activity on the North Slope and working with renewed vigor to reduce production decline,” Weiss says. “A strong economy builds an opportunity for all Alaskans, including sustainable jobs.”

And the employment impact of Alaska’s oil and gas industry is substantial.

Industry Support of Jobs A recent economic report completed by Juneau-based research firm McDowell Group shows Alaska’s oil and gas industry helps support more than 111,000 jobs and more than $6.45 billion in wages statewide.

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The report, commissioned by AOGA, was introduced to a crowd of roughly eight hundred attendees at the association’s annual luncheon in May. It measures spending by sixteen “primary companies” in Alaska’s oil and gas business and tracks the flow of money through Alaska’s economy via spending with other businesses, wages paid to workers, and taxes and royalties paid to the state and local governments.

Ultimately, McDowell Group found the state’s oil and gas industry supports nearly a quarter of total Alaska employment and more than a quarter of all Alaska earnings. When it comes to wage and salary employment, the percentage is even higher: The McDowell Group report shows oil and gas-related spending accounts for more than a third of all wage and salary jobs statewide. It provides more than 90 percent of the state’s unrestricted general fund revenue and about a quarter of local tax revenues collected by cities and boroughs across Alaska.

And when it comes to taking the temperature of the Alaska energy industry, AOGA recommends one sure place to start.

“Pipeline throughput is an excellent indicator of the oil industry’s health,” Moriarty says. “When more oil is produced on the Slope, it makes its way to market through the pipeline. Higher volumes of oil moving down the line make the pipeline safer and more efficient, and Alaskans benefit from more oil being sold and more royalties being deposited into the Permanent Fund.”

Policy Moves Needed As the pipeline’s throughput follows a steady trajectory downward, however, many industry leaders are turning increasingly toward political solutions.

Delivering the keynote address at AOGA’s annual luncheon in May, American Petroleum Institute President Jack Gerard pushed attendees to consider Alaska’s history as an oil-producing giant and consider policy moves that could restore that ranking.

“In recent decades, Alaska has been the highest or second-highest producing state as it relates to crude oil. Today, as you are all well aware, Alaska has now slipped to number four,” Gerard says. “When you look across the US

Alaska Business Monthly | August 2014

today at every oil-producing state in the great energy renaissance that we’re enjoying, every oil and gas-producing state, except Alaska, has increased their production over the last few years.”

He cited “energy leadership,” including streamlined permitting and leasing processes, as the key to reversing Alaska’s declining production rates.

“Alaska is one of the best examples of how energy policy can change not just the trajectory of energy production but how it can greatly improve and enhance the lives and livelihood of its citizens.”

Moriarty says increasing throughput would require an all-of-the-above approach.

“That means continuing the strong partnership with the State of Alaska by keeping a tax structure that is predictable, durable, and fair to the companies taking the risks and making the investments, as well as the Alaskans who own the resource. In addition, the permitting process also must be predictable, durable, and fair so projects can advance in a timely fashion while protecting our environment,” she says. “Lastly, Alaska needs a trained and skilled workforce to do the work required to advance projects focused on producing new oil.”

That trained and skilled workforce plays an integral role in every new project planned along the North Slope.

At Point Thomson, Exxon says it directly and indirectly employed about 1,100 workers during the 2013 winter season. ConocoPhillips Alaska says its two new drill rigs directly created about 200 new jobs. At peak construction, its new drill site on the Kuparuk River is expected to employ about 230 people.

But policy seems to be the driving force behind it all. Trond-Erik Johansen, president of ConocoPhillips Alaska, says a favorable tax structure greatly improves the outlook for his company’s new development and production projects. In BP’s 2013 annual report, Weiss pointed to a “more favorable fiscal climate” as the driving force behind new energy developments in the Last Frontier.

Gerard, the API president, says Alaska’s former standing as one of the nation’s leading petroleum producers demonstrates the role of policy in oil production. www.akbizmag.com

BusinessPROFILE

Little Red Services, Inc.

More Alaska Production Act: Creating opportunity for Alaskans

O

n August 19th the voters will decide the outcome of SB21, also known as the More Alaska Production Act. The issue will decide more than our oil tax policy, it will decide the economic future of Alaska. The oil tax policy issue has raised a number of opinions from residents, and fortunately we all have the right to vote our opinions and weigh in on important public matters.

As voters we carry the responsibility and burden of knowing the facts of what we are voting on and to not take that responsibility lightly.

If you are not aware of the makeup of Alaska’s unrestricted general fund, the production rate decline under ACES, the amount of capital invested in our oil resource extraction under ACES, the number of drilling rigs operating on the North Slope under ACES, the number of exploration wells drilled under ACES, and how things have changed positively in all of those categories under SB21, then you have homework to do.

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

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Alaska Business Monthly | August 2014

“To those who think that policy doesn’t matter when it comes to energy development, I’d suggest that they look at the consequences of the attitude right here in Alaska,” he told members of the Alaska Oil and Gas Association in May. “I would remind them that Alaska’s oil and gas deposits account for almost 30 percent of the nation’s energy reserves, and yet today, the state’s energy production accounts for approximately 7 percent of US production, down from a high of 25 percent in just back to 1989.”

Refilling the Pipeline In order to reverse those fortunes and refill the trans-Alaska oil pipeline, industry advocates and Alaska oil companies alike are banking on an investment-friendly development environment and production policies.

“Just like any other industry, we require public policies that promote growth and protect our investments in the communities in which we live and invest,” Gerard says.

While new projects spearheaded by the state’s largest oil and gas producers could increase the daily amount of oil flowing through the pipeline by as much as 20 percent over the coming years, according to corporate production estimates, they’re not nearly enough to spark a major change in the downward trajectory of pipeline throughput. Today, those numbers are still declining.

According to Alyeska Pipeline Service Company data, the pipeline’s average daily throughput decreased by more than thirteen thousand barrels per day between 2012 and 2013.

While representatives for Alaska’s largest oil and gas companies say recent legislative changes to the state’s oil tax structure are a promising step in the right direction, industry leaders say refilling the pipeline will take a firm focus on creative and compelling energy policy.

R Kirsten Swann grew up in Alaska and calls Anchorage home. She studied journalism at Hillsdale College and has covered everything from business to human interest topics for a variety of publications, both print and digital. www.akbizmag.com

Legal Speak

By Renea Saade

Allocating Liability Risk While Doing Business in Alaska

Standards

Insurance Costs Incurred

Bottom Line

Claims Handling

Independent Relationships

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Renea Saade is a partner with the Anchorage oďŹƒce of Stoel Rives LLP. Saade regularly assists companies with their commercial business and employment law needs. She may be reached at risaade@stoel.com or 907.263.8412. This article is provided for educational purposes only. It is not a substitute for legal counsel.

August 2014 | Alaska Business Monthly

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OIL & GAS

Foreign Fuel for Western Alaska

Economies of scale, ocean transfers save money

ow do Alaskans get their fuel?

It’s delivered in a surprising number of ways and from a wide variety of places.

Alaska is one of the nation’s top oil and gas producing states, yet some parts of the state, mainly western Alaska, get a lot of their diesel, gasoline, and heating oil from foreign sources, overseas.

Why is that? Because it’s more efficient and cheaper.

Foreign tankers loaded with fuel products station themselves at sea just outside the state’s territorial boundaries (there’s less paperwork) and transfer the fuel to shallow-draft “lighterage” barges (small coastal barges) for final delivery to regional terminals or fuel hubs.

From these regional hubs, shallowdraft tugs and barges move fuel to small inland communities on the river systems, where it is transferred to community tank farms. Since most small villages do not have docks, fuel barges are sometimes grounded on the beach as the delivery is made, and Alaska is the one state where the US Coast Guard allows a fuel barge operator to intentionally touch bottom on a beach.

Fuel distributors still bring products in large seagoing barges from domestic sources, such as the Tesoro Corporation

refinery at Nikiski, near Kenai, but the recent trend is to source the fuel from overseas and take advantage of the large volumes that tankers can supply, fuel distributors say.

Fuel is sourced from Canada, Russia, Japan, South Korea, or China, wherever the best bargain can be struck. Major suppliers in western Alaska, like Crowley, Delta Western, and Vitus Marine, buy foreign fuel for at least part of their needs.

The main savings in the new arrangement is in eliminating the “backhaul” returns of empty fuel barges from western Alaska to the Kenai Peninsula, although some fuel is still supplied from Nikiski.

H

Aerial view of the Tesoro natural gas refinery in Nikiski. © Scott Dickerson/AlaskaStock.com

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By Mike Bradner

Fuel Distribution Operations The summer fuel supply operation typically lasts four months, beginning in Bristol Bay and following the spring and summer melt of the ocean ice north to the Arctic. The fuel supply effort reaches Barrow on the Arctic Slope and Barter Island, in far northeast Alaska near the Canada border.

A big customer in Northwest Alaska is the Red Dog Mine north of Kotzebue, which purchases about 20 million gallons of fuel yearly. Nome’s city-owned utility is a big customer, purchasing about 2 million gallons yearly, as is Alaska Village Electric Cooperative (AVEC), which operates small rural utilities. AVEC purchases between 5.2 million and 5.5 million gallons for its

Alaska Business Monthly | August 2014

fifty-five village utilities; plus an additional 3.15 million gallons for Bethel’s utility, which the cooperative now owns.

Crowley and Delta Western are also major fuel distributors in Southeast and Southcentral Alaska. Vitus Marine operates mainly in western Alaska.

Crowley purchased Chevron’s Kotzebue and Nome fuel terminals in 1985 to complement the company’s marine fuel transportation services already underway. Over time, the company’s delivery network extended to about one hundred coastal and inland river villages.

In 2003 the company constructed a 5 million-gallon bulk tank farm at Bethel in cooperation with Bethel Native Corporation and in 2005 acquired Northland Fuel, which included Yukon Fuel Co. Yutana Barge Lines and Service Oil and Gas, which allowed Crowley to expand its fuel distribution through Interior Alaska.

Tank farms in Nenana, Fort Yukon, Galena, and St. Mary’s on the Yukon were added to Crowley’s network as well as at Hooper Bay and St. Michael on the coast, as well as Illiamna, southwest of Anchorage.

Tank farms in the railbelt communities from Kenai to Fairbanks were added along with Delta, Glennallen, and Valdez, and a 30 million-gallon fuel terminal at the Port of Anchorage.

Crowley operates twenty-two facilities in Alaska today with a bulk storage capacity of 50 million gallons.

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Delta Western operates fuel facilities in three coastal regions, in Southeast (Wrangell, Juneau, Haines, and Yakutat); the Bristol Bay region (Dillingham and Naknek)); Bethel in the Yukon Kuskokwim region, and in Southwest Alaska (Dutch Harbor, St. George, and St. Paul). The company is affiliated with Foss Maritime, which offers tug and barge services, and Inlet Petroleum Co., which operates in Southcentral Alaska.

Other fuel suppliers include PetroStar, which operates small refineries near Fairbanks and Valdez and sells diesel, heating oil, and jet and marine fuel. Sourdough Fuel, a subsidiary, sells heating oil in Interior Alaska and the highway communities. PetroStar is also a major fuel supplier in coastal communities in Southcentral and Southwest Alaska, supporting terminals in Valdez, Kodiak, Dutch Harbor, and St. Paul.

In Southeast Alaska most fuel comes from the Pacific Northwest as it always has, but some is also supplied, from time to time, to Southeast from Southcentral Alaska. The distances from Southeast to Southcentral, or from the Pacific Northwest, are about the same,

but there is a long-established and efficient transportation system from the Pacific Northwest to Southeast.

Challenging Conditions There are also rural communities supplied by air, and this is becoming more common as supplying fuel by barge becomes more difficult in some places.

That is happening because water levels in many western Alaska rivers are dropping, a result of climate change, although there are always year-to-year differences. Fuel barges can no longer navigate the Noatak River in Northwest Alaska, and reaching communities along the upper Kobuk and the upper Kuskokwim River by barge is becoming more challenging. Fuel has even been flown into McGrath, a relatively large community, because of low water conditions on the upper Kuskokwim.

Many communities have grown to depend on fuel flown by air operators like Everts Air Cargo and Lynden Air Cargo, which operate specially-equipped tanker aircraft, mainly from Kenai but also some other locations. Fuel by air is extremely costly, but there is no other choice for some communities.

What’s Up?

This year there was a mild winter and a smaller snow-pack in the hills and mountains in western Alaska, which meant that the rivers opened up earlier than usual. That is a good thing for barge operators because they can start making deliveries earlier. However, the lower snowpack levels mean spring water levels are lower than usual, which isn’t good for navigation to some inland villages.

But, there’s no imminent fuel crisis because the mild winter also meant that there is still fuel inventory in the tanks for many communities. Barge operators expect that more rain during the summer will raise water levels, allowing deliveries to be completed.

Meanwhile, there are also changes in fuel supply networks along the inland river systems. For example, small communities along the Yukon River have been traditionally supplied by barge from Nenana, on the Tanana River southwest of Fairbanks. Nenana is traditionally the head of navigation for the Tanana and Yukon River systems.

As long as the Flint Hills refinery operated at North Pole, near Fairbanks, fuel for the Yukon valley was trucked

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August 2014 | Alaska Business Monthly white globe and text

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from Fairbanks to Nenana on the Parks Highway, loaded on barges at Nenana, and shipped down the Tanana River to the Yukon.

In previous years the river freight service was operated by Yutana Barge Lines, but Crowley Maritime purchased Yutana and is now the major supplier.

Ruby Marine, a small river freight operator, also operates from Nenana and serves Yukon River communities.

Closure of the Flint Hills refinery near Fairbanks has now complicated the Interior fuel supply picture. Fuel for the Yukon shipped through Nenana will now mostly come by rail from Southcentral Alaska to Fairbanks, ironically right through Nenana (the rail tank cars pass within a few feet of the docks). In Fairbanks the fuel is reloaded on trucks and brought back to Nenana by highway, where it is reloaded again on the river barges.

This seemingly convoluted system is expensive, but it is actually more cost-effective because there are no longer large fuel storage tanks or facilities to unload fuel from tank cars at Nenana. The

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small size of the shipments do not justify building new facilities at Nenana. Small market size and poor economies of scale are a principle reason why fuel costs to rural Alaska are so high, and the complicated logistics of shipping fuel through Nenana illustrates the point.

However, there are other changes underway. Crowley is also now bringing a significant volume of fuel to lower Yukon River communities from the Bering Sea, through the mouth of the Yukon.

Navigation through the mouth of the river can be tricky, but the alternative of bring barges down the narrow, shallow Tanana River from Nenana to the Yukon can be equally tricky at times.

The communities in the lower Yukon like Emmonak, St. Mary’s, and Mountain Village have relatively large populations that can now be more efficiently supplied from the Bering Sea than Nenana. Upriver towns like Fort Yukon and Galena are still supplied from Nenana.

Ironic Situation The oddest fuel transportation arrangement, however, is the shipment of ultra-

low sulfur fuel to the North Slope from Southcentral Alaska by a combination of rail and truck.

In this situation, crude oil is shipped from the North Slope to Valdez and is refined into ultra-low sulfur diesel at the Petro Star refinery at Valdez and trucked back to the North Slope. Alternately, it is transshipped by small tanker to Nikiski, made into ultra-low sulfur diesel at Tesoro’s refinery, and shipped to the slope via rail and truck.

Previously the North Slope oil producers refined their own diesel in small topping plants on the slope for themselves and contractors. However, when the US Environmental Protection Agency required use of ultra-low sulfur diesel even on the slope, it was no longer cost-effective to make the fuel there.

This led, ironically, to the current situation where the oil producers ship crude to Valdez and truck refined products right back to the North Slope.

Recently the producing companies on the North Slope have been searching for a cost-effective alternative to this odd situation. BP has investigated using

Alaska Business Monthly | August 2014 www.akbizmag.com

compressed natural gas for vehicle fuel, for example, but found it was not costeffective because of the high gas liquids content of the raw North Slope gas.

Other options being considered include equipping trucks to operate on liquefied natural gas, or LNG, which might be available on the North Slope if a small LNG plant is built to supply Fairbanks, but the special tanks and engine conversions needed for LNG impose costs. Also, drill rigs are a big user of diesel and fueling those with LNG may not be practical.

Another idea in the mix is building a small plant using the Fischer-Tropsch chemical conversion process to convert gas to a high-quality diesel that would meet and even exceed the ultra-low sulfur specifications. Making high quality diesel from gas would not require retrofitting vehicles or heavy equipment that now use diesel.

Cost Components Why does fuel cost so much, particularly in outlying, small communities?

Crowley has said that costs of the product typically are about 62 percent of

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the final delivered cost of heating oil, as one example. Those costs more than anything are influenced by world crude oil prices markets. Distribution costs typically amount to about 29 percent of final costs. This varies because transportation costs are higher for communities farther from refineries, such as in western Alaska. More than anything, however, the lack of infrastructure, and things like weather delays, complicate the delivery of fuel and add costs. For example, some villages do not have fuel “headers” at the beach where fuel is unloaded from a barge, so a truck is used to transport the fuel from the barge to the community’s tanks. This multiple handling adds costs. Finally, overhead costs typically amount to about 9 percent. This pays for the cost of employees, utilities, environmental compliance, and many other expenses which are the normal cost of doing business.

Aside from the fuel supplier, the local distribution costs in small communities, the cost of village tank farms and pumps, also add a lot of expense because these facilities typically handle low volumes. “Fixed costs” are paid for

over fewer gallons sold, raising the pergallon cost.

The purchasing power of large customers, or customers banding together, can make a big difference, too. For example, the average diesel cost for Alaska Village Electric Cooperative, which operates small utilities in many small communities, was $4.19 a gallon in 2013. Many fuel users in remote rural communities, lacking the purchasing power of utilities like AVEC or school districts, paid twice that.

For its part, Crowley advises its customers in smaller communities to book fuel orders early to give it and other fuel companies time to plan. Building docks and beach tie-up points increase efficiency for barge operators, which lowers costs. Finally, consolidating community fuel supplies at one location increases efficiency because fuel companies don’t have to make deliveries to multiple locations.

R

Mike Bradner is publisher of the Alaska Legislative Digest.

August 2014 | Alaska Business Monthly

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OIL & GAS

Heavy Opportunity ConocoPhillips, BP plan major projects to produce more viscous oil

© BP

By Wesley Loy

BP heavy oil pilot project, Milne Point field.

I

t’s sticky, gooey, gritty. And Alaska is fortunate to have a lot of it.

It’s a kind of oil known as heavy or viscous crude. Tens of billions of barrels of this unconventional oil exist on Alaska’s North Slope.

So far, industry has not produced much heavy or viscous oil. Companies historically have focused on the Slope’s light oil, which is cheaper and easier to get out of the ground. But over the years, company experts have chiseled away at the technical and cost challenges of producing heavy and viscous oil. And the Slope’s two top producers, ConocoPhillips and BP, have some exciting plans to boost production. What’s more, a new player, Hilcorp, is about to take over as operator of a field with good viscous oil potential.

Major challenges remain, but it appears major slugs of new oil could be entering the trans-Alaska oil pipeline in coming years. That’s important for Alaska, where light oil production has declined steeply. State Senator Hollis French, himself a former oil field worker, has heard plenty of legislative presentations about progress toward unlocking the North Slope’s heavy and viscous oil riches. The oil is “hiding in plain sight,” he says, sitting in shallow pools overlap112

ping the light oil reservoirs.

Extracting the heavy and viscous oil isn’t a matter of reducing the state tax burden so much as figuring out the nuts and bolts, French believes.

“It’s just a technological challenge that will be solved,” he says. “And then look out. It’s going to be a huge, huge boom in North Slope production.”

Like Syrup and Molasses Much of the heavy and viscous oil resides in geologic formations known as West Sak, Schrader Bluff, and Ugnu.

A great deal of it exists, perhaps 30 billion barrels or more. In all likelihood, much of the oil will remain trapped forever underground. But producing even 10 percent of it, or 3 billion barrels, would be akin to discovering a monster new oil field.

North Slope oil exists in various grades, each increasingly more difficult to produce.

BP breaks it down this way: Light oil is almost like water, flowing easily. It’s found in famed Prudhoe Bay, the state’s largest oil field, at upwards of ten thousand feet deep.

Viscous oil is like maple syrup. It’s viscous, meaning resistant to flow. This oil is prevalent in the West Sak and

Alaska Business Monthly | August 2014

Schrader Bluff formations, at about five thousand feet deep.

Heavy oil is even more viscous, like molasses, much thicker than West Sak and Schrader crude. Heavy oil is found in Ugnu, the shallowest formation.

Aside from their thickness, unconventional crudes have other troublesome traits. The oil tends to be cold compared to light oil. And it often comes out of the ground mixed with sand, which is abrasive and thus harmful to production equipment.

In addition to being more expensive to produce, heavy and viscous oils have a lower market value.

But heavy and viscous oils nevertheless are highly valuable, which explains why the industry has worked for many years on techniques to overcome the production problems.

By no means is heavy and viscous oil exclusive to Alaska. Enormous deposits exist elsewhere in the world including Canada, Russia, and Venezuela.

Conoco’s West Sak Project The West Sak viscous oil reservoir generally overlaps the ConocoPhillipsoperated Kuparuk River field, which is Alaska’s second-largest oil field. www.akbizmag.com

A good bit of West Sak viscous oil already has been produced. State figures show production of about 71 million barrels so far.

On February 18, ConocoPhillips Alaska, Inc. announced it would pursue a new viscous oil development called Northeast West Sak, or NEWS. The company said the oil tax reform the Alaska Legislature passed in 2013 provided incentive for the project.

The NEWS project involves expanding Kuparuk Drill Site 1H to accommodate new wells.

The Alaska Department of Natural Resources on April 29 granted authorization to proceed with expanding the drill site, which occupies state land. The state’s approval letter says ConocoPhillips plans a 9.5-acre addition to the site, bringing the gravel pad to a final size of 26.6 acres.

Plans include eighteen new wells, including five producers and thirteen injectors. The expanded pad will have space for three additional wells at a later time, the state letter says.

The pad expansion will be completed in 2015, and drilling is expected to start in the first quarter of 2016, the state says.

First oil will come in early 2017, with estimated peak production of nine thousand barrels per day, the company says.

It’s a $450 million project that will provide around 150 jobs during construction, ConocoPhillips says.

BP’s West End Development BP Exploration (Alaska), Inc. is considering $3 billion worth of new projects under what it calls the West End Development. This work would be at the west end of the Prudhoe Bay field, where viscous oil is found.

The overall program, if field owners decide to go forward with it, would include 130 new wells targeting more than 200 million barrels of light and viscous oil.

Production could peak in 2022 at around 40,000 barrels per day, BP says.

The West End Development would involve construction of a new pad, the first in more than a decade at Prudhoe Bay. Other pads would be expanded.

In addition, infrastructure and pipelines would be upgraded. This work, known as “debottlenecking,” would allow handling of increased flows of oil, water, and natural gas. www.akbizmag.com

GCI Industrial Telecom has proven experience designing for and working in demanding environments. As experts in the field, our aim is to provide innovative full life cycle communications solutions to increase your productivity.

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We are committed to helping our customers execute, monitor, and sustain the process safety lifecycle in their facilities with proven methods and tools.

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Hilcorp’s Milne Takeover Prospects for heavy oil development seemed to take a setback—or perhaps a step forward—on April 22, when BP announced it would sell North Slope assets, including a controlling stake in the Milne Point oil field, to Hilcorp, a Houston-based independent.

Milne Point, located about twentyfive miles west of Prudhoe Bay, has been the scene of considerable heavy oil efforts in recent years, including a pilot project to produce from the Ugnu deposit. The project operated from the S Pad in the Milne Point field.

Ugnu is an enormous resource with

Map courtesy of BP

BP, as operator of the Prudhoe Bay field, was planning to proceed with certain work at Gathering Center 2 during this summer’s maintenance season. The gathering center is a major west Prudhoe processing plant that separates oil, gas, and water coming from wells.

The work will help the plant deal with increased volumes of sandy, viscous oil.

Upgrades include $43 million for installation of equipment including sand tanks and sand jets.

Map of North Slope heavy and viscous oil deposits.

an estimated 18 billion barrels of oil in place. BP says its pilot, which ended in 2013, yielded “promising results.”

BP’s asset sale is expected to close by year’s end. While Hilcorp will take over operation of Milne Point, BP is retaining a 50 percent interest in the field.

Hilcorp spokeswoman Lori Nelson, contacted in June, said the company’s development plans for Milne Point weren’t yet clear.

“There is tremendous resource opportunity at Milne Point, and Hilcorp has a

A coffee table photo book of Alaska’s North Slope oil patch.

track record of unlocking production and resources from mature fields,” BP spokeswoman Dawn Patience says. “By retaining a 50 percent interest, BP retains an interest in future success we anticipate Hilcorp will achieve with Milne Point. We believe that our respective strengths put us on a path to a future with more activity and more investment on the North Slope.” R Journalist Wesley Loy is based in Anchorage.

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2009 Liberty Project, July left Rigging cable, Dock, August, 2010 25 sealift at West above Doyon Rig August 2010 25 move to Deadhorse, next Doyon Rig

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left Pilebuck Gary Pickus, February 2009 10

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Bill Morris Advertising Account Manager Office (907) 257-2911 b_morris@akbizmag.com

Call me so we can discuss improving your marketing goals.

or call (907) 258-4704 In bookstores Spring, 2014 “If you want to really see what the industry looks like in this little-traveled and forbidding part of North America, “Arctic Oil, photographs of Alaska’s North Slope” by Judy Patrick is the best documentary you will find...”

– Kay Cashman, Publisher of Petroleum News.

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RIGHT MOVES Alaska Power Association

Crystal Enkvist has been selected as the Executive Director of Alaska Power Association and Executive Vice President of ARECA Insurance Exchange. She is a lifelong Alaskan who has served the association as its Director of Member and Public Relations for the past fourteen years. Enkvist holds an MPA in public management and BA in journalism and public communications from the University of Alaska Anchorage.

URS Alaska

Baugham

Smith

Compiled by Russ Slaten management and sociocultural impacts analysis.

Ivy Schultz joins URS as a Geographic Information Systems (GIS) Analyst with four years of experience in GIS including collecting, managing, processing, and presenting data for a variety of successful projects.

Bachelor of Arts degree in Psychology from Central Washington University.

Northrim Bank

Fairweather, LLC

Fairweather, LLC appointed Tim Cudney as the director of Deadhorse Aviation Center (DAC) at Prudhoe Bay. In addition to overseeing the operations of DAC’s hangars, passenger terminal s, and twenty-three-acre laydown yard, Cudney is responsible for managing Cudney DAC’s tenant offices, dining facility, accommodations, and equipment leasing operations, as well as coordinating the actions of Fairweather’s MedEvac staging facility.

Monta-Guevarra

Haney

Hard Rock Cafe

Gaines Schultz Dustin Baugham recently joined URS as a Project Administrator with six years of experience in administrative and management support. Baugham’s responsibilities include billing, project controls, and subcontractor compliance.

Neal Smith joins URS as an Environmental Scientist with two years of experience. Smith provides technical studies and environmental support, including National Environmental Policy Act support, Environmental Site Assessment and Marine Mammal Protection Act support, Section 404 and Section 10 permit applications, water quality studies, and discharge monitoring and compliance support with EPA and Alaska Department of Conservation water quality standards.

Edmund Gaines joins URS as a Cultural Heritage Specialist/Applied Anthropologist with fifteen years of experience in all aspects of cultural resource

Jamie Gates was named S ale s a n d M ar ket in g Manager for Hard Rock Cafe Anchorage. She oversees the Anchorage cafe’s event, group sales, and promotional efforts.

Gates has nearly twentythree years of experience in the hospitality industry.

Prior to Hard Rock, Gates Gates was the Corporate Sales Manager for Sheraton Anchorage Hotel and Spa.

Anchorage Senior Activity Center

Mary Shields was appointed as the Interim Chief Administrator of the Anchorage Senior Activity Center (ASAC).

Shields is currently Chair of the Alaska Commission on Aging and is an active member of the ASAC. Prior to her retirement, she was the General Manager Shields for Northwest Technical Services for over twenty years. Shields earned a

Monta-Carangang Downing Northrim Bank announces the promotion of four officers. Gerlie Monta-Guevarra has been promoted to Assistant Vice President, Branch Manager in Ketchikan. Monta-Guevarra has fourteen years of bank operations experience.

Catalina Haney and Fejie Monta-Carangang have both been promoted to Assistant Branch Managers in Juneau. Haney brings eighteen years of bank operations experience. Monta-Carangang started her banking career eight years ago with Northrim.

Lori Downing has been promoted to Assistant Branch Manager in Sitka. Downing began her banking career six years ago when she joined Northrim in Sitka.

APCM

Kim Butler was hired as an Associate Financial Planner for Alaska Permanent Capital Management in May. She provides technical assistance and client service support as she works towards completing her Certified Financial Planner certification. Butler is currently finishing her Master of Butler

SLED DOGS & SOFAS & MILK

OH MY!

WE’RE OFF TO RURAL ALASKA

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RIGHT MOVES Science in Financial Planning. She graduated from UAA with a Bachelor of Business Administration in Finance.

Gere Donovan Creative

Kelly McLain joined the Account Services team at the Gere Donovan Creative Anchorage office in May. Before joining, McLain was the research director and an assistant dean at the University of Alaska Anchorage. She has a a master’s degree in English and a bachelor’s McLain degree in journalism.

US Army Corps of Engineers

Captain Andrew Scott is the new commander of the 62nd Engineer Detachment (Forward Engineer Support TeamAdvance) of the US Army Corps of Engineers-Alaska District. Scott leads the small engineering field force unit to support military operations at war Scott and disaster relief missions. Scott earned a bachelor’s degree in military history from the US Military Academy at West Point and master’s degree in geological engineering from Missouri University of Science and Technology.

Alaska DNR

Longan

Masterman

Sara Longan of Anchorage and Steve Masterman of Fairbanks have been appointed directors in the Alaska Department of Natural Resources.

Longan has been appointed Director of the Office of Project Management and Permitting. She

Compiled by Russ Slaten has worked for the state more than nine years, most recently as Deputy Director of the permitting office.

Masterman has been appointed Director of the Division of Geological & Geophysical Surveys. He joined the division in 2013 as Division Operations Manager and since November served as Acting Director. He has worked for the State of Alaska for the past ten years.

Calista Corporation

Shareholder Monica James was selected as the new Chief Operating Officer for Calista Corporation in June. In the past, James s e r ve d as t h e C h i ef Financial Officer and then Vice President of business operations and administration for the Alaska Aerospace Corporation. James Her journey with Calista Corporation began at Yulista Holding as the Vice President of business strategy before becoming its President and CEO.

R&M Consultants, Inc.

R&M announces the addition of new staff members to its Anchorage office team.

Chad Weiler, PLS, joined R&M’s Land Surveying Group as a Senior Land Surveyor in February. He has more than fifteen years of experience in all facets of field and office surveying. Weiler holds a BS in Geomatics from the University of Alaska Anchorage.

Trevor Hudson joined R&M in March as a Geologist in the Earth Sciences Department. He has three years of experience in geology and holds a BS in Geology from the University of Alaska Anchorage and an AAS in General Studies from Lord Fairfax Community College.

Steven Lewis, PE, joined R&M in March as a Project Engineer in the Waterfront Engineering Group. He has more than seven years of experience in civil and waterfront engineering and holds an MS in Coastal Engineering and a BS in Civil Engineering, both from the University of Alaska Anchorage.

Justin Rich, GISP, joined R&M in March as a GIS Specialist in the GIS Group. He has five years of experience in GIS and has an MS in Geology from the University at Buffalo, The State University of New York, and a BS in Geosciences from the University of Southern Maine.

Chris Fell, LG joined R&M in April as a Senior Geologist in the Earth Sciences Department. He has ten years of experience performing environmental and geotechnical services for private and public clients. Fell has a BS in Geology from the University of Wisconsin-Eau Claire.

Josh Phares joined R&M in April as an IT Systems Administrator. He has fifteen years of experience in IT and has a strong background in user support, upgrade projects, and process improvements. Phares has an AS in Elementary Education from the University of Phoenix.

RIM Architects

Scott Bohne, AIA, NCARB, CSI, CCS, LEED AP and a Principal with RIM Architects, LLC, has passed the Certified Construction Contract Administrator exam. As a CCCA, Bohne understands the role of each construction participant, is sensitive to each participant’s expectations, Bohne and understands the effect that various project delivery methods have on construction contract administration and contractor project management.

Carlile Transportation

Ron Kieswether has been promoted to President of Carlile Transportation.

Kieswether joined Carlile last October as Chief Operating Officer.

Kieswether’s expanded role will include setting strategic direction for Carlile’s Alaska and Lower 48 business and overseeing all opera- Kieswether tions for the company.

Kieswether has put his more than thirty years’ experience in the transportation industry to work for Carlile.

Alaska Aerospace

Matt Steele joined the Alaska Aerospace Corporation as the Vice President of Business Development.

Steele has thirty-four years of experience in aerospace business development. He graduated with a BS in Physics from Kent State University in 1980 and an MBA in Technology Management from the University of Phoenix in 2004.

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INSIDE ALASKA BUSINESS

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Alaska Railroad

he Alaska Railroad is introducing all-inclusive dining for its GoldStar service beginning next summer, marking the 10th anniversary of the Railroad’s GoldStar Service. With the new all-inclusive package, GoldStar guests will be able to enjoy any of the first-class meals offered by the Alaska Railroad’s onboard menu, featuring a selection of local cuisine from Alaska seafood to reindeer sausage. The new all-inclusive offering will incorporate meals as well as beverages, both alcoholic and nonalcoholic. In addition to locavore cuisine, the Alaska Railroad will serve local brews from Alaskan Brewing Company and Denali Brewing Company.

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BP Alaska

n the North Slope, BP is deploying an Unmanned Aerial System (UAS) technology at Prudhoe Bay, marking the first time the Federal Aviation Administration has granted permission for UAS routine commercial services over land in the United States.

The UAS will be used to perform high accuracy land surveying and mapping.

This technology will help BP optimize the planning and implementation of maintenance programs for the North Slope infrastructure throughout Prudhoe Bay. Targeting maintenance activities on specific road areas will save time and address safety and reliability.

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Buckle

nchorage 5th Avenue Mall announced the grand opening of Buckle in May. The store is Alaska’s

Compiled by Russ Slaten

first and only Buckle location. Known for its unique mix of on-trend clothing, shoes, and accessories, Buckle caters to style-conscious men and women seeking to express their individuality through fashion. Buckle offers tops, footwear, and accessories from popular lifestyle labels.

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Bass Pro Shops

ass Pro Shops Outpost in Anchorage opened in July. The eightythousand-square-foot store located at 3046 Mountain View Drive has hired two hundred associates from the Anchorage area. It offers something for everyone who enjoys the outdoors, whether it’s camping, fishing, hunting, boating, and more. Bass Pro Shops’ uniquely designed, award-winning stores are often considered to be part museum, art gallery, antique store and aquarium, and centers for conservation education. Hand-painted murals wrap the store’s interior and depict familiar scenes of the region. In the archery range, a mural done by Alaskan artist, Susan Watkins, portrays the northern part of the Brooks Range and prime hunting terrain. A wall in the camping department pays homage to the Iditarod and shows a painted vintage map of the Iditarod race trails and a sled team. A mural above the aquarium features Mount McKinley, and a tribute mural to the Alaskan bush pilots is in the footwear department and depicts a float plane landing in a fishing village.

A twelve thousand-gallon freshwater aquarium is a focal point of the store and will be stocked with approximately one hundred fish native to the area, including arctic grayling, northern pike,

burbot, rainbow trout, Dolly Varden, arctic char, lake trout, and king salmon.

T

ANSEP

he Alaska Native Science and Engineering Program (ANSEP) hosted two five-day STEM Career Explorations sessions in June, benefiting more than one hundred students from across the state. ANSEP brought the students to the University of Alaska Anchorage to take part in hands-on learning exercises and discover the many opportunities available in STEM fields. Students participated in daily activities on topics such as terrestrial photogrammetry, engineering, and how to create a 3D building with geolocation.

B

BSNC

ering Straits Native Corporation (BSNC) completed an economic feasibility analysis of Port Clarence, a natural deep-water port located on the Bering Strait near the fi ft y-mile-wide expanse between Russia and Alaska in June. The analysis was completed by economic and engineering consultants familiar with arctic maritime needs and determined that development of Port Clarence would be economically feasible if development occurred in conjunction with development of Alaska’s Outer Continental Shelf. The study determined that port development can be viably achieved with private investment and that Port Clarence would be an ideal staging area for oil and gas exploration in the Chukchi and Beaufort Seas.

BSNC determined that a basic deepwater port and man-camp at Port Clar-

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

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From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services.

620B East Whitney Road I Anchorage, AK 99501 www.akbizmag.com

INSIDE ALASKA BUSINESS ence could be operational within four years of an oil and gas industry decision to pursue resource development of Alaska’s Outer Continental Shelf.

Development of Port Clarence would occur with minimal dredging, minor marine disturbance, little impact to subsistence harvests, and no required maintenance dredging. Furthermore, to support the report’s concept of private development, BSNC has been approached by numerous private entities interested in partnering in financing development of Port Clarence.

T

Alaska Air Group

he Alaska Air Group Board of Directors declared in June a two-forone stock split to be effected in the form of a stock dividend. The additional shares were set to be distributed on July 9 to shareholders of record as of June 23, 2014. The stock split increases Alaska Air Group’s outstanding shares from approximately 68 million shares to about 136 million shares. This was Alaska Air Group’s second two-for-one stock split since going public. The last stock split was in March 2012.

Alaska Communications

T

he Anchorage Glacier Pilots and Alaska Communications hosted five free baseball camps the week of June 9-13 for youth ages eight to fourteen. Anchorage Glacier Pilots players, coaches, and local volunteers taught more than 290 children hitting, pitching, catching, and fielding techniques at Mulcahy Stadium. Camp participants had the opportunity to attend any Glacier Pilots home games this season

Compiled by Russ Slaten

for free by wearing their camp T-shirt.

The Left y Van Brunt Memorial Youth Baseball & Softball Camp is also a 2014 Alaska Communications Summer of Heroes event, as it supports youth development by providing safe, healthy environments where children can learn from positive mentors and enriching experiences.

H

Holland & Knight

olland & Knight announced in June the opening of its 19th office in the United States in Anchorage. The office will initially comprise eight professionals, including partners Walter Featherly, Douglas Serdahely, Kevin Callahan, and Teresa Ridle. Holland & Knight’s Anchorage office will represent a broad range of clients in transactional, litigation, and regulatory matters. In particular, the Anchorage professionals will provide services in the following areas: corporate and corporate governance, employment law, real estate, environmental, mergers and acquisitions, taxation, government contracts, litigation, and regulatory matters. Significant clients include one of the world’s leading energy producers and various Alaska Native corporations and tribes. All of the attorneys in the new office were previously with Patton Boggs.

C

Credit Union 1

redit Union 1 announces the winners of its 27th annual Bill Countryman Scholarship program in June. This year, Credit Union 1 awarded funds to fourteen students from communities throughout Alaska, totaling $10,000 in

scholarships toward continued education. Kari Millstein, a 2014 graduate of Kodiak High School, received a $1,500 scholarship. Recent graduates Eimy Anzueto of Ketchikan High School, Eli Shayer of West Anchorage High School, Jennifer Tuttle of South Anchorage High School, and Will Dumm of Kodiak High School each received a $1,000 scholarship. Additionally, graduates Joshua Medina and Jenny Valdez of Kodiak High School and Savannah Nelson of Chugiak High School each received a $500 scholarship.

U

USTravel

STravel announced in June they are joining Corporate Travel Management’s (CTM) North American expansion plans as an acquisition effective July 1, 2014. USTravel will serve as CTM’s Alaska and Pacific Northwest division maintaining the same leadership team and staff providing service level excellence throughout the State of Alaska and Pacific Northwest. President Linda Eliason and CEO Julie Crotts will both maintain their roles in USTravel.

Leaning on his extensive travel management experience, seventeen years ago, Mark Eliason purchased USTravel and with his wife, Linda Eliason, and established the company as USTravel Alaska LLC. They built it into the largest independently owned travel management company in the Pacific Northwest through acquisitions and technology investments. Over the years, USTravel and CTM talked about combining resources so that USTravel could accelerate the growth of their business, brand, and culture. Eliason

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

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From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services.

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119

INSIDE ALASKA BUSINESS (USTravel) and Jamie Pherous (CTM) discussed the many possibilities for leveraging each other’s strengths. Upon Mark Eliason’s passing in September 2013, Linda continued discussions and is eager to continue Mark’s Legacy of growth and excellence through this acquisition.

Associated General Contractors

T

he Associated General Contractors of America joined the national Hiring Our Heroes program as part of the construction industry’s effort to add one hundred thousand veterans over the next five years. The new partnership will make it easier for construction contractors to find, recruit, and hire veterans.

The new partnership will give member firms access to job fairs and other recruiting tools operated by the US Chamber of Commerce Foundation’s Hiring Our Heroes program.

The new partnership comes at a time when two-thirds of construction firms report having a hard time finding skilled workers to fill positions. The partnership with Hiring Our Heroes will make it easier for firms to fill vacancies with highly qualified workers and will be a key part of the association’s Workforce Development Plan.

Construction firms already hire a significant number of veterans, noting that veterans are more likely to be hired in construction than non-veterans, according to federal employment data, though many firms report having a hard time figuring out how to identify soldiers, sailors, and airmen that are

Compiled by Russ Slaten

about to leave active duty and enter the private-sector workforce.

The association will begin distributing information to its members and state and local chapters about the new partnership and help recruit expanding construction firms to participate in job fairs and other hiring events organized

by Hiring Our Heroes.

R

Erickson

epsol tapped Erickson for flights to support scientific expedition in Alaska. The aviation services provider, now operating four facilities in the state, signed a contract to transport an oil, gas, and petroleum research team throughout the North Slope region.

Erickson, a leading global provider of aviation services, announced in June that the company has signed a contract with Repsol, a multinational oil and gas company, to provide helicopter transport for a scientific research expedition in Alaska’s North Slope. The North Slope is home to the Prudhoe Bay oilfield, the largest oil field and arctic drilling venture in North America.

Utilizing two of its Bell 212 helicopters, Erickson will provide daily transportation for the team of researchers and subcontractors from Deadhorse and the Prudhoe Bay area to remote areas in the region to conduct scientific research.

Scientists will perform a number of studies, including an effort to monitor ice breakup and flood and flow patterns along the Colville River. Researchers and engineers from the Michael Baker Corporation, responsible for engineering and constructing the Trans Alaska Pipeline System, are subcontractors for this work with Repsol.

Alaska operations are based in Anchorage with three smaller facilities in rural parts of the state, including Deadhorse, an oil and gas community in the north near the Arctic Ocean; Nome in the northwest; and Valdez on Prince William Sound in the southcentral region.

A

AHFC

statewide, regional, and community look at major factors affecting Alaska’s housing stock released by Alaska Housing Finance Corporation identifies severe shortcomings in statewide housing stock. The AHFC 2014 Statewide Housing Assessment provides policymakers with tools to identify housing solutions.

New for 2014, the report includes data from professional energy audits conducted on approximately 30 percent of occupied housing in Alaska. A recent abundance of energy data compiled in AHFC’s Home Energy Rating Software, combined with identification of Alaska’s unique energy challenges, led to an increased focus on those issues.

The release of the 1,400-page report authored by Cold Climate Housing Research Center in Fairbanks, includes the following highlights: More than fifteen thousand homes in Alaska are overcrowded or severely overcrowded; More than seventy-five thousand households are cost-burdened (meaning households are spending more than 30 percent of total income on housing costs); Nearly twenty thousand homes have the lowest possible energy rating, a 1 Star.

To access the executive summary, full report, or to view it by ANCSA region or census area, visit www.ahfc.us.

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• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

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620B East Whitney Road I Anchorage, AK 99501 www.akbizmag.com

AGENDA August

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CSG West & CSG National Joint Annual Conference

August 9-13—Various venues, Anchorage: The annual conference for the Council of State Governments National and West.

The conference is an opportunity to work across borders to enhance knowledge and exchange ideas through policy forums on high priority public policy issues; network; and discover Alaska’s innovations through policy tours. csg.org

Compiled By Tasha Anderson

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

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August 22—Dena’ina Center, Anchorage: Luncheon celebrating the Institute of the North’s Hickel Day of the Arctic. One of six nominees will be presented the Robert O. Anderson Sustainable Arctic Award in recognition of their long-time achievements balancing development of Arctic resources with respect for the environment and benefit to communities and peoples of the North. Contact Nils Andreassen at nandreassen@institutenorth.org or (907) 786-6324. institutenorth.org/ROA

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September

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Alaska Oil & Gas Congress

September 15-18—Anchorage: This comprehensive four day conference is the place to meet the players, forge new relationships, and get the information you need to capitalize on changes taking place in Alaska. This year is the 10th anniversary event and planning is already underway to make it a memorable and valuable experience. alaskaoilandgascongress.com

Rural Energy Conference

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

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September 29- October 1—Juneau: Events include keynote speakers and training sessions. alaskahousing-homeless.org/conference

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Alaska Coalition on Housing and Homelessness Conference

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Alaska Community Transit/ Department of Transportation Conference

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

discuss current news and events on a state, national and international level. nativefederation.org

November

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October

IEA World Congress of Epidemiology

■ 2014 Sustainable Arctic Award

Alaska Fire Conference

September 22-27—Kenai: Includes training, workshops, lectures, and a firefighter competition. facebook.com/AlaskaFireConference

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Alaska Business Monthly’s Top 49ers Luncheon

October 1—Dena’ina Center, Anchorage: Come honor the Top 49 Alaska companies, ranked by gross revenue, at our annual awards luncheon.

Contact: Melinda Schwab, 907-276-4373 accounts@akbizmag.com, akbizmag.com

■

Museums Alaska/Alaska Historical Society Joint Annual Conference

October 1-4—Various venues, Seward: The 2014 theme is “Milestones: Interpreting events that change the course of communities,” exploring the opportunities and challenges museums face in commemorating community milestones. resbayhistorical.org

■

ACS Convention

October 2-5—Hilton Anchorage, Anchorage: This annual convention is an opportunity to complete up to twenty-four CEUs over the three day event in all required course topics, as well as special events such as meet and greets and receptions. alaskachiropracticsociety.com

Alaska Travel Industry Association Convention

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

■ ■

All-Alaska Medical Conference

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

AAHPA Annual Conference

■

Alaska Chamber Annual Fall Conference & Policy Forum

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

Alaska Federation of Natives Annual Convention

October 23-25—Anchorage: Annual gathering of Alaska Native peoples to

Transcending Adversity: 2014 Alaska Child Maltreatment Conference

November 17—Hilton Anchorage, Anchorage: The annual conference of the Alaska Children’s Alliance, a nonprofit 501(c)3 dedicated to improving community responses to child maltreatment. alaska.nationalchildrensalliance.org

AMMA Annual Business Meeting

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

Annual Local Government Conference

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

RDC Annual Conference: Alaska Resources

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

ALASBO Annual Conference

December 7-10—Hotel Captain Cook, Anchorage: Annual conference of the Alaska Association of School Business Officials. alasbo.org

January 2015

■

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

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

December

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

Alaska Chapter of the American Fisheries Society Annual Meeting

Associated General Contractors of Alaska Annual Conference

■

Alaska Marine Science Symposium

January 19, 2015—Anchorage: Scientists, researchers, and students from Alaska, the Pacific Northwest, and beyond come to communicate research activities in the marine regions off Alaska. alaskamarinescience.org

Alaska Peony Growers Association Winter Conference

January 29-31—Westmark Hotel, Fairbanks: The Alaska Peony Growers Association is a membership organization comprised of commercial peony growers as well as those interested in the emerging peony industry in Alaska. alaskapeonies.org

August 2014 | Alaska Business Monthly

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ALASKA THIS MONTH

By Tasha Anderson

TRAVEL

Photo courtesy of the Kodiak Lions Club

Warm August Nights Festival

Bubba Myers, a member of Greater Cause, plays at a past Warm August Nights Festival.

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Alaska Business Monthly | August 2014

ponsored by the Kodiak Lions Club, the Warm August Nights Festival celebrates long summer nights and good music. Jerimiah “Doc” Myers, the local doctor and a member of the Kodiak Lions Club, says that for the first ten years, with the weather’s cooperation, the festival was called the Bear Country Music Festival, also known as Hot August Nights. “Then the weather went south on us, and when it went down it was forty-two degrees and blowing.”

They determined to have the festival anyway, but many of the musicians couldn’t get to the island, since most of them weren’t local, and sound and stage equipment was shorting out and malfunctioning.

“So we had to reevaluate the program,” Myers says. “Instead of Hot August Nights, we called it Warm August Nights. [And] if it was below fift y degrees, we were going to call it Tepid August Nights,” he laughs. The festival was also changed from being three days to just a Saturday night.

Now in its eighteenth year, the festival takes place at the Kodiak Fairgrounds. Admission is a minimum of either two cans of food or $5. The money is used to pay for some of the costs of the festival, but the remaining funds and all of the food are donated to two local food banks. Last year, the Warm August Night festival donated 2,400 pounds of food.

“It’s been a service project more than a fundraiser,” Myers says. “For the thousand people on our island that love music, this kind of marks summer and the center of the universe.”

This year’s festival is on August 9. The event opens at 6:30 p.m., and music starts on-state at approximately 7:30. Musical guests this year include the Seth Freeman Band, Ronnie and the Tube Screamers, Greater Cause 10 years after, and the country Jeff Freeman Band; others often step up at the last moment to play.

Kodiak.org R www.akbizmag.com

ALASKA THIS MONTH

By Russ Slaten

ENTERTAINMENT

© Chris Arend

Secret Saturdays

N

ew for 2014, the Scared Scriptless Improv troupe has begun Secret Saturdays.

Secret Saturdays take place on the third Saturday of every month.

In May, the troupe performed a teacher appreciation show.

Most importantly, Scared Scriptless Secret Saturdays are in a different format each month; it could be long-form improv, musical improv, blue show, puppet show, or something else. The troupe says, “It’s always fresh and always different. The only things we can guarantee is it will be different than our other shows and it will be awesome fun!”

“Secret Saturdays are often an opportunity to explore different forms of improv, from shorter games to special themes. And it’s a lot of fun for the audience to see the different types of improv,” says Scared Scriptless troupe member Mary Jo Mrochinski.

Scared Scriptless Improv performs at the Snow Goose Restaurant and Sleeping Lady Brewing Company on Third Avenue in downtown Anchorage. On August 16, doors will open at 7 p.m., and the show will start at 8 p.m. with an approximate running time of sixty to ninety minutes.

Scared Scriptless is known to perform some of the edgiest improv in Alaska and is one of the state’s most experienced comedy improv troupes. Since 2000, Scared Scriptless Improv has entertained sold out audiences all over Alaska.

Additionally, Scared Scriptless performs the second and fourth Saturday at the Snow Goose Restaurant and Sleeping Lady Brewing Company. Performances are a comedy powerhouse of improvised theatre that typically involves one to four characters in a rumpus three to five minute one-off scene in a fashion similar to the hit TV show “Whose Line Is It Anyway?” scaredscriptless.com R www.akbizmag.com

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August 2014 | Alaska Business Monthly

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ALASKA THIS MONTH

By Tasha Anderson

DINING

Top: The sixteen piece chocolate gift box. Right: Ingrid paints a chocolate mold.

T

hose looking for a new place to satisfy a summer sweet tooth should make a quick stop at Sweet Chalet, a new Anchorage chocolate and sweets shop located at 300 E. Dimond Boulevard, Suite 202, in the large pink shopping center.

The shop is owned and run by Ingrid, who has loved cooking since she was a young girl. “I loved to work in a kitchen but never [dreamt] I would become a chef or chocolatier in the future,” Ingrid says.

After moving to the United States in 2005, and encouraged by her husband to find work she would love, Ingrid attended the California School of Culinary Arts in Pasadena, California.

After graduation, she worked in California for nearly seven years, expanding her education at Madame Chocolate, “which was run by a well-known chocolatier Hasty Torres,” Ingrid says.

“During the period of internship in Madame Chocolate Shop, I fell in love with chocolates. From that moment on, I had a dream; my dream was to become a chocolatier.”

A dream she officially achieved in January of this year.

Stopping by to visit is well worth the time: “We provide free samples to our first time visiting customers,” Ingrid says, and all of the products are made from scratch.

The inventory of delicious confections changes often, Ingrid says. “We are [always in the process] of making a new menu for our customers.”

As the most popular item in the shop, Ingrid always keeps aurora chocolate bonbons in the case.

Sweet Chalet is happy to fill orders for corporate gifts or at events. “Place and confirm your order as soon as possible, especially during the holiday seasons,” Ingrid says, as her treats can be in high demand. sweetchaletalaska.com R

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Alaska Business Monthly | August 2014

www.akbizmag.com

Photos courtesy of Sweet Chalet

Sweet Chalet

EVENTS CALENDAR Compiled By Tasha Anderson ANCHORAGE

9

Alaska Renewable Energy Fair

This event has live music, crafts, local food, information booths, children’s activities, and workshops while educating about and promoting renewable energy in Alaska. Downtown Anchorage Delaney Park Strip, 11 a.m. to 9 p.m. alaskarenewableenergy.org

16

Dog Days of Summer Block Party

Event-goers can enjoy a Stupid Pet Tricks contest, canine-related products and service exhibits, rescue organizations demonstrations, and more.

Peratrovich Park and E Street, Noon to 4 p.m. anchoragedowntown.org

COFFMAN COVE

9-10

“By the Sea” Arts & Seafood Festival

All Alaskans are invited to participate with fine arts, crafts, music, fresh seafood, fisherman’s poetry, farmers’ market, and a beer/wine garden. Prizes raffled hourly. Downtown Coffman Cove. ketchikanarts.org

FAIRBANKS

1-9

Tanana Valley State Fair

Activities include a demolition derby, pet show, quilted wall art contest and show, livestock contests and exhibitions, live entertainment, food, and vendors. Tanana Valley State Fairgrounds. tananavalleystatefair.com

22-24

Tanana Valley Crane Festival

Annual fall crane migration celebration includes an art show, seminars, reception and membership picnic, workshops, nature walks, a crane calling contest, and a Cranes on Parade costume and puppet show. Creamer’s Field Migratory Waterfowl Refuge, various times. creamersfield.org

HAINES

28

Mardi Gras Party

The party includes costume prices, Cajun music, and refreshments. It takes place at the Fogcutter, Harbor, and Pioneer bars in the evening. haines.ak.us/events

9

GIRDWOOD

Alyeska Blueberry Mountain Arts and Music Festival

A celebration of the lush blueberry season with more than two dozen arts and crafts booths, live music and blueberry concoctions. Blueberry picking and eating is encouraged. Alyeska Resort, Noon to 8 p.m. alyeskaresort.com

30

JUNEAU

Annual Food Festival JAHC

Consumers, growers, and producers of local foods come together to encourage local sustainability through backyard gardening and small business initiatives. Nonprofits sell produce and baked goods containing locally grown or harvested ingredients. Juneau Arts & Culture Center, 9 a.m. to 2 p.m. jahc.org

1-3

KETCHIKAN

Fairbanks

Blueberry Arts Festival

Blueberry pet and doll parade; blueberry food contests; art exhibit opening; the Gigglefeet Dance Festival; adult and children’s runs; a slug race for children twelve and younger; battle of the bands; blueberry beard and moustache contest; and poetry contest. ketchikanarts.org

8/21-9/1

PALMER

Alaska State Fair

Exhibit halls of livestock, produce, arts and crafts, live music, carnival games, fresh produce, awesome treats, and enough vendors to choke a moose. Alaska State Fairgrounds alaskastatefair.org

1-2

SITKA

Sitka Seafood Festival

Celebrate wild Alaskan seafood with local and celebrity chefs, bands, fishermen, foodies, and local food vendors. Activities include fish head tossing, Alaskan-style highland games, and cooking demos. sitkaseafoodfestival.org

8-9

Homeskillet Fest

Home Skillet Records annual summer music festival takes place indoors and features an eclectic group of musicians such as Budo, Vox Mod, Hightek Lowlives, The Wool Pullers, Playbow Spaceman, Benjamin Verdoes, and others. Sea Mountain Golf Course. homeskilletfest.com R www.akbizmag.com

Anchorage

Skagway

Kenai Haines Whittier Sitka

Kodiak

Petersburg

Juneau

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August 2014 | Alaska Business Monthly

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What’s Next September in Alaska Business Monthly ALASKA NATIVE CORPORATIONS SPECIAL SECTION ■ ■ ■ ■ ■ ■ ■ ■ ■

C

M

Y

CM

MY

CY

Regional Corporations Review Aggregated Economic Impact Village Corporation Spotlights The Matriarchal Side of Leadership Alyeska Pipeline’s Alaska Native Program Native Studies in Alaska’s Higher Education Scholars and Scholarships Continue to Increase Alaska Native Regional Corporation Directory Alaska Native Village Corporation Listings

BUILDING ALASKA SPECIAL SECTION

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■ Alaska Native Corporation Construction Projects: Buildings and builders.

■ Growth in the Mat-Su Borough: Construction continues in the region.

■ Using Aerial Cranes in Construction: When these are the only way to go.

■ Rural Construction Review: Ports, boardwalks, schools, and community buildings.

FEATURE ARTICLES & COLUMNS

■ Energy: Lowering Costs in Rural Alaska: More Arctic energy solutions.

■ Environmental Services: Continuing series in Water & Wastewater: Bethel ■ Financial Services: Wealth Management for Individuals and Corporations.

■ Health & Medicine: Remote Healthcare: Special programs in village clinics.

■ Insurance: Employee Health Coverage Options: Latest news for employers.

■ Oil & Gas: Fueling Industry Operations: The energy going into the oilfields.

■ Oil & Gas: Alternative Fuels: New ways of using natural gas to make liquids.

■ Oil & Gas: Alaska Native Corporation companies in the petroleum industry.

■ Telecom & Tech: Asset Tracking in Transportation Industry: A focused look at new technology in use.

■ Transportation: Barge Services: Alaskans rely on barges for cargo needs across all industries.

■ Transportation: Snowfighters Institute helps contractors excel at snow and ice management.

■ From the Editor | Inside Alaska Business | Right Moves | Agenda | HR Matters | Alaska Trends ■ Alaska This Month & Events Calendar

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Alaska Business Monthly | August 2014

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ALASKA TRENDS

By Amy Miller

Alaska’s Energy Profile Varies Greatly by Region

Net Generation by Fuel Type

by Certified Utilities (Mwh), 2011 Hydro 20%

A

laska is well known as one of the nation’s top oil and gas producers, but some residents might be surprised to learn how greatly the sources of available energy vary by region. Costs and consumption are also strikingly different by region, reflecting variation in climate, infrastructure, and use patterns driven by price.

The “2011 Alaska Energy Statistics Report,” prepared for the Alaska Energy Authority by the Institute of Social and Economic Research at the University of Alaska Anchorage in December 2013, details these striking differences in Alaska’s energy picture by region.

In Southeast Alaska, where high annual rainfall makes hydroelectric a popular choice for local utilities, prices are low and average annual use in some communities is well above the national average. At least 69 percent of Southeast communities receive at least a portion of their electricity generated from hydroelectric capacity. Southeast residential customers pay the lowest average per-kilowatt-hour energy rates in Alaska, with some paying as little as nine cents per kilowatt hour. However, in the 31 percent of Southeast communities that rely solely on fuel oil for electricity, rates can be as high as seventy-five cents per kilowatt hour. Southeast communities with the lowest rates averaged 14,900 kilowatt hours per customer compared to the national average of 11,280.

The Railbelt region, which is defined by the Alaska Railroad’s route system from Seward and Whittier to Fairbanks, is the state’s most populous region, and not surprisingly, also the biggest consumer of energy. The region is home to 76 percent of the state’s population and uses 78 percent of the state’s energy. The main source of electricity in the region is natural gas, but this fact can be deceiving. Fairbanks residents don’t have access to natural gas, relying instead on fuel oil and coal, and

Natural Gas 58%

Oil 16%

Coal 5.7%

Source: Alaska Energy Authority, December 2013

Wind 0.3%

paying much higher rates than their southerly counterparts.

Rates within the region range from thirteen to twenty-two cents per kilowatt hour, with higher rates paid where natural gas isn’t available.

In rural areas, the reliance on fuel oil for electricity is high.

Consequently, residents of rural areas pay higher rates and also use substantially less electricity than their urban counterparts. The state’s Power Cost Equalization program provides a per-kilowatt-hour subsidy to rural residents, which helps bring down the cost, but the majority of rural residents still pay more than anywhere else in Alaska. Consumption rates in rural communities are the lowest in the state; residents of the YukonKuskokwim/Upper Tanana region averaged just 3,840 kilowatt hours per year.

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

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127

ALASKA TRENDS

Indicator

By Amy Miller

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

GENERAL Personal Income -- Alaska US $ 4thQ13 37,179 36,923 36,649 1.45% Personal Income -- United States US $ 4thQ13 14,251,060 14,173,058 14,055,505 1.39% Consumer Prices -- Anchorage 1982-1984 = 100 2nd H13 213.91 210.85 206.61 3.53% Consumer Prices -- United States 1982-1984 = 100 2nd H13 233.55 232.37 230.34 1.39% Bankruptcies Alaska Total Number Filed April 48 48 78 -38.46% Anchorage Total Number Filed April 36 22 47 -23.40% Fairbanks Total Number Filed April 8 9 19 -57.89% EMPLOYMENT Alaska Thousands April 337.12 336.92 337.02 0.03% Anchorage & Mat-Su Thousands April 188.72 189.07 187.92 0.43% Fairbanks Thousands April 43.00 42.66 43.61 -1.40% Southeast Thousands April 35.61 34.57 35.73 -0.34% Gulf Coast Thousands April 36.57 35.86 36.08 1.36% Sectorial Distribution -- Alaska Total Nonfarm Thousands April 329.3 325.5 326.4 0.89% Goods Producing

Thousands April 46.8 46.1 43.7 7.09% Services Providing Thousands April 282.5 279.4 282.7 -0.07% Mining and Logging Thousands April 17.9 17.5 17.5 2.29% Mining

Thousands April 17.4 17.2 17.1 1.75% Oil & Gas Thousands April 14.3 14.3 14.1 1.42% Construction

Thousands April 14.9 14.4 15.6 -4.49% Manufacturing

Thousands April 14.0 14.2 10.6 32.08% Seafood Processing Thousands April 9.9 10.6 6.7 47.76% Trade/Transportation/Utilities Thousands April 61.3 61.3 62.2 -1.45% Wholesale Trade Thousands April 6.5 6.4 5.9 10.17% Retail Trade

Thousands April 36.2 35.2 35.2 2.84% Food & Beverage Stores Thousands April 6.4 6.4 6.0 6.67% General Merchandise Stores Thousands April 9.9 9.7 9.8 1.02% Trans/Warehouse/Utilities Thousands April 20.4 19.7 21.1 -3.32% Air Transportation Thousands April 5.8 5.7 5.6 3.57% Information

Thousands April 6.1 6.2 6.0 1.67% Telecommunications Thousands April 4.1 4.1 3.9 5.13% Financial Activities Thousands April 11.6 11.6 13.0 -10.77% Professional & Business Svcs Thousands April 29.2 28.6 27.9 4.66% Educational & Health Services Thousands April 47.3 47.6 47.9 -1.25% Health Care Thousands April 33.5 33.9 33.5 0.00% Leisure & Hospitality Thousands April 30.3 29.9 29.5 2.71% Accommodation

Thousands April 6.2 6.0 6.7 -7.46% Food Svcs & Drinking Places Thousands April 19.7 19.5 18.8 4.79% Other Services

Thousands April 11.4 11.3 11.4 0.00% Government

Thousands April 83.5 82.9 84.8 -1.53% Federal Government Thousands April 14.7 14.6 15.1 -2.65% State Government Thousands April 27.0 26.8 26.9 0.37% State Education Thousands April 8.7 8.6 8.7 0.00% Local Government Thousands April 41.8 41.5 42.8 -2.34% Local Education Thousands April 23.9 23.6 24.1 -0.83% Tribal Government Thousands April 3.5 3.5 3.4 2.94% Labor Force Alaska Thousands April 360.60 363.57 359.73 0.24% Anchorage & Mat-Su Thousands April 199.66 201.40 198.55 0.56% Fairbanks Thousands April 45.48 45.49 46.16 -1.47% Southeast Thousands April 38.14 37.62 38.09 0.14% Gulf Coast Thousands April 39.48 39.01 38.87 1.58% Unemployment Rate Alaska Percent April 6.5 7.3 6.3 3.17% Anchorage & Mat-Su Percent April 5.5 6.1 5.4 1.85% Fairbanks Percent April 5.5 6.2 5.5 0.00% 128

Alaska Business Monthly | August 2014 www.akbizmag.com

ALASKA TRENDS

Indicator

Southeast Gulf Coast United States

By Amy Miller

Units

Period

Latest Report Period

Percent Percent Percent

April April April

6.6 7.4 5.9

Previous Report Period (revised)

8.1 8.5 6.8

Year Ago Period

6.2 7.2 7.1

Year Over Year Change

6.45% 2.78% -16.90%

PETROLEUM/MINING Crude Oil Production -- Alaska Millions of Barrels April 16.09 16.43 15.67 2.65% Natural Gas Field Production -- Alaska Billions of Cubic Ft. April 8.04 8.29 8.40 -4.28% ANS West Coast Average Spot Price $ per Barrel April 107.36 107.91 104.58 2.66% Hughes Rig Count Alaska Active Rigs April 10 13 8 25.00% United States Active Rigs April 1835 1803 1755 4.56% Gold Prices $ Per Troy Oz. April 1299.09 1336.32 1,485.49 -12.55% Silver Prices $ Per Troy Oz. April 19.71 20.74 25.20 -21.78% Zinc Prices Per Pound April 2.03 2.01 0.914 122.01% REAL ESTATE Anchorage Building Permit Valuations Total Millions of $ April 65.2 65.6 92.06 -29.17% Residential Millions of $ April 20.2 13.3 18.68 8.12% Commercial Millions of $ April 38.5 27.8 73.37 -47.53% Deeds of Trust Recorded Anchorage--Recording District Total Deeds April 746 554 1234*GeoNorth -39.55% Fairbanks--Recording District Total Deeds April 182 160 294 -38.10% VISITOR INDUSTRY Total Air Passenger Traffic -- Anchorage Thousands April 319.50 374.32 321.35 Total Air Passenger Traffic -- Fairbanks Thousands April 69.09 94.82 64.72

-0.58% 6.75%

ALASKA PERMANENT FUND Equity Millions of $ April 50789.60 50399.30 46,434.60 Assets Millions of $ April 51898.50 51109.30 47,354.60 Net Income Millions of $ April 262.50 806.10 289.4 Net Income -- Year to Date Millions of $ April 320.50 288.90 852.4 Marketable Debt Securities Millions of $ April 66.50 -17.30 89.7 Real Estate Investments Millions of $ April 69.00 13.40 55.70 Preferred and Common Stock Millions of $ April 28.30 5.00 454.4

9.38% 9.60% -9.30% -62.40% -25.86% 23.88% -93.77%

BANKING (excludes interstate branches) Total Bank Assets -- Alaska Millions of $ 1stQ14 5,477.64 5,394.16 5,121.48 Cash & Balances Due Millions of $ 1stQ14 347.62 141.17 274.72 Securities Millions of $ 1stQ14 139.05 1,753.74 135.91 Net Loans and Leases Millions of $ 1stQ14 2,517.48 2,543.77 2,404.90 Other Real Estate Owned Millions of $ 1stQ14 18.63 17.58 22.19 Total Liabilities Millions of $ 1stQ14 4,731.67 4,656.83 4,380.81 Total Bank Deposits -- Alaska Millions of $ 1stQ14 4,070.91 4,046.21 3,857.32 Noninterest-bearing deposits Millions of $ 1stQ14 1,612.83 1,623.39 1,497.80 Interest- bearing deposits Millions of $ 1stQ14 2,458.08 2,422.82 2,359.52

6.95% 26.54% 2.31% 4.68% -16.04% 8.01% 5.54% 7.68% 4.18%

FOREIGN TRADE Value of the Dollar In Japanese Yen Yen April 102.51 102.27 97.78 4.84% In Canadian Dollars Canadian $ April 1.05 1.11 1.02 2.94% In British Pounds Pounds April 0.60 0.60 0.65 -7.69% In European Monetary Unit Euro April 0.72 0.72 0.77 -6.49% In Chinese Yuan Yuan April 6.17 6.14 6.25 -1.28%

Notes: 1. Source of Anchorage Deeds of trust (GeoNorth) is cited in the data field.

2. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska

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August 2014 | Alaska Business Monthly

129

ADVERTISERS INDEX AE Solutions..........................................113 Alaska Air Cargo.................................... 37 Alaska Oil & Gas Congress ............ 100 Alaska Photobooth Company..........126 Alaska Printer’s Supply........................28 Alaska Rubber ......................................111 Alaska USA Federal Credit Union......31 Alaska USA Insurance Brokers.......... 33 American Fast Freight............................ 3 American Marine/PENCO................ 127 Arctic Branding & Apparel..................34 Arctic Office Products (Machines).. 64 Arctos.....................................................110 ASRC Energy Services......................109 Avis.................................................123, 125 Bering Air..............................................123 Bering Shai Marine LLC.......................99 Bering Straits Native Corp.................. 61 Brand Energy & Infrastructure.........115 Calista Corp..................................... 73, 79 Carlile Transportation Systems......... 91 Chris Arend Photography................ 130 City Electric Inc..................................... 41 Clarion Suites | Quality Suites ........122

130

Construction Machinery Industrial LLC......................................2 Cornerstone Advisors.......................... 19 Cruz Construction Inc..........................49 Dan Tech Services................................56 Davis Constructors & Engineers Inc. .. 30 Delta Airlines...........................................11 Donlin Gold..............................................51 EHS-Alaska.............................................83 Emerald Alaska.....................................80 Engineered Solutions Group............. 48 Explore Fairbanks.................................22 First National Bank Alaska................... 5 Florcraft Carpet One........................... 35 GCI .................................................113, 132 Global Diving & Salvage Inc...............99 Great Originals Inc.................................71 Homer Marine Trades Association.126 Island Air Express................................122 Judy Patrick Photography................. 114 Lifewater Engineering Company.......69 Little Red Services Inc...................... 105 Lynden Inc. ........................................ 9, 93 Matanuska Electric Co. (MEA)...........39

MFCP - Motion Flow Control Products, Inc..................................... 41 Microcom................................................ 57 Modern Dwellers Chocolate Lounge.........................124 MTA Communications......................... 55 Municipal Light & Power (ML&P).... 44 N C Machinery.......................................45 NANA Regional Corp...........................59 New York Life..........................................13 North Slope Telecom Inc.................... 55 North Wind Inc. ....................................71 Northern Air Cargo.................... 116, 117 Offshore Systems Inc........................101 Ouzinkie Native Corp........................126 Oxford Assaying & Refining Inc......125 Pacific Alaska Freightways.................29 Pacific Pile & Marine........118, 119, 120 Paramount Supply..............................126 Parker, Smith & Feek...........................131 Peak Oilfield Service Co. ................106 Pen Air......................................................89 Personnel Plus.....................................124 Polar Supply Co..................................... 77

Port of Anchorage................................ 53 Quality Asphalt Paving (QAP)............28 Ravn ALASKA........................................23 RIM Architects........................................17 Ritchie Brothers Auctioneers (America) Inc.....................................47 Samson Tug.............................................95 Scan Office............................................. 21 Sealaska Corp.........................................65 SeaTac Marine Services.......................95 SGS...........................................................80 Shannon and Wilson Inc.....................85 Shred Alaska...........................................67 Span Alaska Consolidators.................32 Stellar Designs Inc..............................126 Taiga Ventures........................................17 Turnagain Marine Construction.... 100 Tutka LLC.................................................69 UIC Bowhead-Crowley LLC...............97 UMIAQ.....................................................39 URS Corp.................................................79 Washington Crane & Hoist.................15 Waste Management ............................78 Yukon Equipment..................................27

Alaska Business Monthly | August 2014 www.akbizmag.com

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