Alaska Business Monthly January 2017

NON-TRADITIONAL LENDERS | OIL & GAS ACTIVITY | JUNIOR ACHIEVMENT HALL OF FAME

January 2017

Digital Edition

Alaska Can Do It! LEADERS Comment on the 2017 Economic Outlook Page 7

Greg Wolf

Executive Director

World Trade Center Anchorage (Serving all of Alaska)

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January 2017 Digital Edition TA B L E O F C O N T E N T S

DEPARTMENTS

FROM THE EDITOR ALASKA TRENDS RIGHT MOVES INSIDE ALASKA BUSINESS BUSINESS EVENTS EAT, SHOP, PLAY, STAY AD INDEX

7 30 50 52 55 56 58

ABOUT THE COVER: As we push forward into 2017 we look to World Trade Center Anchorage Executive Director Greg Wolf for an Alaskan take on an iconic symbol of determination. Read the comments of Wolf and a couple dozen others about the Alaska economy (starts on page 6).

Cover Design: David Geiger Cover Credits: Greg Wolf’s image is a composite of a photo

by Judy Patrick Photography and the Alaska Business Monthly Art Director’s imagination, with homage to J. Howard Miller’s 1942 “We Can Do It!” poster.

ARTICLES ECONOMY

6 | Alaska Economic Outlook

FINANCIAL SERVICES

16 | Non-Traditional Lenders Helping businesses start and expand around the state

By Tracy Barbour

TRANSPORTATION

32 | Ice Road to Tanana Unique method to transport cargo

By Sam Friedman

MINING

34 | Update on Mine Tailings Dam Regulation in Alaska and North America

By Charles F. Cobb, PE

TELECOM & TECHNOLOGY 36 | Cloud and Mobility Solutions

Helping Alaska businesses do more with less

By Tracy Barbour

OIL & GAS

40 | Emergency

Response Training

UAF’s Homeland Security and Emergency Management program

By Tasha Anderson

42 | Oil and Gas Industry Activity Slowing Down

Some pockets of success and optimism exist

By Julie Stricker

46 | ‘Currently, a golden age for LNG buyers,’ says global energy analyst

By Larry Persily

EMPLOYEE MANAGEMENT 48 | Should You Fire an

Employee Who’s Made a Mistake?

By Dave Marinaccio

HR MATTERS

49 | A New Paradigm It starts by listening deeply

By Kevin M. Dee

JUNIOR ACHIEVEMENT SPECIAL SECTION

20 | 30th Annual Alaska Business Hall of Fame

21 | Grace Greene

JA Alaska’s First Denali Award Recipient

22 | JA: A Solution Provider Positive results from Virtual Finance Park

28 | The Next Generation of Small Business Owners Five ideas to keep it simple

By Michael A. Branham

4

ALASKA BUSINESS HALL OF FAME LAUREATES 24 | James Udelhoven 25 | Oliver Leavitt 26 | Larry S. Cash and Barbara L. Cash

VOLUME 33, NUMBER 1 Published by Alaska Business Publishing Co. Anchorage, Alaska EDITORIAL STAFF Managing Editor Susan Harrington 257-2907 editor@akbizmag.com

Associate Editor Tasha Anderson 257-2902 tanderson@akbizmag.com Art Director David Geiger 257-2916 design@akbizmag.com Art Production Linda Shogren 257-2912 production@akbizmag.com Photo Contributor Judy Patrick BUSINESS STAFF President Billie Martin VP & General Manager Jason Martin 257-2905 jason@akbizmag.com VP Sales & Marketing Charles Bell 257-2909 cbell@akbizmag.com Advertising Account Manager Janis J. Plume 257-2917 janis@akbizmag.com Advertising Account Manager Holly Parsons 257-2910 hparsons@akbizmag.com Advertising Account Manager Christine Merki 257-2911 cmerki@akbizmag.com Accountant Ana Lavagnino 257-2901 accounts@akbizmag.com Customer Service Representative Emily Olsen 257-2914 emily@akbizmag.com 501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 | Toll Free: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2016, 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: Email query letter to editor@akbizmag.com. 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. Email specific requests to editor@akbizmag. com. Online: Alaska Business Monthly is available at www. akbizmag.com/Digital-Archives, www.thefreelibrary.com/ Alaska+Business+Monthly-p2643 and from Thomson Gale.

Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

27 | Max Hodel facebook.com/AKBusinessMonth twitter.com/AKBusinessMonth

Alaska Business Monthly | January 2017 www.akbizmag.com

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We Believe in Alaska

ECONOMY

Alaska Economic Outlook 2017

Greg Wolf

Executive Director

World Trade Center Anchorage (Serving all of Alaska)

6

www.akbizmag.com

crisis so we can move on to building Alaska in the years to come.

—Governor Bill Walker

FROM THE EDITOR

H

appy New Year! We asked leaders across Alaska for their comments on the economic outlook for 2017, and the common theme is an optimistic outlook as long as there is proper legislative action taken and diversification of the economy.

Alaska Business Monthly believes “Alaska Can Do It,” and we’re confident the business community will prosper. We begin the magazine with the 2017 Economic Outlook, which starts with an insider’s expertise, continues with comments from a couple dozen other Alaskan leaders, and ends with a view from Outside by an economist who is very familiar with Alaska.

Dave Harbour, longtime state leader, is someone who knows Alaska and the workings of government, industry, and the economy inside and out. Harbour is a former chairman of the Regulatory Commission of Alaska and director of external affairs for ARCO, the Arctic Gas project, and AGDC. He is former Chairman of the Anchorage Chamber of Commerce, Alaska Council on

2017 Economic Outlook: ‘Bright, if….’

Back in spring, 2012, my Alaska Business Monthly column warned against that generation stealing from the next. I opined that, “Alaska has evolved into a state so blinded by its own greed and constrained by entitlement constituencies that rational, political decision-making is nearly impossible.”

Way back, on December 13, 1980, Alaska’s business and government leaders assembled to warn against overspending and excessive reliance on volatile oil tax revenue (i.e. “The Challenge of Plenty”).

In the early 1990s, Dr. Scott Goldsmith reported on how Alaska could create an economic “safe landing.” Year by year, the Institute of Social and Economic Research has shown lawmakers how to create a sustainable budget.

Most politicians have ignored these warnings.

Result: the burden of irresponsible deficit spending and debt—both in Alaska and nationally—unfairly passes to the backs of our children.

Alaskan private sector employees by the thousands have been laid off in the past year as government workers received pay increases. North Slope production is no longer increasing as it was. Some politicians continue demanding more taxes while demonizing major taxpayers. Few significant government operating costs are getting chopped.

Is Statehood Jeopardized?

We believe Alaska’s economic outlook for the 2017-18 fiscal year is very bright 1) if OPEC efforts to increase oil prices are www.akbizmag.com

Economic Education, and Common Sense for Alaska. A former Army infantry officer, he was also president of the American Bald Eagle Foundation and the Alaska Press Club. Harbour is NARUC Commissioner Emeritus and Chairman Emeritus of the Alaska Oil & Gas Congress. He served on the Energy Transition Team for Governor Sean Parnell and on the Energy Task Force for Mayor Dan Sullivan. Harbour is publisher of northerngaspipelines.com and a former publisher of Alaska Business Monthly. He starts off with a little history lesson.

We hope readers will find all the comments insightful, interesting, and helpful. Enjoy reading the 2017 Economic Outlook as well as the rest of the January issue of Alaska Business Monthly.

Susan Harrington Managing Editor

effective; 2) if the Legislature and governor act decisively to cut the cost of government; 3) if officials don’t seek to keep government whole at the expense of the private sector; and 4) if politicians can begin appreciating and not demonizing the state’s largest investors while adopting a new credo, “In Alaska, a deal is a deal.”

If such corrective action doesn’t happen in the next two fiscal years, we will bequeath to our children an impossible debt burden and a dysfunctional state. The blame game will become intense and solve nothing. All will suffer, especially rural Alaska.

Alaskan pioneers created a state to escape territorial status in 1959. Alaska’s imprudent financial managers increasingly jeopardize statehood and expose citizens to a new era of reliance on federal government funding and oversight.

—Dave Harbour Publisher Northern Gas Pipelines

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laska’s future is bright with opportunity; however, we must address our fiscal challenges in order to reap those benefits. With a $3.4 billion budget deficit and rapidly diminishing savings, it is critical that lawmakers work together this session to pass a complete fiscal plan and bring economic stability back to our state. This will require us to implement a combination of cuts, new revenue, and a restructuring of our financial assets to close the hole in our budget. My administration is committed to working with the Legislature to fix Alaska’s fiscal

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uneau’s economic outlook for 2017 is positive/stable. Industries that bring outside money into Juneau’s economy are strong. Tourism is expected to grow by about 4 percent next year, as the number of cruise passengers visiting Juneau continues to grow. Juneau’s mines continue to have a steady workforce and strong production. We anticipate the same level of fish harvesting activity as 2016 and the potential for more products to be processed in and around Juneau. Juneau continues to see a vibrant arts and culture economy supporting jobs. Construction sector seems poised for a steady year in 2017 with continued opportunities for road spending and municipal infrastructure investments. Juneau will be susceptible to potential government induced economic crisis if state government is subjected to further substantial cuts and deteriorated business confidence if no long-term fiscal plan emerges. The forecast for 2017, therefore, is mostly sunny with a threat of severe rain.

—Brian Holst Juneau Economic Development Council

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ositive developments at the federal level should continue to be a bright spot for Alaska’s economy in 2017. A predictable transportation program and military construction, especially in the Interior, will create new jobs and deliver a much needed economic boost. Furthermore, preparation for the F-35s and other assets should be encouraging for the housing and consumer sectors. New leadership at key federal agencies and growing prospects for regulatory reform are also positive signs for Alaska’s business community and resource development sector, particularly our efforts to refill the trans-Alaska Pipeline System. I also remain optimistic about the opportunities for economic development in the Arctic, which will benefit the communities in the region, as well as our state as a whole.

—Senator Lisa Murkowski

T

he state’s current fiscal dilemma stems in large part to an over reliance on one industry—really, one single commodity— on which to fund our government and its operations. Considering the cyclical, and occasionally volatile, nature of commodity prices, this really isn’t a prudent model for stability and sustainability. When it’s good, it’s really good, and when it’s bad, it’s really bad! What’s needed is greater diversification of our economy, in terms of business activity, and also diversification of our revenue base, in terms of additional tax payers beyond a handful of oil producers. Exports, and other January 2017 | Alaska Business Monthly

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international business, can play a role in fostering such diversification. Already a $5 billion annual contributor to the Alaska economy, there is room for considerable more growth leading to a more balanced economy.

—Greg Wolf Executive Director World Trade Center Anchorage

W

e believe in Alaska. Our economy is one of ups and downs, based on a foundation that hasn’t changed even though circumstances worldwide have changed dramatically. Alaska’s competitive advantages, the principal one being our state’s abundance of certain natural resources, will continue to drive our state economy. While the past year has seen reduced investments in oil and gas exploration and development, bright spots in our state’s economy include substantial levels of national defense spending, a strong tourism season, and a growing healthcare sector. Alaskans are no strangers to adverse economic events. With a balanced, sustainable state budget that changes past patterns of government spending and savings, we believe Alaskans will continue to learn from past economic challenges to achieve success.

—Betsy Lawer Chair and President First National Bank Alaska

S

ettling budgets will inspire confidence.

Having the election behind us will hopefully remove a lot of uncertainty that we believe has been affecting both personal and business finances. While the new administration transitions, we hope that more certainty will help spur business expansion and lend to improved consumer confidence. Closer to home, it’s imperative that we secure a long-term solution to the state budget deficit in order for Alaskans to feel truly confident and more comfortable regarding personal spending and overall consumer confidence.

—Lori McCaffrey KeyBank Alaska Market President

T

he performance of the Alaska economy in 2017 will be impacted by a number of key variables. There will be a short-term drag on the economy if the Legislature is able to create a sustainable budget by making difficult decisions on reduced spending levels, increased taxes, and changes to the Permanent Fund. However, a budget solution will have long-run positive impacts through a return of business confidence and a stabilized climate for private capital investment. The change in federal administration in 2017 has the potential to positively impact the government regulation of natural resource development in Alaska.

The energy sector is starting to stabilize as the worst of falling oil prices and related cuts to employment and spending are likely behind us. Strong growth in tourism and 8

Alaska Business Monthly | January 2017 www.akbizmag.com

“BIA’s knowledge of heavy construction logistics & risk management in southeast Alaska has been the best partner our business could ask for. BIA is an Alaskan company who understands the complexities of Alaska construction.” ~ Jacqueline DuRette, Owner DuRette Construction Co. Inc.

healthcare are also providing opportunities in the Alaska economy.

—Mark Edwards Northrim Bank SVP, Senior Credit Officer & Bank Economist

S

triving in the New Year. The coming year offers more questions than opportunities.

State budgetary issues, federal spending, taxes, and regulations all are vexing issues facing Alaskans. Rising unemployment and flat oil prices will hinder economic growth. The financial industry will continue to struggle with stifling regulations that threaten not only our operations but our ability to serve members, customers, and communities. However, in the financial industry we are also optimists for—and drivers of—future growth. Alaskans do not sit pat, and we look forward to working with Alaskans to build a state we’re all proud to call home.

—Bob Teachworth Denali Federal Credit Union

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fter seeing growth in both our loans and deposits through late 2016, we are beginning to see a softening in loan demand due to the decline in oil prices and the state budget situation. That being said, there are some bright spots in Alaska’s economy.

Among those are the state’s tourism and healthcare industries that continue to see steady employment and economic growth.

The incoming GOP leadership at the federal level also appears to bode well for resource development opportunities and small businesses in Alaska. Wells Fargo remains firmly committed to helping fuel Alaska’s economy as we help our customers navigate potential economic headwinds.

—Joe Everhart Business Banking Division Manager for Alaska, Oregon and Washington Wells Fargo

I

n today’s economic reality of lower oil prices for longer our state is at a crossroads, given the budget deficit.

Coming together and establishing principles built on the desired future for Alaska is essential, as well as keeping an open dialogue to understand the ramifications of choices. Alaska can have a thriving and competitive oil and gas industry. That thriving industry will be the heart of the economic engine of the state, and just like an engine we can kill it and be stuck or maintain it and it will take us places. I hope that the future of Alaska includes a thriving oil and gas industry, where Alaska achieves more oil flowing down TAPS through new developments, more development, and years of life in our backbone fields, including Prudhoe Bay. —Janet Weiss President BP Alaska

C

onocoPhillips Alaska (COPA) expects an active year on the North Slope in 2017. The company is beginning 10

Alaska Business Monthly | January 2017 www.akbizmag.com

PEAK TRUST COMPANY

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ast June, Alaska Trust Company rebranded itself as Peak Trust Company, undergoing perhaps the most significant change in its 20-year history.

The firm—which also has a new Midtown Anchorage location—had added an office in Nevada, warranting a different name with a national focus. But the company will always be headquartered where its roots were established in 1997.

“We always will be an Alaskan company,” says Vice President and Trust Officer Matt Blattmachr.

Clients can still enjoy the stability of being served by the company’s long-standing team of experts. “It’s the same flexibility and service that people have come to know,” Blattmachr says.

Peak Trust Company offers an array of trust and investment management solutions, serving clients with wealth ranging from $250,000 to more than $1 billion. It provides access to a sophisticated investment platform, as well as an innovative, integrated approach to wealth management. Along with its well-established history in Alaska, the company gives clients the benefit of its considerable expertise and customer-focused service. “It’s really our flexibility and the ability for us to come up with customized solutions,” he says.

© Judy Patrick Photography

Elevated Trust and Wealth Management Solutions

A POSITIVE IMPACT Peak Trust Company is focused on keeping Alaska at the forefront of the trust and wealth management industries. The trust industry helps generate insurance premiums, which are the second-largest contributor to Alaska’s general fund. “There have been tens of millions of dollars contributed to the state over the years,” Blattmachr says. “At any given time, we have an excess of $60 million on deposit with Alaska’s banking institutions. We have the jobs we have created at our companies, as well as the impact to attorneys, CPAs, and life insurance businesses that specialize in this area.”

However, Blattmachr is concerned about how the state will resolve its current economic woes. “It’s not that we are opposed to a state income tax,” he says. “But if we have a blanket state income tax, this business will go away almost overnight.”

Because Alaska has good trust and estate laws, there are many nonresidents who come to do business in Alaska, Blattmachr explains. The pure Alaska business will most likely stay in the state, but the state will lose the outside business. “There’s not enough business from Alaskans to keep this industry in its current form,” he says.

–

Pai d

Adve r tis e me n t

–

BEING SMART AND CREATIVE Blattmachr also stresses that Alaska needs to be creative in addressing its economic shortfall if an income tax is adopted. For example, Delaware has an income tax “carve-out” for nonresidents that encourages business to be done in Delaware. “We want to make sure we are smart in trying to close that gap, but keep pieces that are vibrant in the economy still going,” he says.

The issue really is about Alaska. The founders of Peak Trust Company were architects of the Alaska Trust Act, which allowed for progressive planning tactics.

Certain provisions were drafted into the Act, such as a required capital deposit, that were designed to bring business and assets to Alaska. “The founders themselves did this to be in Alaska and for Alaskans,” he says. “They could have gone on to any other state. They wanted it to stay in Alaska.”

Matt Blattmachr, Vice President and Trust Officer 3000 A Street, Suite 200 Anchorage, Alaska 99503 (907) 278-6775, Ext. 711 peaktrust.com

construction this winter on Greater Mooses Tooth 1 (GMT1) in NPRA. The cost to develop is about $900 million gross, and estimated peak gross production is about 30,000 BOPD. The project will support six hundred to seven hundred jobs during this upcoming winter construction season.

Permitting is also underway for GMT2, which represents more than $1 billion in gross investment.

COPA has restarted the viscous oil expansion project in Kuparuk called 1H NEWS and expects first oil in 2018. The company also has an active exploration program, with two wells drilled in 2014, seismic acquired in 2015, three wells in 2016 in NPRA, and one planned for 2017.

Most recently, COPA announced a contract with Doyon Drilling for an extended reach drilling rig. Expected delivery is 2020, and the rig will initially target development of Fjord West, a field northwest of the main Alpine pad.

With the current tax structure, Alaska remains competitive within the global COP portfolio, and the company still has opportunities in Alaska for new investment and growth.

—Scott Jepsen VP of External Affairs and Transportation, ConocoPhillips Alaska

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ontinued investment in responsible resource development is essential

“A healthy and vibrant community

attracts innovative businesses and highly-skilled workers. GCI is partnering with United Way to provide resources for families and neighborhoods to keep our community strong.

When a community is strong, our economy will thrive.”

to a strong Alaska economy. With an unsustainable state budget, focusing on growing the private sector is a vital component to help solve our fiscal crisis.

In 2017, Alaska will continue to depend on the oil and gas industry for revenue, will see a bright star in the tourism industry, will anticipate increased investment in mining, will maintain a healthy and robust fishing industry, and must push for fair management of the forestry industry.

Growing these industries will depend on fiscal and permitting stability, as well as investment from around the world.

Imagine what we can accomplish if we send the right message to investors in 2017: Alaska is open for business in all resource development sectors.

—Marleanna Hall Executive Director Resource Development Council for Alaska, Inc.

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hile Alaska is currently facing tough economic times, we will get through it. However, we must diversify our state’s economy and prepare ourselves to weather challenges down the road. We must focus on opportunities for success such as new oil and gas developments, tourism, fisheries, healthcare, transportation, and federal infrastructure spending. I believe a key component for long-term economic growth and success is making strong investments in our university system. We must look forward and come together if we want to build a strong economy to last.

—Mark Begich Former US Senator President and CEO Northern Compass Group

C Martin Cary SR VP & GM GCI Business

When we improve the lives of those in need, we lift up everyone in the community with a more educated workforce, better economy and safer city.

Creating a thriving community in economically challenging times takes commitment, coordination and engagement.

TRANSFORMATION TAKES A TEAM.

JOIN US! AND MAKE A DIFFERENCE. 12

ontinued uncertainty. The economic outlook for 2017 looks similar to the one we experienced in 2016. By the year’s end, employment losses could be about 2 percent of the Alaska economy.

The three most affected sectors were state government, natural resources, and professional and business services.

The consequences of lower oil prices and government cuts have also spread to other private industry sectors but to a lesser extent. In 2017, we anticipate weakness to remain in the oil and gas industry as well as construction and professional business services. Additionally, we expect vulnerability in local government jobs due to their dependence on the state’s budget.

The continued growth of the healthcare sector coupled with the strength of the national economy, which affects tourism, should offset some of the losses described above but will not be enough to result in positive economic growth.

—Mouhcine Guettabi Assistant Professor of Economics Institute of Social and Economic Research

N

o excuses. Alaska’s oil industry has weathered the worst. Housing prices have remained solid. More North Slope

Alaska Business Monthly | January 2017 www.akbizmag.com

exploration and development activity may follow Caelus’ recent oil discovery. Lower 48 consumer spending has been growing, tourism numbers should remain strong. And Alaska Native Corporations continue to play a vital diversifying role in Alaska’s economy by returning their Outside profits to Alaska.

Alaska Native Corporations are the unsung economic heroes, holding twenty-one spots on the Alaska Business Monthly’s Top 49er list, making up 69 percent of the Alaska jobs generated, 86 percent of the total jobs created, and 75 percent of the income produced by Alaska’s top companies. Now, if only Alaska’s Legislature could get its act together.

—Bob Poe Term Assistant Professor UAA College of Business and Public Policy

OUR PEOPLE. OUR REGION. OUR DECISION.

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ANA is preparing for 2017 to be another year of low oil prices, along with the ramifications the industry downturn will continue to have on Alaska’s economy. Federal contracting will continue to be a bright spot, along with the Red Dog Mine due to rebounding base metal prices and plans for solid mine production.

As an Alaska-based company we look forward to participating in discussions at the State level of how to create a stable and sustainable fiscal environment that continues to attract the investment dollars that are so critical to Alaska’s ongoing prosperity.

—Wayne Westlake President and CEO, NANA

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htna is growing and expects expanded Alaska revenues in 2017. We do not expect any significant impacts on our overall business performance in 2017 from the State of Alaska’s budget shortfall. In, fact we are planning on expanding our revenues in Alaska.

Ahtna’s Alaska business grew 40 percent in 2015 compared to 2014 and we expect our Alaska revenues in 2016 and 2017 to be even higher. We will be looking for strategic partners in 2017 to help build Alaska and create opportunities for Alaskans. We see great opportunities in our focus areas for 2017, which include carbon credits, resource development, oil and gas, tourism, government contracting, and construction.

—Ahtna, Incorporated

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educed spending by state and local government will continue to keep the building sector down. The inability to achieve a long-term fiscal plan and other government related factors has resulted in uncertainty and a lack of confidence, keeping private investment sitting on the sidelines, further impacting the building sector. Notwithstanding the cancellation of state legacy projects, horizontal construction will remain fairly stable but very competitive due to federal highway spending. More stability in construction markets will result from significant federal investment www.akbizmag.com

“WE NEED JOBS” “NO ARCTIC DEVELOPMENT”

“HANDS OFF THE ARCTIC”

Decisions affecting Arctic Alaska must remain in the hands of those who call it home.

OUR VOICE. OUR VISION.

ARCTIC SLOPE NATIVE ASSOCIATION ARCTIC SLOPE REGIONAL CORPORATION ATQASUK CORPORATION CITY OF ANAKTUVUK PASS CITY OF ATQASUK CITY OF BARROW CITY OF KAKTOVIK CITY OF POINT HOPE CITY OF WAINWRIGHT ILISAGVIK COLLEGE

KAKTOVIK IÑUPIAT CORPORATION NATIVE VILLAGE OF ATQASUK NATIVE VILLAGE OF POINT HOPE NATIVE VILLAGE OF POINT LAY NORTH SLOPE BOROUGH NUNAMIUT CORPORATION OLGOONIK CORPORATION TIKIGAQ CORPORATION UKPEAGVIK IÑUPIAT CORPORATION WAINWRIGHT TRIBAL COUNCIL

January 2017 | Alaska Business Monthly

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in Defense spending on Interior Alaska projects.

—John MacKinnon Executive Director Associated General Contractors of Alaska

F

or the Alaska mining industry, 2016 was a year of transition from the bottom of a five-year industry low to the first steps in what appears to be an industry-wide upswing. For 2017 this transition spells better margins for producers and more robust economics for development projects looking to move up the value chain. The coming year also looks to hold more promise for explorers with several miningrelated leading economic indicators showing uptrends that usually translate into more aggressive mineral exploration in Alaska.

—Curtis J. Freeman CPG #6901 Avalon Development Corporation

2

017: Challenges always create opportunities. In a state that typically equates its economy with the energy sector, it’s important to remember we have varied factors that drive our economy. Healthcare has expanded, tourism seasons are strong, federal investment in the military continues, Alaska Native corporations are more diversified—all bringing different revenue streams to our state. While we face uncertainties with low oil prices and state fiscal policy, therein also lies opportunities

for businesses to find efficiencies and new operating models through technology.

Additionally, long underserved regions in our state are getting new broadband access.

With our focus on broadband and managed IT services, we see continued opportunities to bring customers value and fuel Alaska Communications’ growth.

—Anand Vadapalli President and CEO Alaska Communications

T

he clean energy sector continues to grow quickly worldwide. Wind and solar are already competitive with coal and natural gas in many markets. In Alaska, building owners continue to retrofit inefficient building stock, investments that can have very short payback periods. Rural utilities are exploring options to finance renewable infrastructure without state grants. The current effort in Alaska’s Railbelt to consolidate grid operations and establish a uniform transmission tariff will impact the private sector’s ability to invest in renewable infrastructure and compete against natural gas. The Railbelt market is also influenced by the mid- and long-term uncertainty associated with natural gas prices in Cook Inlet and whether the state will continue to subsidize gas production.

—Chris Rose Executive Director Renewable Energy Alaska Project

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rucking has felt the impact of low oil prices and the resulting slowdown in the oil patch. The consumer goods side is slowing down, and most of our members are expecting 2017 to be slower in both sectors than 2016 and are hopeful that solutions can be found to restore confidence in Alaska’s future business climate. We are cautiously optimistic that the governor and the Legislature can come together to resolve our budget crisis.

—Aves Thompson Executive Director Alaska Trucking Association

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laska failed to catch the economic growth wave that brought the United States economy up to full employment. The news for 2017 could be very good or very bad or even a mixture of very good for some sectors, very bad for others. The Trump administration might open up mining and drilling and pipeline construction, but don’t expect it to happen right away.

On the downside, trade wars could wallop Alaska’s fishing and transportation sectors.

The future is more likely to change than continue the state’s flat economy, but the change could go in either direction.

—Dr. Bill Conerly Economist and Business Consultant Conerly Consulting LLC R

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FINANCIAL SERVICES

Non-Traditional Lenders

Photos Courtesy of Glennallen Hardware & Lumber

Owners Ernie and Rhonda Christian in front of their Glennallen True Value Hardware store.

Helping businesses start and expand around the state

By Tracy Barbour

E

rnie Christian had always dreamed of owning a business. Last year, the Glennallen resident was finally able to realize that dream, thanks to about $500,000 worth of financing through the Small Business Administration (SBA) 7(a) Loan Program.

Christian was able to purchase the land, building, and business assets of Glennallen Building Supply. He also expanded the store several thousand square feet, boosting sales space and inventory. The business—officially renamed Glennallen Hardware & Lumber LLC—operates as Glennallen True Value Hardware.

Christian’s dream purchase was facilitated

by National Cooperative Bank (NCB), a preferred vendor of True Value. NCB turned out to be the ideal partner for Christian. “They are familiar with how the True Value stores operate and perform,” Christian says. “We only had to submit [our information] once. They were easy to work with.”

That was a major relief for Christian, who previously had spent five frustrating months

16

The Glennallen True Value Hardware during construction of the expansion project.

trying to secure financing through a different lender. After resubmitting his information several times and trying to work through multiple levels of management, he switched to NCB. “We got the loan closed in a matter of three or four weeks,” he says. “I was happy with the process.”

Christian’s experience with NCB is a prime example of how non-traditional lenders are helping Alaska businesses finance the start and growth of their operations.

National Cooperative Bank NCB provides a full spectrum of financial products and services to help businesses streamline their banking operation and consolidate accounts. Chartered by Congress in 1978, NCB was privatized in 1981 as a cooperatively-owned financial institution. It is currently owned by more than 3,100 customer/owners.

NCB was created to address the financial needs of a traditionally underserved market: cooperative-owned organizations that operate for the benefit of their members—not outside investors. NCB serves a variety of cooperatives and like-minded, socially-responsible organizations, with a strong focus on housing, healthcare, hardware, food, and renewable energy.

According to Earl Carson, vice president of NCB Alaska, the bank is uniquely qualified to serve its target market. “As a cooperative organization, NCB understands member-

owned organizations and small businesses and can act quickly in providing banking solutions to meet their needs,” Carson says.

NCB is a full-service bank that offers term loans, real estate loans, working capital lines of credit, and SBA loans for business owners looking to expand, renovate, or refinance.

The bank also has an online banking and cash management platform to streamline banking operations and consolidate accounts regardless of the geographic location.

As a preferred SBA lender, NCB has the ability to utilize the SBA’s 7(a) and Certified Development Company (CDC)/504 loan programs for new businesses. In addition to facilitating SBA loans, NCB has a long history of working with the loan guaranty programs of the US Department of Agriculture, the Bureau of Indian Affairs, and AIDEA (Alaska Industrial Development and Export Authority).

NCB works with customers and strategic partners to provide novel solutions to practical challenges. “With over thirty-eight years of expertise in niche sectors, we understand the challenges our customers face and work with them to find solutions,” Carson says.

Alaska Commercial Fishing & Agriculture Bank The Alaska Commercial Fishing & Agriculture Bank, or CFAB, has been financing businesses

Alaska Business Monthly | January 2017 www.akbizmag.com

in Alaska since 1980. Since the bank lends primarily to the commercial fishing industry, the bulk of its financing involves fishing vessels, limited entry permits, individual fishing quotas, and supplying working capital. CFAB has also financed its share of fishing lodges, charter boats, agriculture/farms, and fish processing facilities. “We mostly do small mom-and-pop type businesses, ones with an established cash flow—but not necessarily from the business they are starting,” says President Lea Klingert.

As a recent example, CFAB lent Alaska Sea Otter Sound Lodge $350,000 to construct a floating fishing lodge in Southeast. The small, family-owned business had been operating for seventeen years and needed to revamp its aging facilities. Owners Tim and Murtie Comer matched the loan to come up with $700,000 to build a 5,500-square-foot lodge. The lodge opened in June, boasting four cabins surrounded by scenic views and an abundance of wildlife.

“The folks at CFAB were wonderful people to work with,” says Tim Comer. “It was a very pleasant experience. The whole process went very well.”

Like many lenders, CFAB has access to and will on occasion use SBA, USDA, AIDEA, and Bureau of Indian Affairs guaranties on its loans. However, Klingert says, the bank also applies a level of creativity that generally comes from thoroughly analyzing requests and working with borrowers to determine the best loan or path to meet their needs. It also structures payments to coincide with borrowers’ income stream. “Since we primarily lend

“Since we primarily lend to the commercial fishing industry, a lot of our loans have an annual payment, which is unique in commercial lending.”

—Lea Klingert President Alaska Commercial Fishing & Agriculture Bank

to the commercial fishing industry, a lot of our loans have an annual payment, which is unique in commercial lending,” she says.

CFAB’s unique structure as a private, member-owned cooperative enables it to take a versatile stance with borrowers. The bank operates under and is the sole subject of a special Alaska statute (AS 44.81), so it is not subject to typical banking or coop codes. “This allows CFAB some flexibility in how it structures its loans; however, CFAB is a cash flow lender, which means we rely on the historical earnings of an individual or business to determine repayment ability when deciding whether or not to make a loan,” Klingert says.

She adds: “CFAB’s structure also allows us more flexibility when working with a borrower, should they hit rough times and be unable to meet their obligation with CFAB. This is probably one of our best attributes but not really one that most people will truly appreciate or understand until it happens to them. We generally don’t think about those things when

seeking a lender or starting a business, but it is a reality, especially for those businesses involved in the industries CFAB serves.”

Would-be borrowers should take the time to do their research and talk to multiple lenders, Klingert advises. “Having the right type of financing that is structured correctly is critical to your success, as is having your lender understand your business,” she says.

Evergreen Business Capital Evergreen Business Capital is a private, nonprofit organization authorized by the US SBA as a certified development company. Since 1998, Evergreen has helped build economic success in rural and underserved markets by providing flexible lending solutions to an array of industries owned by diverse Alaskans, including veterans and minorities, according to Programs Loan Officer Teo Ransum.

“Evergreen is Alaska’s only authorized SBA Community Advantage Loan Program lender, offering flexible loans for small financing

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January 2017 | Alaska Business Monthly

17

projects, including start-ups,” Ransum says.

“Loans are up to $250,000, with terms as long as ten years. As a nonprofit lender, we maintain competitive interest rates.”

With one Alaska office in Palmer, Evergreen also facilitates SBA 504 loans. “The SBA 504 Loan Program helps borrowers— whether they be an existing business or in some cases a new startup—purchase large commercial real estate properties by participating with local lenders to provide the capital for the purchase,” he says.

As a lender, Evergreen also takes a creative approach to helping its customers. It provides technical assistance and directs borrowers to organizations like the Alaska Small Business Development Center and Alaska SCORE for more in-depth assistance. “We can work with businesses on a long-term basis before and after a loan is made to help them through the loan application process and advise them for success,” Ransum says.

Evergreen’s financing solutions are different from those of a conventional bank in a number of ways. When it comes to lending to new businesses, for example, the risk tolerance may be higher with the Community Advantage Loan Program than with products from a traditional bank, Ransum says.

Additionally, banks may require borrowers to contribute more in equity—30 percent or more compared to 10 to 20 percent for Evergreen. Also, traditional banks may prefer that borrowers be in business for more than three years and offer up some sort of collateral.

18

“Instead of being in competition with traditional banks, we focus on those prebankable loan projects and work with small business owners to eventually move on to having a lending relationship with a local bank.”

—Teo Ransum Programs Loan Officer Evergreen Business Capital

However, Evergreen is striving to fill a niche, rather than contend with conventional banks. “Instead of being in competition with traditional banks, we focus on those prebankable loan projects and work with small business owners to eventually move on to having a lending relationship with a local bank,” Ransum says.

When applying for a loan for a start-up business, borrowers should provide a detailed business plan as well as projections of its assumed earnings, Ransum says. For businesses in oper-

ation two years or more, Evergreen will require tax returns, along with the most current balance sheet and profit and loss statement. A personal financial statement and past tax returns of the individual owners will also be reviewed.

“We would certainly consider the value of business property such as real estate and equipment to collateralize the loan,” Ransum says. “With the understanding that new businesses might not yet have those types of assets, a careful assessment of the business’ and borrower’s cash flow is made. In some cases, we would possibly collateralize personal assets. A personal guarantee is always required.”

Alaska Growth Capital Bidco Inc. Alaska Growth Capital (AGC) was founded in 1997 as the state’s first Business and Industrial Development Corporation. It is a wholly-owned subsidiary of Arctic Slope Regional Corporation, the state’s largest Alaska Native corporation organized under the 1971 Alaska Native Claims Settlement Act. AGC offers SBA and USDA term loans for the start up or expansion of a business operation. The loan purpose can encompass the initial purchase of inventory, all types of equipment, leasehold improvements, initial working capital, and any other start-up or soft costs. “In a new venture, we usually try and take the entire project cost into consideration and finance a percentage of that project,” says Vice President of Lending Jesse Janssen.

Currently, AGC provides financing for a very diverse portfolio of companies, particu-

Alaska Business Monthly | January 2017 www.akbizmag.com

“As we are able to mitigate risk with these loan guarantees, we can, in some cases, take more risk than a traditional lender.”

—Jesse Janssen Vice President of Lending Alaska Growth Capital Bidco Inc.

larly startups in the retail, restaurant, child/ adult day care, and fitness industries. AGC differs in its financing options because it often utilizes USDA and SBA guaranteed loan programs. This means it will obtain a partial “guarantee” of the loan amount, which can benefit borrowers. “As we are able to mitigate risk with these loan guarantees, we can, in some cases, take more risk than a traditional lender,” Janssen says. “Also, AGC may differ in that we can typically offer longer terms, which will allow the business to open with a lower monthly debt load while it’s trying to grow.”

In addition, AGC can take a more flexible approach to the collateral package. “While some lenders have hard advance rates against collateral, we will typically look at the cash flow of the business,” he says. “And if we believe in that, then collateral will come second and, in some cases, may not fully secure the loan.”

If a loan request is for a start-up or new venture, AGC will require a comprehensive business plan with total project cost, projections with assumptions, and market research. Additionally, it will collect a personal financial statement from borrowers and their historical tax information. “Any owner of 20 percent or more of the business will be required to personally guarantee the loan, and in some cases we may ask the minority owners as well,” Janssen says.

When working with borrowers, AGC spends a great deal of time up front. The goal, Janssen says, is to understand their plan and really try to look at the acumen of the owner(s) and if they have the ability to meet their projections. AGC also takes a hard look at the market to gauge if the projections are reasonable. “We also take into consideration secondary or outside income that may add global cash flow support to the loan request,” he says. “If we cannot help the borrower with their initial request, we will help give them the guidance or resources to get them to the point they may qualify for financing.”

NCB, CFAB, Evergreen, and AGC are four financial institutions serving commercial enterprises around the state with different offerings, operations, and philosophies than typical banks and credit unions.

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

January 2017 | Alaska Business Monthly

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SPECIAL SECTION

Junior Achievement

30th Annual Alaska Business Hall of Fame

J

oin us Thursday, January 26, 2017, for the 30th Annual Alaska Business Hall of Fame, an event that celebrates the past, present, and future of business in Alaska.

In 1987, Junior Achievement (JA) began the Alaska Business Hall of Fame to honor outstanding individual leaders of Alaskan business. Since then, the Hall of Fame has become one of the state’s most prestigious events, inducting new Laureates on an annual basis. These individuals are honored for their direct impact toward furthering the success of Alaskan business, support for JA’s mission and programs, and demonstrated commitment to the Alaska economy.

This important event is a fundraiser for JA, an organization dedicated to providing economic and entrepreneurial education in the great state of Alaska. Since 1973, JA has

served K-12 students statewide from Barrow to Ketchikan. JA serves 12,900 students annually in 53 Alaskan communities. As demand for the program continues to grow, JA partners the business community with educators to prepare young people for a global economy. Through the continued support of corporations and businesses in Alaska, we can continue to reach more students in Alaska.

It is our privilege to invite you to attend the 2017 Alaska Business Hall of Fame, presented by Alaska Business Monthly. This year we are honored to induct Oliver Leavitt, Arctic Slope Regional Corporation; Max Hodel, Alaska Sales & Service; Larry and Barbara Cash, RIM Architects and RIM Design; and James Udelhoven, Udelhoven Oilfield System Services. Congratulations to you all!

The Alaska Business Hall of Fame is annually attended by 600 Alaskans, including many prior Laureates, leaders from the busi-

ness community, and supporters of JA. We are again pleased to have General Mark Hamilton emcee the event along with actual JA students.

For table reservations, or to inquire about the limited remaining sponsorship opportunities, we encourage you to call JA at 344-0101 or visit http://alaska.ja.org. Tables of ten are $1,500, or individual reservations can be made for $150 per ticket. JA of Alaska is a registered 501(c)(3) and the majority of your purchase may be tax deductible.

The 2017 Alaska Business Hall of Fame will be held on Thursday, January 26, 2017 at the Dena’ina Civic & Convention Center. Doors open at 5:30 for a no-host reception with the formal program and dinner following at 6:30.

From the board, staff, and students of JA of Alaska, we wish you the very best in 2017 and we look forward to seeing you on January 26!

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Celebrate the 30th Annual Alaska Business Hall of Fame Laureates Dena’ina Civic & Convention Center Thursday, January 26, 2017 5:30 p.m. Reception Dinner/Ceremony 6:30 p.m.

Call Flora Teo at 907-344-0101 to reserve a table or go to alaska.ja.org for more information

2017 HONOREES

Larry & Barbara Cash, RIM Architects & RIM Design Max Hodel, Alaska Sales & Service Oliver Leavitt, Arctic Slope Regional Corporation James Udelhoven, Udelhoven Oilfield System Services

GIVE HER THE POWER TO UNLEASH HER POTENTIAL. Think of those people who changed your life. You can do that as a JA Volunteer.

It’s easy for you. And life-changing for them.

EMPOWER THE FUTURE® Learn more at alaska.ja.org 20

Alaska Business Monthly | January 2017 www.akbizmag.com

Grace Greene JA Alaska’s First Denali Award Recipient

Photo courtesy of Grace Greene/TOTE Maritime

T

Grace Greene

www.akbizmag.com

he Denali Award, sponsored by Alaska Business Monthly and Junior Achievement of Alaska, recognizes an emerging Alaskan leader (1) whose career spans at least the past fifteen years, (2) lives and works in Alaska, and (3) demonstrates professional excellence and leadership in his/her field and a profound commitment to community. The award, presented at the Alaska Business Hall of Fame annual dinner, is designed to honor and celebrate the contributions of those Alaskans—many of whom are Junior Achievement of Alaska volunteers and supporters—who are engaged in Alaska’s economic, civic, educational, and social development.

We are pleased to announce the recipient of the inaugural Denali Award is Grace Greene, Vice President and Alaska General Manager for TOTE Maritime Alaska. Greene was nominated and selected by a committee of peers through a statewide nomination process.

Greene brings more than thirteen years of professional experience managing a wide range of activities from complex oil and gas exploration logistics, aviation operations, and safety in remote Arctic Alaska to business development and consulting. Most recently, Greene was responsible for leading all aviation logistics operations in the Alaska Venture for the Shell Exploration and Production Company. Greene received her bachelor’s degree in Oceanography from the US Naval Academy and served in the US Marine Corps as a helicopter pilot and Aircraft Commander. During her service she held various leadership roles in Operations and Logistics as well as director of Safety and Standardization.

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January 2017 | Alaska Business Monthly

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JUNIOR ACHIEVEMENT SPECIAL SECTION

Junior Achievement

SPECIAL SECTION

Junior Achievement

JA: A Solution Provider Positive results from Virtual Finance Park

“

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here is no reason that Alaskans should be receiving an F in financial literacy,” says Flora Teo, president of Junior Achievement (JA) of Alaska. “The financial choices you make individually can be just as important as your career and education choices. When Alaskans choose to make financial education a priority for young people, we will see a positive change in the hopes for the state’s economic future.”

In 2014 JA of Alaska, along with Alaska Communications, piloted Virtual Finance Park in Alaska’s schools—its first blended-learning program—and has experienced positive results. “The classroom data tells a story. Students increase their knowledge of saving, investing, budgeting, and credit by an average of 27 percent after participating in JA Virtual Finance Park,” says Teo. JA is currently implementing Virtual Finance Park in more than twenty-five classrooms statewide. JA Virtual Finance Park provides students hands-on lessons in personal

financial management and first-hand understanding of the economic issues they will confront upon high school graduation.

The blended model has three parts: part teacher instruction, part volunteer instruction, and part online participation in an online simulation. The simulation functions as an experience as students are taught various aspects of finance, including monetary transactions, savings and investment options, and budgeting. The interactive elements bring the concepts to life in the virtual environment, including social networking and personal challenges.

In 2015 the Anchorage School District adopted JA Virtual Finance Park as a social studies elective course for middle school students.

The program is offered to schools at no cost and includes lesson plans, evaluation tools, student workbooks, access to online simulation, teacher guides, and a trained volunteer to offer support from the business community. By bringing business people into the classrooms, JA helps

today’s students learn from individuals who can relate financial education to their lives, care enough to listen to them, and can provide reallife examples of how obstacles can be overcome.

JA Virtual Finance Park operates through the generosity of volunteers and teachers and requires financial donations from individuals, business, and foundation. JA does not receive funding from the school district, the State of Alaska, or United Way. By bringing together the business and education communities, JA has been teaching financial literacy, workforce readiness, and entrepreneurship programs since 1973 for Alaskans. Annually JA serves 12,900 K-12 students in fifty-three communities statewide at a cost of $40 per student. JA programs are regularly and independently evaluated at both the local and national levels to ensure the highest program quality. These evaluations continue to demonstrate that JA programs provide long-term gains in student learning.

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47 Years...

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Alaska Business Monthly | January 2017 www.akbizmag.com

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Alaska Business Hall of Fame Laureate James Udelhoven 2017 Alaska Business Hall of Fam Laureate James Udelhoven, CEO of Udelhoven, interviewed with Tasha Anderson, Alaska Business Monthly’s Associate Editor; below are excerpts from the interview.

ABM: How did you get your start in the business world?

Udelhoven: I came to Alaska in 1968, and in 1970 I started the business up in the Cook Inlet area. I was encouraged to do that by an employee of ARCO by the name of Jimmy Pruitt, because he got to know me and liked my business ethics and work ethic.

ABM: Where did you grow up?

Udelhoven: I grew up on a dairy farm in Wisconsin. My dad was my first teacher on work ethics, hard work, and how to handle money. Of course, at that time my family didn’t have a lot, but they worked hard, and they were proud, and I walked away from there with a lot of stuff that I kept with me for a lot of years.

ABM: What were your parents like and what was your family life and upbringing like?

Udelhoven: Well, life was different then.

I had five brothers and one sister, and all of my brothers served in the military. My oldest brother fought in the Pacific in World War II, and the next brother volunteered.

And so when I was seventeen, to do something different, I joined the US Navy and volunteered for aviation. And I got a tremendous education out of it; they gave me some of their best schools at the time, so that’s sort of what started putting me on track for where I’m at today.

ABM: What opportunities led to the early success of your business?

Udelhoven: Well, you have an idea of what you want to do, and how you want to get there—but it doesn’t really end up like you first envisioned it, because pretty soon you got one employee, then you got three, then you got fifteen. And I had had people actually step up and say they wanted to finance my business, and I never did that.

I started out with no money, no business education. I basically don’t recommend

doing what I did to the young people today because my education was very costly. I learned as I went, I was always very honest, very ethical; I always surrounded myself with really good employees. And my real education came in the late 80s, during that recession, and I survived that, and having done that then I set new standards for the corporation.

ABM: Do you believe there is value in educating young people about free enterprise?

Udelhoven: There definitely is a value in educating them about free enterprise. In my case it started with my parents on very small issues. But if the parents start that and make their children accountable—say for an allowance or where they do tasks and they get an allowance—and they learn how to save a little of it for special things they want, if they get it started there, that’s the best way.

Junior Achievement and the school systems can build on that, then. And that’s something children will carry with them the rest of their life, whether they go into business and run a business or they just have a job.

ABM: What can we do to prepare young people to succeed in a global economy?

Udelhoven: Well, we have an international corporation. I think one of the things that they need to do, if they’re thinking of doing global work, is form a separate corporation, which we have, Udelhoven International.

And you have to do that and you have to register that corporation in a state that is friendly to that type of business, which in our case we registered that in Delaware.

But you have to have that isolation from the rest of your operations, because when you go international, you’re in a different world, you’re taking more risks, you’re not as knowledgeable on those risks. We’ve been in Bermuda, we’ve been in Venezuela, we’ve been in China, and we’re in Trinidad now.

ABM: So far, what accomplishments are you most proud of?

Udelhoven: The thing that I’m most proud of is that my employees have been able to take our mission statement, which I wrote back in the

Learn more about Junior Achievement, our activities, sponsors, and past and current laureates at juniorachievement.org/web/ja-alaska 24

Photo courtesy of James Udelhoven

SPECIAL SECTION

Junior Achievement

Laureate James Udelhoven

seventies, and we live by it. We must perform safely; we must be environmentally responsible; and we share our profits with our employees.

Also many of our employees are shareholders, so it’s a quasi-family/employee-owned corporation—we’re a very tight knit group. We have a lot of really long-term employees—I’ve got some people that have been working for me for thirty years, a lot of people fifteen years, and it’s something I’m proud of.

ABM: What do you hope for your own future and/or the future of Alaska?

Udelhoven: For my own future, in three more years this company will be half a century old. I’m hoping my employees and the family can have this going a hundred years from now. And I hope the state of Alaska operates in a manner that they can be in good shape a hundred years from now.

And that’s a challenge: in this day and age, that’s a challenge.

ABM: What do you want your legacy to be?

Udelhoven: I want my customers and my employees to look at the company as something that was sort of set apart from our competitors. We’ve done that pretty well, and that’s what I would like to see continue on.

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Alaska Business Monthly | January 2017 www.akbizmag.com

2017 Alaska Business Hall of Fame Laureate Oliver Leavitt responded to Alaska Business Monthly’s questions via email. Here is his Q&A.

ABM: Where did you grow up?

Leavitt: I grew up in Barrow.

ABM: What were your parents like and what was your family life and upbringing like?

Leavitt: My parents were good, kind, courteous people. At times they were demanding in wanting their children to be good as well. I grew up in a strong Christian family and they were always so full of advice and kindness.

I had a late brother who was four years my senior, an older sister who I was not able to meet before her passing, and an adopted sister who was several years younger than me.

ABM: How did you get your start in the business world?

Leavitt: Well, I joined the Arctic Slope Native Association before the land claims act and I served as the treasurer for years. And then, when ANCSA passed, I was elected to ASRC’s board of directors and became treasurer there for nearly ten years. Of course, there was nothing really to “treasure” at the time. We were looking for ways to make money; ways to send our businessmen throughout the state and the nation. Later, I became vice president of lands and I was chairman for many years after that. For a long time though, I was the guy in charge of government affairs—both in the state and at a federal level. Because we were born out of Congress in the land claims act, we had an awful lot to do with the federal government and a lot to learn about the regulations involved with the Act. ABM: What opportunities would you say led to the early success of your business?

Leavitt: Working in the Lands Department and leasing out potential oil lands, along with learning to negotiate with the oil industry. In order to select 5.5 million acres of land, we had to learn the nuances of the land. We also had to learn very quickly how to deal with people in different industries in a professional manner. Hiring the right people was key— people you could trust and people who had the Iñupiaqs in mind.

ABM: In your career, what accomplishments are you most proud of?

Leavitt: Making successful land deals was important but also making amendments to ANCSA and working with Congress to make sure those amendments passed for the Iñupiat people. www.akbizmag.com

ABM: What do you think the business community can offer to young people?

Leavitt: The business community can help young people by first providing scholarship opportunities and encouraging students to attend good colleges. After students graduate, it is just as important for the business community to engage with young people and encourage them to apply for open job positions. We have a lot to offer, just at ASRC itself, because we have so many job opportunities in different fields of work. ASRC has had great success getting graduates into different jobs within our company—from aerospace to oil field services to engineering.

ABM: How can we prepare young people to succeed in a global economy?

Leavitt: Again, making sure they get the right education and have the ability to excel in multiple fields. That ability can open them to jobs all over the country.

ABM: What can schools and parents do to ensure that young people don’t encounter financial pitfalls?

Leavitt: Providing financial training for young people, promoting good common sense, and even encouraging students to be well-read—this can all help young people to succeed as adults. At ASRC, there are many opportunities for students to intern within the company and learn from their superiors.

ABM: Do you believe there is value in educating young people about free enterprise?

If so, why?

Leavitt: Oh, yes! That’s what business is all about. Although ASRC is a regional corporation, we still had to know how other businesses—both regional corporations and corporations outside Alaska—operated and understand the business culture in places outside the North Slope.

ABM: Did you have Junior Achievement in school? If so, what do you remember?

Leavitt: Not really, I went to a Christian school. But it was good common sense and being around knowledgeable people that was important during my schooling.

Competitiveness appears in everything we do, so I believe it’s most important to teach and learn the fair and equitable treatment of people.

ABM: Did you have a role model growing up? Do you think young people benefit from role models?

Photo courtesy of ASRC

Alaska Business Hall of Fame Laureate Oliver Leavitt

Laureate Oliver Leavitt

Leavitt: Of course; Reverend Samuel Simmonds was a great mentor of mine. He was a strong Christian and an extremely nice person—the nicest person I know. He was eloquent, smart.

It’s vitally important to have a role model—someone you can look up to and aspire to be like. Especially when your role model does things well, you want to understand and learn how to do those same things just as well.

ABM: What do you hope for your own future and/or the future of Alaska?

Leavitt: For my own future, I just hope to keep living out my life in the best way I can.

For Alaska, my hope is that the Native people continue to succeed in all of the efforts we’ve started and will continue to take on in the future. I think we’ve done as well as we can as a regional corporation, but there are still changes and challenges ahead.

As for the Iñupiaq people, I hope we continue to educate our younger generations and prepare them for this world that is becoming more complicated and challenging. If we can teach them to overcome these challenges, we’ll do okay.

And I think we’re well on our way.

I think one of the things we all need to learn is patience. It is so difficult to get people to work together, in harmony. We’ve always tried to teach others about our whaling culture as an example of teamwork and teams are what make life and business so successful.

ABM: What do you want your legacy to be?

Leavitt: I think everyone wants to know they were able to educate someone, in some way, during their life. For me—to educate in Congress, to educate the State Legislature, and to educate my own people. So little was known about Alaska Natives when I first got started, and communication with the North Slope was so limited. When I was a kid, there was nothing here—no roads, no water, no sewer. Now we have all of that. There are still things to be done to improve life, but we’ve come a long way.

R January 2017 | Alaska Business Monthly

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JUNIOR ACHIEVEMENT SPECIAL SECTION

Junior Achievement

SPECIAL SECTION

Junior Achievement

Alaska Business Hall of Fame Laureates Larry S. Cash and Barbara L. Cash 2017 Alaska Business Hall of Fame Laureates Larry S. Cash and Barbara L. Cash, interviewed with Tasha Anderson, Alaska Business Monthly’s Associate Editor; below are excerpts from the interview.

ABM: How did you get your start?

Barbara: Getting my start in business came after deciding to get my degree in interior design, and design space design had been a passion of mine since I was very young.

After getting my degree, I came to Alaska...

It didn’t take me long to figure out that commercial design is really where my passion lay. I worked for a company that was established here and in Seattle. In 1978, when the economy started to drop off here, they moved their operation in-total back to Seattle. And I was left saying “ I want to stay here, so what do I do?” and to my good fortune and a real blessing, some client said, “We’ve enjoyed working with you, we’d like to continue working with you.” That was an unexpected gift to me that I was able to just start right in and continue that working relationship, but on my own.

Larry: I’ve always been driven as a person to achieve and be the best—I’m very competitive in that respect. Hard work to me wasn’t hard work, it was fun. I got my degree in architecture, had an opportunity to work in Palo Alto, California, and worked there for four years. Then the opportunity to see Alaska came up, so I came to Anchorage, sight unseen, for a year with a one-year commitment working for another firm.

Eventually became a partner in that firm.

And there came a point in my career when I knew it was time for a change and I, talking with Barb and praying about it, made the decision to start my own company.

ABM: What were your parents like and what was your family life and upbringing like?

Barbara: [My parents] weren’t in business; my dad was a chaplain in the Air Force and my mother a registered nurse and nursing instructor. I’m the only one in my family who actually went into business.

Larry: I grew up in a construction-oriented family, contractors and rock masons and carpenters and whatnot. My dad, in the early years of mom and dad’s marriage, was working construction, and there was a lot of travel involved, and they didn’t want to be apart from one-another. So early after they were married, my dad got the job as the mailman. Being the mailman, my dad got to know everybody. Anytime any of the farmers wanted to sell a piece of land, he 26

Photo courtesy of Rim Architects

Photo courtesy of Rim Design

Laureate Larry S. Cash

Laureate Barbara L. Cash

was the first to know about it. So he started buying and selling land, and that started generating additional income. He figured out that he could build an earthen dam and make a lake, and he started doing that, as the lakes added value, and when you build a lake you’ve got something that’s much more valuable to sell.

Barbara: So there’s a little entrepreneurialism in that family, more than in mine.

financially, and how to book it, and track it, and do the accounting. And then you go ahead and do the business side. In our case, we’re in a creative endeavor which makes it even more challenging, because we have all these wonderfully talented, brilliant people in this profession who are great at what they do, but they’re lousy business people.

Larry: Yeah, teach [young people] that they need to bring in more money than they spend.

Barbara: And I think keeping the faith. I mean, it sounds really simple, but I think it’s challenging when you have tough economic times. You also have to remember that this, too, shall pass, which is more difficult when you’re young.

Larry: And don’t ever give up. There’s always a way to find a way, based on determination, and honesty, and integrity, and perseverance.

ABM: Do you believe there is value in educating young people about free enterprise?

Barbara: Absolutely. I would have had a lot more confidence, I think, when I did find myself starting a business, and it would have helped me a lot.

Larry: I agree with Barb on that one. The sooner you can start to create interest in business, or get kids interested in what business means, and that it can be challenging, and it can also be the source of a lot of fun, the better. And that should be a part of imparting the meaning of business to kids: the joy.

ABM: What can schools and parents do to ensure that young people don’t encounter financial pitfalls?

Barbara: Get educated about it. The first thing is that you find someone who understands how to set the business up

ABM: What can the business community offer to young people?

Larry: Hope.

Barbara: Yes—I was going to say encouragement, and through these programs [like JA], some experience. Some actual discovery and experience in what that business does, and is, and even the opportunity to shadow in your business, if that’s available.

Alaska Business Monthly | January 2017 www.akbizmag.com

ABM: What do you want your legacy to be?

Barbara: Number one is to encourage other people who are interested in interior design, as a profession, that they become educated in it and to let them know that there is this opportunity. [It’s important] to show sincerity and authenticity in dealing with clients and each other. That’s kind of my focus on legacy. It’s not a building, it’s not an interior, it’s a process and a way of living.

Larry: The legacy that I hope to create is a company, RIM, that has endured and will continue to thrive and survive beyond my being a part of this world. And that means a company that has the tenacity and determination to endure through really good times and really challenging times.

Barbara: We’ve been through some tough times, and there are probably more coming, but there are also the great times.

Larry: Exactly. Appreciating the joy that exists with the challenges.

Barbara: We’ve made some mistakes, business and otherwise, but that’s life and get in it; get in it.

R www.akbizmag.com

Junior Achievement Alaska Business Hall of Fame Laureate Max Hodel

Photo courtesy of Chris Hodel

2017 Alaska Business Hall of Fame Laureate Max Hodel responded to Alaska Business Monthly’s question via email. Here is his Q&A.

ABM: How did you get your start?

Max: I spent a couple of semesters at the University of New Mexico. After that, I had odd jobs in the oil and gas industry until, out of curiosity, I decided to come to Alaska. In March of 1950 in company with two friends we departed Texas bound for Alaska via the Alaska Highway, arriving in Anchorage after a sixteen-day trek.

I had no specific objective, but fate took a hand, and in August, 1960, I became the Studebaker dealer and part owner of Inlet Motors, at age twenty-five. The following nine years, and until Studebaker went out of business, I was engaged in running that business. After that, and to have some time to reconnoiter, I spent a couple of semesters at the University of California, Santa Barbara.

In the interim, Alaska Sales and Service approached me, leading to my becoming a part owner and principal operator of that business for the ensuing thirty years.

Throughout that forty-year time period I was engaged in various organizations, civic and business. It was easy to become involved by just being willing to say “yes.” That is one of the great aspects in being a part of a growing, vibrant community.

In 1990 I responded to Governor Wally Hickel’s invitation to be a part of his Cabinet, first as Chief of Staff for a couple of years and then as a Special Envoy to Japan and other Far East nations, in the interest of promoting trade, specifically marketing our natural gas, an endeavor that still eludes us.

I have been married to my wife, Joanne [Seeley] Hodel for fifty-six years. We have six children, two boys and four girls, and twelve grandchildren.

ABM: Where did you grow up?

Max: I was born and raised through my high school years in the state of Texas. In 1943 I entered the US Army Air Corps where I served in the Pacific Campaign from New Guinea to Tokyo as a cryptographer. I returned in the spring of 1946 and was discharged.

ABM: So far, what accomplishments are you most proud of?

Max: In the mid-fifties the United States ceded a section of land in east Anchorage to the city.

At the time, as chair of the City of Anchorage Planning Commission, we passed a resolution zoning the land Institutional and paved the way for the locations of Alaska Pacific University, Providence, University of Alaska Anchorage, and other public interest facilities.

In the late sixties and again in the late seventies, I chaired two Operation Breakthroughs. The earlier one stimulated the merger of the City of Anchorage and the Spenard Utility District into the Municipality of Anchorage. The latter led to the Project 80’s which resulted in a number of public facilities in use today.

In 1981 my wife Joanne and I, along with Wally and Ermalee Hickel, at the request of Archbishop Hurley, co-chaired the group planning and executing the arrangements for Pope Saint John Paul’s historic visit to Anchorage. We had only forty five days to bring everything to fruition, and resulted in Mass on the Delaney Park Strip before an estimated crowd of sixty thousand people— with the temperature just under freezing.

In the late 70’s I was instrumental in the formation of Commonwealth North, which was co-chaired by former governors Bill Eagan and Wally Hickel. I served as president for eight of it’s first nine years.

R January 2017 | Alaska Business Monthly

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JUNIOR ACHIEVEMENT SPECIAL SECTION

ABM: What accomplishments are you most proud of?

Barbara: Whether it’s an educational environment, or a health wellbeing environment, or a corporate environment, if we can come in and improve it—make it more functional, make it more logical, make it more beautiful—all of those ingredients to make people happy to come to work. The best news to me is when a client says to me that their morale has improved, the staff morale has improved, their customer service has improved, and they attribute it inpart to that new environment.

Larry: The buildings [we design] become a part of the fabric of the community. And that’s really meaningful, as an accomplishment.

The other component of accomplishment that has been really, really meaningful to me is the people that we provide employment for and business opportunities for. There’s been a number of young people who come to work here, and they’re young and they’re having a hard time, and I’ve been able to work with several of these young people and impart passion through some pretty stern discipline sometimes, but they all-ofa-sudden they get it and they just take off and they’re very successful.

Barbara: It is a lot like a family. In my organization there are eight of us, and we’re all women, so it’s a sisterhood if you will. And yes it’s a business, and yes we have to deal with tough things, too, but that comradery is wonderful.

SPECIAL SECTION

Junior Achievement

The Next Generation of Small Business Owners Five ideas to keep it simple

I

By Michael A. Branham

’m the son of a small business owner. I understood from a young age that to make a business successful one had to be all in; that long hours, hard work, and self-sacrifice were part of the entrepreneur’s tool chest. We didn’t have mini-MBA courses in my house to teach these lessons, they were simply observed over time. Children are incredibly inquisitive and impressionable, so how can we equip the next generation of small business owner with the skills they’ll need to succeed?

In my experience, keep it simple and start with these five ideas:

Develop a Strong Work Ethic One of the best gifts you can give your children, as well as one of the best tools for the future entrepreneur, is to foster a strong work ethic. Expect them to do various jobs around

Reaching Higher!

Junior Achievement lifts us all

Together we shape our future RIM Architects & RIM Design Larry & Barbara Cash 645 G Street I Anchorage, Alaska 28

the house, hold them accountable if they don’t, and offer a reward (usually financial) if they do. Additionally, ask them to put in some effort for major purchases like a new bike or cell phone.

Foster Self-Motivation The ability to work independently towards success is critical to any entrepreneur. There are some key components of self-motivation that can be unlocked in your children, and allowing them to witness these traits in your actions is a great learning tool. Maintaining a positive attitude in the face of adversity; curiosity and the desire for continued learning; the willingness to take risks (and to fail); and a keen self-awareness of one’s strengths and weaknesses are all key to the development of a motivated business owner. It’s important that rewards extend beyond the financial, so be sure to highlight sense of accomplishment and other intangibles when communicating a job well done.

Encourage Creativity and Passion My dad has worked in the elevator business, and owned elevator related businesses, for his entire adult life (and my entire life), and yet I have no mechanical inclination. Pushing the button for my intended floor is about as elevator savvy as I get. The opportunity for me to learn the requisite skills to be in the elevator business was certainly a possibility, but it never interested me. My dad understood that, and always encouraged my brothers and I to find our own paths. Giving kids the space, and freedom, to figure out what excites and interests them will allow them to run businesses that excite and interest them and give them the best chance at being fully motivated to succeed in their own endeavors.

Be open to the fact that it may not be what you had in mind when you bought them their first “Future Entrepreneur” onesie—but then again, when did your parents know what you’d become?

Develop People Skills The ability to communicate authentically, and to engage with people effectively, will be critical skills for any young business owner.

Whether they’re approaching a neighbor for a lawn mowing job or seeking funding for their Silicon Valley start-up, your young entrepreneur will need “people skills.” Effective spoken communication, the ability to write an e-mail or letter, and simply maintaining eye contact are every day human interac-

tive skills that are often overlooked. Make it a point to encourage your kids to do simple things like ordering for themselves at a restaurant or engaging in conversation with adults at parties and family gatherings. Push them outside of their comfort zone in social situations so they can learn how to think quickly and communicate effectively.

Teach Financial Literacy This seems like the obvious one, but it’s unlikely your teen will be enthralled with learning to read a profit and loss statement. Instead, focus on the basics. Let them do work around the house, or in an actual job, to earn an “income.” Teach them the concepts of making wise consumption decisions to live within one’s means, and give them an education in debt management and creditworthiness. Show them how to build a small cash reserves, as well as to promote saving and investing in future opportunities. Give them an insight to how your household is run and possibly how your business makes financial decisions. If you want third party resources, volunteer in the classroom with curriculum from an organization like Junior Achievement USA, which has developed age appropriate money lessons for K-12, as well as educational opportunities specific to entrepreneurship and small business ownership.

As the American economy continually evolves towards a service economy built on small business, will your children have the tools of an entrepreneur? Obviously not all kids can, or will, run their own small business, but as parents we have the opportunity to help foster the skills and traits necessary if the title of “business owner” is in their future.

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Michael A. Branham, CFP is a Senior Financial Planner with The Planning Center, Inc. in Anchorage and the Twin Cities, Minnesota.

Branham provides comprehensive planning services for young professionals and clients in transition and does extensive work with retiring clients on retirement income solutions. Contact him at mike@theplanningcenter.com or by calling 907-276-1400.

Alaska Business Monthly | January 2017 www.akbizmag.com

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12/16 2016-US-22555

ALASKA TRENDS ANS Crude Oil Production 12/01/2016 ANS Production per barrel per day 555,924 Dec. 1, 2016

12/01/2014 12/01/2012 12/01/2010

Alaska Commercial Fisheries Top N US Domestic Commercial Fishery Landings and Value 2015

12/01/2008 12/01/2006

Alaska 6,038,185 2,738,903 1,763,425

Thousand Pounds Metric Tons Thousand Dollars

12/01/2004 12/01/2002 12/01/2000 0 500,000 1,000,000 1,500,000 Source: Alaska Department of Revenue Tax Division

Pacific Coast 6,791,476 308,593 2,296,363

Total US 9,717,627 4,407,887 5,203,004

 Alaska had the top three leading US ports in quantity of commercial fishery landings  Alaska had the 2nd, 3rd, and 4th leading US ports in value of commercial fishery landings  Alaska had thirteen of the top fifty ports in landings and value; 26%

US Commercial Fisheries Totals 2015

ANS West Coast Crude Oil Prices

 9.7 billion pounds  4.4 million metric tons  $5.2 billion  Alaska led all states in volume with landings of 6.0 billion pounds; 62%  Alaska led all states in value of landings with $1.8 billion; 35%

12/01/2016 12/01/2014 12/01/2012 12/01/2010 12/01/2008

Commercial Fishing Species Breakdown

12/01/2006 12/01/2004

ANS West Coast $ per barrel $52.23 Dec. 1, 2016

12/01/2002 12/01/2000 $0

$20 $40 $60 $80 $100 $120 $140 $160

Source: Alaska Department of Revenue Tax Division

NOAA

Commercially important species of seafood from Alaska include five species of salmon, five species of crab, walleye pollock, Pacific halibut, Pacific cod, sablefish, herring, four species of shrimp, several species of flatfish and rockfish, lingcod, geoducks, sea cucumbers, and sea urchins.

Alaska Department of Fish and Game, Division of Commercial Fisheries

Statewide Employment Figures 10/1976—10/2016 Seasonally Adjusted 10/01/2016 10/01/2012 10/01/2008 10/01/2004 10/01/2000 10/01/1996 10/01/1992 10/01/1988 10/01/1984 10/01/1980 10/01/1976

Labor Force Employment Unemployment 6.8% Oct. 2016

0

50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

SHELLFISH

SHRIMP

CRAB

AQUATIC FARMING

GROUN

Coonstriped General Northern (pink) Sidestriped Spot

Bairdi Tanner Blue King Dungeness Golden King Hair Opilio Snow Tanner Red King

Pacific Littleneck Clams Pacific Geoduck Clams Mussels Oysters

Ling Pacific Rockfish (2 Sable Ska Walleye

Source: Alaska Department of Labor and Workforce Development - Research and Analysis Section. 11/17/2016

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Alaska Business Monthly | January 2017 www.akbizmag.com

By ABM Staff

Nation in 2015 Alaska Commerical Landings Data Collection Alaska Data provided by the Alaska Fisheries Information Nework (AKFIN https://www.akfin.org). Landings estimates are derived by combining NMS Alaska Regional Office's new Catch Accounting System for groundfish and the Alaska Commercial Fisheries Entry Commission-sourced fish tickets for species other than groundfish.

NOAA

Aleutian Islands (Other) 467,000,000 lbs. $111,000,000

At Sea Processed Catches

Naknek 176,000,000 lbs. $69,000,000

Kenai

Cordova

50,000,000 lbs. $33,000,000

162,000,000 lbs. $65,000,000

Bristol Bay (Other)

Sitka

70,000,000 lbs. $90,000,000

Seward 94,000,000 lbs. $59,000,000

Dutch Harbor

87,000,000 lbs. $59,000,000

Juneau

787,000,000 lbs. $218,000,000

Kodiak

Alaska Peninsula (Other)

514,000,000 lbs. $138,000,000

268,000,000 lbs. $90,000,000

Petersburg 70,000,000 lbs. $39,000,000

17,000,000 lbs. $23,000,000

Ketchikan 84,000,000 lbs. $40,000,000

NDFISH

DIVE FISHERIES

SALMON

HALIBUT

HERRING

gcod c Cod 23 Species) efish ates Pollock

Geoduck Clam Sea Cucumber Red Sea Urchin Green Sea Urchin Pinto Abalone

Chinook Sockeye Coho Pink Chum

Pacific Halibut

Herring Herring Roe

Data Soure: NOAA "Fisheries of the United States 2015" released in August 2016

Catches of Alaska pollack, pacific whiting, and other Pacific groundfish that are processed at-sea aboard US vessels in the northeastern Pacific are credited as 'landings' to the state nearest the area of capture. Information is unavailable for landing port or percentage of catch transferred to transport ships for delivery to foreign ports. These at-sea processed fishery products, on a round (live) weight basis, exceeded 1.5 million metric tons in 2015 and made up 33 percent of the total domestic landings in the fifty states.

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January 2017 | Alaska Business Monthly

31

TRANSPORTATION

Ice Road to Tanana Unique method to transport cargo

By Sam Friedman

© Jeff Schultz / AlaskaStock

Tyrell Seavey mushes on the Yukon River near Tanana, where a village-built ice road now connects Tanana to the Alaska road system.

T

he Yukon River city of Tanana began seeing savings from its new road well before the grand opening of the new state highway in September 2016.

This summer a triplex went up to house teachers at the Maudry J. Sommer School. The new building is what Tanana City Manager Jeff Weltzin calls a “legacy building” for the community. It’s a sturdy construction with walls that are two feet thick to keep heating costs down. It’s the type of project that would have been difficult before Tanana had a seasonal link to the Alaska road system.

To build the triplex, the city government shipped a Conex storage container to Fairbanks earlier this year, then had it driven more than two hundred miles over the length of the Elliott Highway and the new state road, the so-called “road to Tanana.” The road ends on the south bank of the Yukon River, so to reach Tanana the Conex finished the trip by crossing a six mile village-built ice road. The shipping container weighed about fifty thousand pounds, but traveled safely over the four feet of solid ice, which is rated to handle a load nearly twice as heavy.

The price for shipping these materials to Tanana was a few thousand dollars, Weltzin says. Before the ice road and the new state highway, the cheapest option would have been barging the container from Nenana, a job that would have cost well more than $10,000.

32

“It’s almost an order of magnitude less” he says.

Where the Rivers Meet Most of the year one cannot drive there, so by most definitions Tanana is a bush community. But it’s not very remote by Alaska standards. The village is less than an hour’s Cessna flight from Fairbanks and is located near the confluence of the Yukon River and its largest tributary, the Tanana River. This major river crossroads make the village site an important location. It’s the site of Nuchalayawa, a major gathering of Native Alaska people from around the Interior that was once held annually and is now held every other year.

For years Tanana residents debated whether they wanted highway access. Then-Governor Sean Parnell proposed the road in 2011 as part of his “Road’s to Resources” program to link Alaska’s road system with possible mine sites for gold and other natural resources.

In the town of 322 people opponents were concerned road access in the area might hurt important hunting and fishing grounds.

Costs always played a large role in the “pro” side of the road debate.

Building the Ice Road The city got to work on the ice road well before the state’s gravel road was completed to Manley Hot Springs.

In January 2015 city workers cleared snow along the six mile stretch of river to test out the ice road route that would also be used in the 2016 season.

The route hugs gravel bars along the southern shore of the river for most of the six miles before crossing the main channel just upstream of Tanana. Even in the 2015-2016 winter—an unseasonably warm year—the ice froze to more than four feet thick under the ice road. Even in winter the Yukon River remains deep and wide. Beneath the four feet of ice there’s at least fifteen feet of liquid river water that doesn’t freeze.

While the Yukon River ice is relatively safe upriver of Tanana, it’s not consistent along the length of the river. Half a mile downriver from Tanana a change in the river’s hydrology makes that section of river a bad place for an ice road, Weltzin says.

“There’s a part of the Yukon that doesn’t freeze at all just below the village. That’s because there’s some kind of upwelling,” he says. “That’s where we depend greatly on local knowledge of the residents of the river.”

Over the last two years, the Tanana road crews have been relying on the Interior’s ambient freezing temperatures to build the road. They’ve been plowing the snow away so it doesn’t insulate the ice and each day they drill into the ice to test the thickness.

Alaska Business Monthly | January 2017 www.akbizmag.com

This winter the city plans to give the ice some help. By spraying water onto the ice each day, they hope to build as much as two inches of new ice a day on top of the natural ice. Building an extra foot or two of ice could extend the season of the road from six weeks to two or three months.

The ice formed quickly on the Yukon this winter, but Wellitizin has been watching the formation of a mess of jumble ice with concern.

Municipal Road Industrial ice roads are common in Alaska, but the one Tanana has been building is one of only a handful that are built by communities to transport supplies.

Melissa Head keeps track of permitting for ice and snow roads as part of her job as a natural resource manager at the Alaska Department of Natural Resources office in Fairbanks.

In the last few years there’s been between two hundred and four hundred miles of statepermitted winter roads built each year over snow and ice, she says. Almost all of the roads are connected to North Slope oil and gas development projects, she says. For example, one of the longest ice roads is a forty-mile seasonal between ConocoPhillips’ Alpine unit and its Kuparuk Field. The biggest recent year for state-permitted winter roads was the winter of 2013 and 2014 when there were 395 miles.

A handful of non-oil related winter roads in Alaska include an ice road to the Koyukuk River community of Bettles and a road that was built some years to the Yukon River

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community of Stevens Village.

Bettles Road and Trials Chief Richard Thorne estimated that in 2016 the twentyseven-mile Bettles ice road cost the city between $25,000 and $50,000 to build, the Fairbanks Daily News-Miner reported this spring. Thorne estimated it saved more than $600,000 in shipping costs for the approximately forty residents of Bettles and the nearby town of Evansville.

The Stevens Village ice road is also twentyseven miles to the Dalton Highway and has been built at least three times, says Weltzin, who was tribal administrator in the community in the ‘90s when the ice road was used to bring a convoy of fifteen fuel-hauling semi-trucks to the village. He still remembers the price they were able to provide fuel for: $1.05 a gallon.

Ice roads are also used widely in Canada.

Although it’s known as an Alaska reality show, the History channel’s “Ice Road Truckers” began as a show about truck drivers who traverse frozen lakes to carry equipment to diamond mines in Canada’s Northwest Territories. Later seasons moved away from actual ice roads and onto the snow-covered gravel of Alaska’s Dalton Highway.

Some of the ice road manuals Weltzin has been studying for the Tanana road come from the governments of Saskatchewan and the Northwest Territories.

Beyond Ice Roads Although they get the job done, ice roads provide only a short opportunity to get heavy equip-

ment across. In the Interior two recent projects are seeking to make permanent bridges in areas previously linked mainly by winter roads.

Most notable is the Tanana River Crossing, a railroad bridge that extends 3,300 feet across the Tanana River in Salcha. The $187 million bridge is the longest bridge in Alaska and was completed in August 2014. The bridge was supposed to replace ice bridges used to access military training lands south of Delta Junction, but there hasn’t been new funding to extend the rail line the rest of the way.

On a smaller scale, the city of Nenana is building a bridge across the Nenana River near the city to provide better access to agricultural lands on the other side of the river.

In December 2014 a bulldozer traveling the ice road on the Nenana became partially submerged in the river ice.

At the Road to Tanana opening this fall Alaska Department of Transportation officials speculated that a bridge will one day cross the Yukon River at the end of the road, but the state’s budget crisis makes it unlikely anything will be built in the near future.

For now there are boats during the ice road’s down season. This fall residents who have boats went to Fairbanks soon after the road opened to buy supplies of bulk heating oil for the winter, Weltzin says. The city is applying for a grant to buy a boat in order to provide ferry services to other residents.

R Sam Friedman is a reporter in Fairbanks.

January 2017 | Alaska Business Monthly

33

MINING

Update on Mine Tailings Dam Regulation in Alaska and North America

By Charles F. Cobb, PE

T

he contributions of mining to human advancement are taken for granted when people take off in their cars, talk on their cell phones, watch the television, cook on their stoves, and many other ordinary and extraordinary activities. Elements from the earth make our lives comfortable, healthy, and safe, but the investment in people, equipment, and infrastructure necessary to produce those elements in a safe, responsible way is often overlooked. Dams at mines are an important part of the infrastructure contributing to the well-being of society that are not overlooked.

The Alaska Dam Safety Program in the Alaska Department of Natural Resources (ADNR) is responsible for ensuring the safety of dams at mines in Alaska, similar to other state and provincial regulatory programs across the United States and Canada. The following information presents a brief review of the Alaska Dam Safety Program, the purposes of dams at mines in Alaska, and a broad overview of the industry response in North America to tailings dam failures at mines, from the Buffalo Creek Mine tailings dam failure in West Virginia in 1972 to the tailings dam failure at the Samarco Mine in Brazil in 2015.

Protecting Life and Property The mission of the Alaska Dam Safety Program is to protect life and property in Alaska through the effective collection, evaluation, understanding, and sharing of the information necessary to identify, estimate, and mitigate the risks created by dams. The Dam Safety and Construction Unit (Dam Safety) within the Water Resources Section of the Division of Mining, Land and Water of ADNR administers the program under the authority of Alaska Statute 46.17 to “supervise the safety” of dams under state regulatory jurisdiction.

This includes a variety of dams, from small, concrete dams for the water supply of villages to large, rockfill embankment dams used for tailings storage at hard rock mines in Alaska.

The Alaska Dam Inventory includes seventysix dams under state regulatory authority. The National Inventory of Dams (NID) lists twenty-five dams in Alaska under federal authority.

Federally owned and operated dams and dams regulated by the Federal Energy Regulatory Commission (i.e., most hydroelectric dams in Alaska) are exempt by statute from state dam safety authority to preclude redundant regulatory oversight. The Alaska Dam Inventory also 34

includes another seventy-five dams that are too small to meet the regulatory definition of a dam based on either state or federal criteria.

Several dams at mines are subject to regulation by ADNR Dam Safety. Both the Red Dog Mine and the Fort Knox Mine utilize large, rockfill embankment dams to store tailings. A relatively small, rockfill dam impounds tailings at the Kensington Mine. A small embankment dam stores tailings from previous operations at the Nixon Fork Mine. The Greens Creek Mine, the Pogo Mine, and the current operations at the Nixon Fork Mine (underground mines) utilize a tailings management method referred to as “dry stacking” for tailings disposed above ground.

Greens Creek, Kensington, and Pogo also backfill mined out stopes with tailings. Water retention dams help manage storm and contact water at these mines, and water retention dams are utilized at Fort Knox and Red Dog Mines for freshwater storage. A small diversion dam at Red Dog is also regulated, and the heap leach pad at Fort Knox is regulated as a dam, even though there is no open water pond behind the rockfill embankment dam that stabilizes the heap.

All of the dams at the hard rock mines in Alaska have current periodic safety inspection reports, appear to be in satisfactory condition, and are in general compliance with the Alaska dam safety regulations including emergency action plans. Satisfactory condition is the highest rating in a system developed by the US Corps of Engineers for dams on the NID and means that a dam is expected to demonstrate acceptable performance under all loading conditions including extreme earthquakes and floods.

Protecting Downstream Communities and Resources The primary objective of ADNR Dam Safety is to protect the downstream communities and resources that may be affected by the operation or failure of a dam. To achieve the mutual goal of safe dams, effective communication and cooperative relationships are required between the various persons, businesses, agencies, and other interests that are involved in the permitting, design, construction, and operation of dams.

ADNR Dam Safety receives geotechnical investigation reports, design drawings, engineering evaluations, detailed design reports, construction specifications, quality assurance plans, emergency action plans, periodic safety inspection reports, and more. The level of detail in this information is dependent on the size, complexity, hazard potential classification, and risk of the dam.

Much of the work represents multi-milliondollar construction projects and requires highly specialized engineers for the technical design and analyses. Independent inspections and engineering evaluations are conducted by ADNR Dam Safety as necessary to confirm and monitor the condition and safety of the dam. After detailed technical reviews are completed on engineering submittals, ADNR Dam Safety issues a Certificate of Approval to Construct, Repair, Modify, Operate, Remove, or Abandon a Dam to indicate compliance with program objectives.

The “Guidelines for Cooperation with the Alaska Dam Safety Program” provide a detailed overview of the program. The Alaska dam safety regulations are flexible and generic in order to address a wide variety of projects, from small, water supply dams for villages to the large, tailings dams at mines. The Alaska dam safety regulations also include requirements that are unique for mine tailings dams in closure.

The National and International Mission Towards Safe Dams The Buffalo Creek Mine Tailings Dam failed in 1972, killing 125 people, and led to the National Dam Inspection Act of 1972 and the first compilation of the NID. This tragedy raised the level of attention to the safety of dams in the United States and the world and set the stage for the advent of the national and state dam safety programs that followed the various enabling legislation.

In 1976, the Resource Conservation and Recovery Act addressed the management of hazardous and solid wastes. However, for various reasons including the broad regional diversity of mining, geology, and hydrology, the Solid Waste Amendment Act of 1980 included the Bevill Amendment which provided an exemption for certain mine wastes including tailings, resulting in exclusive state authority for regulating mine tailings dams (with some exceptions such as coal and uranium tailings).

The State of Alaska demonstrated leadership in dam safety with passage of the Alaska Water Use Act of 1966 (AS 46.15). In the early 1980s, the Alaska Dam Safety Program was organized by ADNR under Chapter 93 of Title 11 of the Alaska Administrative Code (11 AAC 93). The subsequent Alaska Dam Safety Act of 1987 improved and formalized the legislative authority for regulating dams.

The current dam safety regulations were promulgated in 1989 and revised in 2004. The Alaska Dam Safety Program was based on a model dam safety program developed in multi-agency committees including members of the Association of State Dam Safety Officials (ASDSO) and the Federal Emergency Management Agency (FEMA), the administrator of the National Dam Safety Program. While FEMA’s role is primarily to develop and promote consistent standards, as well as to support and strengthen state programs, the states retain the authority for ensuring the safety of 80 percent of the nation’s 84,000 dams.

ASDSO is an organization of state dam safety officials with over three thousand members at large that develops and disseminates information to promote the safe design, construction, and operation of the majority of the dams in the United States. In Canada, dams are regulated at the provincial and territorial level, and the Canadian Dam Association serves a similar role as ASDSO and part of FEMA’s.

In August 2014, a large tailings dam failed at the Mount Polley Mine in British Columbia.

While the failure was spectacular, there were no human casualties and the environmental impacts were apparently not as severe as many feared. In November 2015, a large tailings dam

Alaska Business Monthly | January 2017 www.akbizmag.com

failed at the Samarco Mine in Brazil. In contrast, nineteen lives were lost, two villages were destroyed, and the outflow from the impoundment affected the turbidity in the Atlantic Ocean more than four hundred miles downstream.

These incidents increased the attention on tailings dams at mines around the world and caused mining companies, regulatory agencies, and engineering businesses to take a fresh look at policies, regulations, and business practices. For example, after the Mount Polley incident, the Mining Association of Canada reviewed their membership protocol “Towards Sustainable Mining” and published the “Report of the TSM Task Force: Recommendations to Strengthen the Mining Association of Canada’s Tailings Management Requirements and Guidance” (2015).

Dam safety regulations applicable to mining across Canada are under review by respective agencies. In direct response to the investigation of the Mount Polley failure, the Association of Professional Engineers and Geoscientists of British Columbia published “Professional Practice Guidelines: Site Characterization for Dam Foundations in BC” (2016) which includes specific requirements for site investigations for dams, as well as guidelines on the responsibilities for the engineers involved with designing and operating dams at mines.

In the United States, the Montana Mining Association promoted significant revisions to the mining statutes which were adopted and promulgated by the State of Montana in 2015. The Tailings Dam Committee of the United States Society of Dams (USSD) held a workshop on tailings dams after mine closure at their 2015 annual conference.

In 2016, ASDSO formed a Tailings Dam Regulatory Workgroup led by the writer to develop an issue paper for the board of directors.

This effort resulted in a resolution on tailings dam safety that was passed unanimously by the state representatives at the annual business meeting. The resolution directs the organization to support state dam safety programs with regulatory authority over tailings dams.

The workgroup conducted a survey of states and determined that 947 tailings dams listed on the NID are distributed across thirty-nine states, of which twenty-five state dam safety programs have jurisdiction over tailings dams, while several other states regulate tailings dams under other state programs. The workgroup also recommended the formalization of a Tailings Dam Regulatory Committee, in contrast to the technical committee sponsored by USSD, although there are many common interests.

The purposes recommended for this committee include assessing relevant information from organizations such as the International Commission on Large Dams and disseminating that information to the state dam safety programs that regulate tailings dams. In addition, the committee can facilitate a dialogue between the multitude of stakeholders in mine tailings management in order to advance common interests.

(The ASDSO board is meeting to discuss the formation of the committee and the publication of the issue paper as this article goes to press.)

In January 2017, the Geoprofessional Business Association is holding a workshop in www.akbizmag.com

Denver, Colorado to discuss the responsibilities of tailings dam engineers in the United States. Many other organizations are working on various related projects also.

Accurate understanding and effective communication of technical and operational requirements are paramount to ensuring that all dams are safe including mine tailings dams. The recent tailings dam failures increased awareness of the importance of safe tailings dams at an international level. ADNR Dam Safety reviewed the reports on the technical investigations of these incidents and is reviewing the current state regulations for opportunities for improvement.

In the meantime, all of the existing dams at hard rock mines in Alaska appear to be safe and the mining companies are actively engaged in

dialogue with ADNR Dam Safety. With the help of the engineering community, dam owners and operators, state and federal agencies, and many others, as well as the appropriate resources for all involved to do the necessary work, ADNR Dam Safety will continue to help bear the standard for safe tailings dams in Alaska and the nation.

For more information on the Alaska Dam Safety Program, visit dnr.alaska.gov/mlw/ water/dams or contact ADNR Dam Safety at (907) 269-8636. Visit ASDSO at damsafety. org and USSD at ussdams.org.

R Charles F. Cobb, PE is the State Dam Safety Engineer for the State of Alaska Department of Natural Resources.

January 2017 | Alaska Business Monthly

35

TELECOM & TECHNOLOGY

Cloud and Mobility Solutions Helping Alaska businesses do more with less

By Tracy Barbour

C

loud and mobility trends are playing out in manifold ways with telecommunications companies in Alaska. Businesses are increasingly reaching for cloud and mobile solutions to leverage the capabilities of technology, and companies like Alaska Communications, GCI, Verizon, and AT&T are expanding their service offerings to meet the demand.

The “cloud” is a term that’s often used in business, but carries a nebulous meaning.

There’s a spectrum of solutions that fall under the cloud category, according to Martin Cary, GCI’s senior vice president of business services.

For example, GCI operates several data centers in Alaska and Portland, Oregon, and can offer infrastructure as a service to assist customers with their cloud computing and storage needs. From a more global context, GCI can facilitate cloud solutions through peering arrangements with other providers.

“We would interconnect with them for communication and connectivity,” Cary explains.

“They, in turn, would connect with large cloud providers like Google, Microsoft, and Amazon. It provides an end-to-end solution anywhere in the world.”

Cloud Becoming Preferred There is a “relentless move” to the cloud, says John Barnhardt, GCI’s Seattle-based vice president of business product development.

“At this point, many companies are looking at the cloud first,” he says. “I think we are definitely in an environment where the cloud is the predominate choice for new deployments.”

One of the overwhelming drivers of the transition to the cloud is the constantly-increasing complexity of the IT environment, Barnhardt says. People are looking for places they can outsource activities that are not core to their business. The initial transition to the cloud was more financially-driven, but now that’s less of a factor. “What you get is an ability to be more focused on your core business and to scale infinitely and instantaneously to any level of service,” he says.

The digital imperative is also driving businesses’ gravitation to the cloud. Every business needs to be leveraging the capabilities of the digital world to make their business better, Barnhardt says, and cloud and mobile technology can enhance this process. “It’s not just for technology-centric businesses, but for every business,” he says.

As another trend, the cloud is leading providers to decouple infrastructure from the managed solution for customers, Cary says.

“Cloud and virtualization has allowed us to separate the physical from the virtual and deliver services in areas where we don’t own the network,” he explains. “While the underlying transport technologies have not changed significantly, the ability to pick up your application and put it where you want is a lot easier than it used to be.”

Geography is also becoming less of a barrier, Cary says. More and more, businesses expect to have connectivity regardless of their location. There’s a diversity of complicated technology required to make this happen, which is creating another emerging trend for businesses. “They are looking to not only outsourcing things in the cloud, but they’re also looking to outsource network management,” he says.

GCI Constantly Expanding In the area of mobility, GCI is the largest Alaska-based wireless services provider. With its vast network, GCI believes that wireless is the future. “With the Internet of things, wireless is a key part of the consumer and B2B space,” Barnhardt says.

As such, GCI is seeing opportunities and making investments in helping companies solve problems with bring your own device management, mobile device management (MDM), and managed WIFI service.

MDM involves deploying, securing, monitoring, integrating, and managing mobile devices like smartphones, tablets, and laptops in the workplace. The goal of MDM is to optimize the functionality and security of mobile devices within the enterprise while protecting the corporate network. “It becomes very important that the enterprise can extend the type of connectivity that they want and maintain the level of control and security,” Barnhardt says.

GCI is constantly expanding its network footprint and capability, investing more than $100 million in Alaska every year. A large portion of that goes toward meeting the insatiable demand for more bandwidth and higher coverage, Barnhardt says. GCI is also

“Cloud and virtualization has allowed us to separate the physical from the virtual and deliver services in areas where we don’t own the network. While the underlying transport technologies have not changed significantly, the ability to pick up your application and put it where you want is a lot easier than it used to be.”

—Martin Cary Senior Vice President of Business Services, GCI

36

Alaska Business Monthly | January 2017 www.akbizmag.com

making a significant investment in workforce development.

Alaska Communications Focuses on Reliability and Security The cloud is transforming the way enterprises, government agencies, schools, and healthcare providers operate, allowing them to be more productive while saving money.

And moving workloads to the cloud gives organizations the security, flexibility, and scalability they haven’t had before, says Chris Reaburn, vice president of Managed Services at Alaska Communications.

As more and more businesses migrate to the cloud, Alaska Communications is expanding its offerings to help them do so securely and reliably. The company’s partnerships with Microsoft and Aruba have changed the way it serves Alaska businesses, according to Reaburn.

Microsoft Azure is a leading cloud provider that offers analytics, computing, database, mobile, networking, storage, and web—all designed to host business applications and data securely and reliably at a cost savings. “We provide a direct connection to Microsoft Azure with ExpressRoute, a private, secure, reliable connection between Alaska businesses and Microsoft data centers,” Reaburn says. “ExpressRoute connections do not go over the public Internet and offer high security, reliability, and speeds with lower latencies than typical cloud connections.”

Aruba is a global leader in networking solutions, and Alaska Communications says it is proud to bring these solutions to Alaska businesses. “The Aruba solutions we manage for clients provide them granular visibility into their wireless networks, enabling us to proactively troubleshoot application issues and plan for wireless network capacity before it becomes a problem,” Reaburn says. “We’re excited to be the local experts for designing, implementing, and supporting the wireless networks that are enabling the digital workplace.”

Another way Alaska Communications is expanding cloud offerings is through its recentlyintroduced Cloud Business Office service. This managed IT and connectivity solution allows Alaska businesses to enable their workforce to be more productive, collaborative, and mobile.

The Cloud Business Office package provides businesses with reliable broadband, voice communications, Microsoft Office applications, Microsoft OneDrive storage, and support to keep them connected to their customers.

Security and reliability are huge factors for Alaska Communications’ customers, and they represent a key reason businesses are moving to the cloud, Reaburn says. “Our Silver Partner status with Aruba ensures the ultimate in cloud security and reliability,” he says. “Aruba specializes in wireless access points and network management. Its AirWave network operations system offers real-time monitoring, proactive alerts, historical reporting, and efficient troubleshooting, all through a centralized user interface.”

Recently, Alaska Communications elevated its partnership level with Nimble Storage, which addresses the demand for secure data storage in the cloud. Customers can store www.akbizmag.com

Your business ceases without backup Internet

Your business continues with backup Internet

CALL YOUR LOCAL ALASKAN DEALER TODAY!

January 2017 | Alaska Business Monthly

37

“We have Verizon-preferred partners utilizing our network, understanding our footprint, and understanding what the Alaska business owner needs. We’re taking that knowledge and skillsets that will give them the benefits to their business and providing this all in the cloud and giving them accessibility.”

—Pepsi LaMar Anchorage-based solutions architect manager, Verizon

data onsite, offsite, or at a Nimble-hosted environment, keeping critical data secure and easily accessible. “Enabled by our expertise in managed networks, businesses can ensure performance of cloud storage while maintaining data security,” he says.

Verizon Helps Customers Leverage Big Data Verizon is committed to bringing complete cloud and mobility solutions to its business customers, according to Pepsi LaMar, Verizon’s Anchorage-based manager solutions ar-

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chitect. When it comes to cloud and mobility trends, Verizon takes a “DNA” (data, network, and application) approach to help businesses do more with less. LaMar explains: “We’re going to give them big data that combines all of those. We’ll give them a device to collect the data and transmit that data over the Verizon network. The application will put it into an easy to read format, then the business can take that information and make changes in real time so it can respond to the needs of the business.”

Big data—which encompasses the large volume of machine-to-machine data that inundates businesses daily—can provide a host of analytics. It can involve everything from call volumes to employees’ driving behaviors. With big data, LaMar says, businesses have the agility to change on a dime based on customers’ need, and Verizon gives them that information instantaneously. “Companies are able to budget and plan accordingly and set their marketing around that information,” she says.

Verizon’s remote monitoring solutions are a key area where businesses are capitalizing on cloud applications. These solutions use sensors to quantify everything from temperature and light levels to pressure and humidity. The sensors measure the customer’s requirements and communicate the information over a cellular gateway. “What’s beautiful about these cloud applications is there is no need to download any application on a server,” LaMar says.

As another example, Verizon’s Networkfleet monitoring solution combines the use of in-vehicle hardware and a web-based application to store, view, and analyze data on specific vehicles as well as overall fleet performance.

Vehicles are equipped with a GPS device that sends information to the Networkfleet Data Center over a secure wireless network.

Security is definitely a concern for businesses using cloud and mobile solutions.

Businesses want the ability to completely access information and transfer it to their home office quickly and securely, LaMar says. So Verizon offers businesses the added security of a wireless private network that links wireless devices to the company’s internal IP network using a dedicated connection that keeps data from touching the public Internet.

LaMar says Verizon is not just a telecommunications company; it is a technology company. And it has a constant eye on what Alaska businesses need, she says. “We have Verizon-preferred partners utilizing our network, understanding our footprint, and understanding what the Alaska business owner needs,” she says. “We’re taking that knowledge and skillsets that will give them the ben-

Alaska Business Monthly | January 2017 www.akbizmag.com

“Our network and innovative platforms give them the tools to do just that—where they want it and how they want it—around the globe. Our network evolved with cloud technology every step of the way.”

—Shawn Uschmann Anchorage Director of External Affairs, AT&T

efits to their business and providing this all in the cloud and giving them accessibility.”

AT&T Delivers Integrated Solutions AT&T serves all major industries, including financial, manufacturing, education, healthcare, retail, hospitality, and government.

With the fast pace of business, companies need to be agile to quickly adapt to changing markets, according to Shawn Uschmann of AT&T. “Our network and innovative platforms give them the tools to do just that— where they want it and how they want it— around the globe,” says Uschmann, AT&T’s director of external affairs in Anchorage.

AT&T delivers integrated cloud solutions to help businesses move to the cloud with confidence and security, Uschmann says. The company’s solutions combine the power of its network, a robust ecosystem of cloud service providers, and an industry-leading cloud networking service. “Our network evolved with cloud technology every step of the way,” he says. “As result, we are well-positioned to connect users to their work and cloud services seamlessly and with security from anywhere.”

The company’s relationships with key industry service providers allows it to provide cohesive, high-performing solutions, such as colocation, highly-secure mobile cloud, integrated storage, and content distribution solutions. Along with its expertise, AT&T is enhancing security and performance, simplifying network management and providing users with more control, Uschmann says. For example, businesses can extract more value from their cloud services with AT&T NetBond™ and their AT&T VPN (Virtual Private Network).

“NetBond provides a highly secure connection between a customer’s AT&T VPN to leading cloud service providers,” he says. “This lets businesses take advantage of a multi-tenant cloud and avoid using the Internet.”

AT&T offers various solutions that help businesses equip their mobile workforce.

These complementary options include devices, mobile apps, security solutions, and cloud technology. “Our cloud solutions maximize productivity from nearly anywhere at any time, without compromising overall network security,” Uschmann says.

Uschmann says business is rapidly and constantly changing, and collaboration is integral to that transformation. “Today, employees work together using a variety of independent channels and workflows,” he says. “They layer tools for email, voice, IM, web, and video. We’re seeing these channels come together, giving them more flexibility, www.akbizmag.com

productivity, and mobility.”

AT&T is also making it easier for workers to communicate from the field with its walkie-talkie style Enhanced Push-to-Talk and

mass-texting Business Messaging services.

And AT&T’s Landline Texting lets users send/ receive text or multimedia messages using a landline or toll-free phone number.

Additionally, AT&T Workforce Manager can help companies make real-time decisions about their mobile operations, saving time and increasing productivity. And AT&T Fleet Management Solutions enables truck drivers and other field workers to access near real-time information on the status of deployed vehicles and equipment.

R Freelance writer Tracy Barbour is a former Alaskan.

January 2017 | Alaska Business Monthly

39

OIL & GAS Fairbanks 43 students

Anchorage 21 students

Saipan 10 students

Hawaii 33 students

Guam 6 students

Emergency Response Training UAF’s Homeland Security and Emergency Management program

By Tasha Anderson

T

he Homeland Security and Emergency Management (HSEM) program at the University of Alaska Fairbanks is directed

by Cameron Carlson, who also directs the Center for the Study of Security, Hazards, Response, and Preparedness at UAF, both of which are part of the UAF School of Management.

Carlson says that the HSEM program can be beneficial at any point in a career, whether students are gaining education before starting a career, are looking for supplemental instruction and skills, or are looking for a way to advance within their field.

Technical Skills and Capabilities The program combines the technical skills and capabilities necessary for one to work in the public safety sector with other corporate and business acumen. “Everybody that’s going to move up into management type jobs, they’re going to be managing human beings 40

Locations of students in the University of Alaska Fairbanks School of Management’s Homeland Security and Emergency Management program that is offered through the Center for the Study of Security, Hazards, Response, and Preparedness.

MAP: Courtesy of UAF HSEM PROGRAM

which requires some HR capability; they’re going to be managing budgets and need some kind of background so they can take a look at a financial balance sheet and understand it.

We also build that capacity so that they understand how technologies continue to move forward,” Carlson says.

Sean McGee is an HSEM instructor and is the outreach coordinator for the program. He emphasizes that the program can be catered to any student’s learning schedule or situation.

The program currently has between 250 and 275 students, and approximately two thirds of them are long-distance students—many currently employed. McGee says the program is designed as a “blended learning environment.”

While he conducts class in a traditional way, cameras are set up in the classroom to capture the instructor, students, and their interactions.

“You could be in Newark, New Jersey, watching the live class from Fairbanks,” McGee says.

The program also benefits nontraditional students. “For the student who happens to be on-shift at that particular time and can’t be a part of the live class, I want to offer them the opportunity to watch the recording, and—in order for them to participate in a meaningful manner—afford them the opportunity to answer some questions that we covered as a result of our discussion in the room,” he says.

HSEM offers both an undergraduate and graduate degrees, and students can earn either in-class, online, or through a combination of both.

Carlson says there are three categories of emergency response the program covers: manmade disasters, such as a terrorist event; natural disasters such as a hurricane or earthquake; and technological disasters, such as a cyber security issue, a pipeline leak, or a dam failing.

“A dam is really a piece of technology that has been put place to prevent water moving down

Alaska Business Monthly | January 2017 www.akbizmag.com

“The sad fact of the matter is that a lot of times, you’re never going to have an effective response unless a community has been forced to respond to it in the past.”

—Cameron Carlson Director, Homeland Security and Emergency Management Program and the Center for the Study of Security, Hazards, Response, and Preparedness Program, UAF School of Management

an area, either for storage capacity or perhaps in some areas for power generation and the like. But it’s a still a technological construct,” Carlson explains.

A Cycle to Emergencies McGee says that responding to an emergency is only one part of emergency management.

There’s a cycle to emergencies that includes response, recovery, mitigation, preparedness, and (if possible) prevention. “I put ‘prevent’ out just to the side of it for the simple reason that certain events might be preventable—other ones not necessarily,” McGee says. “A hurricane is coming? There’s really very little we can do to stop the hurricane.” The program covers all aspects of the cycle of emergencies, from immediate response to mitigating risk factors to longterm plans were another emergency to occur.

Carlson says, “The sad fact of the matter is that a lot of times, you’re never going to have an effective response unless a community has been forced to respond to it in the past.”

For example, the 1964 Great Alaska Earth-

quake had a tremendous impact on the entire state; even today, construction follows guidelines to accommodate the number of earthquakes in Alaska, and a current significant concern about the state of infrastructure of the Anchorage Port is whether or not it would retain integrity in the event of a significant earthquake. Alaskans don’t plan for tornados the same way.

McGee says that sometimes when a community doesn’t have a plan, “that’s when a tragedy becomes a disaster.”

Current and Appropriate Curriculum Carlson says he and other faculty have worked closely with local emergency responders to ensure the curriculum is current and appropriate, including the City of North Pole, the City of Fairbanks, the Division of Homeland Security and Emergency Management, the US Northern Command out of Peterson Air Force Base in Colorado, and Joint Base Elemendorf-Richardson, in addition to local emergency responders.

“We work with other organizations here on campus that have done oil spill response. For the Arctic Collaborative Workshop, one of the specific scenarios had to do with was an oil spill response up on the North Slope,” McGee says.

Carlson and McGee have significantly grown the HSEM program over the last few years, and they’re focusing on continuing to expand while maintaining the quality and scope of education. McGee says he’d like for there to be “more awareness of the program.

I don’t think people realize it’s there.” He continues, “I know my first-responder [students] understand aspects of emergency management, they understand aspects of homeland security, they get that. But who else is out there that is looking, searching for that potential career and wondering what it is that they’re going to do? This is an opportunity that’s here in Fairbanks.”

Carlson is bullish about the program: “I work with incredibly hard-working, talented people, and in a way that’s unique to this field.

And it’s beyond the academics; you know your students are going to go away at the end of the day, that they’re going to be saving people’s lives, they’re going to be saving companies’ bottom lines, and that they will have been educationally prepared to do so.”

R

Tasha Anderson is an Associate Editor for Alaska Business Monthly.

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Learn more about UA Local 367 and the mechanical contractors we work with by visiting www.ualocal367.org and www.amcaanc.com January 2017 | Alaska Business Monthly

41

OIL & GAS

Oil and Gas Industry Activity Slowing Down Some pockets of success and optimism exist

Nikaitchuq Unit ENI Petroleum

Pikka Unit Repsol E&P USA Inc. Armstrong Energy, LLC GMT Exploration Co., LLC Qugruk Unit Repsol E&P USA Inc. Armstrong Energy, LLC GMT Exploration Co., LLC Colville River Unit ConocoPhillips Alaska, Inc. Anadarko Petroleum Corp.

Petro-Hunt, LLC XH, LLC Rosewood Resources Inc.

100%

77.74% 22.26% Milne Point Unit Hilcorp Alaska, LLC BP Exploration (Alaska) Inc. Eni Petroleum US LLC Herbaly Exploration LLC George Alan Joyce, Jr.

49.00% 38.25% 12.75%

25.00% 56.26% 18.75%

48.89% 48.89% 1.09% 1.02% 0.10%

Prudhoe Bay Unit ExxonMobil Alaska Production Inc. 36.40% ConocoPhillips Alaska, Inc. 36.08% BP Exploration (Alaska) Inc. 26.36% Chevron U.S.A. Inc. 1.16%

Dewline Unit UltraStar Exploration LLC

100%

Northstar Unit Hilcorp Alaska, LLC

76.63% 22.45% 0.39% 0.30% 0.23%

100% Point Thomson Unit ExxonMobil Alaska Production Inc. BP Exploration (Alaska) Inc. ConocoPhilips Alaska, Inc. All Others Liberty Unit Hilcorp Alaska, LLC BP Exploration (Alaska) Inc.

Bear Tooth Unit ConocoPhillips Alaska, Inc. Anadarko Petroleum Corp.

75.38% 24.62%

Greater Moose’s Tooth Unit ConocoPhillips Alaska, Inc. Anadarko Petroleum Corp.

Kuparuk River Unit ConocoPhillips Alaska, Inc. 54.02% BP Exploration (Alaska) Inc. 38.30% Chevron USA Inc. 4.95% ExxonMobil Alaska Production Inc. 2.73%

78% 22%

Tofkat Unit Caracol Petroleum, LLC 47.25% TP North Slope Development, LLC 29.25% MEP Alaska, LLC 13.50% AVCG, LLC 6.25% Ramshorn Investments, Inc. 3.75%

Southern Miluveach Unit Caracol Petroleum, LLC 36.28% TP North Slope Development, LLC 22.46% Mustang Oerations Center 1, LLC 20.00% MEP Alaska, LLC 10.37% Ramshorn Investments, Inc. 6.08% AVCG, LLC 3.82% Mustang Road, LLC 1.00%

Placer Unit ASRC Exploration, LLC

A

By Julie Stricker

laska’s oil and gas industry made some big headlines in 2016, with massive oil discoveries on the North Slope and exploration expanding in previously undeveloped areas of the state.

Many of those discoveries came through smaller, independent petroleum exploration companies lured to Alaska by generous tax credits for exploration passed by the Legislature in 2013. Senate Bill 21 (SB21), which increased production taxes but provided tax credits for companies exploring for oil and gas in Alaska, was cited as the impetus behind the increase in petroleum exploration by independent companies such as Caelus Energy Alaska, Great Bear 42

Duck Island Unit Hilcorp Alaska, LLC ExxonMobil Alaska . Production Inc Chevron USA Inc. ConocoPhillips Alaska, Inc

100%

Beechey Point Unit Caracol Petroleum LLC TP North Slope Development Chevron U.S.A. Inc Exxon Mobil Alaska Production MEP Alaska LLC Ramshorn Investments Inc. AVCG LLC

53.02% 24.76% 19.17% 3.05%

62.75% 31.95% 4.94% less than 1%

50% 50%

Badami Unit Savant Alaska, LLC ASRC Exploration LLC Red Wolf Exploration, LLC

67.30% 32.50% 0.20%

36.55% 22.62% 11.33% 11.33% 10.44% 4.13% 3.60%

Petroleum, and Armstrong Oil and Gas, as well as regional Native corporations Doyon, Limited and Ahtna Inc. However, recent changes in the tax system are spurring some uncertainty about the future for these finds.

In 2016, low oil prices led to a massive budget deficit for Alaska. Critics said SB21 tax credits were too costly for a state operating in the hole and Alaska Governor Bill Walker signed a law cutting oil and gas exploration credits. He also vetoed $430 million in funding for existing tax credits. The changes mainly affected smaller, independent exploration efforts, but perceived instability in the state’s regulations could have far-reaching repercussions.

“Alaska is still opportunity rich—but so is the rest of the world and especially the Lower

48,” says Scott Jepsen, ConocoPhillips vice president of external affairs and transportation. “Decisions over the next few years will determine if Alaska can stay in the game.”

Higher Stakes The stakes for some companies got much higher in 2016.

In October, Caelus Energy Alaska announced it had made a “significant” light oil discovery at Smith Bay on Alaska’s North Slope.

Caelus drilled two wells in early 2016, which, coupled with existing 3D seismic testing, indicated reserves in its current leases of up to 6 billion barrels. In a news release announcing the discovery, Caelus said oil in adjoining acreage could boost reserves to 10 billion barrels.

Alaska Business Monthly | January 2017 www.akbizmag.com

MAP: State of Alaska, Department of Natural Resources, Division of Oil and Gas

Oooguruk Unit Caelus Natural Resources Alaska, LLC ENI Petroleum U.S., LLC

“This discovery could be really exciting for the state of Alaska,” Caelus CEO Jim Musselman said in the release. “It has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades. Fiscal stability going forward is critical for a project of this magnitude. Without the state tax credit programs, none of this would’ve happened, and I’m not sure Caelus would’ve come to explore in Alaska. We’re proof that the credit programs work.”

Smith Bay could add 200,000 barrels of light oil to the trans-Alaska pipeline daily, Caelus said. Both wells tapped into a large petroleum-bearing complex that spanned more than three hundred square miles. Caelus had planned to drill a third well in 2017, but fiscal uncertainties brought on by low oil prices and questions about the future of Alaska’s oil tax credit system made the company decide to delay the well. It also put its 100 million to 150 million barrel Nuna development at Oooguruk on hold for the same reasons. Caelus is also looking at 3D seismic information from a 350,000-acre lease east of Prudhoe Bay, which could hold up to 750 million barrels of oil.

The Smith Bay complex is far west of the main production areas in Prudhoe Bay and the National Petroleum Reserve-Alaska, where most of the action was happening in 2016.

Successful Year It was a successful year for ConocoPhillips Alaska, which has been focusing recent exploration in NPR-A. It has three projects underway on the eastern edge of the 23 million-acre reserve, all linked by a road and pipeline. In late 2015, ConocoPhillips brought its CD-5 site online and in 2016 saw production levels of 20,000 barrels per day. CD-5 is the first oil and gas development on Alaska Native corporation lands within NPR-A. The company received approval to add another eighteen wells to the site in April. It started construction at its Greater Mooses Tooth Unit and is expecting oil production to begin in 2008. In a November presentation, Scott Jepsen, ConocoPhillips vice president of external affairs and transportation, noted GMT1 cost about $900 million to develop and is expected to produce about 30,000 barrels of oil per day at peak. This winter, Jepsen estimates construction at the unit will employ between six hundred and seven hundred people.

In the meantime, ConocoPhillips is in the midst of permitting for GMT2, about eight miles southwest of the first site. It is expected to cost more than $1 billion, Jepsen says, and is expected to produce its first oil late in 2020.

ConocoPhillips also is expanding its Kuparuk unit, which will provide an estimated 8,000 barrels of oil per day when it comes online in 2018 and create more than one hundred construction jobs. The cost is estimated at $450 million.

Since SB21 passed in 2013, ConocoPhillips has contracted for three new-build drilling rigs, says Lisa Bruner, North Slope operations and development for ConocoPhillips Alaska.

The company received two new oil rigs in 2016, Doyon 142 and Nabors CDR3. It also announced it had contracted with Doyon Drilling to build a powerful, extended-reach drilling rig www.akbizmag.com

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with the ability to drill to thirty-three thousand feet. The rig, which is expected to be completed in 2020, will double the reach of existing drills and give ConocoPhillips access to a 125-milesquare-mile area around the drill, allowing it to develop its Fiord West field at Alpine.

The extended-reach drill rig will benefit Alaskans, ConocoPhillips Alaska President Joe Marushack says in a news release.

“Adding the ERD rig to our rig fleet on the North Slope is a potential breakthrough event. It could enable increased oil production by reducing the cost of developing economically challenged or previously unreachable resources,” he said.

The extended-reach rig is highly mobile and can be moved to other sites on the North Slope, Jepsen says. It requires fewer drilling pads, which reduces the development footprint and helps minimize the environmental impact.

Encouraging Results Other companies also saw encouraging results in 2016.

In late 2015, Armstrong Oil and Gas and its partner Repsol announced a major find at their Pikka Unit site on the North Slope. The discovery, which they’re calling Nanushuk, could put about 120,000 barrels of oil per day through the pipeline, with production estimated to begin in 2022. However, Armstrong believes they are sitting on an even larger pool of oil that could pay big dividends down the road if oil prices rise.

The company is planning a wildcat well this winter about fifteen miles away after looking at

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3D seismic data from the area. The Horseshoe No. 1 well would be a nine-thousand-foot well accessed through a 4.5 acre ice pad.

Armstrong is also planning a well at the southern edge of the Pikka Unit to further evaluate the deposit.

Another independent oil exploration company, Great Bear Petroleum, also believes it may be sitting on an elephant. Great Bear Petroleum, based in Anchorage, holds 570,000 acres in leases. In early 2016, it had acquired five hundred square miles of 3D seismic surveys and was in the process of nearly doubling that area, which would be one of the largest proprietary 3D seismic programs on the North Slope. It has drilled three exploration wells, according to a presentation to the House Resources Committee by Pat Galvin, Great Bear chief commercial officer and general counsel.

Great Bear, which was founded in 2010, initially had planned to pursue unconventional shale deposits on the North Slope, but turned to conventional sources after it found itself in an “Alaska Shale Play Catch-22.” Producing shale oil is uneconomic without cost reductions, which require a “critical mass of drilling activity, such as that generated by a shale play,” according to Galvin. Indications so far are promising, says Matthew Allen, managing director and CEO of Australia-based Otto Energy, which has an 8 percent to 10.8 percent working interest in Great Bear leases.

“Otto is very pleased with the recent track record of the Alaskan North Slope, which continues to deliver on both the conventional

and unconventional fronts,” Allen states.

The companies are studying the results of the seismic surveys and plan to begin drilling two to four sites early in 2017. At least one well in the lease area, drilled in 1988, shows strong signs of oil potential, although technology at the time was unable to tap it economically. With the improvements in technology over the past thirty years, Great Bear says it believes the economics are now in its favor.

The 2017 drilling campaign is expected to be the start of a multi-year development. To date, Great Bear has spent about $220 million, of which about $140 million is expected to be reimbursed by tax credits. Great Bear told the House committee that the “number of exploration wells we will drill is directly dependent on the tax credit program.”

“The primary objective of the multi-well drilling campaign is to identify the most prospective of these conventional trends and sufficiently test their productive potential,” Allen continues. “In addition, recent drilling results immediately to the south of Otto’s acreage confirm the unconventional Hue shale potential as an oil target across a significant portion of Otto’s acreage.”

Elsewhere on the North Slope, Brooks Range Petroleum Corporation says it is back on track to develop its Mustang field in late 2017 after running into production complications in 2015. Brooks Range Petroleum, a consortium made up of seven owners, plans to build operations centers and worker camps early in 2017 and complete the pipeline to the site at the Southern Miluveach unit. The field

Alaska Business Monthly | January 2017 www.akbizmag.com

is estimated to hold proven reserves of 24.7 million barrels, with production peaking at 12,000 barrels of oil per day. Actual reserves may be much higher, according to estimates.

Cook Inlet Alaska’s other major developed oil and gas fields in Cook Inlet seem to have cooled off a bit. A lease sale in May produced no bidders, but with the three major producers looking to work in the area over the long run, there was still plenty of activity in 2017.

Hilcorp Alaska is the dominant producer in the region and has been buying up other leases, including the North Cook Inlet gas field near TyonekFurie Operating Alaska, a relative newcomer to the area, inked a longterm natural gas contract in April 2016 with Homer Electric. The company is also looking for oil. It brought in the Randolph Yost jackup rig to drill for oil in the Kitchen Lights gas field in north Cook Inlet. The company sought to drill up to nine wells over the next five years, but the final number will depend on the state oil tax credit system.

BlueCrest Energy, an independent Texasbased petroleum exploration company, struck oil in the lower Cook Inlet in April 2016 and became the first company to use large-scale fracking techniques in Cook Inlet. The reservoir offshore of Anchor Point may hold anywhere from 70 million to 200 million barrels of oil. Called the Cosmopolitan unit, BlueCrest plans to use extended-reach technology to reach the reserves from onshore locations.

www.akbizmag.com

Middle Earth Two Alaska Native regional corporations are exploring in previously undiscovered basins near Glennallen and Nenana.

Doyon, Limited, headquartered in Fairbanks, drilled a third exploration well in the Nenana Basin in 2016, but the Toghotthele No. 1 well did not strike commercial quantities of oil or gas, says President and CEO Aaron Schutt. However, the results were intriguing enough that Doyon’s board has sanctioned additional 3D seismic test over a sixty-four square mile region to the west of the current wells.

Doyon plans to conduct the tests over the winter and evaluate the results next summer.

Any new wells would likely have to wait until winter, as there is no road access to the site.

Doyon partnered with CIRI Inc. on the well, and Schutt says the Anchorage-based regional corporation would have the option to partner with them in a future well.

“We’ve learned a lot about the geology of the basin through the wells,” he says. “So we will be analyzing those results. It takes months for the processing and the special seismic voodoo they do in places like Denver and Calgary and Houston.”

While Doyon is looking for both oil and gas, they would like to strike oil, he says.

“Oil is a much more economic commodity,” he says. “So we’d love to find oil. We’ve found evidence of oil in the basin in those two or three prior wells.”

Ahtna drilled an exploratory natural gas well only eleven miles from its Glennallen

headquarters. It spudded its Tolsona No. 1 well in late September. The corporation hopes to use local sources of natural gas to help lower energy costs for shareholders. Even larger finds would be an economic boon to the region. Ahtna said it planned to release information about the well and future efforts in 2017.

Both Doyon’s and Ahtna’s efforts are spurred by so-called “Middle Earth” state tax credits.

Offshore Prospects In November, President Obama removed all Alaska offshore waters from federal lease sales through 2022.

In a news release, AOGA President and CEO Kara Moriarty said, “The Obama administration’s decision to close America’s Arctic to energy development is a slap in Alaskans’ face.

A diverse group of Alaskans, including Alaska Natives, labor unions, industry leaders, and everyday Alaskans have repeatedly advocated for keeping America’s energy options open. …

The Arctic offshore still represents the largest and best opportunity available to this nation to bolster its economy and energy independence. With more than 27 billion barrels of oil in the Arctic Outer Continental Shelf, development represents the next generation of Alaska’s oil and gas industry.”

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Freelance writer Julie Stricker lives near Fairbanks.

January 2017 | Alaska Business Monthly

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OIL & GAS

‘Currently, a golden age for LNG buyers,’ says global energy analyst

By Larry Persily Larry Persily, assistant to the Kenai Peninsula Borough mayor, was invited to participate in an LNG conference in Vancouver, B.C., and prepared this report as part of the borough’s ongoing efforts to share information about global LNG market developments. The conference paid the travel expenses.

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global oversupply, low prices, and market uncertainty have combined to make life difficult for gas producers and liquefied natural gas (LNG) project developers.

Demand for LNG will grow in time, but “it is a very competitive market out there right now,” said Deepa Poduval, senior managing director at Black & Veatch Management Consulting.

“Development of new greenfield LNG mega-projects will be challenging worldwide in the near-term as pricing and supply overhang gets played out,” Poduval said at the 19th annual BC Natural Gas Symposium in Vancouver. “There are a large number of sources of potential LNG supply. … It is currently a golden age for LNG buyers.”

Examples of changing market conditions are the LNG supply contracts signed by buyers several years ago in anticipation they would 46

need the gas. Japan’s Osaka Gas and also Chubu Electric Power, which is now part of the Japanese LNG-buying consortium called Jera, struck deals in 2012 to buy gas from the Freeport LNG project under construction on the Texas coast, with a scheduled start-up in 2018. But with weaker demand at home, both Jera and Osaka Gas are looking to sell volumes they have under contract from Freeport.

Buyers are becoming sellers, and buyers are also renegotiating for lower prices under their existing contracts, as India’s Petronet did ten months ago when it succeeded in cutting almost in half what it pays for Qatari LNG by negotiating for new terms under the contract’s oil-price indexation.

In addition to multiple other clients, Poduval during the past ten years has advised the state of Alaska, providing information to help state officials and the public better understand the economics of LNG projects. She did not offer any comments in her Vancouver presentation on the proposed Alaska LNG development or the state’s effort to take over control of the project from the three major North Slope oil and gas producers.

The state has said its target market is Asia, where Japan, South Korea, and China are the big customers.

Oversupply Is Growing Buyers in those countries and elsewhere in the world can count all the new LNG export projects coming online in the past couple of years and in the next few years, especially in Australia and the United States, with even more hopefuls lined up for the next decade.

As they count up all the oversupply, they see the opportunity to negotiate for lower prices.

While annual global LNG production capacity utilization was about 85 percent 2011-2014, that utilization factor could drop closer to 75 percent by 2020, Poduval said in her October 25 presentation in Vancouver.

Supply capacity, or overcapacity, after 2020 is anyone’s guess. Adding up just the LNG production and export plants proposed for the United States and Canada—not counting East Africa, Russia, and other potential suppliers— the total is more than double projected worldwide demand in 2025, said Shelley Milutinovic,

Alaska Business Monthly | January 2017 www.akbizmag.com

chief economist at Canada’s National Energy Board. Most of the proposed projects will not be built if demand does not materialize, and demand projections in some areas are slipping.

Canada’s oil sands projects use a lot of natural gas to create heat, steam, and electricity for recovery of the thick bitumen. In January 2016, the energy board predicted oil sands demand for gas would hit 5 billion cubic feet a day by 2040, almost double today’s needs.

But, with low oil prices knocking down oil sands investment, the energy board now projects demand might reach 3.5 billion cubic feet a day by 2040, Milutinovic said.

Regardless of possibly weaker demand in the oil sands, Canadian gas producers—like Alaska—are looking to the LNG market in Asia. Their historical main customer, the United States, has plenty of gas from its own shale fields. The United States has added more than 21 billion cubic feet a day of gas production since 2008, equal to 140 percent of total Canadian production and taking away market share from its northern neighbor.

United States Looks to Exports The massive build-up in US gas production has propelled the country into the export business, with four large LNG terminals in various stages of construction in Louisiana and Texas and a smaller project in Maryland.

It’s generally not gas producers, however, that are building those projects, but rather what have been called toll-booth operators that charge for their services. The “tolling model”

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is unique to the United States at this time.

The plant owner does not take the market risk of LNG prices—that’s up to the customer that reserves capacity at the liquefaction plant and has to pay for the capacity even if it doesn’t get used.

The price for most of the LNG delivered from the US terminals will be the cost of the gas on the market, any pipeline charges to deliver the gas to the LNG plant doorstep, the cost of liquefaction including a return to the developer, and the cost of shipping to the customer. “Put together, that became your LNG pricing formula,” Poduval said. It was a much more attractive price for buyers than the traditional LNG contract linked to a barrel of oil on an energy-equivalent basis.

“In many minds, this was a slam dunk,” she said of the contracts based on lower natural gas prices in the United States rather than LNG prices based on $100-a-barrel oil of just a couple of years ago. “You saw people flooding to that first wave of contracts.” Osaka Gas and Chubu Electric were among the buyers caught up in that flood. That’s when oil-linked LNG was selling at $15 per million Btu and higher; the spot-market in Asia is now down to less than half that price.

But as US natural gas prices have risen and oil prices have stayed low, it could cost at times more to buy Gulf Coast LNG linked to US natural gas prices (closer to $9 per million Btu when the cost of the feed gas is around $3) than LNG priced at a percentage of a barrel of oil (around $7 to $8 per million Btu with oil at $50 per bar-

rel). Japanese utilities are re-examining the move to US gas-linked LNG pricing and looking for a mix of pricing variables, Poduval said.

Buyers, particularly in Japan, also have a desire to move away from more rigid, long-term gas supply contracts to shorter-term deals with more flexibility, she said, noting that the LNGbuying venture Jera expects to reduce its volume of LNG supply under long-term contracts by more than 40 percent by 2030.

“LNG pricing may trend toward more decoupling from oil with increasing share of spot trading,” she said in her presentation.

Not just pricing, but the buyers are changing too, Poduval said.

In 2015, Japan, South Korea, and Taiwan imported 54 percent of the world’s LNG. By 2020, Black & Veatch estimates that will fall to 40 percent as total demand in the three countries holds flat. China and India are projected to double their LNG imports between 2015 and 2020, with emerging Asian nations to triple their imports. Total demand from China, India, and emerging Asian nations could reach almost 80 percent of the annual consumption in Japan, Korea, and Taiwan.

Low LNG prices have also attracted many small-market import countries that were uneconomical to serve in the past, helping to build new demand for the fuel.

R Larry Persily is the Oil and Gas Special Assistant to the Kenai Peninsula Borough Mayor’s Office.

January 2017 | Alaska Business Monthly

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EMPLOYEE MANAGEMENT

Should You Fire an Employee Who’s Made a Mistake?

By Dave Marinaccio

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t’s a position that no boss wants to be in. Your employee has done something wrong. Maybe it has cost the business in a serious way, or maybe it raises concerns about the employee’s judgment and ability to problem solve. Either way, it can be incredibly stressful. Do you use the incident as a teaching moment, both for the employee who made the error and for the company at large? Or do you lay down the law and fire them?

There is probably a company policy in place that can provide some guidance. However, there is something more important than the employee manual, and that’s professional judgment. Understanding the context of the employee’s action is vitally important. And I am a firm believer in following the spirit of the law rather than the letter of the law.

Zero Tolerance One of my favorite New Yorker cartoons shows a large room filled with cubicles. Only a few workers populate this expanse, giving the appearance of a ghost town. In the foreground, two managers are surveying the sea of empty squares. The caption reads: “Maybe zero tolerance is setting the bar too high.”

Zero tolerance means absolute compliance with company rules. Any infraction is automatically punished by preset policy regardless of the individual circumstances of the transgression.

No exceptions. At the agency I helped to create, LMO, we struggled with the idea of implementing a zero tolerance policy. We finally decided against it. This is not to say people can’t be reprimanded or fired. There are certainly situations that call for that. But, I have found that most mistakes are just that—mistakes. They can usually be fixed, and employees can use those mistakes as a learning opportunity.

A lot of factors played into our decision not to be a zero tolerance workplace. The most important was the creative culture of our shop.

When exploring ways to position products, I want my writers and art directors to leave no stone unturned, to try new and unexpected things. I want them to push the boundaries.

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Pushing the Boundaries One of the boundaries they inevitably come into contact with is the one between good taste and bad taste. The line between good and bad taste is not only hazy, it moves. Over time, we have come to accept things that our parents would have found offensive. In the 1960s, the network censors had a rule that any scene that took place in a bedroom had to show separate beds. Today, such a rule seems foolish. But it is fair to assume that in the future folks will look back and find some of our mores just as foolish.

In my half century roaming around this planet, I’ve observed a truism about human beings. They are not perfect. Not one of them.

Why then, would we expect them to be perfect in the workplace?

Don’t be confused. We do not excuse inappropriate behavior. People have been fired from LMO for improper conduct. But that conduct has to be put into perspective. The reason for the conduct is as important as the conduct itself. And sincere contrition should always be considered.

Sometimes a transgression is sufficient to warrant discharge. When that happens, the particulars of the firing should be kept private while informing the staff that the employee has left the company. Soon after, a general reminder in an email, perhaps a paragraph from the employee manual, can be instructive. It both notes the event and resets proper exceptions for the staff.

No Such Thing as Perfect But the fact is there is no such thing as perfect.

I remember the first time I looked through a loupe. A loupe is a small magnifying glass you can place on a surface and put one eye on.

Jewelers use them to check gems. Art directors use them to check the printing on ads.

I picked up a loupe one day and put it over the logo of an ad. The magnification showed the straight edge of the logo to be extremely jagged.

The perfectly straight line was an illusion.

Zero tolerance demands you fire a fine person who makes an innocent mistake. The standard and the price of such a policy are simply too high.

Worst of all, it eliminates one of the noblest of human qualities, forgiveness. Very often a second chance brings out the best in a person. You gain a better, more loyal employee than the one you had before the mistake.

R Dave Marinaccio is an international bestselling author and successful marketing business entrepreneur. His bestselling book, All I Really Need To Know I Learned From Watching Star Trek, and his newest title, Admen, Mad Men, and The Real World of Advertising, are drawn from his long career in the advertising business. He is co-founder and SVP, CCO of Laughlin Marinaccio & Owens in Arlington, Virginia, the largest shop in the Washington DC area with over $100 million in billings.

Alaska Business Monthly | January 2017 www.akbizmag.com

HR Matters

By Kevin M. Dee

A New Paradigm It starts by listening deeply

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raditionally the New Year is a time of reflection and opportunity—a time to make personal resolutions to better ourselves as human beings, partners, and coworkers. However, some people just want to change their partners and co-workers instead of themselves and will put great effort into the attempt with little or no effect. In the spirit of looking forward and creating positive change in the world, let’s talk about how we can bring about change where everyone wins, where we unlock the amazing potential of every employee to rise to their best game and deliver the results in our companies that truly mean success.

If this sounds too good to be true, it’s not. In fact, there is compelling evidence that if you are not creating a paradigm shift to a more engaged workplace, you are behind the power curve.

Evolve or Die General Electric (GE), under Jack Welch, was famous for rating managers ruthlessly. If you ranked low, you were summarily fired. This “Rank and Yank” system was brutal and annual reviews were dreaded. In 2015 GE abandoned the annual review process entirely. They and many other major corporations realized that performance management is a moving target, not just an annual set of goals. Most organizations have gone to an ongoing coaching model where frequent continuing support is offered to all employees in order to allow everyone to work up to their potential. GE even has an app for it.

Our workplaces must evolve or die; it’s really a simple choice. If your workplace is not stepping up to embrace a healthy engaged workforce, then the painful reality is that it is dying through talent loss and unhappy mediocrity or becoming the place where innovation, results, and competition go to die. There is only one positive choice for companies in today’s world: It’s either get on the bus and become a workplace that empowers everyone or get left behind. So how can you make informed choices on creating a great workplace?

Questions and Conversations It starts by listening deeply—listening to every employee’s point of view, issues, concerns, www.akbizmag.com

and successes. Groups of related workers and cross departmental workers need time to talk to each other in order to find solutions and innovate. Do you have standing quality improvement groups in your workplace? Are they tasked to look for ways to make a process, service, or product better? Are the recommendations that come from these teams listened to?

Implemented? Do your teams understand the need to view an opportunity through the lens of a return on investment if it is implemented?

All these questions are in need of a conversation. Are you creating the opportunities for these vital discussions to occur at all levels of your organization?

The questions and conversations above also have to be filtered through the lens of work/ life integration. How will any changes affect me and my quality of life? We are moving towards a model of integrating our lifestyle and beliefs and social needs with our work lives.

Work/life balance is a bit of a myth.

A Better Workplace I don’t know anyone who wants to work in a place where everyone is grossly dissatisfied and unhappy and unconnected to each other.

The workplace of today must be a place where everyone trusts one another and has respect for every individual, and where all contributions are sacrosanct.

This is where asking employees to define a better workplace and the ways to create it economically is mission critical. Whether it is benefits, work hours, subsidized childcare, or simple amenities like lit parking lots, the best workplaces are asking these types of questions and implementing programs to attain and keep the talent they have engaged and motivated.

Acknowledge, Recognize, Celebrate The final piece of this puzzle is Acknowledgement, Recognition, and Celebration. Have you ever noticed how quickly social media posts get acknowledged with a “like,” a “love,” or an emoticon of celebration? We are quick to be there in congratulatory support of our friends online, but does that also happen at your work?

Have you ever noticed that in many workplac-

es doing good work is like wetting your pants while wearing a dark suit—it gives you a warm feeling and no one really seems to notice.

How does your workplace stack up? Do your employees feel their contributions are recognized and acknowledged? Does everyone recognize how their efforts contribute to your organizations success? Groups that do acknowledge, recognize, and celebrate have fun achieving and outperforming competitors. They quickly mitigate issues, and they become close and supportive of each other to the best of their abilities.

And frankly, we will always remember those teammates because of what “we” accomplished together and the fun we had doing it.

Choice and Voice I hear and see a lot of people say change is hard and people don’t want change. The truth is people don’t want change put on them without any choice or voice in the matter. When employees are truly engaged and listened to and have substantive dialogues to improve the workplace and business outcomes, they become empowered.

When we put everyone in charge of success, with power and authority to achieve it, we all win.

The illusion of command and control management is a dinosaur in today’s world. The choice couldn’t be clearer. Do you want your workplace to survive and thrive or go the way of the dinosaur?

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Kevin M. Dee has a master’s degree from Vanderbilt University and is the president of KMD Services & Consulting. He has been providing organizational development services, human resources consulting, and leadership development since 1984 in Alaska and internationally. Contact him at mail@kmdconsulting.biz.

January 2017 | Alaska Business Monthly

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RIGHT MOVES Alaska Business Monthly

Alaska Business Monthly is pleased to announce our newest team member, Account Manager Christine Merki. With over thirteen years of local media sales experience and ten years of television writing and producing experience, Merki brings a comprehensive set of skills to our Merki advertising sales team. Her marketing knowledge includes strong creative, media planning, product pricing, sales strategy, customer support, and market research. She has a deep sense of community and is passionate about helping businesses with the challenges and opportunities Alaska offers.

Anchorage School District

Superintendent Dr. Deena Paramo named Jim Anderson the Chief Financial Officer for the Anchorage School District.

Anderson had been the executive director of ASD Student Nutrition and previously served as the chief of logistics for US Army Alaska.

Anderson

AGDC

The Alaska Gasline Development Corporation hired Rosetta Alcantra, former President of E3 Environmental, to become AGDC’s Vice President of Communications.

Alcantra has extensive statewide experience with stakeholder engagement and cross-cultural awareness. Alcantra has a BA in Political Science from the University Alcantra of Alaska Anchorage and began her professional career in the Alaska State Legislature as a legislative assistant.

Anchorage Concert Association

The Anchorage Concert Association has named Laura Carpenter as its new Marketing Director.

Carpenter has been working in communications in Alaska for more than a decade, from technical writing and public affairs to reviewing and covering the arts. Most recently Carpenter was the marketing and public relations manager for the Anchorage Museum at Rasmuson Center. Carpenter

Alaska Garden & Pet Supply

Alaska Garden & Pet Supply, Inc. dba Alaska Mill Feed and Garden Center has promoted Kimberly McCourtney from

Sales Manager to Vice President. McCourtney has been with Alaska Garden & Pet Supply for six years. She has a degree in Animal Science from Michigan State University.

Mark Goodman has been promoted to Chief Information Officer. Goodman has been with the company for twenty-eight years. He has a degree in Business from the University of Wyoming. Goodman has worked in many operational functions at the company including warehouse, facilities management, and IT.

Wilson Albers & Company

Wilson Albers & Company has hired a new Marketing Administrator, Ashlee Bobbitt. Bobbitt joined WAC June 2016 and brings ten plus years of professional experience to the team which includes management, marketing, and client support. Bobbitt possesses an Associate degree in Business Administration from Bobbitt the University of Phoenix and is in pursuit of her Bachelor’s Degree in Marketing.

Resource Data Inc.

Resource Data, Inc. has hired Paul Schmidt as a Project Manager/Senior Analyst to its Anchorage Branch. Schmidt has a Bachelor of Science in Information Processing Systems from the University of Cincinnati.

Most recently he worked for GeoNorth, LLC where he was a senior project manager Schmidt mentoring IT professionals in project management and development best practices.

Jon Steele has been hired at Resource Data as a Systems Engineer to their Anchorage Branch. Steele recently relocated to Alaska from San Diego, California, where he was employed as a senior data center operator at Scripps Healthcare. Prior to that Steele worked Steele for Regence BlueCross BlueShield of Oregon as a network engineer III. Steele has varied experience in network installs, maintenance, and troubleshooting, as well as team leadership and client relations.

Additionally, Resource Data hired George Grawe as a Senior Systems Engineer to the Anchorage Branch.

Grawe, an IT professional, has held positions including systems analyst, document solutions manager, applications manager, and IT support specialist.

Grawe’s strong analytical skills and belief Grawe

in team building with an emphasis on employee development will make him a great addition to the Resource Data team.

SBA Alaska District Office

Nancy Porzio returns to the SBA Alaska District Office—where she first started with SBA nearly thirty years ago—following a career during which she has led several other SBA districts across the country, most recently serving as director for the SBA Seattle District Porzio Office. Porzio will oversee a staff of seven and direct SBA programs related to assisting Alaska entrepreneurs and small businesses access financing, business advising, and government contracts.

Alaska USA Federal Credit Union

Alaska USA Federal Credit Union has appointed three individuals to fill executive positions within the organization.

John Cassidy is Chief Financial Officer. Cassidy brings more than twenty-five years of executive-level financial institution experience, including Cassidy positions as president and CEO, as well as CFO of a corporate credit union David Vanzant is Vice President, Enterprise Security. Vanzant has more than twenty years of experience in physical and information security, stemming from a career as special agent for the Federal Bureau of Investigation. Vanzant Shawn Brume is Senior Vice President, Information Management Governance. Previously, Blume spent seventeen years with IBM in the tape storage division. He has been active in the Storage Networking Industry Association and the Linear Tape-Open Brume Program throughout his IT career.

AECOM

Kahlil Bolling joins AECOM as a Marketing Coordinator to support the firm’s Alaska marketing operations. He is responsible for managing proposal coordination, event coordination and facilitation, company publicity, and promotional efforts all across Alaska. Bolling holds Bolling a Bachelor of Science in Business-

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Compiled by Tasha Anderson Marketing from Ferris State University in Big Rapids, Michigan, and also studied at the College of the Canyons in Los Angeles, where he earned his Associate of Science in Accounting.

Arctic Slope Telephone Association Cooperative

Arctic Slope Telephone Association Cooperative (ASTAC) welcomes Thomas Lochner as the newest member of the ASTAC team. Lochner will assume the role of Director of Business Development and Sales. He comes to ASTAC with exceptional telecom experience.

Lochner

Osborne Construction Company

David Klopp joins Osborne Construction Company as Vice President, Operations and Chief Operations Officer. Formerly with Sellen Construction, Ukpeaġvik Iñupiat Corporation, and Turner Construction, Klopp brings more than twenty-eight Klopp years of experience to his new team.

He has a Bachelor of Science in Construction Engineering Technology from Montana State University.

Kumin

Jeff Lintelman has joined Kumin as a Designer, focusing on architectural CAD design. Lintelman has twenty-two years of expertise in all forms of drafting and project assistance, gained through working with several Alaska architecture and engineering firms. He holds degrees from the North American School of Drafting in Pennsylvania, and the High-Tech Institute in Phoenix.

Koahnic Broadcast Corporation

Koahnic Broadcast Corporation named James Dommek Jr. to spearhead its new web-streaming component of its broadcasting operations. Dommek’s new role will include managing and conceptualizing a new youth radio stream that will offer music, culture, and news content Lintelman to youth across Alaska. Dommek has a background in the film industry.

Iñuit Arctic Business Alliance

The Iñuit Arctic Business Alliance named Megan AlvannaStimpfle as its executive director. Alvanna-Stimpfle cur-

rently serves as Chief of the King Island Traditional Council.

She holds a Master’s in Applied Economics from Johns Hopkins University and a Bachelor of Science in Economics from George Mason University.

SEARHC

PeaceHealth Ketchikan Medical Center

Steven Becker, MD, has joined P e a ce H e a l t h M e d i c a l G ro u p’s Orthopedic and Sports Medicine clinic in Ketchikan. He is a renowned orthopedic surgeon with more than thirty Becker years’ experience.

SouthEast Alaska Regional Health Consortium (SEARHC) Mt. Edgecumbe Hospital announces the hiring of Dr. David Brown, a board certified orthopedic surgeon. Brown most recently worked as a general orthopedic surgeon with The Center for Orthopedic Brown & Neurosurgical Care in Bend, Oregon.

Wells Fargo

MBA Consulting Engineers

MBA Consulting Engineers, Inc. announced the addition of Peter Oczkus, EIT, to their electrical team. A graduate of East High School, Oczkus has his BS in Chemical Engineering from Colorado School of Mines and BS in Electrical Engineering from the University of Alaska Anchorage. He has passed the NCEES and has HAZWOPER General Site Worker Certification. His training includes internships in power generation and distribution and transmission.

Alaska Bering Sea Crabbers

Alaska Bering Sea Crabbers (ABSC) announced that Tyson Fick is the new Executive Director. Fick spent the last six years as communications director of the Alaska Seafood Marketing Institute. Previously, he was the legislative liaison at the Department Fick of Commerce, Community, and Economic Development and a legislative staffer before that. Fick graduated from Washington State University with a BA in Business Administration and Marketing.

Sustainable Design Group

for the State of Alaska Division of Agriculture and another Alaskan landscape design firm.

Sustainable Design Group (SDG) has added Taylor Berberich to their team as Landscape Designer. Berberich brings an international perspective to the firm’s focus on sustainable design. She earned a Master of Science in Advanced Sustainable Design from the University of Berberich Edinburgh and a Bachelor’s in Landscape Architecture from Washington State University, with a minor in Horticulture. Previous to joining SDG, Berberich worked

Wells Fargo named Greg Deal as its Alaska Region President, overseeing forty-eight branch locations and more than four hundred team members in Alaska. Deal takes the reins from Joe Everhart who has been promoted to Pacific Northwest Business Banking Division Manager for Deal Alaska, Oregon, and Washington.

Deal has twenty-nine years of financial services experience, twenty-three with Wells Fargo Alaska.

Everhart is a twenty-six-year Wells Fargo Alaska veteran who has served in community banking leadership positions across the state. He served as Wells Fargo Alaska Region President for the last four years. Everhart is a graduate of the Pacific Coast Banking School and earned a Bachelor’s in Everhart Finance from Gonzaga University.

R&M Consultants

James Colles, EIT, and Tyler Shamburg joined R&M Consultants’ Construction Administration Department as Staff Engineers last May. Colles previously worked with R&M as an intern in the materials laboratory for the past two summers before being hired full-time after graduation from Colles the University of Alaska Fairbanks with a BS in Civil Engineering.

Shamburg previously worked as an intern in the CA Department before being hired full-time after graduating from Northern Arizona University with a BS in Civil Engineering.

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Shamburg

Nail guns. Air compressors. Generators. Whatever you need, we deliver.

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January 2017 | Alaska Business Monthly

51

Inside

Alaska Business January 2017

Compiled by ABM Staff

SEALASKA HERITAGE INSTITUTE

I

ALEX HILLS

Courtesy of Sealaska Heritage Institute

n Finding Alaska’s Villages: And Connecting Them, author Alex Hills tells how he traveled Alaska by bush plane and snow machine, braving extreme weather and rough terrain to bring telephone service to small villages across the big state. Alex worked in villages from Port Alexander in southeast Alaska to Kivalina and Noatak in the northwest, providing modern communication services as he went. He fell into the rhythm of life in the villages, and he met Yup’ik and Inupiaq elders, learning about their strongly held values.

Hill also describes how he helped the state’s telecom pioneers bring about an innovation that would forever change rural Alaska. It took some creative technical work, and some convincing of government officials and corporate executives, to make it happen.

Soon the needed telecommunication services, twoway medical communication, a phone in every house and business, and radio and television programs, were available in Alaska’s villages. Order from Amazon or Barnes & Noble in hardcover, paperback, or eBook.

S

ealaska Heritage Institute released six culturally-based children’s books that reflect the Native worldview as part of its Baby Raven Reads, a program for Alaska Native families with children up to age five that promotes language development and school readiness.

The series includes a three-book set derived from ancient creation stories that have been passed from generation to generation for thousands of years. The set includes Raven and the Box of Daylight, Raven Brings Us Fire, and Origins of Rivers and Streams. The books were adapted from oral histories by Pauline Duncan and illustrated by Lindsay Carron.

The series also features a book that teaches the Lingít words for colors. The Lingít words in the book Colors were compiled by Yarrow Vaara, and the book was illustrated by David Lang.

Tlingit Alphabet is a two-book set that was edited by Katrina Hotch, Linda Belarde, and Keri Eggleston, reviewed by traditional scholar Dr. Walter Soboleff, and illustrated by Crystal Worl. sealaskaheritage.org

C

CVRF

oastal Villages Region Fund (CVRF) has launched a new program designed to give highachieving students in Western Alaska an opportunity to explore educational pathways and careers.

In October, thirty-nine ninth graders from the CVRF region participated in the first ever Ciuneq program, a partnership between CVRF and the Take Wing program managed by the Alaska Humanities Forum.

During their time in Anchorage, the participants visited Alaska Pacific University and the University of Alaska Anchorage. Evening sessions included meetings with John Pingayak, an elder from Chevak, and previous CVRF interns. Students then traveled to Seward to visit AVTEC where they met program leaders and instructors in all departments. They partici-

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pated in activities with the AVTEC Maritime Department, where students learned what it takes to work on one of CVRF’s Bering Sea vessels, including time in ship simulators.

The next round of the Ciuneq program will take place in Fall 2017 and high-achieving students from the region will be asked to submit applications beginning in August of next year. coastalvillages.org

DEPARTMENT OF THE INTERIOR

A

fter considering more than 3.3 million public comments and holding thirty-six public meetings, US Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management Director Abigail Hopper released the final plan to guide future energy development for the Nation’s Outer Continental Shelf (OCS) for 2017-2022.

The Proposed Final Program offers eleven potential lease sales in four planning areas—ten sales in the portions of three Gulf of Mexico Program Areas that are not under moratorium and one sale off the coast of Alaska in the Cook Inlet Program Area. The plan does not include any leases in the Chukchi or Beaufort Seas. doi.gov

A

ALIGN CHIROPRACTIC AND MASSAGE

sustain a nationwide network of animal care professionals to respond to oil spills and other disasters.

Under the three-year $455,119 grant, ASLC will work with the Karen C. Drayer Wildlife Health Center of the University of California Davis School of Veterinary Medicine to develop and deliver training courses, a mutual aid framework, and searchable database to facilitate rapid identification and deployment of appropriately trained specialists from the AZA community. alaskasealife.org

T

he Alaska Heart & Vascular Institute (AHVI) recently remodeled its Cardiac Cath Lab & Cardiovascular Surgery Center, adding new procedural equipment such as a custom designed equipment boom, surgical lighting, and a much larger image monitor.

Additionally, AHVI’s physicians integrated state-of-the-art 3D cardiac mapping software into the Cath Lab. This revolutionary technology, combined with the upgraded equipment, makes it possible to offer patients sophisticated electrophysiology studies and cardiac ablations in an outpatient setting. AlaskaHeart.com

lign Chiropractic and Massage, a wellness center, has officially opened to see patients in their updated wellness center off East Tudor Road in Anchorage. Align was developed to provide highquality conservative healthcare to the residents of Anchorage in need of alternative medicine.

Align Chiropractic and Massage specializes in full spine and extremity manipulations in addition to various physical therapy modalities. They are located at 2665 East Tudor Road, Suite 201 in Anchorage. alignchiroak.com

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GCI

A

G

CI launched its new Choice TV plans, featuring three easy-to-understand options that don’t require contracts and offer straightforward pricing.

All three Choice TV plans include a new Smartbox, making it possible to align with TiVo and other online content devices, such as Apple TV and Roku, to enhance customers’ TV experience with their favorite shows. Customers will receive their first set-top box at no additional cost. gci.com

T

ALASKA SEALIFE CENTER

he Alaska SeaLife Center (ASLC) is pleased to announce it has received a grant from the Institute of Museum and Library Services to work with the Association of Zoos and Aquariums to create and

ALASKA HEART & VASCULAR INSTITUTE

CHUGACH

hugach Alaska Corporation recently entered into an agreement to acquire Rex Electric and Technologies. Headquartered in Chicago, Illinois, Rex is a leading provider of electrical and technology services for general contractors and building owners. In tandem with the acquisition, Dominic Sergi will retire from his role as CEO and owner of Rex, while Michael A. Segreti will continue to lead the Rex team as President. The acquisition closed October 31. chugach.com

ANCHORAGE SCHOOL DISTRICT

t the Anchorage School Board’s direction, the District created a public dashboard featuring data on student academic status, attendance, on track for graduation, and behavior/discipline.

Anchorage School Board President Tam AgostiGisler encouraged community members to join ASD in using the dashboard for the various ways they are working to support and improve education in the community. asdk12.org/data

MUNICIPALITY OF ANCHORAGE

A

nchorage Metropolitan Area Transportation Solutions’ (AMATS) launched LinkAK, an innovative, multi-modal trip planner designed to reduce traffic congestion and travel delays.

LinkAK allows users to easily and comprehen-

sively compare travel options and make informed trip choices in one convenient location.

To use LinkAK, users simply enter their trip information (A to B) and the platform aggregates and calculates the options available, time, distance, cost, and health benefits, including calories burned and carbon footprint. LinkAK incorporates transit (People Mover and Valley Mover), biking, walking, carpooling and vanpooling, and driving.

AMATS hopes to integrate more features as the platform evolves and options expand in Anchorage, including carshare, bikeshare, rideshare, rail, taxi, and paratransit trip booking. linkak.org

SOUTHCENTRAL FOUNDATION

S

outhcentral Foundation (SCF) celebrated the graduation of the inaugural class of SCF’s Certified Medical Assistants Student Scholarship Program. A ceremony was held in November for Oswaldo “Ozzie” Quinoveva and Shannon Cusma.

The program, aimed at increasing the percentage of Alaska Native and American Indian people in clinical positions, was created through a pilot partnership program between and SCF and Alaska Career College. The nine-month program with be offered again beginning in Feburary. southcentralfoundation.com

A

ANCHORAGE COMMUNITY LAND TRUST

nchorage Community Land Trust (ACLT) announced the addition of espresso to Mountain View through the beloved Glenn Square cupcake shop Eva’s Cupcakery. Eva’s expansion into espresso marks the neighborhood’s first coffee shop in years and was made possible through a capital microloan provided by ACLT. ACLT’s new microloan fund is a grant from Wells Fargo and will be used to provide low-interest, high impact loans for small businesses in select neighborhoods in Anchorage. anchoragelandtrust.org

C

CONOCOPHILLIPS

onocoPhillips announced plans to sell its Kenai LNG (liquid natural gas) plant. The plant, which processes gas from Cook Inlet, includes a dock and loading facility to transport LNG. For fifty years the Kenai LNG plant was the only export facility of domestic LNG in North America. Though still functional, the plant did not export gas in 2016 due to market conditions. conocophillips.com

T

FCC

he Federal Communications Commission issued an order that adopts tailored service obligations for Alaska Communications Systems, a

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53

INSIDE ALASKA BUSINESS carrier serving a non-contiguous area that elected to receive nearly $20 million annually in Connect America Phase II frozen support amounts in lieu of model-based support. Specifically, Alaska Communications will receive Phase II frozen support for a ten-year term and be required to offer voice service and broadband service at the same speed, latency, usage, and pricing metrics as established for Phase II model-based carriers to at least 31,571 locations, primarily in census blocks identified as high-cost that are unserved by unsubsidized competitors, with limited exceptions. fcc.gov

A

ANCHORAGE POLICE DEPARTMENT

nchorage Police Department (APD) announced the start of a downtown foot patrol. “Because of the community investment in APD and our progress rebuilding the department, we now have the ability to staff a dedicated downtown foot patrol,” said Chief Chris Tolley. APD hopes to expand the foot patrol program as more officers complete training and staffing levels grow. The foot patrol boundary will be from L Street to Cordova and from 3rd Avenue to 6th Avenue and will occur on all patrol shifts. muni.org

S

SHI

ealaska Heritage Institute (SHI) has released its first Tlingit podcast for students who want to learn the language through their mobile devices.

The podcast is part of SHI’s “Learning Tlingit” app, which was released in August. It includes twenty-six episodes that cover a wide range of topics, including verbs, tools, colors, places, carved objects, anatomy of a building, and cooking phrases. The episodes are offered in audio (.mp3) or video (.mp4) formats. SHI will continue to add episodes to the podcast, which is available for iOs (Apple) and Android devices through the app at no cost. sealaskaheritage.org

KENDALL AUTO GROUP

I

daho-based Kendall Auto Group announced it is buying Cal Worthington Ford and Lincoln of Anchorage and Mercedes Benz of Anchorage. This acquisition brings the total number of Kendallowned dealerships in Alaska to eighteen. kendallautogroup.com

E

EVENT! ALASKA

VENT! Alaska, a professional meeting and event planning company, provides customized services for meetings, symposiums, conventions, and private events. The new company is located at

Compiled by ABM Staff 110 Seward Street in Juneau. Along with working with Alaska companies and non-profits, EVENT! Alaska provides destination management services for out-of-state clients. Services include all the components needed to create and deliver effective and memorable events such as planning, promotion, coordination, registration, websites and evaluations. eventsak.com

A

ALASKA DEPARTMENT OF LABOR & WORKFORCE DEVELOPMENT

laska had 737,625 residents on July 1, 2015, or 0.2 percent of the United States population and was the third least populous state in 2015, according to the Alaska Population Overview for 2015, which is now available online. The publication provides estimates of the state’s population in 2015 by sex, race, and age. It also includes the number of active military and dependents in each borough and census area, information that is not available anywhere else. live.laborstats.alaska.gov/pop/popestpub.cfm

T

TRILOGY METALS

rilogy Metals, formerly NovaCopper, reported high grade copper and zinc from last summer’s drilling at its Arctic Deposit. The Arctic poly-metallic volcanogenic massive sulphide deposit, part of the Upper Kobuk Mineral Projects, is located in the Ambler mining district of Northwest Alaska. Most of the $5 million (US dollars) project budget was spent on a drilling program at the Arctic Project that included 3,058 meters of drilling for geotechnical, hydrological, waste rock characterization, and metallurgical studies as well as further resource definition. A series of environmental studies were conducted and a LiDAR survey was completed. This site investigation work will form the basis for completing a future pre-feasibility study. Based on a cut-off grade of 0.7 percent copper, significant zones of high grade copper, gold, silver, lead, and zinc mineralization were intersected. trilogymetals.com

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ALASKA LNG

equests for more information are stacking up for the environmental review of the Alaska LNG project, with the Federal Energy Regulatory Commission adding 96 pages to an earlier 266page list sent to the project sponsor.

Commission staff was still working to gather agency comments on reports No. 11 Reliability and Safety and No. 13 Engineering and Design Material in late November. Most of the comments

on those technical reports will come from the federal Pipeline and Hazardous Materials Safety Administration. Alaska LNG will need to answer the questions and provide the additional information in its final set of resource reports that would accompany a project application to FERC. kpb.us

ALOPEX INTERACTION DESIGN

A

lopex Interaction Design announced the release of its much anticipated app for Alaskans.

The application, called Alaskanisms and built for Apple’s iOS, focuses on Alaska life and sayings and is available today. The application’s sticker pack allows users to express unique Alaska situations through their mobile devices. alopexid.com

AITRC

U

S Department of the Interior (DOI) Deputy Secretary Michael Connor signed a historical agreement to create a cooperative management demonstration project with the Ahtna Intertribal Resource Commission (AITRC). The agreement formalizes the subsistence wildlife management partnership between the DOI and the AITRC regarding the allocation and harvest of moose and caribou on federal lands in the Ahtna region. ahtna.net

N

NORTHERN LIGHTS MEDIA

orthern Lights Media (NLM), operator of Anchorage-based KTUU-TV and Channel 2 News, announced the acquisition of the local NBC (KTVF), CBS (KXD), and Fox (KFXF) television affiliates in Fairbanks from Tanana Valley Television Co. and Chena Broadcasting Co. for $8 million in cash.

Through the acquisition of the Fairbanks stations, NLM will be able to better serve Alaska viewers, businesses, and local institutions across its Anchorage television stations (KTUU and KYES) and the new Fairbanks stations. The transaction is subject to regulatory approval, and the parties anticipate closing the transaction in the coming months.

NLM is locally operated and its parent company, Gray Television, Inc., owns more than forty No. 1 ranked, locally operated television stations across the United States.

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S

end

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Business Events JANUARY

JAN

Meet Alaska Conference

The Sheraton Anchorage Hotel, Anchorage: Hosted by the Alliance, this is the largest one-day energy conference in Alaska and includes educational forums and a tradeshow. alaskaalliance.com

13

JAN

Health Summit

Hotel Captain Cook, Anchorage: The 2017 theme is “The Changing Landscapes of Public Health.” alaskapublichealth.org

17-19 JAN

Alaska Marine Science Symposium

Hotel Captain Cook, Anchorage: Scientists, researchers, and students from Alaska, the Pacific Northwest, and beyond come to communicate research activities in the marine regions off Alaska. amss.nprb.org

23-27 JAN

25-28

Anchorage AEYC Early Childhood Conference

Hilton Anchorage Hotel: “Best Practices in the Face of Change.” Join other early childhood community members to learn new strategies, hear about the latest research, try out a few practical techniques, and discover new tools and resources to help face any challenge. anchorageaeyc.org

JAN

26

Junior Achievement of Alaska Awards Banquet

Dena’ina Civic & Convention Center, Anchorage: Four new Alaskans will be inducted and recognized with this prestigious award. Attended by over four hundred business representations, the program consists of a networking reception, dinner, and awards ceremony. juniorachievement.org

JAN

26-29

Alaska Peony Growers Association Winter Conference

Westmark Hotel Fairbanls: 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

Compiled by Tasha Anderson JAN

28-29

Alaska RTI/Effective Instruction Conference

FEB

Dena’ina Center, Anchorage: A small and rural schools preconference will take place Friday, January 27. asdn.org/school-year-conferences-and-institutes

FEBRUARY

FEB

4-10

Alaska Statewide Special Education Conference

FEB

Alaska Forum on the Environment

Dena’ina Center, Anchorage: The Alaska Forum on the Environment is Alaska’s largest statewide gathering of environmental professionals from government agencies, non-profit and for-profit businesses, community leaders, Alaskan youth, conservationists, biologists, and community elders. akforum.com

6-10

FEB

13-17

Alaska Surveying & Mapping Conference

Hilton Anchorage Hotel, Anchorage: This is the 51st annual conference.

The theme for this year is “Centuries Charting Change,” celebrating the sesquicentennial purchase of Alaska from Russia in 1867 and one hundred years of the Alaska Railroad. aksmc.org

FEB

ASTE Annual Conference

Hotel Captain Cook, Anchorage: This is the educational technology conference of the Alaska Society for Technology in Education. This years’ theme is “Explore, Capture, Connect, Reflect.” aste.org

18-21 FEB

AML Winter Legislative Meeting

Juneau: The Alaska Municipal League is a voluntary, nonprofit, nonpartisan, statewide organization of 162 cities, boroughs, and unified municipalities, representing over 97 percent of Alaska’s residents. akml.org

21-23

Fairbanks: This conference is held every year and brings together farmers, ranchers, researchers, Extension agents, and members of the agriculture support industry to learn from one another and to find ways to improve the agriculture industry in Alaska. uaf.edu/ces/ah/sare/conference

22-24

FEB

Hilton Anchorage Hotel: The Alaska Statewide Special Education Conference (ASSEC) is committed to providing high quality professional development relevant to the cultural, rural, and remote characteristics of Alaska. assec.org

Sustainable Agriculture Conference

23-26

Alaska Library Association Annual Conference

Ted Ferry Civic Center and Cap Fox Lodge: AkLA is a nonprofit professional organization for the employees, volunteers, and advocates at academic, public, school, and special libraries of all sizes in Alaska, as well as library products and services vendors. akla.org/ketchikan2017

Anthropological Association FEB-MAR Alaska Annual Meeting

27-2

Westmark Fairbanks Hotel and Conference Center: The annual meeting includes workshops, an evening reception for information and registration, paper presentations, and an awards banquet, business meeting, and the Belzoni meeting. alaskaanthropology.org

MARCH

MAR

Anchorage ATHENA Society

MAR

AKMGMA Annual Conference

Dena’ina Center, Anchorage: Sponsored by the Anchorage Chamber of Commerce, this annual luncheon begins at Noon and honors the contributions of women in the Anchorage Business Community. athenaanchorage.org

20

29-31 MAR

10-12

Dena’ina Center, Anchorage: Annual conference of the Alaska Medical Group Management Association. akmgma.org

Alaska Academy of Family Physicians Winter Update

Hotel Alyeska, Girdwood: This is the 19th annual Winter Update with an opportunity for fifteen cme credits. alaskaafp.org/Winter_Update.htm

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January 2017 | Alaska Business Monthly

55

WINTER SPORTS

EAT

SHOP

PLAY 

Alaska Skiing and Snowboarding Alaska Heliskiing Alaska Heliskiing is located in Haines, a “deep, steep, spine-covered snow heaven,” according to Alaska Heliskiing. The company has been in operation for more than twenty years, transporting skiers to the 1,200 square miles of accessible mountain ranges, many with lines more than 5,000 vertical feet, from their private heli pad at MP 35 on the Haines Highway, near the Canadian Border. alaskaheliskiing.com Alyeska Resort Alyeska Resort boasts 1,610 skiable acres, 113 acres of snowmaking, and a total number of seventy-six runs. Alyeska has seven lifts: two high speed detachable quads, two fixed quads, two magic carpets, and one sixty-passenger Aerial Trams—a capacity of 12,196 skiers per hour. The trails are a mix of beginner, intermediate, and expert/advanced skill levels, with a total headwall to base vertical rise of 3,200 feet. The Alyeska Mountain Learning Center offers private and group lessons for children or adults for skiing and snow-

boarding. Alyeska also offers a full line of rental equipment for skiers and snowboarders. alyeskaresort.com

Chugach Powder Guides Chugach Powder Guides is located in the heart of the Western Chugach Mountains and partners with Alyeska Resort. Chugach Powder Guides provides transportation via helicopter, snowcat, or airplane for skiers to access terrain inaccessible by other methods, and their range includes the Northern Chugach Range and the Talkeetnas.

Chugach Powder Guides caters to strong intermediate, advanced, expert, and professional skiers. chugachpowderguides.com Alpenglow at Arctic Valley Alpenglow Lodge is located in Artic Valley, a skiing and snowboarding area in Chugach State Park just off the Glenn Highway ten miles from Downtown Anchorage maintained by the Anchorage Ski Club, a nonprofit organization. The ski area is perfect for families, as children who are not skiing can build

By Tasha Anderson

STAY

snow forts, sled, or other outside activities. Arctic Valley has three Lifts: Chair 2 provides access to the longest run with a vertical rise of 1,214 feet and a length of 4,544 feet. skiarctic.net

Mt. Eyak The Mt. Eyak Ski Area is located on Mt. Eyak above Cordova and utilizes a historic 1939 steel and wire single chair lift, as well as a tow rope on the beginner slope. The slope’s base elevation is 400 feet, and the lift rises to 1,200 feet, making for a vertical drop of 800 feet. Mt. Eyak has approximately thirty different trail options. Mt. Eyak is operated by the Sheridan Alpine Association, a nonprofit organization, in cooperation with the City of Cordova. mteyak.org Hilltop Hilltop Ski Area, located in Anchorage, is operated

by Youth Exploring Adventure, Inc., a nonprofit organization. It has a vertical height of 294 feet and a slope distance of 2,090 feet and is serviced by three lifts: the Riblet Triple Chair, Handle Tow, and Platter. Hilltop has thirty groomed acres of ski area, and Hilltop Chalet has indoor and outdoor spaces available for rent. hilltopskiarea.org Moose Mountain Moose Mountain Ski Resort is located in Fairbanks and features intermediate and advanced terrain and is not recommended for beginning skiers, boasting 1,300 vertical feet. Additionally,

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56

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Ski Land Ski Land has been in operation since 1962 and features the farthest north chairlift in North America.

Located on Mt. Aurora, Ski Land has a base elevation of 1,408 and a top elevation of 2,435, a total vertical height of 1,027 feet. The chairlift length is 3,882. Ski Land has a day lodge with food and drink, and ski and snowboard rentals are available.

At night, the lodge offers Aurora Viewing. skiland.org Tordrillo Mountain Lodge Tordrillo Mountain Lodge offers world-class heli skiing and heli boarding, with access to 1.2 million acres of Alaska skiing terrain in the Tordrillo Mountains. Runs top out at 7,500 feet and end at 2,000 feet elevation. Tordrillo Mountain Lodge uses helicopters and ski and float planes to transport guests and has gear available. ordrillomountainlodge.com Alaska Rendezvous Heli-Guides Alaska Rendezvous Heli-Guides operates in Thompson Pass and the Chugach range, offering heli skiing services. Alaska Rendezvous Heli-

Guides access three distinct zones covering more than 3,500 square miles of skiable terrain. The Rendezvous Lodge is a custom-built, eight-room lodge that overlooks the helipad and a view of Mount Billy Mitchell. arlinc.com

Black Ops Valdez Black Ops Valdez is a team of trained Valdez heli skiing guide veterans. Their runs range from 2,500 to 6,000 vertical feet within 2,500 square miles the Chugach Mountains, and skiing packages include accommodations at Robe Lake Lodge or Robe Lake Cabins. Black Ops Valdez operates an A-Start 350 B2s for all heli skiing. blackopsvaldez.com H2O Guides H2O Guides offers skiing opportunities in the Chugach Mountains and is based in Valdez. H2O Guides offers all-inclusive, semi-inclusive, and basic packages in addition to chartered heli skiing services. H2O Guides has access to 4,000 square miles of ski terrain in the Chugach Mountains.

Packages include lodging at the Valdez Harbor Inn. alaskahelicopterskiing.com Alaska Snowboard Guides Alaska Snowboard Guides provides heli skiing and heli boarding opportunities in Thompson Pass, accessing runs anywhere from 50 degree steeps to 5,000-foot, 30 degree glacial powder runs a half mile wide. Runs range from 2,000 to 5,000 vertical feet. The majority of the terrain Alaska Snowboard Guides is “high alpine,” meaning it has no trees. Other features include long ramps, gi-

ant bowls, spines, natural halfpipes, wind waves, extensive couloirs, and massive glaciers separated by rock formations. alaskasnowboardguides.com

Points North Heli Skiing Points North Heli Skiing has been in operation for nineteen years, utilizing three A-Start helicopters to provide heli skiing in the Chugach Mountains.

Points North Heli Skiing flies approximately 1,500 square miles of terrain, with a facility located on the water’s edge in Cordova. The company caters to intermediate level recreation skiers up to world class athletes. alaskaheliski.com SouthEast Alaska Backcountry Adventures SouthEast Alaska Backcountry Adventures is based in Haines and has access to more than 100,000 acres of terrain in the area, extending from the salt water to the Yukon border. The company stages operations along a forty-mile corridor from three heliports at Mile 10, 26, and 33. Haines’ geography enables SouthEast Alaska Backcountry Adventure to ski and snowboard from almost 8,000 feet to sea level. seaba-heli.com Alaska Powder Descents Alaska Powder Descents has access to more than 1 million permitted acres in the Juneau Icefield, southern Chilkats, and Coast Range and is home based in Juneau. Alaska Powder Descents offers single and half day ski opportunities in addition to multi day heli skiing and heli boarding weekend or week long packages. alaskapowder.com R

AVISALASKA.COM/VIP

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January 2017 | Alaska Business Monthly

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WINTER SPORTS

the Moose Mountain averages 20 to 30 degrees Fahrenheit warmer than in town, due to Faribanks’ typical temperature inversion. The lift up Moose Mountain is comprised of variable capacity turbo charged terrestrial trams, or, according to Moose Mountain Ski Resort, “busses with ski racks.”

Moose Mountain offers equipment rentals. shredthemoose.com

ADVERTISERS INDEX

ABR Inc..............................................................8 aeSolutions Alaska LLC...........................43 Alaska Trust Company..............................11 Alaska USA Federal Credit Union.........17 ALSCO.............................................................14 American Marine / Penco.............30, 31 Arctic Chiropractic....................................56 Arctic Office Products.............................44 Avis Rent-A-Car...........................................57 Business Insurance Associates Inc.......10 C & R Pipe and Steel Inc.........................37 Calista Corporation...................................38 Carlile Transportation Systems............23 Central Peninsula Hospital....................18 CIRI...................................................................55 Conrad-Houston Insurance Agency......8

Construction Machinery Industrial........2 EDC Inc..............................................................8 First National Bank Alaska........................5 GCI....................................................................60 Judy Patrick Photography.....................58 Junior Achievement.................................20 Lynden Inc.......................................................3 Microcom......................................................37 N C Machinery................................................9 New Horizons Telecom Inc...................39 Northern Air Cargo..........................50, 51 Pacific Pile & Marine............. 52, 53, 54 Parker Smith & Feek.................................. 15 Peak Trust Company.................................11 PenAir..............................................................33 Ravn Alaska...................................................19

RIM Architects.............................................28 Seawolf Sports Properties.....................59 Seekins Ford Lincoln Mercury Fleet.....47 Stellar Designs Inc.....................................56 T. Rowe Price...............................................29 The Odom Corporation.......................... 21 UA Local 367 Plumbers & Steamfitters.................... 41 Udelhoven Oilfield System Services Inc..............................22 United Way of Anchorage......................12 Voice of the Arctic Inupiat.....................13 Washington Crane & Hoist....................45 Waste Management..................................35 Westmark Hotels - HAP Alaska............10 Yukon Equipment Inc..............................43

AVAILABLE NOW! A COFFEE TABLE PHOTO BOOK OF ALASKA’S NORTH SLOPE OIL PATCH

PICK UP YOUR COPY TODAY! 511 W. 41st Ave, Suite 101, Anchorage, AK 99503 (907) 258-4704 judypatrickphotography.com Also available in bulk quantities!

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Alaska Business Monthly | January 2017 www.akbizmag.com