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ALASKA’S PORTS, HARBORS, AND DOCKS | NEW AND IMPROVED AIRPORT RUNWAYS | OIL & GAS SPECIAL SECTION

May 2014

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North Slope Explorers Resurgence of exploration Page 92

Volvo EC380DL Excavator loading an Atlas Copco Crusher Nome, AK

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May 2014 TA BLE OF CONTENTS

ABOUT THE COVER

DEPARTMENTS

Doyon employee and roustabout Kayla Jonathan works in the pipe shed while exploration well Flat Top 1 is being drilled for ConocoPhillips. The annual Oil & Gas special section begins on page 70.

From the Editor . . . . . . . . . . . . . . . . . . . . . . . . .7 Agenda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Inside Alaska Business . . . . . . . . . . . . . . . 133 Right Moves. . . . . . . . . . . . . . . . . . . . . . . . . . 136 Alaska This Month . . . . . . . . . . . . . . . . . . . 138 Events Calendar . . . . . . . . . . . . . . . . . . . . . 140 What’s Next . . . . . . . . . . . . . . . . . . . . . . . . . 141 Market Squares . . . . . . . . . . . . . . . . . . . . . . 141 Alaska Trends . . . . . . . . . . . . . . . . . . . . . . . . 142 Ad Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

Cover photo by Judy Patrick, Courtesy of ConocoPhillips Alaska, Inc.

ARTICLES

VIEW FROM THE TOP

Heavy equipment staged at CIRI’s project site at Fireweed in Anchorage.

© 2014 Chris Arend

© Russ Slaten

8 | Clif Burnette, President Alaska Textiles Compiled by Russ Slaten

ENTREPRENEURS

10 | Lemonade Day Alaska Making leaders out of lemons

By Russ Slaten

FISHERIES

14 | Boston Seafood Expo Showcasing the best of Alaska

By Dimitra Lavrakas

56 INSURANCE

TRANSPORTATION

ENVIRONMENTAL SERVICES

CONSTRUCTION

26 | Lowering Workers’ Compensation Costs Getting experience mods to less than 1.00

By Tracy Barbour 30 | Water & Wastewater: North Pole

By Rindi White

HEALTH & MEDICINE 36 | Keeping Alaskans Safe is Ultimate Goal Meeting employer needs with occupational health services

By Vanessa Orr

18 | Hard Times for Halibut A cherished Alaska fish stock is depressed as competing fleets sail into new era

By Wesley Loy

4

Alaska Business Monthly | May 2014

52 | New & Improved Airport Runways A key lifeline for rural Alaskans

By Paula Cottrell 56 | Construction Project Update Ramping up for Alaska’s ‘other’ season

By Tasha Anderson Skagway has the northern most ice free port in North America.

Photo courtesy of the Municipality of Skagway Borough

FINANCIAL SERVICES

22 | Commercial and Industrial Lending Synonymous with economic growth

By Tracy Barbour

42 | Alaska’s Ports, Harbors, and Docks Integral to commerce and travel

By Tom Anderson

42 www.akbizmag.com

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May 2014 TA BLE OF CONTENTS ARTICLES

special section

TELECOM & TECHNOLOGY

Oil & Gas Ed Duncan checking samples in the Great Bear Petroleum core shack.

Photo courtesy of Great Bear Petroleum

Photo courtesy of GCI

62

GCI connects the oil patch.

62 | Alaska Oil Patch Worksite Options Meeting the need for connectivity

By Rindi White

HR MATTERS

92 70 | Alaska LNG Project Gains Momentum Distance, temperature, and reliability are winning factors

By Larry Persily 78 | Alaska LNG Project and the Pre-FEED, FEED Phases Early planning, design, engineering key to LNG project success

By Bill White 85 | Flint Hills Refinery Changing hands again

By Mike Bradner

92 | North Slope Explorers Resurgence of exploration

By Russ Slaten 102 | Interior and Northwest Alaska Exploration Searching for oil and gas in underexplored basins

By Mike Bradner 108 | Indemnity Agreements in Offshore Oil and Gas Contracts Multiple considerations when drafting and reviewing

By Isaak Hurst

66 | Put Me In Coach!

Great coaching and achieving the balance needed to succeed

By Kevin M. Dee

ENVIRONMENTAL SERVICES 68 | Emerging Trends in Environmental Services Promoting holistic sustainability

By Tracy Barbour

110 | Alaska Business Monthly’s 2014 Oil & Gas Directory

corrections On pages 22 and 23 in “Path to Prosperity: Extract, Then Add Value” photo captions were omitted. Photos were courtesy of Path to Prosperity (page 22), Steve Helgeson (page 23 far left), and Kevin Skeek (page 23 left).

6

Alaska Business Monthly | May 2014

On page 104 in “Logistics and Scheduling: Alaska’s unique position on the globe” a key fact about Northland Services was incorrectly stated. Northland Services was purchased last fall by Lynden, Inc. not by Alaska Marine Lines; both companies are subsidiaries of Lynden, Inc.

On page 138 in “Geneva Woods: Focusing on patient-centered care” Saharai Thompson was mis-identified in the photo as Vanessa Valadez.

www.akbizmag.com

FROM THE EDITOR

Ports and Airports:

Follow us on and

Volume 30, Number 5 Published by Alaska Business Publishing Co. Anchorage, Alaska Vern C. McCorkle, Publisher 1991~2009

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

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

BUSINESS STAFF President VP Sales & Mktg.

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

Jim Martin Charles Bell Anne Campbell Bill Morris Tasha Anderson Melinda Schwab

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

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

Online: Alaska Business Monthly is available at www. akbizmag.com/archives, www.thefreelibrary.com/ Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfi lm: Alaska Business Monthly is available on microfi lm from University Microfi lms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

www.akbizmag.com

Funding falls short of needs

T

wo stories really stand out as we publish the May issue: “Alaska’s Ports, Harbors, and Docks: Integral to commerce and travel” (page 42) and “New and Improved Airport Runways: A key lifeline for rural Alaskans” (page 51). Both have the elements of transportation and construction at the forefront. Both get the point across that aviation and marine facilities are crucial to the movement of goods and people across Alaska, and although there are 4,900 miles of paved roads in the state, less than 20 percent of the communities in the state are connected by roads.

With so many communities across the state roadless, I am reminded that for many Alaskans, aviation is the only means of year-round transport. Luckily, the federal government keeps sending money to Alaska for airport improvements, and it doesn’t matter if it’s a big airport or a little airport, millions are appropriated every year to bring Alaska’s airports up to federal mandates. Although, at around $20 million per rural airport, the pace of the funds isn’t even close to what it needs to be. However, the Alaska Department of Transportation and Public Facilities works with what is doled out and continues to relocate rural airports to bring them into compliance.

Many of Alaska’s roadless communities have a seasonal savior in marine transportation. Maybe a barge will make it once a year, maybe there is year-round marine access, or maybe frequency of marine access is somewhere in between. The community could be on a river, a lake, or on the coast—Alaska has 33,904 miles of tidal shoreline. The beauty of marine transportation is the savings realized in the transportation costs and the ability to ship larger items than might fit on the size of planes landing at the majority of rural airports as well as the capacity for shipping a larger volume of goods.

If only there were similarly funded federal mandates covering our rural ports and harbors! The state estimates there are about five hundred ports, harbors, and docks in the state, but there are no federal mandates or associated funding for improvements. So, when deciding whether to reinforce an eroding bank to tie up an annual barge or build out a gangway and add new floats, the decision might come down to how many people and boats are going to be using the facilities in the long run.

Get ready though, in the coming years Alaska will see billions of dollars pouring into the state to develop transportation infrastructure for Arctic resource development and commerce. So don’t miss this month’s stories about ports and airports, or any of the rest of the really great magazine the team at Alaska Business Monthly has put together. Enjoy!

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

7

View from the Top

Compiled by Russ Slaten

Clif Burnette, President Alaska Textiles

W

ABOVE AND BEYOND: I was drawn to Alaska Textiles because of the opportunities I saw when I walked through the door. After running the apparel department for Alaska Commercial Company in Barrow, I came to Alaska Textiles, a company with eight employees and very little direction. I felt if we could define our direction and create new practices that take care of our customers with “Above and Beyond Customer Service,” we could be a very successful company.

Today we have twenty employees in Anchorage, sixty or so in our manufacturing plant in Edmonton, Kentucky, and sell around the world from our Anchorage Headquarters.

SECRETS TO SUCCESS: When I was a young up and coming businessman, I was fortunate to have a mentor by the name of Bernie Brotman. With eighteen young men’s clothing stores in Washington state at the time, Brotman was not only an innovator, but a teacher. He taught me how to build a business with the strong values of trust, integrity, respect, and adaptability. He also made sure that we had our priorities straight: “Take care of your health first, family second, and business third, in that order.” Brotman came up with the concept for Costco, and his son Jeff Brotman is a co-founder and chairman of the board.

INNOVATION: Korbana Protective Apparel is a quality Alaska Textiles brand of flame resistant clothing designed for Alaska’s North Slope. From Arctic wear to summer wear, we hold a vast line of personal protective equipment for our customers in the oil and gas and utilities industries. With new, innovative designs, Korbana Protective Apparel continues to be the front-runner in bringing the latest technologies in flash fire and arc flash safety into the workforce. Our goal 8

Alaska Business Monthly | May 2014

© 2014 Chris Arend

ere it not for his grandfather’s funeral, Clif Burnette would have been born in Alaska. His family came to the state before he was born in the early 50s, from Los Angeles. His dad was an Air Traffic Controller, and Alaska was a great place for a young man to start a career (Burnette thinks it still is). He has three sisters and a brother; his brother and younger sister were both born in Bethel, as he would have been. He lived in Bethel, Nome, Tanana, and Kodiak, where he spent most of his youth. His father retired from the Federal Aviation Administration in 1975 and moved the family to Tacoma, Washington. Burnette always came back in the summers to work in the canaries and later to commercial fish, eventually settling back in Alaska.

is to identify the needs and concerns of the customer and deliver the best combination of protection, comfort, and value for each application. One of our latest products is WebSam, a proprietary interactive web-based safety apparel management system that manages our customers’ apparel program on the employers’ behalf.

WORDS OF ADVICE: I wanted Alaska Textiles to be a place where employees could grow with the company. Tasha Dougherty is a fine example of this. She started working parttime in the embroidery room eleven years ago and today is the operations manager. Mary Snare started thirteen years ago as our receptionist and is now the technical/marketing director.

Nothing makes me happier than to find a good fit for the company and the employee. So don’t be so quick to let someone go. There may be a better fit for them in a different role within the company. If not, then help them find a new place to work that better fits who they are and what they want to do in life. A company today has to be about continued improvement—not just speaking it, but executing it at all levels.  www.akbizmag.com

ENTREPRENEURS

Photo courtesy of Lemonade Day Alaska

Ryan and Taylor’s Lemonade Day stand at the Red Apple in Anchorage in 2013.

Lemonade Day Alaska Making leaders out of lemons

By Russ Slaten

G

rowing up from a child to a responsible adult is one of the most exciting and even challenging transformations in life. Many people remember their first attempt at making their own money by mowing lawns or washing cars. The age old children’s business endeavor of opening up a lemonade stand is brought to the forefront with more than just money on the mind.

“Lemonade Day is a program spread

10

Alaska Business Monthly | May 2014

out over several weeks where kids are learning about budgeting, marketing, giving back to the community, and saving for their future,” says Wells Fargo Community Affairs Officer Dana Rogers.

Lemonade Day Alaska has grown since its inception in 2011 from 941 registered kids, offered only in Anchorage, to 3,225 registered children statewide in 2013. This year, Lemonade Day Alaska is Saturday, June 14. Registration began

in April online at alaska.lemonadeday. org. Backpacks with program materials are picked up at sponsoring organizations once registered.

“Last year, 79 percent of the kids chose to donate a portion of their earnings to a charity, and 52 percent decided to open up or deposit money into a savings account, so the lessons are definitely getting through to the kids,” says Lemonade Day Development Coordinator Sam Callen. www.akbizmag.com

Continued Growth Lemonade Day Alaska was started 2011 in Anchorage by the University of Alaska Center for Economic Development. The first year saw a total of $149,000 in revenue from 941 kids with lemonade stands.

The number of registered kids more than doubled the next year to 2,536, and the UA Center for Economic Development saw the total revenue nearly double to $287,000.

Extending Lemonade Day to have a statewide reach caused the major shift in 2012. The latest statistics show continued growth with more than 3,000 kids and total revenue of $419,000 last year.

Numbers show that participation by Alaskan kids is growing and that they are learning positive life lessons, but none of it would be possible without the multitude of organizations that volunteer time and money to the project.

Expanding the Lemonade Day program into smaller communities outside of Anchorage was typically led by city employees, teachers, and members of local chambers or nonprofit groups. In one community, a real estate agent became the Lemonade Day Alaska organizer, says Lemonade Day Program Coordina-

“From the most remote parts of Alaska, villages to cities are having Lemonade Day.”

2014 Communities Lemonade Day Alaska ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

—Sam Callen Development Coordinator, Lemonade Day

tor Natasha Callen. “It doesn’t necessarily have to be someone from an organization. If you want to bring Lemonade Day to your community, we can help.”

Last year nearly twenty communities participated; that number is expected to grow this year.

Volunteer Driven Wells Fargo donated $25,000 this year to Lemonade Day Alaska, the lead sponsor for the program. The money goes to keep Lemonade Day participation free for all students by providing backpacks, workbooks, and materials. Additionally, the money is spent on administrative and marketing costs.

Volunteer businesses also play a major role in making Lemonade Day a successful learning tool and community involvement program.

Anchorage Barrow Copper River Fairbanks Haines Homer Kasaan Kenai Ketchikan Kodiak Nome Palmer Pelican Prince of Wales Juneau Seward Skagway Soldotna Wasilla Wrangell

Contact Natasha Callen at lemonadedayalaska@gmail.com or 907-786-6527 to bring Lemonade Day Alaska to your community this year.

Diversity Works Trust beneficiaries bring unique skills to the workplace. Just ask Mat-Su Regional Medical Center.

We’ve had proven success hiring “people with disabilities. It’s been great for employee morale, our patients, and the community.

”

– John Lee CEO, Mat-Su Regional Medical Center

www.mhtrust.org

www.akbizmag.com

May 2014 | Alaska Business Monthly

11

Statistical Yearly Comparison 2011 - 2013 Measurement Registered Kids # of Cups Sold Total Revenue Total to Charity

BIG PICTURE 2011* 941 91,000 $149,000 $19,000

Measurement Avg. Number of Hours Open Avg. Number of Glasses Sold Avg. Selling Price per Glass Avg. Total Revenue Avg. Total Expenses Avg. Profit

STAND STATS 2011* 4 96 $1.42 $158 $51 $108

LOOK AT LESSONS Measurement 2011* Paid Back Investor 69% Opened/Deposited into a Savings Account 25% Avg. Deposit Amount $30 Donated to Charity 94% Met Their Goal 56% Plan on Participating Next Year 94%

2012** 2536 156,000 $287,000 $68,000

2013 3225 184,000 $419,000 $95,000

2012** 4 67 $1.43 $123 $46 $76

2013 4 76 $1.75 $173 $81 $92

2012** 73% 52% $71 74% 75% 94%

2013 81% 52% $90 79% 79% 94%

* 2011 - Program inception year in Anchorage only. ** 2012 - First year program was delivered statewide in Alaska.

All statistics were compiled from data received from participants via a survey tool.

SOURCE: UACED

“When it comes to Lemonade Day across the country, a program of this scope doesn’t exist,” says Sam Callen.

“To cover the number of different communities and the geographic distribution that we have is a testament to all the volunteers that we have working on the program.”

Wells Fargo and other banks or credit unions, along with companies like Home Depot and Lowe’s, participate as volunteers by providing workshops for kids that want to learn the skills necessary in building a successful lemonade stand. Wells Fargo offers money saving workshops and Home Depot and Lowe’s donate wood and offer stand-building workshops.

“One of our goals is that we inspire some future Wells Fargo bankers,” says 12

Alaska Business Monthly | May 2014

Rogers, “making sure that they appreciate the value of the dollar and saving it for the future.”

Business Participation Any business has the chance to volunteer by hosting a lemonade stand at their place of business, Natasha Callen says. Managers and owners of businesses across the state may add their store, restaurant, or business in any industry to the hosting list. If a youth decides they want that store or restaurant, the kids and their guardian talk to the business directly.

“Finding a stand location is one important entrepreneurial lesson for Lemonade Day, so we step back and let the kids take over,” Natasha Callen says.

Tiffany McMonigle and her two sons,

Ryan and Taylor, ages thirteen and eight, placed their lemonade stand in front of Red Apple Market in Anchorage and saw a great increase in traffic after moving their stand from a neighborhood to a business.

Lemonade Day Alaska spans all sectors of the community and the state.

Nonprofits, schools, churches, government entities, chambers of commerce, small businesses, and corporations all play a role in “empowering today’s youth to become tomorrow’s entrepreneurs,” Sam Callen says. “From the most remote parts of Alaska, villages to cities are having Lemonade Day.”  Russ Slaten is the Associate Editor for Alaska Business Monthly. www.akbizmag.com

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FISHERIES

Boston Seafood Expo Showcasing the best of Alaska

By Dimitra Lavrakas

Bering Sea Commodities The Japanese company, Nippon Suisan Kaisha (Nissui), has a major presence in Alaska, most notably UniSea’s processing plant and support facilities for workers in Dutch Harbor.

The multinational company was founded over one hundred years ago

by Ichiro Tamura, who pioneered steelframe trawlers in Japan. Today, several one hundred-plus-foot factory trawlers ply the Bering Sea. In 2011, the Fukushima earthquake in Japan devastated a large swath of 14

Alaska Business Monthly | May 2014

© Dimitra Lavrakas

T

o get an idea of how huge the international seafood industry is, come to Boston in March. Seafood Expo North America/Seafood Processing North America is held at the Boston Convention & Exhibition Center, which is the largest exhibition center in the Northeast United States. With 516,000 square feet of exhibition space, the number of booths it packs in is dizzying. It is the largest seafood trade event in North America and is attended by more than nineteen thousand people from more than one hundred countries.

Seafood companies dominate the floor, but there are also packaging, container, and other supplies for the industry represented. There are even technology companies offering applications to trace fish from boat to plate.

Come down the escalators and right away the first big banners seen are from Alaska: Icicle, Trident, Peter Pan. While they may be owned by companies outside of Alaska, their contributions to the state’s economy cannot be denied.

And Alaska has a healthy representation by local fisherman organizations, mom and pop businesses, regional organizations, and village corporations, as well as companies like Lynden Transport that ship all over the world.

From left, Kris, Art, and Jo Ann Tilgner, proudly display their award winning smoked salmon.

industrial waterfront, and, at the time, there was concern about how it would affect Unisea’s business in Alaska.

“Nissui is doing fine,” says West Coast Regional Sales Manager Joe Lis, with Nissui subsidiary F.W. Bryce, Inc., the North American sales and marketing company for Nissui’s commodity seafood.

Gifts of Smoked Salmon Created a Thriving Business Beaming with the pride of creating an award-winning product, Art and Jo Ann Tilgner and their son, Kris, offer up a piece of their Ruby Red Olde World Scottish Style Cold Smoked Sockeye Salmon. The fish is moist with a hint of what they call, “spirits of the Caribbean.” Brined then lightly cold smoked with Alaskan alder, the fillets are aged during refrigeration and flash frozen at their facility in Ninilchik.

“I’m the old gobbler,” says Art, an aviation examiner and former surgeon and general practitioner, standing next to his wife, Jo Ann. He was the one who nurtured the product for decades.

“I played around with smoked salmon for years and years when we lived in Cordova,” Art says. “I made it for friends and family in Alaska and outside, and people kept saying, ‘you should sell this.’”

Good advice.

In the Alaska Fisheries Development Foundation’s (AFDF) 2014 Symphony of Seafood New Products Contest the Tilgners won People’s Choice in the Anchorage Gala and First Place in Smoked Products. With the prizes came an allpaid trip to Boston for the convention.

Although Art perfected the smoked salmon recipe, production involves the whole family: Jo Ann is office manager and also an oncology nurse at South Peninsula Hospital in Homer; Kris runs the physical plant using his many technical skills in electrical, instrumentation, refrigeration, and construction that he employs as an electrician and instrument technician for ConocoPhillips at its Beluga River Gas Field across Cook Inlet; another son, Robert, is involved in product development and fills the many roles needed to keep the operation moving; and daughter Debra Hess is production supervisor and an expert in the critical steps to get Tilgner’s to market.

Alaska Seafood Boosters AFDF Executive Director Julie Decker has a vision to expand Alaska’s fisheries through mariculture. In fact, she wants to double Alaska’s seafood industry.

“What needs to be done to push it forwww.akbizmag.com

ward is not just farming, but also wild fishery enhancement, and the same with shellfish,” says Decker. “Shellfish in Southeast have been depleted due to otters.”

A seafood species that is attracting new fans is sea cucumbers, which are grown in a hatchery in Seward, she says, alluding to the success of the Alaska salmon enhancement program, which has produced between $110 million and $250 million yearly in ex-vessel value, or value before processing, since 2010.

Since 1978, AFDF has focused on enhancing the fishing industry, producing success stories like Alaska surimi, fish oil research and development, and backing new seafood products like salmon burgers, salmon bacon, and salmon baby food.

“We want to grow the whole idea of mariculture in Alaska,” Decker says.

AFDF also holds the annual Symphony of Seafood contest that highlights new Alaska seafood products like this year’s winners: Ocean Beauty’s Black Pepper and Original Flavor Salmon Jerky; Trident Seafoods’ Wild Alaskan Beer Battered Cod and Redi Grilled Alaskan Pollock; Orca Bay Seafoods’ Cod Fillets with Sundried Tomato Pesto; AquaCuisine’s Lit’l Sammies in a Blanket; and of course, Tilgner’s Ruby Red Olde World Scottish Style Cold Smoked Sockeye Salmon.

“It’s a way to showcase the best of Alaska,” says Val Motley, Symphony of Seafoods project manager.

Increasing Seafood Consumption Alaska Seafood Marketing Institute (ASMI) was also at the conference.

Executive Director Michael Cerne comes to the job from a career in the US Coast Guard in fisheries, stationed in Kodiak, Ketchikan, and Juneau, and he says, “I enjoyed that a lot.” He also did some consulting with the World Bank and the United Nations.

His goals for the organization, he says, are to continue to partner with industry and open up marketing where it makes sense.

And there’s a pretty daunting quest to separate youth from a diet of fast food.

“We want to increase seafood consumption by the younger generation,” he says.

ASMI attends two major marketing venues during the year in Boston and the even larger one in May in Brussels, Belgium—the European Seafood Exposition. www.akbizmag.com

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15

Copper River is King Blessed with the first summer run of king salmon in May, Cordova capitalized on the timing, and in 2004, when the state passed a bill forming regional seafood development associations, 541 Copper River gillnet fishermen backed formation in a vote by 78 percent. In 2004, Prince William Sound set/gillnetters also joined.

With a 1 percent regional seafood development assessment tax on the fleet, the association went about solidifying marketing of Copper River salmon, capitalizing on the efforts thirty years ago by Jon Rowley, a Seattle restaurant and fish consultant, who flew in four hundred pounds of fresh salmon. It was a sensation—still is, with much of the credit going to the Copper River/Prince William Sound Marketing Association for its outstanding job of branding the fishery so that it’s a legendary product, even in the Lower 48.

“Ultimately, we’d like to have our product placed in higher-end markets,” says fourth-generation, Cordova fisherman Jeff Bailey, captain of the FV Miss Margeaux, at the association’s booth.

One observation, after thirty years fishing for Copper River salmon, Bailey remarked on the sustainability of the fishery.

“It’s been very consistent,” he says.

“No big highs or lows. We’ve managed it pretty well, and we’ve managed it for escapement.”

Copper River Seafoods, with its impressive booth walled in with panels of photomurals of a cannery and a map of Alaska, gives a sense of place. The company offers a variety of Alaska seafood, including cod, shrimp, crab, halibut, and salmon—out of Cordova, Togiak, Kenai, or Dutch Harbor.

In 2009, it formed a partnership with Togiak Tribal Council and Bristol Bay Economic Development Corporation to harvest and process salmon in Bristol Bay. The next year, it partnered with 16

Alaska Business Monthly | May 2014

© Dimitra Lavrakas

Wasting no time, ASMI was the second presentation in the Master Class Series focused on wild salmon at the demonstration theater. On the low stage, fine examples of Alaska salmon were lined up.

All seats were filled by those eager to see Dan Enos, chef and owner of the Oceanaire Seafood Room in Boston, fillet salmon and talk about how best to cook it. He was very knowledgeable and took many questions from the audience.

The Trident Seafoods large trade booth at the Expo.

Norton Sound Seafoods at its Unalaska plant to process Bering Sea catch. It also produces something for furry friends.

“Pet treats,” says Billy Green, general manager of Copper River Seafoods’ Anchorage plant. “There’ve been a lot of recalls with pet products and dogs dying, and there’s been an increase in interest in Alaska.”

The salmon bites, treats, and jerky under the brand names of Wild Sky and Wildcatch are made to human-grade level, he says. Yes, he has tried them.

“They’re very tasty,” he says.

Standing next to him, Cassandra Squibb, chief business development officer, agrees.

Started in 2006 by fishermen, Bristol Bay Economic Development Corporation is a community development quota corporation representing the villages of Aleknagik, Clarks Point, Dillingham, Egegik, Ekuk, Ekwok, King Salmon, Levelock, Manokotak, Naknek, Pilot Point, Port Heiden, Portage Creek, South Naknek, Togiak, Twin Hills, and Ugashik.

“The fishermen voted to tax themselves in order to support our mission,” says Executive Director Bob Waldrop. “We have 1,875 permit holders and 5,000 to 6,000 crew. It’s the largest sockeye fishery in the world. It brings $480 million just to the region, and Bristol Bay brings over 60 percent of Alaska’s sockeye salmon to market.” 

Salmon’s Impact Randy Rice, technical director for ASMI, talked about the impact that salmon fishing has on the Alaska economy.

Dimitra Lavrakas writes from Alaska and the East Coast. She attended this year’s Seafood Expo in Boston. www.akbizmag.com

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FISHERIES

Hard Times for Halibut

A cherished Alaska fish stock is depressed as competing fleets sail into new era

By Wesley Loy Commercial fishing boat Inua in the Kodiak Harbor.

A

sk Alaskans to name their favorite fish, and most would likely say salmon. But many might go with halibut. The big, meaty flatfish is a culinary and economic treasure. Halibut supports one of the state’s most valuable commercial fisheries, and hundreds of charter boats take out tourists and locals alike for the chance to hook a “barn door.”

But these are tough and changing times for Alaska halibut.

18

Alaska Business Monthly | May 2014

The stock has been in serious decline for years, cutting deeply into commercial catch limits. Charter boat captains and their angler clients likewise are feeling the pinch, due to new regulations to restrain the charter catch.

This season ushers in a new era for halibut management with the start of a “catch sharing plan” for the commercial and charter fleets. The plan is designed to end more than two decades of bitter conflict between the two sectors,

establishing a clear allocation of fish for each.

While the catch sharing plan is controversial, all involved can agree on one thing: It would be a relief to see the halibut stock recover. Whether that will happen anytime soon is something the scientists are trying to figure out.

Deep Cuts “The days of filling the freezer are pretty much over for everybody,” says Donwww.akbizmag.com

Photo by Wesley Loy

ald Lane, a Homer commercial fisherman and member of the International Pacific Halibut Commission (IPHC).

The IPHC is the bilateral, scientific organization that manages the halibut stock all along the western US and Canadian coasts. The six-member panel has scaled back the halibut catch limit every year for the past decade. The catch limit for this year is 27.5 million pounds, a 64 percent cut from the peak of 76.5 million pounds in 2004. www.akbizmag.com

An End to Deadly Derbies Commercial fishermen catch halibut by laying strings of baited hooks, called longlines, on the seafloor.

Not so long ago, the Alaska halibut fishery operated as a frenzied derby.

Scores of boats would put to sea in any kind of weather to compete for the quota in seasons that lasted only a few days.

Boats sank and people died in the race for fish. What’s more, the quality of the catch suffered as millions of pounds of halibut hit the docks all at once, which meant processors had to freeze most of the fish.

Lane, sixty, remembers the derby days well.

“It was really crazy, but you know, there were a lot of fish around, too,” he says. A good outing was “like winning the Super Bowl.”

Sweeping management reform came in 1995, when the fishery converted to individual quotas. Under this system, each fisherman is assigned a set number of pounds he may catch each season. The size of these individual catch shares floats up and down with overall halibut abundance.

While some fishermen opposed them, individual quotas appear to have been successful. The need to race is gone. The season now lasts nine months and much of the catch is sold fresh. Halibut today is one of the more expensive consumer choices in the fish case and a regular on the menus of white tablecloth restaurants.

All this has yielded very high dockside prices for fishermen, $6 a pound or more, offsetting to some degree the precipitous decline in halibut catch limits.

Photo courtesy of the Alaska Seafood Marketing Institute

Most of the Pacific halibut harvest comes from Alaska waters.

The cuts are painful, but this is a time for conservative management, says Lane, who has fished halibut for more than thirty years.

Scientists recently reviewed halibut data back to the early 1900s. They note that halibut remain abundant, and catch limits have been even lower in the past. But “recruitment” of juvenile fish into the harvestable stock has been weak lately. Further, halibut are running smaller at a given age.

Smaller halibut translates to a smaller biomass and lower catch limits.

Two commercial fishermen haul in a halibut.

Lane owns a fifty-nine-foot fishing boat called the Predator. He says he’s had to slash expenses due to the stock decline.

For example, he employs two crewmen now, down from as many as five.

Halibut Wars Even before the stock decline began, commercial halibut fishermen were fretting over another threat to their fishery—the rise of the charter boat fleet.

Charter boats take clients out for a half-day or full day of fishing. With luck, the anglers go home with awesome summertime memories plus many pounds of fine eating. The charter boats operate predominantly in two regions of the state—Southeast Alaska (also known as regulatory Area 2C) and Southcentral Alaska (Area 3A). These areas take in busy ports such as Sitka, Seward, and Homer.

Beginning around 1993, fishery regulators began to hear calls from commercial fishermen to address the “rapid, uncontrolled growth” of the charter fleet.

This was an affront to charter captains, who argued their small businesses were every bit as legitimate as commercial fishing operations. They noted the commercial boys were catching the lion’s share of the halibut and should make room for the charter operators.

For years, the charter fleet operated under “guideline harvest levels.” But the rules lacked teeth when charter catches exceeded these soft limits. The growing charter harvest ate into commercial quotas. Federal regulators, including the North Pacific Fishery Management Council, struggled to find solutions.

At one point, it appeared the charter operators would be awarded individual quotas, similar to those held by commercial fishermen. But this plan stalled out amid intense opposition.

May 2014 | Alaska Business Monthly

19

150°0'0"W

140°0'0"W

130°0'0"W

NENANA

Regulatory Areas 3A and 2C Pacific Halibut Area Boundaries

3A 100

50

0

100 Nautical Miles 60°0'0"N

GLENNALLEN

WASILLA ANCHORAGE WHITTIER

VALDEZ CORDOVA

KENAI KASILOF SOLDOTNA SEWARD NINILCHIK

SKAGWAY HAINES YAKUTAT

60°0'0"N

GUSTAVUS

HOMER SELDOVIA

JUNEAU

ELFIN COVEHOONAH PELICAN ANGOON TENAKEE SPRINGS SITKA

3A

PORT LIONSKODIAK

PORT ALEXANDER KLAWOCK

OLD HARBOR Moser Bay

2C

KETCHIKAN CRAIG HYDABURG

55°0'0"N

Source: NOAA Fisheries

Alitak Bay

KAKE PETERSBURG WRANGELL

55°0'0"N

3B 150°0'0"W

140°0'0"W

Map of halibut regulatory Areas 3A (Southcentral) and 2C (Southeast), in red.

Regulators later cut the halibut bag limit for charter anglers in Southeast from two fish per day to one. And they limited the number of licensed charter boats.

Charter operators filed lawsuits to challenge these unpopular measures, but were unsuccessful.

The Catch Sharing Plan Efforts continued to try to settle the protracted halibut wars.

The final product, which takes effect this year, is the catch sharing plan. It splits the available halibut between the commercial and charter sectors, and provides for certain restrictions to constrain the charter catch.

For the 2014 season, the charter fishery in Area 2C has been allocated 18.3 percent of the combined commercial and charter catch limit. In Area 3A, the charter share is 18.9 percent.

The one-fish bag limit remains in effect for charter boat anglers in Area 2C, 20

Alaska Business Monthly | May 2014

while the limit in Area 3A is one fish of any size plus one up to twenty-nine inches long.

So, is the catch sharing plan fair for charter operators?

Many don’t think so.

Others are resigned to the new regime, says Heath Hilyard, executive director of SEAGO, the SouthEast Alaska Guides Organization, which represents charter boat operators.

“Our goal is to do the absolute best we can in living under the allocation and have it do as little damage as possible to our industry,” he says. “Let’s get our boats ready and get some hooks in the water.”

All along, charter operators have feared what fishing restrictions could do to their client bookings. The real and full impact should become clearer over time.

Further adjustments to Alaska halibut management could be coming.

Under the catch sharing plan, a charter captain may lease commercial quota

to allow his clients to keep up to two halibut of any size per day—the limit for sport anglers in Alaska.

Charter operators aren’t confident, however, that this leasing scheme will work.

As an alternative, they’re studying the idea of buying commercial quota to form a “common pool” that could be used to liberalize the charter fishery areawide.

To finance the common pool, charter anglers could pay a surcharge similar to the state king salmon stamp.

The common pool faces “some significant hurdles,” Hilyard says.

For now, halibut players are anxious to see how the catch sharing plan, season one, turns out.

And everyone is praying the halibut stock bounces back, as more fish floats all boats.  Journalist Wesley Loy writes from Anchorage. www.akbizmag.com

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FINANCIAL SERVICES

COMMERCIAL AND I NDUSTRIAL L ENDING Synonymous with economic growth

By Tracy Barbour

A

laska’s financial institutions offer a wide assortment of industrial lending options to support new and expanding businesses around the state. The specific types of financing may vary from institution to institution, but they all serve the same purpose: to stimulate economic growth.

At many of Alaska’s traditional banks, industrial financing goes beyond largescale infrastructure projects. It involves the broader category known as commercial and industrial (C&I) lending. And the terms commercial and industrial financing are synonymous at most traditional financial institutions in Alaska.

First National Bank Alaska typically makes industrial loans for heavy equipment, manufacturing facilities, docks, and shipping terminals. This kind of financing differs from other commercial loans because it often entails larger projects or those that tend to be speculative, according Stacy Tomuro, a vice president with First National’s Commercial Lending Division. For example, if an established company proposed to build a larger manufacturing plant or a completely different type of facility, this could present some uncertainty.

The reason: It might be difficult for the bank to predict how much revenue the project will generate.

In this scenario, the bank would take these elements of risk into consideration and depend on projections and forwardlooking assumptions. “In the case of new construction or a ‘start-up’ period, we would want to see if the owner has the capital, or possibly other sources of

22

Alaska Business Monthly | May 2014

income [to access], before the project can generate revenue,” Tomuro says.

First National strives to collect as much information as possible to understand all aspects about the viability of the customer’s project. A feasibility study might be in order to support the basic assumptions of the owner, as well as an appraisal. In addition, the bank would require all the standard business and financial information to understand the company and its capacity to borrow. “We would also be very focused on the owner’s management structure and experience to assess whether they can successfully implement their plan,” Tomuro says.

Industrial projects may require longer terms—up to twenty years—or customized repayment terms to make the project viable, Tomuro says. Tailored repayment terms could include gradually-increasing payments or interest-only payments early in the loan.

Requiring lower initial payments, Tomuro says, can give projects that are in the start-up stage more time to generate income to repay the loan.

On most larger projects where the customer is primarily dependent on the project for loan repayment, First National might seek out loan participations or some type of government guarantee to minimize its risk. For example, the bank is currently working with a customer on a large energy infrastructure project that involves the Alaska Industrial Development and Export Authority (AIDEA). “The project requires a period of construction start-up before forecasted revenue is generated,” To-

Stacy Tomuro, FNBA

muro says. “Financing for this project would not be possible without AIDEA’s Loan Participation program because the loan repayment is very dependent on the future success of the project.”

Alaska Growth Capital and USDA B&I Loans Alaska Growth Capital offers industrial financing through the United States Department of Agriculture (USDA) Business & Industry (B&I) loan program. The USDA B&I loan program is designed to bolster the economies of rural areas—which includes almost all of Alaska, except for Anchorage.

The underlying goal of the USDA B&I program is to enhance the economic environment. That meshes well with Alaska Growth’s mission to foster economic www.akbizmag.com

development among Alaska businesses.

Alaska Growth, Alaska’s only Business and Industrial Development Corporation, specializes in unique projects, according to Jesse Janssen, vice president of Alaska Growth’s Lending Group. “We like rural markets, unique demographics, and projects off the road system,” he says. “We like to take a creative approach.”

Alaska Growth, a wholly-owned subsidiary of Arctic Slope Regional Corporation, is a lending and consulting company that works through partners like the USDA to help small business owners and entrepreneurs in rural and urban areas of Alaska. Alaska Growth normally originates USDA B&I loans in the $100,000 to $10 million range. But the company can make exceptions to support loans up to $25 million if the project will have a significant enough impact on the economy, Janssen says.

The USDA B&I program can be leveraged by cooperatives, corporations, partnerships, for-profit and nonprofit businesses, federally recognized tribes, public bodies, and individuals. To be eligible, the borrower must satisfy one of the following: provide employment; improve the economic or environmental climate; promote conservation, development, and use of water for aquaculture; or reduce reliance on nonrenewable energy resources by encouraging the development and construction of renewable energy systems. Projects involved in the USDA B&I program run the gamut, from small retail establishments and restaurants to remote lodges and air carriers augmenting their fleet.

“The program can be used for almost any industry, as long as the mission and location criteria fit,” Janssen says.

Alaska Growth frequently partners with local banks, non-traditional lenders, and guarantee agencies. In some cases, it can allocate or source new market tax credits that can facilitate a project.

Janssen says Alaska Growth can consider almost any deal—and if it makes sense— offer more feasible terms and take more risk than most banks. “If we can see that the ownership or management is sound and the project has long-term viability, we can look at it,” he adds.

Recently, Alaska Growth provided non-partner financing to help an air carrier in Southwest Alaska augment its fleet. The additional aircraft helped the www.akbizmag.com

carrier re-establish a market where it had previously operated. The loan, which was a fifteen-year term loan for more than $2 million, enabled the carrier to provide service to an underserved area.

Industrial Lending at Wells Fargo Wells Fargo offers a wide range of industrial loans and credit lines that established businesses can use to finance everything from equipment purchases and construction to the acquisition of other businesses. Wells Fargo also

provides loans with AIDEA and is a preferred lender for US Small Business Administration (SBA) loan programs.

In fact, the bank is Alaska’s No. 1 SBA lender by loan unit volume, according to Wells Fargo Alaska Commercial Banking Manager Sam Mazzeo.

Equipment financing is an important component of industrial lending at Wells Fargo. Smaller businesses needing to purchase one piece of equipment generally opt for a loan. Larger companies often get preapproved for a credit line ahead of time, Mazzeo says, so they

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May 2014 | Alaska Business Monthly

23

Expert Advice

A

laska’s financial professionals offer a wealth of advice to help businesses capitalize on industrial financing to support their enterprises.

Jesse Janssen, vice president of Alaska Growth Capital’s lending group, says business owners should keep in mind that financing for industrial projects is often necessary for growth. However, those that produce goods should be analyzing their market to see if the environment is changing and if the items they are producing are going to be viable for the long term.

Janssen says, “You hate to see someone take on a project that will be obsolete in a few years.”

Key Bank’s Market President in Alaska Brian Nerland’s best counsel is to engage a banker long before financing is needed. He says: “Have your historical financial statements ready for both yearend and interim periods, as well as projections that show the sources of future revenue. Some loans require many time-consuming steps, so the more time you have before needing the money, the better.”

The financial experts at Wells Fargo have similar thoughts. Sam Mazzeo, Alaska commercial banking manager, says business owners should have a relationship with a bank that can handle all of their needs today and in the future and that relationship should be formed as soon as possible. Floyd feels it’s essential for businesses to anticipate their financial needs going forward and get ahead of them.

“Anything we can do ahead of time to make that happen will make it a better experience,” he says.

Likewise, Stacy Tomuro, First National Bank Alaska vice president, recommends planning early and having a business plan supported by as much information as possible.

It’s never too early to start talking to prospective banks, he advises.  24

Alaska Business Monthly | May 2014

Sam Mazzeo, Wells Fargo

Darin Floyd, Wells Fargo

have the funds available for equipment purchases before they need them.

They can draw on the line throughout the year to augment or replace equipment as needed, which is an option that works well for many businesses, according to Darin Floyd, Well Fargo’s first Alaska-based equipment finance manager. “Typically, the customers have a budget, and they know what their capital expenditures will be over six months,” says Floyd, a seventeenyear commercial lending veteran who is now part of the Wells Fargo Equipment Finance team. “They will anticipate the cash flows of what that equipment will generate for them.”

Wells Fargo can also make interim advances to support multiple equipment purchases. Customers can get advances to buy several pieces of equipment over a short period, and then the bank rolls everything into a short-term loan. Normally only interest payments are required on interim advances, and the loan term is structured to coincide with the useful life of the equipment. “Typically, equipment is depreciated over six, seven, or ten years, so we try to match our payment over the life of the equipment,” Floyd says.

On the commercial lending side, Wells Fargo provides terms in the fiveto ten-year range, Mazzeo says. He adds that there is virtually no restriction to the amount of financing the bank can offer because additional lenders can be brought in to participate if necessary.

Floyd says much of the bank’s current equipment lending is related to the

oil and gas, construction, and marine transportation industries. He’s also seeing financing that involves a lot of value-added fisheries equipment. “They’re looking for new equipment to modernize what they have,” he explains. “A lot of it is directly related to the energy sector. I think it’s all [related to] the renewed investors on the North Slope.”

Mazzeo attributes much of the increased activity with industrial lending to the passage of Senate Bill 21, tax credits, and a heightened sense of optimism. He says: “The last five years have been relatively static or moderate in total investment in the North Slope.

It was previously put on hold due to the prior tax structure. The level of economic activity that’s going on in Alaska today and planned in the next three years is substantially greater. We’re excited about what has happened.”

The increase in economic activity is what prompted Wells Fargo to add Floyd’s new equipment finance manager position. The bank was also encouraged by SB21, which Mazzeo says “changed the oil tax structure in Alaska and made it more industry-friendly and has provided more incentive for oil and gas companies to invest more money” in the state.

In addition to incorporating Floyd’s job, Wells Fargo recently hired a relationship manager trainee, expanded its credit analyst team, and added an SBA business development officer in Alaska. “We are optimistic about Alaska’s economy in 2014 and years to come,” Mazzeo says. www.akbizmag.com

KeyBank and Industrial Loans Commercial and industrial loans represent an important line of business for banks and a critical source of funds for business, according to Brian Nerland, KeyBank market president in Alaska.

KeyBank, like many financial institutions in Alaska, does not make a distinction between commercial and industrial financing. However, it’s definition of C&I loans does not include real estate.

The bank offers short-term loans that can provide working capital for businesses that need help handling fluctuations in cash flow. Longer-term loans are available to help companies acquire assets like machinery and equipment and, sometimes, a new business. KeyBank works with all types of businesses and nonprofits that need to borrow money on a short or longterm basis. “Right now, we are processing loans for companies engaged in tourism, service businesses, general contracting, retail, health care, transportation, and oil and gas mining,” Nerland says.

When assisting clients with industrial financing, KeyBank likes to apply its own version of “relationship banking.”

For example, the bank supplied one

www.akbizmag.com

client with a purchase card, or P-card, that enabled them to make payments on their card while keeping the amount of the purchases in their account for an additional thirty days. The card also provided additional fraud protection.

“We take a holistic approach to clients’ businesses and strive to provide services beyond lending money that can help improve their financial position,” Nerland says.

Here’s another example of how KeyBank makes an effort to provide creative solutions for customers: The bank recently extended a long-term loan to a tourism-related company in need of new equipment and made a short-term line of credit available to cover payroll and daily expenses while the business was waiting to receive payment from a cruise line customer.

KeyBank is a preferred lender for SBA guaranteed loans and can help clients access the SBA 504 Loan Program. The bank can also provide financing through the USDA rural loan program, as well as a number of loan programs through AIDEA. In addition, KeyBank recently became a delegated lending authority through the US Export-Import Bank,

Brian Nerland, KeyBank

the official export credit agency of the United States. “We’re training right now to access programs that will enable Alaska businesses to diversify their revenue by exporting,” Nerland says.  Writer Tracy Barbour is a former Alaskan.

May 2014 | Alaska Business Monthly

25

INSURANCE

Lowering Workers’ Compensation Costs

W

ith the exception of the natural resources and mining industry, Alaska led the nation in the incidence rates per one hundred full-time workers for total nonfatal occupational injuries and illnesses, according to the US Department of Labor Bureau of Labor Statistics. It is no wonder Alaska’s employers are paying some of the highest workers’ compensation insurance rates in the country.

However, rates for workers’ compensation insurance—commonly referred to as workers’ comp—decreased in Alaska overall this year. Loss costs (rates) on average decreased this year (minus 2.6 percent voluntary and minus 3.1 percent for the assigned risk pool), according to Dave Kester, CPU, a senior account executive with Alaska USA Insurance Brokers. “In fact, on average workers’ compensation loss costs have decreased four out of the past five years, with one year increasing due to benefit changes contributed by the medical fee schedule,” Kester says.

Michael Monagle, director of the state Division of Workers’ Compensation, says workers’ comp insurance rates dropped about 2.5 percent this year— but he expects the downward trend to shift. In Alaska, as in most states, workers’ comp insurance premiums are cyclical. Rates are rising in other parts of the country, and Monagle envisions the same fate for Alaska. “I think the market is going to turn here in the next few years, and we’ll see rates go up,” he says.

“It’s probably a good time for employers to evaluate this now so when that market turns, they can minimize the impact on their workers’ comp rates.”

Getting experience mods to less than 1.00

By Tracy Barbour

the workers’ compensation insurance system works and how rates are determined.

The Alaska Workers’ Compensation Act requires businesses with at least one employee to carry workers’ comp insurance—unless the employer has been approved as a self-insurer. “The Act provides for the payment by employers or their insurance carriers of medical, disability, and reemployment benefits to injured workers” if an employee is injured or becomes ill due to the performance of their duties.

In cases involving work-related fatalities, dependents may be eligible for death benefits. Businesses that fail to maintain workers’ comp coverage and/ or pay compensation face substantial civil and criminal penalties. They can be fined up to $1,000 per employee work day for each day they remain un-

insured, according to Monagle.

Many businesses also purchase employers liability coverage, which protects them if an employee claims that his or her injury/illness was caused by the company’s negligence or failure to provide a safe workplace. Employer’s liability insurance is not required by the Alaska Workers Compensation Act, but most insurers advise their clients to carry it, Monagle says.

Liability coverage offers broader protection for the employee, as well as the business. “The injured worker has the option of being paid benefits under the Alaska Workers’ Compensation Act— which 99.9 percent do,” Kester says.

How Premiums Are Determined Workers’ comp insurance premiums are based on three primary factors: the

Incidence Rates per 100 Full-time Workers

for Total Nonfatal Occupational Injuries and Illnesses

by Industry Sector, Alaska and All United States, 2011 3.5

Private Industry Goods Producing Natural Resources

and Mining

1.7

26

Alaska Business Monthly | May 2014

5.6 4.4

3.3

Service Providing

1.6

Information 1.4

5.3

3.4 2.6

1.7

2.8 4.7

Educational and Health

Services

Other Services

7.7

4.5 3.9

Trade, Transportation, Utilities

4.0

Leisure and Hospitality

How the System Works There are a number of strategies businesses can implement to lower their workers’ comp insurance rates. But first, it’s essential to understand how

4.5 4.2 4.7 4.0

Manufacturing

Professional and Business Services

Alaska

3.9

Construction

Financial Activities

All United States

2.6

5.4

4.4

3.2

Goods Producing Industries include Natural Resources, and Mining, Construction, and Manufacturing.

Service Providing Industries include Trade Transportation and Utilities, Information, Financial Activities,

Professional and Business Services, Education and Health Services, Leisure and Hospitality, and Other Services SOURCE: Bureau of Labor Statistics, U.S. Department of Labor, Survey of Occupational Injuries and Illnesses in cooperation with participating State agencies.

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size of the employer’s payroll (which can include wages, bonuses, and pay for overtime work, holidays, vacations, and periods of sickness), employee job classifications, and the company’s experience modifier or loss history. Ultimately, the premium is expressed as dollars and cents per $100 of payroll for each job classification code. In Alaska—and most other states—job classification rates and experience modifiers are defined by the National Council on Compensation Insurance, an independent advisory organization.

Classification codes are three- or four-digit numbers assigned to different occupations to indicate the scope of a specific employee’s work or duties.

Companies often have multiple class codes on their workers’ comp policy.

A construction business, for example, might have laborers working under class code 0042 and office personnel rated under clerical code 8810.

Each class code represents a group of employers with a similar exposure or type of hazard. The greater the risk of injury involved with a job, the higher a company’s workers’ comp insurance premiums tend to be, according to Kenneth Murray, CEO of Kenneth A. Murray Insurance. “For example, an iron worker’s rate would be higher compared to an office with all clerical workers,” Murray says, whose Fairbanks-based firm has been serving Alaskans since 1939.

The experience modification factor, typically referred to as the “mod,” is a numeric representation of a company’s claims history over a certain time. The experience mod is based on how a business compares with others that are in its industry and have similar types of employees. The mod serves as an adjustment factor to the company’s premium—either as a reduction (credit) or increase (debit). For example, a modification of 0.85 translates into a 15 percent credit or savings, while a mod of 1.10 results in a 10 percent debit or additional charge. A credit shows that a company has less than average loss experience, while a debit indicates greater than average loss experience.

An experience mod of 1.00 is the average. So an employer with fewer and less severe accidents than average will have a mod of less than 1.00. A brand new business typically starts out with a modifica28

Alaska Business Monthly | May 2014

tion factor of 1.00. The mod factor is adjusted over time based on the company’s track record. “Loss history is worked out by each year on an insured’s work comp policy, so they will have a new experience modification each year,” Murray says.

Improving Experience Modifications Monagle says a critical part of employers improving workers’ comp rates is to know their experience mods. Companies also need to work on enhancing their safety record. Here’s why: Although medical expenses make up the bulk of an employer’s loss costs, the frequency of claims is a key component of workers’ comp rates. Mods take into account the number and rate of accidents in an employer’s claims history. So for instance, a company with one major accident costing $30,000 would have a better rating than another business with five $6,000 claims. The reason: Frequent claims are viewed more negatively because they indicate a pattern of safety issues in the workplace.

The total losses associated with each claim—paid costs plus money held in reserves for future payments—also factor into modification ratings. Ultimately, mod experience ratings are calculated for each company using claims and payroll data from the three most recently completed years previous to the current year. This does not include the policy year that is expiring because the loss data would be too new to properly represent that year.

A business can significantly reduce its workers’ comp rates by getting its experience mod to less than 1.00. That’s where occupational training, safety, and wellness programs can help. Companies that lack in-house expertise to promote such programs can use outside resources.

Monagle says having a strong stay-atwork/return-to-work program can also help companies shrink workers’ comp rates by lowering costs associated with loss wages. For example, if a worker who is a meat cutter injures his hand, the company could assign other appropriate duties instead of letting the individual stay home for four to eight weeks.

“It helps to reduce the loss experience of that particular employer because the employee is back at work,” he says.

Some companies are also requiring termination physicals to substantiate the health of outgoing employees to avoid bogus future claims. “The big thing is reducing the cost of claims by having good safety practices in the working environment and controlling fraud,” Murray says.

Other Ways to Save on Rates Strategies for reducing workers’ comp rates also extend beyond controlling loss and practicing workplace safety.

Where a company buys insurance also can make a difference. In Alaska, insurance carriers typically place newer and smaller employers in an assigned risk pool. However, the assigned risk market has a 20 percent surcharge on premiums, according to Monagle.

He encourages businesses—regardless of their size or longevity—to shop around for the best workers’ comp rates. Employers may be able to earn discounts for their safety program or if they bundle some of their insurance needs. “All insurance companies start at the same base loss costs rates, but they have different expense loads and profit margins,” Monagle says. “So you should get different quotes.”

Employers should also ensure subcontractors have proof of their own workers’ comp coverage. This can help the company avoid getting extra fees tacked onto their policy to cover the subcontractor.

Companies can also take a closer look at their payroll to reduce their workers’ comp rates. They should make sure all their employees are properly classified with codes that accurately reflect the scope of their duties. This step alone can mean thousands of dollars difference in the annual premium required for some occupations.

As general advice, Kester encourages businesses to exercise good hiring practices and hold supervisors accountable for safety and reducing time loss injuries. Larger companies, in particular, may conduct drug testing, offer safety incentive awards, and negotiate with providers for functional capacity evaluations and other medical services.  Writer Tracy Barbour is a former Alaskan. www.akbizmag.com

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ENVIRONMENTAL SERVICES

North Pole

Photo courtesy of the City of North Pole

Green sand filters in the City of North Pole water treatment plant.

By Rindi White Water and wastewater are some of the most expensive utilities to provide and the most vital to keep a community healthy.

The American Council for an EnergyEfficient Economy says municipal water and wastewater treatment systems “are among the most energy-intensive facilities owned and operated by local governments, accounting for about 35 percent of energy used by municipalities.”

In Alaska, costs can be even higher than those national averages, especially in rural and remote communities where groundwater is brackish or soils unsuitable for building wastewater treatment facilities.

But what’s happening with water and wastewater in Alaska’s urban areas? Are water utilities much different than outside the state? What are the issues facing Alaska’s utility providers? Since last fall, Alaska Business Monthly readers have been learning about utilities in Alaska’s major population centers—and utilities provided to industrial users—and finding out how each community is preparing for the future. As part of the continuing series, this month we invite readers to learn about North Pole.

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Alaska Business Monthly | May 2014

A

mid talk of losing dozens of jobs and a major Interior Alaska jet fuel provider, a few effects of the closure of the Flint Hills Resources North Pole refinery have gone largely unnoticed, namely the effect on the city of North Pole.

Flint Hills is the city’s largest industrial customer for the North Pole wastewater treatment plant, providing about 20 percent of the incoming wastewater to the system and a significant amount of associated revenue.

North Pole Director of City Services Bill Butler says it’s impossible to tell how the reduction in flow, which will happen over the spring and summer, will affect the city’s open-air, non-mechanical wastewater treatment facility.

Flint Hills spokesman Jeff Cook, via email, says closures will happen over the course of a month.

“Our extraction unit that produces gasoline will be shut down on May 1, 2014, and the balance of the refinery that produces other products will be

shut down no later than June 1, 2014,” Cook writes.

“Without Flint Hills… we have the potential to lose 20 percent of our income on the wastewater side, and that’s significant,” Butler says.

In addition to paying the same rates any city wastewater customer pays, Butler says Flint Hills pays an extra surcharge because it’s an industrial customer. It’s not a lot—four-tenths of a cent per gallon of water—but the surcharge money goes into a special fund for capital repairs. Without it, the city will be more at the mercy of state and federal funding restrictions when it needs to pay for improvements.

North Pole Mayor Bryce Ward says the city is lobbying legislators to work something out that will allow Flint Hills to sell the refinery to another operator. Currently, Flint Hills is seeking operators for the facility, but Cook says there will definitely be a gap in time between Flint Hills’ closure this summer and the time a new operator www.akbizmag.com

A worker last summer relines city sewer pipe with a flexible new liner that, when filled with hot water, hardens to a plastic-like, non-porous material. The new liner allowed the city to solve a problem of leaking, porous pipes at less than half the cost of digging new lines.

begins operations—if a new operator is found.

In a nutshell, the closure stems in part from cleanup costs associated with a sulfolane plume from Flint Hills’ property. Flint Hills has argued that the former owner of the site, Williams, is responsible for the cleanup because the spill occurred when they owned the property. They also allege that the state shares liability because the state owned the property for one week between the time that Williams owned it and Flint Hills purchased it. With the cleanup issue unresolved, many have said it will be difficult to find a new buyer.

The state and Flint Hills exchanged letters in early March, in which Alaska Governor Sean Parnell said the state would hold Flint Hills liable for the sulfolane cleanup and not a new buyer of the property. But Brad Razook, CEO of Flint Hills, responded in a letter stating Flint Hills could not sell under Parnell’s arrangement because it would make Flint Hills potentially liable for any future spills on the property. In March, Flint Hills had requested an appeal of the state’s cleanup standard.

Photo courtesy of the City of North Pole

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May 2014 | Alaska Business Monthly

31

An aerial view shows the City of North Pole’s four outdoor wastewater treatment lagoons.

Wastewater comes in the lower left pond and cycles counter-clockwise.

The fourth lagoon, on the bottom right, discharges into a channel of the Tanana River.

Photo courtesy of City of North Pole

A Small Utility Serving a Few Big Customers Most North Pole water and wastewater customers are businesses and residents.

Butler says the city has about 650 accounts, serving commercial, residential, and multi-family customers. About 75 percent of the city’s roughly 2,200 people have access to city sewer and water, he says.

But unlike most small-town wastewater utilities, North Pole holds a permit from the state Department of Environmental Conservation to accept industrial wastewater so it can act as a repository for wastewater from Flint Hills, Golden Valley Electric Association, and Petro Star, Inc. The extra layer of permitting means the city pays a lot more for in-depth tests of the water it discharges—everything from arsenic to zinc is tested for, Butler says.

“That adds a significant cost to our operations,” Butler says. “We have to test for a full range of industrial chemicals.”

Each of the three industrial users has a discharge permit issued by the city.

The permits allow the city to set limits on what can be included in wastewater, he says. Flint Hills is permitted to discharge certain levels of arsenic, cadmium, chromium, copper, cyanide, lead, mercury, nickel, oil and grease, selenium, silver, sulfolane, and zinc.

Petro Star, the North Pole refinery that produces about 22,000 barrels per day of kerosene, diesel, and jet fuels, has a permit nearly identical to Flint Hills.

Golden Valley’s permit is the same, except it does not include sulfolane.

Butler estimates about 95 percent of the industrial wastewater discharge, between 40,000 and 80,000 gallons a day of 32

Alaska Business Monthly | May 2014

the city’s average flow of 350,000 gallons per day, comes from Flint Hills. Golden Valley contributes about 3 percent, he says, and Petro Star about 2 percent.

The water and wastewater treatment facility is run by an enterprise fund, Butler says. Essentially, it’s a way for city governments to operate utilities such as water and wastewater service, like small businesses, with the goal that the enterprise pays for itself. Butler says the revenue supports operations but is not enough to pay for capital projects, like a $2.2 million project last year to reline failing sewer mains. For capital projects, North Pole, like many other municipalities, relies on state and federal grant funding.

All Biological in the Far North Butler says the city operates one of the farthest-north open-air wastewater treatment facilities in the state.

“It’s a pretty passive process. All we do is aerate it,” Butler says.

Under its permit, North Pole can treat up to 500,000 gallons of wastewater per day. Use typically runs in the 350,000 gallons per day range, with seasonal increases due to runoff entering the system via manhole covers.

North Pole is a relatively flat city, so Butler says most wastewater travels through more than one of the city’s thirteen lift stations before reaching the treatment facility. Lift stations have shredders that tear large pieces of waste to bits before it gets to the facility, he says, so large screens for waste and grit are not needed.

As the raw sewage flows into the facility, it goes directly into the first of four treatment ponds. The ponds are the size of Olympic-sized swimming pools and each holds about 5 million gallons,

Butler says. The first pond has the most aeration, or bubbles, being injected into the waste to help bacteria break it down.

The solids drip out and settle on the bottom of the pond, and the treated water flows into the next pond. More aeration, more dripping, and then it flows on to the next one. Most of the treatment happens in the first two ponds, Butler says; by the time the wastewater reaches the final two ponds, it’s being polished and treated for release. The whole process takes about eighty days, he says.

The treated water discharges into a small side channel of the Tanana River.

But Butler says the channel, which has served as the city’s discharge area for twenty-five years, has twice gone dry in the last eighteen months. The city is working with the state Department of Environmental Conservation to find a solution.

The city’s location just south and east of Fairbanks in the Interior guarantees a harsh winter and brief but generally sunny summer. Butler says the lagoons generally freeze over in the winter but do not freeze solid.

“It does develop an ice cover that keeps some of the heat in,” Butler says.

High-Tech Lining Gives New Life to Old Lines Last year the city spent $2.2 million to reline old sewer lines. Butler says the old lines, installed in the 1970s, were made of Techite, a cement product with fiberglass fibers embedded in the pipe.

Over decades, the pipe became prone to cracking and leaking. The leaks allowed groundwater to flow into the wastewater discharge, meaning the city was processing a lot more water than necessary. www.akbizmag.com

“We estimated if we had had to excavate and replace the pipe, the cost would have been more than $5 million. This way, people didn’t lose sewer service for more than a few hours. They relined it from manhole to manhole.”

—Bill Butler Director of City Services, North Pole

Instead of digging up and replacing the roughly seven thousand feet of aging pipe, most of which was located in the oldest part of the city, a less expensive solution was found. Butler says workers pulled a sock-like material, impregnated with a resin, through the sewer lines.

The lines were pumped full of hot water, which caused a chemical reaction turning the pliable resin into a hard, plasticlike material.

“We estimated if we had had to excavate and replace the pipe, the cost would have been more than $5 million,” Butler says, and residents would have lost service for days at a time.

“This way, people didn’t lose sewer service for more than a few hours. They relined it from manhole to manhole,” he says.

New Wells Serving the City Flint Hills is the city’s largest wastewater customer, but the company has also played a major role in the city’s water system. In 2009, significant levels of sulfolane were detected at the refinery’s boundary. Further testing detected sulfolane in the city water wells and in several residential water wells.

Butler says initial testing of city wells showed the presence of sulfolane but at less than 5 parts per billion, or ppb.

“On the side that went out to the public, there was no sulfolane,” Butler says.

But Flint Hills “made a commitment to the city that there would be no contamination,” he says, so the company drilled two new wells, between 140 and 160 feet deep and about a mile away, well outside the sulfolane plume, in 2011 and turned them over to the city.

The cost for the wells, including the engineering, piping, road repairs associated with digging the lines, and well houses, was about $4.4 million. The city www.akbizmag.com

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CITY: SF DIV/GROUP: ENV/IM DB: K ERNST LD: G FRANCE PIC: PM: TM: TR: Project (Project #) B0081981.0006.00001 Path: V:\FHR_AK\NorthPoleRefinery\OffsiteSiteCharacterization\MXD\2013_Workplan\Fig 5-1 DeepResidentialMWLocations.mxd Date: 3/11/2013 Time: 2:22:00 PM

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LEGEND:

FLINT HILLS RESOURCES ALASKA, LLC NORTH POLE REFINERY, NORTH POLE, ALASKA

FHRA PROPERTY BOUNDARY

2013 OFFSITE SITE CHARACTERIZATION WORK PLAN

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Above: Flint Hills Refinery in red.

Left: Sulfolane zone in green.

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FLINT HILLS RESOURCES ALASKA, LLC NORTH POLE REFINERY, NORTH POLE, ALASKA

Legend: Private Wells with Access

FHRA Property Boundary

Zone where sulfolane has been detected

RAIL LINE

7 Monitoring location with written access agreement in place

4 Monitoring location where

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2013 OFFSITE SITE CHARACTERIZATION WORK PLAN

DEEP RESIDENTIAL MONITORING LOCATIONS

Note: Image Date June 9, 2007

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did not pay for any of that, Butler says.

Ward says Flint Hills has agreed to continue testing the wells into the future, and will make further testing a requirement of ownership if the refinery sells.

Water on the Move The city might be able to process waste in open-air lagoons, but its water system is a nod to its location. Each water hook-up in the city has two lines, allowing water to continually circulate.

Pumps throughout the city keep water moving, and boilers run from around November to late spring in an effort to 34

Alaska Business Monthly | May 2014

3,500 Feet

FIGURE

5-1

keep the water above freezing.

“The heating cost is significant. Half of the heating fuel cost of the Municipality of North Pole goes to heat the water in the treatment plant,” Butler says.

The amount the city budgeted for heating fuel at the water treatment plant is $70,000, he says.

The city is counting on a plan to bring natural gas to North Pole as part of a gas line from the North Slope to help cut costs, he says.

“If that does come, it could be a significant savings of energy not just for us but for everyone in the area,” he says.

Flint Hills Impacts Extend Beyond City Utilities Ward says Flint Hills was a good partner when sulfolane was found in municipal wells. Other companies may have forced the issue to go through litigation instead of shouldering the responsibility despite questions about who should be held liable.

“Instead, they got out there and decided to get clean water for city residents,” he says.

But the city faces other liabilities because of the sulfolane spill, which contaminated many properties within the city. Ward says future development and expansion of properties within the sulfolane plume may be limited.

“What’s going to happen to those properties that do not have water right now, but may be developed in the next year or ten years and… need clean water? Who’s going to pay for that?” he asks.

North Pole is one of the fastest growing spots in the Fairbanks-North Star Borough, Ward says, and affordable land is part of the reason.

Ward says, “when you have an issue like the sulfolane—when you have folks who want to develop the property but will have to pay for the treatment—it de-incentivizes people who might want to move here.”  Rindi White is a freelance journalist living in Palmer. www.akbizmag.com

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HEALTH & MEDICINE

Keeping Alaskans Safe is Ultimate Goal Photos courtesy of Beacon Occupational Health and Safety Services

Fit for Duty testing has the individual performing a variety of tasks that will be regular and routine tasks performed on the job. These range from demonstrating the ability to safely secure a harness and climb a ladder to testing the dexterity of the individual and his or her ability to perform such tasks overhead, while kneeling, or in a confined space.

Meeting employer needs with occupational health services

By Vanessa Orr

I

magine being on the road beside a truck driver suffering from sleep apnea, or getting on a plane with a pilot who took drugs before the flight, or working around heavy machinery with a coworker who cannot hear warning alarms.

When a person is not fit for a job, that person is not the only one who suffers—other employees, employers, and even the general public risk consequences as well. To lessen the danger, many companies are required by state and federal regulations 36

Alaska Business Monthly | May 2014

www.akbizmag.com

to make sure that their employees are fit for work, and that they are tested to determine their capabilities for specific positions. Some companies are even going so far as to have employees tested for certain jobs when they are not required to do so by regulation in order to reduce the chance of liability and workers’ compensation claims.

“Employers are interested in maintaining a safe working environment by employing those qualified to perform the position safely,” explains Amanda Johnson, director of Clinical and Training Services, Beacon Occupational Health and Safety Services. “We perform preemployment and annual screenings on a variety of employees, including those who are governed by regulations and requirements that include Department of Transportation (DOT) and Occupational Safety and Health Administration (OSHA)-covered positions, as well as non-regulated positions.”

Beacon’s clients range from banks, cargo carriers, and construction companies to DOT-covered positions in aviation, on motor carriers, and on the pipeline, among others.

www.akbizmag.com

State, Federal, and Industry Requirements According to the US Department of Labor Occupational Safety and Health Administration, the State of Alaska exercises safety and health jurisdiction over most private sector employers in the state and over public sector employers other than the federal government.

Depending on the industry, the Alaska Occupational Safety and Health Program (AKOSH) provides standards and regulations for employers to follow to ensure employee safety.

“There are certain vertical standards, such as those for lead exposure, which have very strict requirements,” explains AKOSH Industrial Hygienist John E. King. “In addition to following explicit written instructions, employers may be required to have employees undergo medical testing to continuously monitor the levels of lead in the blood. If these levels are over the limit, that employee must either reduce the amount of time that he or she is exposed on the job or be taken off of that particular job.”

OSHA regulations also include a Respiratory Protection Program designed

to provide a safe environment for those who may breathe air contaminated with harmful dusts, fumes, vapors, and more.

“A physician must preside over a fit test to make sure that the person doing the job is not breathing impaired; that person must be able to overcome the negative pressure seal against his face that is caused by a mask, which is something that a person with a breathing problem can’t do,” says King.

OSHA also has “emphasis” programs, which the state follows, that have recently included focuses on chromium VI, a carcinogen produced in welding; silica, a dust often found in construction; and isocyanates, which are present in paint and polyurethane foam insulation at construction sites or in auto body shops.

Other contaminants of concern in Alaska are benzene in the oil industry, which can cause leukemia; hydrogen sulfide found in sewer systems and on the North Slope; ammonia found in refrigerated systems at seafood processing plants; and hydrogen cyanide, which can result from a polyurethane foam insulation fire at a construction site or within mills at mining sites.

May 2014 | Alaska Business Monthly

37

Pre-employment and annual screenings include a series of lab screenings. CMP (comprehensive metabolic panel), CBC (complete blood count), lead, and zinc are most common.

Photo courtesy of Beacon Occupational Health and Safety Services

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Alaska Business Monthly | May 2014

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“In addition to health standards, there are also safety standards that address how employers should conduct the workplace, based on recognized and generally accepted good engineering practices,” says King. “These standards are constantly evolving—sometimes they are equal to OSHA standards, and sometimes they are behind or even ahead of OSHA standards.

“The safety culture is gradually improving due to the fact that insurance companies are demanding these improvements when auditing the companies that they cover,” he adds, “as well as by growing acceptance by industry that a strong safety culture is an integral part of policy, and the efforts by government organizations such as OSHA and CDC [Centers for Disease Control] to educate and enforce.”

Types of Occupational Testing Just as there are many different types of jobs, there are many different types of occupational testing. Even before an employee is hired, testing may be required to determine if that person can meet the demands of a specific position.

“In the past couple of years, Beacon has seen an increase in non-regulated

20

Drug and alcohol screenings include a series of steps to prepare the specimen for processing.

Here the donor is witnessing the collector transfer the specimen from the cup to the specimen bottle to be sealed and shipped for processing.

Photo courtesy of Beacon Occupational Health and Safety Services

testing to include a Fit for Duty assessment,” says Johnson.

Beacon partners with Worksaver, a nationally recognized program, in which employer-specific job validations are completed for each position, and testing is monitored by a physical therapist.

Beacon creates a testing environment that simulates the requirements of the position.

“Testing might include climbing stairs while carrying a tool bag, lifting a variety of weight or objects multiple times,

climbing a ladder in full Arctic gear, or shoveling gravel,” says Johnson. “The test evaluates the potential employee on a variety of areas to include their cardiovascular endurance and musculoskeletal system, as well as strength.”

For many companies who have personnel in remote areas, it is especially important to determine if new hires will be up to the task before they arrive on site.

“Beacon tests maintenance personnel and operators, as well as cooks and housekeepers to validate that they are fit

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39

for duty,” says Johnson. “In some environments, a housekeeper may be doing hundreds of loads of laundry a day or a cook may be slicing thousands of tomatoes for sandwiches on a single shift. It is important to make sure that those people can meet the minimum lifting requirements and have the necessary grip and hand strength to safely perform the job tasks.”

Johnson added that companies are choosing to make these investments in pre-employment screenings to manage and reduce workers’ comp claims from preventable on-the-job injuries.

Beacon also offers functional capacity evaluations, as well as performs physicals, respirator medical approvals, pulmonary function tests, fit tests, audiograms, and DOT and non-DOT drug and alcohol testing.

“We’ve recently seen an increase in drug and alcohol testing to include hair follicle testing,” says Johnson. “Hair testing reveals usage much further back; while a urine test will show usage from the past three to five days, a hair test can show usage from the past thirty to sixty days.”

While many employees are required to obtain testing by their employers,

Beacon sees many self-directed individuals as well.

“Many times, prospective employees are expected to maintain a DOT medical card to be eligible for employment,” says Johnson. “They maintain these requirements to increase their chances of receiving a job offer based on their current credentials.”

Elizabeth Kohnen, MD, MPH, MRO, co-owner/partner of Alaska Occupational Health in Fairbanks, believes that occupational health testing provides a benefit for both employees and employers.

“Occupational medicine makes sure that employees are not exposed to unnecessary hazards like noise or chemicals, bacteria, viruses, cold stress, repetitive motion injuries, and more; it provides protection,” Kohnen says. “It also protects companies from having people work for them who will be injured and make workers’ comp claims.”

The majority of clients that Alaska Occupational Health sees are those who need administrative exams for exposure or possible exposures.

“We provide exams for those working in environments above certain noise

torn acl

sleep apnea

Outpatient knee surgery, 1996

Diagnosed and treated, 2004

ankle reconstruction

levels and medical evaluations before employees are fit with respirators,” Kohnen explains. “We also provide hazmat evaluations—before and during work responses, as well as provide exams for drivers holding CDLs.” More specific testing and treatment includes providing pilot exams for the FAA, inoculating laboratory workers at the university with rabies vaccinations, and testing scuba divers conducting underwater research to ensure they are safe to dive.

While many of these exams can be given by general practitioners, a number of the tests require that physicians be certified in specific areas, including FAA exams. In April of 2014, certification will also be required for practitioners who provide CDL testing.

“Pilots are used to having to use certified testers, but this will be a big hassle for drivers,” Kohnen says. “The CDL change will affect a huge number of people—the whole trucking industry, in fact. The test will cost more for them, because we now have to pay to get training.”

While inconvenient, this change may help to prevent accidents down the line.

pulled levator Extended physical therapy, 1992

Outpatient ankle surgery, 1997

“If FMH isn’t on our speed dial, it should be. Over the years, we’ve logged a lot of time there. We’re lucky to have a hospital of that quality - and Denali Center right here. We’ve never felt like we had to go outside to get the best care possible.

You can’t raise a big family here, and feel comfortable, without FMH. And we need a big family, to help run the business.”

- Gary Wilken

40

Alaska Business Monthly | May 2014

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“Often, these types of changes are driven by legislative pressure—there’s been an accident somewhere, and the Legislature decides that the rules need to be stricter.

While the FAA has been very strict for quite a while, the driver’s exam has been loosey-goosey until now. A number of people would doctor shop until they got a medical certificate—which means that there are some very unqualified people being given CDLs,” Kohnen says.

Preventing Accidents in the Workplace With the right amount of training and safety measures in place, many accidents can be avoided. Companies who want to be proactive can sign up with AKOSH to have their sites inspected as a way to determine what needs to be done to keep employees safe.

“While some companies will call us because the enforcement division has gone to their site and they are required to have a mandatory consultation to reduce their fines, the majority of the people we see are genuinely concerned and know that their program is not organized enough to keep their people adequately protected,” says King.

Once contacted, a health inspector and a safety inspector will visit the company’s location and walk through the entire site.

“The health person is focused on things like air contaminants and the cumulative effects of low-level exposure,” says King. “The safety person is concerned with hazards that could cause an employee to get electrocuted, or to fall, or to get a hand chopped off.”

In addition to visiting the site, AKOSH interviews the employer and employees to determine concerns.

“We then write up ‘hazard IDs’ as to what we found as it relates to OSHA standards,” says King, adding that the business receives a full written report at a later date.

“There might be five or ten hazard IDs that the company can correct in a month,” he says. “But they do have the right to ask for an extension, especially if the fix requires them to buy a big piece of equipment, for example. In the meantime, they are required to take interim measures to keep their employees safe.”

Between federal fiscal years 2009 and 2013, AKOSH provided 2,424 consultation visits and trained at least 13,914 www.akbizmag.com

employees. They identified 18 imminent danger situations, 8,590 serious hazards, 735 other-than-serious hazards, and 154 regulatory violations of OSHA standards.

Beacon also provides remote medical, safety, and training services. Their training division trained more than ten thousand students in 2013 at their Anchorage, Kenai, and Deadhorse facilities. Training offerings range from the North Slope Training Cooperative course to Hazwoper and CPR/First Aid, as well as aircraft fire and rescue training, confined space entry, and fall protection classes.

While companies are required to follow many regulations to keep their employees safe, the fact is, it benefits them in the long run.

King says, “Not only does it improve employee morale, but it is so costly to have an occupational injury that it makes much more sense to spend less money to comply with industry and OSHA standards.”  Vanessa Orr is the former editor of the Capital Weekly in Juneau.

May 2014 | Alaska Business Monthly

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TRANSPORTATION

Alaska’s Ports, Harbors, and Docks

Photo courtesy of the City of Emmonak

A small portion of construction materials for the water and sewer project for Emmonak. There was no more room at the Emmonak dock, located near the mouth of the Yukon River, so a new staging area had to be permitted before delivery.

Integral to commerce and travel

W

hen singer Otis Redding and guitarist Steve Cropper penned their soulful melody with the iconic chorus “I’m sittin’ on the dock of the bay, wastin’ time,” they definitely weren’t referring to the Alaskan men and women who keep the state’s harbors, ports, and docks operational.

Management of water access infrastructure is no easy task. As capital monies and legislative purse strings tighten, commercial and government agencies that oversee ports, harbors, and docks are feeling the pinch. Many managers are finding it necessary to balance waning legislative funding with the ebb and flow of customers and tourists who pay for the facilities’ services.

The good news is that the majority of Alaskans and tourists, whether commuters and passengers, pleasure boat-

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Alaska Business Monthly | May 2014

By Tom Anderson ers, commercial and sport fishermen, or shippers of cargo and freight, seem to recognize that accessible waterways benefits everyone.

Water Matters Take a look at the entire nation’s surface water and you will find that Alaska holds more than 40 percent of the US total.

The Alaska Department of Natural Resources Mining, Land & Water Division states that when it comes to rain, an average of 1.05 million gallons of precipitation per day falls in the state.

What is even more impressive is the fact that the state has more than 3 million lakes (sorry Minnesota), over twelve thousand rivers, thousands of creeks and streams, and over one hundred thousand glaciers. The Yukon,

Kuskokwim, and Copper rivers are in the top ten list for the nation’s largest rivers. All in all, whether dealing with travel or commerce, Alaska is as much about water as it is about land, mountains, trees, and air.

The Alaska Association of Harbormasters and Port Administrators (AAHPA) is the trade organization for the commercial and non-commercial marine industry. Municipal and nonprofit members exchange information relating to maintenance, operations, safety, enforcement, and regulations.

“We have thirty-seven port and harbor management members throughout the state who represent their respective communities,” says Kim Erickson with AAHPA. “Fortunately they are engaged and active in the association, which makes us more effective when dealing www.akbizmag.com

with policies and budgets for new projects. We actively advocate for legislative funding from the State Legislature every year to ensure needed projects keep getting completed.”

The AAHPA holds an annual conference and pays deference to the size of the state by holding the venue in a different member’s location each year.

One reason this is done is so harbor administrators can learn about their peers’ operations and processes while boosting the local economy in which the event is held. Solidarity in funding requests is also a target, yet there is a sense of self-preservation that also flows through each community’s project requests.

The 2014 AAHPA Annual conference will be held October 13-17 in Ketchikan.

What’s the Difference?

Alaska may be large, and its water integral, but the nomenclature for access methods bounces across the spectrum of size and shape.

Take, for example, a port. This is a location along a shore or coast with at least one harbor where marine vessels can dock and transfer people or cargo from and to land. The harbor is a body of water that is deep enough and protected so as to offer anchorage for marine vessels. Then there is a dock.

The term “dock” could mean the area of water between two piers or alongside a pier to receive a vessel for loading, unloading, or repairs. It might also refer to a single pier, or a wharf, or the old wooden structure that floats at your family cabin and from which you cast a trout line. Docks can be on a river, lake, or in the ocean. The word is also a verb, as written above, and the act of mooring or coming into contact with a structure or land from water.

When asked about the difference between Alaska ports, harbors, and docks, even Michael Lukshin, the Statewide Ports and Harbors Engineer, admits everyone does not use the same definition.

To make things more complicated, because vernacular varies and reporting is inconsistent, there is not a precise count for all marine facilities (ports, harbors, docks) in the state. Lukshin estimates that there are more than five hundred marine facilities throughout Alaska. www.akbizmag.com

As for funding, every community has its druthers, but what Erickson, Lukshin, and the Alaska marine industry can agree on is that ports, harbors, and docks are critically important to commerce and travel throughout the state.

Funding and project momentum help achieve modernization, and absent local, state, federal, and corporate monetary support, business function could stagnate in the state.

Across the Map A handful of infrastructure and facili-

ties offer a sampling of some of the differences and similarities comprising Alaska ports, harbors, and docks and a glimpse at the changes underway.

Seward—Alaska Railroad Dock Terminal: Seward is a community of approximately 2,700 people within the city limits and more than 2,500 on the periphery. The city was founded in 1903 as the ocean terminus of the railroad, now operating as the Alaska Railroad and owned by the State of Alaska.

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Photos courtesy of the City of Seward

Above and Right: Alaska Railroad Dock Terminal in Seward.

Resurrection Bay in the Gulf of Alaska flows into the Alaska Railroad Intermodal Terminal. The state’s facility information literature notes that many port users “make intermodal connections through the Alaska Railroad terminus on the Seward waterfront” and that each year “more than 130,000 people and more than 2 million tons of cargo enter or exit Seward via the Alaska Railroad dock facilities.”

For transportation and commercial freight applications, there are three docks at the harbor: East Dock, West Dock, and the Coal Dock.

The East Dock is the loading point for freight and also receives passengers from cruise ships when the West Dock is full. The dock was originally 620 feet by 200 feet but was widened an additional 120 feet on the east side to provide more room for trucks and equipment in 2007.

“We’re working on a new project that’s going to widen the freight [East] dock to make it larger,” says Louis Bencardino, Seward Dock manager. “We 44

Alaska Business Monthly | May 2014

dredged last year and reduced the depth of water to 42 feet, which is very good in comparison to most ocean-docking areas in the state,” adds Bencardino.

The Seward Terminal applied for and received permits for the new construction, so by late spring Bencardino hopes to begin the next phase of a multi-million dollar project that requires state and federal budget allocations.

The terminal is directly connected to the state’s rail system. The facility website highlights the fact that the dock-torailroad accessibility affords “freight, resources, and passengers to key hubs in Whittier, Anchorage, Wasilla, Palmer, Denali, and Fairbanks/North Pole and communities in between.”

The West Dock is designated for passenger ships as large as 3,000-plus in size, with a size of 736 feet by 200 feet, and is connected to the Dale Lindsey Seward Intermodal Facility. This is the dock that visitors may first glance at when arriving to town as the enormous pleasure cruise ships float alongside each other.

Adjacent to this dock is the 1,700-foot -long Coal Dock, used for coal loading.

Seward—Small Boat Harbor: Established in 1964, the small boat harbor in Seward is the primary destination for tourists and boating enthusiasts. A fullservice port with 50-ton and 250-ton travel lifts and a 5,000-ton syncrolift, as well as boat repairs, potable water, and all necessary power utilities, having a slip (docking place for a boat) in Seward is a mariner’ dream. The harbor has multiple dock floats labeled from A to P, X, and Z, and most sport fishermen, charter services, and water enthusiasts launch from this point.

In terms of budget and upgrades to keep the harbor safe, the same problem exists in this Kenai Peninsula community as with all other Alaska harbor towns—funding. Seward is a busy place, particularly in the summer. The small boat harbor has 3,608 vessels registered with 200 more on the waiting list.

The original infrastructure was built shortly after the 1964 earthquake. The www.akbizmag.com

Photos courtesy of the City of Emmonak

Above: Heavy equipment crowds the city dock in Emmonak.

Left: The Emmonak city dock before the erosion project was completed.

Equipment for improvements is staged in the background.

money and user fees covering the project.

We still have three more docks that need to be replaced based on slip fee income and hope that in the next five years we can finish the float-replacement project.”

wooden D-float was over fift y years old, and a rebuild began in September last year to remove the old float and install a new one.

“We’ve made great upgrade to the harbor,” says Harbormaster Mack Funk.

“Absent direct grants from government sources, we have to build up the funds with fees we charge the slip holders and cover projects from that income, so the construction process can take time. The D-float cost around $2 million, with state

Emmonak: While Alaskan cities like Seward and Anchorage and other communities have the good fortune of road and rail access and tourism, it’s the smaller Alaska towns that consider ports and docks a literal life-line to their survival. Competing against larger cities with a platoon of state legislative champions makes funding support a tenuous

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Photos courtesy of the City of Emmonak

The banks of the Yukon River in Emmonak serve as a city dock and constant reinforcement is needed from ongoing river erosion. The community has asked the state to fund construction of an actual dock.

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Alaska Business Monthly | May 2014

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effort in rural Alaska.

The City of Emmonak has a population of approximately 811 residents.

The community is located at the mouth of the Yukon River, 10 miles from the Bering Sea. It lies 120 air miles northwest of Bethel and 490 air miles from Anchorage, resting in the Yukon Delta National Wildlife Refuge.

In contrast to a deep-water port, the Yukon River generates its own challenges with transportation and marine mobility into Emmonak.

For the Fiscal Year 2014/2015, City Manager Martin Moore Sr. has been seeking funding from the State Legislature for a port. In his capital budget request to Senator Lyman Hoffman and Representative David Guttenberg, Moore noted that the Emmonak City Council’s first priority in 2014 is building a new regional port. The benefits for such a port permeate the lifestyle and commerce of every family, he contends.

In his letter to the Alaska Legislature, Moore reminded the state’s policymakers that “efficient and cost-effective transportation is one of the root problems in rural Alaska.” He added in his reasoning that a fully-functional port “will ensure that lower-Yukon residents yield benefits from barged goods and materials and help foster ongoing economic development.”

Illuminating the tangible struggles of marine transportation and commerce in rural Alaska, Moore light-heartedly explained the community “sort of” has a city dock. The current structure is used for unloading and loading from various commercial barges, but most of the time the shipping companies have a difficult time with such limitation in space, so they’re forced to unload on the right-of-way and roadside.

The two phases of the port and dock facility construction is no easy or inexpensive task. Emmonak projects the dock/wharf build to cost approximately $10 million and the landing ramp almost $6.5 million.

Support is blossoming for the projects, as President James Kameroff of the Emmonak Corporation reminds in his legislative support letter, noting over five thousand Alaskans could benefit from the new dock “as far north as Kotlik, up the Yukon River to Russian Mission, and south to Hooper Bay.” www.akbizmag.com

May 2014 | Alaska Business Monthly

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Two workers look out over the Akutan Boat harbor.

In addition, the safety concerns mount as profiled in a support letter for the project sent to the Emmonak City Council from Bering Pacific Construction, revealing that every year ten to twenty feet of bank erodes into the Yukon, and continued erosion may damage the local tank farm and the Kwikpak Fisheries Processing operation.

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Alaska Business Monthly | May 2014

and the Legislature and state administration are the sources from which the next level of funding can be derived and the project completed.

“We have one of the largest fish processors in the country right here, and with a float system in the mooring basin including gangway connections, pier spacing, and slip sizes—and everything the design report describes, we can keep our vessels in Akutan rather than long distances away in Kodiak or Seattle,” says Bereskin.

Skagway—Small Boat Harbor: The northern most point in Southeast Alaska is the community of Skagway. Over a hundred years ago, in 1900, Skagway became the first incorporated first-class city in the state. In 2007 the city designation was dissolved and another first ensued, with a restructuring and renaming to the Municipality of Skagway Borough.

“We have so much freight coming in that room is limited,” says Harbormas-

ter Matt O’Boyle. “Skagway’s harbor is critical for recreational and commercial use, and to those ends we’re pleased to be expanding services to the marine trades.

Skagway harbor is the economic highway to the community, and any growth to that infrastructure is a direct benefit.”

Skagway’s population is slightly more than nine hundred people. It is the northernmost ice-free, deep-water port in North America. Skagway is a year-round transportation hub connecting the state of Alaska to the Yukon and Northwest Territories of Canada, as well as northern British Columbia.

Money is as tight in Southeast, when it comes to port development, as any other region of the state. Skagway Small Boat Harbor has 103 slips and two thousand feet of linear moorage. Water is available at the dock year round, with a thirty-ton Sealift trailer for haulouts.

The harbor is currently in the process of constructing a new facility within

Photo courtesy of the Municipality of Skagway Borough

Akutan—Boat Harbor: Port and harbor needs have few boundaries along the Alaska map.

Far south of Emmonak is the Aleutian city of Akutan, a community of 1,154 people, where Akutan Island’s first boat harbor is being built in phases.

Akutan Island is located on the eastern part of the Aleutian Chain in the fishladen Bering Sea, 790 miles southwest of Anchorage. The island is home to Trident Seafoods, one of the largest frozen seafood processors in North America.

The initial $31 million harbor design and construction project has been achieved thanks to the US Army Corps of Engineers and Aleutians East Borough. The city’s mayor, Joe Bereskin, has been emphasizing protection of the local environment throughout the project, which will produce a mooring basin of twelve acres, serving the local commercial fishermen and marine industries.

Mayor Bereskin says when finished, the plan is to have room for up to fift yseven large fishing vessels in addition to space and facilities for disabled vessels and repair services integral to commercial fishing and processing.

“The project is coming along and we have the land opened and break water, so now we’re working with the State of Alaska and our legislators to secure funding for the actual harbor and floating docks,” says Bereskin. “Our community works with Trident and commercial fishermen, but the harbor is essential.”

A 2011 “Small Boat Harbor Planning Design Report” prepared for Akutan delineated the various harbor user-groups, once completed. Trident, local pollock co-op members, and Akutan commercial fishermen will be the primary clients to a new harbor, with trawlers, cod/crab/halibut fleets, and mixed-use industries dominating the commerce.

In unison with other Alaska city officials, Bereskin alluded to the fact that budgets are tight throughout the state,

Photo courtesy of the City of Akutan

Skagway Small Boat Harbor, the northernmost ice-free, deep-water port in Alaska. www.akbizmag.com

Nome—Harbor: The city of Nome is made from legend and lore and is possibly the most famous Alaska city when it comes to the rush of adventure, exploration, and gold.

Nome is located on the southern Seward Peninsula coast on Norton Sound of the Bering Sea. The community is inching towards a population of four thousand, while its most essential service is likely its harbor.

The Nome harbor infrastructure is somewhat complex because of its multiple sizes and design, yet it remains a precious safe haven for ships when the temperamental Bering Sea forces mariners inland.

Nome has a small boat harbor that includes small dredges on barges as large as 90 to 100 feet in length used for gold mining operations.

Photo courtesy of the Port of Nome

which marine vessels can conduct repairs in a warm, dry environment. Skagway has also recently contracted with an engineering firm for the expansion of the North and West side of the harbor.

This enhancement will add an additional thirty-two slips to the harbor, lightening demand for room and accessibility.

Aerial view of the Port of Nome infrastructure.

The city’s Outer Dock, or “Causeway,” and its main port facility include two docks: The City Dock is on the outer perimeter with a depth of 22.5 feet. This is where all large ships, such as research vessels and US Coast Guard vessels, some more than 400 feet, come to refuel, re-stock, and weather a storm. Last year smaller expedition cruises from Norway,

Germany, and other foreign countries also came to town. The Inner Dock, or “Westgold,” is typically used for rolling stock (cargo that can be wheeled off a barge), construction materials, supplies, and containers of rock and gravel.

As for projects and growth to handle more customers, Nome’s harbor system hasn’t gone without attention. In 2006

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the US Army Corps of Engineers completed improvements projects, adding a 3,025 foot breakwater east of the existing Causeway and a 270 foot spur on the end of the Causeway, making it a total of 2,982 feet.

However, an essential expansion that is being sought this year is the construction of a middle dock. Nome is a hub community for the region, which means more than two-thirds of all goods and fuels that arrive into Nome’s harbor are intended for neighboring and regional villages. This includes barges with fuel, produce and food supplies, construction containers, and equipment.

The middle dock concept was originally envisioned to connect the inner and outer two docks with sheet pile and bumpers, but the price tag became too high. Nome decided to scale back its initial concept, now focusing on a new 230-plus-foot dock positioned in the middle of the harbor. If successful, this effort will increase Nome’s harbor transit and loading capacity by 100 percent with a roll-on/roll-off “row-row” ramp designed for barges to go nose-straight onto a road and quickly connect with equipment that can offload modular homes, rock crushers, generators, and myriad other cargo onto semi-trucks.

“Nome is a hub community for this area and having a new middle dock will directly impact our region for better,” says Nome Harbormaster Lucas Stotts.

Stotts has been working at the Nome Harbor for almost five years and has been in charge since the summer of 2013.

At age twenty-seven, he may be one of the youngest harbormasters in the state.

“When it comes to funding and budget, we met with state legislators during the 2014 session in Juneau and have explained that an additional dock will reduce shipping and fuel costs for consumers and commercial interests. It will also improve our safety protocols during inclement weather,” Stotts says.

Shipping in general is increasing in Nome. Stotts notes that every day the city has boats at its docks, with two to four vessels often “jogging,” or turning circles, in the Bering Sea awaiting room to come into the harbor to moor.

The middle dock project will cost approximately $9 million. Nome has secured funding commitment of $6 million from the State of Alaska and 50

Alaska Business Monthly | May 2014

Norton Sound Economic Development Corporation, leaving $3 million as the remaining budget necessary to start building the new dock.

“We have research vessels coming to the Nome Harbor from Korea to Greenland, anxious to re-fuel and re-stock, as do we have Alaska’s [US] Coast Guard and a multitude of commercial barges in town to provide essential supplies and services, and that’s why the additional dock is such a priority,” adds Stotts.

Tidal Wave of Projects As current and future projects go, nearly every community in Alaska with a port, harbor, or dock seeks upgrades and modernization, if not expansion.

This mentality may be a matter of basic economic growth, or perhaps it can be attributed to Alaskans thriving on marine commerce and recreation.

State Engineer Michael Lukshin listed some of the cities he’s been working with, beyond aforementioned construction projects, which include: Ketchikan Bar Harbor, South Petersburg North Harbor, Sitka ANB Harbor, Sand Point Harbor, Unalaska Robert Storrs International Harbor, Juneau Aurora Harbor, Juneau Statter Harbor, Juneau Douglas Harbor, Hoonah George Hall Harbor, Seldovia Harbor, Hydaburg Harbor, and Homer Harbor.

The list of state-partnered projects is comprehensive and indicates Alaskan officials also see the benefit of new and improved marine access and moorage.

The future of Alaska waterway transportation and freight delivery, as well as tourism and fishing, will undoubtedly rest in the hands of these policymakers and regulators, as well as the business owners who see the merit in continued investment. All will cost, and prioritization will be the word of the day.

Perhaps Otis Redding never had the chance to visit Alaska and its beautiful ports, harbors, and docks before he wrote his most famous song, but there’s no doubt he would have changed his tune after seeing the phenomenal marine infrastructure and dedicated professionals Alaska has to offer. 

Tom Anderson writes from Alaska. www.akbizmag.com

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CONSTRUCTION

New and Improved Airport Ru nways

Photos courtesy of Alaska DOT&PF

A key lifeline for rural Alaskans

By Paula Cottrell

A

ccording to the Alaska Airports Association: “Alaska has 287 public use land-based airports, 44 heliports, and approximately 735 recorded landing areas (private, public, and military) total. Of course pilots land on many of the thousands of lakes and gravel bars across the state where no constructed facility exists.”

Where constructed facilities do exist, though, ongoing maintenance and upgrades are required, many mandated by federal law.

Current Airport Construction Plans Most of the funding for airport projects comes from the federal government but is administered by the Alaska Department of Transportation and Public Facilities (DOT&PF) with planning, design, and engineering done through its three regions: Northern, Central, and Southeast.

DOT&PF expects to have about eighteen airport projects under construc52

Alaska Business Monthly | May 2014

The runway at Ambler with snow and without.

tion in 2014 with a combined cost of nearly $333 million, more than twothirds of that will be spent on rural projects. Six of the eighteen airport projects in Alaska for 2014 include Runway Safety Area (RSA) improvements.

Many of these projects had not been either advertised or awarded at press time in early April. Some projects have already been awarded and work will either continue or begin this year.

Multi-million dollar, multi-year airport construction projects dot the map from Barrow to Ketchikan. Airport construction is an ongoing activity in Alaska.

Dan Hall, vice president and Alaska manager for Knik Construction, says they have been building airports in Alaska for thirty-five years and the key to successful airport construction is research.

“The biggest challenge that we face is logistics,” Hall says. “Gravel has to be imported and can only be barged in during the summer months. Some-

times we need to travel down rivers that are having issues with low water, and we aren’t able to get the barges in on time to stay on schedule.”

Successfully bidding a rural airport construction project does come with a great deal of risk, he says.

“You have to do your homework and be very aware of the area you are working in and the potential obstacles you will likely face,” Hall says. “These are fixed firm prices we are dealing with here, and there is not a lot of flexibility on the side of the owner in regards to change orders and unexpected expenses.”

While most of the projects are in rural Alaska, the international airports in Anchorage and Fairbanks both have work slated.

A project at Ted Stevens Anchorage International Airport to rehabilitate runway 7L/25R pavement and intersecting taxiways including lighting, signage, marking, grooving and under www.akbizmag.com

Hooper Bay might get a new runway, contingent on federal funding.

include realignment of the access road at the end of the runway, installing shore protection, and re-establishment of eastern extension will include realignment of the Kotzebue Lagoon channel and hillside terrain obstruction removal.

Awarded to Brice, Inc. in October 2012, the $30.9 project began construction in 2013, and is estimated to be complete

by October 2014.

Photo courtesy of Alaska DOT&PF

Northern Region Projects Northern Region projects include an estimated $3.6 million runway repair project in Barrow and a $6.3 million runway resurfacing project in Shishmaref.

Th and Airport Rehabilitation project was still out to bid at press time, and includes extending the main runway to 4,000 feet, and widening it, rehabilitating the operational surfaces and airport access road, and constructing a new 2.8 mile material site access road, among other improvements. estimate range is $10 million to $20 million for the project, which is expected to last three years.

Kotzebue Airport is in Stage 3 of its Airport and Safety Area Improvement project which will extend the RSA of the main runway to 400 feet on each end of the will extend into Kotzebue Sound and will

Photos courtesy of Alaska DOT&PF

drain system was pending on the bid calendar and has an engineer’s estimate range of $50 million to $60 million.

QAP was awarded a $13.5 million ANC Taxiways M, L & Taxilane E2 Reconstruction project last June, and work continues this year.

Osborne Construction Company was awarded a $15.8 million construction contract at the Fairbanks International Airport last August for an Airport Rescue and Fire Fighting Building Upgrade project and will continue working through 2014 and into 2015 with an estimated total project cost of $21.9 million.

The airport at Nome will be under construction this summer. www.akbizmag.com

QAP is embarking on a $26.5 million project this June in Nome that will include expanding the RSAs of both runways from the existing 300-foot width to 500 feet. Expanding the main RSA length will shift the Snake River channel adjacent to threshold 10 in order to provide space for a non-standard 170-foot long Engineered Materials Arresting System, and the other end of the runway will have a 1,000-foot long safety area.

Resurfacing taxiways E and F and repaving taxiways H and J are also included in this project, which is expected to near completion in the fall of 2015 with a possible extension into 2016.

Central Region In Hooper Bay, a project to rehabilitate and extend the runway, relocate apron and associated utilities, construct a new snow removal equipment building, install navigation aids, and relocate the beach access road is anticipated to be advertised in July, with the date contingent upon federal funding availability.

Th $30 million to $40 million.

In Tunanak, QAP will be relocating the existing airport, which will include the construction of a taxiway, apron, May 2014 | Alaska Business Monthly

53

Photos courtesy of Alaska DOT&PF

Above and left: Tunanak airport is being relocated to comply with federal mandates.

access road, snow removal equipment building (SREB), and other improvements. The Tunanak project is expected to cost $19.9 million.

In Platinum, the airport runway is being extended 1,700 feet, and the runway lighting system will also be extended.

The project is being done to enable large aircraft to use the runway. Knik Construction Company expects to complete the $2.7 million project in fall 2014.

In Koliganek, a project to extend and reconstruct the runway to 3,300 feet, replace runway lighting, and rehabilitate the taxiway and apron was anticipated to go to bid in April. Additionally, the existing SREB will be moved and rehabilitated and a second heated SERB will be constructed. The engineer’s estimate range is $5 million to $10 million. Mobilization is expected this summer and construction in 2015.

In the Aleutians, there is a $3 million RSA expansion project at Adak, and in Cold Bay there is a $3.7 million RSA expansion that includes relocating the medium-intensity approach lighting system.

In 2012, Knik Construction Company began work on the Unalaska airport 54

Alaska Business Monthly | May 2014

project that included extending the runway and RSA; rehabilitating the runway, taxiway, and apron resurfacing; airport lighting; and drainage improvements.

Additionally, the project includes the construction of chemical storage and snow equipment removal buildings. In total, these airport improvements are expected to cost $27 million with completion expected in October 2014.

The Kodiak airport improvements project was to be advertised in April to construct runway safety areas for Runways 7/25 and 18/36 to include all airfield lighting, signing, striping, relocation of FAA navaids and approach aids, and access roads as necessary. The engineer’s estimate for this multi-year project is $50 million to $60 million. Also at the Kodiak Airport, to be advertised and awarded with that is a project to rehabilitate the Devil’s Creek culvert that runs under Runway 2/25; engineer’s estimate range is $2.5 million to $5 million.

Southeast Region DOT&PF’s Southeast Region awards more marine infrastructure projects than aviation, but there are some airport projects this summer. Knik Construction was awarded a $5.5 million contract last December for the Ketchikan airport taxiway and apron rehabilitation that included various airports surface preservation maintenance to be done in fiscal year 2014.

One project yet to be advertised in

Southeast includes rehabilitating the pavement surfaces of taxiway A and the apron at the Petersburg airport; it has an engineer’s estimate of $1 million to $2.5 million, and scheduling is contingent on federal funding.

Unplanned Airport Improvement Costs Thousands of hours and millions of dollars go into planning airport projects, but sometimes the elements decide when a project will be done.

Spring flooding is nothing new to the communities along the Yukon River, but when Emmonak experienced unusually high flooding in the spring of 2013, a fift y-foot wide section of the airport taxiway washed away, leaving the community compromised.

“When we have an emergency situation that comes up, we have to address those problems immediately. The runway at Emmonak was never out of service, but the taxiway was cutoff so there was no access to the apron,” says Jeff Roach, Northern Region planning manager for the Alaska DOT&PF. “We used a temporary walkway so passengers could cross over the missing section of the taxiway to the airport building.”

Only one aircraft could use the runway at a time, which meant it had to land, offload its passengers, and take off again before another aircraft could use the runway. As for cargo planes, they could land, www.akbizmag.com

Photos courtesy of Alaska DOT&PF

Emmonak is ten miles from the Bering Sea about a mile and a half up the Kwiguk Channel near the mouth of the Yukon River. Spring flooding in 2013 washed out a section of the new taxiway.

but there was no way to offload the cargo.

“The reason this event was so significant for Emmonak was the timing,” says Roach. “The community was at the beginning of commercial fishing and construction season, and until the runway repair was completed, they couldn’t haul cargo in or out of Emmonak.”

To fix the runway, the FAA granted approval for maintenance and operations personnel to use materials on the airport apron to refill the missing section.

“Seven days after receiving approval,

the taxiway repair was completed and back to its original width,” says Roach.

The cost for the repairs at Emmonak came in at $216,935, which was paid out of the state DOT&PF maintenance and operation budgets. “In a situation like this, we have to respond to the emergency first and worry about the price tag later,” says Roach. “Because the governor declared Emmonak a state of emergency, we were able to seek reimbursement from FEMA for the temporary repairs that were completed and have

also applied for funding to bring the runway back to its original condition.”

“It was a team effort by the FAA and DOT to promptly respond to the damage at the Emmonak Airport,” says Roach. “It was important to us to get the facility operational as soon as possible because airports are a key lifeline for these rural communities.”  Paula Cottrell writes from Anchorage.

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May 2014 | Alaska Business Monthly

55

CONSTRUCTION

Construction Project Update

© Ken Graham Photography.com

Ramping up for Alaska’s ‘other’ season

By Tasha Anderson

E

ven with advances in winter construction, Alaska’s few warm months are still generally the best for advancements on construction projects. Staging and preparation often takes place in March and April as the ground has begun to thaw and warmer temperatures and increased sunlight allow for increased productivity.

Construction activity begins to ramp up at the end of April and beginning of May; below is a brief look at a few of the construction projects that are just beginning, moving on to new phases, or have been completed.

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© Ken Graham Photography.com

Alaska Neurology Center remodeled a previous retail space to expand its operations.

Alaska Neurology Center While new construction dominates the season, remodeling and repurposing of space also represents a portion of the construction activity in any given year. For example, the old Borders Books on Dimond Boulevard in Anchorage was extensively remodeled last year by Davis Constructors & Engineers, Inc. for the Alaska Neurology Center. The new facility designed by ECI/Hyer Architecture & Interiors has enabled Alaska Neurology to combine more services under one roof with the

increased square footage. The company added a new, larger MRI capable of holding patients that weigh up to five hundred pounds and a medical spa. The six-bedroom sleep center has been brought under the same roof, and the walk-in migraine clinic is better equipped for patient comfort with individual rooms that have soundproof walls and adjustable lighting. With the extra square footage comes additional services available through the increased patient capacity the Center is able to accommodate. www.akbizmag.com

© Russ Slaten

Sewer lines are being added in South Anchorage for new infrastructure yet to be built.

Kodiak Long Term Care Facility According to Jenith Flynn, marketing coordinator at Davis Constructors, the contractor for the Kodiak Long Term Care Facility, this project was “substantially complete in January 2014.” The project, located on Kodiak Island, was first started in February 2013 and cost approximately $15 million. The project is owned by the Kodiak Island Borough, and the engineering firm for the project was Architects Alaska.

The facility is a residential, duplexstyle housing unit that accommodates twenty-two residents; it replaces the previous long-term care building, which needed updates to become code compliant and be more comfortable and “homelike” for the residents. The new building is approximately 20,782 square feet, and “the common support core of the building accommodates a production kitchen, general storage, delivery garage, housekeeping facilities, residential laundry, and administrative offices,” Flynn says.

Dena’ina Wellness Center On April 14, the Dena’ina Wellness Center began offering dental and wellness care, and on April 21, primary care and behavioral health, signaling that the facility was open to provide longawaited services to the Kenai community. A grand opening will be held next month on June 12.

The Kenatize Indian Tribe is funding the building through an Indian Health www.akbizmag.com

Service joint venture award won in 2011, guaranteeing funding for operations and maintenance for the facility for a minimum of twenty years.

Neeser Construction was the general contractor of the approximately 52,000-square-foot building, and the architect was Rise Alaska. The cost of the project was roughly $35.8 million.

C Street Sewer Line Improvements Mass Excavation is the contractor currently performing work to install new sewer lines to service various properties on C Street near the intersection of C Street and the Walter J. Hickel Parkway in south Anchorage. The sewer lines will not only service the existing Target and newly opened Cabella’s, but are in place to service any new infrastructure yet to be built between those buildings and C Street, as well as any buildings in the future that are built on lands owned by CIRI and JL Properties on the west side of C Street.

The cost of the project is approximately $2 million to $3 million and is estimated to be completed before summer. Design work was provided by DHI Consulting Engineers LLC. Mountain View Village Low-Income Housing Starting this month, Davis Construction, in partnership with the Cook Inlet Housing Authority, is building fifteen duplexes, a triplex, a four-plex, and a five-plex. Building the low-income May 2014 | Alaska Business Monthly

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© Russ Slaten

Cabela’s opened in April next to Target in South Anchorage.

The contractor for the building was PCL Construction and kpb Architects provided design/landscape and building landscape services.

The project costs approximately $16.6 million. Neeser Construction, Inc. is the general contractor, working with architectural firm kpb Architects.

Coronado Park Senior Village Beginning May 1, the application process will open for those wanting to live in the Coronado Park Senior Village.

The four-story senior rental housing is located in the northern corner of the Coronado Park development in Eagle River. The project will have fift y-six one and two-bedroom units, all of which will be fully accessible and include sight and sound equipment.

CLDC Fireweed Office CIRI Land Development Company has contracted with Davis Constructers to build a new office building on the corner of Fireweed Lane and the New Seward Highway, the previous location of the Fireweed Theatre. Named the Fireweed Office building, the new construction is eight stories and 114,095 square feet and will be used as office space for the CIRI Land Development Company.

Cabela’s After much anticipation, Cabela’s, a specialty retailer of hunting, fishing, camping, and related outdoor merchandise, had its grand opening in Anchorage on April 10. The new store, located at 155 W. 104th Avenue, near the intersection of C Street and the Walter J. Hickel Parkway, is 100,000 square feet, and is just beyond the South Anchorage Target. The new retail store features a gun library, an indoor archery range, wildlife displays and a mountain replica, bargain cave, and various edible treats. It is expected to employ about 250 people.

CIRI Land Development Company is building an eight story office space on Fireweed in Anchorage.

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Alaska Business Monthly | May 2014

© Russ Slaten

housing units within the Mountain View community is part of a larger construction project steered by Cook Inlet Housing Authority to continue the revitalization of Mountain View. The various unit types will contain two or three bedrooms. Scheduled work for May is site preparation.

The engineering firms participating in this part of project are Olberding White Architects, LLC and Spark Design, and Schneider & Associates. The project does not have a single completion date, but rather staggered anticipated completion dates ranging from September of this year through March of 2015.

www.akbizmag.com

© Russ Slaten

McKinley Fence installing moose fencing in South Anchorage.

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Walter J. Hickel Parkway Moose-Vehicle Crash Mitigation In Alaska, new fencing appearing along a road or highway generally means the property is being developed, which may have led to confusion when drivers noticed new lengths of fencing along the Walter J. Hickel Parkway in Anchor-

age. In this case, the project is instead an attempt to reduce the number of collisions between moose and vehicles on the Walter J. Hickel Parkway, since between 2000 and 2010 there were approximately ten crashes per year.

McKinley Fence won the contract for the project, which is a collaboration between the State of Alaska Department of

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This is the first of several buildings proposed for the site, according to Flynn.

Thaw blankets were on the ground in March, and concrete poured in April. It is anticipated that steel will arrive onsite for erection in early June, according to Flynn.

The engineers for the project are RIM Architects and Schneider & Associates, and the final cost has yet to be determined.

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Š Russ Slaten

Work continues on the Alaska Airlines Center in the U-Med District in Anchorage.

Transportation & Public Facilities and the Federal Highway Administration.

The fence line is from International Airport Road to the Alaska Railroad overpass just west of the Old Seward Highway at a cost of approximately $1.1 million.

Northern Access to U-Med District The U-Med District of Anchorage is comprised of the University of Anchorage, Alaska Pacific University, Providence Health & Services Alaska, Southcentral Foundation, and the Alaska Native Tribal Health Consortium and is one of the largest employment centers and traffic generators in Anchorage. There is no direct access to this area from the north or the east, but plans have progressed in providing access from the north.

The northern route will include one lane in each direction, three roundabouts, three grade-separated crossings, in-street bike lanes, a six foot sidewalk, and a ten food multi-use path (for recreation as well as walking) with a posted speed limit of thirty miles per hour. The chosen route will connect Providence Drive to Northern 60

Alaska Business Monthly | May 2014

Lights Boulevard, essentially acting as an extension of Bragaw Street, passing between the University of Alaska Anchorage and Alaska Pacific University.

The selected route will be approximately 0.9 miles long and the estimated cost is $19.4 million. It is anticipated that the final design will be completed in the spring of 2015, with construction taking place later in 2015 and into 2016.

Alaska Airlines Center at UAA Work on the University of Alaska Anchorage’s new sports center is still progressing steadily. Construction began last May on the multi-use facility, which is 196,000 square feet. It will seat five thousand in the gymnasium for basketball, volleyball, and community events and also includes a separate gymnastic

practice/performance gym that will sit eight hundred, as well as locker rooms, office, and other support type spaces.

Cornerstone General Contractors and McCool Carlson Green are the contractors for the project, which has a cost of $109 million. Construction is on schedule to be finished in July.

Salmatof Addition and Renovation, Phase II Wolverine Supply is the general contractor and construction manager for this project to complete the design and construction of a new two-story addition and renovation of the existing Salamatof Facility at the Centennial Village Senior Campus, located in Anchorage and managed by the Cook Inlet Housing Authority. www.akbizmag.com

© Russ Slaten

KTUU’s Northern Lights Media Center in Midtown Anchorage.

The engineer for the project is RIM Architects and the approximate cost is $2.5 million.

Northern Lights Media Center KTUU will soon be moving into its new Northern Lights Media Center located at the intersection of 40th Avenue and

Denali Street. The ceremonial groundbreaking for the building took place in July last year, and construction is expected to be completed this summer.

The contractor for the $22 million, 40,000-square-foot-building is Neeser Construction, Inc., and the architect is Spark Design.

Eklutna Generation Station Currently, Matanuska Electric Association (MEA) purchases the power it distributes to its members from Chugach Electric, a purchase agreement that expires at the end of December this year.

In 2007, approximately 79 percent of MEA members voted to build a locally owned power generation facility rather than renewing or creating a new purchase agreement.

Construction of this new facility is on schedule; by December 2013, all ten of the Wärtsilä engines and generators had been delivered and placed in their final positions. Haskell Corporation is the contractor for the project and also assisted with the Wärtsilä installation.

The Eklutna Generation Station switchyard is to be energized next month, followed by substantial completion in November and testing for the rest of the year—by January 1, 2015, the plant will begin generating power.  Tasha Anderson is the Editorial Assistant at Alaska Business Monthly.

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May 2014 | Alaska Business Monthly

61

TELECOM & TECHNOLOGY

Worksite Options Meeting the need for connectivity

By Rindi White Photo courtesy of GCI

GCI workers in 2010 built a 180-foot tower used for a new oil production facility built on the North Slope.

T

hanks to a drive to make remote offices truly connected, Alaska’s North Slope is one of the best-connected places in the state, and the need for connectivity is increasing every year.

With competition in the oil and gas industry luring workers to other areas, such as offshore rigs in the Gulf of Mexico or the booming fields of North Dakota, some say the connectivity helps boost worker morale and keep employees in Alaska by providing access to their lives and families, whether it be videochatting with their children in the eve-

nings or taking online college courses.

“That’s how you keep quality project staff these days,” says Rick Hansen, director of GCI’s Industrial Telecom division. “The joke about the camps on the Slope is it’s all about the quality of the cook and the speed of the Internet.”

That’s not far off the mark, representatives from ConocoPhillips say. Bill Arnold, manager of North Slope Operations and Projects for ConocoPhillips, says in the early days of the oilfield, everyone used a party-line system, and workers were allowed a scant two min-

“That’s how you keep quality project staff these days. The joke about the camps on the Slope is it’s all about the quality of the cook and the speed of the Internet.”

—Rick Hansen Director, GCI Industrial Telecom 62

Alaska Business Monthly | May 2014

utes per call for every twelve-hour shift for personal use of the phones. The limit was necessary to keep the line open for work-related calls, he says. But today, expectations are different among workers, and thankfully the available technology is expanding to meet those expectations.

Connectivity Vital for Workers and Employers GCI is at the forefront of expanded connectivity. The company is the only carrier with a division dedicated to providing engineering, procurement, and construction, or EPC, for oil-and-gas related telecom project work in Alaska.

It’s also the only company with a fiberoptic link to the North Slope today, a link that was established in 1996.

GCI Industrial Telecom has designed, constructed, and maintains roughly one hundred miles of fiber-optic cable www.akbizmag.com

www.akbizmag.com

Photo courtesy of GCI

to connect various sites throughout Deadhorse and Prudhoe Bay in the past decade, Hansen says. Cellular coverage has gone from one cell site tower used by all carriers to about twenty cell site towers today, he says.

In 1997, according to information supplied by GCI Industrial Telecom, all of Prudhoe Bay ran on 384 Kbps, or kilobytes per second. In 2008, that was upgraded to 60 Mbps, or megabytes per second. Construction camps just five years ago required as little as 800 Kbps.

Last year, some camps were contracted for between 5 and 10 Mbps of Internet.

Most systems now operate on IP networks that require connectivity to corporate headquarters or other locations outside the oil field. Technologies such as voice over internet protocol and radio over internet protocol have increased dramatically and need bandwidth to provide the services. IP surveillance video and security badge access systems, leak detection, drilling data, and well logs are frequently used and can be transmitted online and in real time. The connectivity to and design of the digital oilfields of the North Slope allow for the benefits of being connected.

Add to this the current workforce trend of BYOD (bring your own device) and this means more bandwidth needs. Hansen says a typical remote oil field worker often carries three devices: a phone, a tablet, and a laptop, which are generally used for both work and personal reasons. GCI continues to work with its clients to expand their network to make sure workers are connected wherever they are.

“GCI spent about $5 million in 2013 to install fifteen new 3G towers on the North Slope,” Hansen says. “This year we’ll move to complete the upgrades to LTE on the Slope.”

LTE coverage, or long-term evolution, is a category of 4G coverage that allows faster data transfer than 3G coverage. Hansen says when that expansion happens there may be places on the North Slope that have better data coverage than some areas of Anchorage. All those cell sites need substantial bandwidth and many times rely on GCI fiber optic cable to connect.

“One thing that the producers look at is, how do we get the same work experience and productivity from an engineer sitting in Houston vs. an engineer sit-

A GCI Industrial Telecom crew builds a VSAT, or satellite system, to connect a remote exploration site near Umiat in 2008.

May 2014 | Alaska Business Monthly

63

ately transmit it anywhere in the world, he says. Companies should be able to utilize (and some already do) employees in Houston to remotely operate drilling rigs in Alaska. And in many places on the Slope, those things are possible because of the reliable connectivity.

Photo courtesy of GCI

A worker in 2007 walks near a remote communication site used to support exploration activity on the North Slope.

ting in Prudhoe Bay? We took it a step further—how do we provide connectivity to provide that office-like experience anywhere?” says Hansen.

Today on the North Slope, with the proper connection, a worker can stand on the remote frozen tundra and redline a drawing or take a picture and immedi-

Investing in the Future ConocoPhillips last year completed a major undertaking: installing twenty-eight miles of fiber-optic cable between the oil field at Kuparuk and Pump Station 1, the first pump station along the trans-Alaska oil pipeline on its path south to Valdez.

Prior to the fiber-optic extension, Arnold says companies relied on a microwave transmitter system that limited Internet use to its capacity. The system didn’t work perfectly, he says: bad weather could cause outages, and tools like video conferencing weren’t always available.

“This really raises the game for us,” Arnold says.

The $14 million project was years in the making, and ConocoPhillips officials say it allows the company to transmit drilling data to company officials in Anchorage or elsewhere in real time,

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Alaska Business Monthly | May 2014

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and will hopefully allow the company to utilize industry experts from around the globe without paying for a plane ticket.

“It not only allows our people here in Anchorage to be more engaged, but it allows our global workforce to be engaged. We’ve got subject matter experts on various topics, and this gives us the capability to bring them in—in a realtime scenario,” says Wayne Fletcher, North Slope Integrated Operations manager for ConocoPhillips.

“With all the activity that’s ramped up right now, beds are at a premium.

Instead of having to fly a subject matter expert up there, we can use this technology,” Arnold says.

Arnold and Fletcher say the expansion will allow employees to be more efficient and, in the long term, more connected.

“The important thing from our perspective is, it’s just another incidence where we’re making an investment for the next forty years,” Fletcher says. 

A drilling rig operates in the background as GCI workers build a 180-foot tower used for a new oil production facility on the North Slope. The tower was built in 2010.

Photo courtesy of GCI

Freelance journalist Rindi White lives in Palmer.

www.akbizmag.com

May 2014 | Alaska Business Monthly

65

HR Matters

By Kevin M. Dee

Put Me In Coach!

Great coaching and achieving the balance needed to succeed

W

e can all get overwhelmed with the complexity of keeping up with our daily lives.

Email comes non-stop, and to-do lists cause depression just by glancing at them. The demands this world places on us require us to live and work smarter and not just harder. This is not new information, but the reality of achieving the balance we all need to succeed breaks into three areas. The first is focus management (keeping your eyes on the things that matter) and the second is balancing your goals and dreams so you actually get to be happy. The third is, if you find yourself working like a dog and not playing like a puppy then there’s something that’s out of balance—and great coaching can help.

We’re talking about coaching that helps you lead a more balanced and meaningful life. Let’s face it, if you’re out of balance in just one area of your life, it is likely to sabotage and derail all the other things that are going well. This is where coaching can make a world of difference in the workplace and in life.

But, before you go around saying (as the song goes) “put me in coach, I’m ready to play,” you might want to know some of the characteristics of great coaching.

So, let’s talk about great coaching and what makes a great coach. In sports, the rules and boundaries are clearly defined, but in life that is rarely the case.

The things that are really important to you may not be true for the person who sits next to you. We each have different definitions for success and happiness, and these may change throughout our lives. What might have made you happy even a year ago may not make you as happy this year.

A great coach can help you identify and realize how success and happiness can go together. It really boils down to consciously identifying and creating

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Alaska Business Monthly | May 2014

balance in your life while achieving goals. Great coaching facilitates a person in assessing all areas of their life to determine what a balanced life is for them. Great coaches then assist people in determining what they really want in this chapter of their lives by developing a set of written goals and outcomes.

Prioritizing and then putting those goals into action plans is at the heart of great coaching. It is, in effect, a strategic plan that is individualized to you.

Recently a coaching client was doing very well technically with his job; however, he was sabotaging their success by exhibiting an unprofessional side when frustrated. Relationships at work suffered and the client was derailing his own success. Upon closer examination, it was clear that this person was giving 100 percent at work, but other areas of his life were way out of balance, and he was not taking time to do the things he loved that would help him regain and keep his balance. Through coaching and looking at his success from a balanced perspective, he incorporated the ground rule of “take care of yourself first so you can help take care of others” and found that balance was possible in every part of his life.

Getting the most out of coaching involves three things: 1.Developing a clear plan with goals, objectives, and outcomes and measures that will lead to the overall success of that person. The plan may include goals in work skills, relationships, recreation and play, financial life, physical life, emotional well-being (how we react), and sustaining success.

2.Defining timelines to accomplish goals and the resources needed

to achieve the goals (including the amount of interaction with the coach). Will mentors be involved? Who can help with achieving these goals?

3.Establishing a clear set of rules of engagement including interfaces with the workplace, the coach, and mentors, which are agreed to by all parties.

Once these three things are set up, whatever resources are necessary to help the person being coached achieve their goals can be brought to bear, whether that’s identifying mentors who will assist in learning new skills or identifying opportunities to learn and/or develop new skills (or even to extinguish unwanted habits). Coaching is not just for the senior executive. The best organizations use coaching throughout the ranks so that everyone gets a chance to improve on their skills and their value to the company. Coaching can be used in many ways to overcome the obstacles we place in our way and to improve work skills and performance. Great coaching leads to more meaningful and fulfilling lives as well. Kevin M. Dee has a master’s degree from Vanderbilt University and is the president of KMD Services & Consulting. He has more than twenty-eight years of experience providing leadership development, organizational development, and human resource services in Alaska and internationally. Contact him at mail@kmdconsulting.biz. www.akbizmag.com

AGENDA

Compiled By Tasha Anderson serving the broad interests of tribal governments and communities. ncai.org

May

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Business of Clean Energy in Alaska Conference

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May 1-2—Dena’ina Center, Anchorage: Learn about and share information on the opportunities, benefits, and challenges of renewable energy and energy efficiency in Alaska. bceaconference.com

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US National Conference of Earthquake Engineering

May 7-9—Dena’ina Center, Anchorage: This conference provides opportunities to complete CLE requirements as well as an opening reception, several luncheons, and an awards reception and dinner for 25, 50, and 60 year recognition. alaskabar.org

Joint International Geological Correlation Programme (IGCP) 588 and SAA Meeting

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May 4-10—A weeklong combined conference-fieldtrip in the 50th anniversary year of the 1964 Mw9.2 Good Friday earthquake. Visit sites which experienced co-seismic deformation during 1964, and record late Holocene paleoseismicity and add to an increasing knowledge of seismic and tsunami hazard along the Aleutian megathrust. coastal-change.org

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NACo WIR Conference

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May 21-23—Egan Center, Anchorage: The National Association of Counties’ Western Interstate Region conference focuses on public lands and issues critical to the western region of the United States, providing county officials with the opportunity to hear speakers, discuss legislation, and network with other officials. naco.org

International HETL Conference May 31-June 2—Hilton Anchorage: The theme of this year’s conference for the Higher Education Teaching & Learning Portal is “Innovative Learning-Scapes: e-Scapes, play-Scapes and more.” The aim is to examine the impacts that social and mobile media and networks are having on learning environments in higher education. hetl.org

June

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National Congress of American Indians (NCAI) Mid-Year Conference June 8-11—Dena’ina Center, Anchorage: The National Congress of American Indians, founded in 1944, is an American Indian and Alaska Native organization

www.akbizmag.com

July 20-26—Dena’ina Center, Anchorage: This conference is comprised of the 2014 EERI (Earthquake Engineering Research Institute) Annual Meeting and the NEES (Network for Earthquake Engineering Simulation) Quake Summit, as well as the 10th Anniversary of NEES, the 50th Anniversary of the 1964 Alaska Earthquake and Tsunami, and an undergraduate seismic design competition. The conference, on the 50th Anniversary of the Great Alaska Earthquake and Tsunami, will provide an opportunity for researchers and practitioners to share the latest knowledge and techniques to mitigate the damaging effects of earthquakes and tsunamis.

10ncee.org | eeri.org

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CSG West & CSG National Joint Annual Conference

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August 9-13—Various venues, Anchorage: The annual conference for the Council of State Governments National and West. The conference is an opportunity to work across borders to enhance knowledge and exchange ideas through policy forums on high priority public policy issues and discover Alaska’s innovations through policy tours. csg.org

IEA World Congress of Epidemiology August 17-21—Dena’ina Civic and Convention Center, Anchorage: The theme for this year’s congress is “Global Epidemiology in a Changing Environment: The Circumpolar Perspective.” The event is an opportunity to visit with and listen to prominent researchers in epidemiology and public health. ieaweb.org

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Alaska Oil & Gas Congress

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September 15-18—Anchorage: This comprehensive four day conference is the place to meet the players, forge new relationships, and get the information you need to capitalize on changes taking place in Alaska. This year is the 10th anniversary event and planning is already underway to make it a memorable and valuable experience. alaskaoilandgascongress.com

Rural Energy Conference September 23-25—Westmark Hotel, Fairbanks: A three day event offering a large variety of technical sessions covering new and ongoing energy projects in Alaska, as well as new technologies and needs for Alaska’s remote communities. akruralenergy.org

September 30-October 2—Millennium Alaskan Hotel, Anchorage: This annual conference address transportation information and issues around the state. act-dot.com

Arctic/Cold Regions Oil Pipeline Conference

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September—Dena’ina Center, Anchorage: This conference will consist of presentations addressing the unique challenges associated with the construction and operation of pipelines in the Alaskan Arctic/Cold Regions.

Alaska Fire Conference September—Kenai: Includes training, workshops, lectures, and a firefighter competition. facebook.com/AlaskaFireConference

October

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Alaska Business Monthly’s Top 49ers Luncheon

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October 1—Dena’ina Center, Anchorage: Come honor the top ranked Alaska companies by revenue at our annual luncheon.

Contact Melinda Schwab 907-276-4373, accounts@akbizmag.com or akbizmag.com

All-Alaska Medical Conference

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October 9-11—Sheraton Anchorage Hotel, Anchorage: A continuing medical education conference put on by the Alaska Academy of Physicians Assistants, providing up to 25 CMEs. akapa.org

Alaska Chapter of the American Fisheries Society Annual Meeting

September

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September 30- October 2—Anchorage: Events include keynote speakers and training sessions. alaskahousing-homeless.org/conference

Alaska Community Transit/ Department of Transportation Conference

August

Alaska State HR Conference May 12-13—Sheraton Hotel, Anchorage: Meet more than two hundred human resources professionals, office managers and administrators, directors, and adult educators representing both public and private industry. Pprofessionals from around the state can learn more about their responsibilities as HR Professionals. alaska.shrm.org

Alaska Coalition on Housing and Homelessness Conference

July

Alaska Bar Convention

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October 20-24—Centennial Hall, Juneau: The theme for the 41st annual meeting will be “Bridging disciplines to solve today’s challenges in resource management.” afs-alaska.org

Alaska Chamber Annual Fall Conference & Policy Forum

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October 20-22—Girdwood: The state’s premier business conference. Among this year’s topics are healthcare reform and implementation, workers’ comp reform, grass roots advocacy, and small business workshops. alaskachamber.com

AFN Annual Convention October 23-25—Anchorage: The Alaska Federation of Natives Convention is the largest representative annual gathering in the United States of any Native peoples.

Delegates are elected on a population formula of one representative per twenty-five Native residents in the area and delegate participation rates at the annual convention typically exceed 95 percent. nativefederation.org

May 2014 | Alaska Business Monthly

67

ENVIRONMENTAL SERVICES

Emerging Trends in Environmental Services Promoting holistic sustainability

By Tracy Barbour

A

laska’s environmental services companies are seeing a number of trends developing within the industry. For instance, Central Recycling Services has noticed a growing interest in recycling, reuse, and salvage. Waste Management is taking a holistic approach to serving clients and promoting sustainability to avoid sending materials to landfills. The North Wind Group of companies is seeing more attention shifting toward the Arctic. And E3Environmental LLC is providing more consulting services to larger providers who are placing a greater emphasis on stakeholder engagement, logistics, and planning.

Salvage, Recycle, Reuse Central Recycling Services collects construction and demolition waste from all over Alaska and transforms it into useful products. The recycling facility, which sits on 7.5 acres in downtown Anchorage, uses a meticulous process to divert scrap metal, sheetrock, plastic, wood, and other materials from landfi lls.

First, all large and hazardous items are extracted from the debris. Everything else goes through a giant shredder, screens, and mechanical systems that pull out various materials. These remaining items are sorted by hand on a long conveyor belt and recycled in excess of 75 percent of the waste (excluding hazardous materials), according to Project Manager Shane Durand. Concrete gets crushed into road base; glass gets transformed into pipe bedding; and wood gets shredded into mulch. Cardboard and plastic are baled and sold to the Lower 48.

Central Recycling Services is a unique component of the Central family of companies, which also include Central Environmental, Inc. (CEI) and Central Monofi ll Services. These companies provide full-service facility decommissioning, including all forms of remediation and abatement, demolition, recycling, and waste disposal. This typically involves the removal of asbestos and other hazardous materials from a facility, demolition of the facility, and recycling of the resultant 68

Alaska Business Monthly | May 2014

demolition debris. Any remaining on-site contamination is remediated.

Durand says the environmental services industry is placing more emphasis on recycling, reuse, and salvage possibilities. The trend is due, in part, to companies’ desire to be more environmentally responsible.

A lot of firms are more conscious of their footprint with disposal and where material will end up. He explains, “Now, they want to know where it’s going. They don’t want their waste to come back to haunt them.”

Another major factor in the trend toward recycling construction and demolition waste is LEED (Leadership in Energy and Environmental Design), the rating system for the design, construction, operation, and maintenance of green buildings.

The increased awareness of modern building efficiencies is also leading the government to replace old facilities. Federal goals to reduce operational costs have resulted in different Facility Reduction Programs that remove antiquated buildings burdened with high operational and maintenance costs. For instance, it may cost $300,000 to maintain an outdated facility for a year, but CEI might be able to tear it down for $100,000. Then a replacement structure could be erected with an annual maintenance cost of only $50,000 a year. “A lot of Alaska’s infrastructure is reaching the end of its life, resulting in the removal and replacement of obsolete facilities,” Durand says.

Consequently, CEI is doing a significant amount of work in the area of private and public construction. The main environmental services its clients request are facility removal and the recycling of construction and demolition debris.

As another trend, Durand is also seeing greater demand for full-service contractors to handle all environmental aspects of a project—not piecemeal it to multiple companies.

This type of one-stop shop gives clients better control over the entire process. Plus, it’s often easier on their budget. “You get a better quality job when one person is doing everything.

In the long run, it is cheaper,” Durand says.

CEI—which is licensed in seventeen states—has six facilities, five of which are located in Alaska. The company handles projects from start to finish, offering a full range of environmental remediation services for asbestos, lead, mercury, PCBs (Polychlorinated Biphenyls), radioactive materials, and hydrocarbon contaminants.

Managing Hazardous and Non-Hazardous Waste Streams As North America’s largest publicly-owned waste disposal company, Waste Management (WM) takes a contemporary, holistic approach to providing services and promoting sustainability. Besides traditional waste disposal services, WM now offers complete site management support, including project management, logistics, and completion of paperwork and reporting (profi les, manifests, etc.). The Houstonbased company also provides site remediation, restoration, and transportation support (including over-the-road and marine).

“When customers work with us, they deal with the largest disposal company in North America, which provides a level of liability protection that is unmatched in the waste industry today,” says Senior Territory Manager Mike Holzschuh, who works for Energy and Environmental Services, a subsidiary of WM. Although WM specializes in the management, transportation, and proper disposal of waste, it also provides sustainability services to divert materials from landfills and promote reuse and recycling whenever practicable. In Alaska, WM serves a variety of clients, including federal and state agencies, Alaska Native corporations, and the oil and gas industry. Currently, the company has waste coordinators embedded in a number of customer locations to better facilitate the manifesting, packaging, disposal, and overall handling of their waste streams. Federal agencies are also working with WM to develop plans and innovative systems for recycling, remediation, and waste transportation.

WM is responsible for moving a significant amount of waste from Alaska down to its landfill in Arlington, Oregon. Roughly 45 percent of this southbound material is hazardous waste typically containing heavy metal or PCB contamination, according to Holzschuh.

The remainder is non-hazardous material.

Holzschuh, who has been working with customers in Alaska for more than twentyfive years, has noticed more requests for recycling. He believes it’s just a sign of the times. “Companies in Alaska are turning green, and recycling is a part of their sustainability goals,” he says.

In his role, Holzschuh is responsible for developing solutions on diverting waste from entering landfi lls and is also tasked with using technology to better manage the waste that does end up at the landfill. For example, the company’s Organic Recovery www.akbizmag.com

Unit uses intense heat to treat many types of waste, including refinery tank bottoms.

The thermal treatment option gives customers a safe, convenient, and cost-effective way to manage their waste.

Last year, WM opened a new location near the Port of Anchorage at 1519 Ship Avenue.

The new location also contains a permitted ten-day hazardous waste storage facility to facilitate the short-term storage and consolidation of hazardous, as well as non-hazardous waste for its customers in Alaska. The ten-day facility allows WM’s customers to explore additional options when it comes to managing small waste volumes or drummed waste.

Shift toward the Arctic and Remote Areas The North Wind Group of companies has also observed various trends relating to environmental services. For instance, the industry’s attention has shifted north to more of an Arctic focus, according to North Wind’s Western Regional Manager Kim Kearney. “The melting ice pack, new gas line, and Coast Guard cold water port environmental impact statement are all part of this significant shift,” she says.

The small environmental, engineering, and construction services firm has also seen gravitation to projects at more remote sites. Kearney explains, “For the most part, the project sites along the road system have been completed or are nearing completion.

The work is moving to more remote sites and it is, therefore, getting more expensive.”

CIRI-owned, Idaho-based North Wind provides a wide range of environmental services, including environmental investigation and remediation, waste management, natural and cultural resource services, regulatory public involvement, and environmental permitting and compliance. The North Wind corporate umbrella includes North Wind, Inc., North Wind Services, North Wind Resource Consulting, North Wind Construction Services, North Wind Solutions, and North Wind Site Services.

In Alaska, North Wind works primarily with federal and military organizations.

The oil, gas, and mining industries are also strong. Its clients are primarily seeking environmental investigations and remediation projects, as well as environmental compliance services. Kearney says North Wind has been performing similar work with similar customers for the past ten years; however, the operating environment is changing, Kearney says. “In the current economy, the industry has become more competitive,” she says.

And while much of the basic process hasn’t changed, technology—especially www.akbizmag.com

information technology—has made everything more interconnected. This has resulted in “smarter” pieces of equipment being used in the field, says Kearney, who is based in the company’s Idaho Falls corporate office, but frequently visits Alaska.

Stakeholder Engagement an Increasing Environmental Consulting Trend As an environmental consulting firm, E3Environmental LLC provides an array of services, including project planning and regulatory analysis, environmental permitting and impact assessments, stakeholder engagement, agency coordination and consultation, and regulatory compliance management. The company’s most commonly-requested services center on stakeholder engagement, logistics, and planning services, says President Rosetta Alcantra. A subsidiary of Calista Corporation, E3-Environmental also does water quality testing and other specific tasks requested by clients. Most of its work is performed for oil and gas companies, village corporations, and tribal governments.

Alcantra has noticed a number of emerging trends within the environmental consulting industry. For example, there’s somewhat of a boutique approach being adopted, with smaller companies like hers augmenting larger providers. “Smaller companies tend to be more nimble and can make quick adjustments to accommodate clients’ needs; it’s harder for larger companies to do that,” she says.

For instance, although Alcantra isn’t an archeologist, she often consults with clients on Section 106 of the National Historic Preservation Act of 1966. Section 106, specifically, requires federal agencies to “take into account” the effect a federally funded or permitted project may have on historic properties. It allows interested parties an opportunity to comment on the potential impact projects may have on significant archaeological or historic sites.

That’s where E3-Environmental comes in. The firm provides consultation to enhance stakeholder education, stages townhall-style meetings, and performs a host of other duties to facilitate public comment on projects.

The engagement of stakeholders is increasingly becoming a larger facet of planning any project, Alcantra says. It’s a critical issue that encompasses a wide range of entities, including individuals, tribal governments, historic societies, and government agencies. “It helps identify early on where your potential issues are going to take place,” she says.

If one is working on a project in a pre-

dominately subsistence community with a reliance on birds and animals, stakeholder engagement can have a huge resounding economic impact. “For example, if a potential project impacts a resource area, you’re really putting the community at risk,” says Alcantra. “You need to get the right people at the table to understand what the concerns are.”

Today, there’s also a greater recognition that stakeholder engagement is a vital part of a project. In the past, that wasn’t necessarily the case. People are realizing that a thorough job is done on the front end, to help create an overall better presentation of the project, according to Alcantra. “If you don’t do an effective job early on [by connecting with the community], your project is going to suffer, and your budget is going to go through the roof,” she says.

Alcantra attributes much of the heightened sensitivity to stakeholder engagement to regulatory requirements that encourage outreach. In addition, stakeholders are becoming much more aware of having a place at the table, and there’s also more of an education taking place with the general public.

Logistics is another environmental consulting area where trends are unfolding. Alcantra says logistics is an important consideration in Alaska, where many communities outside Southcentral aren’t connected by roads, lack ample hotel accommodations, and have unpredictable weather. Having someone who knows how to get out to these communities and who has local contacts is essential. And there’s a lot of added value in building relationships with the local community and understanding when it’s appropriate to come into their village to have a meeting.

Nowadays, there’s a lot more effort being spent on getting to know the key people in the villages, Alcantra says. “In my company, we are really making that a priority,” she says. “After all, the people in the villages are on the receiving end of the project that we’re bringing in.”

Companies are also taking an overall different approach to executing environmental services, Alcantra says. There seems to be a greater emphasis on frontend planning and understanding the level of issues involved. It only makes sense. “If you can anticipate where your issues might come up, you’re far more prepared,” Alcantra says. “You can start working those issues early on, and it’s going to save time and budget in the long run.” 

Writer Tracy Barbour is a former Alaskan.

May 2014 | Alaska Business Monthly

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special section

Oil & Gas

Alaska LNG Project Gains Momentum Distance, temperature, and reliability are winning factors

By Larry Persily

I

s it possible that Alaska North Slope gas will be sailing to Asian buyers by the middle of the next decade? Is it possible that the state will make money by owning a piece of the multibillion-dollar project, while also bringing affordable energy to Railbelt communities?

Or could the hopes and dreams of an Alaska gas line project come up short again, just like so many times before?

Yes, to all of the above.

But there are a lot of reasons why it could work this time.

Energy analysts worldwide expect global natural gas demand to grow at a strong rate—especially in Asia—for years to come. They differ only on the rate of growth. But even taking the conservative estimates, the world could need a dozen new, large-scale liquefied natural gas (LNG) export projects by 2025 to supply that demand.

Alaska has a shot at being one of the winners. The biggest reasons are distance, temperature, and reliability: ■ An LNG cargo ship from Alaska can travel to Japan three times faster than a delivery from a US Gulf Coast export plant and twice as fast as a ship running from Qatar in the Middle East. At $75,000 or more for a daily charter rate, saving time means saving money on LNG deliveries.

■ The liquefaction machinery would operate more efficiently in Alaska’s cold climate, making significantly more LNG than the same equipment would make in the Gulf Coast or Middle East.

Of course, any Alaska oil and gas project must overcome the reality of the high costs of construction and operations in the far north, which is exactly what the LNG project team has been doing the past couple of years.

Project Description The major North Slope oil and gas producers—ExxonMobil, BP, and ConocoPhillips—with pipeline partner TransCanada have 70

Alaska Business Monthly | May 2014

Source: Alaska LNG Project

■ Prudhoe Bay has proven itself. Buyers like that fact.

Prudhoe Bay has been running since 1977. There is no question about its gas reserves; the producers have brought the gas to the surface with the oil and then reinjected it to pressure out more oil and to safekeep the gas until the economics of a project look better. This gives an Alaska LNG project a significant advantage over others around the world where developers will have to spend a lot of money to explore and prove up their gas reserves.

Part of the Alaska LNG Project gas-pipeline route. The line would feed an LNG plant and export terminal at Nikiski.

been working since early 2012 to put together a commercially viable Alaska LNG project. Early this year the state announced it wanted to get in on the deal, with Alaska lawmakers this spring working through legislation that would start negotiations toward a deal for state investment in the project. The full contract would come back to the Legislature in 2015 for a vote. www.akbizmag.com

BusinessPROFILE

A Successful Result from the Start™

A

s a premium supplier of process safety and automation services, aeSolutions Alaska, LLC helps manufacturing companies enhance production, quality and safety—all while maximizing their return on investment. The company partners with clients to provide process safety risk management, safety instrumented system lifecycle management, alarm management, cybersecurity, automation and a myriad of other services.

“We provide process safety and control systems on steroids,” said Mike Scott, PE, CFSE, Executive Vice President of Process Safety Technology. aeSolutions Alaska, a subsidiary of Greenville, S.C.-based aeSolutions Inc., supports clients throughout the process safety lifecycle. The company’s engineers have extensive knowledge of all aspects of the lifecycle.

They help customers evaluate risks, identify gaps and close those gaps.

When gap closure involves automation, they assist with design, installation and maintenance of these critical protection layers. “We work with the customer from the cradle to the grave, including decommissioning 20 years down the road,” Scott said.

Maintaining process safety and control systems can be challenging, which is why aeSolutions has designed industry-leading tools to make the job easier. Its innovative aeShield™ and aeFacilitator™ software effectively simplify the execution, monitoring and sustainability of the process safety lifecycle. “We’ve built them for operations and maintenance personnel, so they can readily identify where corrective action is required while efficiently managing changes associated with the

aeSolutions’ Mike Davenport (left) and Mike Scott are helping customers improve their process safety performance.

data,” Scott said.

Director of Alaska Business Unit Mike Davenport adds, “We’re trying to make it easy for end users to keep up with their requirements, so they can stay competitive in the manufacturing environment while still minimizing their corporate risk.” aeSolutions has served major oil and gas companies, refineries and other companies in Alaska since 2007, building a solid reputation for its ex expertise. The company’s skilled employees constitute its competitive edge.

“We have a very talented and energetic workforce,” Davenport said. “Once customers have an experience with our people, they come back.”

Scott says aeSolutions invests in employees to maintain their skills, and many of its 45 Alaska-based professionals are leaders in their field. The company’s cybersecurity expert, for example, is among a handful of folks worldwide with a distinctive combination of skills in information technology, process safety and control systems engineering. Consequently, aeSolutions provides specialized cybersecurity ser services that include training, strategy development, vulnerability and risk assessment, design, implementation and lifecycle reporting. aeSolutions also gives clients the added value of its involvement with –

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©2014 Chris Arend Photography

aeSolutions Alaska, LLC

developing industry requirements.

Scott, who has more than 25 years of experience in risk analysis, safety instrumented systems and control systems engineering, is a member of the International Society of Automation (ISA). He also is the current Subcommittee Chairman for Fire and Gas Systems for the ISA Safety Division and chairman of ISA’s SP84 Technical Report on Fire and Gas Systems. In addition to instructing several ISA courses, Scott has facilitated panel sessions and presented papers at ISA events on safety instrumented systems.

Participating in ISA and other organizations enables aeSolutions to keep clients abreast of evolving industry standards. Scott explains, “We can tell customers what’s coming their way, so they can prepare, adapt and respond to changing requirements while maximizing production and maintaining a sustainable operation.”

Mike Davenport, PE, Director of Alaska Business Unit 3800 Centerpoint Dr., Suite 620 Anchorage, Alaska 99503 Phone: 907-865-5992 Fax: 907-865-5993 www.aesolns.com

The project—estimated at $45 billion to $65 billion in 2012 dollars—includes: ■ Field development costs to produce the gas, especially at the Point Thomson field east of Prudhoe ■ A fifty-eight-mile pipeline to bring in gas from Point Thomson ■ A huge gas treatment plant at Prudhoe Bay to remove carbon dioxide and other impurities from the gas stream ■ About eight hundred miles of forty-two-inch-diameter steel pipe and at compressor stations along the route ■ A liquefaction plant, LNG storage tanks, and marine terminal at Nikiski, where the fuel would be loaded aboard specially designed ships to keep the LNG cold for the voyage to overseas customers.

The plant’s output is planned for 15 million to 18 million metric tons of LNG per year, or about 2 billion to 2.4 billion cubic feet of natural gas a day.

Development Schedule The companies are in what is called pre-FEED, or front-end engineering and design. It’s the early work figuring out what and how to build and where— early, but not inexpensive. An agreement signed by the four companies and the state and released in January put the pre-FEED stage at $400 million or more to be shared by all the parties.

Pre-FEED could take them through the end of 2015. If the project still looks feasible at that point, the next step would be FEED, which the January Heads of AgreeThe first LNG tanker leaving from the Pluto LNG project in Australia when it opened in 2012.

Photo courtesy of Woodside Petroleum

72

Alaska Business Monthly | May 2014

ment document says would cost in the billions. The state estimates at least $2 billion.

By 2019, according to the state, the project sponsors could have enough detailed cost information, sales contracts for the LNG, and confidence in the project to make what is called a final investment decision. That’s the critical point; the time when project developers decide whether to start ordering steel, production modules, pipe, and everything else to build the project.

Getting through the FEED stage is necessary to reach an investment decision, but it’s no guarantee the decision will be “yes.”

If the answer is yes, after four or five years of construction, the first LNG cargo could leave the dock at Nikiski by 2024.

Maybe.

In addition to designing the best way to build and operate the massive project, the partners—the state, too, if it becomes a gas owner in the project—will need to go out in the market and find buyers willing to sign long-term contracts. Because of the heavy upfront capital cost of LNG projects, developers need the assurances of long-term sales deals before making the final investment decision.

It’s similar to how a real estate developer might buy land but would not build dozens of homes on speculation, gambling that buyers exist. The developer would look for sales contracts, and then build what the market needs.

The companies are looking toward Asian markets, where LNG fetches among the highest prices in the world.

Or at least it does now.

Oil-Linked Pricing It wasn’t that long ago—as recently as 2008—that LNG in Asia sold for close to the same price as pipeline gas in North America and Europe. That price was not high enough to cover the cost of an Alaska project.

Rendering courtesy of Alaska LNG

An artist’s conception of the LNG plant and marine terminal.

But unlike sellers in North America, who market their gas in the world’s largest, most well supplied, and most transparent market for natural gas, with daily posted prices on the commodities market, LNG sales to Asia are priced against oil, generally in confidential, private, longterm deals. LNG pricing tracks oil prices on a Btu-equivalent basis since gas has a history of displacing oil in Asian power plants as a fuel to generate electricity. As oil prices last decade shot up and stayed up in the $100-per-barrel range, so, too, did LNG shoot up to record prices.

Japan’s increased reliance on LNG for power generation after the March 2011 Fukushima nuclear plant disaster—which resulted in the eventual shutdown of all of the nation’s nuclear power stations at the same time as oil and, therefore, LNG prices were at their peak—pushed the country into three straight years of trade deficits. That’s especially painful, since Japan had enjoyed three decades of trade surpluses.

The country’s 2013 trade deficit totaled $112 billion. Imported LNG cost Japan more than $70 billion in 2013.

Japan, with India, South Korea, and other fuel importers, are pushing LNG suppliers to alter their pricing formula.

The high cost of LNG—as much as $20 per million Btu on some spot-market trades during peak winter demand—is just too much for the countries to afford.

Government price controls that hold retail natural gas prices below cost in India, China, and elsewhere also mean that LNG importers lose money on many cargoes and have to subsidize the losses.

LNG importers in Asia are acutely interested in the prospect of large volumes of gas coming from the multiple export plants proposed for the US Gulf Coast to take advantage of America’s abundance of affordable shale gas. Even www.akbizmag.com

$18.00 $16.00 $14.00

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Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects

Global gas prices diverge

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with the cost of liquefying the gas and shipping it through the Panama Canal to Asia, US Gulf Coast deliveries tied to the lower cost of North American pipeline gas could be cheaper than today’s traditional oil-linked prices in Asia.

Buyers also want a mix of suppliers and a mix of pricing options, rather than betting everything on one option.

Pricing, competition from other LNG suppliers, and future demand are some of the unknowns that could go Alaska’s way. Or not.

Rosy Demand Forecasts Global LNG demand is a growth industry. Among nuclear plant shutdowns in Japan and Korea; choking coal pollu-

tion in China; population and economic growth in India, China, and elsewhere in Southeast Asia; high oil prices that can make LNG look affordable by comparison—they all add up to strong demand build for LNG in the Asian market.

The International Energy Agency predicts global demand for natural gas to grow more than twice as fast as oil over the next twenty years. Others predict even stronger growth rates for gas. Many analysts talk of a 5 percent to 6 percent annual growth rate for LNG demand through 2020, then slowing down to the 2 percent to 3 percent range through 2035.

That would mean the equivalent of a new, good-sized LNG export terminal will need to start up almost every year to meet that growth.

And in addition to market growth, some older LNG export plants are running low on reserves.

Just this past winter, Egypt, an LNG exporter since 2005, announced it will need to import LNG for the next several years as gas production has fallen short of domestic demand. Indonesia is also feeling the squeeze between its longstanding role as an LNG exporter and

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email: info@cciindustrial.com

May 2014 | Alaska Business Monthly

73

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water supplies needed for large-volume hydraulic fracking operations.

And analysts generally believe it will be years before China develops the expertise for horizontal drilling and fracking required for shale gas production.

China also has the option of pipeline gas imports, currently delivered from Turkmenistan, Uzbekistan, and Myanmar. That gas, while cheaper than most LNG, isn’t cheap by US standards. China paid an average $10 per million Btu for its pipeline gas imports in December 2013— and that just covered getting to the Chinese border, not the additional cost of internal distribution within China.

rising domestic demand for natural gas.

All of which means export project developers are chasing not only new demand but replacement contracts for declining reserves at older projects.

Someone is going to win that new business. It will be the lowest-cost, stable, predictable suppliers.

Of course, a restart of multiple nuclear reactors in Japan could reduce Asia’s demand for natural gas. So, too, would widespread shale gas production in China, which has some of the world’s largest shale gas potential. But China’s shale fields generally are in arid areas of the countryside, far from the abundant

Pipeline gas imports cannot meet all of China’s demand. The country gets about half of its imported gas as LNG.

Crowded Cast of Competitors With so many suppliers chasing the Asian market, it’s important for Alaskans to understand that the competition has its own strengths and weaknesses, just like Alaska.

So who are Alaska’s competitors in the Asia-Pacific gas marketplace?

Australia: Seven LNG export projects are under construction and set to open over the next three years. But most of that gas is already sold on long-term contracts.

Those projects are not Alaska’s direct competition for deliveries to start in the 2020s.

The competition would come from new projects not yet underway and expansions. But those face tough hurdles.

Multibillion-dollar construction cost overruns on the current Australian projects have got companies worried about repeating history and buyers wondering if there are better pricing deals elsewhere.

Meanwhile, domestic consumers in Australia are seeing price increases for natural gas, which is being drawn from the local market to higher-priced export markets. And while more production could help solve the domestic supply problem, some local jurisdictions have imposed drilling restrictions on coalbed gas reserves that feed three of the export terminals under construction.

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Who makes LNG?

Which countries make LNG. 74

Alaska Business Monthly | May 2014

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www.akbizmag.com

Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects

Global LNG trade grows fast 12

As of 2013, 17 countries export LNG and 25 countries import it.

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Trillion cubic feet per year

Russia: The country has just one export plant, but there is talk of expanding it.

Russia has a plant under construction and thoughts of two more positioned to serve Asia.

The expansion talk at Sakhalin-2, led by Gazprom with partner Shell, is dependent on sufficient gas reserves to justify the work. That plant, less than seven hundred air miles from Tokyo, opened in 2009.

Gazprom is also talking about building an LNG terminal at Vladivostok on the Sea of Japan. Yes, a good location— it’s a short tanker trip from there to Japan, Korea, China, or Taiwan, four of the biggest LNG buyers.

But it will take a 2,500-mile pipeline to move gas from Russia’s interior to the coast. The field development costs and pipeline are estimated at $40 billion— not counting the LNG terminal.

Separately, Rosneft and ExxonMobil are doing their due diligence for an LNG plant called Sakhalin-I. They have issued a contract for initial FEED work on the Russian Far East project.

In Russia’s distant Arctic, a terminal under construction is called Yamal LNG. It’s about halfway between Iceland and Nome. Estimated at $27 billion, the sponsors want to start making deliveries in three or four years. They have signed up contractors for the work and ordered equipment.

The tricky part for Yamal is that the Northern Sea Route to Asia will be passable for LNG tankers only a few months each year, and even then only with government icebreakers as escorts.

The rest of the year, the plan is to ship the LNG aboard ice-class tankers to European ports, where the LNG would be transferred to less expensive standard tankers for the long voyage down the European coast, across the Mediterranean Sea, through the Suez Canal, across the Indian Ocean and into Asia.

Look at the map and you see the economic challenges Yamal faces. Plus its main sponsor, Novatek, has never built or operated an LNG terminal.

Canada: There are multiple proposals; none have all their government authorizations or a final investment decision.

None have cleared the consultation process with every First Nation in the area and along the pipeline route.

One hurdle is cost. The developers

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that are talking about price are emphatic that they need oil-linked LNG pricing or something comparable to cover their sizable development costs. There is no Prudhoe Bay production facility in British Columbia’s Horn River and Montney shale gas plays that would feed the LNG terminals at Kitimat and Prince Rupert.

They have to build it. Gas has to pay for it.

The pipelines that would move that gas to the coast are as long as 525 miles and must span two mountain ranges.

BG Group, sponsor of a project near Prince Rupert, BC, says the pipeline could cost as much as $10 billion.

Meanwhile, the British Columbia government has proposed a new LNG exports income tax. The rate would start out low, until developers recover their capital costs, then ramp up to as much as 7 percent of the net income. Several project sponsors have criticized the proposal as too severe.

Though the government has released the tax rate, the details are not expected until legislation is introduced in the fall. The companies are saying they will make no project decisions until they know the tax details.

The Lower 48: It’s a tough political battle, pitting those who favor the existing well-supplied market and low natural gas prices for customers at home vs. the backers of a free market and exports to US trade partners. All that shale gas has transformed the North American gas market in just a few years from supply worries to looking for ways to sell all that gas.

The Department of Energy has approved six LNG export licenses, totaling 8.5 billion cubic feet of gas a day.

That’s equal to almost 12 percent of current US gas production. But there are twenty-five more applications awaiting a decision. Federal authorization is required for gas exports. That’s in addition to Federal Energy Regulatory Commission approval required to build and operate a liquefaction plant.

Regardless what government does, the only terminals to be built will be those that have buyers and can get financing. Just one is under construction so far, in Louisiana. The Federal Energy Regulatory Commission approval could come for a couple more projects this year, setting up the sponsors to make their final investment decisions.

Other issues for Lower 48 exports include $1.6 billion in disputed construc76

Alaska Business Monthly | May 2014

tion cost overruns at the Panama Canal expansion, which is essential for getting LNG tankers out of the Gulf Coast and into the Pacific. The project is delayed and is now expected to open in 2016.

One of the Gulf Coast project sponsors said this winter that Asian buyers are putting off new long-term contracts for US gas because of the delay in knowing just how much it will cost to use the expanded Panama Canal.

And while local opposition over environmental and safety concerns is not very noticeable for Gulf Coast LNG projects, it is extremely visible for terminals proposed for the Oregon and Maryland coasts.

The point is this: Like Alaska, every proposed project has its own problems, its own disadvantages, its own issues to solve. If it were quick and easy to develop an LNG project, more would have been built by now.

The winners, the terminals that get built, will be the ones that solve the problems, hold down costs, and convince buyers that they will start up on time with competitive prices.

The State as Partial Owner The pre-FEED and FEED work—frontend engineering and design—is a key part of that effort. The more done well up front, the better the odds of avoiding surprises during construction.

Under the plan for state investment in the Alaska LNG project presented by Governor Sean Parnell in January, the state’s share of pre-FEED will be less than $100 million. If the project proceeds to FEED, the state’s share would be in the vicinity of $250 million or more.

The state’s slice of actual construction costs, if the project goes ahead, would be several billion dollars, most of which the state likely would borrow and then repay from LNG sales revenues.

The governor’s plan, which will be negotiated in greater detail by the administration through 2014 and into 2015, calls for the state, through the Alaska Gasline Development Corporation, to take an ownership interest in the LNG plant.

(The Legislature created AGDC in 2010 to develop a small-volume gas pipeline project as a backup plan, in case the larger producer-led line does not move ahead.)

TransCanada would act on the state’s behalf and own a share of the gas treatment plant at Prudhoe Bay and the eight

hundred-mile pipeline equal to the percentage of gas owned by the state moving down the line. The deal with TransCanada was outlined in a memorandum of understanding between the state and pipeline company, released in January 2014. The state would pay TransCanada a negotiated fee for using the facilities.

The governor’s proposal is for the state to take ownership of a percentage of the gas production from Prudhoe Bay and Point Thomson roughly equal in value to what it would receive as revenue from Alaska’s production tax. The tax-as-gas plan, as it is called, would put the state in the LNG business, with all the commensurate risks and rewards. It also would give the state a voice in the project.

In addition to the tax-as-gas, the state would take ownership of its royalty share of gas production as the land owner. In total, Alaska would own between 20 and 25 percent of the gas that moves through the project, according to the administration’s proposal. The state would sell its share of the gas and put the money into the treasury.

Corporate income taxes would not change under the governor’s plan. Property taxes on the treatment plant, pipeline, and LNG plant would be paid based on the volume of gas moving through the project, rather than the contentious method of assessing a fair market value for the assets.

The state taking an ownership share of the project would reduce the risk for the North Slope producers—they would not have to put up as much money for development—helping to make it a more attractive investment. The governor and supporters also say state participation would better align all of the parties’ interests.

Detractors question the wisdom of state investment in a commercial endeavor; whether the state can afford the investment; the risk to the state of cost overruns and delays; the fairness of the deal; and whether the state could get a better deal through tougher negotiations.

Much of that will be debated again next year, when the administration is expected to come back to the Legislature—and the Alaska public—with a binding contract for state investment in the venture.  Larry Persily has served as the federal coordinator for Alaska gas line projects since March 2010. www.akbizmag.com

special section

Oil & Gas

Alaska LNG Project and the Pre-FEED, FEED Phases Early planning, design, engineering key to LNG project success

By Bill White

W

ell before big money gets committed to construct a liquefied natural gas export project, sponsors typically spend years studying such questions as: Should this project get built? Does it make business sense? And, as the analysis progresses: Does this project continue to make sense?

The proposed $45 billion to $65 billion Alaska LNG export project is going through that process now.

It’s the up-front planning that is critical to megaproject success.

When done well, this pre-construction work can be the reason a project gets built on time and on budget, and creates the kind of cash flow the board of directors was told to expect.

The work goes by different names in different industries. For Alaska LNG, the current work is called pre-FEED—or pre-front-end engineering and design— which will be followed by a more intense FEED phase if the project continues.

During these stages, the project team selects the technology to be used in the production units. It chooses sites for facilities and does initial layouts. Utilities are plotted. Labor needs, particularly skilled-labor needs, get problem solved.

Pipeline routing and the related issues— soils, vegetation, river and wetlands crossings—get documented and the best solutions determined. Needed licenses, authorizations and environmental permits are identified and many might even be secured. Markets are assessed and reassessed. A financing plan is defined.

For Alaska, the remote location creates logistical challenges that need detailed planning: Winter-only burial of the 800mile pipeline because that’s when the tundra is frozen; summer-only delivery of massive gas treatment plant modules to the North Slope because that’s when Arctic sea ice is absent.

“The definition of a project, from the formation of the core team until full-

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The project is “so big it creates its own weather, and if we’re not careful it competes with itself . . . so we have to plan this very carefully.”

—Steve Butt Senior Project Manager, Alaska LNG

funds authorization is achieved, is what we call the FEL [front-end loading] process,” wrote development guru Edward Merrow in his 2011 book “Industrial Megaprojects: Concepts, Strategies, and Practices for Success.”

“FEL is the single most important predictive indicator of project success.

There are very few project professionals in the process industries who do not agree with the basic principle that definition and planning drive success, and those who don’t should probably be in some other line of work.”

Merrow is founder and president of Independent Project Analysis Inc., a major consultancy whose client list includes some of the biggest companies in the world. IPA conducted a megaprojects seminar for Alaska lawmakers in 2011.

“Megaprojects are the most important projects in any industrial company’s portfolio,” Merrow said in his book.

“When they succeed, the company is strengthened for the long term. When they fail, massive amounts of shareholder wealth can be made to evaporate in a single project.”

Even though good up-front planning means better project results, half of all megaprojects in his company’s vast database fail to meet that standard, and their failure rate is high. LNG projects do a little better than this average “but not systematically so,” he said.

For Alaska LNG, Steve Butt is the man charged with making sure the up-front planning is excellent. He’s a career ExxonMobil manager and the senior project manager for this project, having worked

stints with ExxonMobil most recently on its big LNG projects in Qatar.

“Megaprojects are often defined as projects over $1 billion,” Butt told an Alaska Senate Resources Committee on Feb. 3. “In today’s world they’re sometimes defined as projects over $10 billion. By any metric this is one of the largest megaprojects ever, and in some ways it’s really five megaprojects, each one working with each other. ...

“No one has ever permitted a project this large. No one has ever permitted an 800-mile pipeline in the NEPA (environmental impact statement) era in the U.S. No one has ever done an LNG plant this big or a gas treatment plant this big. We’ll have to do all three.”

Hundred-Million-Dollar Questions “Ignorance is the mother of research.”

—Laurence J. Peter, founder of the Peter Principle ExxonMobil owns the largest proportion of North Slope gas that would be produced for the Alaska LNG project, and it is leading the technical team among the four companies scoping the project—North Slope producers BP and ConocoPhillips as well as pipeline company TransCanada are the other three.

ExxonMobil has a reputation for tightly controlling its LNG projects, such as the massive Qatar plants built during the first decade of the 2000s. Its Papua New Guinea project is over budget due to unfavorable currency exchange rates, landowner protests, labor work stopwww.akbizmag.com

pages and bad weather, but it’s still on schedule to start production this year.

“Before we make the first cut with a saw, we re-measure five times instead of one,” an ExxonMobil executive said in The Wall Street Journal in January 2014 of the company’s megaproject planning.

Butt talked with the Alaska Senate Resources Committee about the challenges of the project he is overseeing, including planning a megaproject that needs labor, resources and equipment that can handle Alaska’s extreme environment.

“It’s so big it creates its own weather, and if we’re not careful it competes with itself, because we don’t want to have challenges with welders on Part A working at odds or at issues with Part B. So we have to plan this very carefully so we level-load this work, we make sure we get the resources we need for the right craft skills and we don’t compete with ourselves. That’s very important.”

The team he oversees is looking at every detail, to narrow the estimated $45 billion to $65 billion price range and pin it as low in that range as possible.

“We go from really big questions— multibillion-dollar questions—and we just keep grinding it down: Hundredmillion-dollar questions, ten-milliondollar questions, million-dollar questions, until we get to such a high level of certainty you move to a place where the investors are ready to make a decision,” he said. “They want to know that you’ve resolved all those uncertainties.”

He cited some examples.

The steel for the 800-mile, 42-inchdiameter pipeline would be what’s known as X80—extra-strength steel that, if you extracted a plug from it and strained the plug, could withstand 80,000 pounds of pressure per square inch. Ultra high-end stuff.

“We’re looking real hard at the materials,” Butt said. “The type of material is really important because it defines the amount of steel in the line and the type of steel in the line, and that tells you who can make it, how many mills can you get it from and what it’s going to cost. So one of things we have to study in pre-FEED is the material on that pipeline design. ... Can you go to X70?

There’s little questions that drive huge value, because this system is so big, any little change you make is hundreds of millions of dollars.” www.akbizmag.com

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May 2014 | Alaska Business Monthly

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Source: Alaska LNG Project

Graphic from October 2012 outlining the stages and decision points anticipated for the Alaska LNG export project. The project is in the pre-FEED stage currently.

The natural gas produced at Prudhoe Bay—the main field that will feed Alaska LNG—is tainted with about 12 percent carbon dioxide. The project is planning a multibillion-dollar gas treatment

plant to extract the CO2 because it would foul up the LNG plant, doesn’t burn and LNG buyers don’t want it in their gas.

Recently Butt’s team reconceived the gas treatment plant, streamlining it from an

earlier design and syncing it with design of the liquefaction plant to be built 800 miles to the south.

“That’s a lot of money we saved,” Butt told the committee. “But more importantly, it means the system in the north—with three trains for treating— is now balanced with the system in the south—with three trains for liquefaction.

For operations and maintenance over the next 35 years it a much better balanced system. So this is a pretty big achievement for us that we’ve been working on over the last several months. It’s a huge cost savings and risk reduction.”

Officially, people involved with Alaska LNG, including state of Alaska officials, dub the phase the project is currently in as pre-FEED, or pre-front-end engineering and design.

This phase is a precursor to a more formal—and expensive—stage called FEED, which in turn leads up to a final investment decision, or FID, on whether or not to construct the project.

One thing to know about FEED in particular is that this is a term commonly used in the LNG industry but isn’t all that universal within the engineering

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world. Other words cover the same scope of project work—Merrow in a passage quoted above spoke of front-end loading, or FEL, a more common term.

Pre-FEED is starting to get used more widely to describe the LNG project-related activities that occur before FEED—there can be many such activities, so a term for them can be handy.

In the case of the Alaska LNG project, FEED would include: n Enough engineering of the project so that contracts can be let for final engineering, procurement and construction (called EPC). EPC contracts are where the BIG money gets spent and the project is built. n Crafting a plan for supplying, commissioning and starting up the Alaska LNG infrastructure— the gas treatment plant, gas pipeline, LNG plant and all related facilities. n An estimate of the capital costs itemized in sufficient detail that corporate directors charged with making the yes-no final investment decisions are comfortable with their choice. n A final assessment of environmental, social and health impacts. n Action on procuring anything for the project that requires long lead times.

each of the Alaska LNG Parties with sufficient information for evaluating the technical, cost and schedule aspects of the Alaska LNG Project,” says the January 2014 Heads of Agreement signed by the state, the three major North Slope producers and TransCanada.

The pre-FEED, combined with other commercial, legal, economic, financial and marketing information, will help all of the parties decide whether to spend billions of dollars on FEED, the HOA says.

Joe Balash, Alaska commissioner of Natural Resources, and Michael Pawlows-

ki, Alaska deputy commissioner of Revenue, told the Senate Resources Committee on Feb. 7 the pre-FEED phase should last up to 18 months and involve about $435 million in spending. Pending Alaska Legislature action before it adjourns in April, the parties committed in the HOA to ramping up pre-FEED in 2014.

The agreement says the FEED decision would occur within three years after pre-FEED ramp-up begins—that could put it at late 2016 or early 2017. Balash and Pawlowski told the Senate committee the more intense FEED stage would

These are standard activities during FEED. Pre-FEED would involve engineering, design, technical and other work needed to prepare for FEED. This includes conducting enough environmental field work and designing the project in enough detail to support applications to the Federal Energy Regulatory Commission for authority to build and operate the project. At a minimum, FERC would oversee the LNG plant construction and possibly the pipeline and gas treatment plant. The commission would produce an environment impact statement as part of its review.

At the end of the pre-FEED stage, each company sponsoring the project would decide if it wants to continue to FEED based on the information gathered so far.

“The purpose of Pre-FEED is to progress technical work that would provide www.akbizmag.com

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span two to three years and roughly estimated it would involve about $1.8 billion in spending. The HOA says FEED would cost “billions of dollars.”

Is That Big Money?

Now, $2.4 billion in pre-FEED and FEED expenditures that the state of Alaska estimates might sound like BIG money, and it is.

But for a $45 billion to $65 billion project, it’s only about 5 percent of the total. It’d be like saying a 10-story building is tall—perhaps in some cities, but not in Manhattan.

Five percent CapEx spending through FEED is about normal for megaprojects, according to Merrow and others.

Pre-construction spending for a typical large LNG project might involve just 6 percent of the overall capital expenditures, with the other 94 percent of spending coming after the final investment decision, or FID, to build the project.

For LNG projects, figure 6 percent, said Nikos Tsafos of Enalytica Inc., a consultant to the Alaska Legislature on the LNG project, in November 2013. The other 94

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Pre-construction spending for a typical large LNG project might involve just 6 percent of the overall capital expenditures, with the other 94 percent of spending coming after the final investment decision, or FID, to build the SOURCE: PFC ENERGY project.

percent gets spent after the final investment decision to build. This encompasses all the final engineering, purchase of

materials and construction spending. In January, Tsafos loosened his estimate to “less than 10 percent” before FID. “Before you get to final investment decision, you haven’t spent any real money,” Tsafos told the Legislative Budget and Audit Committee Jan. 28.

“It’s not ‘real money’ in the context of $65 billion.

“The reason this matters (the preFEED and FEED spending) is because by the time you get to FID, you haven’t resolved but you have found an answer to most of the things you are worried about.

“So it’s not the type of project where you put in $65 billion and as you’re putting the money down you’re thinking, ‘Well, how should we do this? Who should we market it to? How should we finance it?’ It doesn’t work that way.

“By the time the large bulk of that investment takes place, all these things will have been sorted out. Maybe not to a 100 percent. You may not have signed every single deal with everyone. But you’ll have a pretty precise idea about what each one of these things (upstream, midstream, liquefaction, shipping, marketing, finance, permitting) are going to look like,” Tsafos said.

www.akbizmag.com

“So, yes it’s a big project, it’s a massive project. But the call of capital really comes only after you’ve had an enormous amount of time to spend to study all the permutations of the options in coming up with a schedule and a project structure that is comfortable to all the project partners.”

in July 2013, more than a year behind schedule. Chevron is a partner here, too, and the CEO said Jan. 31, 2014, “we have had some technical issues on the front end of that plant.” Likely the plant will operate at just half capacity in 2014 and ideally will hit full capacity sometime in 2015, he said.

What Can Go Wrong?

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

—Mark Twain (some say)

Money Well Spent In his book, Merrow said a project with severe and continuing production problems in its initial years is a failure by definition.

One needn’t look hard to find megaprojects that became big messes. Way over budget. Way behind schedule. That didn’t work as planned.

Take Denver International Airport, a favorite case study in the annals of project management disasters.

It opened in 1995, 16 months behind schedule and 80 percent—$2 billion— over budget. Its much-touted automated baggage-handling system “became famous for its ability to mangle or misplace a good portion of everything that wandered into its path,” as the New York Times put it. The airport scrapped it in 2005, replacing it with humans. A triumph of man over machine.

The textbooks call Denver’s failure a classic case of inadequate pre-FID work, of reliance on untested technologies, of “optimism bias.” And, a flaw that sometimes infects big-ticket public works projects that politicians really want. It’s called “strategic misrepresentation”—the cloaking of true costs from the public for fear they would rebel.

Other favorite examples: Boston’s Big Dig tunnel—original budget $2.8 billion, ultimate cost $22 billion—and the Chunnel connecting England and France—20 percent late; 80 percent more expensive than forecast.

Among LNG projects, the Chevron-led Gorgon project under way off Australia’s west coast is more than 40 percent over budget as the sponsors endure a trickier environment, and costlier labor and materials than expected, as well as an unfavorable exchange rate and some acutely nasty cyclones. These are all issues that developers try to foresee and address during pre-FEED and FEED. Angola LNG was supposed to start up in 2012. It finally shipped its first load www.akbizmag.com

After spending billions or tens of billions upfront on megaprojects, the corporate board wants its payoff, and that starts the moment the plant gets switched on. A late start or a slow start mean a lot less cash inflow than the directors were told to expect.

“The early years’ production are the most valuable the project will ever have,” Merrow said. When lost, they’re lost for good.

Although there are no ironclad laws about these things, there are some general rules of thumbs circulating in the

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industry’s literature about what constitutes a problem project besides start-up production problems: big cost overruns or big schedule slips—say 25 percent beyond what they should be.

“Megaproject results are frequently seriously short of the expectations of the sponsor-investors,” Merrow wrote. “Their cost overruns are often so significant that the whole project becomes NPV negative.”

Negative NPV—or net present value—does not mean unprofitable, it should be noted, but rather that the return on investment is below the investor’s requirements.

“The real question is whether the investment you made up-front is optimal or not, or whether having put that money elsewhere would have generated a better return. So it’s not really usually about losing money. It’s about the optimal use of money,” Tsafos explained to the Alaska Legislative Budget and Audit Committee in January 2014.

Megaprojects whose pre-FEED and FEED are well done—Merrow calls these stages FEL-1 through FEL-3— have good track records for producing plants that operate as expected, according to his company’s database.

Megaprojects are headed for trouble if the partners’ interests are out of sync, if they skimp on pre-FEED and FEED staffing, if they’re under such schedule pressure that corners get cut, if they short-change upfront planning because it can be expensive.

“We hear things like, ‘Why should it cost so much money? I once front-end loaded a big project on a napkin over a beer.’ If you are the project director, now would be a good time to post your resume,” Merrow said in his book.

“Doing a thorough job defining and planning an industrial megaproject takes 3 to 5 percent of eventual total capital cost.

Let’s be clear; on a megaproject that is a lot of money. The cost, however, of not spending the money is much, much more.”  Bill White is a researcher and writer for the Office of the Federal Coordinator for the Alaska Natural Gas Transportation Projects.

Used with permission, this article first appeared online at arcticgas.gov, on the website of the Office of the Federal Coordinator for the Alaska Natural Gas Transportation Projects. www.akbizmag.com

Oil & Gas special section

Flint Hills Refinery Changing hands again

By Mike Bradner

C

ommunity and business leaders in Fairbanks are very worried about the potential loss of the Flint Hills Resources refinery that operates at North Pole, east of the Interior city. Flint Hills has said that it will close the refinery this summer due to a variety of problems but has also been working on a possible sale. A sale to another owner has been complicated, however, by contamination that was discovered on the property and the financial liabilities that have been created.

ŠChris Arend/ AlaskaStock.com

www.akbizmag.com

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Flint Hills Resources North Pole refinery.

Photo courtesy of Flint Hills Resources

The possible loss of the refinery is a blow to the community not just in terms of jobs—Flint Hills employs 126 in Alaska—and taxes paid to local municipalities. The refinery is also important symbolically because it made the Interior largely sufficient in fuel supply, an important consideration given the region’s traditionally cold winters.

Flint Hills has asked the State of Alaska to consider a way to protect a new buyer from lawsuits and penalties over the contamination. State officials are working on this, but issues of liability from pollution are complex and it may take some time.

Interior Fuel Needs Since large oil discoveries were made in the late 1960s on the North Slope and the Trans Alaska Pipeline System (TAPS) was first planned, a key goal of community leaders in Interior Alaska was to encourage development of a refinery in Interior Alaska to supply fuel needs.

There was a strong desire to no longer depend on a long fuel supply chain 86

Alaska Business Monthly | May 2014

from Southcentral Alaska and the Pacific Northwest, particularly since large volumes of crude oil were flowing through TAPS right past Fairbanks.

The concern was not so much price, fuel prices in the Interior have never been a bargain, but more the possibility of a fuel supply disruption in an extended transportation system from Southcentral Alaska and the Pacific Northwest.

Flint Hills does not divulge information on quantities of fuel it produces, but according to information published by the state Division of Oil and Gas in 2013 in its Best Interest Finding for a sale of royalty oil, Flint Hills was producing, per day, about 670,000 gallons of jet fuel, 143,000 gallons of gasoline, 41,000 gallons of home heating oil, and 68,000 to 194,000 gallons of other products such as high-sulfur diesel; HAGO, a form of heavy oil used in power generation; naphtha; and asphalt.

The numbers are based on refinery operations at less than full capacity and when Flint Hills was taking about

thirty thousand barrels per day of state royalty oil that it purchased to make products. When all three of the refinery’s crude oil processing units were in production, Flint Hills was taking about seventy thousand barrels per day of royalty oil, the only source of crude oil. Currently the company is operating with only one unit.

Alaska Refineries The Flint Hills refinery was originally built in 1976, a venture of Texas-based Earth Resources, an independent company. It began operations in late 1977 at North Pole, east of Fairbanks, following the completion of TAPS start of crude oil production at Prudhoe Bay. A second refinery was built by PetroStar, an Alaska-based company now owned

by Arctic Slope Regional Corporation, following construction of the Earth Resources plant. PetroStar also owns a small refinery near Valdez.

Since it started up, the Flint Hills refinery has gone through several changes of ownership, from Earth Resources www.akbizmag.com

The possible loss of the refinery is a blow to the community not just in terms of jobs—Flint Hills employs 126 in Alaska—and taxes paid to local municipalities.

The refinery is also important symbolically because it made the Interior largely sufficient in fuel supply, an important consideration given the region’s traditionally cold winters.

Photo courtesy of Flint Hills Resources

Flint Hills Resources workers creating efficiencies at the North Pole Refinery.

to Mapco in 1980 and to the Williams Companies, which assumed ownership and operation of Mapco’s assets in 1998. Mapco also developed a number of retail gasoline and diesel outlets to sell products made in the refinery.

In 2004 Williams sold the refinery to Flint Hills Resources, the present owner. Flints Hills is a subsidiary of Koch Industries and operates refineries elsewhere. Flint Hills opted not to purchase the Mapco/Williams retail outlets, and these were sold to Holiday Stationstores, Inc., a privately held US 88

Alaska Business Monthly | May 2014

fuels marketing company that works with Flint Hills elsewhere and is based in Minnesota.

Alaska has one other refinery. It has operated since 1968 and is designed to handle the lighter crude oils from Cook Inlet. Located at Nikiski, near Kenai, it is owned by Tesoro Corporation.

Crude Oil Issues Flint Hills is unique among the Alaska refineries in that it is solely dependent on state royalty oil as a source of crude oil. PetroStar and Tesoro buy crude

oil from other sources, including the private North Slope producers and, in Tesoro’s case, from Cook Inlet producers and even overseas suppliers.

The state entered into a long-term, twenty-five-year contract to supply royalty crude oil to Earth Resources when the refinery was built. That contract, for thirty-five thousand barrels per day, was eventually assigned to Mapco and then Williams, although both companies also negotiated separate contracts for additional royalty oil. When Flint Hills purchased the refinery in 2004, the state signed a new contract for royalty oil that also included a small premium to the state on top of the previously-negotiated price based on the average prices and payments by the major producers for their royalties. While state officials have argued the premium is not enough to be a significant factor in the refinery’s economics, Flint Hills disagreed, saying that the premium doesn’t help it, either.

A key problem for all of the Alaska refineries, but particularly the Interior refineries, is that the Alaska market isn’t large enough for them to operate as refineries do elsewhere in larger markets where refineries are built large enough to enjoy economies of scale and use all or almost of the crude oil in the making of products. Tesoro’s plant near Kenai is more fully equipped than the Interior refineries, which are smaller and simpler in design, but even Tesoro can’t fully use the “lower end” oil of the crude oil it receives, and often sells this residual oil at a loss.

The Flint Hills and two PetroStar refineries cannot use all of the crude oil, either, but they are allowed by TAPS owners to return their unused residual oil to www.akbizmag.com

the pipeline. These plants essentially use the higher, more valuable, parts of the crude oil to make products, mainly jet fuel, gasoline, and diesel, but when they return unused, lower-quality residual oil to TAPS, the effect is to slightly diminish the overall blended quality of the oil flowing through the pipeline.

The Flint Hills and PetroStar refineries pay a penalty for this to the other TAPS shippers, mostly North Slope producers, who send their oil through TAPS. The penalty has varied over the years and has increased recently, which had become a concern to Flint Hills.

The ability to send the unused portion of the oil, the residual, back to TAPS is an advantage, although the financial penalty is paid, because the refinery does not have to find a use for the residual—it is just blended back in with the crude oil in TAPS. The Tesoro refinery, which is on the Kenai Peninsula and far from the pipeline, does not have this advantage. When it purchases North Slope crude oil, Tesoro must ship the oil itself from Valdez to Nikiski (the company uses its own small shuttle tankers) and must also find a use for the lower-end residual oil left after products are made by Tesoro. Sometimes the residual can be sold for a small profit and sometimes it must be sold at a loss.

Tesoro’s major product is gasoline along with jet fuel. It is the largest supplier of gasoline in Southcentral Alaska. Flints Hills, for its part, is primarily a jet fuel producer, much of which is shipped to Anchorage, but is also the major supplier of gasoline and heating oil in the Interior. That includes supplying heating oil to the Yukon River communities that are served by barge from Nenana on the Tanana River southwest of Fairbanks. The fuel is trucked from the Flint Hills refinery to Nenana.

PetroStar has meanwhile carved out a niche as a major supplier of jet fuel to military bases, such as Eielson Air Force Base near Fairbanks, although the company also serves marine customers from Valdez.

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Commercial Challenges The major commercial challenges for the Flint Hills refinery are well known, and some of these are shared by PetroStar.

Chief among Flint Hills’ challenges is that the refinery is relatively simple (and www.akbizmag.com

May 2014 | Alaska Business Monthly

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Alaska Business Monthly | May 2014

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Meanwhile, if the refinery shuts down in June there will be substantial changes in the way fuel is transported and distributed in the Interior. PetroStar does not make gasoline at its North Pole plant, so gasoline will have to be shipped into the Interior. It’s likely that quantities of heating oil will also have to be shipped north. is sometimes called a “topping plant”) with the ability to make only certain products. It makes jet fuel, its primary product, as well as gasoline, a heating oil (akin to diesel), and a few other products including asphalt, which is important for highway maintenance and construction.

Flint Hills opted not to install the equipment necessary to make ultra-low sulfur diesel, or ULS diesel, which is required for use by trucks operating on highways and some off-road equipment. Tesoro did make the investment to manufacture ULS diesel, as did Petro Star at its Valdez refinery. Flint Hills offers ULS to its customers, but purchases the product from others, such as Tesoro or PetroStar.

However, the major commercial problem for Flint Hills has been the steady erosion of its large market share in jet fuel sales to commercial airlines operating through Ted Stevens Anchorage International Airport. The airlines, many of which are joined together in a bulk fuels-purchasing consortium, have been importing increasing amounts of foreign jet fuel, which is less expensive. The airline consortium has invested in additional bulk fuel storage capacity at the Anchorage airport to store imported fuel, and improvements at the Port of Anchorage, where fuel is unloaded, have helped facilitate this. The effect, however, has been a gradual loss of the jet fuel business for Flint Hills, which caused the company to first close one, and then two, of its three crude oil process units at the North Pole refinery, leaving only one unit in operation. Now that may close as well.

The loss of the jet fuel market has resulted in reducing Flint Hills’ fuel shipments on the Alaska Railroad. Fuel www.akbizmag.com

transportation for Flint Hills has been one of the railroad’s most profitable sources of freight revenue, so the trickle-down effect of the refinery’s problems have affected the railroad. If the refinery closes, the total loss of the business will result in no southbound fuel shipments for the railroad, although there would be more northbound fuel to supply the Interior communities. The northbound fuel volumes—largely expected to be gasoline and diesel—will not make up for the loss of southbound shipments of jet fuel, railroad officials have said.

Meanwhile, if the refinery shuts down in June, there will be substantial changes in the way fuel is transported and distributed in the Interior. PetroStar does not make gasoline at its North Pole plant, so gasoline will have to be shipped into the Interior. It’s likely that quantities of heating oil will also have to be shipped north.

No fuel shortages are foreseen, but there could be some higher costs due to the extra transportation. It is likely that changes will have to be made in storage facilities, because the sizes and locations of bulk storage tanks that exist for the fuel being distributed from the refinery may be different than for fuel shipped north by rail or truck.

Fuel to the Yukon River communities may come increasingly via a different route as well, through the Bering Sea and lower Yukon upriver, rather than by rail or truck to Nenana, and then downriver.

The spill at the refinery involves sulfolane, a chemical commonly used in gasoline production. It seeped into the soil at the refinery during the years that Williams owned and operated the plant.

This was acknowledged to Flint Hills when the refinery was purchased and Williams posted a $40 million insurance policy to help pay for any contamination. However, the spill on the refinery property has spread beyond the property and is continuing to spread. How that is dealt with, as well as the contamination of residential water wells in the area, are among the issues Flint Hills and state officials are now dealing with. 

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Mike Bradner is editor and publisher of the Alaska Legislative Digest and Alaska Economic Report. www.akbizmag.com

May 2014 | Alaska Business Monthly

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special section

Oil & Gas

North Slope Explorers Resurgence of exploration

By Russ Slaten

¹ Smith Bay

Chukchi Sea OCS Repsol Drilling two appraisal wells into the Qugruk prospect (Q-5 and Q-7) and one exploration well (Tuttu 1) southeast of Kuparuk River Unit.

Shell, Statoil, ConocoPhillips Exploration plans on hold following federal appeals court ruling that BOEM must address shortcomings of environmental impacts analysis for the 2008 lease sale that drew record bids totaling $2.6 billion.

NordAq Energy Planning a multiyear oil and gas exploration program in the Smith Bay area; multiple permitted well locations for drilling winter seasons 2015-2016.

Teshekpuk Lake

Pioneer Natural Resources - Caelus Energy Amended agreement to sell Pioneer’s Alaskan asset to Caelus Energy Alaska for $300 million.

SAE Alaska Permitted Nigliq-Fiord and Big Bend 3-D surveys to acquire up to 650 square miles during 2014 season.

ConocoPhillips Construction on CD-5 scheduled to begin first quarter 2014; drilling operations to commence in mid 2015 with startup late 2015.

Nikaitchuq Oooguruk

Qugruk

Bear Tooth ConocoPhillips Plans to drill Rendezvous 3 and Flattop 1 in Greater Mooses Tooth unit in winter 2014.

CASSIN 6

Greater Mooses Tooth

Placer S.Miluveach

NORTH TARN 1 & 1A

MUSTANG 1 SHARK TOOTH 1

TUTTU 1

Kachemach

Brooks Range Petroleum Start of Mustang production targeted for fourth quarter 2014. Five mile gravel access road and production pad now in place.

CGG Land, Inc. Permitted Cronus 3-D survey for up to 267 square miles south of Colville River and Greater Mooses Tooth units.

Linc Energy Spud Umiat 23H horizontal well to provide flow testing comparison to Umiat 18 vertical well. Linc’s intent is to move reserves to proven and firm up plans to utilize horizontal drilling to commercially develop the field.

UMIAT 23H

UMIAT 18

" Umiat

Alaska Business Monthly | May 2014

NUNA 1 & 2 QUGRUK 5

Colville River Tofkat

Beeche Point

Kuparuk River KACHEMACH 1

National Petroleum Reserve - Alaska

92

QUGRUK 2 & 6 QUGRUK 7

QUGRUK 1

QUGRUK 3 & 3A

RENDEZVOUS 3

In early permitting stages for GMT-1 calling for 33-well capacity gravel pad connected to CD-5 by a gravel access road.

Source: Alaska Department of Natural Resources, Division of Oil and Gas

CASSIN 1

Milne Point

SIKUMI 1

QUGRUK 4

MERA

ConocoPhillips Permitting a 24-well 2S pad, access road, gravel mine, pipelines, and power lines; expects to install infrastructure 2014 and bring Shark Tooth area online by late 2015.

ConocoPhillips Permitting for expanded viscous oil development at Kuparuk River Unit North East West Sak 1H pad; first production targeted for 2017.

0

10

20 Miles

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A

laska’s North Slope is seeing a resurgence of activity. New companies and new projects—along with the maintenance and redevelopment of existing fields—have all played a role in the Slope’s recent growth.

Even with a steady decline of oil throughput in the Trans Alaska Pipeline System (TAPS) since 1988, employ-

“Deeper and harder-to-reach oil reserves require greater efforts to extract.”

—Alaska Department of Labor and Workforce Development

ment in the oil and gas industry has fluctuated, but has seen overall growth over the years, according to numbers

North Slope Oil and Gas Activity

State of Alaska, Department of Natural Resources, Division of Oil and Gas, March 2014

Beaufort Sea Division of Oil and Gas DNR deferred 11 lease tracts, totaling approximately 28,000 acres, from the 2013 North Slope and Beaufort Sea areawide lease sales to make acreage available for long term production testing of onshore gas hydrates. These tracts may be deferred again in 2014.

CGG Land, Inc. Permitted West Canning 3-D survey for up to 366 square miles southeast of Badami unit and south of Pt. Thomson unit.

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Duck Island Prudhoe Bay

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Global Geophysical Services, Inc. Permitted Schrader Bluff 3-D seismic survey to acquire up to 293 square miles for Repsol USA Inc. during the 2014 winter season.

Arctic National Wildlife Refuge Wells Spud 2014

CGG Land Inc. Permitted Great Bear and Niksik 3-D surveys to acquire a total of up to 1,010 square miles during the 2014 season.

Wells Spud 2013 Wells Spud 2012 !

!

Trans Alaska Pipeline Dalton Highway Units

Division of Oil and Gas Northern Alaska areawide lease sales tentatively scheduled for November 2014, encompassing 14.7 million acres in North Slope, Beaufort Sea, and North Slope Foothills sale areas.

Alaska Seaward Boundary

Map Location

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from the US Department of Revenue and Alaska Department of Labor and Workforce Development (ADLWD).

High oil prices are the best explanation for the past decade’s employment growth, ADLWD said in their June 2013 issue of Alaska Trends. And went on to say a rise in production jobs amid lower output is because “deeper and harderto-reach oil reserves require greater efforts to extract.”

Many oil companies have changed their attitude towards oil exploration on the North Slope since oil tax reform in Alaska, and are now delving into the economic possibilities.

NordAq Energy is exploring oil and gas reserves in the National Petroleum Reserve-Alaska (NPR-A) as well as offshore locations nearby in Smith Bay. Australian independent, Linc Energy, is drilling test wells at Umiat, more than seventy miles southwest of the major North Slope fields, to determine whether or not oil deposits discovered

by US agencies are commercially viable.

Brooks Range Petroleum completed a gravel access road and production pad to begin production for its Mustang field, adjacent to the Kuparuk River Unit, by the end of 2014.

Exploration Priority One Repsol, a Spanish multinational oil and gas company based in Madrid, Spain is relatively new to the North Slope, but is one of the most active companies exploring. Repsol started in 2011, with Armstrong Oil and Gas affiliate 70 & 148, LLC, by drilling two exploration wells at the Colville River delta in the 2011 to 2012 season, then three the next season. Repsol will continue oil exploration this year by drilling two appraisal wells designated as Q-5 and Q-7 in the Qugruk area, fifteen miles west of the Kuparuk River field. Repsol is also set to drill one exploration well and acquire 3D seismic information in the area designated Tuttu 1, southeast of Kuparuk.

May 2014 | Alaska Business Monthly

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NUIQSUT

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Arctic For (On Appea

Map: Courtesy of Mapmakers Alaska

NATIONAL PETROLEU M RESERVE ALASKA

UMIAT

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Alaska Business Monthly | May 2014

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North Slope, Alaska

Oil & Gas Operators Beaufort Sea

Duck Island

Prudhoe Bay

Liberty

PRUDHOE BAY DEADHORSE

Pt Thomson

Badami

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Oil & Gas Unit Boundary

Trans Alaska Pipeline

Dalton Highway

Current Oil & Gas Lease by Operator 70 & 148, LLC Alaskan Crude Coporation Anadarko E&P Onshore, LLC; Anadarko Petroleum Co. ASRC Exploration, LLC AVCG, LLC BP Exploration (Alaska) Inc. Burgundy Xploration LLC Cade, S; Donkel, D Chevron USA Inc. ConocoPhillips Alaska Inc.; ConocoPhillips Company Craig, P

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Devon Energy Production Co. LP

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Eni US Operating Co. Inc. ExxonMobil Corporation; ExxonMobil Oil Corporation; ExxonMobil Alaska Production Inc.

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NordAq Energy Inc. Ocean Energy Resource Pioneer Natural Resources Alaska Inc. Polar Petroleum (AK) Corp.

Bachner, A

Š2014 MAPMAKERS ALASKA 259 SOUTH ALASKA STREET PALMER AK 99645

Great Bear Petroleum Ventures I LLC; Great Bear Petroleum Ventures II LLC; Ursa Major Holdings LLC

Renaissance Umiat, LLC Repsol E&P USA Inc. Royale Energy Inc. Savant Alaska LLC Shell Offshore Inc.; Shell Gulf of Mexico Inc. Ultrastar Exploration LLC White, J Woodstone Resources LLC

ARCTIC NATIONAL

WILDLIFE REFUGE NATIONAL ARCTIC 20 30 40 Miles

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May 2014 | Alaska Business Monthly

95

Photo by Judy Patrick, Courtesy of Repsol

Repsol’s Q-5 appraisal well in the Qugruk prospect on the North Slope.

“We won’t know whether the discovery is commercial until after we analyze this year’s data,” says Alaska Project Manager for Repsol, Bill Hardman.

Repsol’s operations this year had as many as five hundred people in the field, including drillers, seismic contractors, industrial hygienists, heavy equipment operators, caterers, housekeeping, and subsistence representatives, Hardman says.

Unique to exploration, Repsol says the seasonal nature of the process stands out.

“In order to protect the sensitive environment, we wait until the tundra is frozen over and we perform almost all of our work on ice roads and ice pads,” Hardman says. “We even construct an airstrip out of ice.”

Conducting the exploratory phase in this manner is effective at protecting the environment, but Repsol says it creates planning and logistical challenges. There is most often not a set start and end date 96

Alaska Business Monthly | May 2014

for operations, companies can only plan and ready crews until weather allows.

“Whenever the weather starts warming up and the ice starts deteriorating, we must be ready to rig down and move out—regardless of whether or not we’ve completed our objectives,” Hardman says. “However, once the exploration and appraisal phase is complete, if a development is justified, then permanent infrastructure is built and year-round operations begin.”

“Part of the puzzle is that these source rocks could have generated a lot more oil, and it hasn’t been found on the North Slope fields, so the question is ‘where did it go?’ Much of it was trapped on the way up there, or trapped within the local source rock [unconventional reservoirs]. So there are billions of barrels of oil Unconventional Resources One independent company that does that were generated, and a lot of not need to worry about frozen surface that has never been found.” operations is Great Bear Petroleum.

The small independent oil and gas company leased nearly five-hundred thousand acres of land from the state in 2010 with hopes to find shale-based oil at a commercial scale. Most of the leases cover lands south of the Prudhoe Bay oilfield, near and along the Dalton Highway and TAPS.

—Bret Chambers Exploration Manager Great Bear Petroleum

Great Bear began operations in 2012 by drilling two stratigraphic test wells along the Dalton Highway, nearly twenty miles south of Pump Station One of www.akbizmag.com

BusinessPROFILE

Little Red Services, Inc.

VOTE NO ON 1 LRS Hot Oil Unit being built at WEONA

T

he More Alaska Production Act (SB21) is the new tax law which took effect January 1st of 2014. The law has improved our competitive position among other oil producing regions and is generating new investment in Alaska. The change in the tax law has been sharply criticized by some and praised by others. It has been my observation that too many Alaskans have not been made aware of the facts, and critics continually use propaganda and misrepresentations to further confuse the issue. The facts of the More Alaska Production Act (SB21) are pretty straight forward, and here are just a few: 1) At current prices, the new tax brings in more revenue to the state than ACES. The new tax law has not cost the treasury $2 billion dollars as the opposition has stated. At higher prices there is a cost to Alaska’s treasury. For example, at $111.67 per barrel, the cost to the treasury, assuming no new production, is $430 to $505 million. While this sum is significant, it is much lower as the price of crude declines. In fact at just about $105 per barrel, the state collects about the same revenue between old tax (ACES) and the new law (SB21). As prices go below $105, we collect more tax revenue under the More Alaska Production Act (SB21).

2) We have seen a significant change in investment and activity level since the passage of the new law SB21, and

the state predicts $10 billion in new investments. We are hiring more Alaskans and putting them to work with good paying jobs in the oil and service related industry since the law passed.

Alaska is benefitting from a healthy oil environment and is seeing real progress on a major LNG project to bring our vast gas resources to market.

3) Why is our oil production so important? Revenues from oil production provide the majority of state funding. I encourage every citizen to review the “Revenue Resources Book” that is published by the Tax Division of the Department of Revenue semiannually. This shows how we fund the state treasury to pay our bills and fund important public needs like education, roads, social services, etc. The tax base has many components, but they are grossly overshadowed by the 92% of tax revenue provided by oil to the unrestricted general fund this past fiscal year. Oil revenues are projected to provide over 85% of our unrestricted general fund for the next 10 years.

4) How will the new tax law impact the permanent fund? The permanent fund does not receive money from production taxes. The permanent fund receives 25% of the royalties paid to the state as the landowner. So the permanent fund is at risk by the old tax policy that results in continual oil production decline and benefits under a tax policy that encourages investment

and rewards production. We have seen the results of decline over the past 6 years and it is time to go a dif different direction with the More Alaska Production Act. The activity level is up at Little Red Services for the first time in years and the future looks bright for our local business. The benefit extends outside of our company as we are producing new equipment at a locally owned fabrication shop to meet new demands and hiring local Alaskans to fill the good paying job opportunities being created. Be informed of the facts and base your position on those facts. Aviod the misleading commentary and sensationalism by those who are working hard to politicize the issue as opposed to supporting what’s good for Alaska’s future.

Little Red Services, Inc. Doug Smith, President & CEO dsmith@lrs-ak.com 3700 Centerpoint Drive, Suite 1300 Anchorage, AK 99503 907-349-2931

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Photo by Judy Patrick, Courtesy of Repsol

Worker preparing to raise a rig tank at Repsol’s Qugruk prospect on the North Slope.

the Trans-Alaska Pipeline. Fifty percent of Great Bear’s leasehold is within fifteen miles of the pipeline. And although the science must be there, says Great Bear Petroleum President and CEO Ed Duncan, it has reaped the benefits of drilling during the summer.

Great Bear says the data collection from the drill sites goes in parallel of collecting 3D seismic information, which started 2012 and on through early 2014.

Great Bear collected a total of more than four hundred square miles of data.

“Companies that have explorationled strategies are handcuffed,” Duncan says. “It’s almost impossible to make good business judgments without sound science and engineering, and 3D [seismic data] is a precursor for us to make good decisions.”

Great Bear is pursuing unconventional oil on the North Slope, and with its special recovery process, its engineers are working out ways to recover oil from the shale rocks within its leasehold.

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Alaska Business Monthly | May 2014

“Part of the puzzle is that these source rocks could have generated a lot more oil, and it hasn’t been found on the North Slope fields, so the question is ‘where did it go?’ Much of it was trapped on the way up there, or trapped within the local source rock [unconventional reservoirs],” says Great Bear’s Exploration Manager Bret Chambers. “So there are billions of barrels of oil that were generated, and a lot of that has never been found.”

Duncan says the company is currently working tirelessly on its 3D data to build exploration inventory and internally debate critical risks in order to compile a list of prospects by the third quarter of 2014.

“I can imagine from the outside, the process looks slow and tedious, but from the inside, this is a pressure cooker,” Duncan says.

Tested Fields Although BP does not conduct exploratory drilling, it plans to explore

through technology. It knows the potential of oil and gas on Prudhoe Bay, and is focused on expanding its possibilities.

“Prudhoe Bay is just a resource rich opportunity that it has not been fully developed yet,” says BP Alaska Spokesperson Dawn Patience.

Before tax reform was put into place, BP added two drill rigs this year, which it says accounts for increased activity on the North Slope, but planning for these rigs started in 2006—prior to Alaska’s Clear and Equitable Share tax law, or ACES. BP expects to complete production-enhancing well work on one hundred more wells than last year.

“There’s a lot of work that goes toward optimizing production, and well work is a key part of that,” Patience says.

Looking for future potential, BP plans to gather 190 square miles of 3D seismic data this summer in North Prudhoe Bay to support land-based oilfield development. BP says preliminary data shows about 55 million barrels of www.akbizmag.com

“As you move west [on Prudhoe Bay], the oil has become a partly viscous oil which tends to be thicker and heavier, a bit like maple syrup, with sand particles in it. So part of the work is infrastructure and pipeline upgrades to be able to handle the volumes of viscous oil, as well as volumes of increased water and gas capacity at the facility.”

—Dawn Patience BP Alaska Spokesperson

recoverable resources, with the potential of 30 new wells.

“Prudhoe Bay has great opportunity.

We always say the best place to find oil is on or near an oil field. It just has all sorts of resource opportunity yet to be developed,” Patience says.

In addition to the seismic data and two new rigs this year, BP plans to add a drilling rig in 2015 and again in 2016 to Prudhoe Bay, a $1 billion investment over five years. BP says the two new rigs will account for two hundred new jobs and about thirty to forty additional wells drilled each year.

BP’s major project, in accordance with fellow owners of the Prudhoe Bay Unit [ConocoPhillips, ExxonMobil, and Chevron] is the West End Prudhoe Bay development project. The assessment stage is estimated to cost about $3 billion in capital investment.

The project consists of expanding two existing oilfield pads by adding facilities and creating new wells, and constructing one new drill site altogether.

BP says the new development will call for increased capacity of existing infrastructure and pipelines.

“As you move west [on Prudhoe Bay], the oil has become a partly viscous oil which tends to be thicker and heavier, a bit like maple syrup, with sand particles in it,” Patience says. “So part of the work is infrastructure and pipeline upgrades to be able to handle the volumes of viscous oil, as well as volumes of increased water and gas capacity at the facility.”

Heading West ConocoPhillips is also looking to expand existing operations west, and expand its reach.

ConocoPhillips is currently laying gravel for Drill Site 2-S, known as the Shark Tooth project. Operations began with drilling an appraisal well in winter 2012 to gain more reservoir information. Located on the southwest edge of www.akbizmag.com

the Kuparuk oilfield, this project will target an undeveloped section of the Kuparuk formation.

“The results looked good, and later this year we’ll go back to our partners and our

board to seek approval to fully develop it with wells, roads, facilities, and bring it on stream,” says Scott Jespen, vice president of external affairs at ConocoPhillips Alaska. “And if we get that funding, we

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99

ConocoPhillips drilled two exploration wells in NPR-A this winter: Rendezvous 3 and Flat Top 1.

Photo by Judy Patrick, Courtesy of ConocoPhillips Alaska Inc.

would probably have first oil in 2015, and producing about eight thousand barrels a day. We’re estimating about $600 million to develop it, and somewhere in the range of 200 to 250 people working during the construction period.”

Production for Drill Site 2-S will be processed through the Kuparuk River Unit facilities.

Next on the horizon for ConocoPhillips is to pursue development in the Greater Mooses Tooth Unit in the National Petroleum Reserve-Alaska, thirty miles west of Kuparuk. ConocoPhillips was in the regulatory and permitting phase as of April, and continues to progress the engineering for final project approval by late 2014. ConocoPhillips says the Greater Mooses Tooth One (GMT-1) will be connected to CD-5, another satellite site connected to the Alpine oilfield in the Colville River Unit. CD-5 is currently undergoing engineering and material acquisition, and oil from both GMT-1 100

Alaska Business Monthly | May 2014

and CD-5 will be processed through existing Alpine facilities, and connected by a 7.8 mile road and pipeline.

More Alaska Production Act For projects in the exploration phase, the shift to development lies heavily on whether or not Senate Bill 21, the More Alaska Production Act, is repealed this August.

Many companies say if Senate Bill 21 is repealed, it will negatively affect their investment decisions.

“The funding decision for [the exploratory and developmental] investments is going to be heavily influenced by the results of the referendum on [oil] tax reform this August,” says Jepsen. “If the tax reform gets repealed, it’s going to have a very adverse impact on the corporation’s view on investment.”

BP attributes the decision to pursue many of its development projects to Senate Bill 21.

“After oil tax reform was passed and signed into law, it aligned the Prudhoe Bay working interest owners behind these projects and opportunities, in particular the West End and the two rigs set for 2015 and 2016,” Patience says.

Even Repsol says Senate Bill 21 plays a role after discovery. “Besides the size of the discovery, the other critical variable will be the outcome of Ballot Measure One,” Hardman says. “The oil tax structure could mean the difference between a ‘go’ and a ‘no go’ decision on a development project.”  Russ Slaten is the Associate Editor at Alaska Business Monthly.

www.akbizmag.com

special section

Oil & Gas

Interior and Northwest Alaska Exploration Searching for oil and gas in underexplored basins

By Mike Bradner

Copper River Basin Exploration License:

Albers Equal-Area Conic Projection, 1927 North American Datum, Clarke 1866 ellipsoid with a central meridian of 146º, origin latitude of 50º, northern parallel of 65º, and southern parallel of 55º, Map created, edited, and published by the State of Alaska, Department of Natural Resources, Division of Oil and Gas.

Ahtna is exploring for natural gas in the Copper River Basin in the yellow license area shown above in the map.

A

laska Native corporations are leading the exploration for oil and gas in the large, underexplored sedimentary basins in Interior and Northwest Alaska. Sedimentary basins are acculations of sedimentarytype rocks, the kind of rock where oil and gas can accumulate.

While the Cook Inlet and North Slope sedimentary basins have seen major oil and gas discoveries, the potential of other basins in Alaska has hardly been scratched. Now three Alaska-based Native corporations, Doyon, Ltd. in the Interior,

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Alaska Business Monthly | May 2014

Ahtna, Inc. in the Copper River region, and NANA Regional Corporation, are actively exploring or promoting exploration.

The motivation has been mostly focused on developing local supplies of energy, like gas, for communities now largely dependent on imported diesel, along with a desire to develop lands owned by the corporations.

However, Doyon and Ahtna are initially focused on exploring state-owned lands, although both own lands near their initial drilling locations. For Ahtna and NANA, which is seeking to ex-

plore the Kotzebue Basin where it owns lands, the focus is on natural gas.

For Doyon it is both oil and gas. For many years the large Nenana and Yukon Flats basis where Doyon is active were thought to be more prone to gas, but Doyon’s recent drilling has shown the presence of an oil system in the Nenana Basin. Doyon has drilled two wells and is planning another possibly in 2016.

Copper River Basin Meanwhile, Ahtna is making its second try at finding natural gas in the Copper www.akbizmag.com

Map: Alaska Department of Natural Resources, Division of Oil & Gas

General Land Status

River Basin near Glennallen. The corporation, which is based in Glennallen, has signed an exploration agreement with two independent oil and gas companies to explore a gas prospect about twenty miles west of the community.

Rutter & Wilbanks, of Midland, Texas, and Australia-based Santa Petroleum will join with Ahtna to explore a large structure identified on state-owned lands, according to Joe Bovee, Ahtna’s vice president for lands and resources.

Ahtna drilled previously in the area with Rutter & Wilbanks in 2007 and 2009, although the well was unsuccessful.

Ahtna has done a “reprocessing” of about ninety miles of seismic done previously, some on the state lands and some on nearby lands owned by Ahtna.

The presence of gas in the formation has been demonstrated with the seismic but more seismic will be needed as well as a test well, Bovee says.

Gas was discovered previously in two other exploration wells drilled nearby, including the one drilled by Ahtna and Rutter & Wilbanks, one of the partners in the current venture. An early well was drilled by Pan American Petro-

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leum in the 1960s. Gas was found, but Pan American was looking for oil.

Ahtna is the operator of the new jointventure, for now, but that could change after the completion of new seismic work, Bovee says. The group hopes to do more seismic later this year and to drill a well in 2015, but that will depend on a suitable rig being located, he says.

The new structure, which has been mapped with two-dimensional seismic, covers a twenty-five-square-mile area and is a structural rather than a stratigraphic trap, which means gas-bearing reservoir sands would likely be thicker and more productive than thinner layers of reservoir more likely in a stratigraphic trap.

Depth of the gas-bearing formation is about four thousand to five thousand feet.

“We’re very excited about this because it could lower very high home heating and power generation costs in the region. We now depend on fuel oil, and our goal is to get cheaper energy for local residents,” for heating and power, Bovee says.

Copper Valley Electric Association, the electric utility serving the region,

has access to some hydro power but also depends on diesel and is keenly interested in a lower-cost source of fuel.

The gas prospect is on state-owned land that is held by Ahtna in the fortythree-thousand-acre Tolsona Exploration License that has been issued to Ahtna by the state, he says.

Exploration licensing is a special procedure used by the Department of Natural Resources to encourage new exploration in regions of the state that have seen little drilling, such as the Copper River Basin.

The holder of the license has the option to convert it to traditional state oil and gas leases after a certain period or if a discovery is made.

Ahtna itself is a large landowner in the region, with about 1.5 million acres, some of which are adjacent to the state lands that will be explored by the joint-venture.

The previous well drilled by Ahtna and Rutter & Willbanks is about ten miles east of the current prospect, which is also about two miles north of the Glenn Highway. Highway access will facilitate the additional seismic work and drilling, although some im-

May 2014 | Alaska Business Monthly

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Alaska | Hawaii | Guam | California

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Alaska Business Monthly | May 2014

provements will be needed to get equipment to a drill site.

Ahtna and its partners will take advantage of special state of Alaska exploration tax credits that could pay up over half of the cost of the project. The well is expected to cost between $10 million and $15 million.

Bovee says Ahtna’s previous well, which did discover gas, was affected by an unusual geological condition: high water pressure that was encountered by the drill crew.

When the drilling crew attempted to control the water by injecting special fluids, the section of reservoir near the well was damaged.

That geologic condition may be found at the new location as well, but this time the possibility is being anticipated and incorporated into planning for the well.

For example, a larger-diameter drill pipe, or casing in industry terminology, will be used that would facilitate the injection of fluids to control water if the procedure is needed.

The first well in the region, drilled in 1963 by Pan American, was approximately eleven miles west of Glennallen. The well encountered several hundred feet of sandstone that yielded natural gas shows and the same high water flows found later.

The water flow was considered a good sign, however, because it indicated that the rock formation had the necessary porosity, or microscopic spaces in the rock to hold fluids, as well as the permeability to produce the fluids, meaning that liquids could flow through the rock.

Pan American’s drilling also showed the surrounding rock had high organic content that had undergone the necessary heat and pressure to generate hydrocarbons.

More attempts were made, this time

by Ahtna and its partner, from 2007 to 2009 to find the natural gas indicated in the Pan American well. The third attempt in 2009 located natural gas at approximately four thousand feet. Unfortunately, during the third attempt, fractured rock was encountered and resulted in water from a shallower zone flowing into the well and inhibiting any gas flow from the sandstone reservoir.

Interior Alaska Doyon, Ltd., based in Fairbanks, is the Alaska Native regional corporation for www.akbizmag.com

the Interior and is exploring the large sedimentary basins west of Fairbanks and along the Yukon River north of the city.

Doyon and Interior Native village corporations own about 11 million acres of Interior Alaska, but the area Doyon is focused on for oil and gas involves 1.8 million acres, including 400,000 acres in the Nenana Basin and 1.4 million acres of the Yukon Flats Basin.

The Nenana Basin prospects are on state lands that Doyon holds under lease, while the Yukon Flats lands are owned by nearby village corporations and by Doyon. Two exploration wells have been drilled by Doyon in the Basin, both a few miles west of the city of Nenana, and while neither found commercial quantities of oil or gas, both found tantalizing indications that hydrocarbons were present in the area.

Doyon selected the area as its first target because the area is near infrastructure, including the Parks Highway and long-distance power transmission lines, and because Fairbanks, sixty miles northwest, is in dire need of less expensive energy, which natural gas could provide.

The Nunivak No. 1 well was drilled in 2009 about six miles west of Nenana by a consortium led by Doyon. The well found organic rich shales and oil-prone coals among the hydrocarbon shows, and what was significant is that the well showed the potential for oil, not just natural gas.

Encouraged by that, Doyon drilled the Nunivak No. 2 well in 2013, without partners, a few miles farther west of Nunivak No. 1, and it included a “sidetrack,” or separate well drilled off the first well.

The well didn’t find a commercial deposit, which was disappointing, but the results were still encouraging in that excellent quality reservoir sands with residual gas and source rocks actively expelling wet gases were found. There were also “top seals,” or rocks that could seal in and trap the hydrocarbons being expelled by the source rocks.

“In our first well we were looking only at coals as a source of gas, but in the second well we found shales mixed with coal, so now we have two very good source rocks for gas and, we believe, for oil, too,” according to Jim Mery, Doyon’s senior vice president for lands and resources. www.akbizmag.com

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106

Alaska Business Monthly | May 2014

There were also excellent high-porosity reservoir rocks, or rocks capable of holding oil and gas along with the porosity, or micro-spaces in the rocks, that are capable of holding fluids, Mery says.

“Wet” gas was also found—gas that contained propane, butane, and other hydrocarbons that are heavier than methane, the main component of natural gas, which are also indicators that oil may be present nearby.

Unfortunately, in the prospect being drilled in 2013, the underground faults didn’t close up the way it was hoped to form a trap to hold the gas or oil. No matter how good the prospect looks, there are always uncertainties.

The potential appears to be widespread across the basin. In a 1984 well drilled at the southern margin of the basin by ARCO Alaska, significant coal seams were found, which are known as source rocks for gas, and surveys of sediments taken on the surface across the basin show chemical fingerprints of hydrocarbons seeping from below, all of which confirms widespread oil and gas potential in the region. Doyon chose the initial drilling locations because they were relatively near Nenana and easy to reach with a gravel road built to the site.

The corporation is putting its focus on the Nenana Basin for now because it has obligations under its state oil and gas leases, Mery says. Yukon Flats exploration is still on the list, however.

That area is about 150 miles north of Fairbanks near the Yukon River and has less infrastructure, though unlike Nenana, it is crossed by the Trans Alaska Pipeline System and the Dalton Highway, which would allow for surface access to the region and efficient transport of oil, if discovered. A gas pipeline through the area is also now being proposed.

To date, Doyon has done geologic, geochemical sampling, and seismic work in the region and has identified two exploration regions of interest, one near Stevens Village, about thirty miles from the Dalton Highway and TAPS, and the second is the Birch Creek exploration area about one hundred miles east of the Dalton Highway and TAPS and thirty to fift y miles west of the Steese Highway. www.akbizmag.com

Significantly, a geochemical sampling program has shown the chemical fingerprints of hydrocarbons in the basin, and Doyon believes there could be oil as well as gas.

Northwest Alaska In Northwest Alaska, the Kotezbue Basin covers a large twenty-eight thousand square miles, with the parts of the basin with oil and gas potential owned by NANA of Kotzebue.

NANA is renewing efforts to get new oil and gas exploration in the basin and has done geologic and geochemical investigation, as well as gathered information from two early exploration wells drilled by Chevron Corporation in 1974 and 1975, the Nimiuk No. 1 and Cape Espenberg No. 1 wells. Both were unsuccessful.

However, NANA recently reprocessed two hundred miles of twodimensional seismic data and, with the benefit of modern technology, has identified nine prospects in the basin that merit further investigation.

“Some of the structures are quite large, as big as the Beluga gas field near Anchorage in fact, and that has gotten a lot of people interested,” says Lance Miller, NANA’s lands and resources vice president.

The likelihood is that gas will be found rather than oil based on what is known about the depth of the prospects and the geologic history, he says. But gas could be important as a source of energy for communities and possibly mines in the region.

If gas is found it might be possible to process it into liquefied natural gas, or LNG, and deliver LNG in containers to communities, Miller says. The Red Dog Mine, a large lead-zinc mine north of Kotzebue that is now a large user of diesel for power generation, could be an important industry customer, he says.

NANA is now actively seeking an exploration partner for its project.

An agreement has been signed with Moyes & Company, a Houston-based oil and gas consulting firm, to assist in that effort. 

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

Mike Bradner is editor and publisher of the Alaska Legislative Digest. www.akbizmag.com

May 2014 | Alaska Business Monthly

107

special section

Oil & Gas

Indemnity Agreements in Offshore Oil and Gas Contracts Multiple considerations when drafting and reviewing

I

By Isaak Hurst

t’s a story many Alaskan businesses are familiar with. The large, multinational company pushes a service contract onto the small, Alaskan owned and operated company with the simple undertone of: “Hey, you want to do business with us, sign the bottom line.” However, buried in these contracts is always an “Indemnity Clause.” These clauses are designed to effectively transfer certain third party liabilities (personal injury, property damage, pollution expenses, etc.) away from one party (usually the multi-national) and onto the other party (usually the small Alaskan owned and operated company). In the offshore oil and gas industry, where costs can quickly accumulate and liabilities can be astronomical, indemnity agreements are an effective risk management tool for the skilled contractor. The flip side of that coin, however, is that indemnity agreements can have immense financial repercussions for the unwary. Naturally, Alaska businesses should be cautious about signing any contract with an onerous Indemnity Clause—especially those engaged in the offshore oil and gas arena.

Indemnity Agreements—Generally An indemnity clause is a contractual provision in which one party agrees to answer for any specified or unspecified liability or harm that the other party might incur, according to Black’s Law Dictionary, Eighth Edition. In effect, a well drafted indemnity clause can transfer the negligence of one party (and all the costs associated with that negligence) onto another party. Sound crazy? Well, it is—a little. In the maritime and offshore oil and gas industry, courts still respect the “Freedom to Contract” principle, which allows two parties to basically agree to anything—so long as it violates no public policy principles. As a result, US courts will generally uphold indemnity agreements even where the negligence of the 108

Alaska Business Monthly | May 2014

party seeking indemnity actually caused or contributed to the injury.

In Alaska, indemnity agreements are typically entered into between an owner or operator of an offshore facility and a contractor hired to perform services on that facility. Moreover, the enforceability of an indemnity provision carries particular significance in Alaska’s oil and gas industry because accidents related to offshore exploration can incur significant cleanup costs. Consequently, indemnity clauses have become a ubiquitous feature in modern offshore oil and gas contracts.

Insurance Implications Indemnity and insurance provisions in offshore oil and gas contracts are tremendously important, but often receive little or no attention during contract negotiation and drafting. To support the terms of the indemnity agreement, the service contract will often include insurance requirements that each party is obligated to have.

However, the interplay between indemnity clauses and insurance requirements rarely weave together. Subsequently, when a claim arises, each party (and their respective insurer) end up litigating about who owes what. Logically, the question then becomes: Which obligation prevails—the indemnity provisions or the insurance provisions?

In the offshore oil and gas world, courts will generally hold that an insurance obligation trumps an indemnity obligation. A leading case on this matter is Ogea v. Loffland Bros., 622 F.2d 186 (5th Cir. 1980).

The case arose when an offshore oil worker slipped on a stairway after stepping in a puddle of oil on the deck of the oil rig.

The plaintiff sued the rig operator for $285,000, which led the operator to file a third party complaint against the rig’s owner to assert its rights under the service contract’s indemnity clause. Under that contract, however, the operator had to obtain a general liability policy for $500,000 and to name the owner as a coinsured.

Unfortunately, for the operator, the court

held that the service contract’s indemnity clause was triggered only after the operator exhausted its contractually mandated insurance policy—the $500,000.

In reaching its decision, the court reasoned the operator was not entitled to indemnity from the rig’s owner for claims that fell squarely within the scope of the operator’s insurance coverage mandated under contract. Put another way, even if a party has a contractual right to indemnity, that party must first exhaust its own insurance coverage before it can assert its contractual indemnity rights against another party.

Invalid Indemnity Agreements In offshore oil and gas contracts, indemnity agreements are normally enforced in accordance with their clear and unequivocal terms, even where the negligence of the party seeking indemnity may have caused or contributed to the injury. There are, however, exceptions to this rule.

First, many US states have anti-indemnity statutes. For example, Louisiana and Texas have passed oil field anti-indemnity laws—the Louisiana Oilfield Indemnity Act (LOIA) and the Texas Oilfield AntiIndemnity Act (TOAIA). Both LOIA and TOAIA seek to invalidate certain indemnity clauses—especially those that pertain to death or bodily injury. Each of these laws were enacted to “level the playing field” between two contracting parties. As a result, indemnity clauses that fall under the jurisdictional authority of LOIA or TOAIA and attempt to shift any liability associated with the death or bodily injury from one party to another are null and void.

Second, courts will not enforce an indemnity agreement if it is contrary to public policy. Specifically, indemnity provisions that are tied to allegations of gross negligence, punitive damages, and civil penalties may be unenforceable. For example, in Royal insurance Co. of America v.

Southwest Marine, 199 AMC 2873 (9th Cir. 1999), a court invalided an indemnification agreement after a boat yard severely damaged a yacht. There, the yacht owner hired the defendant boat yard to house his yacht during its renovation, but when the yard first attempted to lift the yacht, the yard’s crane was damaged in the process. Yet, the following day, the yard again attempted www.akbizmag.com

to lift the yacht. This time, however, the crane’s wires snapped, dropping the yacht into the water, followed immediately by the crane’s boom onto her hull. Unsurprisingly, the vessel sustained substantial damages.

In response, the defendant boat yard sought to invoke the indemnity provisions of the contract between him and the yacht owner. The owner countered that the indemnity agreement was unenforceable due to the yard’s grossly negligent conduct, and the court agreed. The court reasoned that the boat yard’s actions constituted gross negligence because it knew the crane was damaged from the incident the day prior, yet it proceeded to attempt a second lift before ensuring the crane’s ability to lift a vessel of that size. The court held that the boat yard’s actions, taken as a whole, constituted an extreme departure from the standard of reasonable care—thus invalidating the contractual release from liability.

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Take Away—Time to Lawyer Up In closing, Alaska businesses must understand there are multiple considerations when drafting and reviewing indemnity agreements—especially in the offshore oil and gas arena. First, don’t just skirt these clauses in your service contracts. Indemnity clauses involve complex issues that require significant time and attention.

Second, pay careful attention to the intersection between your service contract’s indemnity provisions, its insurance requirements, and your company’s existing insurance portfolio. Your service contract may be biting off more liability than your company’s existing insurance policy can chew. Third, if you are dragged into an indemnity clause dispute, don’t lose hope.

Even a skillfully drafted and negotiated indemnity provision may be unenforceable if one party’s actions amount to gross negligence. At that point, however, it’s likely time to lawyer up. 

Find us at

Isaak Hurst is an attorney with the International Maritime Group, PLLC—a boutique law firm that provides legal services to Alaska’s maritime, oil and gas, mining, and international business communities.

Contact him at Isaak.Hurst@ InternationalMaritime.net www.akbizmag.com

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109

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

EXPLORATION & PRODUCTION Top Executive

Company Company

Top Executive

Apache Corporation 510 L St., Suite 310 Anchorage, AK 99501 Phone: 907-272-2722 Fax: 907-277-0005

John L. Hendrix, Gen. Mgr.

BP Exploration (Alaska) Inc. PO Box 196612 Anchorage, AK 99515-6612 Phone: 907-561-5111 Fax: 907-564-4124

Janet Weiss, Regional Pres.

ConocoPhillips Alaska, Inc. PO Box 100360 Anchorage, AK 99510 Phone: 907-276-1215 Fax: 907-265-1410

Trond-Erik Johansen, President

Cook Inlet Energy LLC 601 W. Fifth Ave., Suite 310 Anchorage, AK 99501 Phone: 907-334-6745 Fax: 907-334-6735

David Hall, CEO

Denali Drilling 8240 Petersburg St. Anchorage, AK 99507 Phone: 907-562-2312 Fax: 907-562-5971

Ron Pichler, Pres.

Doyon Drilling Inc. 11500 C St., Suite 200 Anchorage, AK 99515 Phone: 907-563-5530 Fax: 907-561-8986

Aaron Schutt, Pres.

Eni Petroleum 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 Phone: 907-865-3300 Fax: 907-865-3384

Steve Massey, AK eni Rep/Ops Mgr.

ExxonMobil PO Box 196601 Anchorage, AK 99519 Phone: 907-561-5331 Fax: 907-564-3719

Karen Hagedorn, AK Production Mgr.

Furie Operating Alaska LLC 1029 W. Third Ave., Suite 500 Anchorage, AK 99501 Phone: 907-277-3726 Fax: 907-277-3796

Damon Kade, President

Great Bear Petroleum Operating LLC 601 W. 5th Ave., Suite 505 Anchorage, AK 99501 Phone: 907-868-8070 Fax: 907-868-3887

Ed Duncan, Pres./CEO

Hilcorp Alaska LLC PO Box 244027 Anchorage, AK 99524 Phone: 907-777-8300 Fax: 907-777-8310

John Barnes, Sr. VP of Exploration & Production

Linc Energy Ltd. 3000 C St., Suite #103 Anchorage, AK 99503 Phone: 907-868-8660 Fax: 907-868-8881

Corri Feige, GM Alaska

NordAq Energy Inc. 3000 A St., Suite 410 Anchorage, AK 99503 Phone: 907-646-9315 Fax: 907-646-9317

Robert Warthen, Pres.

Parker Drilling 1420 E. Tudor Rd. Anchorage, AK 99507 Phone: 907-339-4032 Fax: 907-339-4001

Richard Bohon, Gen. Mgr.

Shell Exploration & Production Co. 3601 C St., Suite 1000 Anchorage, AK 99503 Phone: 907-770-3700 Fax: 907-646-7142

Pete Slaiby, VP Alaska

XTO Energy Inc. 52260 Wik Road Kenai, AK 99611 Phone: 907-776-2506 Fax: 907-776-2542

Jack P. Williams, Pres.

110

AK Estab. Empls.

AK Estab. Empls.

1954

4

Business Activity

Services Oil and gas exploration and development.

lisa.parker@apachecorp.com apachecorp.com 1959

2300 BP operates 13 North Slope oil fields, four North Slope pipelines, and owns a significant interest in six other producing fields and in the Trans-Alaska Pipeline System.

1952

1,200 Exploration and Production

alaska.bp.com

COPAlaskaInfo@ConocoPhillips.com conocophillips.com 2009

35

Oil and gas exploration and production.

1970

20

DDI provides geotechnical, environmental, mineral exploration, commercial water well and large diameter (8') shaft drilling. We also drill, install tie-backs and construct retaining walls. We have provided these services throughout Alaska since 1970.

Specialized equipment for onshore and offshore.

millerenergyresources.com

rpichler@ak.net or denali@ak.net denalidrilling.com 1982

info@doyondrilling.com doyondrilling.com

400+ Doyon Drilling operates on the North Slope of Alaska with rigs designed to drill in northern Alaska conditions. The company consistently strives to improve its operations and has some of the most technologically advanced land drilling rigs in the world.

1926

60

Eni is an integrated energy company. Active in 77 countries, with a staff of 78,400 employees, it operates in oil and gas exploration, production, transportation, transformation and marketing, in petrochemicals, oilfield services construction and engineering.

1870

100

Conducting business in Alaska for more than 50 years, investing billions into local economies. As one of the largest oil producers in Alaska, Exxon Mobil has explored most major Alaska basins over the years.

2011

6

Exploration and planned gas production in 2014 from the Kitchen Lights Unit located in the Cook Inlet of Alaska.

2010

7

Exploration and production company.

2012

310

Hilcorp is one of the largest privately-held exploration and production companies in the US. We strive for US energy independence. Hilcorp was named to the 2013 & 2014 FORTUNE Top 100 Companies to work for list. Protecting the environment and ensuring a safe, healthy workplace are our priorities.

1996

20

Oil and gas exploration and production, Underground Coal Gasification (UCG), Gas to Liquids (GTL), Enhanced Oil Recovery (EOR).

2009

8

Natural gas exploration, Cook Inlet Basin & The North Slope. The Shadura find on north end of Kenai Peninsula expected to last 30 years. Offices in Anchorage and Kenai. nordaqenergy.com

1934

134

Contract drilling, drilling and production rental tools, advanced rig design, engineering,d rig construction, extended-reach drilling, drilling in environmentally sensitive and harsh/ remote climates, and training and HSE programs.

1952

185

Arctic Offshore oil and gas exploration

1986

34

XTO activities and operations in Alaska include: Cook Inlet Onshore Acreage (January 2013): 1,300; Cook Inlet Offshore Acreage (January 2013): 8,800. Community investments are made in higher education, medical care, environmental research, and arts and civic organizations.

eni.com

exxonmobil.com

www.furiealaska.com

greatbearpetro.com

hilcorp.com

linc@lincenergy.com lincenergy.com

moverly@nordaqenergy.com nordaqenergy.com

parkerdrilling.com

Alaska@shell.com shell.com.us/alaska

scott_griffith@xtoenergy.com www.xtoenergy.com

Alaska Business Monthly | May 2014

www.akbizmag.com

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

3M Alaska 11151 Calaska Cir. Anchorage, AK 99515 Phone: 907-522-5200 Fax: 907-522-1645

Julie Morman, Gen. Mgr.

Acuren USA 600 E. 57th Pl., Suite B Anchorage, AK 99518 Phone: 907-569-5000 Fax: 907-569-5005

Dennis Lee, Mng. Dir.

aeSolutions 3800 Centerpoint Dr., Suite 620 Anchorage, AK 99503 Phone: 9078655992 Fax: 9078655993

Mike Davenport, Dir. AK Business Unit

Afognak Leasing, LLC 3909 Arctic Blvd., Suite 400 Anchorage, AK 99503 Phone: 907-222-9500 Fax: 907-222-9502

Matt Thorpe, Sr. VP of Operations

Afognak Oilfield Services, LLC 3909 Arctic Blvd., Suite 400 Anchorage, AK 99503 Phone: 907-222-9500 Fax: 907-222-9502

AK Estab. Empls.

AK Estab. Empls.

Services

Services

1976

15

3M manufactures a wide range of products covering many markets in Alaska. In the area of natural resources, we provide products and services which support the oil/gas and mining industries in worker safety, electrical and communications, welding protection, fire and corrosion protection.

2002

240

Materials engineering, nondestructive examination and integrity management for the oil and gas, power, mining, transportation and construction industries.

1998

50

aeSolutions is a complete supplier of performance-based process safety engineering and automation solutions. To fulfill their mission of continuously improving the safety performance of the process industry, they utilize proven processes to help ensure consistent project execution and help customers

2004

26

Temporary and Remote Facilities, Portable Offices, New Camp Construction, Camp Relocation, Camp Operations and Management.

Jeff Allison, Sr. VP of Operations

2012

11

As a privately-owned Alaska oilfield service provider, we utilize revolutionary products and services to produce innnovative solutions for challenges on our customers' projects.

We specialize in oil field rig matting helping to ensure the protection of the environment and personnel safety.

Air Liquide America L.P. 6415 Arctic Blvd.

Anchorage, AK 99518 Phone: 907-562-2080 Fax: 907-564-9752

Robert Cook, Gen. Mgr.

1905

75

Providing packaged and bulk gas, scientific and calibration gases, welding tools, filler metals, hardgoods and machines to oilfield and pipeline constructors. Full line of rental welders and plasma equipment and repair (warranty and other) for all major welding equipment and tool manufacturers.

Airgas USA LLC 6350 Arctic Blvd.

Anchorage, AK 99518 Phone: 907-563-6644 Fax: 907-562-2090

William Sanborn, Reg. Pres., NorPac

1982

19

Airgas is the largest U.S. distributor of industrial, medical and specialty gases and welding equipment and supplies. Airgas is also one of the largest distributors of safety products in the U.S.

Alaska Air Cargo 4700 Old Int'l Airport Rd. Anchorage, AK 99502 Phone: 800-225-2752 Fax: 907-266-7808

Marilyn Romano, Reg. VP, Alaska

Alaska Airlines 4750 Old Int'l Airport Rd. Anchorage, AK 99502 Phone: 907-266-7200 Fax: 907-266-7229

Marilyn Romano, Reg. VP Alaska

Alaska Analytical Laboratory 1956 Richardson Hwy. North Pole, AK 99705 Phone: 907-488-1271 Fax: 907-488-0772

Stefan Mack, PE/Pres.

Alaska Clean Seas 4720 Business Park Blvd., Suite G42 Anchorage, AK 99503 Phone: 907-743-8989 Fax: 907-743-8988

Barkley Lloyd, Gen. Mgr.

Alaska Directional, LLC PO Box 871130 Wasilla, AK 99687 Phone: 907-357-9015 Fax: 907-357-9027

Billy Long, President/Member

Alaska Dreams Inc. 2081 Van Horn Rd., #2 Fairbanks, AK 99701 Phone: 907-455-7712 Fax: 907-455-7713

Meini Huser, President

Alaska Hydraulics Inc. 166 E. Potter Dr., Suite #1 Anchorage, AK 99518 Phone: 907-562-2217 Fax: 907-561-1262

Thomas Loran, VP

Alaska Interstate Construction LLC 301 W. Northern Lights Blvd., Suite 600 Anchorage, AK 99503 Phone: 907-562-2792 Fax: 907-562-4179

Steve Percy, Pres.

Alaska Marine Lines 100 Mt. Roberts St., Suite 200 Juneau, AK 99801 Phone: 907-586-3790 Fax: 907-463-3298

Kevin Anderson, Pres.

Alaska Rubber & Rigging Supply 5811 Old Seward Hwy. Anchorage, AK 99518-1479 Phone: 907-562-2200 Fax: 907-561-7600

Janeece Higgins, Pres.

112

innovation.3malaska@mmm.com 3m.com

acuren.com

jodi.caldwell@aesolns.com www.aesolns.com

www.alutiiq.com

airliquide.com

airgas.com 1932

~170 Goldstreak small package express, Petstreak animal express, priority and general air freight services. Full ULD and charter services also available.

1932

1700 Alaska Airlines and its sister carrier, Horizon Air, together, provide passenger and cargo service to more than 95 cities in Alaska, Canada, Mexico, Hawaii, and the Lower 48.

alaskacargo.com

alaskaair.com 2008

3

ADEC certified environmental testing laboratory. Soil and water analysis for methods 8021B, AK101, AK102 and AK103.

1979

67

As a not-for-profit cooperative, ACSĂ•s thirty-five year performance as the arctic experts stands alone for delivering emergency and environmental response services on the North Slope of Alaska. ACS's base of operations is in Deadhorse and our business office is in Anchorage.

2013

15

Horizontal directional drilling, trenching, utility installation.

1994

30

Design, sales and construction for fabric covered and pre-engineered metal buildings.

1976

25

Hydraulic repair and design, sales and service.

1987

450

Alaska Interstate Construction, LLC is an Alaska company providing heavy civil construction services to private industry, as well as local, state and federal government agencies in the oil and gas, mining and public works sectors throughout Alaska - from the Aleutian chain to the North Slope.

1980

13

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

1981

60

AK's largest supplier of hydraulic & industrial hose assemblies & associated products; specialize in fabrication/testing of wire rope, chain & synthetic slings for overhead lifting & rigging; supply & service fueling, lubrication & pressure washing equip., hydraulic pumps, motors, cylinders & valves

klovejoy@alaska-analytical.com alaska-analytical.com

gm@alaskacleanseas.org www.alaskacleanseas.org

akdirectional@alaskadirectional.com alaskadirectional.com

sales@alaskadreamsinc.com alaskadreamsinc.com

sales@alaskahydraulics.om alaskahydraulics.com

info@aicllc.com aicllc.com

amlcsc@lynden.com shipaml.com

info@alaskarubber.com alaskarubber.com

Alaska Business Monthly | May 2014

www.akbizmag.com

Only pay for the speed you need...

Dynamic Routing!

SM

At Lynden, we understand that plans change but deadlines don’t. That’s why we proudly offer our exclusive Dynamic Routing system. Designed to work around your unique requirements, Dynamic Routing allows you to choose the mode of transportation — air, sea or land — to control the speed of your deliveries so they arrive just as they are needed. With Lynden you only pay for the speed you need!

www.lynden.com 1-888-596-3361

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

Alaska Support Industry Alliance 3301 C St., Suite 205 Anchorage, AK 99503 Phone: 907-563-2226 Fax: 907-561-8870

Rebecca Logan, Gen. Mgr.

Alaska Textiles 620 W. Fireweek Ln. Anchorage, AK 99503 Phone: 907-265-4880 Fax: 907-265-4850

Clif Burnette, President

Alaska UVS PO Box 90895 Anchorage, AK 99509 Phone: 907-529-2797

Doug Patchin, President

Alaska West Express 1048 Whitney Rd. Anchorage, AK 99501 Phone: 907-339-5100 Fax: 907-339-5117

Scott Hicks, Pres.

Alcan Electrical & Engineering Inc. 6670 Arctic Spur Rd. Anchorage, AK 99518 Phone: 907-563-3787 Fax: 907-562-6286

Scott Bringmann, Pres.

Allied GIS Inc. 8600 Spendlove Dr. Anchorage, AK 99516 Phone: 907-333-2750 Fax: 907-333-2751

Gail Morrison, Pres/Sr GIS Analyst

Alutiiq General Contractors LLC 3909 Arctic Blvd., Suite 400 Anchorage, AK 99515 Phone: 907-222-9500 Fax: 907-222-9519

Greg Strike, VP Construction

Alutiiq Oilfield Solutions LLC 3452 Trailer St. Fairbanks, AK 99709 Phone: 907-456-4433 Fax: 907-456-4439

Jeff Allison, Sr. VP of Operations

Alyeska Pipeline Service Co. PO Box 196660, MS 542 Anchorage, AK 99519-6660 Phone: 907-787-8700 Fax: 907-787-8240

Thomas Barrett, Pres.

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

Ron Moore, Alaska Sales Manager

American Marine International 6000 A St. Anchorage, AK 99518 Phone: 907-562-5420 Fax: 907-562-5426

Tom Ulrich, VP

Analytica Group 4307 Arctic Blvd.

Anchorage, AK 99503 Phone: 907-375-8977 Fax: 907-258-6634

Elizabeth Rensch, Business Dev. Mgr.

APICC 2600 Cordova St., Suite 105 Anchorage, AK 99503 Phone: 907-770-5250 Fax: 907-770-5251

Cari-Ann Ketterling, Manager

ARCADIS 880 H St., Suite 101 Anchorage, AK 99501 Phone: 907-276-8095 Fax: 907-276-8609

Roe Sturgulewski, AK Ops Leader

Arctic Branding & Apparel 501 Raspberry Rd. Anchorage, AK 99518 Phone: 907-868-3630 Fax: 907-771-9736

AK Estab. Empls.

AK Estab. Empls.

Services

Services

1979

5

More than 500 statewide businesses, organizations and individuals that derive their livelihood from providing products and services to Alaska's oil and gas and mining industries. Our membership currently employs more than 30,000 Alaskans.

1978

20

We are the number one supplier of FRC Apparel, to include our very own Korbana Protective Apparel, in Alaska and North Dakota. With a highly trained sales staff we make customer service and quality control our priorities.

2011

-

A progressive Unmanned Aerial Vehicles company that reduces risk and increases tools available to companies. Ice monitoring, 2D/3D mapping, inspect flare stack/pipeline leak detection, security patrols, real time data to command centers, and agriculture/wildlife/ marine mammal surveying.

1978

133

Alaska West Express provides truckload transportation throughout the United States and Canada, specializing in your shipment to and from Alaska, where we are the leader in transporting liquid- and dry-bulk products, hazardous and non-hazardous chemicals and petroleum products.

1971

175

Electrical & Telecommunications, Security, CCTV, Outside Line Construction, Oil Production Modules.

2002

2

GIS/mapping for oil & gas industry, spill response, environmental, land ownership, permitting, utility, programming, web services, ArcGIS Online, Google Earth Pro, mobile apps, app dev., software sales, training, CMMS, asset & facility mgmt. software, ESRI Business Partner & Adapx software resellers

2009

24

Construction services, design-build, bid-build, pre-manufactured modular buildings, preengineered metal buildings, and waste-water/envirovac modules.

2001

20

We provide industrial coatings for the oil and gas industries as well as tundra and portable road matting.

info@alaskaalliance.com alaskaalliance.com

info@alaskatextiles.com alaskatextiles.com

dougpatchin@alaskauvs.com

information@lynden.com lynden.com/awe

sbringmann@alcanelectric.com alcanelectric.com

gmorrison@alliedgis.com alliedgis.com

gstrike@alutiiq.com alutiiq.com

alutiiq.com 1970

800+ Alyeska Pipeline Service Company has operated the Trans Alaska Pipeline System since 1977, expected to deliver its 17 billionth barrel of oil in 2014. Focused on safe and flawless operations and sustainability, AlyeskaÕs employees are working to manage the challenges of declining throughput.

1984

150

Ocean freight forwarding, freight consolidation, full loads, temperature protected, bypass mail and air freight, specialized equipment, heavy haul, project logistics, intra-state trucking, Alcan express, barge, distribution, military shipments, household goods.

1973

45

American Marine International is a full service marine contractor providing international standard commercial diving, marine construction services,vessel support and operations throughout the oil and gas industry.

1991

20

Analytica is the largest state certified laboratory in Alaska, specializing in drinking water, wastewater and general water quality testing. Locations in Anchorage, Fairbanks, and Wasilla, Alaska. Analytica is a wholly owned subsidiary of The Aleut Corporation. www.aleutcorp.com.

1998

5

Workforce development and career pathways for Alaska's oil, gas and mining industries; North Slope Training Cooperative (HSE), Process Technology Degree program support, industry priority occupations report, and Teacher Industry Externships (TIE).

1994 (in Alaska)

30

ARCADIS is a leading global natural and built asset design and consultancy firm working in partnership with our clients to deliver exceptional and sustainable outcomes through the application of design, consultancy, engineering, project and construction management services.

Angela Cernich, CEO

2012

7

Fire Resistant Protective Apparel, Safety Incentive Awards, Work Wear, Promotional Products and Safety Products.

Arctic Controls Inc. 1120 E. Fifth Ave. Anchorage, AK 99501 Phone: 907-277-7555 Fax: 907-277-9295

Scott Allan Stewart, Pres.

1985

5

Arctic Controls Inc. is Alaska's leading expert in valves, flow meters, actuators, instrumentation, and process controls for commercial oil, gas, and water management.

Providing professional expertise for all commercial applications and can assist you with estimates and recommendations.

Arctic Foundations Inc. 5621 Arctic Blvd.

Anchorage, AK 99518 Phone: 907-562-2741 Fax: 907-562-0153

Edward Yarmak, Pres.

1972

17

Two-phase thermosyphons for long-term ground freezing - used for permafrost stabilization, frozen dams, containment, etc.

114

facebook.com/alyeskapipeline alyeska-pipe.com

youtube.com/americanfastfreight americanfast.com

alaska@amarinecorp.com amarinecorp.com

er@analyticagroup.com analyticagroup.com

apiccadmin@gmail.com apicc.org

cynthia.oistad@arcadis-us.com www.arcadis-us.com

customerservice@arcticcouriers.com arcticcontrols.com

info@arcticfoundations.com arcticfoundations.com

Alaska Business Monthly | May 2014

www.akbizmag.com

WE’RE NO STRANGERS TO ICE There’s a good reason why Thompson Metal Fab has assembled roughly one-third of the rigs currently operating on the North Slope.

We started over 75 years ago as a manufacturer of ice tongs used to carry blocks of frozen fuel to early refrigerators. As the years passed, American innovations would alter our lives and create the need for skilled manufacturers to keep up.

Cities grew, so we built bridges to connect communities. Then, as the need for goods increased, we built infrastructure for American factories, and then later built the hydroelectric dams to power them. Over time, our focus shifted to becoming the leader in the manufacturing of arctic drilling rigs and we became experts at low-temperature fabrication, ironically returning us to our roots in ice.

Our history informed our expertise, and today we have knowledge, size and logistical advantages that are difficult to find elsewhere. Our 374,000 sq. ft. indoor fabrication facility is fully-equipped with modern tooling, heavy handling capabilities, and skilled labor. We have an additional 15-acres for rig-up and commissioning that is adjacent to a maintained roll-on roll-off barge slip only 90-miles upriver from the Pacific Ocean. We’re the only API 4F (4F-0087) licensed fabricator on the West Coast with direct access to water.

Thus, we forge ahead, inspired by our vision to innovate, our ability to empower, and our commitment to a sturdier, uncompromising standard.

API LICENSE (4F-0087), ISO (9001:2008), AISC (ADVANCED BRIDGES, F, P1), ASME (SECTION VIII) | VETERAN OWNED SMALL BUSINESS

WE ARE THOMPSON METAL FAB, AND WE ARE FORGING THE FUTURE.

360-696-0811 TMFAB.COM

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

ARCTOS LLC 130 W. Int'l Airport Rd., Suite R Anchorage, AK 99518 Phone: 907-632-1006 Fax: 866-532-3915

Kirsten K. Ballard, CEO

ASRC Energy Services Inc. 3900 C St., Suite 701 Anchorage, AK 99503 Phone: 907-339-6200 Fax: 907-339-6212

Jeff Kinneeveauk, Pres./CEO

ATCO Structures & Logistics Ltd. 425 G St. Anchorage, AK 99501 Phone: 907-677-6983 Fax: 907-677-6984

Harry Wilmot, Pres./COO

Baker Hughes Inc. 795 E. 94th Ave. Anchorage, AK 99515 Phone: 907-267-3409 Fax: 907-267-3401

Peter Mathew, Dir. AK Geomarket

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

Gary Porter, Director of Operations

Beacon Occupational Health and Safety 800 Cordova St. Anchorage, AK 99501 Phone: 907-222-7612 Fax: 907-222-6976

Holly Hylen, Pres./CEO

Beaded Stream PO Box 190311 Anchorage, AK 99519-0311 Phone: 907-227-9421 Fax: 907-227-9421

Brian R. Shumaker, Owner/Dir. Eng.

Bering Marine 6441 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-248-7646 Fax: 907-245-1744

Rick Gray, Pres.

Black Gold Oilfield Services 615 Bidwill Ave., Suite 103 Fairbanks, AK 99701 Phone: 907-374-9300 Fax: 888-481-2898

Chris Huffman, CEO

Bristol Engineering Services Corporation 111 W. 16th Ave., Third Floor Anchorage, AK 99501 Phone: 800-563-0013 Fax: 907-563-6713

Traviw Woods, Pres./CEO

Bristol Fuel Systems, LLC 111 W. 16th Avenue, Third Floor Anchorage, AK 99501 Phone: 800-563-0013 Fax: 907-563-6713

Ed Znoj, Fuels Division Manager

Bristow Alaska Inc 1915 Donald Ave. Fairbanks, AK 99701 Phone: 907-452-1197 Fax: 907-452-4539

Danny Holder

Brooks Range Supply Inc. Pouch 340008 Prudhoe Bay, AK 99734 Phone: 907-659-2550 Fax: 907-659-2650

Eric Helzer, Pres./CEO

C2 North LLC 4141 B St., Suite 201 Anchorage, AK 99503 Phone: 907-569-9122 Fax: 603-388-0793

Melanie Roller, Owner/Principal

Canadian Mat Systems (Alaska) Inc. 831 Gambell St. Anchorage , AK 99501 Phone: 907-272-5766

Wadeen Hepworth, AK Sales Mgr.

Canrig Drilling Technology Ltd. 301 E. 92nd Ave. Anchorage, AK 99515 Phone: 907-561-2465 Fax: 907-561-2474

Jim Carson, Alaska District Mgr.

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

James Armstrong, Pres.

116

AK Estab. Empls.

AK Estab. Empls.

2007

10

info@arctosak.com arctosak.com 1985

info@asrcenergy.com asrcenergy.com

Services

Services ARCTOS specializes in ODPCP "C" Plans, full range spill prevention and response planning services, response management and support, project permitting, compliance assistance with state and federal oil pollution regulations. Project engineering, API certified tank, piping and AWS welding inspections, HSE and waste management plans.

3305 AES offers expertise from the earliest regulatory stage to exploration, drilling support, engineering, fabrication, construction, project management, operations and maintenance and field abandonment.

1947

2

ATCO Structures & Logistics offers complete infrastructure solutions to customers worldwide, including remote work force housing, portable offices and trailers, innovative modular facilities, construction, site support services, operations support, catering and noise reduction technologies.

1910

260

An international engineering firm, delivering technical solutions to the oil industry for over 100 years. Reservoir services to drill bits, directional drilling, pumping services and completion equipment.

1993

12

Single and multi-engine; 19 passenger, cargo and fuel delivery; VFR and IFR capable; turbine fleet for reliability; off-airport and arctic operations; Flight safety trained crews; services on wheels, floats and skis; aerial scientific platforms; 100NM+ off shore survey capability.

1999

250

On-site medical staffing, safety staffing, full service third party administration drug and alcohol testing, occupational medicine, and work related injury and illness management.

2004

4

Through the manufacture and installation of patented multi-point Temperature Acquisition Cables and satellite data loggers, BeadedStream LLC monitors and profiles ground, snow, air, and water temperature data in real-time via the web.

1985

30

Bering Marine Corporation provides highly specialized, contracted marine services to reach water-locked villages and other remote Alaska locations. Bering Marine gets building materials, equipment and gravel to some of Alaska's most isolated spots.

2009

20

Black Gold Oilfield Services is a full-service provider of turn-key workforce housing in remote areas and extreme weather conditions. With years of experience, we coordinate every aspect of your facility, from concept design and setup, to management and catering.

1994

18

Civil engineering, permitting and planning; total project management encompassing planning, design and construction. facebook.com/BristolAllianceOfCompanies

2010

5

Bristol Fuel Systems, LLC, serves the oil and gas markets with design, construction, and testing of bulk fuel facilities, as well as piping/pipeline and fuel systems, with a special emphasis on military aircraft fuel systems. facebook.com/BristolAllianceOfCompanies

1977

72

Helicopter contract and charter transportation services.

1982

40+

Diverse range of automotive and heavy equipment parts, industrial and hydraulic hose, hardware, welding equipment, safety and MRO supplies, propane refilling, oil spill materials, lubricants, WSB fuel and oil enhancement products, hand and power tools, NAPA, True Value, VIPAR, IWDC Welding.

2001

2

Small business certifications with an emphasis on Alaska Native corporations. Project management, technical writing and business solutions for the oil and gas industry.

2002

1

Internationally advanced rig mat and environmentally safe Permazyme soil stabilization solutions. Rig matting; wood/steel, interlocking, composite, plastic. Composite bridges and marine products. Design, Build, Deliver. We welcome challenges.

1989

12

Canrig provides capital equipment sales, services and rentals and enterprise solutions to the upstream oil and gas industry.

1980

550

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

atco@atcosl.com atcosl.com

www.bakerhughes.com

coordinator@baldmountainair.com www.baldmountainair.com

mhylen@beaconohss.com beaconohss.com

contact@beadedstream.com beadedstream.com

information@lynden.com bmc.lynden.com

facebook.com/blackgoldlodging blackgoldlodging.com

www.bristol-companies.com

www.bristol-companies.com

dave.scarbrough@bristowgroup.com bristowgroup.com

manager@brooksrangesupply.com brooksrangesupply.com

mroller@c2north.com c2north.com

whepworth@matsystems.ca matsystems.ca

canrig.com

pspittler@carlile.biz carlile.biz

Alaska Business Monthly | May 2014

www.akbizmag.com

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

CCI Industrial Services, LLC 560 E. 34th Ave., Suite 200 Anchorage, AK 99503-4161 Phone: 907-258-5755 Fax: 907-770-9452

A. Ben Schoffmann, Pres./CEO

CH2M HILL 949 E. 36th Ave., Suite 500 Anchorage, AK 99508 Phone: 907-762-1500 Fax: 907-762-1600

Terry Bailey, Sr. VP AK Reg Mgr

Chugach Alaska Corporation 3800 Centerpoint Dr., Suite 700 Anchorage, AK 99503-4396 Phone: 907-563-8866 Fax: 907-563-8402

Gabriel Kompkoff, CEO

Colville Inc. Pouch 340012 Prudhoe Bay, AK 99734 Phone: 907-659-3198 Fax: 907-659-3190

Eric Helzer, Pres./CEO

CONAM Construction Co. 301 W. Northern Lights Blvd., Suite 300 Anchorage, AK 99503 Phone: 907-278-6600 Fax: 907-278-4401

Dale Kissee, Pres.

Construction Machinery Industrial 5400 Homer Dr. Anchorage, AK 99518 Phone: 907-563-3822 Fax: 907-563-1381

Ken Gerondale, Pres./CEO

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

Bob Cox, VP

Craig Taylor Equipment 733 E. Whitney Rd. Anchorage, AK 99501 Phone: 907-276-5050 Fax: 907-276-0889

Lonnie G Parker, Pres/CEO

Crowley Solutions 201 Arctic Slope Ave. Anchorage, AK 99518 Phone: 907-777-5505 Fax: 907-777-5550

Bruce Harland, VP

Cruz Construction 7000 E. Palmer Wasilla Hwy. Palmer , AK 99645 Phone: 907-746-3144 Fax: 907-746-5557

Dave Cruz, Pres.

Cruz Marine LLC 7000 E. Palmer-Wasilla Hwy. Palmer, AK 99645 Phone: 907-746-3144 Fax: 907-746-5557

Kevin JT Weiss, General Manager

Cummins Northwest LLC 2618 Commercial Dr. Anchorage, AK 99501 Phone: 907-279-7594 Fax: 907-276-6340

Jeff Pereira, Operations Manager

Deadhorse Aviation Center PO Box 34006 Prudhoe Bay, AK 99734 Phone: 907-685-1700 Fax: 907-685-1798

Sherron Perry, Pres.

Delta Leasing LLC 8101 Dimond Hook Dr. Anchorage, AK 99507 Phone: 907-771-1300 Fax: 907-771-1380

Rudi von Imhof, Pres.

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

Kirk Payne, President

Denali Drilling 8240 Petersburg St. Anchorage, AK 99507 Phone: 907-562-2312 Fax: 907-562-5971

Ron Pichler, Pres.

DHL Global Forwarding 2000 W. Int'l Airport Rd. Anchorage, AK 99502 Phone: 907-243-4301 Fax: 907-677-0900

John Witte, Reg. Mgr.

118

AK Estab. Empls.

AK Estab. Empls.

1989

250

info@cciindustrial.com cciindustrial.com 1946

bclemenz@ch2m.com ch2m.com/alaska

Services

Services Corrosion-under-insulation refurbishment; asbestos and lead surveys and abatement; specialty coatings; sandblasting; tank and vessel cleaning; fire proofing; demolition and hazardous waste removal; operations, maintenance and construction; oil spill response; heat treat services.

2,456 Premier Alaskan oil & gas contractor; offering consulting, engineering, procurement, logistics, fabrication, construction, construction management, operations and maintenance service all under one roof; supporting oil & gas, mining, environmental, water, power, transportation and government.

1972

500

Chugach provides wide-ranging services for federal, municipal and commercial clients including facilities management and maintenance, construction and engineering, technical and information technology, education and oil and gas services.

1981

200

Colville's group of oilfield companies provide a full compliment of Arctic Logistics capabilities. Our services include fuel, aviation, waste management, transport, industrial supply and camp services.

1984

100

General construction contractor specializing in design and construction of oil and gas facilities and pipelines, mining facilities, water and sewer facilities, and other remote infrastructure projects.

1985

105

Construction and mining equipment sales, rentals, service, and parts.

1892

285

CPD operates fuel terminals in 22 locations in the Railbelt, western AK and now SE AK, providing home heating oil, jet fuel, diesel, gasoline and propane. Our fuel barges make direct deliveries to over 200 western Alaska communities. Crowley proudly celebrates 60 years of service to Alaska.

1954

57

Factory authorized dealer for: Komatsu construction and mining, Bobcat loaders and excavators, John Deere commercial and lawn tractors, Dynapac compaction rollers, Fecom land clearing attachments and carriers. Providing sales, parts and service.

1892

500

Crowley Solutions was formed in 2010 to provide increased support services to the oil and gas industry including turnkey project management solutions, ocean towing, heavy lift transportation services, spill response services, tanker escort and docking services in Valdez.

1990

192

Specializing in heavy civil construction and remote work locations throughout the state of Alaska. Oilfield support services and support, ice roads, ice pads, transportation and rig support.

2008

20

Shallow draft marine support for heavy civil and oil field services in based in Cook Inlet with services extending to the western and arctic coast of Alaska. Eco friendly tugs and ramp barges that have double hull fuel tanks and hospital grade silencers.

1969

30

Solutions for your power needs. Sales and service for Cummins engines and generators, also an extensive parts inventory for Cummins engines and generators. Selling and servicing generators for your business, home, RV or camp.

1976

9

The DAC is Fairweather, LLC's multimodal aviation facility designed to meet the needs of onshore and offshore oil and gas development on the North Slope. The DAC has 2 large hangars, office space, terminal, full-service medical facility, bedrooms, and full dining facility.

2002

33

Specialized leasing of fleet trucks, SUVs, vans, & shuttle buses, as well as construction & mining equipment, oil & gas equipment. GM, Dodge & International warranty repair center. Alaskan-owned. Deadline driven. Results oriented. Anchorage/Kenai/Prudhoe Bay/Fairbanks/Remote Alaska.

1985

100

Fuel and lubricant distribution

1970

20

DDI provides geotechnical, environmental, mineral exploration, commercial water well and large diameter (8') shaft drilling. We also drill, install tie-backs and construct retaining walls. We have provided these services throughout Alaska since 1970.

Specialized equipment for onshore and offshore.

1970

10

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

communications@chugach.com chugach.com

info@colvilleinc.com colvilleinc.com

conamco.com

o.prestwick@cmiak.com cmiak.com

bob.cox@crowley.com cpdalaska.com

anc.sales@craigtaylorequipment.com craigtaylorequipment.com

crowley.com

info@cruzconstruct.com cruzconstruction.com

info@cruzmarine.com cruzmarine.com

www.cumminsnorthwest.com

deadhorseaviationcenter.com

info@deltaleasing.net deltaleasing.com

deltawestern.com

rpichler@ak.net or denali@ak.net denalidrilling.com

jane.treadway@dhl.com dhl-dgf.com

Alaska Business Monthly | May 2014

www.akbizmag.com

WHEN THE ROAD ENDS,

WE KEEP GOING Whether your project is across Alaska, North America or even beyond, Carlile has the expertise and equipment to deliver PO-to-project solutions that are seamless and reliable.

We’ll take care of the trucks, planes, ships and trains – so your cargo arrives on time and on budget.

ONE POINT OF CONTACT, A WORLD OF SOLUTIONS.

1-800-478-1853 | carlile.biz

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

Dowland-Bach Corporation PO Box 230126 Anchorage, AK 99523-0126 Phone: 907-562-5818 Fax: 907-562-5816

Reed B Christensen, Pres. Gen. Mgr.

Doyon Anvil 509 W. Third Ave. Anchorage, AK 99501 Phone: 907-276-2747 Fax: 907-279-4088

Werner Plagge, Gen. Mgr.

Doyon Universal Services LLC 11500 C St., Suite 100 Anchorage, AK 99515 Phone: 907-522-1300 Fax: 907-522-3531

Thomas (Bob) Kean, Pres.

Engineered Fire and Safety 3138 Commercial Dr. Anchorage, AK 99501 Phone: 907-274-7973 Fax: 907-274-6265

Matt Atkins, Gen. Mgr.

Equipment Source Inc. 1919 Van Horn Rd. Fairbanks, AK 99701 Phone: 888-868-9049 Fax: 907-458-7180

Troy Lockes, General Manager

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

Elliott Neal, Vice President - Alaska

ESS Labor Services 201 Post Rd Anchorage, AK 99501 Phone: 907-344-1207 Fax: 907-865-9850

Larry Weihs, COO

ESS Support Services Worldwide 201 Post Rd. Anchorage, AK 99501 Phone: 907-344-1207 Fax: 907-865-9850

Larry Weihs, COO

Fairweather LLC 9525 King St. Anchorage, AK 99515 Phone: 907-346-3247 Fax: 907-349-1920

Lori Davey, General Manager

Fircroft Inc. 2550 Denali St., Suite 1202 Anchorage, AK 99503 Phone: 907-569-8100 Fax: 907-569-8099

Sherill Lumba, Branch Mgr.

Foss Maritime Company 188 W Northern Lights Blvd, Ste 1020 Anchorage, AK 99503 Phone: 907-782-4950 Fax: 206-281-4702

Gary Faber, Pres., Global Svcs.

Foundex Pacific Inc. 2261 Cinnabar Lp. Anchorage, AK 99507 Phone: 907-522-8263 Fax: 907-522-8262

Howard J. Grey, Mgr.

Fugro 5761 Silverado Way, Suite O Anchorage, AK 99518 Phone: 907-561-3478 Fax: 907-561-5123

David Millar, Managing Director

GeoTek Alaska Inc. PO Box 11-1155 Anchorage, AK 99511-1155 Phone: 907-569-5900 Fax: 907-929-5762

Christopher Nettels, Pres.

GIS Oilfield 1800 W. 48th Ave., Suite G Anchorage, AK 99517 Phone: 907-265-3600 Fax: 907-265-3699

Mark Pregeant, President

Global Diving & Salvage Inc. 5304 Eielson St. Anchorage, AK 99518 Phone: 907-563-9060 Fax: 907-563-9061

Devon Grennan, CEO/Pres.

Global Services Inc. 1701 E. 84th Ave. Anchorage, AK 99507 Phone: 907-349-3342 Fax: 907-349-2015

Kurt Winkler, Pres.

120

AK Estab. Empls.

AK Estab. Empls.

Services

Services

1975

26

Wellhead Control Systems, NRTL Listed Industrial Control Panel Fabrication, Automation Services/Systems Integration, Stainless Steel Tubing, Pipe, Fittings, Flanges. Chemical Injection and Custom Stainless Steel fabrication.

1984

40

Full service consulting engineering for the Petro chemical industry.

1946

900

Operational support including catering, housekeeping, facility maintenance and security.

1986

19

Fire and gas detection and suppression system design, supply, installation and service.

Alaska's only representative of Detector Electronics, Kidde Fire Systems, Fenwal Protection Systems, Chemetron Fire Systems, EST/Edwards fire alarm, and Siemens fire alarm.

2000

36

We offer durable, Alaskan built industrial heaters, generator sets, triplex pumps, water pumps, trailers, enclosures, and more. Our manufactured products focus on supplying solutions for the oil, gas, and mining industries. We are also a proud Kubota Tractor dealer.

1948

130

Founded in Alaska in 1948, Era not only serves the oil and gas industry in Alaska, but provides services for geological surveys, university studies concerning global warming and wildlife impact, state and government business, executive charter services and flight-seeing tours.

1984

300

Full service camp operator: food service, housekeeping, janitorial, security, transportation, labor service.

1986

300

Restaurants, lounges and espresso operations. Catering services: small to large remote site facilities for short- or long-term projects, including offshore drilling platforms, employee staffing and leasing, in-flight services, governmental agency support services and Impressions Catering.

1976

140

Founded in 1976 by Sherron Perry, Fairweather offers a range of highly-specialized services to support remote oil & gas & mining operations. These services include remote medical & HSE support, meteorological & oceanographic forecasting, aviation & airstrip support & expediting & logistics services.

2009

50+

Fircroft is a leading provider of technical recruitment solutions to a number of specialist industries, active in over 30 countries worldwide. Our key sectors include: oil & gas, petrochemicals & process, automotive & aerospace, nuclear & power, mining & minerals and general engineering.

1889

24

Foss offers tug and barge support services, contract towing, offshore support, and oil development project support. We also partner with the energy services arm of the Arctic Slope Regional Corporation to assist with petroleum field production in the North Slope while safeguarding the environment.

1983

15

Provide geotechnical and environmental drilling services. Equipped for drilling with air and mud rotary, sonic, coring and auger tools. Some of our equipment is specially designed for helicopter support.

2005

10

Offshore: marine geophysics and seafloor mapping, metocean services and geotechnical investigations. Onshore: aerial and satellite mapping, precise positioning, geotechnical investigations, and regulatory and environmental assessments.

2002

25

We specialize in the acquisition of subsurface data for both the environmental and geotechnical professional communities. If your needs involve the characterization of the subsurface for either environmental assessments or geotechnical data acquisition, we provide drilling and geophysical services.

1948

160

GIS is a full service construction and fabrication company providing turnkey solutions for the resource development industries: Field Construction, O&M/TAR support; Fabricating of Industrial, & Blast Resistant Modules, Camps, Envirovacs, Offices Complexes & other Light Modules construction.

1979

23

Specialize in portable mixed gas and saturation diving with capabilities to 1,000 feet and provide a variety of underwater maintenance, repair, installations and inspections. Full project management services and engineering support for undertakings that require technical underwater services.

1982

25

Remote camps, industrial catering, and facilities management.

reed@dowlandbach.com dowlandbach.com

doyonanvil.com

doyonuniversal.com

matt.atkins@efs-fire.com efs-fire.com

equipmentsourceinc.com

pgargan@erahelicopters.com erahelicopters.com

mmcaleese@ess-worldwide.com www.essalaska.com

lweihs@ess-worldwide.com essalaska.com

fairweather.com

alaskaoffice@fircroft.com fircroft.com

info@foss.com www.foss.com

hgrey@foundex.com foundex.com

searl@fugro.comM fugro.com

ksmith@geotekalaska.com geotekalaska.com

www.gisy.com

info@gdiving.com gdiving.com

facebook.com/globalsrvc globalsrvc.com

Alaska Business Monthly | May 2014

www.akbizmag.com

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

Golder Associates Inc. 2121 Abbott Rd., Suite 100 Anchorage, AK 99507 Phone: 907-344-6001 Fax: 907-344-6011

Mitchells Richard, Mgr. AK Operations

Granite Construction Company 11471 Lang St. Anchorage, AK 99515 Phone: 907-344-2593 Fax: 907-344-1562

Derek Betts, VP/Region Mgr.

Great Northwest Inc. PO Box 74646 Fairbanks, AK 99707 Phone: 907-452-5617 Fax: 907-456-7779

John Minder, CEO

HaberVision 15710 W. Colfax Ave #204 Golden, CO 80401 Phone: 303-459-2220 Fax: 303-379-4742

Steve Haber, Chairman/Co-Founder

Halliburton Energy Services 6900 Arctic Blvd.

Anchorage, AK 99518 Phone: 907-275-2600 Fax: 907-275-2650

Robert McDaniel, AK Distr. Ops Mgr.

Hawk Consultants LLC 670 W. Fireweed Ln., Suite 201 Anchorage, AK 99503 Phone: 907-278-1877 Fax: 907-278-1877

Maynard Tapp, Managing Member

Hector's Welding Inc. 2473 Old Richardson Hwy. North Pole, AK 99705 Phone: 907-488-6432 Fax: 907-488-8385

Ken Therriault, VP/Gen. Mgr.

High Tide Exploration 2775 N. Hematite Dr. Wasilla, AK 99654 Phone: 907-354-3132 Fax: 907-354-3132

Chris Hoffman, Owner

AK Estab. Empls.

AK Estab. Empls.

Services Services

1980

44

Arctic and geotechnical engineering, groundwater resource development, environmental sciences and remedial investigation.

1922

60

Public and private heavy civil construction, design-build, construction aggregates, recycled base, warm and hot mix asphalt, road construction, bridges, piling, mine infrastructure and reclamation and sitework.

1976

250

Heavy highway civil contstruction, utilities, paving, landscaping

2005

10+

HaberVision is an innovative leader in Safety Eyewear. The first only patented UL Intrinsically Safe Auto No Fog Fan technology in our Safety Fan Goggles, and Splash Fan Goggles. Steve Haber, founder of Bolle and an Alaska resident, has returned to the eyewear industry with sunglasses and goggles.

1966

505

Halliburton offers a broad array of oilfield technologies and services to upstream oil and gas customers worldwide.

1985

100

Project management services for the Alaska oil and gas industry, primarily through staff augmentation services. We also provide technical consulting services during all phases of project delivery and serve clients in contract closeout, claims consulting, and dispute resolution services at project completion.

1956

6

Steel sales, iron fabrication: shear, brake, roll, Iron Worker and 10' X 24' plasma table.

Located at 701 Finel Drive in North Pole.

2010

1

We gather underwater video to depths of 1,000 ft using our Remotely Operated Vehicle throughout Alaska and locations worldwide. The ROV can be deployed quickly and can work from a variety of platforms. As biologists, we are well suited to describe underwater habitat or can team with engineers to assess underwater infrastructure.

golder.com

alaska.projects@gcinc.com graniteconstruction.com

info@grtnw.com www.grtnw.com

jani@habervision.com www.habervision.com

halliburton.com

davenorton@hawkpros.com hawkpros.com

hectors@acsalaska.net hectorswelding.com

chris@hightidealaska.com hightidealaska.com

An c h orage r y! e s r u N l a i c Comm e r

COME CHECK OUT OUR

Polar Supply stocks a wide range of specialty product lines including: deciduous and evergreen trees and shrubs, as well as plastic and metal commercial landscape edging.

We also sell bulk commercial grade grass seed, fertilizer, and lime.

ANCHORAGE 300 EAST 54TH AVENUE | 907.563.5000 SUMMER HOURS MON – FRI: 7:30AM TO 5:30 PM SAT: 8:00AM TO NOON | CLOSED SUNDAY

122

Alaska Business Monthly | May 2014

www.akbizmag.com

Company Company

Top Executive

Independent Lift Truck of Alaska 1200 E. 70th Ave. Anchorage, AK 99518 Phone: 907-344-3383 Fax: 907-344-8366

Wayne Dick, Pres.

Intertek Resource Solutions, Inc. 205 E. Benson Blvd., Suite 116 Anchorage, AK 99503 Phone: 907-337-1900 Fax: 907-337-1905

Drema Fitzhugh, Business Dev. Mgr.

Intertek Testing Service NA, Inc. 22887 NE Townsend Way Fairview, OR 97024 Phone: N/A Fax: 503-676-2350

Greg Tiemann, Exec. VP

Jacobs 4300 B St., Suite 600 Anchorage, AK 99503 Phone: 907-563-3322 Fax: 907-563-3320

Terry Heikkila, Dir. AK Ops

Judy Patrick Photography 511 W. 41st Ave., Suite 101 Anchorage, AK 99503 Phone: 907-258-4704 Fax: 907-258-4706

Judy Patrick, Owner

Kakivik Asset Management, LLC 560 E. 34th Ave., Suite 200 Anchorage, AK 99503-4161 Phone: 907-770-9400 Fax: 907-770-9450

A. Ben Schoffmann, Pres./CEO

LifeMed Alaska PO Box 190026 Anchorage, AK 99519-0026 Phone: 907-563-6633 Fax: 907-563-6636

Scott Kirby, CEO

Lifewater Engineering Company 1936 Donald Ave. Fairbanks, AK 99701 Phone: 907-458-7024 Fax: 907-458-7025

Bob Tsigonis, Pres./PE

AK Estab. Empls.

AK Estab. Empls.

1982

22

Authorized Dealers and repair centers for Advance floor care machines. CAT, Jungheinrich, Mitsubishi, Manitou, Maximal, Bendi and Skyjack forklifts; GEHL and Wacker Neuson construction equipment. Full parts, sales and service for most all makes and models of equipment.

1911

90+

Technical Staffing: contract staffing, permanent placement, assignment support.

Technical Inspection: recognition and accreditation, project life cycle and managed services, expediting, auditing and inspection. Consulting and Training. Oil, chemical and electrical testing and certification.

1896

5+

Third party testing laboratory for product safety testing of electrical, mechanical, building products, sanitation and wood or gas fired appliances. This includes the oil and gas industries and seafood processing plants throughout Alaska.

1947

70

Professional services provider to federal and energy clients. AK services include environmental permitting, compliance, investigation & remediation; energy conservation; logistics; upstream design; feasibility analysis & construction management.

1984

1

Creative photography for oil and gas, mining, construction and transportation industries in North America.

1999

200

Kakivik is a full service industrial asset integrity management company specializing in Nondestructive Testing (NDT), External and Internal Corrosion Investigations, Quality Program Management and Field Chemical and Corrosion Management including chemical laboratory and coupon/probe operations.

2008

101

Statewide air ambulance services with bases in Anchorage, Bethel, Fairbanks, Palmer and Soldotna. Anchorage-based ALS ground ambulance services. CAMTS Accredited.

1998

10

Sewage treatment plant and drinking water treatment plants, Commercial and Residential. Specializing in design, permitting, fabrication, training, and operation. Plants built to work in the most extreme environments and most remote places. Plastic tank fabrication.

barry.ilt@gci.net iltalaska.com

drema.fitzhugh@intertek.com intertek.com

wendell.whistler@intertek.com intertek.com

jacobs.com

judy@judypatrickphotography.com judypatrickphotography.com

info@kakivik.com kakivik.com

info@lifemedalaska.comC lifemedalaska.com

Bob@LifewaterEngineering.com LifewaterEngineering.com

Services Services

Where the road ends…

Our Work Begins

Our crews have decades of experience, and the skilled manpower to take on any task.

With our tundra-approved vehicles, we can get your drill rig and project materials to any remote location, and build ice pads and ice roads. And our range of logistics support – hauling fuel and freight – has been broadened with the addition of our new marine services division.

cruzconstruct.com

Main Office (907) 746-3144 North Slope (907) 659-2866

From start to finish, we are a partner who can deliver what you need.

Anywhere you need it. Any season of the year.

tundra transport • rig moves • rig support • remote camps • ice roads • ice pads • well site trailer units • marine services

www.akbizmag.com

May 2014 | Alaska Business Monthly

123

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

Little Red Services Inc. 3700 Center Point Dr., Suite 1300 Anchorage, AK 99503-5393 Phone: 907-349-2931 Fax: 907-349-2750

Douglas Smith, Pres./CEO

Lounsbury & Associates 5300 A St. Anchorage, AK 99518 Phone: 907-272-5451 Fax: 907-272-9065

Jim Sawhill, Pres.

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

Rick Zerkel, Pres.

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

David Richardson, Pres.

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

Alex McKallor, Pres.

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

Paul Grimaldi, Pres.

MagTec Alaska LLC 43385 Kenai Spur Hwy. Kenai, AK 99611 Phone: 907-394-6305 Fax: 907-335-6313

Ryan Andrew Peterkin, Pres.

Marsh Creek LLC 2000 E. 88th Ave. Anchorage, AK 99507 Phone: 907-258-0050 Fax: 907-279-5710

Mick McKay, CEO

124

AK Estab. Empls.

AK Estab. Empls.

Services Services

1983

100

Hot oil, fluid heating, and pumping services throughout Alaska.

1949

85

Civil engineering, land surveying, planning, construction management. Servicing local and state government, oil and gas industry and more.

1996

153

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

1980

53

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

1984

3

Arrangement of freight transportation, information management and logistical services.

1954

134

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

2008

70

Oilfield equipment rental and project support. Logistic service, North Slope camps, equipment sales and service. Generators 20KW to 2meg, heaters, trucks, vans and flatbeds. Based in Kenai with a camp and service center in Deadhorse.

2004

140

Energy systems, environmental, construction, telecommunications.

dsmith@lrs.ak.com littleredservices.com

k.ayers@lounsburyinc.com lounsburyinc.com

charters@lac.lynden.com lac.lynden.com

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

information@lynden.com lynden.com

trananccs@lynden.com lynden.com/ltia/

skeeter@magtecalaska.com magtecalaska.com

gina.heath@marshcreekllc.com marshcreekllc.com

Alaska Business Monthly | May 2014

www.akbizmag.com

Company Company

Top Executive

MFCP Jackovich 1716 N. Post Rd. Anchorage, AK 99501 Phone: 907-277-1406 Fax: 907-258-1700

Peter Grimes, VP

Michael Baker Jr. Inc. 3900 C St., Suite 900 Anchorage, AK 99503 Phone: 907-273-1600 Fax: 907-273-1699

Jeffrey Baker, AK Office Principal

Million Air Anchorage 6160 Carl Brady Dr. Anchorage, AK 99502 Phone: 907-550-8500 Fax: 907-550-8502

Elliott Nal, VP

Motion Industries Inc. (Anchorage) 611 E. Int'l Airport Rd. Anchorage, AK 99518 Phone: 907-563-5565 Fax: 907-563-5536

Matt Bailey, Anch. Branch Mgr.

Motion Industries Inc. (Fairbanks) 1895 Van Horn Rd., Unit A Fairbanks, AK 99701 Phone: 907-452-4488 Fax: 907-456-8840

Brad Deweese, Fairbanks Branch Mgr.

MWH 1835 S. Bragaw St., Suite 350 Anchorage, AK 99508 Phone: 907-248-8883 Fax: 907-248-8884

Chris Brown, Alaska Reg. Mgr.

N C Machinery 6450 Arctic Blvd.

Anchorage, AK 99518 Phone: 907-786-7500 Fax: 907-786-7580

John J. Harnish, Pres./CEO

NANA WorleyParsons PO Box 111100 Anchorage, AK 99511 Phone: 907-273-3900 Fax: 907-273-3990

Rock Hengen, Pres./Gen. Mgr.

AK Estab. Empls.

AK Estab. Empls.

Services Services

1960

47

Serving Alaska for 47 years, we offer products and services to the mining, petroleum, and construction industries in Fairbanks and Anchorage. MFCP Jackovich provides Parker Hannifin fluid power components and all other types of industrial and hydraulic hoses, fittings, and accessories.

1942

60

Engineering-pipeline, H&H, geotechnical, mechanical, civil, structural; GIS and LiDAR mapping; design; NEPA and permitting.

1979

50

WeÕre AlaskaÕs 24 hour, full service FBO with fuel, aircraft support, crew resting facilities and business services.

2007

8

A leading distributor of industrial maintenance, repair and operation (MRO) replacement parts (over 5.2 million parts), including bearings, power transmission, hydraulic/ pneumatic components, linear, hydraulic/industrial hose, industrial and safety supplies, seals, process pumps & material handling.

1970

4

A leading distributor of industrial maintenance, repair and operations (MRO) replacement parts (over 5.2 million parts), including bearings, power transmission, hydraulic/pneumatic components, linear, hydraulic/indus. hose, indus. & safety supplies, process pumps, seals & material handling

1977

30

Water, wastewater, environmental remediation, permitting and power.

1926

273

Cat machine sales, parts, service, and rental. Cat engines for marine, power generation, truck, petroleum, and industrial applications. Sales and rental of Cat and other preferred brands of rental equipment and construction supplies.

1997

500

A project delivery company focused on multi-discipline engineering and desgin, procurement and construction management services for the Hydrocarbons, Power, Minerals & Metals, and Infrastructure & Environment industries.

Pgrimes@mfcpinc.com jackovich.com

mbakercorp.com

tmichaud@millionair.com millionair.com/FBO/anc.aspx

mksupport@motion-ind.com motionindustries.com

mksupport@motion-ind.com motionindustries.com

chris.brown@mwhglobal.com mwhglobal.com

sfield@ncmachinery.com ncmachinery.com

info@nanaworleyparsons.com nanaworleyparsons.com

Anchorage: 907.771.1300 Prudhoe Bay: 907.659.9056 www.deltaleasing.com

WE DO IT BETTER. Better Products. Better Service. Better Results.

From Alaska’s Premier Leasing Company. DELTA LEASING, LLC.

Fleet Trucks & SUV’s

www.akbizmag.com

Crew Transport Vehicles

Industrial Equipment

Aerial Equipment

Heavy Duty Oilfield Equipment

Specialty Equipment

May 2014 | Alaska Business Monthly

125

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

National Oilwell Varco 10330 Old Seward Hwy. Anchorage, AK 99515-2627 Phone: 907-522-3727 Fax: 907-522-3497

Lori White, Branch Manager

NORCON Inc. 949 E. 36th Ave., Suite 143 Anchorage, AK 99508 Phone: 907-349-0821 Fax: 907-275-6300

Jeff Doyle, VP

Nordic-Calista Services 219 E. Int'l Airport Rd., Suite 200 Anchorage, AK 99518 Phone: 907-561-7458 Fax: 907-563-8347

Noel Therrien, Ops. Mgr.

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

David W. Karp, President/CEO

Northern Land Use Research Alaska LLC 234 Front St. Fairbanks, AK 99701 Phone: 907-474-9684 Fax: 907-474-8370

Burr J. Neely, Gen. Mgr.

Northwest Fluid Systems Technologies 6160 Tuttle Pl. Anchorage, AK 99507 Phone: 907-563-5630 Fax: 907-563-4721

Brenton Burbank, Dir. AK Ops

Northwest Technical Services 4401 Business Park Blvd., Bldg. N-26 Anchorage, AK 99503 Phone: 907-562-1633 Fax: 907-562-5875

Mary E. Shields, Gen. Mgr.

Nu Flow AK 1301 E. 71st Ave. Anchorage, AK 99518 Phone: 907-677-2144 Fax: 907-677-2566

Joe Jaime, Pres.

126

AK Estab. Empls.

AK Estab. Empls.

Services Services

1955

28

Manufacture and distribution of oilfield parts and equipment. MRO supplies. Pipe, valves, and fittings. Various oilfield specialty items.

1974

136

NORCON is a full-service General Contractor with particular expertise in Mechanical construction. NORCON delivers high quality mechanical istallations work at Prudhoe Bay, AK, executing a variety of projects, including: Well Tie-Ins, critical shutdowns/ turnaround, and support facility construction.

1986

128

Workovers, completions, coiled tubing drilling, rotary drilling, remote camp leasing and catering services.

1956

340

Anchorage based Northern Air Cargo is AlaskaÕs largest all-cargo airline. From groceries and generators to medical supplies and lumber, customers across Alaska, including a wide array of industries such as oil & gas, mining, construction, and commercial fishing rely on NACÕs services.

1991

15+

National Historic Preservation Act Sec. 106 assessments; identification, evaluation, mitigation services-prehistoric/historic archaeology, historic architecture, cultural landscapes, and subsistence investigations; documents to satisfy NEPA and permitting requirements; reg compliance; consultation.

1965

8

Instrumentation and fluid system components. Authorized Swagelok Distributor for Alaska.

1980

60

"Connecting the right people to the right jobs" for Alaska businesses.

1987

10

Nu Flow installs blown-in epoxy coatings & pull-in-place structural liners to failing small diameter pipe systems & rehabilitates several types of potable, drain & mechanical pipe systems in residential or commercial buildings. Our patented & unique green repipe alternatives tech. saves time, hassle and money v. traditional pipe replacement.

Lori.white@nov.vom nov.com

Inquiries@NORCON.com norcon.com

info@nordic-calista.com www.nordic-calista.com

customercare@nac.aero www.nac.aero

nlur@northernlanduse.com northernlanduse.com

info@alaska.swagelok.com swagelok.com/Nwus.aspx

ddelgado@pdstech.com pdstech.com/nwts.php

nuflowak.com

Alaska Business Monthly | May 2014

www.akbizmag.com

Company Company

AK Estab. Empls.

AK Estab. Empls.

Top Executive

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

Jared Davis, Dir. AK Ops

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

Jared Davis, Dir. AK Ops

Offshore Systems Kenai (Nikiski) PO Box 8505 Nikiski, AK 99635 Phone: 907-776-5551 Fax: 907-776-8836

Jared Davis, Dir. AK Ops

Oil & Gas Supply Co. 6160 Tuttle Pl. Anchorage, AK 99507 Phone: 907-344-2512 Fax: 907-349-7433

Jackie Brunton, Pres.

Olgoonik Oilfield Services 3201 C St., Suite 700 Anchorage, AK 99503 Phone: 907-868-5112 Fax: 907-562-8751

Kevin Hand, President

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

Ed Fitzgerald, CEO

Pacific Environmental Corp. (PENCO) 6000 A St. Anchorage, AK 99518 Phone: 907-562-5420 Fax: 907-562-5426

Brent Porter, Alaska Reg. Mgr.

Paramount Supply Company 7928 King St. Anchorage, AK 99518 Phone: 907-349-0280 Fax: 907-349-0281

Jay Goold, Branch Mgr.

Services Services

1983

150

Dock facilities in Niksiki, Dutch Harbor, and Adak servicing the oil and fishing industries.

Services include dock space, warehousing, cold storage, stevedoring services, heavy equipment, and fuel.

1982

60

Since 1983, Offshore Systems, Inc. (OSI) has been the premiere fuel and dock facility in Western Alaska. 1,500 linear feet of dock space, around-the-clock stevedoring services, secure, dry warehousing and cold storage, and material handling equipment.

1982

32

Vessel support services to Cook Inlet Oil and Gas companies, full service dock facility, fuel, storage and material handling services.

1995

10

Premier Aeroquip hydraulic distributor. Fabricator of industrial and hydraulic hose assemblies. Sales and repair of hydraulic motors,pumps,valves and cylinders. Stocking Swagelok stainless tube, fittings and valves in Kenai warehouse.

2009

31

Exploration and Production Infrastructure; Marine, Air and Land Logistics; Environmental Science Studies; Camp and Facilities Operations; Heavy Equipment Operations; Downhole Tools; Drill Rig Consulting Services; HSE Personnel Placement; Remote Sensing Data Collection

1961

65

Consolidating On time deliver service Freight forwarding

1973

150

Pacific Environmental Corporation (PENCO) specializes in land and marine spill response, environmental cleanup and remediation, and marine vessel remediation.

PENCO's array of environmental services includes supplying teams of highly skilled spill response technicians for emergency response.

1982

5

Paramount Supply Company is an industrial wholesaler, founded in 1954 by John Hagen. Paramount quickly built its reputation with quality products and exceptional service. That tradition which literally began out of the trunk of the founders car, continues today. Now serving SE Alaska from Ketchikan.

offshoresystemsinc.com

offshoresystemsinc.com

offshoresystemsinc.com

jb2inc@oilandgassup.com

oilfield@olgoonik.com olgoonik.com

Info@pafak.com pafak.com

alaska@penco.org penco.org

jaygoold@paramountsupply.com paramountsupply.com

We support Alaska’s Oil and Gas Industry

Terminal and logistical support from Adak, Dutch Harbor and Nikiski • Warehouse • Staging • Cold Storage • Fuel Distribution • PSV, OSV, LC and RV Operations • Crane Services C • Heavy & Light Equipment www.akbizmag.com

We’re there when you need us.

Visit www.offshoresystemsinc.com/support 2410 E. 88th Avenue • Anchorage, AK 99507 • (907) 646-4680 May 2014 | Alaska Business Monthly

127

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

Peak Oilfield Service Co. LLC 2525 C St., Suite 201 Anchorage, AK 99503 Phone: 907-263-7000 Fax: 907-263-7070

Mike O'Connor, Pres.

Petro Marine Services 3201 C St., Suite 302 Anchorage, AK 99503 Phone: 907-562-5000 Fax: 907-273-8242

Kurt Lindsey, CEO

Petrotechnical Resources of Alaska LLC 3601 C St., Suite 1424 Anchorage, AK 99503 Phone: 907-272-1232 Fax: 907-272-1344

Tom Walsh, Managing Partner

PistenBully / Kassbohrer ATV 18460 SW 126th Pl. Tualatin, OR 97062 Phone: 503-783-1935 Fax: 503-783-1936

Dennis McGiboney, VP Sales/Mktng.

PND Engineers Inc. 1506 W. 36th Ave. Anchorage, AK 99503 Phone: 907-561-1011 Fax: 907-563-4220

John Pickering, Pres.

Price Gregory International 301 W. Northern Lights Blvd., Suite 300 Anchorage, AK 99503 Phone: 907-278-4400 Fax: 907-278-3255

Robert Stinson, Sr. VP

Professional Business Services Inc. 807 G St., Suite 200 Anchorage, AK 99501 Phone: 907-279-2679 Fax: 907-276-5758

Joan Stolle, Pres.

Puget Sound Pipe & Supply Co. 2120 Spar Ave. Anchorage, AK 99501 Phone: 907-277-7473 Fax: 907-277-9656

Scott English, Alaska Div. Mgr.

128

AK Estab. Empls.

AK Estab. Empls.

Services Services

1987

800

Oilfield contracting services.

1959

177

Serving the unique petroleum needs of a broad range of Alaskan industries, including fishing, home fuel sales, power generation, tourism, timber, transportation, construction, mining, and retail gasoline.

1997

85

Alaska's oil and gas consultants specializing in geoscience, engineering, project management, seismic and well data.

1969

4

Kassbohrer All Terrain Vehicles, Inc. / PistenBully tracked utility vehicles. Up to 490 horsepower. Ice road construction, snow removal, transport equipment, pull heavy sleds, personnel cabins, special use.

1979

88

General civil, structural, geotechnical, arctic, marine, and coastal engineering; survey; permitting; hydrology; metocean; quality assurance; inspection; among others.

1974

200

Pipeline, power, heavy industrial construction, EPC and consulting services.

Infrastructure construction services provider.

1978

50

Providing personnel for professional, technical, and administrative positions for oil and gas industry clients. Staffing services include temporary, temp-to-hire, and regular placement.

1984

34

Alaska's largest supplier of pipe, valves and fittings to Alaska oilfields. Two locations in Alaska: Anchorage and Kenai.

peak@peakalaska.com peakalaska.com

rogerb@harborent.com petromarineservices.com

info@petroak.com petroak.com

chales@pistenbullyusa.com pistenbullyusa.com

pndengineers.com

pricegregory.com

info@pbsjobs.com pbsjobs.com

senglish@pspipe.com pugetpipe.com

Alaska Business Monthly | May 2014

www.akbizmag.com

Company Company

Top Executive

Quality Equipment Sales & Services 11801 S. Gambell St. Anchorage, AK 99515 Phone: 907-349-6215 Fax: 907-349-2332

Ray Belanger, Pres.

Schlumberger Oilfield Services 2525 Gambell St., Suite 400 Anchorage, AK 99503 Phone: 907-273-1700 Fax: 907-561-8317

Christine Resler, GeoMarket Manager

Security Aviation 6121 S. Airpark Pl. Anchorage, AK 99502 Phone: 907-248-2677 Fax: 907-248-6911

Stephen "Joe" Kapper, Pres.

Seekins Ford Lincoln Inc. 1625 Seekins Ford Dr. Fairbanks, AK 99701 Phone: 907-459-4000 Fax: 907-459-4057

Ralph Seekins, Pres.

Shoreside Petroleum Inc. 6401 Lake Otis Pkwy.

Anchorage, AK 99507 Phone: 907-344-4571 Fax: 907-349-9814

Kurt Lindsey, Pres.

Siemens Industry Inc. 5333 Fairbanks St., Unit B Anchorage, AK 99518 Phone: 907-563-2242 Fax: 907-563-6139

Leverette Hoover, Gen. Mgr. AK

SLR International Corporation 2700 Gambell St., Suite 200 Anchorage, AK 99503 Phone: 907-222-1112 Fax: 907-222-1113

Brian G. Hoefler, AK Mgr.

Span Alaska Transportation Inc. PO Box 878 Auburn, WA 98071 Phone: 253-395-7726 Fax: 253-395-7986

Mike Landry, CEO

www.akbizmag.com

AK Estab. Empls.

AK Estab. Empls.

Services Services

1982

8

1956

900

Oilfield Services.

1985

25

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

1977

115

Automotive Services.

1981

105

Shoreside Petroleum is an Alaskan owned fuel and lubricants distributor marketing fuels, lubricants, and other petroleum related products in Southcentral Alaska & PWS with terminals in Anchorage, Wasilla, Cordova, Whittier and Seward. Shoreside also owns & operates the ÔEssential 1Õ brand.

1982

100

Energy Services Company (ESCO)/Total Building Integrator: to include Building Automation/Energy Management control systems, fire alarm, HVAC mechanical systems, security (card access, CCTV, intrusion, etc.), audio and video solutions and mass notification systems.

2000

81

Air permitting and measurements, acoustics, project permitting, environmental compliance, site investigation, remediation, risk assessment and oil spill contingency planning

1978

60

Freight transportation services to and from Alaska, less-than-truckload and truckload.

Steamship and barge service to Railbelt area of Alaska. Barge service to Juneau and Southeast Alaska. Overnight service from Anchorage to Fairbanks and the Kenai Peninsula.

quality@ak.net www.quessak.com

Truck Upfitter, Construction Equipment, Vehicle Mainenance, Highway Maintenance Equipment.

schlumberger.com

sales@securityaviaition.biz securityaviation.biz

sales@seekins.com seekins.com

info@shoresidepetroleum.com shoresidepetroleum.com

leverette.hoover@siemens.com siemens.com

bhoefler@slrconsulting.com slrconsulting.com

kathyL@spanalaska.com spanalaska.com

May 2014 | Alaska Business Monthly

129

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

Spill Shield Inc. 2000 W. International Airport Rd, #D-2 Anchorage, AK 99502 Phone: 907-561-6033 Fax: 907-561-4504

Ken Bauer, Ops & Sales Mgr.

Steigers Corporation 791 South Park Dr., Ste. 800 Littleton, CO 80120-5719 Phone: 800-935-6569 Fax: 303-500-3113

William D. Steigers, Chairman/CEO

StormGeo 5631 Silverado Way Anchorage, AK 99518 Phone: 907-782-4396 Fax: 907-782-4396

Joe Stacey, Vice President

Superior Machine & Welding Inc. 1745 Ship Ave. Anchorage, AK 99501 Phone: 907-278-3944 Fax: 907-277-4999

Jantina Lunsford, Pres.

Surveyors Exchange Co. 3630 Springer St. Anchorage, AK 99503 Phone: 907-561-6501 Fax: 907-561-6525

David Larry Wilmarth, Owner

Swagelok Northwest (US) 6160 Tuttle Place, Suite A Anchorage, AK 99507 Phone: 907-563-5630 Fax: 503-288-7919

Mike Butkovic, President

Swift Worldwide Resources 3111 Denali St., Suite 102 Anchorage, AK 99503 Phone: 907-222-4100 Fax: 907-222-4101

Heather Day, Regional Mgr.

Taiga Ventures 2700 S. Cushman St. Fairbanks, AK 99701 Phone: 907-452-6631 Fax: 907-451-8632

Mike Tolbert, Pres.

AK Estab. Empls.

AK Estab. Empls.

Services Services

1992

4

Supplier for Smart Ash, Oil Away, Drug Terminator and MediBurn incinerators.

Absorbents, water scrubbers, oil spill response kits, Super Sacks, harbor boom, MicroBlaze, and related oil spill cleanup and prevention products.

2004

1

Steigers Corporation is a full-service environmental consulting firm providing a wide range of services for industrial projects. We specialize in project development and in managing complex environmental and permitting programs.

1997

4

Weather forecasting, alerting, and site-specific monitoring for onshore and offshore assets.

1950

10

Full service machining shop and oilfield servicing company.

1969

15

Satellite phone and two-way radio specialists, auto-desk software, surveying instruments, sales, rentals and service.

2003

8

We are a high-end fluid system products and solutions provider. We offer energy management, industrial products and services, fluid system assemblies, training and rentals.

2009

167

We specialize in providing manpower for the global oil & gas industry. For more than 30 years, our proven process has matched qualified candidates with many of the world's largest oil & gas companies, including major & independent operators, oil & gas service companies, and EPC companies.

1979

20

Taiga Ventures provides remote camps and logistics services (expediting, resupply, catering, fuel systems, vehicle & equip. rentals) for exploration, drilling, mining, clean-up & disaster relief projects Statewide. Drill mud, PVC well pipe & supplies in stock. In Anchorage @ 351 92nd Ave, 245-3123

spillshield@ak.net spillshield.com

wdsteigers@steigers.com www.steigers.com

stormgeo.com

smwjal@acsalaska.net superiormachine.net

garza@tse-ak.com www.satellitephonesak.com

info@nwus.swagelok.com swagelok.com/nwus

SwiftWWR.com/Alaska

taiga@taigaventures.com taigaventures.com

Alaska’s Source for 2D Plotters & 3D Printers

• Architectural Modeling • GIS Land Printing • Product Protyping

907 E. Dowling Rd., Suite 30 Anchorage, AK 99518

(907) 563-7060 Email: Akprint@alaska.net www.alaskaprinterssupply.com 130

Alaska Business Monthly | May 2014

www.akbizmag.com

Company Company

Top Executive

Tanks-A-Lot Inc. PO Box 1036 Kenai, AK 99611 Phone: 907-283-0580 Fax: 985-385-1950

A.J. CANNATA, Pres./CEO

Taylor Fire Protection Services LLC 725 W. Wasair Dr. #1a Wasilla, AK 99654 Phone: 907-373-1760 Fax: 907-373-5760

Rick R Taylor, President

Tesoro Alaska Co. 1601 Tidewater Anchorage, AK 99501 Phone: 907-261-7221 Fax: 866-421-8306

James Tangaro, VP

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

Lee McKenzie, Pres./Owner

AK Estab. Empls.

AK Estab. Empls.

Services Services

2008

1

Tanks-A-Lot subscribes to a standard-BS 12079, which insures customers get high quality, well maintained lifting gear and containers which undergo periodic inspection.

This is what makes us world class. DOT tanks, cutting & freight boxes, cargo baskets, storage containers, drum & pallet racks.

2002

17

Taylor Fire Protection Services is a full service fire protection contractor. We supply, maintain, and inspects all facets of fire protection systems and equipment including Fire alarm, Sprinkler, Clean Agent suppression, Kitchen Hood suppression, Fire Extinguishers, and backflow prevention.

1969

550

Located on the Cook Inlet, 60 miles southwest of Anchorage, the 72,000 (bpd) Kenai Refinery has been producing gasoline and gasoline blendstocks, jet fuel, diesel fuel, heating oil and heavy fuel oils, propane and asphalt since 1969.

1969

45

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

TTT Environmental Instruments & Supplies Deborah Tompkins, Owner 4201 B St. Anchorage, AK 99503 info@tttenviro.com Phone: 907-770-9041 Fax: 907-770-9046 tttenviro.com

2003

10

Portable gas detection, health and safety monitoring, environmental equipment. Rentals, sales, service and supplies. Warranty center. Alaskan owned small business.

Tutka LLC (Anchorage) 620 E. Whitney Rd., Suite B Anchorage, AK 99501 Phone: 907-272-8010 Fax: 907-272-9005

Amie Sommer, Member

1999

40

WBE/DBE (SOA), EDWOSB/WOSB, HUBZone, CCR/ORCA registered. General Contractor, heavy civil construction, environmental cleanup and consulting, oil water separator maintenance, cleaning & repair.

Tutka LLC (Wasilla) 5825 E. Mayflower Ct., Suite B Wasilla, AK 99654 Phone: 907-357-2238 Fax: 907-357-2215

Amie Sommer, Member

1999

40

WBE/DBE (SOA), EDWOSB/WOSB, HUBZone, SAM/ORCA registered. General Contractor, heavy civil construction, environmental cleanup and consulting, oil water separator maintenance, cleaning & repair.

Udelhoven Oilfield System Service 184 E. 53rd Ave. Anchorage, AK 99518-1222 Phone: 907-344-1577 Fax: 907-344-5817

Jim Udelhoven, CEO

1970

679

Oilfield Services, Construction Management, Electrical & Mechanical Construction

www.akbizmag.com

tal.office@tanks-a-lotinc.com www.tanks-a-lotinc.com

rick@taylorfire.com www.taylorfire.com

tsocorp.com

sales@trailercraft.com www.trailercraft.com

amie@tutkallc.com tutkallc.com

amie@tutkallc.com tutkallc.com

rfrontdesk@udelhoven.com udelhoven.com

May 2014 | Alaska Business Monthly

131

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive

ALASKA BUSINESS MONTHLY’S 2014 OIL & GAS DIRECTORY

SERVICES, EQUIPMENT SUPPLIES Top&Executive Company Company

Top Executive

UMIAQ 6700 Arctic Spur Rd. Anchorage, AK 99518 Phone: 907-677-8220 Fax: 907-677-8286

Richard S. Reich, P.E. , Gen. Mgr.

Unitech of Alaska 7600 King St. Anchorage, AK 99518 Phone: 907-349-5142 Fax: 907-349-2733

Karl "Curly" Arndt, Sales

URS 700 G St., Suite 500 Anchorage, AK 99501 Phone: 907-562-3366 Fax: 907-562-1297

Joe Hegna, Alaska Operation Manager, Vice President

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

Adam Beck, President

Washington Crane & Hoist 651 E. 100th Ave., Unit B Anchorage, AK 99515 Phone: 907-336-6661 Fax: 907-336-6667

Mike Currie, VP

Waste Management of Alaska Inc. 1519 Ship Ave. Anchorage, AK 99501 Phone: 855-973-3949 Fax: 866-491-2008

Mike Holzschuh, Territory Mgr./N.Am.

West-Mark Fairbanks Service Center 3050 Van Horn Rd. Fairbanks, AK 99709 Phone: 907-451-8265 Fax: 907-451-8273

Grant Smith, CEO

Yukon Equipment, Inc. 2020 E. Third Ave. Anchorage, AK 99501 Phone: 800-478-1541 Fax: 907-258-0169

Roy J. Rank, President

AK Estab. Empls.

AK Estab. Empls.

Services

Services

1982

200

UMIAQ is a member of the Ukpeagvik Inupiat Corporation (UIC) family of companies.

UMIAQ services include resource development, design, architecture, engineering, regulatory planning, stakeholder relations, surveying, logistics, onshore/offshore spill response, Arctic science support, etc.

1985

6

Unitech of Alaska offers a wide range of environmental supplies, with extensive experience in oil spill response world-wide, a knowledgeable staff, prompt service and extensive product lines.

1904

175

URS Alaska is a team of over 175 engineers, scientists, planners, and support staff located primarily in offices in Anchorage and Fairbanks. URS provides Òarctic-smartÓ engineering & environmental services for the complete project life-cycle from permitting & design through production & closure.

1994

161

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

1975

7

Crane builders, crane design, new crane sales, new hoist sales, lifting equipment design and sales. Material handling solutions for industry, hoists, job cranes, work stations, chain falls, lever hoists, crane upgrades, crane maintenance, crane inspection, crane repair, hoist repair and crane parts.

1969

3

Hazardous and nonhazardous waste disposal, project management, complete logistical oversight, complete U.S. and Canadian manifesting, rail transportation, over-the-road transportation, marine transportation and turnkey remedial services.

2009

15

Liquid transportation tank trailer repair.

1945

45

Sales, service, parts, rental and lease equipment, including Case, Trail King, Elgin, Vactor, Oshkosh, Etnyre, Monroe, Trackless, Snow Dragon. Anchorage, Fairbanks and Wasilla locations. A subsidiary of Calista Corp.

info@uicumiaq.com uicumiaq.com

carndt@unitechofalaska.com unitechofalaska.com

urscorp.com/

info@akship.com vigoralaska

SDick@washingtoncrane.com washingtoncrane.com

mholzschuh@wm.com wm.com

wwalker@west-mark.com west-mark.com

info@yukoneq.com yukoneq.com

907.278.1877 132

Alaska Business Monthly | May 2014

www.akbizmag.com

INSIDE ALASKA BUSINESS

B

BSNC

ering Straits Native Corporation formed an Arctic Development Committee that will provide guidance on responsible Arctic development and other matters related to the increase in maritime activities through the Bering Strait.

The committee will focus on the creation of economic development opportunities for the region, as well as advocate for environmental, food, and energy security.

The Arctic Development Committee will discuss and make recommendations on development and other matters related to the increase in maritime activities through the Bering Strait, including but not limited to subsistence hunting and fishing efforts in the region, economic development opportunities that relate to expanding marine traffic, port and infrastructure development, and community safety.

T

UAF

he Board of Regents for the University of Alaska officially created the University of Alaska Fairbanks School of Natural Resources and Extension.

The new unit merges the UAF School of Natural Resources and Agricultural Sciences and the Cooperative Extension Service. The regents’ action comes after months of planning by UAF, which announced the proposed change in July 2013. The goal of the merger is to strengthen the research, teaching, and outreach missions of both units.

The UAF School of Natural Resources and Extension awards bachelor’s, master’s, and doctoral degrees. Faculty and students conduct research in natural resources management, forest sciences, agriculture, and geography, while Exten-

Compiled by Alaska Business Monthly Staff

sion agents provide practical outreach in the areas of agriculture, natural resources, economic development, energy, food safety and food preservation, health, families, and youth development.

First National Bank Alaska

A

branch of Alaska’s largest locally owned bank will open in a new building on the corner of Providence Drive and Piper Street in the U-Med district of Anchorage in late 2014. The 31st branch of First National will be a twostory building offering the convenience of three drive-up lanes, including a drive-up ATM and night drop. A staff of lending and deposit experts will focus on meeting the banking needs of Alaskans living and working in the area.

The bank will occupy a 6,300-squarefoot unit of the new building developed by Pfeffer Development, LLC, a multidisciplinary commercial real estate developer based in Anchorage. Criterion General, Inc. is the design-builder, and kpb architects is the design firm for the project.

C

CVRF

oastal Villages Region Fund (CVRF) recently promoted its oncall Community Service Representatives (CSR) to part-time employees, guaranteeing at least twenty hours of work a week. These part-time positions are adding at least $415,000 in salaries in CVRF’s member villages each year.

CVRF now has twenty-two full-time and twenty-three part-time CSRs supervised by four Community Service Managers to provide direct services and represent CVRF locally. In a region faced with the highest unemployment and

poverty rates in the nation and a high cost of living, CVRF is providing meaningful year-round and seasonal jobs in numbers second only to the Government—according to the State of Alaska’s Economic Trends October 2013 edition.

Alaska Pacifi c Bancshares, Inc.

S

hareholders approved the proposed merger of Alaska Pacific Bancshares, Inc., the parent company of Alaska Pacific Bank, with Northrim BanCorp, Inc. in March. In addition, Alaska Pacific Bancshares shareholders also approved, on an advisory basis, the compensation of certain executive officers of the company in connection with the merger. Completion of the transaction remains subject to the satisfaction of the remaining closing conditions contained in the merger agreement and regulatory approval.

Granite Construction

G

ranite Construction, Inc. has been awarded a $36 million road and bridge project by the Alaska Department of Transportation. Granite expects to book the project into backlog during the first quarter of 2014.

This multiphase infrastructure improvement project includes creating a new East-West corridor by extending Dowling Road within the Anchorage city limits as well as construction of a new bridge over the Alaska Railroad lines and Arctic Avenue. Scope of the work also includes soil stabilization improvements, retaining walls, 800,000 tons of imported gravel borrow, 230,000 cubic yards of excavation, utility improvements, two new signalized

Your Project, Our Responsibility.

24/7 Service Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

www.pacificpile.com I (907) 276-3878 276-3873 www.akbizmag.com

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services.

620B East Whitney Road I Anchorage, AK 99501 May 2014 | Alaska Business Monthly

133

INSIDE ALASKA BUSINESS intersections, multi-use pathways, and landscaping amenities. Construction is estimated to be complete by November 2015.

A

ABIP

laska Business and Insurance Professionals (ABIP) is a newly formed Alaska corporation with a mission statement to assist Alaska business owners in managing their businesses effectively.

The principal ally in this venture is Harbor America Specialty Brokerage LLC (HASB). Michael Hanuschak, president of HASB, is a Cover Holder at Lloyds of London and has more than forty-five years of insurance experience. Brandon Chenault, President of ABIP, was born and raised in Alaska and takes pride in the corporate motto of “Alaskans Serving Alaskans.”

ABIP works with clients to review existing coverage, for adequacy of current coverage, as well as any recommendations for additional coverage required for full protection. Additionally, ABIP use the professional employer organization business model to streamline operations.

These services include payroll, tax deposits/state and federal reporting, employment practices liability insurance, life insurance, counseling, and guidance on HR issues, as well as options to include workers compensation insurance coverage.

S

Nordstrom

eattle-based Nordstrom, Inc. will be opening a Nordstrom Rack at The Mall at Sears in Anchorage. The approximately thirty-five thousand-square-foot store is scheduled to open in fall 2015 in what is currently the north end of the existing Sears store. Sears will continue to serve as a primary mall anchor and will

Compiled by Alaska Business Monthly Staff

undergo a complete interior remodel, new storefront, and upgrade to its existing façade as a part of the comprehensive strategic plan for the property.

Nordstrom Rack is the off-price retail division of Nordstrom, Inc., offering customers a wide selection of on-trend apparel, accessories and shoes at an everyday savings of 30 to 70 percent off regular prices. The Rack carries merchandise from Nordstrom stores and Nordstrom.com, as well as specially-purchased items from many of the top brands sold at Nordstrom.

Florcraft Carpet One

F

lorcraft Carpet One has been acquired by Patrice Case of Fairbanks and Evan Hall and Aaron Lautaret of Anchorage, partners in BHAG LLC. With locations in Fairbanks and Anchorage, Florcraft has been an Alaska-owned family business since it was established in Fairbanks in 1962. In 1992, Florcraft became a member of the Carpet One CoOp, a partnership with over one thousand family-owned stores nationwide.

Patrice Case has served as Florcraft’s president for the past eight years. Case’s father, the late Robert Hanson, and his partner, Richard Wien, were the most recent owners of the company. Evan Hall has served as Florcraft’s vice president and Anchorage store manager since 2011.

Aaron Lautaret has been a long-time Florcraft customer throughout his twenty years in the construction and commercial property management industries.

S

KABATA

tate administration officials unveiled the updated financial plan for the Knik Arm Crossing project. Changes

were made to the plan when the state pursued a move from a P3 to a publically financed project. Financing includes one-third from bonds, one-third from National Highway System funds, and one-third from the federal TIFIA loan program. The Knik Arm Crossing Project is a National Highway System route, and federal funds for these routes are available to the state through the Statewide Transportation Improvement Program.

The new construction estimate is $782 million, or about $76 million above the last financial estimate developed in 2010. The Office of Budget and Management, in cooperation with KABATA, the Alaska Department of Transportation, and the Department of Revenue, developed an $894 million contingency budget for the financial plan, which includes the $782 million to construct the bridge. The contingency budget represents the cost of construction, inflation, overruns, and change orders.

A

Amphib-Alaska

mphib-Alaska announces its new Mark V Landing Craft. The unique vessel is designed to tackle transportation across a wide variety of surfaces, from hard land to snow, tundra, ice, rivers, lakes, and the sea. Dimensions are thirty-three feet in length and eleven feet in width. The unit is equipped with twin five hundred horsepower, eighteen-foot North American T 431 H Tractor Jets, and a three hundred kilowatt generator.

The tracks are hydraulically lifted clear out of the water. It will travel up to a thirty degree slope, and is engineered to drive thirty miles per hour on water and land.

Amphib-Alaska is an Alaska-based manufacturer of vessels designed to tackle both land and marine transporta-

Your Project, Our Responsibility. 24/7 Service

Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

www.pacificpile.com I (907) 276-3878 276-3873 134

Alaska Business Monthly | May 2014

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services.

620B East Whitney Road I Anchorage, AK 99501 www.akbizmag.com

INSIDE ALASKA BUSINESS tion in rugged environments. AmphibAlaska unites owner Stan Hewitt’s mechanical virtuosity and his knowledge of the challenges posed by untamed backcountry. His uniquely versatile vehicle is designed to conquer any course.

T

SEARHC

he SouthEast Alaska Regional Health Consortium (SEARHC) announced that SEARHC patients that require radiation as part of their cancer treatment will be able to remain close to home. Through a partnership with Southeast Radiation Oncology Center in Juneau, patients will no longer need to travel as far as Anchorage or Seattle to receive radiation, making treatment more convenient, more comfortable, and more cost effective.

While it is difficult to eliminate patients’ feelings surrounding a cancer diagnosis and some patients will still have to travel for treatment, being closer creates more opportunities for a connection to home, friends, and family.

Those things may relieve some of their anxiety and will go a long way toward the ability to focus on taking care of one’s self during treatment. SEARHC is grateful for the ability to offer patients such excellent care so close to home and looks forward to a long partnership with Southeast Radiation Oncology Center.

A

Alaska Dispatch

laska Dispatch Publishing LLC, the owner and publisher of Alaska Dispatch, has reached an agreement to purchase the Anchorage Daily News from The McClatchy Company.

Founded in 2008, Alaska Dispatch is an award-winning site at the forefront

Compiled by Alaska Business Monthly Staff

of the national movement toward independent online news. Alice Rogoff, a longtime supporter of journalism and a former chief financial officer of US News and World Report, became the majority owner of Alaska Dispatch LLC in 2009.

Since then, the operation has employed writers, editors, and a full-time sales staff. Rogoff is the publisher and chief executive while co-founder Tony Hopfinger is the executive editor and president.

The Anchorage Daily News, the largest newspaper in Alaska, has a long history of distinguished journalism, winning two Pulitzer Prizes for public service in 1976 and 1989.

The purchase price is $34 million, payable at closing, which is anticipated to occur in May. The transaction covers the Anchorage Daily News, their website adn.com, and the newspaper’s real property and operations in Anchorage. After the purchase is completed, the real estate assets of the Anchorage Daily News will be sold by Alaska Dispatch to a private local buyer. The Anchorage Daily News will continue operations as a tenant from its East Anchorage location.

T

ANSEP

he Alaska Native Science & Engineering Program (ANSEP) has received two large donations which will help the program achieve its goal of increasing the number of Alaska Natives who are prepared for and inspired to pursue a career path to leadership in science, technology, engineering, and mathematics fields. Both ExxonMobil Alaska and Udelhoven Oilfield System Services donated $200,000.

There are now more than more than 1,250 students, including middle school students, high school students, univer-

sity students, and alumni, all engaged in ANSEP. The students come from more than ninety-five different Alaska communities. At its current rate, there will be more than four thousand ANSEP students on track for science and engineering degrees by the year 2020.

The $400,000 donated by ExxonMobil Alaska and Udelhoven will be used to enable the successful continuation and growth of the program’s multiple components from middle school to college and even at the graduate level.

T

Alaska Zoo

he Alaska Zoo plans to expand its Polar Bear Exhibit. The project will create a premier habitat for polar bears to advance the scientific and behavioral knowledge of this species in Alaska. The $8 million Polar Bear Project will be built in two phases. Phase I is devoted to the Polar Bear Transition Center, a dedicated facility to care for polar bear cubs coming from the North Slope. Phase II focuses on the expanded natural substrate (yard) and water feature with an elevated public viewing area. The project is being designed by the Portico Group, an award winning architectural firm located in Seattle. Watterson Construction of Anchorage will be the general contractor on the project.

The new facility will increase the Alaska Zoo’s capacity to care for polar bear cubs.

For thirty-six years, the Alaska Zoo has cared for the polar bear cubs the US Fish & Wildlife Service has deemed needing rescue. Last year, the US Fish & Wildlife Service issued the Alaska Zoo a five year letter of authorization to serve as a standby facility for North Slope polar bear cubs in need of rescue—the only facility in the country to have this permit in place. 

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

www.pacificpile.com I (907) 276-3873 www.akbizmag.com

620B East Whitney Road I Anchorage, AK 99501 May 2014 | Alaska Business Monthly

135

RIGHT MOVES Alaska Business Monthly

Russ Slaten joins the Alaska Business Monthly team as the Associate Editor. As a well-traveled, born and raised Alaskan, he brings a perspective necessary in fulfilling the magazine’s goal of promoting business in the state by covering trends and issues that affect Alaska business. Slaten Slaten has more than seven years of professional communications experience, with a diverse background in broadcast radio and television, marketing, and print journalism. Slaten is a graduate of the University of Alaska Anchorage, Journalism and Public Communications program. With a knack for research, editing, and storytelling, he will be a great fit for Alaska Business Monthly.

Compiled by Alaska Business Monthly Staff Alquiza-Cordero specializes in assisting home buyers in the entire mortgage process, from application to closing.

Alaska Department of Commerce

Lori Wing-Heier joins the Department of Commerce, Community, and Economic Development as the newly appointed Director of the Division of Insurance. WingHeier will oversee the Division’s mission to regulate the insurance industry and to protect Alaskan consumers.

A certified Insurance Counselor and Certified Risk Manager, Wing-Heier’s experience spans the broker, carrier, and consumer side of the insurance industry.

Southcentral Alaska along with the Yukon Territory of Canada. Kurt takes the reins of the fifty-five-yearold Alaskan owned family business from his mother, Carol Lindsey, who became CEO after her husband Dale Lindsey’s passing in 2007. Kurt also owns Shoreside Petroleum, Inc., which has been in business since 1981.

Design Alaska

WHPacific, Inc.

Miller

Putnam

Holmes

Johnston

Carlile

Carlile Transportation Systems, Inc. has named Todd Allen as its new Vice President of Human Resources.

Allen is a seasoned professional with more than fifteen years of leadership experience providing human resource solutions and expertise to organizations in diverse industries. He has been involved with strategic restructuring, HR process transformation, and re-engineering of organizations. Allen has an undergraduate degree in Employee and Labor Relations from Southern Illinois UniversityEdwardsville. He holds a lifetime Senior Professional in Human Resources certification with the Society for Human Resource Management and is a certified compensation professional with World at Work.

Denali Alaskan Home Loans

Ever Alquiza-Cordero joins Denali Alaskan Home Loans as a Loan Originator.

Alquiza-Cordero joins a team of seven experienced loan originators located in Anchorage and the Mat-Su Valley and will be working at the main Denali Alaskan Home Loans office in Anchorage. Alquiza-Cordero Alquiza-Cordero has more than seventeen years in the financial industry. Prior to joining the Denali Alaskan Home Loans team, AlquizaCordero worked for Wells Fargo Home Mortgage.

Oliver

Cogger

WHPacific, Inc. adds James “Jim” Oliver, RG as Vice President of Water and Environment, who will lead this new department for the firm. Oliver will focus on furthering the strong reputation that WHPacific has developed within the municipal and public sectors and broaden capabilities in the energy market, particularly those in the oil and gas and mining sectors.

Additionally, Corinne Cogger joins WHPacific, Inc. as an Environmental Technician in the company’s Anchorage office. Cogger graduated from Humboldt State University in 2009 with a Bachelor of Arts in Geography. Cogger will be conducting site characterizations for WHPacific in Kotzebue.

Harbor Enterprises, Inc.

Harbor Enterprises, Inc. announces Kurt R. Lindsey as its new President and CEO. Harbor operates under the trade names of Petro Marine Services, Alaska Oil Sales, and Nor th 6 0 Petro. The company markets and distributes petroleum products in Southeast and

Lindsey

Architectural and engineering firm Design Alaska announces organizational changes within the company.

Chris Miller was appointed to President and Principal in Charge of Professional Services. Miller has worked for Design Alaska since 1996 and most recently held the position of Chief Mechanical Engineer. Miller is a licensed Mechanical Engineer, Fire Protection Engineer, and Control Systems Engineer and also holds certificates as a LEED AP and Commissioning Agent.

Jeff Putnam was appointed to Vice President and Principal in Charge of Business Development and Operations. Putnam is a licensed Civil Engineer and Project Management Professional. Putnam has seventeen years of civil engineering and project management experience; he joined Design Alaska in 2008 after having worked for the US Air Force as the Deputy Base Civil Engineer and Chief Engineer for Eielson AFB. Jennifer Holmes transitions to Mechanical Engineer Department Head. Holmes is a licensed Mechanical Engineer; she received her BS in Aeronautical and Mechanical Engineering from Rensselaer Polytechnic

SLED DOGS & SOFAS & MILK

OH MY!

WE’RE OFF TO RURAL ALASKA

136

Alaska Business Monthly | May 2014

www.akbizmag.com

RIGHT MOVES Institute in 2005. Holmes began working for Design Alaska in 2008 and has experience designing mechanical, ventilation, plumbing, utilidor, and fire protection systems.

Elizabeth Johnston was appointed to Electrical Engineering Department Head. Johnston received a Bachelor’s of Science in Electrical Engineering in 2006 and a Bachelor of Arts in Russian Studies in 2007 from the University of Alaska, Fairbanks. Johnston was selected by the Fairbanks Chapter of the Alaska Society of Professional Engineers as Young Engineer of the Year in 2013.

Office of Senator Murkowski

Senator Lisa Murkowski announces the addition of Deborah Vo to be her Rural Outreach Coordinator. In her new capacity, Vo will engage with rural Alaskans to assist them with the challenges facing them from a federal perspective and advise Senator Murkowski’s policy team in Vo Washington, DC. She graduated from Elms College in Chicopee, Massachusetts, and then received her MBA from Alaska Pacific University. She has over a decade of experience working for CDQ groups in the Lower Yukon and Kuskokwim and statewide experience with Alaska Inter-Tribal Council and the Alaska Native Health Board. Most recently, Vo managed rural projects for the Alaska Energy Authority.

Stoel Rives LLP

Stoel Rives LLP, a US business law firm, is pleased to announce that Kevin M. Cuddy has joined its Anchorage office as Of Counsel in the Litigation Group. Cuddy brings experience before state and federal courts in a wide array of general commercial litigation matters, ranging from Cuddy breach of contract and tort claims to environmental and oil and gas matters to complex insurance disputes. Before joining Stoel Rives, Cuddy was with Feldman Orlansky & Sanders in Anchorage and Ropes & Gray LLP in Boston. He is a graduate of Duke University School of Law and Bowdoin College.

Compiled by Alaska Business Monthly Staff KeyBank

Sathurin Ouannou has joined KeyBank in Alaska as Branch Manager of the Fairbanks East College Key Center branch. In his new role, he is responsible for day-to-day operations as well as providing financial services, including investments and mortgages, to both small business and con- Ouannou sumer clients. He brings to Key more than thirteen years of experience in financial services. Ouannou is a graduate of Northeastern University in Boston, Massachusetts. He and his wife, a captain in the United States Army, are the parents of two sons.

Moffatt & Nichol

Moffatt & Nichol is pleased to announce that Paul Wallis, PE, SE, MLSE, has joined its Anchorage office as a Senior Structural Engineer. With over sixteen years of experience with structural design and the analysis of new and existing building and non-building systems, he is well versed in Wallis high-seismic and high-wind design and analysis and Arctic, sub-Arctic, and Antarctic project engineering. A registered Professional Engineer and Structural Engineer, Wallis received his Bachelor of Science in Civil Engineering from the University of Alaska Fairbanks.

SIKU Construction

Rob Sorensen has joined SIKU Construction, LLC as Superintendent for the Facility Services Group in the Pacific Northwest office. SIKU’s Facility Services Group provides cost savings and added value to a wide range of clients by using proven facilities technology and Sorensen implementing best practices. Sorensen has more than twenty years construction and facilities experience, most recently with Jody Miller Construction of Tacoma, Washington.

R&M Engineers, Inc.

Mark Pusich, PE, was recognized by his peers as the 2013 Outstanding Engineer of the Year for the Juneau branch of the American Society of Civil Engineers at the annual Engineers Banquet. Pusich was selected for his outstanding civil engineering achievements and dedi- Pusich cation to the profession for the past twenty-eight years within the communities of Juneau and Southeast Alaska. Pusich was also recognized as being active in the community through youth coaching and various volunteer groups. Pusich is a firm principal and Vice President of R&M Engineering, Inc. in Juneau.

Davis Wright Tremaine LLP

Jason Hartz, an experienced environmental litigator, has joined the Anchorage office of Davis Wright Tremaine LLP. Hartz comes to the firm from the US Department of the Interior, where he served as an attorney for seven years, first in Washington, DC, with the Office of the Solicitor, and Hartz then in Anchorage, with the Office of the Regional Solicitor. Hartz received his BA in Political Science from Gonzaga University and his JD from the University of Oregon, School of Law.

Delta Leasing

Delta Leasing has named J o s h S c h o u te n V i c e President of Sales & Marketing. Schouten comes to Delta with nearly a decade of sales and heavy duty truck design experience, as well as print and web marketing experience.

Schouten will be responsible for overseeing all new Schouten business development, as well as refining and improving on what Delta has already built. 

W W W. N AC . A E R O • ( 8 0 0 ) 7 27 - 214 1 • www.akbizmag.com

May 2014 | Alaska Business Monthly

137

ALASKA THIS MONTH

By Tasha Anderson

trAveL

The Historic Silverbow Inn Juneau’s the Historic Silverbow Inn, which is also a restaurant and bakery, features a new wine bar.

Photo courtesy of the Historic Silverbow Inn

T

“

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Alaska Business Monthly | May 2014

here’s something for everyone at all times of day,” Jill Ramiel says of the Historic Silverbow Inn, which isn’t surprising since the Silverbow is a boutique hotel, restaurant, and bakery and has a newly constructed wine-bar in the lobby. Ramiel continues, “[There are] fresh-baked breakfasts— featuring the most authentic New York-style bagel you’ll find for four thousand miles—homemade soups and sandwiches for lunch, and happy hour at the wine bar with a small bites menu created by a Le Cordon Bleu-trained chef. And if you’re a hotel guest, you can relax in the rooftop hot tub looking at the stars.”

Guests would possibly be tempted, upon checking in, to never leave the hotel, if downtown Juneau and the surrounding area were any less beautiful.

But they would at least have good company. The owner/ hosts, Ramiel and husband Ken Alper, live in the building in an apartment on the roof of the bakery, supplying on-site, extensive knowledge of Juneau and Alaska. The couple fell in love with downtown Juneau during a summer visit.

“We bought a historical building with the idea of revitalizing it. The fact the building housed a bakery was sort of a happy accident,” Ramiel says, since she worked in bakeries, restaurants, and bars while putting herself through grad school.

By 2007, the couple had refurbished every part of the building except the lobby, renovating six rooms and adding five more rooms and a two thousand-square-foot building to the property.

This January the couple renovated the lobby by adding a wine bar. “So far, local feedback has been very positive,” Ramiel says. “Silverbow saw a need—in this case, a contemporary evening hangout for grown-ups—and is filling that need… one wine glass at a time.” silverbowbakery.com silverbowinn.com  www.akbizmag.com

ALASKA THIS MONTH

By Tasha Anderson

entertAinMent Courtesy of the Juneau Economic Development Council

Juneau Maritime Festival Fairbanks

Kenai

Skagway

Anchorage

Whittier Kodiak

Juneau

Sitka

Haines

Petersburg

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Two girls design and color their own captain’s hats at the 2013 Juneau Maritime Festival.

W

“

e expect over two thousand attendees and over sixty vendors and activities” at the Juneau Maritime Festival May 10, says Brian Holst, executive director of the Juneau Economic Development Council and member of the Festival Steering Committee. The purpose of the festival, which began in 2010, is “to celebrate Juneau’s maritime history, culture, and commerce, drawing together a diverse community whose heritage, recreation, and livelihood is centered on the sea.”

Some of the highlights of the festival include food, arts, crafts, and service vendors; filet demonstrations by local experts of salmon, halibut, and rockfish, including a filet contest; kids’ activities such as boat building, safety activities, and a sea creature touch-tank; traditional Tlingit canoes from Douglas Island will be present, as well as a traditional welcome ceremony; marinade and smoked salmon dip contests; vessel tours; other contests; and a Coast Guard helicopter fly-over “and maybe a water rescue!” Holst says.

New this year, on May 9, will be the first Port to Starboard progressive dinner, a fundraising event that “was dreamed up by some very dedicated and resourceful individuals who did not want to see the festival scaled back due to funding concerns,” Holst says. He continues that it “promises to be an elegant dinner and exciting night of entertainment.” Tickets for both dinner and the after party—“drinks and entertainment upstairs at Rockwell,” Holst says—will most likely be available up to the event and can be purchased online.

“JEDC [Juneau Economic Development Council] recognizes that community events such as the Maritime Festival enrich the lives of our residents and help keep our town vibrant. The festival is planned specifically on a day with few cruise visitors to encourage Juneauites to get out and experience their downtown,” Holst says. juneaumaritimefestival.org 

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139

EVENTS CALENDAR

Compiled by Tasha Anderson

AnCHOrAGe 3

KOdiAK

“Railroad Days” Open House

A family favorite—train rides, railroad equipment on display, balloons, giveaways and gadgets, a prize drawing—all free. Anchorage Historic Depot, 11 a.m. to 3 p.m. alaskarailroad.com

3-4

Great Alaska Aviation Gathering

Premier event for flying enthusiasts and families and the state’s largest aviation tradeshow, almost 300 vendors and 70+ indoor and outdoor static aircraft displays. FedEx Maintenance Hangar on Postmark Drive. Saturday 9 a.m. to 5 p.m. and Sunday 10 a.m. to 5 p.m. greatalaskaaviationgathering.org

COrdOvA 8-11

Copper River Delta Shorebird Festival

This world-class birding event includes birding excursions, educational presentations, sightseeing, and art workshop led by Lars Jonsson, renowned Swedish painter and naturalist, who is also the Festival’s keynote speaker. Various times and locations. cordovachamber.com

FAirBAnKs 17

Fairbanks Aviation Day

This one-day event includes airport tours, mini-seminars, a pancake breakfast, free flights for youth ages 8-17, and a chance to take a tour “behind the scenes.” UAF Community & Technical College Aviation Hangar, 7 a.m. explorefairbanks.com

HOMer 8-11

Kachemak Bay Shorebird Festival

This four-day festival celebrates the return of migratory shorebirds and is filled with family friendly events all day. Events include a disc golf tournament, singer/songwriter Ruth Foster, a Rubber Ducky scavenger hunt, and “Brunch with Bill,” a brunch with keynote speaker Bill Thompson. Various locations and times. homeralaska.org

JUneAU 2-17

Juneau Jazz & Classics

This annual festival includes various jazz and classical musicians, open rehearsals, workshops, dances, free brown bag lunch concerts, and other musical events. Various times and locations.jazzandclassics.org

2-25

“Boeing Boeing”

Written in Mad Men-era 1960, this Tony award winning comedy follows the misadventures of Bernard, an American playboy living in Paris who has one Italian, one American, and one German flight attendant fiancée.

He juggles their “layovers” until Boeing’s new 707 jet shortens flight times and unscheduled arrivals put all three ladies in his apartment at the same time. Perseverance Theatre, 7:30 p.m. traveljuneau.com

KenAi 15-18

Kenai Birding Festival

The annual Kenai Birding Festival draws birders of all ages and abilities.

With a variety of low cost or free activities including kids’ activities, guided birding excursions, social events and not-to-be missed Kenai River float trip complete with local birding experts, there is something for every interest. Various locations and times. kenaibirdfest.com

KetCHiKAn 2

Celebration of the Sea Art Walk

Celebrate art and the start of a new season at the 14th Annual Sea Art Walk, enjoying new art pieces by local artists, music, refreshments, and fun. Various locations, 5 p.m. to 8 p.m. ketchikanarts.org

9-10

Ketchikan Theatre Ballet Spring Gala

Enjoy the artistic talents of the Ketchikan Theatre Ballet. There will be a special performance by the younger dancers at 2 p.m. on May 10. Kayhi Auditorium, 7:30 p.m. ketchikanarts.org 140

Alaska Business Monthly | May 2014

17

Chocolate Lover’s Fling and Art Auction

The first Fling in 2009 featured a halibut tail art auction and more chocolate than anyone really needs to eat. In 2012, the art auction featured humpy salmon fashioned into incredible art. Add music and wine and you have a winning combination at this adult date-night event. Harbor Convention Center. kodiak.org

22-27

Kodiak Crab Festival

Crab Festival, a Kodiak tradition for more than fifty years, celebrates the bounty of the sea, the end of winter, and the promise of sunshine.

Events include the Pillar Mountain Race, carnival rides, survival suit races, demonstrations by the Coast Guard rescue team, an art exhibit, bed race, moustache competition, arm wrestling contest, the blessing of the fleet, and Fisherman’s Memorial Service. Various locations and times. kodiak.org

PALMer 17

Operation Clean Sweep

This annual event in Palmer is an opportunity to volunteer to clean up trash that built up over the winter. Free lunch is served to all volunteers, and there will be prize drawings. Downtown Palmer Picnic/ Pavilion Area, all day. palmerchamber.org

PetersBUrG 15-16

Little Norway Festival

This festival celebrates the signing of Norway’s Constitution, US Armed Forces Day, the coming of spring, and the beginning of the fishing season.

Residents and visitors dress in Norwegian folk costumes and participate in a ping pong competition, art shows, live music, a softball tournament, herring toss, parade, and more. Various locations and times. petersburg.org

sitKA 5-17

Annual Quilt Show

This quilt show is organized by the Ocean Wave Quilt Guild and is now in its 31st year. A Mother’s Day Tea will be celebrated from Noon to 4 p.m. on Sunday, May 12. Harrigan Centennial Hall, various times. sitka.org

5/31-6/29

Sitka Music Festival

This is a nearly month-long celebration of music. Events include a kick-off “Wine & Music with Friends,” an evening of wine and tapas with the festival’s founder; evening concerts Friday and Saturday throughout June; a family concert and ice cream social; Alaska Crab Feed picnic, musical movie nights, and more. Various locations and times. sitkamusicfestival.org

sKAGWAY 9-10

Spring Stroll and Be a Tourist for a Day

Skagway merchants and tour operators open their doors for everyone to familiarize themselves with what’s being offered this visitor season.

Various locations and times. skagwaynews.com/attractions.html

vALdeZ 12

Ruthie Foster

This extraordinary singer/songwriter/performer tackles life’s big issues throughout songs on her new album. Foster repeatedly testifies to her core message: that through all the ups and downs of living, you must stay true to yourself. Valdez Civic Center, 7 p.m. valdezartscouncil.org

WAsiLLA 9-25

See How They Run

Find out what a former American actor, a vicar’s wife, a Russian spy, a Cockney maid, a visiting Bishop, and the town gossip doing in the vicarage of a small English town in this British comedy. Valley Performing Arts, Thursday 7 p.m.; Friday and Saturday 8 p.m.; Sunday 2 p.m. valleyperformingarts.org www.akbizmag.com

What’s Next June in Alaska Business Monthly

TRANSPORTATION

■Shipping News: Why there’s an uptick ■PLUS: Air Cargo, Rural Cargo, and more ■Annual Transportation & Shippers Directory

BUILDING ALASKA

■Buildings Roads: STIP Construction Projects ■Building Boats: Shipyards of Alaska

FEATURE ARTICLES

■Continuing Series: Urban Water & Wastewater ■Environmental Services: Remediating Buildings ■Financial Services: Non-Conventional Financing ■Fisheries: Commercial Fisheries ■Oil & Gas: Contingency Response Services ■Oil & Gas: Cook Inlet Overview

■Oil & Gas: Cook Inlet Energy ■Oil & Gas: Weather Factors ■Real Estate: Buying & Selling Commercial Real Estate ■Telecom & Tech: Remote Maritime Telecom ■Visitor Industry: Mid-Range Meeting Plans

DEPARTMENTS ■From the Editor ■View from the Top ■Legal Speak ■Agenda ■Right Moves ■Inside Alaska Business ■Alaska Trends ■Alaska This Month

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May 2014 | Alaska Business Monthly

141

ALASKA TRENDS

By Amy Miller

Alaska’s Interesting Relationship with Oil An inverse pattern between employment and production

25

EMPLOYMENT Oil & Gas Alaska Labor Force Alaska Unemployment Rate Alaska PETROLEUM Crude Oil Production—Alaska Natural Gas Field Production—Alaska ANS West Coast Average Spot Price Hughes Rig Count Alaska United States 142

1/2014

10/2013

7/2013

4/2013

1/2013

7/2012

10/2012

4/2012

1/2012

10/2011

7/2011

4/2011

1/2011

7/2010

10/2010

4/2010

7/2009

4/2009

1/2009

Indicator

1/2010

20

here is an interesting—and at times difficult to discern—re15 lationship between produc10 tion, prices, and employment in Alaska’s oil industry, as the charts 5 illustrate. While a five-year period is a relative blink of the eye when it 0 comes to identifying trends in an industry with as long of lead times as the oil industry, a glimpse of the larger picture is still visible here.

For example, in the last five years, there’s a perceptible decline in production, as most Alaskans have probably heard. Meanwhile, prices climbed from less than $40 per barrel to well over $100 during this time period and have been holding steady at around $100 per barrel since early 2011. But perhaps most interestingly, although production has declined, employment in Alaska’s oil and gas industry has increased. What does this mean?

While there are many complex factors, most likely price is the single biggest factor. When Alaska’s oil production was at its peak of more than 759 million barrels

10/2009

Millions of barrels

T

Crude Oil Production - Alaska, 2009-2014

in 1988, employment stood in the 8,000-jobs range. Yet at the time, the price of Alaska’s oil was just $13.51 per barrel. In 2013, with production at less than a third of 1988 levels (approximately 205 million barrels), employment was 14,100, and Alaska’s oil was fetching $107.63 per barrel. According to the Alaska Department of Labor and Workforce Development, another reason for the inverse pattern between employment and production is that Alaska’s aging fields require more and more labor to extract their reserves.

Interestingly, although Alaska produces 8 percent of

Units

Period

Latest Report Period

Previous Report Period (revised)

Thousands Thousands

January January

14.2 336.10

14.3 338.80

13.6 335.80

4.41% 0.09%

Thousands

January

362.24

360.57

361.21

0.29%

Percent

January

7.5

6.5

7.8

-3.85%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

January January January

16.79 8.13 103.82

16.92 8.12 108.19

17.01 9.40 109.88

-1.29% -13.51% -5.52%

Active Rigs Active Rigs

January January

11 1769

9 1771

9 1756

22.22% 0.74%

Alaska Business Monthly | May 2014

Year Ago Period

Year Over Year Change

www.akbizmag.com

ALASKA TRENDS

Employment in Alaska's Oil and Gas Industry, 2009-2014

In thousands of jobs

16 14 12 10 8 6 4 2

4/2013

7/2013

10/2013

1/2014

4/2013

7/2013

10/2013

1/2014

1/2013

7/2012

10/2012

4/2012

1/2012

7/2011

10/2011

4/2011

1/2011

10/2010

7/2010

4/2010

1/2010

7/2009

10/2009

4/2009

1/2009

0

ANS West Coast Average Spot Price 140 120

Price per barrel

the domestic oil supply in the United States, less than 3 percent of the domestic oil and gas employment is located here. Again, according to the Department of Labor, there are several reasons for that.

First, Alaska’s largest oil field, Prudhoe Bay, requires relatively low employment to function. Secondly, in other states, there are a variety of small, medium, and large fields with associated jobs, but in Alaska there are only large fields.

On a related note, other oil-producing states have more oil and gas establishments. If Alaska’s oil was not as remote and logistically difficult to extract, more of it would probably be developed; in effect, what might be worth developing in Louisiana or Oklahoma is not worth the effort and expense in Alaska.

Alaska also has fewer corporate jobs in the industry than in places like Texas. Finally, Alaska has fewer downstream operations and far less refining activity than in other states. 

By Amy Miller

100 80 60 40 20

1/2013

7/2012

10/2012

4/2012

1/2012

10/2011

7/2011

4/2011

1/2011

10/2010

7/2010

4/2010

1/2010

7/2009

10/2009

4/2009

Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

1/2009

0

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143

ALASKA TRENDS

Indicator

By Amy Miller

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Over Year Change

Year Ago Period

GENERAL Personal Income—Alaska US $ 3rdQ13 36,923 36,557 36,123 Personal Income—United States US $ 3rdQ13 14,180,492 14,032,587 13,683,809 Consumer Prices—Anchorage 1982-1984 = 100 2nd H13 213.91 210.85 206.61 Consumer Prices—United States 1982-1984 = 100 2nd H13 233.55 232.37 230.34 Bankruptcies Alaska Total Number Filed January 29 28 59 Anchorage Total Number Filed January 17 10 44 Fairbanks Total Number Filed January 3 2 8 EMPLOYMENT Alaska Thousands January 336.10 338.80 335.80 Anchorage & Mat-Su Thousands January 172.30 177.30 172.70 Fairbanks Thousands January 36.30 38.40 36.40 Southeast Thousands January 32.90 33.65 32.70 Gulf Coast Thousands January 30.00 30.05 28.10 Sectorial Distribution—Alaska Total Nonfarm Thousands January 317.3 320.8 314.3 Goods Producing Thousands January 43.6 40.4 40.3 Services Providing Thousands January 273.7 280.4 274.0 Mining and Logging Thousands January 17.0 17.4 16.4 Mining

Thousands January 16.9 17.2 16.3 Oil & Gas Thousands January 14.2 14.3 13.6 Construction Thousands January 14.4 15.3 12.8 Manufacturing Thousands January 12.2 7.7 11.1 Seafood Processing Thousands January 8.7 4.0 7.6 Trade/Transportation/Utilities Thousands January 60.5 62.4 60.1 Wholesale Trade Thousands January 6.3 6.3 6.4 Retail Trade Thousands January 35.1 36.2 34.3 Food & Beverage Stores Thousands January 6.2 6.3 5.9 General Merchandise Stores Thousands January 9.9 10.4 9.6 Trans/Warehouse/Utilities Thousands January 19.1 19.9 19.4 Air Transportation Thousands January 5.5 5.6 5.5 Information

Thousands January 6.2 6.2 6.0 Telecommunications Thousands January 4.1 4.1 4.0 Financial Activities Thousands January 11.8 11.9 11.8 Professional & Business Svcs Thousands January 28.2 28.6 28.6 Educational & Health Services Thousands January 47.1 47.5 46.5 Health Care Thousands January 33.6 33.7 33.2 Leisure & Hospitality Thousands January 28.5 29.3 28.4 Accommodation Thousands January 6.1 6.2 6.0 Food Svcs & Drinking Places Thousands January 18.5 19.0 18.6 Other Services Thousands January 11.4 11.2 11.4 Government

Thousands January 80.0 83.3 81.2 Federal Government Thousands January 14.5 14.9 15.4 State Government Thousands January 24.7 26.6 24.5 State Education Thousands January 6.6 8.6 6.6 Local Government Thousands January 40.8 41.8 41.3 Local Education Thousands January 22.9 23.8 23.7 Tribal Government Thousands January 3.6 3.7 3.4 Labor Force Alaska Thousands January 362.24 360.57 361.21 Anchorage & Mat-Su Thousands January 201.16 202.28 202.50 Fairbanks Thousands January 44.69 45.79 45.08 Southeast Thousands January 37.27 37.02 37.20 Gulf Coast Thousands January 39.90 38.45 37.98 Unemployment Rate Alaska Percent January 7.5 6.5 7.8 Anchorage & Mat-Su Percent January 6.1 5.2 6.3 Fairbanks Percent January 6.7 5.4 7.2 144

Alaska Business Monthly | May 2014

2.21% 3.63% 3.53% 1.39% -50.85% -61.36% -62.50%

0.09% -0.23% -0.27% 0.61% 6.76% 0.95% 8.19% -0.11% 3.66% 3.68% 4.41% 12.50% 9.91% 14.47% 0.67% -1.56% 2.33% 5.08% 3.13% -1.55% 0.00% 3.33% 2.50% 0.00% -1.40% 1.29% 1.20% 0.35% 1.67% -0.54% 0.00% -1.48% -5.84% 0.82% 0.00% -1.21% -3.38% 5.88% 0.29% -0.66% -0.87% 0.19% 5.06% -3.85% -3.17% -6.94% www.akbizmag.com

ALASKA TRENDS

Indicator

Southeast Gulf Coast United States

By Amy Miller

Units

Period

Latest Report Period

Percent Percent Percent

January January January

8.7 8.7 7

Previous Report Period (revised)

7.2 8.1 6.5

Year Ago Period

8.7 9.5 8.5

PETROLEUM/MINING Crude Oil Production—Alaska Millions of Barrels January 16.79 16.92 17.01 Natural Gas Field Production—Alaska Billions of Cubic Ft. January 8.13 8.12 9.40 ANS West Coast Average Spot Price $ per Barrel January 103.82 108.19 109.88 Hughes Rig Count Alaska Active Rigs January 11 9 9 United States Active Rigs January 1769 1771 1756 Gold Prices $ Per Troy Oz. January 1244.80 1225.40 1670.95 Silver Prices $ Per Troy Oz. January 19.91 19.61 31.11 Zinc Prices Per Pound January 2.04 0.95 1.02 REAL ESTATE Anchorage Building Permit Valuations Total Millions of $ January 45.28 41.78 31.46 Residential Millions of $ January 6.75 5.35 10.98 Commercial Millions of $ January 38.53 36.43 20.48 Deeds of Trust Recorded Anchorage--Recording District Total Deeds January 525 655 1195*Geo North Fairbanks--Recording District Total Deeds January 130 186 275

Year Over Year Change

0.00% -8.42% -17.65%

-1.29% -13.51% -5.52% 22.22% 0.74% -25.50% -36.00% 100.00%

43.93% -38.52% 88.13% -45.19% -52.73%

VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Thousands January 332.66 362.93 323.70 Total Air Passenger Traffic—Fairbanks Thousands January 70.6 77.18 66.68

2.77% 5.88%

ALASKA PERMANENT FUND Equity Millions of $ January 48,585.8 49,241.9 44,752.5 Assets Millions of $ January 49,180.6 49,882.4 45,895.6 Net Income Millions of $ January 204.0 357.9 178.3 Net Income—Year to Date Millions of $ January -725.4 408.8 1,028.9 Marketable Debt Securities Millions of $ January 72.9 -57.3 72.6 Real Estate Investments Millions of $ January 82.4 -10.5 103.8 Preferred and Common Stock Millions of $ January -857.4 276.0 859.8

8.57% 7.16% 14.41% -170.50% 0.41% -20.62% -199.72%

BANKING (excludes interstate branches) Total Bank Assets—Alaska Millions of $ 4thQ13 5,394.16 5,432.27 5,219.35 Cash & Balances Due Millions of $ 4thQ13 141.17 281.86 171.34 Securities Millions of $ 4thQ13 1,753.74 1,666.44 287.89 Net Loans and Leases Millions of $ 4thQ13 2,543.77 2,478.91 1,377.40 Other Real Estate Owned Millions of $ 4thQ13 17.58 17.22 21.17 Total Liabilities Millions of $ 4thQ13 4,656.83 4,697.47 4,482.37 Total Bank Deposits—Alaska Millions of $ 4thQ13 4,046.21 4,086.89 3,936.18 Noninterest-bearing deposits Millions of $ 4thQ13 1,623.39 1,693.48 1,558.47 Interest- bearing deposits Millions of $ 4thQ13 2,422.82 2,393.41 2,377.41

3.35% -17.61% 509.17% 84.68% -16.96% 3.89% 2.80% 4.17% 1.91%

FOREIGN TRADE Value of the Dollar In Japanese Yen Yen January 104.05 103.47 88.94 In Canadian Dollars Canadian $ January 1.09 1.06 0.99 In British Pounds Pounds January 0.61 0.61 0.63 In European Monetary Unit Euro January 0.73 0.73 0.75 In Chinese Yuan Yuan January 6.05 6.12 6.28

16.99% 9.89% -2.48% -3.07% -3.68%

Notes: 1. Source of Anchorage Deeds of trust (GeoNorth) is cited in the data field.

2. 4th Qtr. banking data is not available at this time.

3. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska www.akbizmag.com

May 2014 | Alaska Business Monthly

145

Advertisers Index aeSolutions.......................................................................71 Alaska Aviation Heritage Museum...............138 Alaska Dreams Inc..................................................128 Alaska Mental Health Trust . ...............................11 Alaska Photobooth Co..........................................141 Alaska Printer’s Supply........................................130 Alaska Rubber . .........................................................103 Alaska USA Federal Credit Union.................147 Alaska USA Insurance Brokers..........................29 Alyeska Pipeline Service Co. . .........................105 American Fast Freight..............................................51 American Marine/PENCO..................................143 Anchorage Sand & Gravel.....................................59 Arctic Branding & Apparel................................... 75 Arctic Controls.............................................................79 Arctic Office Products (Machines).................65 AT&T ......................................................................................9 Avis.....................................................................................139 BDO......................................................................................17 Beacon OHSS................................................................38 Bering Air.......................................................................138 Bering Shai Rock & Gravel . ................................. 55 Black Gold Oilfield Services . ............................111 BP Exploration (Alaska)..........................................23 Brand Energy & Infrastructure.........................87 Calista Corp....................................................................99 Carlile Transportation Systems......................119

146

CCI Industrial................................................................. 73 Chris Arend Photography..................................146 Construction Machinery Industrial LLC...........................................................2 Cruz Construction Inc...........................................123 Delta Leasing LLC.....................................................125 Delta Western............................................................107 Dino’s Donuts Inc.....................................................141 Donlin Gold.................................................................104 Dowland-Bach Corp..............................................130 Doyon Limited............................................................101 eDocsAlaska Inc..........................................................91 Emerald Alaska..............................................................31 Fairbanks Memorial Hospital........................... 40 Fairweather LLC..........................................................41 First National Bank Alaska......................................5 GCI . .........................................................................89, 148 Global Diving & Salvage Inc................................84 Golder Associates Inc..............................................79 Granite Construction...............................................57 Hawk Consultants LLC..........................................132 Island Air Express.....................................................139 Judy Patrick Photography................................106 Kakivik Asset Management............................... 80 Landye Bennett Blumstein LLP..........................33 Little Red Services Inc.............................................97 Lounsbury and Associates....................................89

Alaska Business Monthly | May 2014

Lynden Inc. ...........................................................43, 113 MagTec Alaska LLC...................................................84 Medical Park Family Care.....................................39 MFCP - Motion Flow Control Products Inc...........................................................79 MTA Communications............................................ 64 N C Machinery............................................................121 NALCO Champion...................................................107 Northern Air Cargo......................................136, 137 Northrim Bank..............................................................83 Nu Flow Alaska.........................................................109 Offshore Systems Inc............................................127 Olgoonik Development Corp........................... 131 Oxford Assaying & Refining Inc......................138 Pacific Alaska Freightways..................................50 Pacific Pile & Marine.........................133, 134, 135 Paramount Supply....................................................141 Parker, Smith & Feek................................................27 Peak Oilfield Service Co. ..................................106 Pen Air................................................................................81 Personnel Plus............................................................ 117 PND Engineers Inc....................................................90 Polar Supply Co.........................................................122 Port of Anchorage......................................................47 Port of Kodiak...............................................................49 Procomm Alaska..........................................................63 Ravn ALASKA................................................................15

Remax / Dynamic Properties Matt Fink..................................................................39 RIM Architects.........................................................104 Ritchie Brothers Auctioneers (America) Inc.......................................................124 Ryan Air..........................................................................129 Senior Helpers...............................................................35 SGS....................................................................................... 82 Span Alaska Consolidators....................................61 Stellar Designs Inc....................................................141 Taiga Ventures..........................................................109 Taylor Fire Protection.............................................90 Tesoro.................................................................................77 Thompson Metal Fab..............................................115 Totem Ocean Trailer Express (TOTE)...........45 Tutka LLC...........................................................................33 Udelhoven Oilfield Systems Service..........126 UMIAQ.............................................................................132 URS Corp..........................................................................79 US HealthWorks dba Primary Care Associates......................37 Verizon . ............................................................................21 Washington Crane & Hoist..................................25 Waste Management ................................................91 Wells Fargo .....................................................................13 West-Mark Service Center...............................105 XTO Energy ......................................................................3

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