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Higher
On Ice
Duo trying world’s most difficult climb
Kenai and Soldotna renew hockey rivalry
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CLARION
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P E N I N S U L A
Friday-Saturday, January 9-10, 2015 Kenai Peninsula, Alaska
Vol. 45, Issue 85
50 cents newsstands daily/$1.00 Sunday
Mayor asks for oil, gas liason
Question How do you feel about the low price of oil? n I’m worried about the negative impact on the state budget. n I’m happy about the positive impact on my personal budget. n I have a mixed opinion. To place your vote and comment, visit our Web site at www. peninsulaclarion. com.
By DAN BALMER Peninsula Clarion
Navarre said that he and Soldotna councilor Linda Murphy, a member of the Alaska Municipal League, are “working to put together a group that will help the Legislature and Governor Walker in addressing the fiscal situation,” referring to the state’s $3.5 billion budget deficit. “You’ll hear more about that in the upcoming weeks, as we get more toward the legislative session,” Navarre said.
With the anticipation of a liquid natural gas pipeline terminus in Nikiski, the Kenai Peninsula has the potential to see its largest economic impact ever. To facilitate such projects, Borough Mayor Mike Navarre is looking to re-create a position in his office to focus on oil, gas and mining issues. Navarre introduced an ordinance to the borough assembly at the Jan. 6 meeting for the position of “special assistant to the mayor on oil gas and mining.” Prorated funding for the job would total $67,500 to start from Feb. 1, 2015 to June 30, 2015, the end of fiscal year 2015. According to a memo from Navarre to the assembly, the position would evaluate oil, gas and mining industry related projects and “develop responsive policy positions and initiatives and implement and advocate for those positions approved by the mayor and assembly.” The annual salary for the position is proposed to be $98,171. Including benefits and other expenses, the cost of the position is estimated to be approximately $161,800. Navarre requested a shortened hearing for the position to be discussed at the Jan. 20 meeting so recruitment could begin as soon as possible. Navarre discussed the need for the position during the assembly finance committee meeting Tuesday. He said the AK LNG project is a “game-changer” to the Kenai Peninsula economy and a socioeconomic study would define what the state would pay for and what the impact would be to the borough “We have to start planning now,” he said. “It is of critical importance to the borough. I have not brought new positions to you on a regular basis. This is one that makes absolute sense.”
See END, page A-10
See GAS, page A-10
In the news Cook Inlet Energy ordered to take corrective actions
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The Alaska Oil and Gas Conservation Commission softened its enforcement actions on Cook Inlet Energy, LLC after the company requested a review of a proposed $295,000 fine stemming from a flare up of more than 24,000 mcf — or 24 million cubic feet — of natural gas from its Kustatan Production facility. The violations occurred between Nov. 26, 2013 and Feb. 28 of 2014 when the company did not shut-in one of its gas wells while it was overhauling its Kustatan Production Facility intermittent flaring throughout a several month period. The conservation commission asserted that the company did not seek approval for the flaring, while the company claimed that flaring authorization it had previously received form the commission was unclear. They found that Cook Inlet Energy violated regulations and must comply with corrective actions which include a description and example of its regulatory compliance tracking program, a root cause analysis addressing the violations and a time line for implementing corrective actions and evidence that its personnel would be trained in the conservation commission’s regulatory requirements. The commission dropped the $295,000 fine from its final enforcement actions. — Staff report
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Photo by Rashah McChesney/Peninsula Clarion
Fan zone
Mike Erstrom carries his son Owen Erstrom, 3, up to the bleachers as Owen watches a Zamboni resurface the ice Thursday during the Kenai and Soldotna hockey game at the Soldotna Regional Sports Complex in Soldotna, Alaska. Mike Erstrom said the two attended the game to watch Owen’s brother play.
Industry Outlook Forum wraps up Regional politicians’ speeches bookend 2-day event By BEN BOETTGER Peninsula Clarion
Speeches from regional politicians opened and closed the 14th annual Kenai Peninsula Industry Outlook forum, held this week in Kenai’s Old Carrs Mall. The forum’s first session began on Wednesday morning with speeches from municipal leaders. Kenai Mayor Pat Porter, Kenai Peninsula Borough Mayor Mike Navarre, Soldotna Mayor Nels Anderson, and representatives from Seward, Seldovia, and Homer provided updates on their respective communities to the audience of industry and non-profit representatives. Porter outlined her optimistic view of Kenai’s economy by citing a 6 percent growth in Kenai’s sales tax revenue in the last two quarters, a high level of occupancy in Kenai retail space, the stability of Kenai real estate, and a fishing industry that “provides seasonal jobs for over 500 individuals.” Porter described Kenai’s residential growth as “amazing,” and said that “available homes and apartments are nearly nonexistent” in Kenai because of the high demand. Porter said
that in 2014, houses for sale in Kenai spent an average of 79 days on the market before being bought. That year, 95 homes were sold in Kenai, a 20-home increase from 2013. Eight vacant lots in Kenai were sold in 2013, while 34 were sold in 2014 — a number that did not include Kenai’s 87 property sales to the Alaska LNG project. To keep up with this growth, Kenai added two residential subdivisions this year. Porter credited the increase in demand for Kenai property to development on the northern Kenai Spur Highway. Speaking after Porter, Navarre opened his speech by thanking industry representatives for their “investment in our communities,” then spoke on borough programs, including hospital expansion. At Tuesday’s borough assembly meeting, Navarre encouraged the assembly to appropriate $200,000 for consultation regarding health care cost reduction and hospital management. In Wednesday’s speech, he described health care cost as “out of control.” “(The appropriation) is designed to get our arms around
Photo by Rashah McChesney/Peninsula Clarion
Alaska LNG project manager Steve Butt talks to a crowd during the Kenai Peninsula Economic Development District’s Industry Outlook Forum on Wednesday in Kenai, Alaska.
health care, because it’s so important to us as local governments, as businesses, as residents,” Navarre said. “It’s the single biggest expenditure we have in our nation, in our communities, in the borough, and in the state. ... Somebody has to do something to fix it.” In addition to borough programs, Navarre also remarked on state-level politics, which is he is involved with as the president of Alaska’s Conference of Mayors.
Economist forecasts ups, downs for borough By IAN FOLEY Peninsula Clarion
The state of the Kenai Peninsula Borough’s economy, with regards to job growth, wages and housing, has both positive and negative aspects, according to the state economist Alyssa Rodrigues. Speaking at the Industry Outlook Forum at the Old Carrs Mall, Rodrigues said that the borough has fared better than the state in terms of job growth. Using preliminary data, Rodrigues said that, as a whole, Alaska will have zero job growth in 2015.
While the outlook for the state is gloomy, the borough will hopefully fare better. “My forecast for 2015, which is a pseudo-forecast — it’s not official — is for 3.5 percent (job) growth,” Rodrigues said. “The reason it’s not bigger is because I tend to give you relatively conservative forecasts. I don’t want to tell you that you’ll grow by 9 percent and then have everyone be mad at me when you only grow by 5 percent.” Rodrigues said that historically, the borough has done better than the state in terms of job growth.
With data from the first half of 2014 compared to 2013, the borough added 200 jobs and saw the highest industry growth in the health care and retail sectors. Rodrigues said that typically, job growth isn’t seen in just one sector. It is spread out to fulfill the needs of a growing economy. As of 2013, teacher and retail salesperson are the two most common occupations in the borough. While the borough outpaces the state in job growth, its job market makeup (percentage of the population working in a C
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particular job sector), is proportional to that of the state. “(The types of jobs) are actually quite similar to the state, which is both a good thing and a bad thing,” Rodrigues said. “If the state does well, that likely means the state factors are doing well in the borough. If the state’s not doing well, that might not bode well for the borough, because they have the same factors going on.” When it came to job salaries, Rodrigues said that before last year, the growth from year to year on the Kenai Peninsula just barely passed inflation. Recently, however, she said
that salary growth has surpassed inflation and people have a lot more purchasing power than in the past. When it came to housing prices on the Kenai Peninsula, Rodrigues said that prices haven’t gone up that much. She said that the average house price in Kenai is cheaper than the state average, and places below Anchorage, Juneau, Fairbanks and the Mat-Su region. “Maybe you should buy your house now instead of waiting,” Rodrigues said. Reach Ian Foley at ian.foley@peninsulaclarion.com.