Alaska Business May 2022 by Alaska Business

OIL & G A S | EDG E COMPU TING | SUBSIS TENCE ECONOMIE S MAY 2022

GWEN HOLDMANN Director of The Alaska Center for Energy and Power

WILL GREEN AMMONIA FURTHER ALASKA'S OIL & GAS LEGACY?

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CONTENTS MAY 2022 | VOLUME 38 | NUMBER 5 | AKBIZMAG.COM

FE AT UR E S 20 TELECOM & TECH Edge Computing Rapid, private, and secure processing By Tracy Barbour

26 REAL ESTATE The Cost of Living in Alaska The single number that doesn’t exist By Rachael Kvapil

30 RETAIL No Sitting Still Rearranging the office furniture market By Amy Newman

38 FISHERIES Alutiiq Pride Marine Institute Science and industry in Seward By Nancy Erickson

44 ALASKA NATIVE Feeding Communities Subsistence economy is more than cash and calories By Isaac Stone Simonelli

92 MINING Upper Tanana Bonanza The glitter of Manh Choh gold By Isaac Stone Simonelli

10 EDUCATION

100 CONSTRUCTION

Beyond Shop Class

Building Up North

Training students for all careers By Scott Rhode

Capital improvements in the North Slope Borough By Vanessa Orr

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QUICK READS 8 FROM THE EDITOR

106 I NSIDE ALASKA BUSINESS

110 ALASKA TRENDS

106 ECONOMIC INDICATORS

108 R IGHT MOVES

112 OFF THE CUFF

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CONTENTS MAY 2022 | VOLUME 38 | NUMBER 5 | AKBIZMAG.COM

SPECIAL SECTION: OIL & GAS 62 ANWR REMAINS AS IT EVER WAS Exploration is at a standstill as various lawsuits wait for resolution By Alexandra Kay

68 EYES IN THE SKY, EARS ON THE GROUND Advances in remote sensing in the oil fields By Isaac Stone Simonelli

76 OIL AND ARCTIC NATIONS Eight approaches to energy in the far north By Tasha Anderson

88 NON-TRIVIAL TRIVIA How well do you know Alaska’s oil and gas industry?

Sarah Lewis

By Connor Lockmiter

52 COLORLESS GREEN AMMONIA SLEEPS FURIOUSLY

Awakening the dream of carbonless energy

By Scott Rhode

Giles Barnard | Shell

ABOUT THE COVER

80 PHOTO ESSAY

An Eye on Oil

She came to Alaska to mush dogs and finished the Iditarod and Yukon Quest, but Gwen Holdmann’s claim to fame—literally—is energy. From her off-grid cabin on the outskirts of Fairbanks, powered by solar panels and a wind turbine, to her day job as director of the Alaska Center for Energy and Power at UAF, Holdmann’s mission is to apply new technology to bring affordable electricity to remote households. “We get to have fun with this at the university,” she says, “thinking through these bigger ideas.” Holdmann was part of the inaugural class of the Alaska Innovators Hall of Fame in 2015, and now another innovator is setting up shop down the hall from her office. Nathan Prisco received an Arctic Innovator award from the US Department of Energy, and he’s looking for ways to keep Alaska’s energy infrastructure relevant in the post-petroleum era by converting to an entirely different fuel: ammonia. Photo by Sarah Lewis

Alaska Business (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. © 2022 Alaska Business Publishing Co. All rights reserved. No part of this publication may be reproduced without written permission from the publisher. Alaska Business accepts no responsibility for unsolicited materials; they will not be returned unless accompanied by a stamped, self addressed envelope. One-year subscription is $39.95 and includes twelve issues (print + digital) and the annual Power List. Single issues of the Power List are $15 each. Single issues of Alaska Business are $4.99 each; $5.99 for the July & October issues. Send subscription orders and address changes to circulation@akbizmag.com. To order back issues ($9.99 each including postage) visit simplecirc.com/back_issues/alaska-business.

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FROM THE EDITOR

he oil and gas industry has had significant highs and lows over the thirty-plus years that we’ve been reporting on it, but this year feels like a turning point, a subtle change of scene signaling that, while certainly still on stage, oil may not remain in the spotlight. At Meet Alaska—a mid-March, one-day oil and gas conference organized by The Alliance— Rowena Gunn, Canada and Alaska Research Analyst for Wood Mackenzie, gave a global oil and gas update, in which she said that longer-term demand for liquids (essentially oil or gas) will peak in 2030 and then go into decline, though demand won’t disappear. Even in accelerated energy transition scenarios, which account for a concerted effort worldwide to pursue other forms of energy over oil and gas, Gunn still anticipates that in 2050 demand will be approximately 30 million barrels of oil per day and approximately 20 million barrels of oil equivalent per day of gas. “Current production decline cannot meet [that] demand, and much new production is needed,” she said. As is standard with any thirty-year forecast, Gunn underscored throughout her presentation that “large uncertainty remains on the pace of the energy transition,” and even in the shortterm, “there is large uncertainty on oil price supply and demand outlooks due to the Russia/ Ukraine conflict.” Russia’s attack on Ukraine has highlighted how truly interconnected the world has become: we all, to some degree, participate in a global market. Since the conflict began, prices of oil and gas have increased, and questions about energy supply have been commonplace: What kind of energy do we want to pursue? How do we want to produce it? Where do we want it produced, and by whom? Those questions are driven by cost, security, and social responsibility. However many dollars and cents one may need to pay, there’s a global understanding that energy can never be cost free, and those costs influence the energy picture. In Alaska, forward thinkers are looking at a range of options: the Alaska Gasline Development Corporation and Qilak LNG are both exploring ways to get stranded North Slope gas to market; Copper Valley Electric Association is collaborating with Ultra Safe Nuclear Corporation to determine the feasibility of a micro modular reactor energy system; ORPC and the MatanuskaSusitna Borough are launching a test of a hydrokinetic (tidal energy) project at Port Mackenzie; and multiple parties around the state are researching the development of ammonia and hydrogen as the energy carriers of the future. It may not be many years off that the managing editor for Alaska Business will plan an “Energy” special section instead of “Oil and Gas.” Whatever the name of the section, I’d bet on any odds that it will still have an oil and gas article (or two) within it. We may have already seen a peak for oil and gas, but the industry’s story certainly isn’t over.

VOLUME 38, #5 EDITORIAL STAFF Managing Editor Tasha Anderson 907-257-2907 tanderson@akbizmag.com

Editor/Staff Writer Scott Rhode 907-257-2902 srhode@akbizmag.com

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BUSINESS STAFF President Billie Martin VP & General Manager Jason Martin 907-257-2905 jason@akbizmag.com

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Tasha Anderson Managing Editor, Alaska Business

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Melissa Guernsey | AVTEC

E D U C AT I O N

Beyond Shop B Class Training students for all careers By Scott Rhode 10 | May 2022

lazers, blouses, and skirts hang on racks, but this isn’t a clothing boutique. In the Enterprise and Entrepreneurship lab at Martin Luther King Jr. Technical High School in Anchorage, students can borrow professional attire for a job interview or presentation. That’s just one way King Tech helps guide students into a career. Entrepreneurship is a long way from the vocational school King Tech started as in 1974. At that time, shop class was for “hobbyesque” crafts and home economics was, well, for homes, says Kern McGinley, principal of King Tech. Nowadays, auto shop and carpentry are taught alongside nursing, cooking, video production, and, yes, starting a business—all under the umbrella of career and technical education (CTE). The transformation came in 2006. When Congress reauthorized the Perkins Act—first enacted in 1984 to provide federal funds for vocational education—the term “vocational

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education” was replaced with “career and technical education.” The old terminology will fade as generations change, says Cathy LeCompte, director of Alaska Vocational Technical Center (AVTEC) in Seward. The school operated by the Alaska Department of Labor and Workforce Development was established to crank out welders, diesel mechanics, and cooks for the newly discovered Prudhoe Bay oil fields. Those remain core programs, yet in the 21st century AVTEC also trains modern millwrights in the use of 3D printers and automated CNC routers. Hands-on tinkering isn’t just for shop class; it’s also part of STEM (science, technology, engineering, and math), another educational trend that’s gained momentum since 2006. As far as the Anchorage School District (ASD) is concerned, STEM is a subset of CTE: it’s one of twelve “career clusters.” The others are agriculture, business management, communications, construction, education, health science, hospitality, human services (which includes both counseling and personal care, like hairstyling), information technology, manufacturing, and transportation. Missy Fraze, ASD’s acting director of CTE, says about half of middle and high school students are involved in a program in some way. That involvement boosts graduation rates: compared to 82 percent of ASD’s general population, King Tech has a 97 percent graduation rate, among the highest in the city. Kids get excited to be there, says Fraze, and CTE promotes a passion for learning.

“We have a fully untapped workforce in our young people in our region, for sure… We want folks to understand that our kids are worth the development in being the next workforce.” Conrad Woodhead, Residential and CTE Director, Lower Yukon School District

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Center of Attention Before 2018, King Tech was King Career Center, where students from Girdwood to Chugiak could access equipment and expert teachers. About 800 part-time students still visit King Tech each day, split between morning and afternoon sessions. What changed in 2018, along with the name, was accreditation as a selfcontained high school. Having some 300 full-time students, all 11th and 12th graders, entitles King Tech to its own share of state funds, rather than relying on the funding formula from students’ neighborhood schools. In www.akbizmag.com

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King Tech students practice editing in the film, audio, and visual production course.

return, King Tech has academic faculty to ensure students complete general graduation requirements. One thing King Tech graduates need, not common at other high schools, is a plan for after they leave. A postgraduation plan is such a simple, high-impact idea that the Anchorage school board is considering a similar requirement for all students. Eleven of the twelve career clusters have programs at King Tech. (STEM is distributed among West, Dimond, Eagle River, and South High.) Five clusters are represented at King Tech exclusively. In addition to entrepreneurship, King Tech is the only place in ASD for students to learn early childhood education. One room on campus is equipped as the most inviting daycare a preschooler might ever see. Amid the toys, tiny chairs, and an indoor play fort sits a black and white rabbit in an enclosure on the carpet. Tots scurry from station to station, watched by larger kids, in turn watched by adult faculty. Upstairs, there are dogs. They help with veterinary assisting, part of the agriculture cluster. Also in the cluster

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is sustainable food systems, centered on a greenhouse along Northern Lights Boulevard. King Tech has the district’s only cosmetology program, and its auto shop is the last remaining at any Anchorage high school. In fact, McGinley says the collision repair and refinishing program is the only formal auto-body training available in the city, at any level. “I look at it as an opportunity to help our students narrow their interest areas and start to explore those,” says Fraze. Speaking as an international business major who switched careers to education, Fraze says, “They do that before graduating high school to make a more informed decision for those years after high school that are likely to be most expensive.” By the post-secondary level, students have a clear idea of what they want. According to LeCompte, “At AVTEC, you get in, get out, and get on with your life.” No time wasted on exploration; a novice can become a plumber in four months. To maximize exploration in high school, King Tech has its “Third Session,” a class period from 3 p.m. to 5 p.m.

Apart from two hours at King Tech, students at Kusilvak Career Academy keep up with regular studies, such as wood burning for art class. Carter Damaska | Alaska Business

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Learning to maintain and repair heavy equipment takes a lot of space and money, so AVTEC must carefully choose which programs to offer. Melissa Guernsey | AVTEC

taught by faculty working overtime, like coaches for extracurricular sports. Third Session opens King Tech to students in the district who might not have access during the day.

…And Students Outside the District

Training welders was one of the core missions of Alaska Vocational Technical Center when it was established shortly after the discovery of oil at Prudhoe Bay. Melissa Guernsey | AVTEC

14 | May 2022

“Just coming here is a big deal,” says Jessica Hunt of Emmonak, a teacher for the Lower Yukon School District (LYSD). Hunt gets back home during the summer to fish, but she lives in Anchorage now because LYSD operates a residential school on the shores of Lake Spenard. So highly does LYSD value CTE that it sends students to the big city, just to use King Tech’s facilities for two hours each day. The rest of the time, students live at Kusilvak Career Academy (KCA), a former log-sided hotel. The academy’s de facto headmaster, LYSD Residential and CTE Director Conrad Woodhead, says the district estimated the cost of furnishing a career ed program locally at $95 million. In comparison, the $2.7 million to purchase the Long House Alaskan Hotel was a bargain, plus that much more to renovate it into dorms and common space. As a public school, LYSD pays for travel, room, and board. LYSD also pays for the privilege of using King Tech, covering the cost of Third Session mainly through grant funding. ASD budgets half a million dollars for CTE statewide partnerships, and so far this partnership has been “nothing but smooth,” says McGinley. Since 2019, KCA has hosted up to forty-five students for nine-week quarters. Whereas a boarding school like Galena Interior Learning Academy, up the Yukon River, houses students year-round, KCA students choose when to leave home, Woodhead says. For instance, the cohort in early 2022 was just fourteen; other students stayed home for basketball season. Or, Woodhead explains, if they hunt or fish, they come to town in the off-season. Career education supplements subsistence, as Woodhead sees it. “You might be the culture bearer for your village; subsistence is all you want to do. But in the system in which you live, you have to be able to still provide for yourself,” he says. “You still Alaska Business www.akbizmag.com

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A King Tech student assesses the roof of a shed in a carpentry course. Carter Damaska | Alaska Business

have to buy the gas. You have to buy the ammunition.” Such reminders are an antidote to homesickness, Woodhead says. The discomfort of leaving the Lower Yukon and living in a strange city is the price students pay for opportunities. A quarter at KCA exposes students to diverse peers, gives them access to Southcentral Foundation healthcare, and connects them to career avenues, such as local labor unions. Anchorage also offers Alaska Middle College School, which happens to be co-located at King Tech. A couple of KCA students are on that path, earning college credits while in high school, 16 | May 2022

and Woodhead says there is room for expansion. “We would partner with other districts that want their kids to access middle college by having KCA be the conduit for those sites to do that,” says Woodhead.

Competing for Electives College credit is at the core of ASD’s CTE programs. Dual credit alignment with UAA and UAF gives high school students a head start toward a certificate or associate degree. “We do that with our certified nurse program. We’re going to start doing that with our business academy that we’re starting next year,” says Fraze.

“Those are creative ways that we can build that bridge between high school and post-secondary.” Fraze notes that not every CTE program is available at every school, and CTE is absent from elementary schools (apart from STEM-stimulating maker spaces). King Tech fills the gaps, but that’s not all it’s for. McGinley says his school offers a deeper dive into more advanced skills, serving as a capstone to programs at other schools. A CTE teacher is a master in their field, like a plumber earning $140 per hour, who must set that paycheck aside. School districts award Type M certificates to become classroom teachers while they hone their pedagogical skills on the job. McGinley says CTE programs are “often hiring teachers direct from industry, not teachers who’ve been classically trained in education.” King Tech’s principal himself is classically trained in education. A doctorate, in fact, yet McGinley’s original background was as a cook, informally trained. “I feel very strongly about career and technical education because I know what those skills can bring in life,” he says. Voc-ed carries a stigma that separates certain kids from their college-bound peers. “We’ve had these different lanes, and different attitudes and opinions, but we’re moving away from that,” McGinley says. “The idea that college is very important, and college will change your life and offer better employment opportunities—I think that’s still part of the way society thinks, but I think people are starting to realize that college debt isn’t going away.” The broader scope of CTE also helps to reduce the stigma, according to Fraze. “As career-technical education has expanded and grown, and legislation has changed, it has really developed to encompass all careers,” she says. “It’s not a program for ‘those kids’ or ‘these kids.’ It’s a program for all kids.”

Alternative Paths College and career training aren’t mutually exclusive, of course. LaCompte, who used to teach business courses at UAS, served for six years as associate dean of UAA’s Community and Technical College (CTC), a

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remnant of the former Anchorage Community College. LaCompte says AVTEC could fit within the UA System but for the fact that its accreditation is based on “clock hours” rather than academic credits. After 180 days of intensive training, AVTEC students complete the equivalent of twenty to thirty college credits, LeCompte figures—about halfway to an associate degree. LaCompte wishes to dispel the myth that voc-ed is only for students who are not academically inclined: “That’s not how it works. You’ve got to know some math. You gotta know how to read a technical journal.” Rather, LaCompte says, career training is for those who have the time, flexibility, and energy to acquire specific job skills in a matter of months. Demand for fast-track training may outstrip supply. “As soon as this infrastructure money lands,” LeCompte says, “we're probably not going to be able to meet the need,” but she says other schools are stepping up, including Charter College and Northern Industrial Training. Yet workforce training requires a certain prudence to avoid oversaturating the job market. “I’m not going to turn out a thousand welders,” says LeCompte. “We couldn’t employ a thousand welders. I’m going to turn out twenty or thirty a year, and they get jobs.” In the Lower Yukon School District, where unemployment rates consistently surpass anywhere else in Alaska, CTE can create new job opportunities. KCA teacher Hunt says students trained in auto mechanics, carpentry, or cosmetology can bring those services to villages without any, making the region’s service economy more self-sufficient. “We have a fully untapped workforce in our young people in our region, for sure,” says Woodhead. “We want folks to understand that our kids are worth the development in being the next workforce.” He calls Kusilvak Career Academy an “institution of hope,” especially in an area suffering from high rates of despair and suicide. “We’re saving lives every day,” says Woodhead. “Whether we know it or not, giving kids a plan really is going to help them.” 18 | May 2022

A King Tech student repairs car bodywork in the collision/repair class. Carter Damaska | Alaska Business

King Tech students learn how to nail roofing material. Carter Damaska | Alaska Business

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TELECOM & TECH

Edge Computing Rapid, private, and secure processing By Tracy Barbour 20 | May 2022

loud computing has a silver lining, of sorts, at its edge. Edge computing is an alternative to transferring data to a distributed cloud, which has limitations on bandwidth (transmission capacity) and latency (transmission delay). As networked devices become more numerous and powerful, edge computing is steadily growing in usage. By 2025, 75 percent of enterprise data will be processed at the edge, compared to only 10 percent today, according to technology research firm Gartner, Inc. Edge computing is related to another somewhat recent technology, the Internet of Things (IoT), according to Kenrick Mock, a professor of computer science and dean of the UAA College of Engineering. “The central premise behind IoT is to have everyday objects and sensors connected to the internet,” he says. “Under the vision of IoT, your watch, thermostat, garage door, oven, refrigerator, and even your coffee mug could all connect, communicate, and compute via the Internet. In edge computing, there is the same vision of many interconnected computing devices, but the distinction is where the computation occurs. If you think of large, powerful, remote servers as being in the ‘center’ of the cloud that makes Kenrick Mock up the Internet, then the ‘edge’ of the UAA College of Engineering Internet are devices on the periphery, such as your phone, laptop, thermostat, watch, or sensor.” The edge is not a specific location; it’s about facilitating the distribution of services to where people need them. Regardless of the device, the edge is located near the user. “Edge computing puts that processing, the brains, or content as close to the users as possible,” says Victor Esposito,

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vice president of engineering and architecture at GCI. “It’s as close to an instantaneous response or transaction as you can get.” Since edge computing brings processing capabilities nearer to the user, it eliminates the trip to the cloud data center. That significantly reduces latency, the amount of time it takes for data to pass Victor Esposito GCI from one point to another. Edge computing allows for quicker and more comprehensive data analysis and improved customer experiences. Decreasing transaction time is especially important in an isolated place like Alaska, where communication throughout the state and the rest of the world involves unavoidable transmission delays to the Lower 48. “For us, bringing content into Alaska and getting it closer to our customers is important to giving people that traditional urban experience,” Esposito says.

Common Applications Edge computing has been around long enough to be employed in an array of products and services. Some common examples are smart devices that run code locally instead of in the cloud; medical monitoring devices where real-time response is critical; self-driving cars that need to make splitsecond decisions; and interactive video conferencing, gaming, or streaming that requires a significant amount of bandwidth. In Alaska, edge computing is being deployed in business scenarios at enterprise scale. It’s primarily used today with larger firms that require the lower latency that edge computing provides, Mock says. Alaska Airlines, for instance, uses multi-access edge computing (MEC)—edge computing on the telecommunications network— to quickly access airline, baggage, and ground operations information. Consumer electronics are also moving in this direction. “For example, Amazon’s newer Echo devices will now analyze audio on the device itself, whereas older devices required audio to be transmitted to a remote server

for processing,” he says. “Local analysis allows a faster response and the ability to follow up with a more natural dialogue.” The healthcare and education industries in Alaska are also leveraging edge computing within. Lower latency allows clinics to connect directly with patients and schools to connect directly to students. As a service provider, GCI ensures its clients have the low-latency connectivity to support their efforts in these areas, Esposito says. “For our healthcare clinics and education businesses, we make sure we provide them high bandwidth and highly reliable connectivity from their remote locations to the main hospitals and to their students,” he explains.

Evolution of Edge Computing Like any technology, edge computing is perpetually evolving. In the early days of computing, centralized applications ran on isolated, bulky mainframe computers. Then personal computing allowed for decentralized applications that run locally on the user’s device. With more recent cloud computing, centralized applications

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“I anticipate that in the next few years, you’ll start to see edge compute as a service. As a business, you may buy it, so you have a whole package— connectivity, high bandwidth, low latency, and cloud services. Bringing these ideas together, you’ve got the compute right on the edge of your links.” Victor Esposito Vice President of Engineering and Architecture GCI

22 | May 2022

run in cloud-based data centers that can be accessed from any device over the internet. Edge computing closes the distance, running centralized applications close to users on the device itself or on the network edge. Esposito says computing has, in a way, come full circle, making a virtual connection back to the mainframe. “Initially we placed compute toward the edge out of necessity,” he explains. “Then we had a massive step forward with the internet, so people were able to pull that compute into centralized locations (data centers). Because of virtualization and high-bandwidth links, we now have choices. We can put compute out toward the edge, virtualize it, and use it for many applications and functions, or move applications into the cloud.” Mock sees Alaska organizations employing edge computing at a similar rate as the rest of the country as part of normal technology upgrades. “Our networking and telecommunications firms are developing capacity in this space so that edge computing applications can be realized, as the computing is often needed at a base station or local data center,” he says. “As computation is pushed to the edge, we also need more powerful and capable devices.” He adds: “Integrating edge computing with 5G networks and traditional computer networks is also occurring, especially as expectations rise to seamlessly access services from a phone or computer. There are a host of AI [artificial intelligence] applications that are enabled by edge computing. For example, security cameras with built-in image processing can detect if detected motion is a potential human intruder or a wandering moose. For resiliency, it is better if this analysis can occur locally rather than be dependent on a connection to a remote internet server.” The roll out of 5G communications networks, with WiFi speed at cell phone range, is accelerating the usefulness of edge computing. According to Esposito, 5G is mostly intended to be the framework for virtualized edge deployment. “The network function is being virtualized [simulated in a computing environment] and pushed to the edge,” he explains. “The great thing about virtualization and compute

is they work together. When we have a failure at the edge, that can be backed up in a data center in the Lower 48.” Esposito expects developments in areas like IoT, AI, and 5G to continue advancing with edge computing. “It’s really making sure the compute is right on the other side of that low-latency link so the AI or IoT can respond quickly and react,” he says. “I anticipate that in the next few years, you’ll start to see edge compute as a service. As a business, you may buy it, so you have a whole package— connectivity, high bandwidth, low latency, and cloud services. Bringing these ideas together, you’ve got the compute right on the edge of your links. That’s where we see a lot of possibility in the future.” Mock also anticipates growth of edge computing. The proliferation of IoT devices continues, and edge computing is likely to grow with it, he says. There will be more wearable computing—particularly medical devices—and smart appliances around the home. “AI has made great progress, especially around image recognition but also with understanding human language, so expect more natural interaction with computing devices,” he says. “We are also at the point where edge computing can enable the vision of a smart city. Examples include real-time monitoring of traffic and potholes, so your car knows the best route to drive; streetlights that turn on when needed rather than on a timer; or the ability for your car to direct you to an empty parking spot rather than driving around the block looking for one.” Edge computing will be mostly “invisible” to consumers, Mock says, but they will benefit from newer and faster services. “As more devices are added to the IoT, we will need a commensurate rise in edge computing to avoid bottlenecks at centralized servers,” he says.

Expanding Edge Solutions Technology companies like AT&T and IBM are pivoting to create edge solutions that enterprises can leverage easily. AT&T, which has been deploying private cellular networks for businesses, universities, and the public sector for years, is working

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“As more devices are added to the [Internet of Things], we will need a commensurate rise in edge computing to avoid bottlenecks at centralized servers.” Kenrick Mock Dean UAA College of Engineering

24 | May 2022

on bringing private 4G/5G wireless networks as an integrated platform with connectivity and applications to enable low-latency services at the edge. Its upcoming service, called AT&T Private 5G Edge, allows users to roam beyond the geographic boundaries of the AT&T private network while staying connected through the AT&T public network, according to a February 24 press release. AT&T Private 5G Edge, which is currently under development with Microsoft, uses Azure private MEC to deploy private wireless networks rapidly across radio spectrums, including Citizens Broadband Radio Service (CBRS). The service is ideal for companies and organizations where private networks need to be simple, flexible, and easy to use. For example, a hospital might use its private network to closely track ventilators, wheelchairs, and other critical items in its building. But if a ventilator is on loan to another hospital, the company’s roaming capability could ensure that machine always remains accounted for even outside the private network. “With AT&T Private 5G Edge, we are enabling customers to create and deliver innovation faster—with simplicity, flexibility, security, and highspeed wireless connectivity,” Rupesh Chokshi, vice president product strategy and innovation at AT&T Business said in the press release. “This solution opens the door to entirely new applications and use cases we haven’t even imagined yet.” In an interview, Chokshi says he thinks there is huge demand for AT&T Private 5G Edge in rural areas. “Oil drillers, for example, in extremely remote regions could use a private network running on CBRS to enable onChoski Rupesh premises, lowAT&T Business latency edge services they otherwise wouldn’t have access to,” Chokshi says. “That could either be a self-contained CBRS-based private network or potentially have connectivity back to the public network either via a roaming agreement with another carrier or through AT&T’s commercial network if it’s available in

that area. Overall, we think AT&T Private 5G Edge will be appealing to midsize companies with small facilities or to larger companies that have a large, distributed footprint (such as a retailer with locations across a region or across the country), or a university with multiple campuses.” Last year, IBM released several solutions to help businesses take advantage of 5G and edge computing. They include IBM Edge Application Manager, an autonomous management solution to enable AI, analytics, and IoT enterprise workloads to be deployed and remotely managed; IBM Telco Network Cloud Manager, which facilitates intelligent automation capabilities to orchestrate virtual and container network functions in minutes; and a portfolio of edgeenabled applications and services. These services, according to IBM’s website, are all designed to allow companies across industries to realize the benefits of edge computing, including running AI and analytics at the edge to achieve insights closer to where the work is done. In Alaska, GCI is also launching technology to support edge-enabled devices. Recently, GCI became one of the first companies to deploy Remote MACPHY Device (RMD) in its broadband network. RMD service—in partnership with CommScope—is a component of GCI’s broadband internet. According to Esposito, RMD technology allows GCI to move internet distribution from the centralized headend out to neighborhood nodes, enabling the company to provide more reliable, better quality, and higher performance service. “Between that and our fiber-to-the-home equipment or our 5G networks, we’re employing the latest technology for people to use to provide that lowlatency, high-bandwidth platform,” he says. “From edge compute for gaming or video content, we bring that content into Alaska and push that into our data centers, so it’s close to our subscribers,” Esposito says. “As a provider across Alaska, we’ve got an obligation to make sure people have the tools and connectivity they need to run their business.”

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R E A L E S TAT E

The Cost of Living in Alaska The single number that doesn’t exist

ost of living seems like a simple calculation. Alaskans have an intuitive sense of paying more for necessities than households in the Lower 48 do. Off the road system, stickers that would shock an urban shopper are an everyday feature of store shelves. City dwellers, too, have long known that Alaska is a frontier when it comes to affordability, with extra expenses for home heating and for buying food shipped from Tacoma. Yet the historic “end of the road” is getting a little closer to market. Despite a jump in the nationwide consumer price index (CPI) of 7.9 percent in the last twelve months, Alaska is a much less expensive state to live in, compared to the Lower 48, than it used to be. To measure cost of living, economists define necessary expenditures and sort them into broad categories: transportation, groceries, healthcare, housing, utilities, and miscellaneous goods and services. Data collected on those expenditures are sorted into several indexes. According to Neil Fried, an economist with the research and analysis section of the Alaska Department of Labor and Workforce Development, there are two aspects to cost of living: tracking it in one place over time (inflation) and comparing it in different places at the same time. Either measurement has different applications. “The numbers are the most practically used in long-term real estate rental contracts, annual adjustments

26 | May 2022

By Rachael Kvapil to the state’s minimum wage, child support payments, and budgeting,” says Fried. “The Alaska Permanent Fund Corporation uses these numbers to inflation-proof the fund, and Social Security payments are adjusted based on this information.”

How to Measure the Impossible To determine the cost of living in one place in Alaska over time, Fried says state economists rely on the CPI for Urban Alaska. The index is a result of detailed surveys of consumer spending habits conducted by the US Bureau of Labor Statistics. These surveys are a “market basket” of everyday items, to which the Bureau of Labor Statistics assigns location-specific weights to determine how people spend their money. Fried explains that this CPI can only track costs over time in one area and can’t compare costs between places. As Fried wrote in the July 2021 issue of Alaska Economic Trends, published by Alaska Department of Labor and Workforce Development, the national index was 258.8 while Alaska was 226.153, which means prices have increased faster nationally since the early ‘80s than they have in Alaska cities—but that does not necessarily mean that the cost of living in the United States was higher. Measuring the cost of living in different places at the same time requires a broader range of sources and different methodologies. When comparing costs between locations, Fried says one of the

most-used sources is the Cost of Living Index (COLI), published quarterly and annually by the Council for Community and Economic Research (C2ER). Based on detailed surveys of 266 cities, including four in Alaska, the survey covers fifty-seven specific items in categories such as groceries, housing, utilities, transportation, and healthcare. It assumes a consumption pattern based on a professional and executive household in the top income quintile. Anchorage, Fairbanks, and Juneau have regularly contributed to this index, and Kodiak returned in 2021 after being absent from the survey for several years. This index does not measure the change of prices over time but rather the relative cost of living compared to the national average. Bill Popp, president and CEO of the Anchorage Economic Development Corporation (AEDC), says his organization uses the C2ER COLI data to compare the cost of consumer goods and services in Anchorage versus other cities within the state and nationwide. For instance, AEDC’s 2021 Year-End COLI publication reported Anchorage’s overall index in 2021 was 126, or 26 percent more expensive than living in the average American city. That makes Anchorage the 21st most expensive city of the 266 cities that participated in the 2021 COLI survey. Though AEDC’s Year-End report does not report the overall indexes for other participating Alaska cities, the COLI spreadsheet lists the overall index for Fairbanks,

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Juneau, and Kodiak as 126.8 percent, 129.1 percent, and 126.6 percent of the national average, respectively. While Alaska cities are more expensive than average, they are far more affordable than the country’s largest urban areas. Manhattan, San Francisco, and Honolulu top the COLI, with the after-tax cost of living for the professional-class household at double the national average. Seattle’s index rating of 152.7 puts the Emerald City in 9th place. The least expensive of the 266 cities measured is Kalamazoo, Michigan at 75.7, followed by similar Fairbanks- and Juneau-sized cities in Texas, Oklahoma, and Mississippi. Both Fried and Popp agree that identifying a singular cost of living number for all of Alaska is impossible. First, each household varies in size and prioritizes spending differently. A household with school-age children will spend in categories that a household without children may not. Likewise, living in rural Alaska often requires additional expenses to fly in goods and services. They also pay more for utilities and communications. “Even if it isn’t 100 percent accurate

for remote areas, the C2ER Cost of Living Index still provides a good comparison,” says Popp. “But getting an accurate view of the cost of living in remote areas will require a consumer to do additional research.”

‘Living’ Requires a Place to Live In the past two years, the average price of a home in Alaska has risen to $421,438, up 5.8 percent from 2020. Dar Walden, owner and CEO of the Dar Walden Team, Keller Williams Realty Alaska Group, compares this to last year’s average sale price of $396,726. A buyer can typically find an 1,800-square-foot home with an additional 500-square-foot two-car garage for $420,000. However, many factors ultimately determine the cost of a home, including the home’s condition, location, amenities, interest rates, and supply and demand. Currently, the latter factor affects the cost of Alaska homes most. “There is a much stronger demand for a limited number of houses currently for sale,” says Walden. “Previous to COVID, people across the nation started downsizing as a way to limit

Anchorage’s overall index in 2021 was 126, or 26 percent more expensive than living in the average American city. That makes Anchorage the 21st most expensive city of the 266 cities that participated.

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the amount spent on utilities and other variable costs. Once COVID hit and people started working from home, they realized their homes weren't big enough to work from home with kids running around. A lot of people upgraded at that point so they would have room for an at-home office.” In 2020, Alaska still had a greater supply of larger homes. Buyers could better afford down payments and closing costs due to Paycheck Protection Program relief funds and extra personal income as they spent less on fuel and entertainment. Since then, the inventory of larger homes has decreased. Likewise, potential sellers aren’t listing their homes for fear that they won’t find another one without paying way more than the asking price. At this point, not much can change this situation. Walden says builders are increasing the number of homes in some areas, such as the MatanuskaSusitna Borough, which has plenty of land. However, for cities like Anchorage, minimal buildable land remains. Increased prices of building materials have also become a nightmare for new builds due to an unpredictable supply chain. Walden says builders hesitate to list the price for a newly constructed home until it is complete because the likelihood that materials costs might increase mid-build is almost a certainty. “Real estate licensees are working harder looking for available properties for their clients,” says Walden. “We are constantly contacting people in a specific area looking for a seller with a home that meets the specific criteria of a buyer.” Walden says this trend is the same throughout the state. With real estate licensees in Anchorage and Fairbanks, Walden says the lack of inventory disrupts the market. A licensee might make four or five offers on a property before one is accepted. The final price is often significantly higher than the asking price, which leads to disgruntled buyers who think their agent is not doing their job. Walden says realtors end up taking the brunt of negativity with buyers switching licensees, hoping to find one that is more “aggressive.” A lack of homes isn’t only causing a bidding war; it also stokes a generational conflict. Millennials and 28 | May 2022

The Dar Walden Team of Keller Williams Realty Alaska Group, like other real estate brokers, has noticed buyers paying more than asking price because of competition for scarce housing inventory. Dar Walden Team

Gen Z commonly post on social media about the difficulties of buying homes in Alaska because they don’t have the purchasing power of Boomers and Gen X. Popp says this is true in some ways, but not true in others. Despite inflation, income for younger generations has increased in several professions. Although a fair amount of housing inventory is indeed held by older generations, the population of Boomers is declining as they reach the end of their lifespan. That puts younger generations on the verge of the most significant transfer of wealth in human history. “It’s true that younger generations have not had the same opportunity to grow wealth over time,” says Popp. “But at the same time, older generations are retiring with disposable income they can use without taking jobs from younger generations. The opportunity for younger generations to save enough money for a home is on the horizon.” Walden adds that spending priorities also factor into the younger generation’s ability to buy a home. Compared to Boomers and Gen X, Millennials and Gen Z are making a higher starting wage in nearly every profession, even with inflation. She says it is now easier for younger generations to qualify for low interest rates and afford down payments and closing costs than previous generations. However, she sees many purchasing decisions by Millennials and Gen Z that move them away from their financial goals.

“Ordering take-out every day through DoorDash isn’t going to save money,” says Walden. “A lot of young people will say it’s expensive to live in Alaska, but a lot of that is relative to a person’s income and their expenditures. Sure, it might be cheaper to live in Mississippi, but people there are making only $6 per hour. I often advise young people to change the way they look at things, and the results will ultimately change.” For those who feel like they really can’t afford a home, Walden says there are several things they can do while saving money. First, she recommends connecting with a lender who will provide a realistic insight into what kind of house they can afford. Walden says it isn’t unusual for firsttime homebuyers to start the buying process before understanding the numbers. A lender will review credit scores and advise ways to improve them. Ultimately, Walden says the housing market will play a big hand in how quickly younger generations can afford a home. “Right now, it’s hard to compete in Alaska for under $400,000,” says Walden. “If you can’t hit that mark, don't get discouraged. Work with a lender and follow their advice. Save the money necessary for a down payment and closing cost. It may be that you are not financially ready to purchase a house, which is totally fine. If you start now, you will be much closer when the opportunity to purchase eventually opens up.”

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R E TA I L

No Sitting Still

Rearranging the office furniture market By Amy Newman

30 | May 2022

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epending on the source, annual revenue for the United States’ commercial furniture market was between $12.3 billion and $12.94 billion in 2020. Given the swift transition offices made to remote work when the COVID-19 pandemic sent the country into lockdown in March 2020, those figures might seem counterintuitive. The logical assumption was that COVID-19 would spell disaster for office furnishings.

It didn’t, and no one is more surprised than John Rafferty, COO of Capital Office in Juneau. “Going back to when COVID had just hit and everybody goes into lockdown, you would have thought it wasn’t the best time to be in the commercial furniture business,” he says. “But Capital Office has been in business for seventy-five years, and I would say the last two years were our top five in terms of sales revenue.”

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Market research indicates that much of the COVID-era boom is the result of companies taking advantage of empty offices to revamp their space and the need to furnish home offices. The need is still growing, with annual commercial furniture sales in the United States forecast to increase $3.14 billion by 2025. That optimism is driving mergers and acquisitions at the national level, which create opportunities at the local level. “A lot of what you’re seeing and hearing in the local market is really just driven by the overall industry, and that’s just trickling down to the local dealers,” Rafferty says.

From the Islands to the Mountains Honolulu-based SystemCenter, which has clients in Hawaii, the Lower 48, Guam, Japan, and South Korea, is a family-owned business that has provided commercial furniture, industrial storage, and architectural interior design to commercial, education, government, and healthcare entities since 1976. SystemCenter entered the Alaska market four years ago, serving as the exclusive distributor of the Haworth furniture line to federal government and military agencies, says Jack McCann, director of SystemCenter’s Alaska market. Outside of those customers, Alaska’s exclusive distributor of Haworth was AA-K Business Environments, Inc., McCann says. When AA-K’s owner began to downsize in anticipation of retirement, SystemCenter’s longstanding partnership with Haworth, ranked the world’s fourth-largest commercial furniture manufacturer in 2020, gave them an immediate advantage in assuming the reins from AA-K. “Haworth started thinking about succession, and because we already had a presence in Alaska and we were already a Haworth dealer, it was a natural fit,” says SystemCenter Vice President Bob Egbert. “We’re already familiar and in a position to support the success of a bold dealership in Alaska.” SystemCenter’s Hawaiian roots gave it another advantage in taking over the Alaska market. As an island business, the company created a www.akbizmag.com

system of technological and teamsoriented processes that allow them to meet their customer’s needs and overcome physical remoteness. Those same processes come into play in Alaska, Egbert says, and made Haworth’s decision to grant succession rights to SystemCenter an easy one. “Alaska and Hawaii have a lot of similarities, meaning they’re both detached from the Lower 48,” Egbert explains. “From that standpoint, being able to, at a high level, operationally support our customers and the solutions that they are buying from us, it was a no-brainer.” Though government agencies are SystemCenter’s primary market, it plans to leverage the new distributorship to break into new sectors. “Our marketing plan is going to include the State, as well as quasigovernment agencies, Alaska Native corporations, oil and gas, just any sector you can imagine,” McCann says. “Whoever needs furniture.” Sys te m Ce nte r ’s A n ch o r a g e showroom is opening this spring, McCann says. It will also service AA-K’s

“If they’re selling the same exact product that we’re selling and vice versa, how do you really differentiate yourself from your competitor?” Rod Young Owner Think Office

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“There’s a big uptick in hybrid workspaces, with people investing in their home offices… The commercial side of the business is our

existing contracts and, hopefully, win over their current customers. Just like it is in Hawaii, SystemCenter intends to become a valuable, invested part of the Alaska community. “We understand being an island state and what it means to truly invest and give to a community in a way that is enduring and is, at some point, welcomed and recognized as part of the fabric of that community,” Egbert says. “For us, a healthy, thriving business is being part of supporting the community so that it thrives.”

bread and butter, but

Corporate Merger Leads to Local Expansion

we’re finding that our

Think Office in Anchorage has become Alaska’s distributor of two of the world’s largest commercial furniture manufacturers thanks to Herman Miller’s 2021 acquisition of Knoll. The two manufacturers—ranked the second and seventh largest in 2020, respectively—merged their product lines to form MillerKnoll, explains Think Office owner Rod Young. He describes the merger as “probably the biggest thing that’s happened in the office furniture industry since Herman

commercial contacts are coming to us for residential solutions.” John Rafferty, Chief Operating Officer Capital Office

Miller designed and manufactured the cubicle.” The upstream acquisition tangled up the competition between Think Office, the local Knoll distributor, and BiNW of Alaska, the local Herman Miller dealer. “If they’re selling the same exact product that we’re selling and vice versa, how do you really differentiate yourself from your competitor?” Young says. The two merchants had batted around the idea of a buy-out or merger for years, Young says, but it had never been a good fit. The MillerKnoll merger changed that. “We thought it made sense for us to buy them out and merge the two teams, which we’ve done,” Young says. “In essence, we eliminated a competitor and now we have both Herman Miller and Knoll to go along with our other brands to provide our clients with more options.” Finalized on December 30, 2021, the buy-out not only cemented Think Office as Alaska’s sole MillerKnoll distributor but let the company realize a longtime expansion goal as well. “ We’ve always wanted to grow,

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and this was kind of a one-stopshop to growth if you will,” Young says. “We were able to grow our product offering again by bringing on the Herman Miller brand to our Knoll offering, but we were also able to pick up their entire team. So now, we have more salespeople, more project managers, more field installers, so we essentially doubled the size of our deliver y and installation team. So, you know, we increased our product solutions offering if you will.”

Trickle-Down Expansion Unlike SystemCenter and Think Office, Capital Office didn’t merge with another company or acquire a new distributorship. Instead, it benefits from more than two dozen acquisitions and partnerships by Steelcase, the top commercial furniture manufacturer in 2020. As Alaska’s exclusive distributor of Steelcase products, the changes at the top “really opened the door” to the selection of furniture Capital Office can offer its customers. “The biggest benefit really is these

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are products that we likely wouldn’t have marketed prior, so [customers] are getting a large palette of choices,” Rafferty says. “For us, it was the right partnership at the right time.” These include the acquisition of Spanish company Viccarbe and partnerships with Blu Dot and West Elm, which Rafferty says transitioned from a more residential feel to what he calls “lite commercial.” Steelcase even partners with tech giant Microsoft to integrate computers with furniture. Increased product choices simplify logistics. Before the acquisitions, Capital Office customers wanting furniture other than Steelcase would have to deal with different vendors and work around varying shipment dates. Now, every unit is consolidated onto one truck in Seattle and shipped to a rapid distribution center in Alaska. “Before, we had to source from all different vendors,” Rafferty explains. “Now, we can offer one point of contact. [Clients] can basically procure a package by fifteen to twenty different vendors with one purchase

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order, one point of contact, with one entity handling all aspects of that. I can’t understate how valuable that is from a customer and fulfillment and freight logistics standpoint, to have that one organization that services all of those items.” Capital Office also plans to double down on its Southeast presence with a new Juneau showroom, which is scheduled for completion by the end of 2022. That showroom comes on the heels of renovations to its Anchorage and Fairbanks showrooms, Rafferty says, adding that he expects the Anchorage showroom will undergo a second renovation in the next eight to twelve months due to the number of new products to showcase. As more employees and companies are investing in furniture to help remote employees remain comfortable, efficient, and productive working from home, Rafferty says Capital Office has also seen growth in the sale of home office furniture. Many of Capital Office’s new furniture lines help fill that niche. “There’s a big uptick in hybrid workspaces, with people investing in

May 2022 | 35

“Going back to when COVID had just hit

Furnishing and design input from Think Office created a lively, functional break room for Calista Corporation employees. Think Office

and everybody goes into lockdown, you would have thought it wasn’t the best time to be in the commercial furniture business… [but] I would say the last two years were our top five in terms of sales revenue.” John Rafferty Chief Operating Officer Capital Office

their home offices,” Rafferty says. “The commercial side of the business is our bread and butter, but we’re finding that our commercial contacts are coming to us for residential solutions.”

Turn-Key Office Solutions While supplying tables and chairs is the most visible part of the commercial furniture market, retailers’ involvement often extends behind the scenes to design and space planning as well. “We provide consultation, sales, design, project management, and installation services,” says SystemCenter’s McCann. “So we can go and help a client identify their needs, come up with conceptual drawings and renderings so the client can actually see what their space is going to look 36 | May 2022

like with their fabrics, their finishes, veneers, whatever we helped them select. So, we’ll do a whole turn-key office solution.” Whether a retailer works directly with the client or collaborates with other designers depends on the needs of the space. “Some clients may not be doing an elaborate improvement, so they would come directly to us, and we would work with them,” Young says. For architecturally driven designs, “we enhance what they [architects and interior designers] do and we support them to work with their clients.” Rafferty says COVID-19 made companies more thoughtful when it comes to workspace design, with many placing an increased emphasis

on ergonomics, health, and safety, incorporating things like heightadjustable desks—“Probably 90 percent of every desk we sell is heightadjustable,” he says—as well as highperformance task chairs and laptop trays. Watching the industry adapt to the changing ways companies and employees view the workplace has been just as interesting as the changes happening in the industry. “It’s been a really fun time,” Rafferty says. “There’s been a tremendous amount of change, even more in the last eighteen-twenty-four months— and I think everybody, regardless of industry, can say that—but it’s been pretty interesting to see how people are wanting to work now.”

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FISHERIES

Alutiiq Pride Marine Institute Science and industry in Seward

Birds Eye Photography

By Nancy Erickson

eward’s Alutiiq Pride Marine Institute quietly celebrated its 30th anniversary recently, but many residents and even some in the industry are unaware of the pioneering work the shellfish hatchery and mariculture research center has conducted. Built by the Alaska Department of Fish and Game from criminal settlement funds resulting from the 1989 Exxon Valdez oil spill, the Mariculture Technical Center opened in 1992 with the primary purpose of producing oysters and clams for aquatic farmers. The institute was initially operated by the Qutekcak Native Tribe of Seward, and it became the Alutiiq

38 | May 2022

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Pride Shellfish Hatchery in 2002, recently rebranding as the Alutiiq Pride Marine Institute (APMI). APMI is a division of Chugach Regional Resources Commission (CRRC), an intertribal consortium of seven Alaska Native tribes in the Prince William Sound and Lower Cook Inlet region: village councils in Tatitlek, Eyak (Cordova), Port Graham, Nanwalek, Chenega, the Qutekcak Native Tribe, and the Valdez Native Tribe. CRRC was organized in 1984 and incorporated as a nonprofit in 1990. The seven villages’ strong cultural ties and rich understanding of natural resources and marine systems on the waters and lands of this region give CRRC access to a deep knowledge base generally not readily accessible to other aquaculture facilities.

“Farmers are still developing their markets, but most [seaweed] is destined as fertilizer until additional infrastructure is developed in Alaska to make other products such as dried kelp, extracts, food binders, and pharmaceuticals.” Michael Mahmood, Production Manager, Alutiiq Pride Marine Institute

RESOURCE DEVELOPMENT COUNCIL

Making Strides with Shellfish Located on the corner of Railway Avenue and Lowell Point Road in Seward, a walk through APMI’s doors reveals a lot more than researchers propagating shellfish for aquatic farmers. “We do much more now than just hatch oysters,” says Jeff Hetrick, mariculture director. “We’ve raised geoducks, clams, oysters, littleneck clams, butter clams, cockles, abalone, red king crab, blue king crab, rock scallops, and sea cucumbers, to name a few. We’ve also cared for salmon, halibut, herring, and octopus for research projects.” “We provide juvenile shellfish seed and kelp string with partners statewide,” Hetrick adds. “We’re presently raising abalone and sea cucumbers for Southeast projects and clams for our communities’ enhancement projects. All our research is applicable statewide.” The main room contains the algae lab, where flasks under grow lights produce food for the hatchery’s inhabitants. Beyond huge round tanks in the main room are smaller containers housing baby soft shelled clams. When they grow to about one-quarter inch, they are re-seeded to beaches near Seward. Smaller tanks also contain littleneck clams and butter clams for Chenega. Researcher Annette Jarosz is working on a clam habitat suitability study to www.akbizmag.com

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May 2022 | 39

This spool will soon be covered with kelp and ready for outplanting in approximately six to eight weeks. Southern Dippers Production

determine what beaches are more suitable for seeding. APMI Science Director Maile Branson explains, “We have various tanks of different depths to see how [clams] best dig, how rapidly they dig, and what their survival is in different kinds of sand.” The next tank’s side walls are covered with abalone. Southeast Alaska has a small fishery for the species, which has been declining, Branson says. APMI received a grant from the National Oceanic and Atmospheric Administration to experiment with abalone culture techniques with the goal of restoring the fishery. “They’re really interesting and super responsive,” Branson adds. “The way we get them off the side of the tank is to put a starfish in there. They can sense it and all head for the hills.” Sea cucumbers at APMI aren’t immobile as their name implies. 40 | May 2022

“They’re kind of funny,” says Branson. “Sometimes they pick their heads up and do funny things like wave it around.” The project involves spawning the sea animals for aquaculture development research in Southeast Alaska and Washington, Hetrick adds.

Keeping Oceans Healthy APMI began looking at ocean acidification through its Chugach Regional Ocean Monitoring Program (CROM) about ten years ago as part of a network on the West Coast and now worldwide, says researcher Jacqueline Ramsay. Her Ocean Acidification lab within CROM measures carbon dioxide, salinity, and temperature at Resurrection Bay to provide long term climate data showing seasonal and annual variations and trends. Also, partners around the state send

water samples to APMI to measure acidification levels. “It’s the first and longest running nearshore data set for carbonate chemistry monitoring in the state of Alaska,” says Ramsay. Monitoring expanded in 2015 when APMI began sending field kits to member tribes for weekly water sample collections. Sampling has also been extended to King Cove, Little Diomede, Kotzebue, Nome, and Utqiaġvik. Another part of CROM detects harmful algae blooms and paralytic shellfish poisoning. Planktonic algae can produce toxins harmful to people, animals, and surrounding ecosystems. These toxins can cause severe health problems when ingested and can be fatal. The APMI website provides realtime data to the public to help best determine the risk level for recreational

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May 2022 | 41

and subsistence harvest of shellfish and other marine organisms. While CRRC’s focus is to serve its seven member tribes, the general public also benefits. “Our research and monitoring programs are key to understanding the basic ecological health of the region,” says Hetrick. “The public benefits from our work because we are re-establishing localized clam populations and increasing our understanding of shellfish life histories throughout Alaska,” Hetrick says. “We also provide comprehensive data on ocean waters and are developing a lab to ensure our shellfish are safe to eat,” adds Ramsay.

Kelp Is on the Way Kelp farming is gaining in popularity among regional fishermen looking for opportunities during their offseason and tribes interested in providing economic opportunity during winter months. The United States grows a miniscule percentage of the world’s $6 billion seaweed market, but Alaska has the capability of growing into a major contributor, according to the Alaska Seaweed Market Assessment. Eight seaweed farms are currently active in Alaska, sixteen are authorized but not active, and twenty-three are in the permitting pipeline, according to the report compiled by McKinley Research Group for the Alaska Fisheries Development Foundation. Farms are located in the Aleutian Islands, Kodiak, Southeast, and Southcentral. APMI is assisting farmers with startup logistics by growing “starts” to set up their ocean-based farms— experimenting with sugar, ribbon, and bull kelp. Kelp is extremely versatile and used in food, pharmaceuticals, cosmetics, and biofuel, according to Branson. “Kelp is also highly productive and sequesters large concentrations of carbon, counteracting localized ocean acidification,” she adds. “Therefore, in a regenerative ocean farming system, kelp can benefit both the farmer and numerous marine species.” Don’t expect APMI’s kelp nursery to be lined with pots under lights containing little green sprouts. 42 | May 2022

A kelp garden consists of 2-by-15inch plastic pipe wrapped with 200 feet of nylon twine and inoculated with kelp spore solution. The string is controlled with temperature and light until the kelp (not a plant but a colony of single-celled algae) germinates and is ready for shipment to farmers or test sites at approximately six weeks. APMI is currently working with nine farms/test sites near Cordova, Chenega, and Tatitlek. “It takes a lot of time and care to tend to the seed string for a couple months, but it is very rewarding to see kelp grow on the string,” says Michael Mahmood, APMI production manager. When ready, spools are taken to farms or test sites and unraveled onto grow lines suspended between buoys approximately 7 feet below the surface and monitored for six to seven months until harvest in the spring. “The kelp grows very rapidly and will reach lengths up to 10 feet in April when it will be harvested,” Hetrick says. “The test harvest last year yielded about five pounds per foot of grow-out line,” he adds. Alaska’s first crop of sugar and ribbon kelp was harvested in Kodiak in 2018, and production since then has totaled 743,000 pounds, according to the assessment report. Nearly all the harvest was sold to California-based Blue Evolution, which produces frozen, dried, and pureed kelp. Two private farmers in Prince William Sound and one in Kachemak Bay have used APMI’s kelp string to propagate their farms. Hetrick says APMI expects to be a major producer of kelp string in Southcentral Alaska. There are currently eleven seaweed farms in the permitting process in Prince William Sound, encompassing 307 acres. CRRC is exploring developing its own farms near Tatitlek, Chenega, Port Graham, and Nanwalek on behalf of member tribes. More than 2,000 acres are currently involved in Alaska seaweed farming, according to the report. “Farmers are still developing their markets, but most of it is destined as fertilizer until additional infrastructure is developed in Alaska to make other products such as dried kelp, extracts, food binders, and pharmaceuticals,” says Mahmood.

Employees from APMI and the Native Conservancy collect bull kelp on Chenega Heritage's M/V OMC from the surface in western Prince William Sound for hatchery cultivation. Birds Eye Photography

Sights on the Future Alaska’s mariculture industry is growing and is ripe for expansion and investment. The State of Alaska and Kenai Peninsula Borough adopted plans to support development of the industr y, and the Division of Economic Development created a Mariculture Revolving Loan Fund providing loans of $100,000 per year up to $300,000 to fledgling businesses, according to a CRRC statement.

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And as for APMI, Hetrick says, “We see ourselves continuing to be a leader in shellfish research in Alaska and North America, not only with hatchery technology but in clam enhancement and restoration.” APMI has doubled its staff in Seward over the past year and will continue to grow as new opportunities and challenges arise with the expansion of mariculture in the state and changing ocean conditions. APMI is proposing to expand its fully integrated Mariculture Technical www.akbizmag.com

Center and Mariculture Production Center which, if funded, would approximately double the size of its physical infrastructure while quadrupling the services that staff can provide to tribal members and partner organizations. “We’ve always had support from our CRRC board to continue working on prevailing issues in the mariculture and ocean research industries but are plagued by lack of space,” says Hetrick. “This proposed facility expansion will be a unified campus of approximately Alaska Business

20,720 square feet of facilities, storage, and yard space. The new facility will also provide sufficient space for our ocean monitoring and mariculture programs as well as accommodate repairs, maintenance, fabrication, and storage of equipment.” The expansion will add education, cultural, training, office, and lab space to provide the necessary capacity for not only CRRC and APMI but other businesses, Alaska Native organizations, and tribes in the region to recover and build resilience for the future. May 2022 | 43

Haliehana Stepetin

A L A S K A N AT I V E

“H Feeding Communities Subsistence economy is more than cash and calories By Isaac Stone Simonelli 44 | May 2022

arvesting our personal food has been something that my family has always done,” says Johon Atkinson, a community wellness specialist in Metlakatla. “We've always harvested off the land and been able to fill our freezers with wealth, with investments.” Atkinson is a full-time harvester of wild resources, in addition to his career in the cash economy. Hunters, fishers, and gatherers harvest an estimated 34 million pounds of wild foods annually, according to the Alaska Department of Fish and Game’s (ADF&G) Division of Subsistence. Those foods provide 25 percent of

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calorie requirements and more than the entire nutritional requirement for protein in rural communities. Beyond calories, though, Atkinson explains that the subsistence economy provides a foundation for mental, physical, and spiritual health. In fact, some Alaska Natives believe the word “subsistence” is too reductive. “I actually don't use that word when I'm talking about harvesting our foods,” says Marina Anderson, the tribal administrator for the Organized Village of Kasaan and also a full-time harvester. Anderson explains that “subsistence” often refers to supporting oneself at a minimum level. “Our ways of life are some of the richest ways of life, ways that connect us physically and spiritually to the lands and waters through our ways of coexistence,” Anderson says. “It's not at a minimum level of keeping us alive.”

Laws of the Lands The Alaska Native Claims Settlement Act of 1971 extinguished indigenous hunting and fishing rights, with the understanding that the state government would come to a new

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arrangement. However, many Alaska Natives argue that Congress didn’t have the authority to trade away those rights in the first place. “We’re indigenous nations with sovereignty, and it's up to us to decide what and how we harvest,” says Haliehana Alaĝum Ayagaa Stepetin, who teaches Alaska Native Studies at UAA while working on her PhD dissertation on subsistence lifestyles in Unangam Tanangin, Alaska’s Aleutian Islands, through the University of California, Davis. Stepetin grew up practicing traditional fishing, hunting, and gathering with her father and aunties in the Aleutian island of Akutan. The first state subsistence law in 1978 prioritized subsistence uses of fish and wildlife over personal and commercial use, but it defined subsistence users as all Alaskans equally. In 1980, Congress gave rural residents priority access to subsistence resources in the Alaska National Interest Lands Conservation Act (ANILCA). “People who are living in rural Alaska are going to be generally more dependent on subsistence resources as a larger part of their household and

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community economy because they don't have grocery stores and also because of a cultural history of living off the land,” explains Caroline Brown, the statewide program manager for the ADF&G Subsistence Division. Even in rural communities that do have grocery stores, residents pay much higher prices despite rural Alaska being more economically depressed due to limited opportunities for jobs. “You’re paying more, even though you have less money,” says Brown. The largest annual per capita harvest of wild food resources comes from rural Arctic communities. In 2017, they harvested roughly 402 pounds per person compared to the average of 15 pounds per person harvested by Anchorage residents. The rural preference was enacted in state law, as well, but it didn’t last long. In the case of McDowell v. State, the Alaska Supreme Court ruled in 1989 that every citizen has an equal constitutional right to fish and game. This created a split between state and federal subsistence law. The US Department of Interior began enforcing the rural preference in ANILCA on federal lands and waters,

May 2022 | 45

Haliehana Stepetin’s PhD work focuses on the deeper cultural implications behind Alaska Native harvests, such as the importance of gifting. Haliehana Stepetin

while ADF&G manages subsistence resources its own way everywhere else. That doesn’t mean that ADF&G ignores the needs of traditional harvesters. “We don't really think about subsistence in purely economic terms,” Brown says, “because subsistence, as a way of life, has value beyond what we would describe as just economics.” In its management studies, the division combines quantitative harvest surveys with ethnographic interviews of high-yield harvesters. “We interview them in order to provide that cultural and social context to harvesting,” Brown says. Data gathered by the division are used by the Boards of Fisheries and Game to create subsistence rules and regulations. The boards use eight criteria for determining if a fish stock or game population is subject to subsistence preferences on state and private land. These include a long-term consistent pattern of non-commercial 46 | May 2022

harvesting; geographic location; intergenerational transmission of knowledge; methods of harvesting; and the means of handling, preparing, preserving, and storing the harvest. However, the input of harvesters does not ensure that regulations provide full access, according to Anderson. “Subsistence laws lock a lot of our people out from being able to actually harvest, learn our ways of life, and live our ways of life,” she says. At a Board of Fisheries public hearing on permits for herring egg harvesting, Anderson made it clear that, if passed, she would not go through the bureaucratic process of receiving a permit to collect food that her Tlingit and Haida people have harvested for countless generations. “I do not need to ask for permission for access to my spiritual sustenance,” Anderson says. “That puts me at risk for being criminalized. It puts me at risk of potentially having gear seized and the food seized.”

Anderson is particularly concerned about subsistence rights for Alaska Natives who reside out of state. These individuals cannot legally participate in resident-only subsistence harvests. “They're not able to come home and harvest. They're not able to bring their families home to harvest, so it leads to more generational gaps in the knowledge,” Anderson says. “It's more than taking food out of their mouth. Essentially, you're stopping somebody from walking into their church. You're putting a roadblock between them and their spiritual connection.”

One for Me, Four for You Which resources are harvested varies widely among regions and communities. In general, Arctic communities rely more on marine mammals and large land mammals, while some communities in the Southeast, which rely heavily on salmon, specialize in gathering seaweed and herring eggs. One harvesting

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pattern that is remarkably consistent, though, is the 30/70 Rule. Brown explains, “Regardless of where you are in rural Alaska… about 30 percent of the community’s residents produce 70 percent of the community's food.” That makes sharing one of the primary characteristics of a subsistence economy. “These dense networks of sharing between households and between communities within a region are to make sure that everybody is covered,” she adds. That makes the economy especially fragile. Anderson argues that if regulations pull heavy harvesters out of the sharing network, they affect everyone in the community. Her family, for example, uses a 60/20/20 rule, where they immediately distribute 60 percent of what they harvest and process to everyone in Kasaan. Another 20 percent is stored for the village to use later, while the family keeps the last 20 percent for their own needs. “We start with families that are struggling, single mothers, and elders,” Anderson says. In return, Anderson says she gets precious time with these elders, an opportunity to learn more about her culture and traditions. As in Southeast, so too in the Aleutians. “[Gifting] has been the number one thing that keeps coming up in my visits with community about subsistence,” Stepetin says. “Through gifting we are rich, we are wealthy.” Stepetin explains that there are traditional protocols throughout Alaska Native communities that establish a relationship between animals and plants, which she describes as morethan-human relatives, and the gifting economy. “If you get a salmon, your first salmon of the summer, and you don't give that away to an elder, the salmon will stop coming,” Stepetin explains, as an example. Another element of subsistence economies is bartering. Trading often exists between households with certain specialties, as well as between communities that have access to different resources. Anderson explains that if she was going to get a traditional cedar hat, with a retail value of about $900, she’d go to an artisan and trade cases of smoked sockeye, bags of dry www.akbizmag.com

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For Stepetin, she says one of the reasons she pursued a career in academia is because it gives her the summers off and allows her to prioritize her traditional harvesting lifestyle.

Haliehana Stepetin created a presence on Instagram to share her academic studies of Alaska Native food sovereignty. Haliehana Stepetin

Between Two Worlds

fish, and seaweed or other resources she harvested. Atkinson says that it's not unheard of for people to barter for an iPad or iPhone because of the high value of wild harvests. “Seaweed is such a seasonal food, where you can only get it for like two weeks out of the year, so it's highly valued, and that's how a lot of our foods are,” Atkinson says. “We truly appreciate what goes into harvesting our foods.”

Beyond Barters Bartering is okay, but selling subsistence goods for cold, hard cash is illegal. A harvester can accept money to pay for boat fuel and equipment, but she could not sell a bag of processed seaweed in Anchorage, Anderson explains. She doesn’t like it, though. “I don't believe that indigenous people should have any limits on the way that we trade our food or our resources,” Anderson says. “I do believe that people should be able to trade for other resources or trade for money… The fact that it's not allowable is another way to criminalize our people. And, when that happens, you take a harvester out of the community, and you take food out of people's mouths.” Anderson explains that traditional harvesting practices are, at their core, based on sustainability and that the point of any barter is to have an equitable trade that ensures everybody is increasing value for their families, which can include trading for cash. Because subsistence economies don’t 48 | May 2022

exist in a vacuum in Alaska but are part of the mixed economy, cash is important. “Access to cash often supports people’s subsistence activities because you've got to buy bullets. You've got to buy guns. You've got to buy nets. You've got to buy all these things that help you do subsistence,” Brown says. “A lot of people in rural Alaska will take some of the money that they make doing jobs and put it back into subsistence to support their subsistence activities.” Stepetin points out that certain organizations, such as the Aleutian Pribilof Island Community Development Association, help alleviate the economic pressures of subsistence harvesting by providing reimbursement grants for gear and other expenses. ADF&G has found that highly productive harvesters tend to be households with several adult members who have access to cash. But the seasonal and variable nature of harvesting can make it hard to operate in both the subsistence and cash economies. Atkinson says he’s fortunate to have a job in wellness that allows him to schedule his life around seasons, but he is aware that many people simply can’t get time off to participate in harvests that have narrow windows of availability. That makes resource sharing more important. “Everybody can still have a piece of that traditional lifestyle, that traditional wealth,” he says.

As early as elementary school, Alaska Natives face significant challenges in balancing their lives in the Western educational system and learning the skills and cultural knowledge of traditional harvesting. “Education in school was secondary to our subsistence activities. It was always secondary,” says Stepetin. “It's because Unangax̌ education happens on the water. It happens on the land.” Likewise, Anderson recalls being pulled out of school for hunting trips and different types of harvesting activities. “There was a lot of friction between school and that lifestyle,” she says. “It’s expected for me to be, as a child, in school Monday through Friday, when the reality is I was out on the water learning my traditional knowledge.” Anderson says she ended up having to petition her high school to graduate because she’d missed so many days. “There's a lot of pressures that are pushing down on our traditional economy and our harvesting ways of life,” Anderson says. While these pressures can make participating in the wild harvest economy difficult, that lifestyle remains vital to Alaska Native food sovereignty. Stepetin explains, “Food sovereignty means that we, as sovereign nations and sovereign peoples, get to determine on what terms we have access to foods or the role that our own original foods play in our current day-to-day lives and our cultures.” For more than 10,000 years, more than 200 different resources were harvested, processed, and used by Alaska Native communities, explains Atkinson. Far fewer are harvested now, but they are still out there. “Knowing that is always a huge inspiration because there’s food everywhere,” Atkinson says. “We are so fortunate to be living where we have the opportunity to be able to harvest our traditional foods—because it's more than just food.”

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OOI LI L&&GGA AS S

t’s late in the first quarter of 2022, which means a relatively new tradition is taking place in Juneau: the annual debate over the amount of the PFD, which before Alaska’s five-year recession followed a well-established formula. As of publication, conversations about the October payout include the option of a $1,300 energy rebate in addition to a PFD of approximately equal size. To many of the state’s political leaders, it’s not enough money; to others it’s too much. All of them are keenly aware that Alaskans are dealing with a tight housing market, sky-high gasoline prices, and out-of-control inflation. At the same time, Alaska’s residents 50 | May 2022

and businesses have been clamoring for years for a long-term, sustainable fiscal plan. So what’s the magic number that best serves Alaskans of today and tomorrow, considering the unusual mix of tight budgets and high oil prices? Conversations like this dominate legislative sessions and around-thetable conversations because of the state’s long and enduring ties to the oil and gas industry. Of Alaska’s sixty-three years of statehood, oil and gas activities have been fundamental for more than fifty. “Non-Trivial Trivia” brushes up on that history. One decades-long dispute between the state and federal government

still lacks a resolution, which we examine in “ANWR Remains As It Ever Was.” New frontiers in the oil and gas industr y also include advancements in technology, covered in “Eyes in the Sky, Ears on the Ground.” Innovations are key to bridging Alaska’s energy economy into the next few decades, when countries shun petroleum; “Colorless Green Ammonia Sleeps Furiously” reports on some new approaches. And for perspective, this section looks at how Alaska’s Arctic neighbors treat their petroleum wealth—or lack of it. Not everyone is as blessed with oil and gas as Alaska is, after all.

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May 2022 | 51

Leif Van Cise | UAF

OIL & GAS

Colorless Green Ammonia Sleeps Furiously Awakening the dream of carbonless energy By Scott Rhode 52 | May 2022

ydrocarbons are a two-edged sword. One edge is hydrogen, storing energy like woundup springs that is released when combusted with oxygen. The other edge is the carbon atoms the hydrogen is bonded to, which in the grip of oxygen become a climate-warming veil of carbon dioxide gas. Petroleum under the North Slope and methane under Cook Inlet have both potentials: productive energy from hydrogen and destructive pollution from carbon. In a decarbonizing global market, Alaska needs a way to separate the good from the bad. “If we want to continue to be an energy exporting state, which is very much what we see ourselves as, we need to understand those markets are changing internationally,” says Gwen Holdmann, director of the Alaska Center for Energy and Power (ACEP) at UAF. The fastest change is in maritime shipping. Last year, the Marine Environment Protection Committee of the International Maritime Organization adopted its MEPC 76 amendment,

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Nitrogen for Carbon A molecule that swaps out carbon for a nitrogen atom, NH3 is mostly used as fertilizer—88 percent of worldwide consumption. Ammonia can also be a household cleaner or refrigerant, but it’s also as combustible as diesel fuel, albeit with about one-third of the energy density. (Although NH3 and gaseous hydrogen involve different chemistry and technology, both are lumped together as carbonless energy carriers.) The International Energy Agency forecasts up to 10 percent of global shipping will use ammonia fuel by 2040 to satisfy the MEPC 76 standard. Within fifty years, the projection is 70 percent. On shore, South Korea and Japan set targets of net-zero carbon emissions by 2050, followed by China’s goal of netzero in 2060. Japan’s largest electric utility wants ammonia to replace coal in its power plants. That shift requires a new marketing approach for the Alaska Gasline Development Corporation (AGDC) as it tries to sell liquified natural gas (LNG) from the North Slope to Asian utilities. “When we’re talking to them, they ask about the LNG opportunity but also the hydrogen opportunity,” says AGDC President Frank Richards. Prior to 2013, South Korea did import ammonia from Alaska, made at the Kenai Nitrogen Facility in Nikiski. It was sprayed into dirt as plant food. “Ammonia has always been sold for its nitrogen value; people pay for what it’s worth as a fertilizer,” says chemical engineer Nathan Prisco. “And then [Japan] realized, just a few years ago, ‘If we burn it, we already hit our hydrogen target.’ The hydrogen value of ammonia had been undervalued.” Anyone selling hydrocarbons needs a “credible energy transition story,” says Nick Szymoniak, AGDC’s manager of new business ventures. Alaska has that story, he says: “Alaska, by geologic www.akbizmag.com

“You can convert existing infrastructure to run off of either 100 percent ammonia or high proportions of ammonia, so it’s one of the few things that can be a replacement fuel.” Gwen Holdmann, Director, Alaska Center for Energy and Power

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which requires large ships to be rated for carbon intensity, starting next year. The quickest path to reduced carbon intensity is burning fuel without carbon in it. “Ammonia is probably the leading candidate for them,” Holdmann says.

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A model of how reconfiguring the Trans Alaska Pipeline System to ammonia service could extend its usefulness beyond 2050. Mighty Pipeline

CO2 Direct-Air Capture 1,200 10,000 MTd Large-scale Green Blue Ammonia Ammonia Projects expansion

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Part of Mighty Pipeline's pitch for sending ammonia down TAPS is that it creates opportunities for ammonia generated elsewhere by renewable sources: solar, wind, or hydro.

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dumb luck, has a great carbon sequestration basin in Cook Inlet. By a history of industrial dumb luck, we have an existing ammonia plant sitting idle. And based on geography dumb luck, we’re located in close proximity to Asia.”

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Photography by Waliszek.

Blues for Methane The Nikiski factory stopped producing ammonia because Cook Inlet natural gas was more valuable to generate electricity or heat for Southcentral homes. From 1968 to 2013, the facility plucked hydrogen from methane molecules, spat out the carbon as CO2, and attached the hydrogen to nitrogen from the air. Because the process emits carbon dioxide as surely as if the fossil fuel were burned directly, this form of ammonia is called “gray” or “brown.” Nikiski is AGDC’s choice for the terminal of its AK LNG pipeline, which could revive the fertilizer factory next door. To the extent that North Slope natural gas itself is a low-carbon alternative, Richards explains that the mixture of gasses out of the ground includes about 10 percent CO2. The carbon dioxide can be separated from methane and reinjected, just as natural gas is currently put back in the ground to repressurize oil reservoirs. That is why carbon emissions compare favorably to LNG from the Gulf of Mexico, according to a report AK LNG released last October. Richards says that makes Alaska LNG one of the best bets in the world, in terms of low carbon intensity. For lower intensity, carbon capture and sequestration (CCS) can, by the same principle, trap CO2 emissions from an ammonia factory. In the color scheme of ammonia production, this is “blue.” Although the Nikiski fertilizer factory never captured its carbon, the potential is there. “The Cook Inlet basin, not only with its depleted oil and gas reservoirs but with its immense coal bed seams, has the greatest opportunity for carbon sequestration of any basin on the Pacific West Coast,” says Richards. Holdmann agrees Cook Inlet is a pretty good CCS basin. Now, what if the ammonia factory were on the North Slope? That’s what Prisco is proposing.

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Gwen Holdmann’s Alaska Center for Energy and Power shares a floor at UAF with the Center for Innovation, Commercialization, and Entrepreneurship, which is supporting the ammonia transport start-up Mighty Pipeline. Sarah Lewis

Prisco is the first Arctic Innovator, a program sponsored by the US Department of Energy (DOE). The award allows Prisco to split his time between Pacific Northwest National Lab in Richland, Washington and UAF’s Center for Innovation, Commercialization, and Entrepreneurship (Center ICE). When he came to Alaska in 2021, he wanted to apply his PhD toward decarbonization. Prisco recalls, “When I arrived in Fairbanks, they walked me around the lake, and they’re like, ‘No, you’re starting a company!’” His start-up, barely a year old, is aimed at transporting ammonia from the North Slope. He named the company Mighty Pipeline.

Be the Rabbit

ACEP specializes in integrating energy sources into microgrids, developing technology used in Alaska villages. Sarah Lewis

56 | May 2022

The name references the 2019 comedy Jojo Rabbit, in which an imaginary Adolf Hitler praises “the mighty rabbit.” Adolf tells the titular Jojo, “The humble bunny can outwit all of his enemies. He’s brave and sneaky and strong.” Prisco had to be sneaky to outwit ammonia, coaxing it to blend with crude oil. “Emulsions are a very subtle art,” he says, so he looked to shampoo and lotion manufacturing for tricks to hold both liquids together. The result is “mighty solution,” what Prisco calls the world’s first stable emulsion of ammonia and crude oil. “You might think of this like natural peanut butter which, over time, will separate into oil and protein components,” he says. “Basically, we have a low-cost, low-energy method of producing stable mixtures for use in pipeline and fuel systems.” The Trans Alaska Pipeline System (TAPS), in particular—provided Alyeska Pipeline Service Company is convinced it can be done safely. “We’ve had a few discussions with Alyeska,” Prisco says, “and it’s about as useful as saying, ‘What do you think about ghosts?’” He says the oil industry is wary of ammonia; a skill set built on hydrocarbons has little love for inorganic chemistry. Ammonia can also be corrosive, but Prisco says that shouldn’t be a problem for TAPS because the oil emulsion protects the steel. Alyeska had no comment. Alaska Business www.akbizmag.com

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Only a fraction of North Slope gas might be sent down TAPS this way, says Mighty Pipeline Chief Operating Officer Ky Holland. “The North Slope is currently producing such an incredible amount of natural gas and reinjecting it that… you could put another ten projects in there, and we could all stay busy,” he says. AGDC agrees there’s no competition with AK LNG for gas supply. By the way, Holland used to work in the sewer business, so when it comes to the pungent aroma of ammonia, he has a simple philosophy: “Smells like money.” In dollar terms, Prisco estimates about $10 billion would be needed to build an ammonia factory on the North Slope and, crucially, to “recalibrate” TAPS to accept the emulsion. That compares to nearly $40 billion for AK LNG. If successful, it could add 120,000 barrels per day to the pipeline, now carrying about 500,000 barrels per day of crude, or one-quarter of its maximum capacity. Mighty Pipeline will begin a Phase 1 demonstration this summer at UAF. One person awaiting the results is Bill Leighty, a Juneau-based inventor who’s been working on ammonia energy for decades. Leighty calls Prisco “the perfect guy to pursue it,” yet he has reservations about the Mighty Pipeline approach. “Assuming that we capture every molecule of CO2, give it back to them, and they inject it underground for enhanced oil recovery, now we have accomplished blue ammonia—but for the purpose of producing more oil so we can burn it and put more CO2 in the atmosphere,” Leighty says. “What color ammonia is that?”

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Fuel from Thin Air Leighty is director of The Leighty Foundation, a charity established by his father in 1985 that, among other causes, promotes renewable energy. Leighty is also the brain behind Alaska Applied Sciences, which he describes as a 30-year-old startup that hasn’t burned through its cash yet. One of his projects is ammonia synthesized with hydrogen split from water, not methane—a true carbonless pathway. Ammonia and hydrogen produced this way is called “green.” www.akbizmag.com

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In 2013, Leighty intended to use a $750,000 state grant to build a mobile, kilowatt-scale pilot plant to demonstrate production, storage, and energy recovery from ammonia. Suffice to say, that never happened. “The ammonia industry has leapfrogged, as hydrogen has, beyond my usefulness,” he says. Major institutes are trying to solve the green ammonia problem through DOE’s Advanced Research Projects Agency-Energy (ARPA-E) and its REFUEL program, which stands for Renewable Energy to Fuels through Utilization of Energy-dense Liquids. ARPA-E program director Grigorii Soloveichik says megawattscale green ammonia facilities are on the drawing boards in Australia, Chile, and Oman. What’s held them back has been the integration of continuous ammonia production from intermittent wind and solar. But the principle is sound. “You can convert existing infrastructure to run off of either 100 percent ammonia or high proportions of ammonia, so it’s one of the few things that can be a replacement fuel,” says Holdmann. In fact, she collaborated with Szymoniak on a 2008 study into ammonia fuel for rural Alaska. They concluded ammonia wouldn’t be economic until wholesale diesel was at least $8 per gallon. Ammonia of any color can’t compete with hydrocarbons on those terms. Fossil fuels are energy-dense and synthesized for free in the ancient geologic past. Synthesizing ammonia consumes energy; combining nitrogen with hydrogen costs more energy than it releases. “Round-trip energy efficiency for ammonia produced from excess renewables, delivered to market, you’re getting about 30 percent,” says Prisco. “You always lose when you convert.”

Professor Abhijit Dandekar of the UAF petroleum engineering department assisted Dr. Nathan Prisco in the research that helped Mighty Pipeline start up. The company may relocate to the lab for further research after this year. Leif Van Cise | UAF

During the Arctic Encounter symposium in April, a delegation from Norway met in Anchorage with Holland (left) and Prisco (right) of Mighty Pipeline. Carter Damaska | Alaska Business

Soaking Up the Surplus

Dr. Nathan Prisco developed technology to blend ammonia and crude oil at Pacific Northwest National Laboratory, while UAF has the resources to help him commercialize the invention. UAF

58 | May 2022

Conversion pays off, though, where energy supply exceeds local demand. For example, Scotland’s wind-powered Orkney Islands regularly generate more than the community can consume, so Orkney uses electrolysis (splitting hydrogen from ordinary H20) to soak up the surplus energy. The stored

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“Our energy legacy is not over if we move into this carbonless world. We can use this as a way to step into that new world, to build upon the best of what we’ve done, to be able to create something the world needs in the future.” Ky Holland Chief Operating Officer and Co-Founder Mighty Pipeline

hydrogen powers the local ferry when it’s in port. Mighty Pipeline’s Holland sees the same possibility for Alaska. “Now you don’t necessarily have to ask the question, ‘Can we use that much energy in Alaska?’ Now we become a vehicle to be able to move that stranded energy to the markets that need it, in a form that they require.” Leighty points out that Norway pioneered ammonia synthesis in the ‘30s because of that country’s plentiful hydropower. Nearly a century later, Norway’s dams still make ammonia (for fertilizer) by running continuously at night, when electricity demand is lower. “The marginal cost of that energy is zero,” Leighty says, “so why not do something useful with it?” Ammonia could fuel village power stations, snowmachines, or ATVs. Leighty notes that electric aircraft are scaling up, with two-seaters currently powered by hydrogen fuel cells. Maritime fuel could be synthesized from offshore wind farms in the Aleutians, already abuzz with fishing fleets and cargo ships. Holland suggests harnessing water currents through False Pass or in the Yukon River, places with immense power but not enough people to use it. Why stop there? Geothermal power, tidal generators in Turnagain arm, small nuclear reactors—any excess electricity can be monetized and transported as ammonia. The prospects are intoxicating. And then sober reality sets in. “Alaska’s not set up to do [green hydrogen] in a big way today,” Holdmann says. “We certainly have renewable resources that we could develop, but that’s not going to happen tomorrow.”

This Carbonless World Holdmann is optimistic about Alaska transitioning to carbonless energy someday, with the state’s hydrocarbon infrastructure as a scaffold. Just as brown ammonia factories turn blue with CCS, the market for blue ammonia lays the groundwork for green. But there must be money in it. “It’s easy to say ‘Hey, we should be doing more of this,’ but if nobody is 60 | May 2022

willing to actually invest in moving us in that direction, it’s pretty hard for people to figure out how to get there,” Holdmann says. More money is becoming available, thanks to the Infrastructure Investment and Jobs Act, which allocates $8 billion for Regional Clean Hydrogen Hubs, another $1 billion for a Clean Hydrogen Electrolysis Program, and $3.5 billion for CCS. Other states have begun bidding for the federal cash. Senator Lisa Murkowski said in September that Alaska has “an enviously complete checklist” to grab a share, too. Holland puts it this way: “Our energy legacy is not over if we move into this carbonless world. We can use this as a way to step into that new world, to build upon the best of what we’ve done, to be able to create something the world needs in the future.” No single organization has all the answers for green ammonia right now, Holdmann says. “We all have a little piece of it, and we’ve all kind of dabbled in it here and there,” she says. “So now how can we get a little bit more serious about what that looks like today?” The answer to “how” may be on the same floor of UAF’s Engineering Learning and Innovation Facility that Holdmann’s ACEP shares with Center ICE, where Prisco is halfway into his two-year Arctic Innovator award. Prisco, Holland, and their mighty colleagues have spent nearly a year looking for buyers of ammonia shipped out of Valdez—a much harder sell than when TAPS opened the spigot on Alaska’s hydrocarbon wealth in 1977. Although ammonia fuel is a limited market now, it can only expand as carbon goes out of fashion. Prisco conjures a dream of Alaska villages storing energy in ammonia tanks, like firewood stacked for winter. In subzero weather, ammonia stays liquid without being pressurized. “There’s very few places in the world where in winter you can walk around and borrow a cup of ammonia from your neighbor,” Prisco says. “Alaska is one of those places.”

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ANWR Remains As It Ever Was Exploration is at a standstill as various lawsuits wait for resolution By Alexandra Kay

62 | May 2022

Alaska Business www.akbizmag.com

When ANWR leases became available, not one major oil company placed a bid. None. It was like a birthday party where the guest of honor refused to show up

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AIDEA Takes the Cake Established in 1960 and expanded in 1980, ANWR encompasses approximately 19.3 million acres, most of it designated as wilderness area. The major exception from that designation is 1.5 million acres of the coastal plain. Section 1002 of the Alaska National Interest Lands Conservation Act (ANILCA) requires an “analysis of the impacts of oil and gas exploration, development, and production, and to authorize exploratory activity within the Coastal Plain in a manner that avoids significant adverse effects on the fish and wildlife and other resources.” At the same time, Section 1002 of ANILCA states that “production of oil and gas from the Arctic National Wildlife Refuge is prohibited and no leasing or other development leading to production of oil and gas from the [Refuge] shall be undertaken until authorized by an act of Congress.” Congress acted in 2017. Over the next three years, the US Department www.akbizmag.com

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e came so close. For more than forty years, the most enduring cause that Don Young advocated for, as Congressman for All Alaska, was oil and gas development in the Arctic National Wildlife Refuge (ANWR). Before he died in March, Young had seen a president sign legislation authorizing lease sales in ANWR’s coastal plain; he saw a lease sale actually carried out; and he was on the verge of seeing initial exploration toward eventual development. The first exploration campaign is on hold, pending court action. And Young had one more counterattack in his pocket, a bill to prevent a moratorium on leasing in the refuge: HR 1726, the ANWR Act, which stands for “America Needs Worthwhile Resources.” His last ANWR bill was only the latest, after fourteen previous attempts to open ANWR. The attempt that succeeded came in December 2017, when an ANWR rider became law with then-President Donald Trump’s signature on the Tax Cuts and Jobs Act. “We finally got it done,” Young said at the time. In his fifth decade on Capitol Hill, Young should have known that hardly anything in politics is final.

OIL & GAS

“Here is the truth: throughout the ANWR leasing process, we conducted extensive environmental review and successfully carried out sales… [E]verything was done by the book and in accordance with the law. The Biden administration is dead wrong to have imposed a leasing moratorium on ANWR, and their decision looks especially foolish as skyrocketing gas prices continue to impact American families.” Representative Don Young (1933-2022)

of Interior published the required environmental impact study, a leasing program was approved, and in January 2021 the lease sale results were released. (The news was sidelined that day by the riot at the US Capitol.) The results—$14.4 million bid on 437,804 acres covering eleven parcels—might seem impressive, yet the outcome was a disappointment. During the decades that Congress sat on the question, the ANWR debate proceeded along a second prong: a public relations campaign to discourage investment in the refuge. Thus, when ANWR leases became available, not one major oil company placed a bid. None. It was like a birthday party where the guest of honor refused to show up. The guests who did get a slice of the ANWR cake were a small company named Knik Arm Services and Regenerate Alaska, a subsidiary of Australia’s 88 Energy. Each submitted winning bids for a single tract. The other nine winning bids came from the Alaska Industrial Development and Export Authority (AIDEA), the statebacked investment agency. Federal oil leases are a new asset for AIDEA, but

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Not So Fast Less than six months after AIDEA successfully bid on its leases, in early June 2021, the Biden administration suspended oil and gas leases in ANWR, pending an environmental review. Alaskan officials were angry, with Governor Mike Dunleavy calling the move an “assault on Alaska’s economy.” The Alaska Legislature passed a non-binding resolution urging the Department of Interior’s Bureau of Land Management to honor the lease sale

and proceed with permitting. Weitzner says AIDEA was “extremely disappointed in the Biden Administration’s effort to prevent Alaska from lawfully and responsibly developing its natural resources as agreed and provided for under ANILCA.” Within days, AIDEA issued a formal response, calling on the US Department of Interior to “address the statutory or regulatory grounds for suspension,” which AIDEA said the department had failed to identify. The response also noted the public support for development by more than twenty Alaska Native organizations and corporations on the North Slope, in particular the Native Village of Kaktovik, the only federally recognized community in the 1002 Area. Despite the suspension of its leases, AIDEA continued preparatory work, with the AIDEA board authorizing up to $1.5 million on pre-development permitting and planning for its oil and gas. Activities would support a phased, multi-year seismic acquisition program targeted to begin in 2022. AIDEA noted that “establishing the permitting for a 3D seismic data program starting in

2022 [would] support future exploration planning to reduce surface impact and optimize field drilling efforts.” The agency wanted to use data from the assessment to plan the best locations for recovering petroleum. In August of 2021, AIDEA issued a notice of intent to award SAExploration the contract to perform predevelopment permitting and planning, noting that they believed that “the Environmental Impact Statement the Bureau of Land Management prepared for the 1002 Area Lease Sale is comprehensive and appropriately addresses all issues relevant to a leasing phase environmental impacts assessment.” Five months after Biden’s suspension of oil and gas leases, AIDEA filed a lawsuit claiming the administration violated the terms of AIDEA’s leases. Dunleavy supported the lawsuit, saying that “AIDEA [was] well within its rights to take the President and his staff to court over their unlawful actions.” Attorney General Treg Taylor filed a motion to intervene. In December 2021, the North Slope Borough and Arctic Slope Regional

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without its involvement the ANWR lease sale would have fizzled completely. AIDEA chose to finalize seven of its ANWR leases, putting its focus on “the planning and permitting [the organization] would need to ultimately engage in seismic,” as AIDEA Executive Director Alan Weitzner explains. “We had a very robust team that was put together to consult on AIDEA’s planning activity.” Seismic studies have yet to take place. The ANWR lease sale occurred during the final weeks of the Trump administration. The new administration had a different direction in mind.

OIL & GAS

The tracts that received attention at the January 2021 lease sale are all on the western part of ANWR's 1002 Area, adjacent to the Point Thomson unit. BLM

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Same As It Ever Was Much as the Biden administration aggravates Alaskans who’ve dreamed of oil from ANWR since the 1002 Area was established, the president can count on the support of groups that oppose Arctic

oil drilling in principle and in practice. For example, Trustees for Alaska filed a motion in March to intervene in the AIDEA lawsuit on behalf of the Gwich’in Steering Committee, representing Native villages on the south side of the refuge. They had sued the Trump administration to halt the lease sale, and while they didn’t win an injunction, that case remains unresolved. Conscious of the public relations prong, AIDEA has adopted the message that oil and gas development in Alaska is more environmentally sound than anywhere on Earth. “Alaska is a key resource for reliable and responsible oil and gas resources,” says Weitzner. “In all of our media releases we keep highlighting that when we develop responsibly that is the driver for growth in our rural communities, and I don’t understand why we’re sacrificing that in favor of these other parties.” Weitzner points to sanctions against Russian oil imports as a reason to invest in domestic energy. “It’s perplexing to us that there’s abundant resources for energy available on the North Slope on state and federal land, and the federal government is looking to limit that

access while relying on resources from other sanctioned nations,” he says. That argument echoes one of the last made by Young, as he promoted his yetunpassed ANWR Act. “Here is the truth: throughout the ANWR leasing process, we conducted extensive environmental review and successfully carried out sales,” the late Congressman said. “[E]verything was done by the book and in accordance with the law. The Biden administration is dead wrong to have imposed a leasing moratorium on ANWR, and their decision looks especially foolish as skyrocketing gas prices continue to impact American families.” Not even AIDEA is suggesting that oil from ANWR can lower prices at the gasoline pump this month or this year, but what could have been? What if then-President Bill Clinton had not vetoed ANWR drilling in 1996? Or if the US Senate had not blocked it in 2002? Back then, major oil companies might have been able and willing to explore the 1002 Area, and its oil might be filling the Trans Alaska Pipeline System today. And Don Young would’ve been alive to see it.

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Corporation also intervened in the lawsuit on AIDEA’s side. North Slope Borough Mayor Harry Brower Jr. said, “Since the 1970s, Alaska has proven that energy development and environmental conservation can proactively co-exist. As Iñupiat, we maintain our traditional values, while our culture continues to evolve and adapt to the changing world around us. We support AIDEA and the Governor for continuing this fight.” Brower and Utqiaġvik Representative Josiah Patkotak jointly authored a column published in the Wall Street Journal imploring the Biden Administration to “Let Alaska Sell American Energy to the World.” The lawsuit gained another intervenor in March 2022, when Kaktovik Iñupiat Corporation joined the case. Until AIDEA v. Biden is resolved in US District Court in Anchorage, ANWR exploration is on hold.

OIL & GAS

Eyes in the Sky, Ears on the Ground

Advances in remote sensing in the oil fields

SAExploration

By Isaac Stone Simonelli

yte by byte, technology is helping the oil and gas industry become more efficient, costeffective, and safe. Advancements in remote sensing technology and their implementation allow oil and gas companies to collect higher quality data and act more precisely in the field. “Using remote sensing, you can collect a lot more data a lot faster,” explains Adam McCullough, the Alaska program manager for NV5 Geospatial, which specializes in light detection and ranging (LIDAR) mapping. The laser-based remote sensing technology—deployed on autonomous vehicles, fixed-wing aircraft, and helicopters—can provide detailed topographic maps, lake-bottom maps, and vegetation data.

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“We do a lot for the oil and gas sector in Alaska,” McCullough says. “Mapping pipelines and infrastructure at high resolution, monitoring changes over time, seeing how pipelines move and subside, looking at how roads are being impacted by landslide risks and geotechnical hazards.” Having high-resolution mapping is important when a company is trying to model slight year-over-year changes in infrastructure, McCullough says. This is particularly important on the North Slope where the seasonal and yearly changes in permafrost are constantly reshaping the landscape. “When you can map down to a couple centimeters, you can really start looking at year over year changes and trajectories,” McCullough says. If, for example, the mapping shows that a section of pipeline has subsided several centimeters in the last few years, a company can deploy a maintenance team to that area to prevent any further erosion or impacts to the infrastructure, McCullough explains. “You don’t want a pipe to burst or your facility to fall into a pond developing up on the Slope,” McCullough says. “It's really a way of using the [increased] precision to model the entire network of infrastructure—hundreds of miles of pipes and gravel roads and facilities up on the Slope—and pinpoint the areas that are being put at risk.” “[LIDAR] is a cheaper unit cost,” McCullough says, noting that what used to take an entire field season can be completed in greater detail in a week or two. “The processing becomes a lot faster, so the reporting becomes a little more immediate, and it becomes highly repeatable.” By running the same data collection processes year after year, clients can see changes in the landscape and infrastructure in greater precision. The highly accurate data also allows them to better model future changes. “You're doing things smarter with remote sensing technology,” McCullough says. Previously, teams required complicated logistics, including bear guards, to collect this type of data in the field. “They’d spend all summer on foot, measuring places where there’s potential change and risk,” McCullough

OIL & GAS Topobathymetric LIDAR is exactly what it says: “topo” = place, “bathy” = deep, and “metric” = measuring. Measuring deep places with light detection and ranging, in this case a river and ponds. NV5 Geospatial

says. “You’re talking about hundreds of thousands of dollars in field work and a slower data gathering process, a slower data analysis process, and a not very repeatable process.” LIDAR has similar advantages when mapping bodies of water on the North Slope. Oil and gas companies are

particularly interested in modeling lakes and ponds in the region because they need to know how much water they can pull from different sources to build ice roads during the winter. Traditionally, companies would bring a Zodiac boat with an outboard motor to a remote destination by helicopter

and then map the bottom of the lake with sonar. Using this method, a team could survey about two lakes a day, explains McCullough. “It would be extremely expensive with all of the helicopter time and boots on the ground and all the permits required,” McCullough says. Technological advancements in remote sensing equipment now allow McCullough and his team to fly over lakes and ponds on the North Slope using a specialized LIDAR technology known as topobathymetric LIDAR. “With that, we can map through the water column down to the bottom,” McCullough says. “We can map in much higher precision, hundreds of lakes a day, as opposed to two a day.” Topobathymetric LIDAR is also used to collect data on rivers and streams for understanding the habitat of overwintering fish. These data help meet reporting requirements at the state and federal level, McCullough says. Additionally, matching LIDAR with aerial imagery provides ecological data for development impact assessments, McCullough explains.

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Above the Clouds LIDAR and aerial imagery have limitations, though. “The weather is our biggest challenge,” McCullough says. In order to map an area with LIDAR or imagery, McCullough and his team need windows of time without fog or clouds—a rarity on the North Slope. Ten to fifteen years ago, two to three weeks of cooperative sunny weather on the Slope in the summer wasn’t unusual. That’s changed.

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“The last few years have been a lot different,” McCullough says. “Last year, we only had three really workable sunny days the entire summer. It was one of our worst seasons.” Unlike LIDAR, bad weather is no obstacle for radar technology used in the oil and gas industry. Synthetic Aperture Radar (SAR) on satellites is particularly useful to the oil and gas industry because the technology is weather independent, sunlight independent, and operates 24/7, explains Franz Meyer, a professor of remote sensing at UAF and chief scientist of the Alaska Satellite Facility. While spaceborne SAR has been around since the ‘70s, technological advancements in the field continue to open doors to a better understanding of the world. “It makes the dataset very repeatable,” Meyer says. “If we take an image every ten days from the same spot in space, the image, in theor y, should look the same because we have the same amount of energy we sent in from the exact same spot.”

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The one exception is when something has changed on the ground. SAR on satellites show changes in the Earth’s surface caused by permafrost as well as oil production. They can also help scientists recognize landslides, waterway expansions, and other changes—big and small—over a period of years or days. Meyer is particularly excited about the NASA and Indian Space Research Organization collaborative mission NISAR, which will result in vast amounts of additional geospatial data being housed at the Alaska Satellite Facility. Scheduled to launch in early 2024, the satellite will provide allweather, day/night imaging of nearly the entire land and ice masses of the Earth. “NISAR’s orbiting radars will image at resolutions of 5 to 10 meters to identify and track subtle movement of the Earth’s land and its sea ice and even provide information about what is happening below the surface,” the NISAR website explains. Satellite-based radar imagery can characterize how the Earth’s surface deforms due to actively managed

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“We do a lot of vegetation and wetland health assessment,” McCullough says. By imaging vegetation using visual and infrared spectra, the greens associated with chlorophyll shift into the infrared band, which displays important plant health characteristics. “You pick up a lot of really intense nuance in the growth patterns of vegetation,” he says. Plant ecologists who specialize in analyzing this data can track the health of these areas. This is done by comparing a pre-development baseline map with a post-development map.

OIL & GAS Bathymetric LIDAR of a lake, colored by elevation. Mapping ponds on the North Slope is important for sourcing water to build ice roads. NV5 Geospatial

oil and water reservoirs. Even more important to oil and gas companies on the North Slope is information about changes in permafrost. “NISAR will enable unprecedented insights into changing permafrost landscapes. It will provide precise measurements of subsidence induced by the melting of subsurface ice as permafrost thaws and of annual frost heave and settlement, which occurs as water expands upon freezing and contracts upon thawing,” the website states. Meyer explains that NISAR will provide an incredibly high-quality basemap for interested parties, including oil and gas companies. “We literally will have a useful dataset every twelve days, which is not something you get from optical data,” Meyer says. “You can use the free datasets to sort of figure out where it’s most important to acquire potentially more costly, higherresolution imagery that you need to track down very localized signals and patterns.”

Worm’s Eye View While some wavelengths of radar can penetrate the ground, the 72 | May 2022

technology is incapable of providing the detailed subsurface mapping needed in the oil and gas industry. For that, companies rely on geophysical ground acquisition services. “We're creating images for our clients, whether it's for reservoir development or for exploration work,” explains SAExploration President and CEO Forrest Burkholder. “We're doing a lot of reservoir management work, which gives a refined image to make sure that they're efficiently drilling out their prospect.” The technological advancement in this type of subsurface mapping in the last decade is comparable to the difference between black-andwhite television and a modern 4k LED monitor. “You're able to have a higher resolution of image, which allows our customers to understand what's going on in the subsurface better, so that when they're doing their drilling, they're hitting their targets,” Burkholder says. “From that perspective, we dramatically reduce their costs.” Working with BP, SAExploration adapted high-resolution seismic technology developed for the Middle

East. The company also deploys autonomous nodes—a device smaller than a coffee can—in the survey area instead of hundreds of miles of cables. “You plant it and it records autonomously, twenty-four hours a day, seven days a week, and it'll do that for sixty days, if you needed to,” Burkholder says. What the device is recording is vibrations bouncing off subterranean formations and features to create an image of what’s below the surface. Before the autonomous nodes were used, a team would lay out hundreds of miles of ground cable that were then connected to boxes wired to geophone sensors. It was slower to set up and more difficult to maintain. The team was usually able to complete a maximum of 100,000 vibrator pad (VP) data points a season. By using the nodes and sourcedriven shooting, SAExploration is now able to collect a million VPs in about two months. “You're not actually covering more area, you're making a better picture,” Burkholder says. This is possible because the company is able to put out a higher density of nodes, which provides a dramatically better picture.

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UNITY Since the beginning of time, the Arctic Iñupiat have relied on each other to survive. With teamwork, respect and cooperation, our people have prospered for thousands of years by working together. Our culture unites us, and our unity will allow us to prosper for thousands of years more.

Our voice. Our vision.

voiceofthearcticinupiat.org MEMBER ORGANIZATIONS Arctic Slope Native Association City of Anaktuvuk Pass City of Point Hope Native Village of Atqasuk Olgoonik Corporation Arctic Slope Regional Corporation City of Atqasuk City of Wainwright Native Village of Point Lay Tikigaq Corporation Atqasuk Corporation City of Utqiaġvik IỊisaġvik College North Slope Borough Ukpeaġvik Iñupiat Corporation City of Kaktovik Kaktovik Iñupiat Corporation Nunamuit Corporation Native Village of Point Hope Wainwright Tribal Council Native Village of Barrow Iñupiat Community of the Arctic Slope North Slope Borough School District Native Village of Kaktovik www.akbizmag.com

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Remote sensing doesn’t end the need to map a site in person, but preliminary data from satellites or aircraft can narrow down the areas that need further study. SAExploration

The 40-ton vibrator vehicles not only transport geophysical crews across the frozen tundra but they generate the signals detected by an array of sensors. SAExploration

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In 2014/2015, BP was still in the process of finalizing a new image with a higher density of nodes and vibrator points when a team drilled a dr y hole, Burkholder says. Engineers checked with the geophysical team to see if the new data could show what happened; based on the old dataset, they should have been good. “It was an anomaly, but on the old dataset they couldn't properly see that. On the new dataset, they could,” Burkholder says. “So, instead of abandoning the well as a dry hole, they were able to complete drilling and put a well into production on a 40-yearold reservoir.” Getting rid of the cables was really the key, Burkholder says. “Our efficiencies went up quite dramatically with nodes,” Burkholder says, noting that this increased the efficiency of the vibrators, large vehicles that shake the ground. Even the largest vibrators SAExploration has—80,000 pounds— aren’t comparable to standing next to a train, he says. Yet the autonomous nodes detect those vibrations and paint a vivid picture of underground features. The nodes are also cheaper to operate. Previously, if a snow drift covered the webbing of cables, a team would dig it out, which would delay the project and increase costs. Breaks in the line also caused delays. With a cable system, a 3 percent sensor failure rate was considered acceptable—though SAExploration usually kept it to 1.5 percent. The failure rate with the nodes is typically less half a percent, Burkholder says. “All those cost savings and all of those efficiencies have been passed on to the client,” Burkholder says. “But the benefits that they realize, because their data is so much better, is far greater, because there are fewer dry wells and more efficient drilling.” The efficiencies offered by new developments in remote sensing, such as clearer images of belowground resources and the risks to infrastructure, as well as the ability to collect the data more cheaply, all help the bottom line of operating Alaska’s oil fields.

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Oil and Arctic Nations Eight approaches to energy in the far north By Tasha Anderson

he development of oil and gas in the Arctic has been a hot topic for some time, but the reality is that oil produced in Alaska has always primarily come from the North Slope, solidly within the Arctic Circle. However, the majority of oil and gas production in the United States is not within the Arctic, as Alaska is currently the fifth largest oil producing state, following Texas, North Dakota, New Mexico, and Colorado. Even though the state doesn’t lead US production (which is the current largest producer of oil in the world), Alaska’s location is what includes the United States as one of eight countries with territory in the far north. The others are Canada, Denmark (via Greenland), Finland, Iceland, Norway, Sweden, and Russia. Oil and gas operations in the eight Arctic countries are incredibly varied, ranging from national policies that discourage oil and gas to countrywide efforts to ramp up production. Below are broad overviews of the eight Arctic nation’s relationship with the oil industry.

Finland Finland does not produce any oil or gas, instead importing crude oil and methane primarily from Russia— for now. According to Bank of Finland and Statistics Finland data, oil imports accounted for 22 percent and gas imports accounted for 5 percent of Finland’s total energy consumption in 2019, but in late April officials announced a $924 million investment with the intended purpose of cutting petroleum ties with Russia. Finland’s Minister of Economic Affairs Mika Lintilä explained that Finland will partner with Estonia to rent a floating LNG terminal, which he said will provide enough capacity for Finland to operate independent of Russian oil and gas. As of early April, Finland had replaced 85 percent of its oil supply with crude from other countries and 76 | May 2022

indicated it will not sign any new contracts with Russia, though some are still in place that will expire by the end of this year. According to the Finnish Energy Industry Association, Russian gas imports can be replaced by the fall of 2023. Crude oil that is imported to Finland is refined by Neste Oyj, the country’s sole oil refiner. Once imported, oil is transported by truck, train, or ship, as the country has no oil pipelines. LNG is also generally transported by truck or ship, though natural gas is generally delivered to end consumers by pipelines, the majority of which are buried underground. Finland’s cold climate, long distances between communities, and industries with high energy consumption have led to the country having one of the highest per capita energy consumption rates in the European Union.

concerns influenced the decision to move away from oil exploration, stating “the environmental consequences of oil exploration and extraction are too great.” Another factor in the decision was an economic analysis that showed development would likely deliver low profits or operate at a loss. “It is a decision where climate considerations, environmental considerations, and economic common sense go hand in hand,” Nathanielsen said. Eighty percent of Greenland’s oil imports come from Sweden, though it also sources oil from Iceland, Netherlands, Denmark, and Belgium to meet its petroleum needs; in 2020 it imported nearly $80 million in refined petroleum. Its gas imports are negligible, as most of Greenland’s energy needs are met by renewable resources, primarily hydropower.

Greenland

Iceland

Greenland also does not produce any oil within its borders, though until last year it had intentions to do so. The US Geological Survey estimated in a 2007 report that there is up to 31.4 billion barrels of oil equivalent in northeast Greenland, and a more recent study estimated there are 18 billion barrels of oil on Greenland’s west coast. Since the ‘70s Shell, Chevron, ExxonMobil, and Eni have all participated in oil exploration activities there. Exploration for oil and gas peaked in Greenland between 2002 and 2014, with upwards of twenty offshore licenses being granted. In July 2021, Greenland announced it would end its strategy to find oil and would stop granting exploration leases. At the time of the announcement, four active exploration leases remained, which will expire in 2027 and 2028. In mid-2021 Greenland’s Minister of Natural Resources Naaja Nathanielsen explained that, in part, environmental

Iceland is another Arctic nation without any domestic oil production, though there are areas with potential and systems in place to allow exploration activities. Oil and gas exploration in Iceland is regulated by Orkustofnun, its National Energy Authority, which grants licenses for prospecting, exploration, and production. Experts believe that the Icelandic Continental Shelf has two areas with the potential for commercial accumulations of oil and gas: Dreki and Gammur. According to the Orkustofnun, Dreki has potential for hydrocarbon accumulations “because of its geological similarity to hydrocarbon basins which were its next door neighbours [sic] prior to the opening of the northeast Atlantic ocean basin.” At Gammur, according to Orkustofnun, “indications have been found of gas escaping the sediments; however, the type of gas has not been demonstrated.”

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Sweden While historically there has been oil production in Sweden, today it has no commercial oil or gas operations. In June 2006, a specially appointed commission in Sweden published the report Making Sweden an Oil-Free Society, which cited four reasons for Sweden to reduce oil dependence: the impact of oil prices on economic growth; the link between oil, peace, and security throughout the world; the potential to use Sweden’s renewable energy sources instead of oil; and the threat of climate change. Sweden shares a focus with Iceland on reducing the use of hydrocarbons in favor of other energy options and has committed to being carbon neutral by 2045. In line with that is Sweden’s goal to stop using fossil fuels in vehicles by 2030, instead using biomass resources to produce ethanol, biogas, or biodiesel. In 2013 busses in twelve Swedish cities ran on 100 percent biomethane, and by 2017 more than 55,000 natural gas vehicles were traveling Swedish roads. www.akbizmag.com

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There was exploration in Iceland as recently as 2017, though Chinese company CNOOC and Norwegian Petoro pulled out of exploration in Icelandic waters in early 2018. The two companies were working in partnership with Icelandic Eykon Energy to explore the Dreki region. While Eykon Energy was eager to continue exploration without its partners, Orkustofnun cancelled its permit stating the company lacked the financial and technical capacity to conduct exploration on its own. According to the Orkustofnun at the time, CNOOC and Petoro pulled out of the project based on an assessment of the cost of drilling and extraction, as well as the risks involved, as the economics of the project changed significantly in four years: CNOOC and Petoro initially joined the project in 2013, when oil prices averaged more than $90 a barrel. Iceland’s current oil imports are negligible, as 70 percent of its energy is supplied by hydroelectric and 30 percent by geothermal. Less than 0.2 percent of electricity generated in Iceland comes from fuel oil, according to the Orkustofnun data.

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As of 2020, oil accounted for roughly 20 percent of the country’s energy portfolio, with Sweden importing approximately 375,000 barrels of oil per day, and the majority of its energy was produced through nuclear, hydro, wind, solar, and biofuels. In Sweden residents use more energy per capita than anywhere else in Europe, but because of their focus on low carbon energy sources, its emissions are lower than many other European countries. Rather than prioritize oil or gas development, Sweden’s priorities in the Arctic include ensuring that the Arctic remains an area of low political tension and strengthening the Arctic Council.

Canada Alaska’s eastern neighbor has the third largest oil reserve in the world and is the largest supplier of oil to the United States, exporting more than 3.7 million barrels of oil per day to the United States in 2019. Less than 1 percent of Canada’s oil is exported to other countries. Canada also exports natural gas to the United States, though natural gas exports to its (mostly)

southern neighbor have dropped by 22 percent in the last ten years as the United States has increased its own natural gas production. Most of Canada’s oil production takes place in Alberta, nearly 80 percent. Alberta, Saskatchewan, and Newfoundland and Labrador combined produce approximately 97 percent of the country’s oil production. According to 2020 data, the largest field by production in Canada is Hebron (located offshore of Newfoundland and Labrador in the Jeanne d’Arc Basin), which produces approximately 140,900 barrels of oil per day, followed by Hibernia (117,600 barrels per day) and Pembina (40,900 barrels per day). In recent oil news, the Canadian government approved a $12 billion offshore oil project, Bay du Nord, proposed by energy companies Equinor (Norway) and Canadian Cenovus. According to the Journal of Petroleum Technology, the project comprises several oil discoveries in the Flemish Pass Basin; oil was first discovered in 2013, with additional finds in 2015, 2016, and 2020. The

project is expected to generate $2.8 billion in government revenues and has an estimated recoverable resource of approximately 300 million barrels of oil equivalent. The estimated life of the Bay du Nord project is thirty years; now that the project has regulatory approval, the partners still need to make a final investment decision.

Norway Norway is one of the world’s largest producers of oil, to the tune of 1.5 billion barrels of oil in 2021, which is about 13 percent lower than the country’s record year of production in 2004, according to Norwegian Petroleum, a website run in cooperation by the Ministry of Petroleum and Energy and the Norwegian Petroleum Directorate. At the end of 2021, Norway had 90 oil producing fields, but projections anticipate that figure could raise to 130 within the next few years. Norway is actively supporting its oil and gas industry, in part because of the pandemic. During the first months of COVID-19, Norway provided oil and gas companies tax breaks as part of a relief package, and in the last few years the

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Russia Russia is second only to the United States in terms of oil production

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according to 2020 data and has estimated oil reserves of 80 billion barrels. Russia also has the largest reserves and is the largest exporter of natural gas. While other countries are shying away from Arctic development, Russia is leaning in. In 2020 Russian leaders announced $300 billion of incentives for new oil and gas projects north of the Arctic Circle. Already established Arctic oil fields include the Vankor Field, located in Eastern Siberia, which began producing oil in 2009 and is operated by Russian national oil company Rosneft. The first Russian commercial offshore oil development in the Arctic was the Prirazlomnoye Field, which started operations in 2013. Also located in the Arctic is Yamal LNG on the Yamal Peninsula; in addition to the LNG plant there, the project includes production at the YuzhnoTambeyskoye gas field. The General Scheme for Oil and Gas Development lays out the country’s plan for development until 2035, though it includes the expectation that Russia will “never again reach the high production levels” of oil it saw pre-

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pandemic: in 2019, Russia produced 560 million tons (approximately 4.2 billion barrels) of oil. Whether or not it reaches pre-pandemic levels, Russia plans to continue production and get whatever value it can out of its petroleum resources. Pavel Zavalny, chairman of the State Duma Committee on Energy, said in midMay 2021, “Plainly speaking: all that can be extracted must be extracted and sold.” Of course, Russia’s energy economy has been significantly affected for the long term by its aggression against Ukraine, as countries around the world impose sanctions or search out alternative hydrocarbon sources and private entities reconsider investments and partnerships. Russia’s dominance in oil and gas markets, combined with unprecedented actions taken against the country due to its war on Ukraine and worldwide efforts to reduce carbon emissions, makes for an incredibly uncertain global energy picture. But while uncertainty can introduce risk, it can also create opportunities for those ready to take them.

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country has offered a record number of new exploration leases to oil and gas companies. According to data from Statistisk Sentralbyrå (SSB), a Norwegian national statistics office, oil and gas firms in Norway plan to invest $17.6 billion to take advantage of tax incentives designed to boost activity. Five fields in Norway started production in 2021: Aerfugl Nord (operator: Aker BP ASA), YME (Repsol Norge AS), Solveig (Lundin Energy Norway AS), Duva (Neptune Energy Norge AS), and Martin Linge (Equinor Energy AS). Of those, one is on the Norwegian Sea and the other four are in the North Sea. Another six fields are currently approved for production, according to Norwegian Petroleum, located in the North Sea, Norwegian Sea, and Barents Sea. Norway has been producing oil for more than fifty years and estimates that, as of yet, it has only produced half of its available resources.

OIL & GAS

An Eye on Oil T

he Trans Alaska Pipeline System is an iconic image of Alaska and the oil industry. Because many sections of the pipeline are easily accessible and traverse stunning Alaska landscapes, it’s often photographed and is instantly recognizable. In fact, when looking for oil infrastructure images in Alaska, more often than not the challenge is finding an image of anything else. So Alaskans may be less familiar with other vistas of the state’s oil industry (if that’s the case, make sure to check out “Images of Infrastructure,” a photo essay of Alaska oil field infrastructure we published in October 2021). For Alaska Business, even more rare are opportunities to look at oil and gas operations around the world. Alaska is one of the largest producers of oil in the United States, which is the largest producer of oil in the world, a position it’s held since 2018, yet we’re nowhere close to being alone in delivering oil to market. Worldwide private and publicly-owned entities conduct their own exploration and production activities, all of which feed into a vibrant global oil market that—as Alaskans well know—can be unpredictable and influenced by innumerable economic, political, and social factors. It may feel like Alaska is isolated, and often we are, but the influence oil has on our economy incontrovertibly ties us to the rest of the world. In the following pages, we have selected several oil operations from around the world that demonstrate how different oil operations can look—and how much they all have in common.

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Manifa Field Arabian Gulf | Aramco Aramco

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Perdido Platform Gulf of Mexico | Shell Stuart Conway | Shell

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OIL & GAS Tanajib Oil Field Arabian Gulf | Aramco Aramco

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Ekofisk Norwegian North Sea | BP BP

North Rankin Complex Western Australia | Woodside Petroleum Woodside

Bonga Floating Facility Gulf of Guinea | Shell Giles Barnard | Shell

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the oil & gas industry. fact:

A quarter of Alaska jobs and approximately half of our state’s economy is supported by the oil industry. source: akrdc.org/oil-and-gas

Dawson City Stewart Crossing

Wasilla

Watson Lake

Anchorage Whittier

Soldotna Homer

Whitehorse

Haines Junction

Seward

Cordova

Skagway Juneau

Kodiak

Petersburg

Sitka

Wrangell Craig Ketchikan

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Celebrating

OIL & GAS

t’s easy to take oil for granted in Alaska. The average citizen knows enough to be grateful that money from petroleum development is the reason the statewide income tax was abolished and why the Permanent Fund was established, sharing its dividends with residents each year. Beyond that, anyone not connected to the industry can be confused or overwhelmed by the terminology. Well, here’s some whelmable knowledge to increase appreciation for Alaska’s richest resource—and sharpen skills for pub trivia, as a bonus. True or False: All of Alaska’s oil and gas resources are located near the northern coast of Alaska, often referred to as the North Slope.

koekeloer | iStock

False

NonTrivial Trivia How well do you know Alaska’s oil and gas industry? By Connor Lockmiter

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Oil production fields located near the north coast of Alaska are generally referred to as the “North Slope,” but it is not the only oil and gas resource in Alaska. Cook Inlet is Alaska’s second commercial oil region—or rather, first. The Swanson River oil field northeast of Nikiski was discovered in 1957 and is still producing today. Most wells in Cook Inlet are underwater, though, beneath ten offshore oil platforms and two offshore natural gas platforms. True or False: The terms “North Slope” and “Prudhoe Bay” are interchangeable, referring to any oil coming from Alaska’s Arctic region. False Prudhoe Bay is the name of one unit on the North Slope—yes, the largest and the site of the Prudhoe Bay Operations Center, the central camp for thousands of workers. However, ten other units are currently producing. Milne Point, northwest of Prudhoe Bay, is another onshore unit operated by Hilcorp, which also operates Northstar and Duck Island, just offshore from Prudhoe Bay. ConocoPhillips owns nearly all of the Kuparuk River, Colville River, and Greater Mooses Tooth units, west of Prudhoe Bay. ExxonMobil owns Point Thomson, to the east. That leaves Oooguruk and Nikaitchuq, two offshore units owned by Italian oil company ENI, and the Badami unit owned by Savant Alaska. Another

ten units are designated on the North Slope but are not currently producing anything. True or False: Three companies control more than half of the land leased for oil production in Alaska. True Alaska has issued leases for approximately 3.2 million acres for oil production. Three entities associated with ConocoPhillips control 566,870 acres. Two entities associated with Hilcorp control 759,743 acres. An entity associated with Oil Search, recently merged with the Santos group, controls 540,328 acres. Combined, these three companies control approximately 55 percent of the currently issued leases. True or False: The Trans Alaska Pipeline System (TAPS) crosses three mountain ranges to bring oil from the North Slope to the shipping terminal in Valdez. True TAPS, constructed from 1974 to 1977, stretches 800 miles from the North Slope to Prince William Sound. The pipeline crosses the Brooks Range, the Alaska Range, and the Chugach Range. It also crosses 34 rivers and nearly 500 smaller streams. True or False: Oil production flowing through TAPS today is approximately one-third of the flow rate that the pipeline had at its peak. False It’s less than that. The average throughput of oil through TAPS in February 2022 was 501,981 barrels per day. The highest daily throughput was 2,145,297 barrels in a single day on January 14, 1988. That makes today’s production approximately one-quarter of the throughput that the pipeline experienced at its maximum. True or False: It took twenty-two years after the discovery of oil on the North Slope before oil production began. False On March 13, 1968, the Atlantic Richfield Company and Humble Oil and Refining Company announced the discovery of oil at Prudhoe Bay.

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pniesen | iStock

True or False: By acreage, nearly half of the oil and gas production leases in Alaska are offshore. False Approximately 2.2 million acres of onshore land in Alaska are leased for

oil and gas production. Approximately 1 million acres of oil and gas leases are offshore. That makes the ratio of offshore leases slightly less than onethird. True or False: Nearly one quarter of all land in Alaska is being used for oil and gas production. False Approximately 2.2 million acres of land in Alaska have been leased for oil and gas production. With approximately 365 million acres of land making up the state, only 0.6 percent of its land is currently dedicated to the production of oil and gas. True or False: As far as is currently discovered, there is more than twice as much oil available to produce on the North Slope as there is in Cook Inlet. True The US Geological Survey estimated as much as 600 million barrels of oil can be produced with available technology in Cook Inlet. For comparison, current technology can produce nearly 6

billion barrels of oil from the North Slope—nearly ten times the volume. True or False: Cook Inlet oil and gas production leased acreage is less than one-quarter the size of the North Slope. True There are approximately 450,000 acres leased for production in Cook Inlet. The North Slope has approximately 2 million acres of land leased for production. True or False: Despite the huge volume of oil produced in Alaska, all of the state’s gasoline is refined in California and shipped back north. False That would be silly! Which is why a cynic might believe it. Three refineries operate within the state. Petro Star runs the two smaller refineries, at North Pole and Valdez. The larger of the three, the Kenai facility now owned by Marathon, does indeed produce gasoline for Alaskan consumers. The refinery also makes jet fuel, ultra low sulfur diesel, propane, and asphalt for local use.

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First oil flowed through TAPS in 1977, making the gap between discovery and production only nine years. TAPS was designed, permitted, litigated, permitted again, and built entirely within that period. Even more trivially, the first barrel actually came out of Prudhoe Bay in 1969—literally one barrel, as a test of whether SS Manhattan, a tanker modified to be an icebreaker, could deliver North Slope crude via Canada’s Northwest Passage. Suffice to say, the sea route didn’t work.

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OIL & GAS

However, it is true that that the majority of Alaska’s crude oil leaves the state, bound for refineries such as BP’s Cherry Point in Washington.

True or False: BP entirely left Alaska when it sold its assets to Hilcorp. False When the transaction between BP and Hilcorp completed on July 1, 2019, BP’s ties to Alaska were not entirely severed. BP agreed to remain secondarily liable for dismantlement, removal, and restoration on all North Slope assets in place at the time of the transaction and provide a guarantee to that effect.

True or False: The temperature range along TAPS is more than 150°F. True The air temperature along TAPS’ route can range from -80°F to 95°F, which makes the potential difference 175°F. True or False: All of Alaska’s state income comes from revenue from oil and gas production. False In FY2021, of the State’s $29.8 billion in revenue, $19.8 billion was from the Permanent Fund’s investment income, $7.6 billion coming from the US federal government, and approximately $1.6 billion of revenue from oil and gas royalties, leases, and taxes. Arguably (this is pub trivia after all) the $19.8 billion counts as oil money, considering where the Permanent Fund got its nest egg to begin with. However, the state treasury also collects $300 million to $400 million of non-petroleum revenue (mostly taxes on alcohol, tobacco, marijuana, motor fuel, and insurance premiums, plus taxes on mining, cruise ship gambling, charitable gaming, fisheries,

Building Alaska for over 40 years

and corporate income). So no, not all state income comes from oil and gas; just four times more than all other instate revenue sources, not counting Permanent Fund earnings. True or False: From January 1, 2019 to March 1, 2022, only thirty-seven new wells were completed in Alaska. False In that time period, 333 wells were completed. This includes wells drilled for oil and gas production, wells for storage of petroleum or other production fluids, and wells drilled for injection for fracturing and other production purposes. True or False: For North Slope oil production facilities, all of the available oil within those leases has been discovered. False The US Geological Survey estimates that there could be 3.6 billion barrels of oil and 8.9 trillion cubic feet of natural gas still undiscovered within the same areas on the North Slope where oil and gas production is already occurring.

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What good are facts if you can’t back them up? Alaska has fantastic access to information about the oil and gas industry. Below are the many, many, many sources used as this article was researched and written. • Alaska Oil and Gas Conservation Commission. (2022, 3 21). AOGCC DATA MINER. Retrieved from http:// aogweb.state.ak.us/DataMiner4/ Forms/WellHistory.aspx • Alyeska Pipeline Service Company. (2021). Fast Facts. • Alyeska Pipeline Service Company. (2022). Historic Throughput. • Alyeska Pipeline Service Company. (2022). TAPS Facts Tidbits. • bp. (2020). bp completes sale of upstream Alaska business. • Division of Oil and Gas. (2022). Acreage by Lessee - Summary. • Division of Oil and Gas. (2021). Cook Inlet Oil and Gas Units.

• Division of Oil and Gas. (2022). Lease Status.

and Gas Resources of the Cook Inlet Region, South-Central Alaska.

• Division of Oil and Gas. (2022). Maps & GIS.

• State of Alaska. (2022). alaska.gov/ kids/learn/aboutgeography.htm

• Division of Oil and Gas. (2021). North Slope Oil & Gas Units.

• Tax Division. (2022). Spring 2022 Revenue Forecast.

• Division of Oil and Gas. (2021). Working Interest Ownership of Cook Inlet Units.

• US Department of Energy. (2022). March 13, 1968: Oil discovered on Alaska's North Slope.

• Division of Oil and Gas. (2021). Working Interest Ownership of North Slope Units.

• US Geological Survey. (2011). National Assessment of Oil and Gas Fact Sheet.

• Governor’s Oversight Committee. (2020). Due Diligence Memorandum.

• US Geological Survey. (2020). Assessment of Undiscovered Oil and Gas Resources in the Central North Slope of Alaska, 2020.

• Richard G. Stanley, B. S. (2011). US Geological Survey 2011 Assessment of Undiscovered Oil

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Proof for Pub Night

Contango Ore

MINING

Upper Tanana Bonanza

The glitter of Manh Choh gold By Isaac Stone Simonelli

92 | May 2022

etlin Lake in Alaska’s eastern interior is situated in the Tetlin Passage, a corridor through the upper Tanana River valley where the Alaska Range and Wrangell Mountains create a funnel for migratory birds. Tetlin Lake also feeds the Tetlin River, a short tributary of the Tanana. Both are named for the Athabascan village of Tetlin, located along the riverbank within hiking distance of both the Tanana and the lake. The Upper Tanana Athabascan language gives the lake a different name: Manh Choh, which simply means “big lake.” Manh Choh is also the name of a nearby gold mining development. Until last year, it had been called the Peak project, and the developer is still known as Peak Gold, a joint venture of Texas-based Contango ORE and

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Ontario-based Kinross Gold. The companies agreed to change the name of the project at the suggestion of the Tetlin tribal council and village chief Michael Sam. “We look forward to the safe and responsible development of the project and the positive benefits it is expected to generate for our community,” Sam says. “We also look forward to further building a relationship with Kinross, a company with a strong track record in Alaska.” The Manh Choh project is designed as an open pit mine about 12 miles west of Tetlin, or 10 miles south of Tok. To shrink both costs and environmental impact, ore will be trucked about 250 miles to the outskirts of Fairbanks for processing at Fort Knox, the largest producing gold mine in Alaska, also owned by Kinross. “Utilizing existing infrastructure makes this project possible and also reduces the environmental footprint of the operation,” Kinross says on its Manh Choh website. At 4.1 grams of gold per tonne of milled ore, the deposit is considered relatively high grade for an open pit mine. The developers estimate at least 1.2 million ounces of recoverable gold, which would keep the mine operating for about four and a half years. Short in the life of a very old village; a huge windfall in the life of a very small village.

Off the Road A gold rush passed through Tetlin once before. Stampeders heading to Chisana, in what is now Wrangell-St. Elias National Park and Preserve, bought provisions at a trading post along the Tetlin River in 1913. The village swelled… to a few dozen people. Today, Tetlin has a population of 126 from twenty-five families, according to the US Census Bureau. A dirt road connects Tetlin to the stretch of Alaska Highway between the Canadian border and Tok. Manh Choh will use mostly existing highways to haul ore to Fort Knox for processing. The developers tell locals to expect up to four trucks per hour. The Alaska Department of Transportation and Public Facilities has sketched out road improvements, including asphalt resurfacing, passing www.akbizmag.com

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May 2022 | 93

Developers have made an effort to hire locally for geotechnical legwork. Contango Ore

94 | May 2022

lanes, and bridge replacements. That project is now seeking an independent corridor analysis. The Native Village of Tetlin, which owns the surface and subsurface rights to the Manh Choh project, will earn mineral royalties once the mine is in operation. Chief Sam published an op-ed in the Fairbanks Daily NewsMiner in February that said, “Manh Choh is more than an economic opportunity and the promise of jobs— it is a legacy project for my people and the surrounding region. With the development of this mine, we will be able to be financially self-sufficient and continue to live our cultural and traditional way of life.” Over the operating life of the mine, Manh Choh is forecast to pump several millions of dollars toward local community benefits, such as investment in training, education, scholarships, or sponsorships, according to an economic impact report by McKinley Research Group. The mine also comes with the promise of infrastructure improvements, such as a fully functional elder’s home.

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Those benefits should start flowing once gold production begins, scheduled for late in 2024. Whether that schedule holds depends on factors far outside of Tetlin.

The community gathers for Tetlin Cleanup Day. Contango Ore

More with Less Peak Gold had approved spending $47.9 million on Manh Choh in 2022. A February filing with the Securities and Exchange Commission shows the partners cut that investment by nearly half, to $26 million. This, just as the project was about to embark on a feasibility study in advance of final permitting. “The reduced spend in 2022 reflects the reality that inflation is hitting all sectors of the economy, especially construction,” says Contango ORE President and CEO Rick Van Nieuwenhuyse. He also blames the cutbacks on competition for construction contractors. However, Van Nieuwenhuyse adds, “The reduced spend this year does not significantly delay delivery of key milestones: feasibility and permitting by the end of 2022, main construction in 2023, and production

Winners Advertise with the Best By Janis Plume, Senior Account Manager Summer in Alaska is a sacred time. Perhaps you’ll take the time to be out on the river fishing at your favorite spot, waving a stick at the fish. How can you ensure your business is still working for you when you’ve swapped your slacks for waders? One solid solution is to advertise in the popular Best of Alaska Business awards issue. Here are four great reasons to run an ad in July’s Alaska Business magazine: Stay Visible During Summer: Winning businesses stay visible all year long— they don’t take the summer off. Keep your business top-of-mind (maybe your competitor is snoozing in a hammock, but you shouldn’t be!). July’s Magazine is a Reader Favorite: Readers want to know who the Best of Alaska Business winners are since our readers voted for them. July’s magazine is now one of our most popular issues, and this year we’ll honor more than 100 winners in thirty-plus categories.

A Highly Targeted Audience: We deliver the audience you need to reach: business owners, C-suite executives, management, all decision-makers in charge of buying decisions. Our readers are astute, affluent, influential, and most importantly, they make informed decisions. Consistent Management: Tom Landry, the first head coach of the Dallas Cowboys (1960-1988), once said, “The secret to winning is constant, consistent management.” Landry’s words ring true with us at Alaska Business. We care about your advertising as much as you do, and we promise we will handle your ad message professionally. Before setting your fishing and camping dates, get your marketing plan in place. Ad space in July’s Best of Alaska Business issue closes May 20, 2022. Don’t wait for your competitor to take the winning position—carpe diem and schedule your campaign today!

A smile is worth a thousand words Before joining Alaska Business, Janis was a ‘jack of all trades’ in Alaskan advertising for over two decades, working at some of Alaska’s best ad agencies. While he is pretty capable with a camera and loves photography and graphic art, he’s quick to say, “I’m not a graphic designer, and I don’t play one on TV.” He is, however, pretty handy at working one on one with clients seeking advertising solutions in Alaska Business. Janis is a product of the UAA JPC program and believes the pursuit of knowledge and professionalism are lifelong endeavors. When not helping advertisers, Janis celebrates his love for fish and music with a guitar in one hand and a fly rod in the other.

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907-257-2917 | janis@akbizmag.com

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May 2022 | 95

More than 300 drill holes have defined the mineral deposit at Manh Choh of at least 1.2 million ounces of gold at a grade of 4 grams per tonne, which is relatively high for an open pit mine. Contango Ore

96 | May 2022

Alaska Business www.akbizmag.com

in 2024.” He adds that Contango is likewise undeterred in its other Alaska prospect: reviving the Lucky Shot gold mine near Hatcher Pass, north of Palmer and Wasilla. Project management firm KG Mining also expects the Manh Choh feasibility study to remain on target for the second half of the year, despite the reduced budget. The spending level is still considered robust, enough to pay for economic and engineering details, environmental monitoring, community engagement along the route to Fort Knox, and additional mineral exploration. The company is refining its project plan to address labor market constraints and the effects of inflation. Indeed, the same inflation that squeezes less out of a dollar also makes the gold mine more attractive at this moment. “It should also be no surprise to gold investors to see the price of gold rise as well, yesterday piercing above the $1,900 level,” Van Nieuwenhuyse said in February. “Gold is doing what it has done for eons and remains a store of value.” As it is, Manh Choh is streamlined for quick development. Using the existing mill at Fort Knox reduces the cost and complexity of the new mine. Tailings waste will also be stored at Fort Knox where the ore is processed, avoiding the need for some environmental permits at a new site. Local concerns mainly center on the noise and pollution from trucks. To alleviate those worries, the company pledges to use late-model vehicles to minimize road rumble and diesel exhaust. “Kinross is continuing to prioritize transparent engagement with local communities in the Village of Tetlin as it develops the project, building on its long and successful history of safe, responsible mining in Alaska,” says Jeremy Brans, a former general manager and vice president at Kinross who has since been transferred to a different Kinross mine in Canada.

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Spreading the Wealth Operating Fort Knox since 1993, Kinross is a relative latecomer to Manh Choh. Contango and Colorado-based Royal Gold began the development; Contango’s subsidiary CORE Alaska www.akbizmag.com

Alaska Business

May 2022 | 97

A soil auger crew testing the Manh Choh site. A reduced spending outlay is not expected to derail plans for further mineral exploration in 2022, as well as a feasibility study and permitting. Contango Ore

had been a 60 percent owner, but now Contango retains a 30 percent interest. Kinross owns the other 70 percent, acquired in September 2020. For its $93.7 million in cash, Kinross bought broad authority to steer the project, pairing it with Fort Knox as a “tuck-in” supplement, reducing overall risk. Pairing the two mines together also spreads the economic impact across two regions: the Fairbanks North Star Borough and the Southeast Fairbanks Census Area, which stretches from the Golden Heart City to the Canadian border. Fort Knox is already the largest single payer of Fairbanks North Star Borough property tax. Manh Choh is lined up to have a similar impact for the unorganized area encompassing Delta Junction, Tok, and Tetlin. During the development phase, McKinley Research Group estimates Manh Choh will generate $50 million in labor income and about 280 new jobs over the construction period. Moreover, 98 | May 2022

economic multipliers that consider indirect, as well as direct, impacts from the mine put total labor income of about $75 million statewide. Once the mine is up and running, McKinley Research Group estimates 500 direct jobs with an annual direct payroll of $75 million. By comparison, 320 miners work at Pogo, the underground gold mine near Delta Junction. Counting indirect and induced employment, Manh Choh is expected to support 950 jobs in Alaska, with an annual average payroll of $120 million. “The average annual wage is estimated to be about $128,230 (not including benefits), exceeding the average 2020 wage for residents of the Southeast Fairbanks Census Bureau ($75,085) by 70 percent and the Fairbanks North Star Borough ($56,916) by 125 percent,” the report states. “While the economic impacts of Manh Choh will be significant, the population-related impacts will be short-term and likely will not result in

significant population changes in the nearby communities,” the McKinley Research Group analysis continues. “The employment and income opportunities offered by Manh Choh are not expected to attract new permanent residents to the area, but rather provide employment and income opportunities to existing residents.” Putting traditional lands to productive use was the vision of the late Tetlin chief Donald Fred “Danny” Adams. Before he passed away, he urged the tribe to develop its resources as a way to secure long-term operating funds, employment opportunities, and infrastructure support for Tetlin tribal members. “With the mining of minerals, the point I am trying to make is that if you sit back then you get nothing. You have to go out and venture, but if you don’t find anything then it doesn’t mean you give up,” Adams said in 2015. A second gold rush for the village by the big lake brings to fruition the vision Chief Adams had for his people.

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Alaska Business

May 2022 | 99

CONSTRUCTION

Building Up North Capital improvements in the North Slope Borough

Wayde Carroll

By Vanessa Orr

100 | May 2022

Alaska Business www.akbizmag.com

orth Slope Borough communities were supposed to be well into a six-year program of capital improvements by now. The COVID-19 pandemic interrupted the timeline, but the federal Infrastructure Investment and Jobs Act is revving it back up. In 2020, the North Slope Borough approved a capital plan through 2025 with a special focus on construction projects in eight Arctic communities. “We prioritize our projects based on life, health, and safety issues— things that will make our residents’ lives better,” says Bernadette Adams, director of the borough’s Capital Improvement Program Management. “These include things like providing water and sewer to homes or creating eight- or ten-plexes to help ease the housing crisis. Our goal is to undertake projects that will have a good impact in these communities.” Adams says COVID-19 waylaid those construction projects. Villages imposed strict protocols for testing and isolating contractors. And, like the rest of the world, materials and equipment became difficult to acquire—which is not easy on the North Slope at the best of times. “Our long-lead items become even longer-lead items; supply chain issues have really affected our timelines on these projects, and they continue to do so,” Adams explains. “It has also affected costs. I would say things have gone up at least 40 percent, though that number might be higher. We’re still having trouble and we’re hoping it eases up soon, but nobody knows when it will.” One positive note is the passage of the Infrastructure Investment and Jobs Act, which steers federal money toward construction of roads, bridges, transit, rail, ports, broadband, and drinking water and wastewater projects. For example, $925 million for Alaska port and coastal erosion projects includes $364 million for the Barrow Coastal Storm Damage Reduction Project in Utqiaġvik. Designed to reduce the risk of storm damage to approximately five miles of coastline, the project includes rock revetment at the bluff area to replace the ocean seawall lost during 2018 storms. The community has been

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“We prioritize our projects based on life, health, and safety issues—things that will make our residents’ lives better.” Bernadette Adams Director North Slope Borough Capital Improvement Program Management

Alaska Business

May 2022 | 101

“Our long-lead items become even longerlead items; supply chain issues have really affected our timelines on these projects, and they continue to do so… It has also affected costs. I would say things have gone up at least 40 percent, though that number might be higher.” Bernadette Adams Director North Slope Borough Capital Improvement Program Management

spending millions of dollars every year to build temporary dirt berms to protect the city and its only fresh water source. Communities across the Arctic coast are slated for capital improvements. Here are some of the projects, from east to west.

Kaktovik According to Adams, the biggest project in Kaktovik is a new school, which is currently in the design phase. “It has taken longer than expected because we want to make sure we don’t leave any money out there that we can get,” says Adams. “Right now we’re waiting on a rough estimate to share with the governor’s office; they have stated that they are interested and want to help us.” In February 2020, the previous school burned down, and an interim school was constructed from the insurance proceeds. “Public Works brought up modules and pieced them together, so we currently have classroom-type space, but it is not permanent,” says Adams. The first phase of the project will be to construct a gym, which will cost at least $25 million. Burkhart Croft Architects has been contracted to do the design. “We’re hoping to build the gym portion as the first phase because it will not only help the school but because it is used as an emergency shelter for people in the villages,” says Adams. “The gym is the heart of the community.” Kaktovik is also undergoing a power grid upgrade, with crews replacing all the wiring and adding new poles where needed. “In coastal communities like this, the wires get corroded easily, so every so often you have to go through and redo all of the wiring,” says Adams, estimating that project should be completed this summer. Kaktovik also gets an upgrade to a sewage outfall line, though the location has yet to be determined. “There is some disagreement on the location right now, but hopefully that project will be underway sooner rather than later,” says Adams.

Nuiqsut A power plant upgrade was completed before winter 2021, and 102 | May 2022

the village is also near completion on a housing ten-plex, which is awaiting water/sewer connections. “This year, we also plan to undertake a road lift to the landfill, adding insulation and gravel to build up the road, which has sunk to tundra level,” says Adams.

Anaktuvuk Pass Looking south in the Brooks Range, Anaktuvuk Pass is lined up for a new Public Works shop and North Slope Borough administration building to replace one that burned years ago. “This new shop is currently in the design phase, and pending funding, we’ll see when we can consider construction,” says Adams. Water and sewer hookups were completed last summer to twenty homes, and drilling and testing was done to establish a secondary water well. “We’re currently in the process of getting ownership or leasing land to build a new wellhouse,” says Adams.

Utqiaġvik In addition to coastal protection in the North Slope’s largest town, the first phase of the Barrow High School renovation is close to being finished. That project addressed structural and mold-specific issues in the swimming pool and locker room areas. “The pool has not been operational for a year, and we’re hoping to have it open again soon,” says Adams. Design is underway for mechanical and electrical systems in the rest of the school, with construction dates still to be determined. “The building is fairly old, and we’ve had some near failures in some of the mechanical/electrical systems,” says Adams. “It’s a priority to fix those systems before something happens.” Next year, Utqiaġvik’s water utility is due for renovation, which will include adding a SCADA (Supervisory Control and Data Acquisition) monitoring system for monitoring and remote management of critical equipment. “Years ago, we had a big freeze-up that left half the town without water, and we later found out that a valve was turned that caused the issue,” says Adams. “If we’d had SCADA in place, this could have been prevented, which

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is why the project was brought before the borough.” Also, Phase 5 of the Utqiaġvik landfill project is ongoing, with crews closing out old cells and building out new cells.

Atqasuk Inland from Utqiaġvik, Atqasuk gets an upgrade to its airport. The FAA is providing 93 percent of the funding for resurfacing the runway. “There is no gravel in Atqasuk, so it’s a very expensive project because we had to import gravel from Nome and have it barged to Barrow,” says Adams. “We did that in summer of 2020 and then brought it overland in winter of 2021. “Now we have a huge stockpile of gravel, and we’re getting ready to hire the contractor; we’re just waiting on more FAA funds,” she adds. An eight-plex house was recently completed in Atqasuk, and a power grid upgrade is scheduled for completion in 2023. “The project is in design now, but there are some long-lead items that we’re trying to get that may delay the process,” says Adams, adding that the Atqasuk power grid upgrade still needs funding for construction. To save money, the borough plans to contract with local companies to haul power poles over winter access trails. “It’s always less expensive when we don’t have to fly things in,” says Adams.

Wainwright There is quite a bit of work going on in Wainwright, including the construction of a new $40 million Public Works shop. “We had to build a temporary fabric structure to keep the equipment warm this past winter after we tore down the old building,” says Adams. “We’re building the new shop in the same spot, but first we had to dig up and send out the contaminated gravel on the site for remediation.” The building, which begins construction this summer, is expected to be finished in 2023. Wainwright is also undergoing a water treatment plant upgrade, which includes approximately $10 million for construction. The Alak school renovation is currently in the design www.akbizmag.com

Alaska Business

May 2022 | 103

Anaktuvuk Pass, a town inside Gates of the Arctic National Park, is in need of a new Public Works building after the old one burned down. BlueBarronPhoto | iStock

process, as is a new snow fence for the outside of the village. “We’ll be building the snow fence once we get the okay from the community,” says Adams, noting that the fence’s exact location has yet to be determined. “We also know that a power plant renovation is down the road, but we don’t want to overwork our resources, so it will not be scheduled until we complete the Public Works shop.”

Point Lay Point Lay is also in the process of working on a water source project to help make the lives of its residents easier. “The area is currently getting water from the river using reverse osmosis to treat it, but we’re hoping to provide year-round access by building a well in the lagoon,” says Adams. “We’ve done some test wells, and we’re currently in the design phase for the actual well. 104 | May 2022

UMIAQ Design is working on new water and sewer designs, as the old system is failing. “This will be a huge project; the design portion alone is $6 million,” says Adams. “Right now, a lot of residents have gone to truck haul, having water brought in to fill water tanks in their homes. The ground moves there so much that the pipes just completely fail. “Once this project is complete, they won’t have to conserve water and can do laundry whenever they want,” she adds. Point Lay is also completing a wastewater septic receiving station. Also, an eight-plex has been completed that is expected to receive new residents soon.

Point Hope After a recent gym upgrade was completed at Tikigaq School, crews moved on to undertake the kitchen upgrade, which is the final phase of the school project.

“One of the main projects in Point Hope is a wastewater treatment plant upgrade, which includes purchasing new membranes,” says Adams. “It’s not a huge upgrade, but it will ensure that the wastewater treatment plant can handle more flow.” A secondary water source project is also in the design phase, with the goal of providing Point Hope with another option for water since the lake that currently supplies the town’s water is drastically shrinking. Construction of a housing ten-plex has recently been completed, with water and sewer connections recently added to the building. “While no one has moved in yet, we should be placing people there soon,” says Adams. “Our goal with all of these eight- and ten-plexes is to help ease the housing crisis in these different communities,” Adams adds. “Right now, there can be two or three generations living in one home, and this will help ease this overcrowding.”

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INSIDE ALASKA BUSINESS

Alaska DNR

Alaska Division of Agriculture

adapt to patients of all shapes and sizes. Imaging Associates CEO Ward Hinger says the technology delivers a personalized MRI experience with greater diagnostic accuracy, decreasing the need for re-scans. imagingak.com/mat-su-valleylocation

Sonic Drive-In

The Totchaket Agricultural Project on state land near Nenana is going forward. The state Division of Agriculture expects to hold land sales around midsummer on 30,000 acres of the 140,000-acre project, with tracts ranging from 5 to 5,000 acres but mostly around 40. A new bridge across the Nenana River made the area accessible, and Doyon, Limited built a road, initially for oil and gas exploration. Unlike previous state-led agricultural projects at Delta and Point Mackenzie, Division Director David Schade says landowners will have more flexibility to define “agricultural use,” with no rigid timelines for development. dnr.alaska.gov/ag/nentot/

Imaging Associates Advanced MRI is empowering physicians and improving patient experience at Imaging Associates in the Matanuska-Susitna Borough. The MAGNETOM Vida 3T MRI with BioMatrix technology has a 70-centimeter bore and a new magnet design that lets the scanner

Fans of fast food served on roller skates need not travel all the way to Wasilla anymore. Sonic Drive-In opened its second Alaska location at Huffman Road in South Anchorage. As usual when a new chain restaurant arrives, customers lined up around the block on opening day. sonicdrivein.com

Port of Alaska The US Department of Transportation (DOT) must pay the Municipality of Anchorage $367,446,809 because of defective construction at the city-owned Port of Alaska. A judge granted the city’s full request in February, following a December ruling by the US Court of Federal Claims which found that DOT’s Maritime Administration breached its contract to ensure defect-free opencell sheet piles. Defects halted port construction a decade ago. portofalaska.com

Ucore The next phase of developing a facility near Ketchikan to separate rare earth elements is proceeding without the team that invented the technology. Three top executives of Innovation Metals, which was acquired by Ucore Rare Metals in 2020, are resigning as the company transitions from “white coat science” to commercialization of the RapidSX

separation method. Using RapidSX, Ucore plans to build a Strategic Metals Complex in Southeast Alaska, first processing concentrates from Canada and then rare earths mined from its Bokan-Dotson prospect on Prince of Wales Island. ucore.com

Alaska Premier Auctions & Appraisals A huge opal kept by an Alaskan family since the ‘50s sold at auction for $143,750. Alaska Premier Auctions & Appraisals (APAA) conducted the sale in February for the 11,855-carat opal named Americus Australis. Fred von Brandt, a gold miner in Big Lake, said the milky, iridescent gemstone had been kept in his family’s closet long enough, so he wanted to put it back out in the world. The final gavel price equaled the minimum bid of $125,000, plus a 15 percent buyer’s premium. According to APAA principal auctioneer Dan Newman, the buyer was a man in Dallas who read a news article about the opal on the day of the sale. alaskapremierauctions.com

Iñupiaq Wordle A new tool to keep an Alaska Native language thriving rides the coattails of a popular online guessing game. Barely a month after Wordle launched in January, Myles Creed created a spinoff in the Iñupiaq language. Creed grew up in Kotzebue but he is not Iñupiaq, so he used the North Slope Iñupiaq dictionary by Edna Ahgeak MacLean to plug five-letter words into a Wordle modification template developed by a Canadian linguist. The game is hosted by Ilisaqativut, an Iñupiaq language learning group. ilisaqativut.org/wordle

ECONOMIC INDIC ATOR S ANS Crude Oil Production 501,379 barrels 3.4% change from previous month

ANS West Coast Crude Oil Prices $105 per barrel 7.2% change from previous month

Statewide Employment 361,800 Labor Force 5.4% Unemployment

3/30/22 Source: Alaska Department of Natural Resources

3/31/22 Source: Alaska Department of Natural Resources

2/1/22. Adjusted seasonally. Source: US Bureau of Labor Statistics

106 | May 2022

Alaska Business www.akbizmag.com

RIGHT MOVES Altman, Rogers & Co.  Alaska’s largest locally owned accounting firm promoted Heather Savery to the role of Chief Operating Officer. In this position, Savery Savery works with the leadership team of Altman, Rogers & Co. on strategy and execution with a focus on the firm’s employee engagement and support initiatives. Savery previously served as the firm’s administrator, overseeing finance, administration, and public relations. She also held accounting leadership roles in the areas of aviation, nonprofits, and government contracting.

Resource Data  Custom software company Resource Data named Ariel Gibson to succeed Jim Rogers as President. “Ariel is the right person to take over Gibson as president,” says Rogers. “I am confident she will steer Resource Data into the future while maintaining our mission and values.” Rogers is retiring after twenty-five years as president, remaining on the board of directors to support Gibson’s transition. Gibson has more than twenty years of experience in information technology and project management, the last ten at Resource Data. Gibson received her MBA from the University of Alaska.

FNBA The retirement of a financial industry veteran from the top management of First National Bank Alaska (FNBA) leaves room for other executives to move up a notch. Doug Longacre served as President from

2018 until his retirement in February. He remains a member of the board.  To replace Longacre as president, the FNBA board appointed Betsy Lawer, who previously was president in 2013. When Longacre was Lawer made president in 2018, Lawer took on the titles of Board Chair and CEO. Lawer’s father and grandfather previously led FNBA. After she earned an economics degree from Duke University, Lawer returned in 1974 to work her way up.  The board of directors promoted Chief Commercial Lending Officer Darren Franz to Chief Credit Officer and appointed him Senior Franz Executive Officer. Franz oversees FNBA’s lending division. Franz holds a bachelor’s degree in finance and economics and is a graduate of Pacific Coast Banking School.  Chief Administrative Officer Cheri Gillian was appointed Senior Executive Officer. Gillian oversees the central administration division. Gillian Originally part of FNBA’s marketing team, Gillian has spent nearly thirty-five of those years building the brand and helping shape the bank’s unique workplace culture.  Chief Banking Officer Ryan Strong was appointed Senior Executive Officer. Strong oversees the retail banking and treasury management Strong division. Some of his new duties were previously performed by the bank president. Strong brings more than twenty years of hands-on operations

experience and detailed knowledge of Alaska’s economy.

Northrim Bank Northrim Bank is adding two new hires to its statewide team, and a company veteran gets a promotion.  Melissa Galloway has been with Northrim since late 2020 and has thirteen years of experience in the financial industry. She is promoted to Associate Vice President, Loan Officer at the Soldotna Financial Center. Galloway earned a bachelor’s degree in finance and economics from Utah State and an MBA from the University of Phoenix.  Davina Napier, the new Vice President, Consumer Lending Manager, comes to Northrim with twenty-four years of lending experience, most recently as chief lending officer at Credit Union 1. Napier earned a bachelor’s degree in management from University of Phoenix.  Clark Bihag, the new Vice President, Loan Officer at the Fairbank Financial Center, joins Northrim Bank with nineteen years of experience in both government and private sectors, most recently with the US Small Business Administration. Bihag holds a master’s degree in business administration from UAA.

Schwabe, Williamson & Wyatt  The law firm of Schwabe, Williamson & Wyatt is promoting an attorney in its Anchorage office to Shareholder. Lee Baxter is part Baxter of the firm’s Indian Country and Alaska Native Corporation and Natural

RIGHT MOVES IS BROUGHT TO YOU BY NORTHERN AIR CARGO

108 | May 2022

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Resource industry groups. Baxter studied at University of Montana Law School and clerked for the Montana Supreme Court and the US District Court for Alaska.

R&M  Travis Ross recently joined R&M Consultants as a Senior Geotechnical Engineer in the firm’s Earth Sciences Ross department. Ross has a BS in civil engineering from Northern Arizona University. Ross’ focus over his career has been on transportation and infrastructure. He is experienced in working with a variety of public agencies, including the Alaska Railroad Corporation. Since joining R&M, Ross has been involved with several Alaska Railroad projects, including the Bird Creek and Cottonwood Creek bridge replacements.

Calista  A shareholder of the regional Native corporation for Southwest Alaska is moving up to the veep suite. Thom Leonard Aparuk Leonard was recently promoted to Calista Corporation Vice President of Corporate Affairs. In that role, he oversees Calista’s daily communications activities. He was previously director of corporate communications and shareholder services. A shareholder born in the Calista region, Leonard received his undergraduate degree from Gonzaga University and is attending Alaska Pacific University in pursuit of an Executive MBA in information technology.

Sitnasuak  The Native village corporation for Nome is bringing back a shareholder as Director of Marketing and Communications.

Brittany Brown comes to Sitnasuak Native Corporation (SNC) with more than eleven years of experience in public and community relations. Brown After graduating from UAA with a bachelor’s degree in business administration, Brown earned a master’s degree in industrial distribution from Texas A&M University. She began her professional journey as a shareholder relations intern at SNC, and over the last decade Brown served in a variety of public relations and community development roles with oil and gas companies, Native village and regional corporations, and state and federal government.

Blueprint Alaska  Anchorage-based communications firm Blueprint Alaska hired Malia Barto as junior account executive. In that role, she Barto works in copy writing and editing, social media content, and research. Barto earned a bachelor’s degree in journalism and public communications from UAA, with a concentration in digital media and a minor in justice. Barto brings experience as a former copyeditor at KTVA 11 News and a digital reporter and producer at Alaska’s News Source, KTUU/KYES. She returns home to Anchorage from Juneau, where she worked as the deputy press secretary for the Alaska State Legislature’s Senate Majority.

UA System  Pat Pitney is ‘interim’ no more. The University of Alaska Board of Regents formally appointed Pitney as the UA System’s seventeenth President, a job she’s been doing since 2020. She is the first woman to lead the statewide university

system in its 100-year history. Pitney, who won a gold medal in women’s air rifle at the 1984 Olympic Summer Games, has held administrative positions Pitney with the UA System for twenty-three years. From 2014 to 2018, she was director of the Office of Management and Budget for the Walker administration.

Alaska Pacific University  Effective June 1, Janelle Vanasse is the new President of Alaska Pacific University (APU). Vanasse has twentynine years of education Vanasse experience in Alaska, most recently serving as superintendent at Mt. Edgecumbe High School since 2016. She was previously director of secondary education for the Lower Kuskokwim School District and founding director of Yuut Elitnaurviat—the People’s Learning Center. Vanasse earned a doctorate in educational leadership from Gonzaga University, a superintendent endorsement from UAS, a master’s in educational leadership from UAA, and a bachelor’s in special education at St. Cloud State University.

Ted Stevens Anchorage International Airport  Craig Campbell is stepping in as Interim Manager of Ted Stevens Anchorage International Airport, replacing Jim Campbell Szczesniak, who departed the job in February. Campbell led the Alaska National Guard as Adjutant General from 2003 to 2009, when he was appointed to fill a vacancy as lieutenant governor. He served as CEO of the state-run Alaska Aerospace Corporation from 2012 to 2018.

Keeping Alaska Open for Business www.akbizmag.com

Alaska Business

May 2022 | 109

ALASKA TRENDS

asoline prices fluctuate in direct response to the price of the crude oil it’s made from. Oh boy, do they fluctuate. Not so, however, the employment of workers who supply those fossil fuels. Not in Alaska, at least. The number of oil industry jobs has declined fairly steadily since the 2014 oil price crash, even though prices themselves have gone up, then down, then up again. The oil and gas industry remains the primary economic activity of Alaska, no question about it. No question, too, that the industry looks much different today than it did just seven years ago, with half as many workers on the payroll. Production has not shrunk by half, though. The volume of crude in the Trans Alaska Pipeline System is down, yes, but the decrease is closer to 8 percent than 50. Clearly, the fewer remaining oil workers are more productive than ever, thanks to new tools and techniques. For example, this month’s article “Eyes on the Sky, Ears on the Ground” describes advancements in remote sensing that help oil companies pinpoint and monitor their precious resources. By helping workers do more with less, technological advances reduce costs for exploration, development, and production, thus sustaining the industry as Alaska’s cash cow. Lower costs usually mean smaller crews, though, and in turn less work for the allied services that support those crews. Personnel is a huge component of oil industry expenses. Those hefty paychecks go a long way toward attracting workers willing to withstand the harsh conditions and grueling schedule. Not to mention compensating them for expertise they could, if they chose, apply to oil fields anywhere else in the world. This month’s Alaska Trends puts on green eyeshades to examine the flow of oil industry money through the state economy and what’s changed, or not, since at least the turning point of 2014. SOURCES: US Energy Information Administration: Alaska North Slope Purchase Price Alaska Department of Labor & Workforce Development: Alaska Monthly Employment Statistics Alaska Department of Revenue, Tax Division: Spring 2022 Revenue Forecast; Revenue Sources Book, 2015 Livescience.com: First Commercial Drone Use Approved in US Lynden: How ‘The Beast’ Moved from Alberta to the North Slope National Energy Technology Laboratory: First ever field pilot on Alaska's north slope to validate the use of polymer floods for heavy oil EOR

Production Volume

Oil Money: 2014 vs 2021 $6.9B $3B $1.7B

Alaska produced 531,000 barrels per day in 2014 vs 486,100 in 2021

$4.3B statewide expenditures $2.4B tax revenue $709M royalty revenue

Cumulative petroleum revenue since 1959: $150B

2 on 2 off The typical North Slope employee works 12hour days for 2 weeks and receives 2 weeks off each month

2014

2021

Monthly Wages in 2021 $15K

Oil & Gas Wages $14,040 is the average monthly wage in the Oil & Gas Industry $19,810 is the average

$10K

$5K

monthly wage in the Oil & Gas Extraction job category

$9,354 is the average monthly wage in the North Slope Borough 110 | May 2022

PROFESSIONAL CONSTRUCTION & BUSINESS SERVICES

MINING

OIL & GAS

Alaska Business www.akbizmag.com

15K

10K

Oil & Gas Employment JOBS

$5K

0 2015

2018

2020

2020: “The Beast,” the first extended reach drilling rig built

2014: The FAA grants approval for a drone to fly over and inspect oil and gas operations in Prudhoe Bay—the

Oil & Gas Tech

first such commercial flight in the US

2018: The federally-

and moved in North America,

funded pilot test of

arrives on the North Slope

polymer flood tech for heavy oil enhanced

The first Alaska trident well—a

oil recovery begins

main wellbore that splits

at Milne Point Field

into three fishbone wells, each with eight individual wells—is spud in Cook Inlet

$80

$60

$20

DOLLARS/BARREL

$40

0 2015

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ANS Oil Prices

2018

Alaska Business

2020

May 2022 | 111

AT A GLANCE What book is currently on your nightstand? Traction: Get a Grip on Your Business by Gino Wickman [as an audiobook]. What charity or cause are you passionate about? Anchorage South Rotary Club. What’s the first thing you do when you get home after a long day at work?

Kiss my wife and kids. Figure out what’s for dinner. Try to get off my computer. Not always super successful because a lot of times our auctions close in the evenings, so I have to process invoices. What vacation spot is on your bucket list? Australia. If you could domesticate a wild animal, what animal would it be? A cheetah would be pretty cool ‘cause they’re so fast, and an auctioneer is known for their speed, at least in voice.

112 | May 2022

Alaska Business www.akbizmag.com

OFF THE CUFF

Dan Newman T

he new refrigerator for employees at Alaska Premier Auctions and Appraisals has a video screen on the door. That’s not just because co-owners Dan Newman and Nick Cline like to pamper their staff; the fridge door becomes one more place to display security monitors watching the eclectic stock of merchandise. Newman spent a decade in marketing and sales for KTUU Channel 2, and he says those skills transfer to auctions. He used to deal with mattress stores one day, then cars the next. Now he deals in taxidermy, liquor, firearms, furniture, paintings, knickknacks, and office surplus—none with set prices. A “salesman through and through,” Newman decided to monetize his motormouth by training at Missouri Auction School, specializing in charity benefits. He opened the auction house in 2018 and is its principal auctioneer. Items enter the shop mainly because of the Five Ds, he explains: death, divorce, downsizing, departing, and developing fundraising strategies. His Anchorage warehouse is crammed with reminders of lives gone by. Newman hopes his business will become his lasting reminder: “I like the thought of building something that outlasts and is greater than myself.” Alaska Business: What’s your best attribute and worst attribute? Dan Newman: My best, I would like to think, is my ambition. Having the drive to want to succeed, want to do better, want to do good. That, and maybe a little bit of charisma mixed in helps pay dividends in the long run. My biggest detriment… getting complacent, getting lazy, being comfortable. AB: Is there a skill you’re currently developing or have always wanted to learn? Newman: Learning how to be a business owner. I think that is a skill in itself, and every day I try and learn something new, either about the business or the people or whatever systems and processes.

AB: What’s the most daring thing you’ve ever done? Newman: I’ve gone skydiving. I’ve driven a Lamborghini around the Las Vegas speedway. I’ve snowmachined up mountains. I’ve taken motorcycle trips down to Seward. I like the thrill of speed. AB: Other than your current career, if you were a kid today, what would your dream job be? Newman: International rally race car driver. AB: Dead or alive, who would you like to see perform live in concert? Newman: I think Jay-Z would be awesome to see in concert. He is an icon and a very savvy business mogul as well. AB: What’s your favorite local restaurant? Newman: Twin Dragon. They’ve been around forever, and back in my advertising days I had to dig up one of their old soundtracks [“Twin Dragon! Mongolian barbecue!”], so I got to remake that commercial. I’m good friends with the owner, so I’ll go there for client lunches and just hang out. They have a really great, inexpensive lunch buffet that you can load up and eat like a fat guy and love it. AB: What is your favorite way to exercise? Newman: High-intensity interval training. AB: Is there anything you’re superstitious about? Newman: I do believe in karma. You get out of it what you put into it, in terms of planting good seeds. Filling the good karma bank and eventually taking good, positive withdrawals. AB: What’s your greatest extravagance? Newman: Probably my tech and my gadgets. That’s kinda my thing. I’m nerdy and geeky enough to be dangerous. The thing that I’m willing to splurge a little, in terms of extra luxuries, is gonna be my tech gadgets. Unfortunately, it sucks because they don’t retain value. Six to twelve months later, they break and you have to go buy something new.

AB: What do you do in your free time? Newman: I like watching movies. That is one of my escapes… Hanging out with the kids at their different sporting activities… Motorcycles in the summer… Snowmachines in the winter. www.akbizmag.com

Alaska Business

May 2022 | 113

ADVERTISERS INDEX Afognak Leasing, LLC.................65, 89, 101 afognakleasing.com

Cruz Companies....................................... 90 cruzconstruct.com

Nu Flow Alaska......................................... 64 nuflowalaska.com

Ahtna, Inc.................................................. 41 ahtna-inc.com

Delta Constructors................................... 31 deltaconstructors.net

Pacific Pile & Marine............................... 107 pacificpile.com

Airport Equipment Rentals..................... 115 airpor tequipmentrentals.com

Denali Materials........................................ 57 Needs URL

Alaska Communications Systems.............. 3 acsalaska.com

Dorsey & Whitney LLP.............................. 91 dorsey.com

Alaska Oil & Gas Association.....................11 aogaconference.org

Doyon, Limited......................................... 49 doyon.com

Alaska Pacific University........................... 55 alaskapacific.edu

Equipment Source, Inc........................... 105 equipsrc.com

Alaska Procurement Technical Assistance Center....................................................... 97 ptacalaska.org

ExxonMobil............................................... 67 ex xonmobil.com

Alaska Roof Restorations........................ 103 alaskaroofrestorations.com Alaska USA Federal Credit Union............. 37 alaskausa.org Altman, Rogers & Co................................ 32 altrogco.com Arctic Information Technology................ 17 arcticit.com ASRC Construction................................... 77 asrcbuilders.com AT&T.......................................................... 15 at t.com Business Insurance Associates Inc........... 47 businessinsuranceassociates.com

First National Bank Alaska.......................... 5 fnbalaska.com Fountainhead Development.................... 51 fountainheadhotels.com

Parker, Smith & Feek................................... 9 psfinc.com Petro Marine Services............................... 87 petromarineservices.com Petroleum Equipment & Services, Inc..... 57 ht tps://pesiak.com PND Engineers Inc.................................... 69 pendengineers.com Quintillion................................................. 25 quintillionnetworks.com Resolve Marine......................................... 45 resolvemarine.com

GCI............................................................ 59 gci.com

Resource Development Council.............. 39 akrdc.org

Hecla Greens Creek Mining Company... 77 hecla-mining.com

T. Rowe Price............................................ 99 alaska529plan.com

Kiewit Infrastructure West Co.................. 53 kiewit.com

Teamsters Local 959................................. 12 akteamsters.com

Leonardo DRS........................................... 23 LeonardoDRS .com/Alaska

The Plans Room....................................... 97 theplansroom.com

Lynden.................................................... 116 lynden.com Material Flow & Conveyor Systems, Inc... 94 materialflow.com

Think Office.................................................7 thinkofficellc.com Tutka, LLC................................................. 27 tutkallc.com

C & R Pipe and Steel, Inc.......................... 69 ht tps://crpipeandsteel.com

MICROCOM.............................................. 21 microcom.tv

Carlile Transportation Systems................ 19 carlile.biz

MT Housing Inc........................................ 63 mthousing.net

Central Environmental Inc....................... 78 cei-alaska.com

Nenana Heating Services, Inc.................. 33 nenanaheatingservicesinc.com

CITC's Alaska's People.............................. 47 citci.org/alaskas-people/

New Horizons Telecom, Inc..................... 35 nhtiusa.com

Conrad-Houston Insurance Agency....... 32 chialaska.com

Nortech Environmental & Engineering.... 66 nor techengr.com

Construction Machinery Industrial............ 2 cmiak.com

Northern Air Cargo.........................108, 109 nac.aero

Cook Inlet Tug & Barge Inc...................... 55 cookinlet tug.com

Northrim Bank.......................................... 29 nor thrim.com

Voice of the Arctic Inupiat........................ 73 voiceofthearcticinupiat.org

Credit Union 1........................................... 34 cu1.org

NorthStar Supply LLC............................... 70 nor thstarsupplyak.com

Yukon Equipment Inc............................... 93 yukoneq.com

UA Local 375 Plumbers & Pipefitters....... 75 ualocal375.org Udelhoven Oilfield System Services, Inc. 71 udelhoven.com/ Unite Us..................................................... 61 ht tps://uniteus.com University of Alaska-Fairbanks eCampus.13 ecampus.uaf.edu Usibelli Coal Mine..................................... 79 usibelli.com

+ Careers Find Your Next Great Hire Post your job where the industry’s most qualified professionals go to advance their careers. 114 | May 2022

Alaska Business www.akbizmag.com

Anchorage 907.522.6466 Delta Junction 907.895.9898

The Rental Zone 907.474.2000

Fairbanks 907.456.2000

Prudhoe Bay 907.659.2000

Kenai 907.335.5466

www.airportequipmentrentals.com

www.akbizmag.com

Alaska Business

May 2022 | 115

Barge Service to the North Slope Villages

Wainwright

Barrow

Point Lay Point Hope

Prudhoe Bay Kaktovik

Alaska Marine Lines is providing scheduled barge service to the North Slope Villages of Point Hope, Point Lay, Wainwright, Utqiagvik (Barrow), Prudhoe Bay and Kaktovik.

Kotzebue Nome

The stops are in addition to Alaska Marine Lines’ many other service locations including the major hubs of Naknek, Dillingham, Nome, Bethel and Kotzebue, and more than 65 villages along the coast of Western Alaska.

Cargo receiving deadline: Seattle – June 20 Anchorage – June 30

Bethel Dillingham Naknek

Dutch Harbor

For additional information and schedules please visit www.shipaml.com, email westernakcs@lynden.com, or call 1-800-426-3113.

Alaska Business May 2022

Articles inside

CONSTRUCTION

OFF THE CUFF

RIGHT MOVES

MINING

OIL AND ARCTIC NATIONS

NON-TRIVIAL TRIVIA

PHOTO ESSAY

REAL ESTATE

ALASKA NATIVE

FISHERIES

ANWR REMAINS AS IT EVER WAS

TELECOM & TECH