November 2018 | VOLUME 34 | NUMBER 11 | AKBIZMAG.COM

Contents

Features

Savings, Security, and Risk Mitigation

Why outsourced IT services are indispensable
By Tracy Barbour

Expanding Airlines

Outside markets and operations bolster Alaska
By Tasha Anderson

The Business of Big Rigs

Staying on the road and on budget
By O’Hara Shipe

Wellness in the Workplace Isn’t a Luxury

Mental health programs aren’t just nice, they’re smart
By Isaac Stone Simonelli

Showing Off the Last Frontier

Sharing Alaska’s lands and cultures
By Vanessa Orr

Mining Special Section

Donlin Gold’s Record ROD

Interior project hits major milestone
By O’Hara Shipe
Donlin Gold

Trilogy Invests in Copper, Cobalt

But hasn’t forgotten zinc, lead, gold, or silver
By Kathryn Mackenzie

Explosives!

A specialized mining tool
By Tasha Anderson
Contributing Research by Rebecca Bergman
© Greg Martin Photography | Fairbanks Gold Mining Co.

Gilmore Expansion at Fort Knox

‘We’re not standing still’
By Julie Stricker
Donlin Gold

Resource Development Special Section

Facing the Blob

Challenges facing Alaska’s seafood industry
By Isaac Stone Simonelli

The First Oil Wells in the Alaska Arctic

‘The difficult we can do at once, the impossible takes a little longer.’
By Ross Nixon
© ConocoPhillips

Staying Safe on the North Slope

Facing Arctic weather, heavy equipment, and wandering bears
By Julie Stricker

On the Cover

Trilogy Metals President and CEO Rick Van Nieuwenhuyse presented an update on the Upper Kobuk Mineral Project, which includes its Arctic and Bornite developments, at an October Resource Development Council breakfast. Trilogy is one of many mining companies moving forward to responsibly develop the state’s natural resources.

Cover Photo: © Matt Waliszek

Departments

Volume 34, #11

Published by Alaska Business
Publishing Co. Anchorage, Alaska

Editorial Staff

Managing Editor
Kathryn Mackenzie
257-2907 editor@akbizmag.com

Associate Editor
Tasha Anderson
257-2902 tanderson@akbizmag.com

Digital and Social Media Specialist
Arie Henry
257-2906 ahenry@akbizmag.com

Art Director
David Geiger
257-2916 design@akbizmag.com

Art Production
Linda Shogren
257-2912 production@akbizmag.com

Photo Contributor
Judy Patrick

BUSINESS STAFF

President
Billie Martin

VP & General Manager
Jason Martin
257-2905 jason@akbizmag.com

VP Sales & Marketing
Charles Bell
257-2909 cbell@akbizmag.com

Senior Account Manager
Janis J. Plume
257-2917 janis@akbizmag.com

Advertising Account Manager
Christine Merki
257-2911 cmerki@akbizmag.com

Accounting Manager
Ana Lavagnino
257-2901 accounts@akbizmag.com

Customer Service Representative
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257-2914 emily@akbizmag.com

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From the Editor

How to Make Money Kicking Rocks

F

irst and foremost the Alaska Business team sends out a big thank you to our readers. Your positive feedback on the new design and Premium Digital Edition have made all the hard work more than worth it—so, thank you! Thank you for reading, for taking the time to comment, and for continuing to support our efforts to highlight the individuals, organizations, and companies that shape the Alaska economy.

Now, on to business. It’s mining month at Alaska Business—a month in which we place a spotlight on one of the state’s cornerstone industries.

Even with just six major producing mines in the state (at the moment), the mining industry is a major economic driver in Alaska. In 2017 estimated total mining industry employment in Alaska averaged about 4,500 jobs and $404 million in annual wages, according to an early 2018 report prepared for Alaska Miners Association by McDowell Group.

Kathryn Mackenzie
Managing Editor, Alaska Business

Telecom & Tech

Alaska Communications’ Business Technology Center.

Alaska Communications

Savings, Security, and Risk Mitigation

Why outsourced IT services are indispensable

By Tracy Barbour

N

o business ever wants to have its telephone system stop working—especially at the beginning of a workday. But that’s what happened to Business Insurance Associates a few months ago. Thankfully, James Parks of James Parks Consulting was able to quickly resolve the situation. Business Insurance Associates doesn’t have any internal IT professionals, so it relies on Parks to manage its routers, servers, and other technology-related hardware. “He keeps us online and takes care of everything, so we don’t have to spend the time and resources to figure it out,” says President Christopher Pobieglo.

Business Insurance Associates, with a total of eight employees in Alaska and Idaho, is an independent commercial insurance broker that depends heavily on outsourced IT services. The Anchorage company uses The Agency Manager (TAM) Online from Applied Systems for various tasks, including client billing, maintaining policy records, and issuing certificates and auto insurance cards. The cloud-based system, which the company has used for about eight years, gives employees the flexibility to log in anywhere and work remotely. “It manages the entire operation,” Pobieglo says. “It’s super critical to what we do… They provide things on a level that we couldn’t [provide] internally.”

Transportation

The Business of Big Rigs

Staying on the road and on budget

By O’Hara Shipe

I

n many ways, the Alaska economy runs on the trucking industry’s ability to keep up with supply demands. Whether trucks are hauling lumber and building materials along the Dalton Highway or are traversing the Glenn Highway on a routine grocery delivery, Alaskans depend on the trucking industry to be efficient and reliable. In turn, the transportation companies rely on retailers, repair shops, and truck manufacturers to keep them on the road and on budget.

Since 1969, TrailerCraft has been one of the leading truck parts and sales facilities in Alaska. In 1994, the company became the state’s only full-service Freightliner dealer; it has since continued to supply equipment to entities statewide, including State of Alaska Department of Transportation (DOT) plows and sanding trucks, Blue Bird school and transport buses, and truck flatbeds. In addition to selling Freightliner trucks, TrailerCraft also sells Western Star industrial trucks.

Transportation

The Business
of Big Rigs

Staying on the road and on budget

By O’Hara Shipe

I

n many ways, the Alaska economy runs on the trucking industry’s ability to keep up with supply demands. Whether trucks are hauling lumber and building materials along the Dalton Highway or are traversing the Glenn Highway on a routine grocery delivery, Alaskans depend on the trucking industry to be efficient and reliable. In turn, the transportation companies rely on retailers, repair shops, and truck manufacturers to keep them on the road and on budget.

Since 1969, TrailerCraft has been one of the leading truck parts and sales facilities in Alaska. In 1994, the company became the state’s only full-service Freightliner dealer; it has since continued to supply equipment to entities statewide, including State of Alaska Department of Transportation (DOT) plows and sanding trucks, Blue Bird school and transport buses, and truck flatbeds. In addition to selling Freightliner trucks, TrailerCraft also sells Western Star industrial trucks.

“Our parts and service departments are made up of industry professionals who really know their stuff… they play a big role in supporting the trucking industry up here.”

—Mike Lash
General Manager of Alaska Operations, RWC Group

RWC Group is a leading truck supplier with two locations in Alaska in Fairbanks and Anchorage in addition to locations in Arizona (including the company’s headquarters), California, and Washington State. The full-service center stocks a variety of brands such as International, Isuzu, and Hino. Recognizing the financial investment required to purchase a new truck, RWC has a number of used trucks for sale as well as leasing options. It also offers in-house financing options.

But according to RWC Group’s General Manager of Alaska Operations Mike Lash, the company’s group of dedicated full-time mechanics is one of the most vital aspects of the business. “Our parts and service departments are made up of industry professionals who really know their stuff. I think they play a big role in supporting the trucking industry up here,” says Lash.

Mining Special Section | Trilogy Metals

Trilogy Invests in Copper, Cobalt

But hasn’t forgotten zinc, lead, gold, or silver

By Kathryn Mackenzie

T

here are a lot of moving pieces to the Upper Kobuk Mineral Project (UKMP), but when all is said and done, the project in the Ambler mining district in Northwest Alaska is expected to produce copper, zinc, lead, gold, silver, and cobalt. Before that can happen, there are a number of steps that Trilogy Metals and its three partners must complete, including the receipt of critical permitting and the permission to build a private access road.

Trilogy Metals, which has spent $122 million to-date on UKMP, holds interests in two primary projects in the Ambler district: the Arctic project and the Bornite project.

“Arctic’s a little further advanced [than Bornite]. We completed a pre-feasibility study that demonstrates that it’s a very viable project.

It’s not a marginal project by any chance and we don’t need higher metal prices for this to work. We just need a road,” said Trilogy Metals President and CEO Rick Van Nieuwenhuyse at an October Resource Development Council breakfast. “Bornite is still in early-stage exploration, but it’s a much bigger scale project and certainly has a lot more potential to grow both in copper and cobalt, which is a strategic, critical metal. If you want clean, green energy in a clean, electric car that doesn’t burn fossil fuels, you have to have metals to do all that.”

Mining Special Section | Trilogy Metals

Trilogy Invests in Copper, Cobalt

But hasn’t forgotten zinc, lead, gold, or silver

By Kathryn Mackenzie

T

here are a lot of moving pieces to the Upper Kobuk Mineral Project (UKMP), but when all is said and done, the project in the Ambler mining district in Northwest Alaska is expected to produce copper, zinc, lead, gold, silver, and cobalt. Before that can happen, there are a number of steps that Trilogy Metals and its three partners must complete, including the receipt of critical permitting and the permission to build a private access road.

Trilogy Metals, which has spent $122 million to-date on UKMP, holds interests in two primary projects in the Ambler district: the Arctic project and the Bornite project.

“Arctic’s a little further advanced [than Bornite]. We completed a pre-feasibility study that demonstrates that it’s a very viable project.

It’s not a marginal project by any chance and we don’t need higher metal prices for this to work. We just need a road,” said Trilogy Metals President and CEO Rick Van Nieuwenhuyse at an October Resource Development Council breakfast. “Bornite is still in early-stage exploration, but it’s a much bigger scale project and certainly has a lot more potential to grow both in copper and cobalt, which is a strategic, critical metal. If you want clean, green energy in a clean, electric car that doesn’t burn fossil fuels, you have to have metals to do all that.”

The Partnerships

Trilogy Metals partnered with NANA, the Alaska Industrial Development and Export Authority (AIDEA), and South32 to advance UKMP. The business arrangement with NANA involves giving Trilogy Metals access to about 350,000 acres of NANA land. In return, NANA receives net smelter royalties of 1 percent to 2.5 percent and the option to become an equity partner (16 percent to 25 percent) or receive a net proceeds royalty (15 percent NPI). For its part, Trilogy Metals is committed to promoting employment for NANA shareholders, as well as providing scholarships and ensuring the area’s subsistence lifestyle is not interrupted by project operations.

According to 2017 numbers, nearly 65 percent of UKMP’s direct hires are NANA shareholders. Nearly 50 percent are from the Upper Kobuk region.

Mining Special Section | Donlin Gold

Donlin Gold’s
Record ROD

Interior project hits major milestone

By O’Hara Shipe

I

n August, a joint Bureau of Land Management (BLM) and US Army Corps of Engineers Federal Record of Decision (ROD) was handed down to Barrick Gold Corporation and NOVAGOLD Resources, who jointly own Donlin Gold. Located ten miles from Crooked Creek, the proposed Donlin Gold Mine sits on what is predicted to be one of the largest and highest-grade undeveloped open pit gold endowments in the world. If the estimates are correct, the proposed mine could produce an average of 1.3 million ounces of gold annually during the mine’s projected twenty-seven-year lifespan. Even with the ROD, it will likely be years before the mine is developed and even longer before it begins producing.

Mining Special Section | Donlin Gold

Donlin Gold’s Record ROD

Interior project hits major milestone

By O’Hara Shipe

I

n August, a joint Bureau of Land Management (BLM) and US Army Corps of Engineers Federal Record of Decision (ROD) was handed down to Barrick Gold Corporation and NOVAGOLD Resources, who jointly own Donlin Gold. Located ten miles from Crooked Creek, the proposed Donlin Gold Mine sits on what is predicted to be one of the largest and highest-grade undeveloped open pit gold endowments in the world. If the estimates are correct, the proposed mine could produce an average of 1.3 million ounces of gold annually during the mine’s projected twenty-seven-year lifespan. Even with the ROD, it will likely be years before the mine is developed and even longer before it begins producing.

An Extensive Permitting Process

In December 2012 Donlin Gold and its partners assembled a team of field scientists to conduct feasibility studies to include in the initial Section 404 permit applications and Environmental Impact Statement (EIS). Enforced by the US Army Corps of Engineers and overseen by the Environmental Protection Agency (EPA), Section 404 of the Clean Water Act regulates the discharge of dredged or fill material into waters of the United States, including wetlands. The program largely affects water resource projects like constructing dams and levees as well as certain infrastructure developments and mining projects.

The EPA suggests that, for most material discharge that will only have minimal adverse effects, a general Section 404 permit is sufficient, allowing eligible projects to proceed with little delay. In Donlin Gold’s case, acquiring the required 404 permit was more difficult than anyone initially anticipated.

Mining Special Section | OVERVIEW

Alaska 2018—
Mining in Review

By Curtis J. Freeman

Curtis Freeman is the owner and president of Fairbanks-based Avalon Development Corporation. He may be contacted via email at avalon@avalonalaska.com or for more information visit avalonalaska.com.

A

lthough the Alaska mineral industry is in better health in 2018 than it has been in the last five years, the spirited recovery that was in progress in the first quarter of the year turned into a dead-cat bounce, a minor unsustained recovery after a long down trend extending back to 2012. Hindsight says the cause was threat of a global tariff war that introduced uncertainty and angst into the natural resource sector. Metal prices soon reacted as demand softened, and by the end of the second quarter virtually all of the precious, base, and strategic metals had declined in price significantly or were showing signs of doing so in the near future. Alaska’s producing mines are feeling the pinch of declining metals prices, and—not surprisingly—the mineral exploration sector had budgets slashed in response. With exploration funds shrinking for many explorers, their previously approved work programs had to be downsized or eliminated completely. To be sure, companies are spending 10% to 15% more on exploration than they did in 2017, but the prognosis for the mining industry in 2019 remains murky.

Mining Special Section | OVERVIEW

Alaska 2018—
Mining in Review

By Curtis J. Freeman

Curtis Freeman is the owner and president of Fairbanks-based Avalon Development Corporation. He may be contacted via email at avalon@avalonalaska.com or for more information visit avalonalaska.com.

A

lthough the Alaska mineral industry is in better health in 2018 than it has been in the last five years, the spirited recovery that was in progress in the first quarter of the year turned into a dead-cat bounce, a minor unsustained recovery after a long down trend extending back to 2012. Hindsight says the cause was threat of a global tariff war that introduced uncertainty and angst into the natural resource sector. Metal prices soon reacted as demand softened, and by the end of the second quarter virtually all of the precious, base, and strategic metals had declined in price significantly or were showing signs of doing so in the near future. Alaska’s producing mines are feeling the pinch of declining metals prices, and—not surprisingly—the mineral exploration sector had budgets slashed in response. With exploration funds shrinking for many explorers, their previously approved work programs had to be downsized or eliminated completely. To be sure, companies are spending 10% to 15% more on exploration than they did in 2017, but the prognosis for the mining industry in 2019 remains murky.

Western Alaska

Teck Resources and partner NANA Regional Corporation announced year-end 2017 and first-half 2018 results from Red Dog mine. For 2017 the mine produced 541,900 tonnes of zinc in concentrate at a mine grade of 15.5% with mill recoveries steady at 82.1%. The mine also produced 111,300 tonnes of lead in concentrate for 2017 at an average grade of 5% with mill recoveries of 52.3%. Year on year, zinc production was 13% higher in 2017 while lead production was 29% lower. Gross operating profit for the year was $874 million, compared with $668 million in 2016. Mill throughput for 2017 was up slightly at 4,270,000 tonnes. During 2017 the mine paid royalties of $412 million versus royalties of $282 million in the year-previous period. In the latter part of 2017 the company began a $110 million mill upgrade designed to increase average mill throughput by about 15% over the remaining mine life, helping to offset lower grades and harder ore in the Aqqaluk pit. For the first half of 2018 the mine produced 275,100 tonnes of zinc in concentrate at an average grade of 16.2% with mill recoveries at 83.9%. The mine also produced 45,400 tonnes of lead in concentrate at a grade of 4.6% with mill recoveries of 48.9%. The mine posted a $342 million operating profit for the first half of 2018, up significantly from the $245 million profit in the year previous period. Royalty costs for the first half of 2018 quarter were $96 million versus $70 million in 2017. The expected 2018 production of contained metal is now estimated at 525,000 to 545,000 tonnes of zinc contained in concentrate and 95,000 to 100,000 tonnes of lead contained in concentrate.

Mining Special Section | Fort Knox

Kinross CEO J. Paul Rollinson, left, Kinross Chief Operating Officer Lauren Roberts, and Alaska Governor Bill Walker talk before the groundbreaking ceremony for the Gilmore expansion at Fort Knox.

Fairbanks Gold Mining Inc.

Gilmore Expansion at Fort Knox

‘We’re not standing still’

By Julie Stricker

O

ne of the highlights of a visit to the Fort Knox gold mine is posing at the end of the tour with a gold bar produced at the mine. The value of the bar, which weighs 257.1 troy ounces, has fluctuated over the years with the price of gold: $98,000 in September 2003; $484,170 in September 2011; $307,372 in September 2018.

Holding an object in your hand that’s worth more than your house leaves an indelible impression. But a couple of years ago it was looking like the gold bar, the mine, and the millions of dollars it brings to the Fairbanks economy were coming to an end. Fort Knox was running out of gold.

But even while the mine’s operators were publicly planning to shut down mill operations in 2017 and ready the heap leach facility to accept its final loads of ore in 2020, they continued to look at additional prospects in the area, including drilling 205 holes at Gilmore, adjacent to the western edge of the existing pit. Those efforts, which started in 2014, paid off.

Mining Special Section | Directory

The 2018 Alaska Business Mining Directory

Company
Top Executive
Year Founded/ Established in Alaska
Worldwide/ Alaska Employees
Mining District | Commodity | Recent Projects
Company
Alaska Aggregate Products

809 S. Chugach St., #2
Palmer, AK 99645
Phone: 907-746-4505

Top Executive

Kirk Zerkel, Pres.

Year Founded/ Established in Alaska

2006
2006

Worldwide/ Alaska Employees

85
85

Mining District | Commodity | Recent Projects

ak-gravel.com | Kirk.Zerkel@aicllc.com
Recent Projects: Kensington Mine Stage 3 Dam Raise, Ft Knox WCHL BCHL MSA, Ft Greely Missile Field 4 Site Clearing/Grubbing, Mekoryuk Erosion Protection rip rap, Buckhorn Mine Reclamation. Mining District: Statewide Commodity: Pit run gravel type II–2” minus; crushed aggregate D-1 base; 2” minus gravel/sewer filter rock; concrete aggregate (3/4 minus); concrete sand; and Redi-mix concrete.

Company
Avalon Development Corp.

PO Box 80268
Fairbanks, AK 99708
Phone: 907-457-5159

Top Executive

Curt Freeman, Owner/Pres.

Year Founded/ Established in Alaska

1985
1985

Worldwide/ Alaska Employees

75
75

Mining District | Commodity | Recent Projects

avalonalaska.com | avalon@avalonalaska.com
Recent Projects: Peak, Golden Summit, Tibbs.
Mining District: Multiple
Commodity: Precious metals, base metals, platinum group metals, strategic metals.

Company
Bering Shai Rock & Gravel

PO Box 196
Unalaska, AK 99685
Phone: 907-581-1409

Top Executive

Diane Shaishnikoff, Owner/Mgr.

Year Founded/ Established in Alaska

2004
2004

Worldwide/ Alaska Employees

10
10

Mining District | Commodity | Recent Projects

beringshairock@gmail.com
Recent Projects: Products: Armor, rip-rap, gravel, several gradations, sold locally in Unalaska/Dutch Harbor. Barge ramp at quarry. Provide rock products for Turnagain Marine UMC Project. Clearing, civil, roads. Mining District: Aleutian Chain Commodity: Spec rock, rip rap, armor stone, gravel.

Mining Special Section | Demolition

Explosives!

A specialized mining tool

By Tasha Anderson

Contributing Research
by Rebecca Bergman

I

t’s not surprising that the federal government has a few regulations regarding the use of explosives in mining: 30 CFR, Part 15 (approval of explosives and sheathed explosive units); 30 CFR Part 56, Subpart E (safety and health standards: surface metal and nonmetal mines: explosives); 30 CFR Part 57, Subpart E (safety and health standards: underground metal and nonmetal mines: explosives); 30 CFR Part 75, Subpart N (mandatory safety standards: underground coal mines: explosives and blasting); and 30 CFR Part 77, Subpart N (mandatory safety standards: surface coal mines and surface work areas of underground coal mines: explosives and blasting) cover the bulk of it.

Mining Special Section | Demolition

Explosives!

A specialized mining tool

By Tasha Anderson

Contributing Research
by Rebecca Bergman

I

t’s not surprising that the federal government has a few regulations regarding the use of explosives in mining: 30 CFR, Part 15 (approval of explosives and sheathed explosive units); 30 CFR Part 56, Subpart E (safety and health standards: surface metal and nonmetal mines: explosives); 30 CFR Part 57, Subpart E (safety and health standards: underground metal and nonmetal mines: explosives); 30 CFR Part 75, Subpart N (mandatory safety standards: underground coal mines: explosives and blasting); and 30 CFR Part 77, Subpart N (mandatory safety standards: surface coal mines and surface work areas of underground coal mines: explosives and blasting) cover the bulk of it.

“UCM uses explosives by drilling holes into the sandstone or coal, loading those holes with explosives, and then initiating the blast from a safe location.”

—Lorali Simon
Vice President of External Affairs
Usibelli Coal Mine

National entities such as the Mine Safety and Health Administration, the Environmental Protection Agency, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Office of Surface Mining Reclamation and Enforcement all have a part in ensuring that explosives used above or below ground in the pursuit of any commodity are handled in a way that is safe for workers and the environment.

Richell and Jason Carmichael, NorthStar Supply owners

© Matt Waliszek

Richell and Jason Carmichael, NorthStar Supply owners

© Matt Waliszek

NorthStar Supply LLC

Not just another supplier

N

orthStar Supply is one of only a few Alaska-owned suppliers of geotextiles, erosion control, asphalt maintenance materials, and dust and ice control products in the state. Locally-owned and -operated by Richell and Jason Carmichael, North­Star Supply is based in Wasilla and can successfully deliver products any­where in the state. “I understand the unique conditions present in Alaska,” says Richell, who was born and raised in Palmer.

Aviation

A new Northern Air Cargo wide-body B767-300 arrives at the Miami International Airport.

Northern Aviation Services

Expanding Airlines

Outside markets and operations bolster Alaska

By Tasha Anderson

T

he landscape of Alaska’s home-grown airlines has changed significantly in just the last few years. One of the state’s major aviation success stories, Alaska Airlines, acquired Virgin America and, in January, received its single operating certificate from the FAA. Alaska Airlines continues to move forward, leveraging its new assets to provide a more comprehensive route map balanced with ever improving customer service.

In 2015, Ravn Alaska CEO Bob Hajdukovich secured financing to buy out his partners and recapitalize the airline. A majority share of Ravn was acquired by J.F. Lehman and Co., and the remaining shares were consolidated in the Hajdukovich family. President and CEO Dave Pflieger now helms a leadership team (completed in July) that combines Alaska know-how and Outside expertise and is building on the company’s long history of success. On October 5 the court overseeing PenAir’s bankruptcy proceedings approved J.F. Lehman and Co.’s bid for the airline’s assets—PenAir will now operate with a separate FAA certificate as a subsidiary of Ravn Air Group, creating further connectivity among Alaska’s air carriers.

Photo courtesy Fountainhead Hotels

Fountainhead Development, Inc.

Real estate development, management, and operation

F

ountainhead Development Inc., (FDI) has more than 600 rooms spread across three distinctive Fairbanks properties: Sophie Station Suites, Wedgewood Resort, and the Bear Lodge. Sophie Station, for example, is ideal for business travelers, with its proximity to the airport and spacious, apartment-style accommodations. Offering 148 fully-appointed suites, it provides many of the comforts of home, including a full kitchen, living room, and separate bedroom.

Sophie Station also features beautiful landscaping and one of the best restaurants in town: Zach’s, which is known for its innovative cuisine. It also has a first-class bar—the Express Room Lounge—a relaxing space with floor-to-ceiling bookshelves and overstuffed leather chairs. “We’re truly local and independent,” says Bobby Hanson, Operations Manager of Fountainhead Development. “This enables us to personalize service to our guests in a way that they don’t get at other hotels.”

Resource Development Special Section | Fisheries

Facing the Blob

Challenges facing Alaska’s seafood industry

By Isaac Stone Simonelli

C

hallenging statewide salmon harvests have dominated head­lines, with record-high sockeye production in Bristol Bay being the state’s primary saving grace. However, salmon are not the only fish in the sea keeping the state’s fisheries afloat, with many fishermen relying on groundfish, herring, and miscellaneous shellfish to make ends meet. Some fishermen use alternative fisheries as a way to balance their portfolios, while others focus entirely on a single target species ranging from Dungeness crab to sablefish. “In a typical year, Alaska’s most valuable fisheries [measured by value of harvest] include salmon, pollock, Pacific cod, crab, halibut, and black cod,” says Garrett Evridge, an economist with McDowell Group, an Alaska-based research firm.

Resource Development Special Section | Fisheries

Facing the Blob

Challenges facing Alaska’s seafood industry

By Isaac Stone Simonelli

C

hallenging statewide salmon harvests have dominated head­lines, with record-high sockeye production in Bristol Bay being the state’s primary saving grace. However, salmon are not the only fish in the sea keeping the state’s fisheries afloat, with many fishermen relying on groundfish, herring, and miscellaneous shellfish to make ends meet. Some fishermen use alternative fisheries as a way to balance their portfolios, while others focus entirely on a single target species ranging from Dungeness crab to sablefish. “In a typical year, Alaska’s most valuable fisheries [measured by value of harvest] include salmon, pollock, Pacific cod, crab, halibut, and black cod,” says Garrett Evridge, an economist with McDowell Group, an Alaska-based research firm.

In 2017, salmon was the most valuable fish group. Harvest of all five salmon species totaled more than $781 million in ex-vessel value, the amount paid to fishermen for their catch. However, Evridge notes that 2018 has been a disappointing year for many salmon fisheries, a statewide concern.

“Salmon across the state have come in weaker than forecast, particularly in the North Gulf of Alaska,” says Bert Lewis, the Central Region supervisor of the Division of Commercial Fisheries for the Alaska Department of Fish and Game (ADFG). “In the region I work, we saw some of the lowest returns of sockeye salmon in recent history with the exception of Bristol Bay, where we had the biggest run on record.”

The sockeye salmon harvest is estimated to be 37 percent of the recent ten-year average, making it the smallest since 1975—all other smaller harvests date back to the 1800s.

Resource Development Special Section | Oil & Gas

The First Oil Wells in the Alaska Arctic

‘The difficult we can do at once, the impossible takes a little longer.’

By Ross Nixon

T

he path to Alaska’s modern day oil prosperity began with a top priority and long forgotten WWII expedition. This mission was a true epic, worthy of remembrance.

Alaskan people always knew some sort of oil supply lay beneath the Arctic. For generations, Alaska Natives collected tarry lumps of sand and burned them for warmth. Early explorers mentioned finding oil sands. Rumors floated around of tar-filled lakes north of the Brooks Range. The “King of the Arctic,” Charles Brower, reported oil seeps along the Arctic Coast to the chief geologist of Standard Oil Company in the 1920s. A Wainwright teacher even filed oil claims for seepages he found at Cape Simpson, also in the ‘20s.

Resource Development Special Section | Oil & Gas

The First Oil Wells in the Alaska Arctic

‘The difficult we can do at once, the impossible takes a little longer.’

By Ross Nixon

T

he path to Alaska’s modern day oil prosperity began with a top priority and long forgotten WWII expedition. This mission was a true epic, worthy of remembrance.

Alaskan people always knew some sort of oil supply lay beneath the Arctic. For generations, Alaska Natives collected tarry lumps of sand and burned them for warmth. Early explorers mentioned finding oil sands. Rumors floated around of tar-filled lakes north of the Brooks Range. The “King of the Arctic,” Charles Brower, reported oil seeps along the Arctic Coast to the chief geologist of Standard Oil Company in the 1920s. A Wainwright teacher even filed oil claims for seepages he found at Cape Simpson, also in the ‘20s.

President Harding designated an Indiana-sized chunk of Alaska as Naval Petroleum Reserve 4 (NPR 4) in 1923. The times saw the US Navy converting from coal-fired ships to oil burners. Securing land for an emergency wartime fuel source made sense. At that time, the states of Texas and Oklahoma rolled in oil money from their booming oil fields, keeping the isolated Alaska North Slope off the oil man’s radar. Through the 1920s there’d been geologic and topographical surveys north of the Arctic Circle, but of the oil potential there, little was known.

Under the pressure of a mechanized war run on limited oil resources, the US Navy sent an exploratory group to check NPR 4 for oil in 1944. Lieutenant William T. Foran USNR led the party. As a member of one of the 1920s geological survey teams, Foran believed the North Slope held large amounts of oil. Flown from Fairbanks by the famous Bush pilot Sig Wien and led by Simon Paneak of Chandalar Lake, the naval explorers found oil seep evidence throughout NPR 4. Interestingly enough, the horrible North Slope weather gave a fortuitous break. Foran wrote: “Impossible flying conditions forced considerable waiting in Barrow, but much was accomplished, and waiting periods provided time for gathering invaluable information from old-time resident trader Charles Brower and from the parties’ veteran pilot Sig Wien.”

Resource Development Special Section | Arctic

Safety reminder built right into the drilling rig floor.

© ConocoPhillips

Staying Safe on the North Slope

Facing Arctic weather, heavy equipment, and wandering bears

By Julie Stricker

W

orking in Alaska’s North Slope can be challenging enough, but a few companies are taking that challenge a step further, drilling from manmade islands into promising basins miles off the coast. Going offshore adds a measure of remoteness and additional hazards to the workplace, such as floating ice, frigid water, and transportation by boat, hovercraft, or helicopter—or tracked vehicle after freezup.

It’s still Alaska’s North Slope, so it’s dark for months at a time. Blizzards bring high winds, stinging snow, and wind chills that in 2014 dropped to 97 degrees below zero. Polar and grizzly bears roam the region. In the summer, mosquitoes descend in hordes, backed up by swarms of biting flies.

Healthcare

Wellness in the Workplace Isn’t a Luxury

Mental health programs aren’t just nice, they’re smart

By Isaac Stone Simonelli

L

ong before clinical depression or suicidal tendencies take hold of a person, the mental health of an employee can impact a business, large or small.

Wellness at Hope

“For-profit organizations that have wellness programs make more money—straight up,” says Rick Benjamin, the director of organizational and spiritual wellness at the secular, nonprofit organization Hope Community Resources. “That makes the point that this whole wellness thing isn’t just a nice thing or a feel-good thing, it’s very practical. If people are better, they do better work—and the for-profit business makes more money. So businesses that have wellness programs aren’t just nice, they are actually smart.”

Hope provides services to individuals and families who experience intellectual and developmental disabilities, traumatic brain injury, and mental health challenges. But when it comes to supporting these individuals and their families, the process really starts with ensuring the mental wellness and quality of life of Hope’s employees.

Alaska Native

Wonder Lake is only a short hike from the Kantishna Roadhouse.

Doyon Tourism

Showing Off the Last Frontier

Sharing Alaska’s lands and cultures

By Vanessa Orr

I

n a state in which tourism is a major economic driver, it’s not surprising that Alaska Native corporations would establish and operate their own visitor attractions. What sets them apart—whether running lodges deep in Denali Park, operating the Kodiak Brown Bear Center in the Karluk Basin, or running a tram to the top of Mt. Roberts in downtown Juneau—is their emphasis on culture in every aspect of what they do.

“One of the biggest advantages of our tourism products is the element of being Alaska Native-owned and -operated; we represent more than just summer tourism in Alaska,” says Marie Monroe, general manager for Kantishna Roadhouse, owned by Doyon, Limited. “People staying with us want to learn more about our culture and to know that they are getting an authentic Alaska experience from an authentic Alaskan business.”

“Our heritage and history is at the forefront of everything that we do,” agrees Elliott Wimberly, president and CEO of Goldbelt, Inc. “It is clear to visitors, our employees, and everyone who does business with us that we are an Alaska Native corporation.”

CRAFT FAIRS

CRAFT FAIRS

Seasonal Shopping

T

here’s little worse than an under-utilized PFD check—if there’s any unused PFD money still rattling around in your account (or pocket), make sure to schedule time to visit one of Alaska’s many craft fairs in November, all of which highlight Alaska artisans, products, and services—just in time for the holiday season.

This is the 50th anniversary of the Annual University Women’s Association Holiday Bazaar, which features local arts and crafts at the Pioneer Park Civic Center in Fairbanks on November 3-4. www.uaf.edu/uwa

The Bad Girls of the North Bazaar takes place this year on November 2-3 at the Lakefront Anchorage and November 9-10 in Wasilla at the Mat-Su Resort, offering up jewelry, handcrafted soaps, silk scarves, handmade clothing, pottery, leather purses, metal art, gourmet foods, home décor, and one-of-a-kind artwork. badgirlsofthenorth.com

Events Calendar

Events Calendar

Statewide

Nov 6
General Election

The 2018 General Election takes place Tuesday, November 6. Every Alaskan is affected by election results, so Alaska Business highly encourages every eligible resident to participate by voting. elections.alaska.gov

Anchorage

Nov 10
Big Band Bash

Join the Alaska Aviation Museum at the Egan Civic & Convention Center for the Big Band Bash. This 1940s-themed dance includes vintage photos, a photo booth, live and silent auctions that benefit the Alaska Aviation Museum, and a sit-down dinner. alaskaairmuseum.org

Nov 17
Thanksgiving for the Birds

Visitors can make bird feeders and learn about winter birds and how to feed them at Creamer’s Field Farmhouse Visitors Center from Noon to 4 p.m. friendsofcreamersfield.org

Nov 20
Costco Opening

The new Costco, located at 48 College Road, opens on Tuesday, November 20. Attendance is free and open to the public; shoppers must be a member to purchase merchandise. explorefairbanks.com

Haines

Nov 7-10
Alaska Bald Eagle Festival

Many festival activities are located at the American Bald Eagle Foundation museum such as wildlife workshops, tours, and presentations. There are also visits to the Alaska Bald Eagle Preserve to witness the “Gathering of the Eagles,” where usually more than three thousand eagles can be found this time of year. baldeagles.org/festival

Business Events

November

November 1-4

Sitka WhaleFest

Sitka: Presented by the Sitka Sound Science Center, WhaleFest is a science festival that celebrates marine life. At the core of the festival is a unique science symposium blending local knowledge and scientific inquiry concerning the rich marine environment of our northern oceans. sitkawhalefest.org

November 2-3

All Alaska Pediatric Symposium

Hotel Captain Cook, Anchorage: The All Alaska Pediatric Partnership supports and links healthcare services between government, healthcare entities, social services, and payers for children and families. a2p2.org

November 4-10

Alaska Miners Association Conference

Dena’ina Center, Anchorage: The fall convention includes technical sessions, short courses, a trade show, and networking opportunities. alaskaminers.org

November 12-13

AAMC Conference

Hotel Captain Cook, Anchorage: The Alaska Association of Municipal Clerks is an organization that focuses on providing educational training and mentoring and professional growth opportunities. alaskaclerks.org

November 12-16

Alaska Municipal League Local Government Conference

Hotel Captain Cook, Anchorage: The Alaska Municipal League is a voluntary, nonprofit, nonpartisan, statewide organization of 162 cities, boroughs, and unified municipalities, representing more than 97 percent of Alaska’s residents. akml.org

November 14-15

RDC for Alaska Conference

RDC’s purpose is to link various industries together to encourage a strong, diversified private sector and grow Alaska through responsible resource development. akrdc.org

Inside Alaska Business

Office of the Governor

Governor Bill Walker has signed the following into law:

HB79—Makes efficiencies in Alaska’s workers’ compensation system that will reduce administrative costs; combats worker misclassification by establishing a clear statutory definition of “independent contractor”; and creates an interim legislative workers’ compensation working group tasked with reviewing the workers’ compensation system.

AO297—Extends the life of Alaska’s Mariculture Task Force, establishing it as an ongoing advisory panel to work with state, federal, tribal, industry, and other stakeholders to support the implementation of the Alaska Mariculture Development Plan released this year.

HB76—Expands the Mariculture Revolving Loan Fund to create new financing options for mariculture businesses.

HB354—Updates the protocol used by the Southeast Alaska Regional Dive Fisheries Association to charge an assessment to its members.

HB56—Updates the state loan fund to account for increasing costs for permits, vessels, and equipment.

HB240—Regulates pharmacy benefit managers, which serve as the middle-men between local pharmacies and insurance companies. gov.alaska.gov

Right Moves

Tlingit & Haida

Central Council of Tlingit & Haida Indian Tribes of Alaska hired Jesse Parr as the Temporary Assistance for Needy Families (TANF) Manager; Parr will oversee the daily management of the TANF department. He holds a bachelor’s degree in tourism and commercial recreation from Georgia Southern University and a master’s degree in public administration from the University of Alaska Southeast.

Parr

AAPCS

The Alaska Association for Personal Care Supports (AAPCS) hired Allison Lee as part-time Executive Director. She brings with her to this position a deep commitment to informed policy making, excellent communication skills, and extensive knowledge of state and federal regulations and regulatory processes.

Lee

At a Glance

What book is on your nightstand?
The American Heiress [by Daisy Goodwin].

What movie do you recommend to everyone? Crash: the message in it is really powerful and I think it’s probably even more relevant today.

What’s the first thing you do after work? I go out and play with my dog [Trinity, a Siberian Husky] or take her for a walk.

If you couldn’t live in Alaska, where would you live? I’d live somewhere with a lot of the same traits. There’s a reason I’m here.

If you could domesticate a wild animal, what animal would it be?
A red fox.

At a Glance

What book is on your nightstand?
The American Heiress [by Daisy Goodwin].

What movie do you recommend to everyone? Crash: the message in it is really powerful and I think it’s probably even more relevant today.

What’s the first thing you do after work? I go out and play with my dog [Trinity, a Siberian Husky] or take her for a walk.

If you couldn’t live in Alaska, where would you live? I’d live somewhere with a lot of the same traits. There’s a reason I’m here.

If you could domesticate a wild animal, what animal would it be?
A red fox.

Off the Cuff

Julie Saupe

J

ulie Saupe has been the president and CEO of Visit Anchorage since 2007; she has worked to develop visitor industry opportunities in Alaska for more than twenty years, including positions at Explore Fairbanks, Travel Alaska, and the Mat-Su Convention & Visitors Bureau.

Alaska Business: What is your favorite pastime?
Julie Saupe: Can I tell you what I like to say I do? [She laughs.] I like to think of myself as an avid hiker. I just don’t get out as often as I should to really apply that to myself, but when I do have spare time, I would like to be somewhere up in the mountains. My absolute favorite hike is Portage Pass Trail.

Alaska Trends

Last Frontier Recreation

Alaska is home to one of the largest consumer bases for outdoor products as a percent of the population. Consumers access a broad range of activities at varying levels of intensity.

Outdoor Participation Rates

CED estimates that of the total population of people visiting Alaska, 61 percent participated in at least one form of outdoor recreation.

In 2017 there were approximately 44,700 registered snowmachines in Alaska, which means an average of roughly 1 in 12 Alaskan residents owned one.

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Thanks for reading our November 2018 issue!