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Southeast Alaska News
With an oversupply of natural gas in the country, Alaska is exploring the construction of a relatively small, low-pressure gasline within the state’s borders — while still holding out hope for a much larger project should prices improve.
Dan Fauske is the president of the Alaska Gasline Development Corporation — or AGDC. He spoke to Sitka’s Chamber of Commerce on Wednesday about when and where Alaskans may see gas.
Earlier this year, Gov. Parnell announced that the state and TransCanada had called it quits, putting an end to AGIA.
Now, the Alaska Gasline Development Corporation is the only game in town. And Dan Fauske knows this game has been played time and time again.
“We have a plaque in our office. It says, Fairbanks to get Gas. It’s from the 1954 Daily News-Miner. So this debate’s been going on a while.”
The problem is economic. Natural gas is sold in volumes of 1,000 cubic feet at a price — right now — somewhere between $3 and $4. To sell gas, it has to be delivered in pressurized pipelines, or be super-cooled and liquefied.
If you’re close to the gas, it can be a great deal. The city of Anchorage has been served for decades by low-cost gas from oil refineries next door in Cook Inlet.
On the North Slope, where the state has vast reserves of natural gas, Fauske says it’s considered a byproduct.
“For years, the gas a Prudhoe Bay has been reinjected into the ground to force the oil out. The petroleum engineers will tell you that we’ve looked at this gas three and four times. They’ve recycled it.”
The AGDC is exploring a 700-mile gasline from Prudhoe Bay to Nikiski, which would be about one-hundred miles shorter than a gasline to Valdez, where the TransAlaska Oil Pipeline terminates. There are two options on the table. A 36 -inch low-pressure pipeline that would carry so-called “lean gas” — or gas ready for delivery directly to consumers. The other option is a 42-inch pipeline delivering much higher volumes of gas under much higher pressure. The smaller pipeline would cost almost $8-billion and serve primarily Alaskans. The larger pipeline would cost $65-billion, and supply Alaska and the global export market.
The big three oil producers — Exxon Mobil, ConocoPhillips, BP — and even TransCanada would partner with the state in the big pipeline, if it ever pencils out. Fauske says this is a big “if.”
“Oil companies are not charged with taking care of Alaskan citizens. Oil companies do things for their shareholders. I’m not defending them, I’m just saying no one’s going to invest in this kind of project so that 700,000 Alaskans can get a benefit. The reality is: They do things for their shareholders. The irony is that the Alaska Permanent Fund is a huge shareholder of Exxon stock. People say, They should have done this. It’s been looked at thirty times.”
The state invested $355 -million dollars in the Alaska Gasline Development Corporation to perform the preliminary engineering and design for the smaller gasline — called the Alaska Stand Alone Pipeline — which will take about 2 years. Fauske believes that sometime in that window, the two projects will meld and the state will ultimately have a 10-percent stake in a gasline that is operational by 2020.
Fauske spent 18 years as the director of the Alaska Housing Finance Corporation before taking over AGDC. He was on Gov. Palin’s AGIA team, which he says was a good idea, when gas was at $10. His expertise is in finance.
The discovery of shale gas in the northern plains of the US undermined AGIA, but Fauske believes this new gasline strategy, based on revenue bonds, is a workable solution for the state’s energy needs, as well as the largest construction project in the country.
But he says gas is nothing akin to the discovery of oil on the North Slope.
“Oil is king. Gas gives us security. From a revenue standpoint gas will never replace oil.”
Asked by a member of the chamber audience to give odds on which gasline would be built, Fauske pointed to the radio microphone and tv camera and declined. Instead, he quoted a line from the movie 2001: A Space Odyssey, and said, “Something wonderful’s going to happen.”
As Mark Twain would say, reports of the demise of seaweed collecting at the Halibut Point State Recreation Site have been greatly exaggerated.
It turns out that gathering this much-favored garden fertilizer does not require a special use permit. Under a new policy, however, permits are required for anyone who wants to drive a vehicle into the park, for any reason.
Kevin Murphy, the State Parks’ Chief Ranger for Southeast Alaska, said the new policy was prompted by road damage in the rec area.
“It was the damage to the roadbed that kind of forced us into trying to mitigate that,” Murphy said. “And the way to mitigate that was to limit the access down there, at least have some accountability for it. That’s what has driven it all.”
Murphy said that a combination of wet spring weather and too much traffic had caused damage at the end of the roadway. Park employees were seeing six or seven trucks in the park at once, he said, many of them parked off the gravel areas designated for them.
The policy is not aimed at people gathering seaweed for gardens or compost, Murphy said. A press release issued by the State Parks’ citizens’ advisory board earlier this week said that the special use permits were required to limit the amount of seaweed collected. Murphy said that is not accurate — no permit is required to collect seaweed, as long as people walk in.
“Foot traffic, wheelbarrows, buckets, any time,” he said. “Don’t even need to call and let the specialist know. Go for it. It’s really more about vehicle access.”
Anyone who wants to drive in will need a special use permit, whether it’s to collect seaweed, to transport a grill for a picnic, or to provide access for those with disabilities.
A permit might sound daunting, Murphy said, but it’s really just a five-minute phone call to let park staff know when they need to be present to unlock the gate.
“It sounds like a highly technical long piece of paperwork,” Murphy said. “It’s really a one-page thing that has the person’s name on it so we have contact for that person, and establishes a time for us to let them in and let them out and control the access.”
Murphy said that the new policy is in fact a return to an older policy; until about four or five years ago, he said, the main gate was locked at all times.
Anyone with questions, or to get a special-use permit, should call the State Parks Sitka office, at 747-6249.
The Sitka Assembly delivered its verdict on the city’s top two employees on Tuesday night (4-15-14).
City Administrator Mark Gorman and City Attorney Robin Koutchak each received their annual evaluations; Koutchak’s evaluation took place in private executive session; Gorman elected to have his evaluation done in public.
Assembly Member Mike Reif said his overall message for both Gorman and Koutchak was one of appreciation.
“I am so pleased with both of them,” Reif said. “I am so pleased with the way they work with each other, with their staff and with the Assembly. We have a really high functioning team. You have superior talent both in Mark and Robin.”
That said, Reif and assembly members Pete Esquiro and Aaron Swanson expressed concerned that the city is relying too much on studies done by outside consultants. The city is spending up to $250,000 for an outside firm to develop a solid waste management plan, and considering a similar study to create a master plan for the general fund.
Esquiro said he hoped the city would do more of that planning and analysis in-house.
“We’ve got some pretty talented people that work for the city,” Esquiro said. “You know, they’re very capable, and I’d like to see us use our in-house expertise, instead of some of these studies that we’re authorizing. I don’t think we’re necessarily getting the best work products from outside consultants all the time.”
Esquiro had particularly high praise for City Attorney Robin Koutchak
“She doesn’t speak down to people, but she has the ability to speak in a way that most people can understand her,” Esquiro said. “You know, I’m not a lawyer and quite often I could get lost. But she has a great ability to reword things to where we can understand them, and I think it’s a pretty talented person who can do that.”
For her part, Mayor Mim McConnell said that she was pleased with Gorman’s work during the six months that he’s been on the job.
“I think he’s done very well, and I think he’s been well-received by the municipality,” McConnell said.
Gorman said that so far, he’s enjoying the work.
“It’s an incredibly stimulating job,” he said. “Every day I come to work, I’m not sure what’s going to come through the door, but it’s always challenging and engaging, and it’s a real privilege for me to be in this position, to be serving Sitka.”
McConnell said that both Gorman and Koutchak had proposed going on contract; right now, both are city employees, and covered by the city’s personnel policy.
Gorman said he recommended to the assembly that, as Administrator, he be placed on contract, because it would offer the assembly more flexibility in hiring and firing the city’s top official.
“From their perspective, I think they’re served better by having their CEO under a contract,” Gorman said. “It gives them more flexibility as they move forward. From my vantage point, it’s fairly neutral, but it’s my advice to them that I think it’s a better tool for them for managing their administrator.”
McConnell said the assembly will consider the issue.
Following a somewhat heated public hearing on the issue Thursday, the Ketchikan City Council unanimously approved a budget amendment to provide an extra $100,000 for the city’s contract with engineering consultants CH2MHill.
Members of the public speaking against the budget amendment questioned the need to use CH2MHill for certain activities, such an answering concerns from the public about the city’s new chloramine water treatment system, which was turned on April 7th.
Jeannie Wills told the Council that city staff should be able to answer the questions themselves. Wills adds that she believes CH2MHill is biased in favor of the use of chloramine.
“I wonder if it would have been better to get a different third party and not the person that you paid all that money to build that plant,” she said. “It just seems like there is this huge conflict of interest there.”
Council Member Bob Sivertsen responded that a different firm would need to spend significant time studying the background, and learning all about the project before it would be able to answer any questions.
Speaking of background, here’s a little information for those who might not be familiar with the issue. For many years, the city’s water treatment system has been using free chlorine – essentially bleach – to kill organisms in the water that can make people sick. Unfortunately, when chlorine comes into contact with organic material, it produces byproducts. Some of those byproducts are regulated by the federal Environmental Protection Agency, because studies have indicated that they can cause cancer.
Ketchikan’s water had too many of those regulated byproducts, and the EPA told the city it needed to do something to reduce the levels. There were options. One was a filtration plant, but the cost estimate was high – somewhere in the range of $30 million. The other was a combination of chloramine and ultraviolet light.
Chloramine is chlorine mixed with a small amount of ammonia. It also produces some of those regulated byproducts, but not usually as many. It also was a lot less expensive to build that system, so that’s what the city chose to do.
That was about 10 years ago. This winter, the city announced it was ready to turn the new system on, and that’s when a group formed to oppose the switch. United Citizens for Better Water members are worried mostly about the health effects of chloramine. They got a petition to put the issue on the ballot, collected signatures and turned it in. The city is in the middle of reviewing that petition, to make sure it passes legal muster.
That brings us to the present. Because of the public opposition, the city used CH2MHill’s services more than anticipated, and the money in the contract was used up. City officials said they’ll need the firm’s guidance through fall, at least, which is why they wanted the $100,000 budget adjustment.
Amanda Mitchell, who spearheads the United Citizens group, said she’s concerned about at least a couple of the items listed under CH2MHill’s proposed scope of work. One is assistance with the petition review.
“Why does CH2MHill think that they need to review our citizen initiative?” she said. “They’re not involved in our local ordinances, and we’re looking at paying them $10,000 to fight against us wanting to vote on this. That’s kind of disturbing.”
City Mayor Lew Williams III responded that the only person who will make the decision about the petition is the city attorney. But, the attorney might have technical questions, and needs to be able to get answers from an expert.
City Manager Karl Amylon added that the $10,000 is a placeholder, and the city may well not spend that much for the attorney’s technical advice.
“Money will not be borrowed unless expenses are incurred,” he said. “In terms of the technical support that CH2MHill will provide to the city attorney in this context, they’re the experts on the design of the plant. They didn’t build the plant, they designed it. If the city attorney needs their assistance to answer questions he has, that’s what this money is intended for. It may or may not be expended.”
Amylon added that it is common for municipal governments to hire professional firms to provide expertise in specific areas.
A couple more people spoke during public comment about chloramine, asking the Council to rethink its decision. One, Sally Balch, said she’s been testing her water and it appears that the pH level had risen since the city started chloramine. She said she would like clear, simple answers from city officials.
“If I really felt, heart to heart, that it was safe for us, I wouldn’t oppose it, because I trust you guys. I really do,” she said. “I voted for most of you guys to be here, because I believe in what you’re doing.”
But, she said, the Council should take a step back and rethink the decision about chloramine.
Later, during Council discussion of the budget amendment, Williams asked City Attorney Mitch Seaver to explain how he would use CH2MHill for the petition review.
“I have most of the information I think I’m going to require from Mr. Kleinegger,” Seaver said. “There are some technical and complex issue that I want to be able to speak with CH2MHill. I don’t foresee it being anywhere near the amount in this estimate.”
The budget amendment passed unanimously.
During Council comments at the end of the meeting, Council Member Marty West noted that the city of Portland, Oregon, is known for its environmental conscientiousness.
“I was noticing a news item today that they are going to discharge 38 million gallons of water from their reservoir because they found that a guy peed in it,” she said. “So, they take their water purity and quality extremely seriously. And they also have chloraminated water.”
If the ballot initiative proposed by the anti-chloramine group is approved by the city, it would go before voters within two months. If city voters then chose to prohibit the use of chloramine, the city likely would have to move forward with filtration.
The city’s legal review of the ballot initiative petition must be completed by May 2nd.
The chloramine issue is moving beyond city limits. At the prompting of people opposed to chloramine, the Ketchikan Gateway Borough Assembly has scheduled a presentation about the water treatment process for its next meeting; and the Ketchikan School Board is supposed to talk about the issue, as well.
The Ketchikan Gateway Borough Assembly meets on Monday, and in addition to a presentation from city officials about the switch to chloramine water disinfection, the Assembly will talk about repairs to the roof over the borough’s new pool.
An executive session to discuss potential litigation is on the agenda, and likely will take place before the Assembly discusses what action to take. According to the agenda statement, the pool opened in July of 2012, and condensation issues were noticed about two months later.
The borough took action to correct what was causing the condensation, but damage already had taken place. According to the agenda statement, some sections need to be replaced, and continued monitoring will be required to make sure more work isn’t needed.
Borough Manager Dan Bockhorst has recommended that the Assembly move forward with repairs, despite the lack of legal resolution. He writes that money remains in the original project budget to cover those repairs.
The Assembly meeting starts at 5:30 p.m. Monday in Borough Assembly chambers at the White Cliff building. Public comment will be heard at the start of the meeting.
Listen to iFriendly audio.
Assembly delivers positive evaluations for administrator, attorney. State parks requires permits for vehicles at HPR; seaweed gathering on foot is allowed. State gasline exec outlines Alaska’s stand alone project for Sitka Chamber.
The Ketchikan City Council approved an additional $100,000 for the water division should additional costs be incurred with the chloramine plant. The council decided against a fence on the bypass. Marty West gives a meeting update. City041814
A bill allowing parents to sue those responsible for unlawful or negligent actions that lead to an unborn child’s death has cleared the statehouse.
Dubbed “Jackson’s Law,” SB200 was sponsored by Sen. Lesil McGuire, R-Anchorage.
Presuming Gov. Sean Parnell’s signature, the bill would make Alaska the 41st state allowing parents to file civil lawsuits for such actions.
Republican Gov. Sean Parnell signed into law Thursday a bill to legally define the term “medically necessary” in relation to abortion funding criteria.
Supporters say the bill is not related to the pro-life vs. pro-choice debate but is an issue about how abortions are funded under Medicaid.
“We are simply trying to define, using relevant, neutral legal and medical standards, when it is appropriate for the people of Alaska to pay for a truly medically necessary abortion,” said Sen. John Coghill, R-Fairbanks and one of the bill’s primary sponsors.
BETHEL, Alaska — A woman from Western Alaska will be competing later this month for the title of Miss Indian World.
Megan Leary, a graduate of Bethel Regional High School, will compete in the Miss Indian World Cultural Pageant April 22-26 at the Gathering of Nations Powwow in Albuquerque
JUNEAU — Republican U.S. Senate hopeful Dan Sullivan raised more money during the first quarter than he previously reported.
The summary of his filing with the Federal Election Commission showed he brought in $1.4 million between January and March. That includes about $1.3 million in contributions from individuals and political committees and more than $150,000 in transfers from committees authorized to raise money on his behalf.
The campaign previously announced Sullivan had raised over $1.3 million. He had about $2 million available.
JUNEAU — A bill revamping how medical costs under the Alaska workers’ compensation program are calculated passed the state House Wednesday.
Time is tight for House Bill 306 to make it through the state Senate before the Legislature’s required April 20 adjournment, however.
The legislation changes the method for paying medical fees of injured workers under the state program to one that is used in several other states.
ANCHORAGE — An Anchorage psychiatrist is accused of billing Medicaid more than $300,000 for services authorities said were never provided.
Shubhranjan Ghosh, 39, is charged by the state with medical assistance fraud, scheme to defraud and evidence tampering, the Anchorage Daily News reported. Ghosh is the founder and sole practitioner at Ghosh Psychiatric Services.
He was arrested Tuesday. His arrest comes after a string of unrelated charges connected to Medicaid in what the state calls a continuing crackdown on billing fraud.
JUNEAU — The Alaska Legislature has confirmed Gov. Sean Parnell’s picks to lead the departments of Natural Resources, Revenue, Public Safety and Administration.
The only commissioner over which there was debate during a joint session of the Legislature Thursday was Joe Balash with the Department of Natural Resources.
The vote on Balash’s confirmation was 57-2. Democratic Reps. Scott Kawasaki and Chris Tuck were the lone members to vote against Balash’s confirmation.
JUNEAU — The Alaska Legislature has confirmed Gov. Sean Parnell’s appointees to Alaska boards and commissions, including two controversial picks.
Bernard Washington was confirmed to the State Assessment Review Board on a 45-15 vote. Richard Rabinow was confirmed to the board of the Alaska Gasline Development Corp., or AGDC, 43-17.
JUNEAU — One of the last major bills to come together in the Senate this session could be the education package.
Senate Finance Committee co-chair Kevin Meyer says members are trying to figure out what they want in their version of HB278. Meyer has charts in his office breaking down elements that have been proposed as part of the bill and issues that could be incorporated, such as a study on the per-pupil funding formula.
It’s almost time for the rush of family and friends from the Lower 48, and Alaska’s tourism industry leaders are expecting a good, but not great, 2014 visitor season.
John Binkley, president of Cruise Lines International Association Alaska, formerly the Alaska Cruise Association, said he is expecting 972,000 cruise visitors to the state this year, a slight decrease from the 999,600 cruisers in 2013. About 95 percent of those passengers stopped in Juneau.
JUNEAU — Gov. Sean Parnell said repealing the state’s oil tax system would “kill” oil production.
During an online town hall Wednesday evening, he also said he personally opposes the legalization of marijuana for recreational use. But he said if a ballot initiative on that issue passes this year, the state would implement the regulations needed for the measure.
Democratic U.S. Senator Mark Begich said he remembers driving through the Kenai Peninsula five years ago, shortly after his election to the U.S. Senate, and noticing the economy here was not in the best of shape.
In a return to the area, he shared some insight into his congressional activities, then fielded questions on his tax reform proposal, health care and the future of Alaska’s economy at a joint Soldotna and Kenai Chamber of Commerce luncheon Tuesday at the Soldotna Regional Sports Complex.
Three incumbent members of Alaska’s Board of Fisheries were unanimously confirmed after a Chugiak representative withdraw his objection to the two commercial fishers on the board.
Rep. Bill Stoltze, R-Chugiak, said he objected to the confirmation of Sue Jeffrey, board member from Kodiak, and John Jensen, of Petersburg, because he had heard that someone was going to object to the third appointee — sportfishing guide Reed Morisky of Fairbanks.