Alaskanomics

Cook Inlet Salmon Management

The Anchorage Chamber of Commerce hosted a lively panel discussion today about the issues facing Cook Inlet Salmon and the groups that are fishing the waters in the area. Hannah Harrison, an environmental and development consultant, moderated the discussion between Ricky Gease of the Kenai Sports Fishing Association; Rod Arno, with the Alaska Outdoor Council; Paul Dale of the Alaska Salmon Alliance; and Dwight Kramer, a Cook Inlet Task Force public stakeholder representative. The panelists were asked a series of questions in regards to Cook Inlet Salmon Management and each gave his take on the situation, from a different perspective.

The discussion that resulted from a series of four questions illustrated the fact that there are many concerns surrounding Cook Inlet fishing. Everyone agreed that over the past 10 years there has been a decrease in the annual salmon harvest and the issues facing the industry have become more complex in the past decade. Cook Inlet is the heart and soul of the sport fishing industry in Alaska and there are more than 450,000 people living within the Cook Inlet region. There was also a general consensus that the conflict regarding Cook Inlet salmon has had a negative effect on the Kenai Peninsula. The communities of the peninsula are very different, and most on the panel believed that a solution was possible if the communities and user groups were able to weigh in with their concerns and ideas.

Sport, commercial, personal and subsistence fishermen all have opinions on how the Cook Inlet fisheries should be handled. Over 50% of sport fishing in Alaska occurs in upper Cook Inlet. While over half of the State’s population lives in the area, it is not an area open to subsistence fishing. One only needs to visit the Kenai river in July to understand how popular the area is for tourists and locals, alike. The Fred Meyer in Soldotna is the highest grossing Fred Meyer in the nation during the month of July. It will be important for the industry to find solutions to the problems that are currently plaguing the area. Dwight Kramer noted throughout the discussion that the way to find solutions was through scientific research. He believed that if we were able to breakdown the research by watershed, it would be possible to identify future issues and help find solutions for current problems.

The discussion moved into the “aging of the fleet” and the fact that many in the industry are getting older and the cost of entry for younger fishermen is very high. Ricky Gease assured the audience that his association worked very closely with the younger generations of fishermen, from all sides of the industry and that the youth are being raised to be good stewards of Cook Inlet resources. It was also noted that the younger generations are very interested in solving the problems in Cook Inlet to help extend longevity along the watershed.

The panel wrapped up with a question about the state of Cook Inlet salmon in 25 years. Most believed that there was a place for sport, commercial, personal, and subsistence fishing throughout Cook Inlet. It will take hard work but there are many groups and individuals that are willing to make sure that Cook Inlet is available for multiple user groups to fish for many years to come. 

Alaska and the Film Industry

The State of Alaska Film Office promotes, “Alaska: a big state for the big (and small) screen!” Film was the topic of this week’s Monday Forum at the Anchorage Chamber of Commerce. Roberta Graham, assistant commissioner with the Alaska Department of Commerce, and Kelly Mazzei, executive director of the State of Alaska’s Film Office, spoke about the film industry’s impact on the Alaska economy. The Alaska Department of Revenue- Tax Division works to promote the Alaska film production tax credit to make Alaska more enticing for film projects of various size. The production value in Alaska is as big as the wide open tundra. Variety of locations, untapped beauty and many different landscapes and ecosystems throughout the state are just a few of the things that attract projects to Alaska.

In recent years, there has been an increased interest in all things Alaska and the local economy has benefitted from this interest. In the first three quarters of fiscal year 2013,  $10.5 million in wages were brought to Alaska through the film industry. $34.7 million was spent with Alaska vendors, 1,138 Alaskans were employed and 300 workers were trained because of projects being work on in Alaska. There is even a new degree program at UAF that will help future film makers and industry professionals. The state is working to show that Alaska is not only an attractive backdrop for a variety of projects, but is also a good place to work with a pool of local talent for all types of productions.

The Alaska Film Office helps organizations expand and develop programs within the film industry; promotes Alaska as a location for film production; provide production assistance by connecting filmmakers with Alaska contractors, suppliers, and workers; and certify Alaska film production internship training programs and promote the employment of interns by eligible productions.

Production companies are able to receive a tax credit for their work in Alaska. To receive a tax credit, production companies must apply and qualify for the production incentive from the State of Alaska. The incentives range from 30 to 44 percent of qualified expenses and is issued as a transferrable tax credit. More and more projects are coming to Alaska including commercials, reality shows, documentaries and feature films. The film industry is just another example of ways to boost the Alaskan economy.

The Federal Shutdown and Alaska's Economy

As the US enters week three of the federal government shutdown, people are beginning to wonder how the Alaska’s economy will be affected. Nearly 5% of workers in Alaska are federal employees. Only Maryland and Hawaii have a higher percentage in their work forces. The majority of federal employees in Alaska are members of the military or work for the Department of Defense (DOD). The military was not furloughed during this shutdown and DOD employees were called back to work last Monday. The Department of the Interior has the 2^nd highest number of federal employees in the state. Those workers are still furloughed due to the shutdown.

One area that will be hard hit from the shutdown is crabbing. Today was to be the official start of the season, but very few boats are in the Bering Sea right now. Each crab fisherman is required to hold official permits, but these are not being issued because the officials who issue the permits are currently furloughed. Every day that the fishermen are not able to be in the water, they are losing about $1,000. The retailers that sell crab will be hard hit because they typically require the product in their stores by mid-November to be able to fill the holiday orders. “Overall, we’re looking at if it drags on long enough, it’s going to be a 20 to 25 percent decrease in the price paid, not to mention the cost and bills the vessels are racking up, sitting there tied to the dock,” said Mark Gleason, director of the Alaska Bering Sea Crabbers in an interview with KTUU.

Another related industry that is being hurt by the shutdown is the fishing industry that calls the Kenai National Wildlife Refuge home. Area guides are losing money each day that they are not able to access the waters within the Refuge. The boat launches are all closed and guide permits are on hold due to the shutdown. The guides aren’t willing to risk their future permits by fishing in the closed areas, even with the great weather that has been seen in Southcentral Alaska this fall. Hunting trips that access federal lands are also being put on hold until after the shutdown.

It is hard to calculate exactly how the shutdown will affect the Alaska economy, but the longer the shutdown lasts, the harder it will be for industries that rely on federal officials and are on federal land to recover the money lost during the shutdown.

Alaska LNG Project Announces Lead Terminal Site

Earlier this week, it was announced that Nikiski is the leading contender for the terminal for liquefied natural gas (LNG) coming from the North Slope. A news release from ExxonMobil states that BP, ConocoPhillips, ExxonMobil and TransCanada are “continuing to refine the agreed project concept that includes a gas treatment plant located on the North Slope, an 800-mile, 42-inch pipeline with up to eight compression stations and at least five off-take points for in-state gas delivery, and a liquefaction plant and terminal.”

Senior project manager for the gas pipeline and LNG project, Steve Butt said, “The work we have put into the site selection process gives us confidence that the Nikiski site is the lead location for the LNG plant and terminal. The Nikiski site also results in a pipeline route that provides an access opportunity to North Slope natural gas by the major population centers in Fairbanks, Mat-Su Valley, Anchorage and the Kenai Peninsula.”

There are other sites that are still being considered, but Nikiski has the land available for a plant and the producers know that they can route a pipeline there. The companies have been working to create a solution to meet energy needs in Alaska as well as export LNG to Asian and Pacific Rim markets while responsibly developing North Slope Resources. The project would be a huge boost for Alaska’s economy by providing state revenue, new jobs for Alaskans and access to domestically produced natural gas. The companies will continue to work together on the logistics of a gas pipeline and major LNG plant.

August 2013 Employment Report

The Anchorage Economic Development Corporation (AEDC) recently published the August 2013 Employment Report for Anchorage. The August employment numbers show a bit of a slowing from the forecast presented earlier in the year, but Anchorage and the state are both ahead of the National average when it comes to employment.  For the past 23 years, the August unemployment numbers have averaged 0.3 percent lower than the annual rate at the end of the year, so August is typically a good indicator of where the numbers will be at year-end.

An encouraging piece from the report shows that the private sector has grown by more than 1,950 jobs, or 1.6 percent. The industries with the largest year to date growth are mainly in the goods producing category, including oil and gas, manufacturing and construction. The oil and gas sector has seen an 11.8 percent increase in jobs over last year. Three positive factors are, Eni expanding its operations at their Nikaitchuq unit, Cook Inlet Energy’s announcement of $20 million in new financing, and increasing interest in LNG exploration to the Far East.

In the Municipality, the largest decrease in jobs was seen in the government sector, Federal and Local government both saw decreases over 4 percent YTD from 2012. Statewide, Federal Government jobs are down almost 9 percent, from where they were in August 2012. The private sector has offset the loss of government jobs in Anchorage and Alaska as a whole, but the average employment in Anchorage has not grown at the same speed as it was forecast to do.

The final four months of the year will show whether there will be an increase of 1-1.5 percent as forecast by AEDC. Low unemployment and the high cost of housing continues to make it difficult to find and keep strong employees. Anchorage’s unemployment continues to go down, but the labor force is shrinking, which affects the overall unemployment numbers. To read the full report, please visit, www.aedcweb.com