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R E V I E WRESOURCE

A PERIODIC PUBLICATION OF THE RESOURCE DEVELOPMENT COUNCIL FOR ALASKA, INC. www.akrdc.org

By Dave GeringExecutive Director

Manufacturing Industrial Council

Gold first wove togetherthe economies of Alaska andPuget Sound in the late 1800s.Today, more than a centuryafter the Klondike Gold Rush,the 49th state and its southerntrade partner are even moretightly interwoven by energyp roduction and exploration,seafood, tourism, serv i c e s ,federal spending, constructionand manufacturing, and retailand wholesale trade.

The remarkable economicconnection between the twostates is documented in “Tiesthat Bind,” a study commis-sioned by the Tacoma-PierceCounty Chamber of Com-merce and the Greater SeattleChamber of Commerce withsponsors from Alaska andPuget Sound. It is the thirdedition in a series of studiesthat started in 1984 to trackthe economic impact of tradebetween the two states. Put to-gether by Tacoma economistR o b e rt A. Chase, the new

edition clearly portrays thatAlaska’s economic impact onPuget Sound is profound.

Job Impacts

A c c o rding to the study,Alaska trade directly and in-directly accounted for morethan 103,000 jobs throughoutPuget Sound in 2003, up from90,000 in 1994. The growthwas equivalent to adding a1000-employee company eachyear to the Puget Sound re-gion. During the same period,the value of goods and servicesexported to Alaska rose from$2.4 billion to $3.8 billion. IfAlaska were a separate nation,it would be Puget Sound’sfifth largest trading partner.

Nearly 30 percent ofAlaskan employment in PugetSound is now related to serv-ices, with service jobs up 22p e rcent between 1994 and2003, while labor earn i n g sfrom service exports increased

79 percent and the dollar valueof services exported to Alaskagrew by 120 percent.

The vast majority of Alaska-related employment inWashington is in traditionalindustrial occupations andsectors, including oil refining,maritime and air transporta-tion, wholesale distribution,seafood fishing and produc-tion, manufacturing and con-struction.

Petroleum Impacts

Petroleum remains a hub ofthe Alaska-Puget Sound eco-nomic relationship. In2003, crude oil worth$2.8 billion came toPuget Sound refineries.Direct impact of thistrade included 1,990jobs and $144.5 millionin labor earnings. Spinoffbenefits of this employ-ment are dramatic, with

every refinery job accountingfor 11 others throughout theeconomy. This multiplier ef-fect means that there are about20,000 oil-related jobs up anddown the I-5 corridor in thePuget Sound region.

Thanks to today’s high oilprices, the dollar value ofmanufactured oil products inthe state of Washington nowexceeds the value of allp rocessed agriculture pro d u c t s ,

I N S I D E

Alaska-Washington 1, 4-5

Mixing Zone Regs 3

Young Alaskans Forum 3

RDC Conference 6-8

High Oil Prices 9

Alaska Budget Surplus 10

RDC Briefs 11

TH E EC O N O M I C IM PAC T OF AL A S K A

ON TH E PU G E T SO U N D RE G I O N

TI E S THAT B I N D

This Edition Sponsored By: KONIAGIncorporated

The bonds between Alaska and Washingtonstate continue to grow along with the healthof their respective economies. Photo showsAlaska’s Mt. McKinley and Washington’s Mt.Rainier, as a reflection.

(Continued to Page 4)

Resource Review is the official periodic publication

of the Resource Development Co u n c il (RDC),

Alaska's largest privately funded nonprofit economic

development org a nization worki ng to develop

Alaska's natural resources in a responsible manner

and to create a broad-b a sed, div e rsified eco n o m y

w hile pro t e c t i ng and enhancing the environment.

Resource Development Council121 W. Fireweed, Suite 250Anchorage, AK 99503Phone: (907) 276-0700Fax: (907) 276-3887E-mail: resources@akrdc.orgWebsite: www.akrdc.org

Material in this publication may bereprinted without permission providedappropriate credit is given. Writer & Editor Carl Portman

Executive Committee OfficersPresident John ShivelyS r. Vice Pre si d e n t R ick RogersVice Pre si d e n t Wendy Lindsko o gSecretary Tom MaloneyTreasurer Stephanie MadsenPast President Chuck Johnson

StaffExecutive Director Tadd OwensDeputy Director Carl PortmanProjects Coordinator/AMEREF E.D. Jason BruneFinance/Membership Deantha Crockett

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TADD OWENS

A M E S S AG E FR O M TH E EX E C U TI V E D I R E C TO R

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December 19, 2005 marked the end of the public commentperiod regarding the Alaska Department of EnvironmentalConservation’s (ADEC) proposal to adopt regulatory changesdealing with mixing zones. ADEC’s proposal was the prod-uct of more than a year’s worth of work and the subject of sig-nificant public scrutiny. If adopted, the new regulations willserve Alaska well going forward.

While historically mixing zones havebeen allowed throughout Alaska (mu-nicipal discharge facilities and shore-based seafood processing facilities beingthe most common examples), state reg-ulations have prohibited mixing zonesin spawning areas. This absolute prohi-bition is unique in the PacificN o rthwest. Neither Wa s h i n g t o n ,O regon nor Idaho prohibit mixingzones in spawning areas.

Alaska’s prohibition is excessive andinconsistent with state laws directingADEC, along with the Department ofNatural Resources and Department ofFish and Game, to approve of construc-tion in and use of anadromous waters,as long as proper protection of fishspawning, rearing and migration is en-sured. In this regard, ADEC’s currentmixing zone proposal strikes a muchmore appropriate balance between reg-ulatory flexibility and protection of thestate’s fisheries resources than an ab-solute prohibition.

It is important to note, under ADEC’s current proposal,mixing zones in spawning areas will always be the exceptionrather than the rule in Alaska. In reality, the proposed regula-tions continue to generally prohibit mixing zones in spawningareas. Moreover, the proposed regulatory changes in no wayundermine the ultimate responsibility Alaska’s resource agen-

cies have to protect rivers, lakes and streams important toanadromous fish throughout their life-cycle.

Additionally, ADEC has correctly placed the burden ofproof on permit applicants when making a determination re-g a rding the appropriateness of a proposed mixing zone.Applicants are required under the proposed regulations to

“…provide to the department all avail-able evidence reasonably necessary todemonstrate that a mixing zone willsatisfy…” the depart m e n t ’s re q u i re-ments.

As part of a 19-step test, applicantsmust demonstrate that any effluent orsubstance will be treated consistentwith the highest statutory and regula-tory requirements and the overall bio-logical integrity of the re c e i v i n gwaterbody will not be impaired. Ofcourse, in addition to a thorough analy-sis of all mixing zone applications,ADEC must actively enforce a permit’sconditions and stipulations once it hasbeen approved. In this manner, onlythe most environmentally sensitive ofp roposed mixing zones will be ap-proved and the requirements of theirapproval will be enforced.

As a matter of policy, RDC favorsregulatory flexibility over absolute pro-hibitions whenever possible. This posi-tion is not rooted in a desire to weakenor diminish Alaska’s rigorous environ-

mental protection standards, but rather to give operators op-p o rtunities to develop creative solutions to perm i t t i n gchallenges. Future technological advances, seasonal restric-tions and other developing best practices will create opportu-nities for environmentally-sound development to occur inplaces it may not have in the past.

RE G U L ATO RY FLE X I B I LIT Y WI LL SE RV E STATE

Deantha Crockett, RDC’s Finance and MembershipCoordinator, is one of 55 Alaskans appointed by Universityof Alaska President Mark Hamilton to serve as adelegate to the Conference of Young Alaskans. InJanuary, these emerging leaders will gather at theUniversity of Alaska Fairbanks to discuss andmake policy recommendations.

The Conference of Young Alaskans is one of a se-ries of Creating Alaska events this winter com-memorating the 50th Anniversary of Alaska’sConstitutional Convention and honoring the work

of the convention’s 55 delegates. Delegates will address fivekey issues: education, healthy communities and families, cre-

ating leaders for the next generation, responsibledevelopment of natural resources and reviewing theAlaska dream and last frontier spirit.

“Undoubtedly, this will be a tremendous learningexperience for you and for the public too,” saidGovernor Frank Murkowski in a letter congratulat-ing Crockett and other delegates. “I am proud ofthe hard work and dedication shown by so many ofour young people, and you are no exception.”

R D C STAFFE R APP O I NTE D TO CO N FE R E N C E OF YO U N G AL A S K AN S

Deantha Crockett

“It is important to note,under AD E C ’s current pro-posal, mi x i ng zones insp aw ni ng areas will alwaysbe the exception ra ther th a nthe rule in Al a ska. In re a l i t y,the pro p o sed re g u l a t i o n scontinue to generally pro-hibit mi x i ng zones in sp aw n-i ng areas. The pro p o se dregulatory changes in no wayu n d e r mine the ultimate re-sp o n si b ility Al a sk a’s re s o u rceagencies have to pro t e c triv e rs, lakes and st re a ms im-portant to anadromous fis hth roughout th eir life-cycl e . ”

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$13 billion to $12 billion, ac-cording to business revenuesreported to the WashingtonState Depart-ment ofRevenue.

From 1994 to 2003, PugetSound refinery capacity in-c reased from 555,000 to607,950 barrels per day andplans are underway for addi-tional expansions in refinerycapacity.

If the proposed Alaska nat-ural gas pipeline project isbuilt, the impact on PugetSound would be dramatic,not only for constru c t i o ncompanies and suppliers, butall the businesses engaged inp roducing, distribution andtransporting equipment andsupplies.

While energy pro d u c t i o nand exploration dominate theAlaska-Puget Sound trade re-lationship, the “Ties thatBind” study documented allthe other ways in which the

two regions depend on eachother.

Transportation

The Puget Sound has al-ways been the primary gate-way to Alaska and it remainsso today.

By dollar value, about 60p e rcent of goods re a c hAlaska by water and 40 per-cent by air or truck via theAlcan Highway. By weight,97 percent of the goods go byw a t e r. Two steamship linescarry cargo between the Portof Tacoma and Anchorage.The remainder of the state isserved by tug and barge busi-nesses based in Seattle andTacoma.

This business sector is agood barometer of the overalltrade relationship. Wa t e r-b o rne container shipmentsexperienced steady gro w t hduring the study period.

After four straight years ofre c o rd tonnage, the figuretopped 2.5 million tons in2003.

Air transport represents 38percent of northbound trans-portation revenues. This fig-u re continues to showstrength, and air cargo com-ing from Alaska to Puget

Sound is also clearly on theincrease. Air passenger trafficnumbers are stable and repre-sent 86 percent of total airtransport revenues.

Fisheries

The Bering Sea and theGulf of Alaska account for

TH E EN D U R I N G IM PAC T

OF AL A S K A ON TH E

PU G E T SO U N D RE G I O N

A Horizon Lines ship at the Port of Tacoma prepares to embark on a voyage tothe Port of Anchorage. By dollar value, about 60 percent of goods reach Alaskaby water, 40 percent by air or truck. By weight, 97 percent of the goods go bywater.

(Continued from Page 1)

( 9 07) 276-070 0 January 2006 Resource Review Page 5

more than half the total U.S.fisheries harvest. Wa s h i n g t o n -based boats only account forabout 10 percent of the ves-sels re g i s t e red to fish inAlaska, but they account forabout 60 percent of theAlaska “catch.” Several PugetSound cities, includingA n a c o rtes and Bellingham,and Seattle’s Ballard neigh-b o rhood, have benefitedg reatly from the dramaticgrowth in fresh and frozenseafood processing.

Following 15 years oftough times, fishing began torebound about two years agoand fishing remains a vitallink in Alaska-Puget Soundtrade and a major employerin both regions.

Cruise Industry

The Alaska-bound cru i s ei n d u s t ry has enjoyed phe-nomenal growth in re c e n tyears. While most of theships still depart fro mVancouver, B.C., a growingnumber now sail fro mSeattle. This is part i c u l a r l ysignificant because PugetSound benefits from provi-

sioning ships and spendingby cruise ship guests whenthey visit Seattle. The numberof cruise line passengers de-parting from Puget Sound forAlaska has risen from 9,000in 1998 to 550,000 in 2004.

F u rt h e rm o re, HollandAmerica and PrincessCruises, plus four U.S.-flaglines with smaller ships, areheadquartered in Seattle, gen-erating even greater eco-nomic activity. There is noquestion that the cruise lineindustry is now a vital part ofPuget Sound’s Alaska trade.

Services

Alaska’s need for businessservices has increased as itseconomy has diversified andm a t u red. While computersoftware represents the mostrapidly growing PugetSound-based service sector,the range of services PugetSound offers Alaska includesuch areas as advertising, en-gineering, arc h i t e c t u re, ac-counting, and financial andmanagerial consulting.

Washington remains amagnet for Alaskans seeking

higher education. Because ofeconomies of scale, Alaskahas neither a law nor a med-ical school, so aspiringlawyers and doctors mustseek their education out ofstate. Washington is oftentheir first option. Alaskansalso use the Puget Sound re-g i o n ’s vast health care re-sources.

Some facilities, such asC h i l d re n ’s Hospital andRegional Medical Center inSeattle, offer a telemedicineprogram, as well as special-ized capabilities for treatmentof burns and cancer. In thelast decade, the value of PugetSound health care services forAlaskans more than doubled,but a portion of the increaseis the result of spiralinghealth care costs.

Federal Spending

Tr a d i t i o n a l l y, Alaskanshave benefited from federalspending, an economic sectorthat is on the rise again after adecline between 1993 and1995. The federal govern-ment spends more per capitaon Alaska than on any other

state, and accounts for 38percent of Alaskans’ personalincome.

The money provides grantsto state and local govern-ments, tribes, non-profit or-ganizations, and industriesfor roads, airports, hospitals,and basic infrastru c t u r a lneeds in rural Alaska.Military spending, about $2.5billion in 2003, also accountsfor much of the federalmoney spent in Alaska.

Puget Sound benefits sub-stantially from this spending.In 2003, Puget Sound’s ex-p o rts to Alaska related tofederal spending amounted to$86 million and created 1,295jobs.

Manufacturing

The value of manufacturedgoods traded between Alaskaand Puget Sound has beenstable over the last decadeand food products are likelyto remain the largest compo-nent. While Alaska is steadilyincreasing its own manufac-turing capability for certainproducts, it continues to relyon the Puget Sound regionfor supplying most of themanufactured goods it needs.

Conclusions

Puget Sound and Alaskaare more than just healthytrading partners. To g e t h e rthey help one another excelin the good times andweather the bad times. Eachfills significant economicneeds of the other and PugetSound holds a major stake inAlaska’s continued economichealth and growth.

Editor’s Note: The Manufactu ringIndustrial Council (MIC) is a Seattle-area trade group that promotes the in -terests of in d u s trial fir ms whil eworking to preserve industrial landsfor industrial purposes and to retainthe city's "family-wage" job base. TheMIC covers Alaska issues in its quar -terly magazine, Seattle Industry.

The TOTE ship Midnight Sun embarks on its maiden voyage from Puget Sound to Alaska. Waterborne container shipmentsto Alaska have experienced steady growth with the figure topping 2.5 million tons in 2003.

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R D C ’S 26TH AN N UAL CO N FE R E N C E

AL A S K A R E S O U R C E S 20 0 6 : R I G H T P L AC E, R I G H T TI M E!

More than 30 high-level industry and government leaders addressed more than 500 registrants attending RDC’s 26th annual conference in Anchorage November16-17. At left, Governor Frank Murkowski focused his remarks on his administration’s efforts to get North Slope gas to market. The governor said the project beingnegotiated with the Producers “is the one that moves the most gas to market at the lowest tariff for the highest value ,generating the most tax and royalty revenuesfor the state.” At center, Northwest Territories Premier Joseph Handley is hopeful that a MacKenzie Valley gas pipeline could be operating by 2010, but noted becausethe Alaska project is much larger, the MacKenzie line would “fall behind” if development were delayed. At right, ConocoPhillips Alaska President Jim Bowles pointedout, “if we have a gas pipeline in place, you’ve got exploration that can occur that’s indifferent as to whether or not it discovers oil or large gas resources.”

At left, BP’s Bernard Looney said his company is looking for fiscal certainty in itsgasline negotiations with the state. “Clarity and stability for oil is every bit as im -portant as it is for gas as the two are inextricably linked,” said Looney. At upperleft, Shell’s Chandler Wilhelm called the Arctic “the last remaining frontier” foroil and gas development. He said Arctic basins contain about 25% of the world’sremaining undiscovered resources. At upper right, Tim England of TalismanEnergy noted his Calgary-based company has started a two-year drilling programin the NPR-A region to the west of Prudhoe Bay through its FEX subsidiary.

Bill Boycott, left, announced Agrium’s plans to possibly use coalfrom the Usibelli Coal Mine as a feedstock for its Nikiski am -monia and urea plant. Agrium is joining with industry partnersto conduct a feasibility study to evaluate the potential of coalgasification to produce the natural gas it needs to operate itsplant. The plan includes building a gasification plant next doorto its existing plant. At right, Anchorage Mayor Mark Begichjoined industry speakers in a panel focusing on Cook Inlet oiland gas operations. In addition to Boycott, John Bar n e s ,Marathon Oil Company, Scott Pfoff, Aurora Power, and TonyIzzo, ENSTAR Natural Gas Company, participated in the CookInlet discussion.

Anadarko’s Greg Hebertson said thatfor his company “an aggressive incen -t ive pro gram is one way to helpAlaska projects compete with oppor -tunities worldwide.”

Conference Speaker Presentations Available At:www.akrdc.org/membership/events/conference/2005/presentations/

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Hiroaki Ishii, Minister, Economic Development, Embassy of Japan in Washington, D.C., spoke of future Japanese and Pacific Rim energy needs. At right, Charles Ball,President of Princess Tours, was one of four panelist addressing “Alaska’s Fiscal Regime: Does It Work For Industry And Communities?”

Stephanie Madsen, Chair of the North Pacific Fisheries Management Council, engages Jim Ayers, right, Director of the NorthPacific Office of Oceana, in a spirited discussion on emerging oceans policy and the implications for Alaska.

Susan Fleek, Alaska Co n s e r va t i o nFoundation, warned of the impacts ofglobal war ming on Alaska. Below,Ronald Brower said warming temper -atures have widespread ramificationson people who live in the Arctic.

Sasha Mackler, National Commission on Energy Policy, was one of four panelists to speak on global climate change and po -tential national policy implications. In center photo, Bruce Jenkins, Northern Dynasty Mines, Inc., provided an update onthe Pebble copper-gold project. At far right, Karl Hanneman, Council of Alaska Producers, outlined the role Alaska’s min -ing industry plays in Alaska’s economy, as well as the revenues it pays into local and state coffers.

Above, RDC board member Bob Cox and Vice President Rick Rogers visit the exhibit area. At center, Luke Russell, Coeurd’Alene Mines, updates RDC on the Kensington project. At right, long-time RDC members Heinrich and YasminSchnoeke of Platinum Jewelers enjoy the conference.

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HI G H OI L PR I C E S: TH E RE S T OF TH E STO RY• The price of oil is determined

by the forces of supply anddemand worldwide.

• Demand is surging and sup-ply is struggling to keep pace.

• Under these conditions,small changes have a big impact.

• Oil is a global commodity;events anywhere impact pricesfor all.

Some have criticized industry for not doing enough to increase domestic supplies of oiland gas. Federal policies significantly constrain development of abundant volumes ofoil and gas resources beneath federal lands and coastal waters, constricting supply andraising costs to consumers. Some 85% of coastal areas are currently off-limits to energyproduction, as well as ANWR, America’s most promising onshore oil/gas prospect.

The chart above shows where industry investments were to be made in 2005. The energyAmericans consume today is made possible through investments made years or even decadesago. Today’s oil and natural gas earnings are invested in new technology, new production andenvironmental and product quality improvements to meet tomorrow’s energy needs. While in -dustry revenues are large, so are its costs of providing consumers with the energy they need.

The U.S. Congressional Budget Office estimates the energy sectorsustained capital losses from hurricanes Katrina and Rita between$18 billion to $31 Billion.

The graph at the left shows industry earn -ings are very much in line with otherindustries and often they are lower.

Charts providedby the

American Petroleum Institute

World spare oil production, the amount of extraoil that can be brought to the market quickly,was at the lowest level in 30 years during 2005,d riv ing oil prices hig h e r. The U.S. En e rg yDepartment is now forecasting oil prices will staynear or above $50 a barrel for years, forcing ashift to more fuel-efficient cars and alternativefuels. The department said it added about $21 tothe projected price of a barrel of crude becauseanalysts no longer believe today’s tight global oilmarket would ease much over the next severalyears. The department noted coal would remainthe primary fuel for producing electricity.

635 Tcf is enough natural gas toheat 635 million homes for 15years; and 102 Bbbls is enoughoil to power 228 million cars for15 year AND heat 93 millionhomes for 15 years

Although the number of refineries have declined,capacity at remaining refineries has increased.

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“Surplus wealth is a sacred trust whichits possessor is bound to administer in his life -

time for the good of the community.”

Andrew Carnegie

As most of you know, RDC sponsored another verysuccessful conference in November. “Alaska Resources 2006:Right Place, Right Time!”, got me thinking about the future.

Indeed, we may be on the brink of prosperity that can carrythis state forward for decades to come. High oil prices havegiven us a budget surplus at a time when only a few years agomost observers (including me) predicted we would have runthrough all of our savings accounts. Rather than facing a fis-cal crisis, the governor and the legislature will have to siftthrough a mountain of good and bad ideas about how tospend this unexpected windfall.

But it is more than high oil prices that point to a bright to-morrow. High natural gas prices have followed the oil pricetrend. These rising prices have contributed to the belief bymany that getting our North Slope natural gas to market isfinally economic. Alaskans are eagerly awaiting the publicunveiling of the Stranded Gas Act agreement the governor hasbeen negotiating with the Producers.

Our construction economy is booming, and some maintainit is close to, or at, the point of being overheated. This situa-tion is fueled by the success that Senator Ted Stevens andCongressman Don Young have had in securing federal fund-ing for a variety of programs and projects. In addition, thelegislature funded a more aggressive capital budget than we

have seen since thespending heydays ofthe early ‘80s. Theprivate sector is doingits share with a varietyof large projects pro-posed for Anchoragealone.

And there is moregood news in other in-dustries. To u r i s m ,near and dear to myheart these days, con-tinues to grow at ahealthy rate. The min-

ing sector is looking at numerous possibilities for new mines,while Kensington continues work on what will be our state’snewest mine.

Fishing remains a vital part of the economy, and efforts tomarket wild salmon as a superior product seem to be payingoff with higher prices.

Even the opening or ANWR seems to be closer than ever,although as I write this column, Congress seems inclined toback away from the issue.

So maybe it’s time to sit back and just enjoy the ride.Well, maybe not.It has been my experience that budget surpluses can disap-

pear faster than roadkill at a raven convention, if politiciansare left to their own devices. There are some budget increasesoutside the control of our political leadership, and the pres-sure to spend is enormous. For instance, if the legislaturefunds the governor’s proposed increase for education, we willhave added more than $200,000,000 to that budget over athree-year period, an amount that will continue in futurebudgets. As the economy grows, generally so does the popu-lation, so government’s expenses increase. There is muchgood that government needs to do, thus Andrew Carnegie’squote at the beginning of this piece.

However, our current fiscal system primarily taxes one in-dustry, so as other segments of the economy grow, the statedoes not have a method for capturing revenues to pay for theservices an expanding population requires. In addition, thecurrent fiscal boon will most likely allow our political leadersto avoid the difficult discussion on how we use the earningsof the Permanent Fund to address the needs of an expandinggovernment.

Something else to keep in mind is that some of our eco-nomic future is quite speculative, with ANWR leading thatlist. Also, even if the governor can negotiate a gasline agree-ment that is acceptable to the legislature, the fiscal benefits tothe state will not flow until about 2014. Meanwhile, the statewill need to come up with $1 billion dollars more or less tofund our share of owning the gasline and incur another $3 bil-lion or so worth of debt for that project.

In addition, if oil slips below about $45 per barrel, we willonce more not have the direct income we need to balance thebudget.

Therefore my message for this holiday season is that, de-spite all of our good fortune, current and prospective, weneed to proceed with some caution, and we still need a fiscalplan. Or as Confucius said, “When prosperity comes, do notspend all of it.”

A M E S S AG E FR O M TH E P R E S I D E NT

J O H N SH I V E LY

“ My mess age for thish o l i d ay season is th a t ,d e spite all of our goodfortune, current andp ro sp e c t ive, we need top ro ceed wi th somecaution, and we st il lneed a fiscal plan. Or asConfucius said, ‘Whenp ro sp e rity comes, do notspend all of it.’”

P R O S PE R IT Y AN D R E S P O N S I B I LIT Y

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KE N S I N GTO N CO N S T R U C TI O N HALTE D

With its major permits suspended, construction at theKensington Gold Mine near Juneau has stopped.

Coeur Alaska began building the mine in early July afterworking more than 17 years to obtain federal and state per-mits. The U.S. Army Corps of Engineers notified the com-pany in November that it had suspended the mine’s waterdischarge permits for internal review. As a result, the only ac-tivity now occurring at the mine is related to fixing an erosioncontrol problem that developed following recent heavy rains.

After revisiting the permits, the Corps said it will either re-instate, modify or revoke them.

Coeur has performed more than 900 environmental stud-ies, invested $25 million in environmental reviews andworked with local, state and federal agencies to secure thenecessary permits to develop the mine. The mine is an eco-nomic engine for Southeast Alaska with $42 million issued incontracts so far. It will provide hundreds of jobs and tax rev-enues to state and local government.

The Corps filed a motion in District Court for a voluntaryremand of its Section 404 wetlands fill permit issued toCoeur. The court granted the motion, which was filed in alawsuit brought against the mine by several environmentalgroups.

Coeur believes the Corps performed a thorough and com-prehensive review of the Section 404 permit before it was is-sued. However, the company says if further review of thepermit curbs litigation, such action would be welcomed.

FE D E R AL JU D G E CLE AR S HE LI- SK I I N G

A federal judge has rejected a lawsuit opposing expansionof helicopter skiing in the Chugach National Forest.

U.S. District Court Judge Ralph Beistline ruled the U.S.Forest Service did an adequate job assessing the likely im-pacts of more helicopter flights on wildlife. He emphasizedthat the Chugach is a vast national forest that allows a varietyof activities, including heli-skiing.

After a lengthy environmental process, the Forest Servicegranted Chugach Powder Guides nine areas under a five-yearpermit to operate. The company was also given access to fourexploratory areas between Girdwood and Seward, on a one-year basis.

The new territory gives the company more options for itscustomers who seek virgin powder in remote areas. Oftenseveral areas within the mountainous forest may be unavail-able due to bad weather, so having expanded territory in-creases the likelihood that at least one area may be accessible.

Chris Owens, the owner of Chugach Powder Guides,noted the lawsuit was a scary ordeal since it was backed bysome of the biggest environmental groups in the nation.

R D C SU PP O RT S RAI L EX TE N S I O N

In comments to the federal Surface Transportation Board,RDC has expressed its support for an 80-mile extension ofthe Alaska Railroad Corporation’s main-track to Fort Greely.The extension would provide support for movement of mili-tary equipment and supplies and enhance economic expan-sion in an area with little transportation infrastructure.

“Although a highway links Fairbanks with Fort Greely,the route can be hazardous, particularly during the icy wintermonths,” RDC said. “Train service would facilitate betterchoices and meet the transit needs of military personnel andtheir families, as well as those working in other sectors.”

RDC also noted the extension would provide infrastruc-ture that would support existing and new mineral and agri-cultural development in the area.

TI M B E R SALE GE T S R D C ’S SU PP O RT

RDC is urging the State of Alaska’s Division of Forestry tomove forward with a timber sale eleven miles off of thePetersville Road in the Matanuska-Susitna Borough.

RDC believes the sale will not only benefit the timber in-dustry and the Mat-Su economy, but will also contribute tohealthy forest regeneration and enhance wildlife habitat.

According to state foresters, the sale will require selectivelogging to improve forest growth and vigor by harvesting andreplacing mature birch and spruce stands with new healthystands of re-growth, while protecting other forest values. Thesale is expected to have no adverse impacts on recreation.There will be no visual impacts from the Petersville Road.

NE W BOAR D AT AM E R E F

AMEREF reconstituted its Board at its Annual Meeting inNovember. New board members include Michele Brunner ofNorthern Dynasty Mines, Karl Hanneman of TeckPogo, KipKnudson of Tesoro, Mary Martinez of Calista, Kara Moriartyof the Alaska Oil & Gas Association and Mike Satre ofKennecott Greens Creek Mining.

Steve Lovs of Anchorage Sand & Gravel was re-electedpresident, Lorna Shaw of Fairbanks Gold Vice President andLarry Cooper of Wells Fargo Treasurer.

UAA EN G I N E E R I N G SCH O O L ACH I E V E M E NT

University of Alaska Anchorage ranked in the Top 50 ofAmerica’s Best Colleges, according to U.S. News and WorldReport.

UAA’s School of Engineering took 24th place among pub-lic schools nationwide this year for its undergraduate engi-neering programs. UAA offers Bachelors of Science in Civil,Mechanical, Electrical and Computer Systems Engineering.U.S. News annually publishes college rankings which arebased on faculty resources, SAT scores, peer assessment, re-tention and other factors.

R D C NE W S D I G E S T

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