Ed Schoenfeld, CoastAlaska

Alaska’s top Forest Service official is retiring

Alaska Regional Forester Beth Pendleton is retiring in April. Her replacement will be Montana’s David Schmid, who worked in Alaska’s Tongass and Chugach National Forests for more than 20 years. (Photo courtesy U.S. Forest Service)

The top official overseeing Alaska’s national forests is leaving her job.

Regional Forester Beth Pendleton will retire in April after eight years in the position. She oversaw the U.S. Forest Service’s Alaska region during development of a controversial Tongass Land Management Plan that’s being challenged in Congress.

Pendleton also served as acting associate chief of the agency during the transition from the Obama administration to the Trump administration.

Forest Service officials announced her retirement plans Friday in a press release.

Officials also named David Schmid as her replacement, in an acting capacity.

Schmid is deputy regional forester for the agency’s Northern Region, based in Montana. He also worked in Alaska’s Tongass and Chugach national forests for more than 20 years. He begins his new Alaska job in mid-April.

The state’s two national forests total 22 million acres of land in Southeast and Southcentral Alaska.

Southeast tribes broaden transboundary alliance

The state has identified eight transboundary watersheds feeding Southeast Alaska rivers. (Map by Alaska Department of natural Resources.)
The state has identified eight transboundary watersheds feeding Southeast Alaska rivers. Tribal governments and groups from Southeast and British Columbia met March 12-13 to talk strategy in their fight against B.C. mines in those watersheds. (Map by Alaska Department of Natural Resources.)

Southeast tribal leaders are gaining new allies in their battle against British Columbia mining projects.

Representatives of a dozen Alaska tribal governments and organizations met earlier this week with their counterparts from British Columbia, Idaho and the Yukon River watershed.

Southeast Alaska Indigenous Transboundary Commission Chairman Frederick Otilius Olsen Jr. said the gathering strengthened an informal alliance.

“The purpose of the meeting was to continue the unification of the indigenous voices around the issue of the so-called transboundary mines and also any transboundary industrial activities,” said Olsen, who is also tribal president of the Organized Village of Kasaan.

The more than 30 representatives met Monday and Tuesday at the Tulalip Indian Reservation, between Seattle and Vancouver, British Columbia.

The alliance released this proclamation at the end of the meeting:

Olsen said they shared concerns about damage to traditional waterways and lands. He said they also talked about state, provincial and national environmental programs they say don’t work.

“We call on the federal governments to do their jobs. To listen to us and work with us. And you know what, if they can’t do it or won’t do it, as one of our members said, ‘Give us a shovel. Let us do it,'” he said.

Southeast’s indigenous transboundary commission is already working with the United Tribes of Bristol Bay. That group opposes Southwest Alaska’s Pebble Mine project.

Developers on both sides of the border challenge the assumption that their projects will damage fish and other resources.

Trump tariffs could jack up boat prices

A crane moves an aluminum replacement cabin made by Homer's Bay Weld Boats. The company is one of a number of Alaska businesses already affected by President Trump's imported metals tariffs. (Photo courtesy Bay Weld Boats.)
A crane moves an aluminum replacement cabin made by Homer’s Bay Weld Boats. The company is one of a number of Alaska businesses already affected by President Donald Trump’s imported metals tariffs. (Photo courtesy Bay Weld Boats)

In at least one sector in Alaska, the impacts of President Donald Trump’s steel and aluminum tariffs are real.

Homer’s Bay Weld Boats makes custom aluminum watercraft, from 60-foot tenders to 22-foot seine skiffs.

General manager Eric Engebretsen has been keeping an eye on plans for a 10-percent tariff on imported aluminum.

He’s not alone.

“The supply chain heard this was potentially going to happen back in early January and the whole marine aluminum supply chain started to adjust itself and prepare itself for this,” he said.

His company buys sheet aluminum from a local supplier. He said his understanding is that it’s manufactured in the United States.

But that hasn’t made any difference.

Bay Weld and other aluminum users started buying up supplies in advance of the announcement.

“We’ve seen over 35 percent and in some cases 50 to 60 percent increase in our pricing structure of purchasing aluminum,” he said.

The second-generation business owner hopes the hikes will level out soon, but he’s not counting on it.

He said that will increase prices on the 12 to 18 custom boats his up to 32 employees make in a year.

Alaska has a number of other aluminum boatbuilders.

Other businesses make or repair steel ships, including Vigor Marine, which runs the Ketchikan Shipyard, where state ferries have much of their work done, including rusty steel replacement.

Trump’s imported steel tariff is 25 percent.

The state Department of Transportation includes the ferry system.

“DOT doesn’t expect the tariffs will impact our state transportation,” spokeswoman Aurah Landeau said. “DOT doesn’t purchase foreign steel because we operate under the Buy America program.”

The ferry Malaspina is in drydock and the Columbia is tied up at the Ketchikan Shipyard in February, 2012. Federal funds have covered millions of dollars of repairs. (Photo by Ed Schoenfeld/CoastAlaska News)
The ferry Malaspina is in drydock and the Columbia is tied up at the Ketchikan Shipyard in 2012. Marine Highway System fleet repairs require the use of American steel. (Photo by Ed Schoenfeld/CoastAlaska News)

Beyond shipbuilding, Alaska businesses fabricate fuel tanks and other goods out of the embargoed metals. But not a lot.

“We tend to have a pretty small manufacturing industry in Alaska,” state economist Karinne Wiebold said.

The tariffs could still drive up prices, she said, which will affect stores, warehouses and other sellers. She said their response could shake up sectors of our economy.

“If the cost of the final product goes up, the demand may fall as consumers either cut back on that product or substitute for something that (has) a comparably lower cost,” she said.

That’s also the case for steel and aluminum used in bridges, buildings, ports, pipelines and other public projects. And overall, many parts of Alaska’s construction industry have slowed down.

“Road construction, airport construction, that’s still very healthy and it’s been under the Buy America Act for years,” said John MacKinnon, executive director of the Alaska Chapter of Associated General Contractors.

Steel’s role in construction is pretty obvious. But he said many people aren’t aware of how much aluminum is used.

“On the building side, you’ve got a lot of aluminum because all the windows, storefronts and that sort of thing are aluminum,” he said. “The structure is usually steel or concrete. And the highway projects, road projects, most of your signage and there’s other components in there, are aluminum.”

He said prices change for a variety of reasons. Tariffs, such as Trump’s, are only one type of variable in his industry.

“Will it make much difference? Not from the practices that we’ve been going on for the last few years,” he said.

Back at Homer’s Bay Weld Boats, Engebretsen said some in the business are scratching their heads.

“There was a political layer to this that really wasn’t driven by the industry itself,” he said. “The industry didn’t ask for the aluminum pricing to be adjusted. It was kind of something that was forced on us and now here we are,” Engebretsen said.

He’s already considered how much he’ll have to raise his prices.

It could be 5 to 10 percent, which is not out of line with other adjustments for inflation, he said.

“But it’s also a fairly high-dollar product. I suspect it will have an impact,” he said. “But we just don’t know yet.”

The president has granted exemptions for metal imports from Canada and Mexico, which could lessen some of the price hikes.

The exemptions are only temporary, and they’re dependent on negotiations to update the North American Free Trade Agreement.

Ferry reform effort gets a legislative boost

Extra ferry life rings lean against other spare parts at an Alaska Marine Highway System warehouse in Ketchikan in 2014. A reform plan aimed at preserving the ferry system is being turned into legislation. (Photo by Ed Schoenfeld/CoastAlaska News)

The effort to reform the Alaska Marine Highway System took a step forward Thursday.

The House Transportation Committee voted to instruct staff to draft legislation that would establish a public corporation to take over the system. But it’s a long way from a done deal.

The ferries are run by the state Department of Transportation.

The plan would shift control to an independent board that could make its own decisions about labor contracts, fares and other parts of the operation.

It would also forward-fund the system, allowing for better schedule planning.

During the committee meeting, Anchorage Republican Rep. Chuck Kopp said a seven-member board of experts would provide better oversight than 60 ever-changing members of the Legislature.

“Imagine if we were trying run the Anchorage International Airport as a legislature, Kopp said. “It would be a disaster. But it’s the No. 4 air cargo airport in the world and entirely successful.”

Several other members of the House Transportation Committee also expressed support at the hearing.

Big Lake Republican Rep. Mark Neuman is intrigued by the marine highway reform plan, but he’s not ready to ask for a bill.

“There’s still a lot of questions to be answered and this is something that’s going to take massaging of a couple years to work through,” Neuman said. “I can understand how that can work, let alone trying to figure out how we’re going to come up with a couple hundred million dollars for a fund.”

The committee voted 5-2 in favor of writing a reform bill, which will be discussed and modified at future meetings.

Two other ferry reform bills, addressing funding and ports, have already been introduced, but haven’t had a hearing.

Action will likely wait until the next legislative session.

The plan came out of a task force set up by the state and the Southeast Conference, the regional development organization that pushed for the ferry system’s creation more than 50 years ago.

Reform would create a more flexible system that could more quickly respond to problems, task force consultant Susan Bell of the McDowell Group told lawmakers.

“That financial expertise that the board would lend to guide the organization has value,” she said. “By maintaining the Alaska Marine Highway as a public corporation, it maintains some of the existing strengths, but it addresses some of the existing limitations.”

The reform effort is in response to large cuts in state funding, which have shrunk the number of ships and sailings.

While the impetus has come from Southeast, the initiative includes leaders from Southcentral and Southwest communities where ferries also sail.

Ferry LeConte down for repairs

A passenger boards the Alaska Marine Highway System ferry LeConte in Pelican on Aug. 6, 2017.
A passenger boards the Alaska Marine Highway System ferry LeConte in Pelican on Aug. 6, 2017. A generator breakdown has halted sailings at least until March 7. (Photo by Jeremy Hsieh/KTOO)

A mechanical problem is keeping the ferry LeConte tied up through at least March 7.

Alaska Marine Highway spokeswoman Aurah Landau said it’s docked in Juneau.

“The LeConte suffered a bent push rod and it’s an internal component on a generator. So one of the generators was out and the Coast Guard can’t certify the ship to sail without that generator,” she said.

The Juneau-based ship will miss sailings to and from Gustavus, Hoonah, Haines and Skagway.

But Landau said repairs could take longer than March 7. That could cancel sailings to and from Angoon and Tenakee Springs.

The LeConte also makes port calls at Kake and Pelican, but not until later this month.

The ferry is 44 years old. It can carry 225 passengers and approximately 33 vehicles. It has no staterooms and was built to serve small communities.

Marine highway reform bills introduced in state House

Three ferries dock at the Ketchikan Shipyard in 2012. Four ships are slated to be tied up for the 2016 season. (Photo by Ed Schoenfeld/CoastAlaska News)
Three ferries dock at the Ketchikan Shipyard for repairs and storage in 2012. Legislation has been introduced as part of a marine highway reform project organized by port community leaders and the state. (Photo by Ed Schoenfeld/CoastAlaska News)

Three bills aimed at protecting the Alaska Marine Highway System are before the state Legislature. Two would stabilize funding and maintain routes. A third, addressing governance changes, is up for its first hearing March 8.

The state ferry system has seen significant cuts in recent years. While the routes remain the same, the number of sailings has dropped. One ship has been sold and another is tied up with no plans to return.

Juneau Rep. Sam Kito III has introduced legislation that’s part of a larger plan to restructure ferry funding and management.

One measure, House Bill 377, would move nearly $200 million from the Alaska Permanent Fund’s earnings reserve into a ferry operations account.

Kito wasn’t available for immediate comment. But in a speech last fall, he pointed to schedules published before the system knew how much money it had.

“So if the budget passes on July 1 and the budget is significantly different from year to year, that we don’t have to work about the marine highway system having to terminate runs that have already been scheduled,” he said.

The money would fill a funding gap that could shut down the ferries this spring. It would also forward fund the following budget year, which starts in July.

Forward funding is a significant part of the Alaska Marine Highway Reform Project, led by the Southeast Conference, which pushed to create the system about 50 years ago.

But state Transportation Commissioner Marc Luiken, who’s part of that project, said he’s no longer using that term.

“I’ve really changed my tune, if you will, at least the verbiage or the syntax I’m using around this and it’s really stable funding,” he said.

Another measure introduced by Kito, House Bill 378, would put all ferry port communities into law. His office said that would keep officials from ending ferry routes without public debate.

Other legislation changing the ferry system from a state agency to a public corporation is also in the works.

Kito has said he doesn’t expect his bills to pass in this year’s legislative session, which is supposed to end mid-April. But he wants to get the discussion going.

At a February meeting in Juneau, the Southeast Conference encouraged regional leaders to lobby lawmakers to make them aware of the issue.

McDowell Group consultant Susan Bell also urged ferry supporters to take their campaign to the public.

“This isn’t going to happen unless it’s important outside of the Capitol. … All the legislators need to hear that it’s important in their community and to their constituents,” she said.

The ferry reform project has collected information demonstrating the system’s value to the state.

Elliott Bay Design Group consultant John Waterhouse said meetings in communities, including those without ferry ports, show support.

“One of the resonating messages was that people do recognize the worth of the marine highway system. Not just to Southeast Alaska, not just to Southwest Alaska, but to all of Alaska,” he said.

The legislation faces opposition at several levels. Some lawmakers see the ferries as too expensive while others consider it state-funded competition to private enterprise.

Some don’t want to take money out of the earnings reserve. Still others, including Sitka Sen. Bert Stedman, say the bills will make the system vulnerable to further funding cuts.

Editor’s note: This report was changed to reflect that only one ferry reform measure will be before the House Transportation Committee March 8.  

 

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