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HomeMy WebLinkAboutUnalaska Public News 1992fa es mCAMM. Anchorage Daily News Date:8/6/¢z Managers approve compromise allocation;The Associated Press JUNEAU -.A_compro- .mise allocation of,Bering 'Sea pollock for Alaska's shore-based fishermen was. -approved Wednesday by theNorthPacificFisheriesMan-.1agement Council. The vote was 10-1,with -the council's Washington representative dissenting.©Puget Sound is homeport to most of the factory trawl- er fleet,which had bitterly opposed the allocation.plan. It_gives shore-based_ves- sels 35 percent of the avail- -able pollock stocks in 1993 ing a plan to award _up to 45 percent of the harvest to the shore-based fleet by 1995. and 37.5 percent in 1994 and1995.e majority of stocks,will go to factory trawlers, which Jast year took about73percentoftheharvest.*The council was _consider- The catch of the shore- based fleet has shrunk in direct proportion to the growth of the factory trawl fleet,authorities say. Despite their share of the harvest,factory trawler rep- resentatives complained to the council,which met in Juneau for a two-day session that ended Wednesday. Trawlers said they were being '"'pre-empted''by the shore-based fleet. "There was no justifica- tion for (a shore fleet alloca- tion)beyond the status quo,”said Joe Blum,execu- tive director of the Ameri- can Factory Trawler Associ- ation. Donna Darm,the Wash-ington Department of Fish-eries representative on the council,proposed eliminat- ing critical elements _o deep waters where they could not follow. Without a dedicated oper ating area,the in-shore fleet would lose out to:the trawl; provision for a ''catcher ves-ers,he said.|Sel_operating area'in theDutchHarborarea. The proposal passed 6-5. Supporters wanted to re- serve some fishing groundsforsmallershore-based boats that don't have the ability -as factory trawlersdo-to withstand fierceBeringSeastorms Clem Tillion,a council member and chief fisheries adviser to Gov.Wally Hick-el,said that as former skip- per of a large crab boat he regularly ''hammered”'areas where small competitorsfished,and then moved on to "To close our eyes and expect it's not going to hap- pen is unrealistic,''he said. Darm's.proposal means catcher vessel operating ar- eas will be in effect only,during the second half of the' year when the better part of, pollock stocks already have been harvested. The debate included testi- mony from nationally and internationally known econ- omists who claimed there were major flaws in a Na- tional Marine Fisheries Ser- vice analysis. Pollock plan -gives villages harvest rights Oo Share could hit $40 million y HAL BERNTON ily News business reporter |Western Alaska villages rould gain the harvest ghts to tens of millions of ollars'worth of pollock ach year under a federal roposal tentatively ap- roved Wednesday by the !.S.Commerce Department. The plan would guarantee ©percent of the annual ering Sea pollock catch to nese villages,which would e free to lease the fishing ights or conduct their ownarvests.Communitiesrouldsubmitfishingplans >the state government, thich would then forward 4em to the Commerce De- artment for final approval. 'This is an enormous deal rith tremendous economic pportunities,”said Larry 'otter,a member of the forth Pacific Fishery Man- gement Council that devel- ped the plan."'This verifies he villages rights to benefit rom the resource and pro- ide revenue for their de- ressed communities.”' 'If put into place this year, he plan would guarantee he villages more than 200 uillion pounds of pollock vorth roughly $40 million. The poundage exceeds hat of the total Gulf of ilaska catch that sustains he major fishing port of kodiak.And the pollock's 'alue dwarfs that of the $14 nillion-a-year salmon catch hat is now a main source of @ This is an enormous deal with tremendous economic opportunities.© -fishery council member Larry Cotter cash for the Yukon and Kus- kokwim delta communities. But the future of the plan remains uncertain. The fishing council initial- ly proposed the plan for at least the next four years. But in the Wednesday ac- tion,Undersecretary of Commerce John Knaus ap- proved the plan only for this year and required an analy- sis of its costs and benefits before allowing the commu- nities to seek fishing rights. The first half of the Be- ring Sea pollock season closes Friday.Clarence Pautzke,executive director of the fishery council,doubts a _cost-and-benefitanalysiscouldbecompleted in time for the June 1 open- ing of the second season. The village fishing rights also may get bogged down in the broader,bitterly con- tested fight over who may o- ANCHORAGE DAILY NEWS aS MARCH 5,1992 ----- Cnabit. catch hundreds of millions'Gollars®worth of Bering Seapollock.The village quotasareasmallpartofalargerplanthatdividestheNorth. "Pacific pollock catch be- tween boats delivering toonshoreprocessingplantsandfactoryshipsthatcatch,and process at sea.Factory trawler represen-tatives said Tuesday they!support the coastal commu- nity allocation.But they op-|pose the overall plan,and.they will go to court toblockit,said Bruce Buls,spokesman for the American Factory Trawler Associa- tion. If such a suit is successful,|it could torpedo the village |!quota.Meanwhile,state officials are working to develop rulestoguidethecommunitiesas they put in claims for fish. Those rules could include a cap on the amount of fish any one group could claim,according to Carl Rosier,state fish and game commis- sioner. The plan would allow vil- lage governments,Native corporations or other local groups to claim the fish,according to Cotter,the fish council member.The groups are supposed to offer de- v tailed plans on how pollock |profits would be used for|local fishery development;projects. Those projects could in-clude buying new boats,pur-|chasing salmon permits forjlocalfishermen,building|processing plants or a wide:range of other projects,ac-!cording to John Zuck of the;Bering Sea Fishermen's As-' sociation,a group that,helped develop the plan. Paul Fuhs,former Un- alaska mayor and now Hick- el's lobbyist in Juneau,pre- dicted a '"'big chunk'”'of the quotas will go to the Pribi- lof Island communities that have been struggling to shiftfromharvestingfursealsto|fishing.But many other communi-: ties are likely to seek the, fish,and competition is ex-: pected to be intense.; "YT think our future for' economic development lies' with the cod,halibut and:pollock,”said Ed Glotfelty,|city manager of Emmonak,a Yukon River village of 700 people located six miles: from the Bering Sea. Glotfelty,who also serves as chairman of a regional economic development asso-; ciation,said he favors vil- lagers catching their own fish rather than leasing outtherights.cee ene Kodiak,shore-based ANCHORAGE DAILY NEWS MARCH 5,1992 processors win battle for bigger share wasteful use of those fish by the factory processors. Rick Lauber,the council chairman and a 'lobbyist for shore-based processors,was pleased with Wednesday's decision. "Tf you live right,you win some,'”'Lauber said."They (the Commerce Department) have accepted the fact that this is a conser- vation issue as well as an economic issue.” A permanent solution under consideration by the council is assigning each boat a catch quota that,when met,would end that vessel's right to fish for the year. Dennis Phelan,a Washington lobbyist for the shore plants,said it was disappointing - to have to launch another round of studies. 'The irony is that this decision will delay council work on the quota system,''Phelan said."Instead,we will be dealing again with allocations.So we are right back where we were before.” Jim Gilmore,the factory trawlers'Wash- ington,D.C.,lobbyist,said the association will sue over the decision.The association fears the loss of hundreds of jobs in Wash- ington state and financial ruin for many owners of the more than 60 ships in the factory trawler fleet.The vessels can cost as much as $30 million apiece. "There is no legal support for this deci- sion,”'Gilmore said.''What the Commerce Department said is that the council doesn't have to act responsibly if it's got political muscle in Washington,D.C.” But the decision is clearly a victory for the shore-based processors.Phelan estimat- ed that the 35-65 Bering Sea distribution, which will take effect in the second half of this year's split pollock season,will increase the shore-based share by 120,000 metric tons. Factory trawlers historically have taken . 75 percent to 80 percent of the Bering Sea catch and between 20 percent and 25 percent of the Gulf catch,Buls said. Advocates for the shore-based industry often portrayed the issue as an Alaska-ver- sus-Outside battle,but most of the major seafood companies involved are headquar- tered in Seattle,whether they own factory trawlers or shore-based plants.Also,many companies on both sides have foreign invest- ment.Three of the largest shore plants,for example,are controlled by Japanese seafood companies.And Unalaska,in the Aleutian Islands,had supporters for both sides in the battle,because the community is home to both shore-based processing plants and busi- nesses that service the factory trawlers. O The Associated Press contributed to this story. IS Onshore plants win fish battle Share of pollock reserved; trawler owners cry foul By DAVID WHITNEY and HAL BERNTON Daily News reporters WASHINGTON -The Commerce Depart- ment dealt a victory to Alaska's shore-basedfishingindustryWednesdaywhenitap-proved most of a controversial plan todividetheNorthPacificbottomfishhar- vest. The precedent- @ VILLAGES'SHARE:setting decision, 7.5%of Bering catch.C-1 made by Underse-cretary for Oceans and Atmosphere John A.Knauss,is intend-ed to reserve a steady supply of fish for shore-based processors in Alaska.They havefacedheavyandincreasingcompetitionfromalargelySeattle-based fleet of factory trawlers.-Most of the harvest is of pollock,which is the largest commercial fishery in the coun-try,worth $1 billion a year.Since themid-1980s,both the factory fleet and theshore-based industry have expanded so rap-idly that processing capacity now far out-strips the allowable annual pollock catch.The decision is intended to divide the catch by regulation rather than raw compe-tition.It was based on a proposal by theNorthPacificFisheryManagementCouncil. The decision -unless voided by a court -will guarantee for four years that theshore-based industry gets almost all Gulf of Alaska pollock and cod."What this means for Kodiak is the survival of our community,''said ChrisBlackburn,a Kodiak fisheries advocate whohelpeddrafttheGulfofAlaskaproposal.Kodiak has hundreds of fishermen andprocessingworkerswhodependonpollockforpartoftheirincome.Gulf pollockseasonshavebeenshortenedasmoreboats-both factory trawlers and shore-basedvessels-crowded into the fishery. _K ANCHORAGE DAILY NEWS MARCH 5,1992 For this year only,the plan also sets aside 35 percent of Bering Sea pollock for the shore-based fleet,leaving the factory trawlers with 65 percent.The Commerce Department rejected portions of the fishery council proposal that would have gradually increased the shore plants'share to 45 percent over the next four years,and called for the council to come up with a new plan. "We are convinced that this action will help preserve our natural resources while dealing fairly with competing economic in- terests in the region,''Knauss said a pre- pared statement. The council plan was strongly promoted by Gov.Wally Hickel and Alaska's Republi- can congressional delegation,which met with White House Chief of Staff Sam Skin- ner Tuesday to discuss the decision. "This was a hard-fought battle but it's not over,''said Sen.Ted Stevens,R-Alaska. Stevens said the Alaska delegation will work with the fishery council to try to extend the shore-side Bering Sea preference through 1995. The decision came as a shock to the American Factory Trawler Association. "This is unfair,and just not acceptable,”' said Bruce Buls,the association spokesman. He attributed its defeat to the political clout of Stevens."There's no question that Sen.Stevens ,- has had this very high on his agenda,and is a powerful man in Washington,D.C,''Buls said. Trawler operators thought the plan would be rejected after the Commerce Depart- ment's inspector general released a report last week that faulted the fishery council's , procedures in drafting the allocation and recommended its disapproval. The inspector general also is in the midst of a criminal investigation into how the council approved the allocation plan. But Knauss,in commenting on the inspec- tor general's report Feb.24,strongly disput- ed the conclusion that proper procedures were not followed.While federal fishery law permits immediate rejection of a council plan if it doesn't meet national fishery standards,Knauss said,there also is lati- tude for officials to exercise ''professional judgment.”' The council proposal was envisioned as a four-year interim compromise to end what it viewed as a major problem:the ability of wide roving factory trawlers to sweep up most of the fish sought by smaller boats.zelivering to shore-based process(rs,and the - KODIAK TIMES FEBRUARY 11,1992 Crab flood plantsinDutchUNALASKA(AP)-They'rerunningoutofplacestostorethecrabinDutchHarbor..The phenomenal rise of opilio or snow crab is making fisher- men smile,processors sweat and shippers scramble to move one of Alaska's prime seafood prod- ucts to market.©"There's more crab our there than I've ever seen,and they're bigger and you see them in some places where you never saw them before,''said Joe Carlough,34,skipper of the 90-foot crabberKona-Kai. The crab season that beganJan.15 has astounded veterans° of the seafood businessin Dutch Harbor-Unalaska,the capital of Alaska's ocean harvest industry. The crab fleet has reported landing about 29.5 million pounds of crab in each of the first two weeks of the season.That compareswithaweeklypeakof .about 20 million pounds lastyear,said Mike Clutter,managerofIcicleSeafoods'floating pro- cessor the Arctic Star from its permanent shoreside berth.**Nobody believes how fast_they're catching it,or how.fastwe're processing it,''Clutter.said,As fast as Carlough's crew can toss their 250 crab pots into the North Pacific,they can empty them and return the 120 miles to Harbor port,the skipper said, An average trip takes a week, Carlough said.But crab is so abundant this year the vessel has shortened that run to as few as four days.Carlough expects to get about$80,000,and each of his five crew members will be paid about $40,000 for their catch at the go- ing rate of 50-cents a pound.They and the rest of the crabfleethavetheweathertothank, Although the North Pacific can dish up the world's worst weather,a mild winter so far has pushed back the arctic ice pack, freeing more space for the fleet. '*Last winter you had 230 boats squeezed into 100 square © miles to spread 80,000 pots,”' Carlough said. The flood of crab is causing problems for processors,how- ever,who are scrambling to find containers and ships. **The pressure is on every- body,”'said Icicle's Clutter.*'It's on the engineers.to keep theequipmentrunning,on the pro- cessors to keep the line going andontheshipperstokeeptheprod-uct moving out.”' A recent federal immigrationlawrequiringJapanesefreight- ers to use only American long- shoremen also is squeezing the limited pool of available work- ers at that Aleutian port. WISCONSIN STATE JOURNAL MARCH 1,1992 REA sparks rural economy By Ron Seely Wisconsin State Journal On May 7,1937,a switch was thrown and electric light glowed from the tall windows of the James Hanold farmhouse near Richland Center. It was a shining moment for Wis- consin's rural citizens.The Hanold farm was the first in the state to re-ceive central station electric power from a rural electric cooperative. Until then,the Hanolds and most other farm families had been living a lot like their ancestors;they used oil lamps and wood stoves,milked their cows by hand,and chopped ice from a nearby lake to keep perish- ables cool. So it was in most of rural Wis- consin prior to 1930.But in 1935, President Franklin Roosevelt es- tablished the Rural Electrification Administration (REA).He set the new agency up with $100 million which was to be loaned to local rural electric cooperatives at low interest rates and used to string lines and bring electricity to the countryside. Rural Wisconsin went to work. Farmers who wanted electricity formed cooperatives ranging in size from 150 to 1,500 customers.Each member chipped in $5 and the coop- eratives applied for their REA loans,purchased equipment,and started stringing lines -some- times doing the work themselves. By the spring of 1938,19 local coop- eratives with a total of 16,000 members had strung 5,000 miles of power line.By 1940,half of Wiscon- sin's farms had electricity. Today,of course,farm families have every convenience enjoyed by their urban neighbors.But they still | rely on rural electric cooperatives to provide electric and telephone service.Statewide last year,rural electric cooperatives provided power for 167,390 customers and full-time jobs for 1.350 employees. 'Our cooperatives were formed for the purpose of doing one thing -electrifying rural America. But today we're also concerned about the economy in the state of Wisconsin,especially rural Wisconsin.We're involved with rural economic development.' Progress has not come without problems.In recent years -espe-cially during the budget-choppingyearsofRonaldReagan's presi-dency -repeated efforts were made to eliminate the REA and the millions of dollars it loans to rural cooperatives.The numbers are sub- stantial;last year,for example,theREAlentnearly$7 million to its 25 Wisconsin cooperatives and $485 million to its cooperatives nation-wide.Critics charge that the REA hasdoneitsjob,that all the lines are strung and the power supplied.Now,the critics say,the REA is abureaucraticboondoggleenjoyingasubstantialsubsidyfromthefed- eral government and costing tax- payers millions.While the efforts to eliminate the agency have not been success-ful,the loan program has beenchanged.As far back as 1973,theinterestratesonREAloanswere raised from 2 percent to 5 percent. Also,the loan program waschangedsothatlocalcooperativesarenowforcedtoobtain70percent of their loan funds from the REA and 30 percent from the indepen-dent money market at regular in- terest rates. Then,last October,came amotherblow-"60 Minutes”aired a segment criticizing the REA for ap-proving low-interest loans to ques-tionable,seemingly non-rural proj-ects.Loans had been approved,ac- cording to the show,for the poshHiltonHeadResortinSouthCaroli- na,for ski resorts in Aspen andVail,Colo.,and for several wealthy onhorhs .Kathleen Burns Officials with the REA defend the loans and argue that such re- sorts provide jobs for rural Amer- ica and that the growth of rural suburbs is also good for the rural economy. "A utility's service area is an economic unit,like a city”wrote Bob Bergland,executive vice presi- dent of the National Rural Electric Cooperative Association."Some rich parts,some poor parts.We must look at the system as a whole, not just the fringes.Growth in one area benefits another.” Bergland,a former Secretary of Agriculture,also said the govern- ment subsidy for rural electric cooperatives is actually less than subsidies for investor-owned and publicly owned utilities -if you consider the tax benefits afforded the latter two. According to REA computations, federal assistance to the REA amounts to $51.28 per customer per year compared to $64.73 per cus- tomer for investor-owned utilities and $90.71 per customer for pub-licly owned utilities. Wisconsin rural electric officials make similar arguments -that byobtainingloansforcooperatives that serve what appear to be moreurbansuburbsorrecreationalre- sorts,they are helping improve the economy for all their rural custom- ers.Rural economic development, they say,has become as much a focus of the cooperatives as string- ing power lines was in the old days.Certainly the kind of customer: being served by rural electric coop- eratives in Wisconsin has changed SsTHE ANCHORAGE TIMES FEBRUARY 8,1992 Cargo crews race to docks in Unalaska Dutch Harbor hums with busv workers By DANIEL R.SADOLER TIMES WRITER UNALASKA -In the biting air of an Aleutian evening at the peak of the fishing season,the city dock is a bustling place. A half-dozen ships tied up along the shore,cranes grinded, forklifts scurried,and workers stacked cardboard boxes of surimi under cold artificial lightDockworkers,union officials,and industry observers here re- port little slowdown of ships tak-- ing on cargo despite immigration laws that have forced Japanese tramp freighters to replace theiron-board longshoremen with Americans. "There haven't been any prob- lems,”said Bill Murray,boss of a gang of American workers load- ing roe from the factory trawler American Triumph into Hatch 3 of the Japan-bound Yoko Maru."The vapanese have been realcooperativeonthisboat,”saidMurray,who along with his crewwashiredfromunionlists.The U.S.Immigration and Naturalization Service began en- forcing the ban on Jan.31,prompting Japanese trampers tofloodtheDutchHarborlong- shoremen's union with requestsforAmericastoloadmillionsofpoundsofseafoodintotheships.The trampers haul about 90 per-cent of the seafood processed intheBeringSea,or about 1.3 bil-lion pounds in the first few months of the year. "The community has had 200 jobs dumped into its lap at thelastminuteoutofnowhere,”said Pete Hendrickson,a longshore- man and official with the International Longshoremen's and Warehousemen's Union Lo- cal 200,Unit 223. Though the ruling caught the union off-guard,with its own workers already busy on a boom- ing snow crab harvest in additiontothepollockfisheryalreadyinfullswing,a call for extra workers has apparently been successful inthiscityofabout2,000 people. Dan Kondak,the union's worker dispatcher,said he sent 88 U.S.workers,mostly unem- ployed fishermen,to jobs at thedocksFriday. On Friday,there were plentyofworkersevidentonthecitydock,and the rows of 5-foot- square stacked crates of pro-cessed pollock indicated the gangswouldhaveplentyofwork. Some of the arrivals were drawn by the chance to earn $17.43 per hour plus overtime for 2 hours of back-breaking labor ay. "Today there were guys every-where,”Kondak said."A lot of them guys live in the bunkhouses in town,and the word travels fast.” Contrary to Japanese claims of insufficient labor,Kondak said,there are plenty of willing work- ers,even if the chronic housingshortagemakesithardforthe new arrivals to stay. "There are some people out there with backpacks and tents on their backs camping out in the hills,”he said. The telephone has been ring- ing often at the union office with people wanting to work the docks. About 50 messages were on Kon- dak's answering machine,some from California and Montana.On Friday,10 people were turned away because they were not need- ed. The union members said the Japanese have tried deliberately to overtax the U.S.labor pool by asking for four or five 15-man crews at once,hoping to prove a lack of sufficient labor.Kondak said such a situation would bol-ster the owners'claims for exemp- tions from the law,one of which is pending in the port of Akutan, about 45 miles away. Some freight-transport compa- nies tried to gain access to Aku- tan and other ports by askingharborofficialstopostanoticeof intent to use an alien labor force at the docks.The companies sought clearance through theSeattleofficeoftheU.S.Depart- ment of Labor. The companies included Sun- mar Shipping Corp.,KyokuyoCompanyLtd.,Rokuchu Marine Corp.,Nichiro Corp.,Nissui Ship-ping Corp.and Taiyo Gyogyo "What they wanted to do was keep their alien crew members in Akutan Bay,”said Akutan Mayor Darryl Pelkey."I think they were trying to slide this by us.” Pelkey said he has been in con- tact with longshoremen in Dutch Harbor and that he supportstheirpositionofusinglocallabor to service the foreign-owned freighters. "We're behind (the American- ization of labor movement)100 percent and people here are get- ting pretty excited that we're clos- er to getting longshoremen wagesandwork.”he said. ni teeie,+or srr fs = ws Piers Ete -PastoyB__ an s SSS = =mse ey po||aay | Times photo by AL GRILLCiawaitloadingbyAmericancrewsinDutchHarbor,where a new faderal labor law banning foreian cargo handlers has kept workers busy 'Bruce Buls,spokesman for the American Factory Trawlers Asso- ciation,said factory trawlers, which primarily use trampers, need to get their processed seafood unloaded as fast as possi- ble. Without skilled stevedore crews who are trained to unload quickly,costs will increase,he said. "It's a bottleneck,”he said."It's like an Indianapolis pit stop.”Some agents for the Japanesetramperswereunwillingtospeakontherecordaboutthesensitive situation,and others were un- available for comment. A former employee of one oftheshippingcompaniessaidget-ting rid of alien crews will in- crease costs six-fold. He said it also will be difficult to retain a ready work force be- cause activity comes irregularly.Hendrickson said,"Of course itll cost more money to operate,but they had a good deal for a long time.We're getting atremendousnumberofjobswe'vealwaysdeservedandwecancer- tainly use.” Thursday,October10,1991ageDailyNews'first geothermal Geothermal company sets sights on Unalaska volcano By WESLEY LOY Daily News business reporter A Nevada energy company has revived interest in building Alaska's power plant on booming Unalaska Island. OESI Power Corp.of Sparks, Nev.,last week signed an agreementwiththeAlaskaEnergyAuthority that commits both parties to making their '"'best effort'?to develop the plant. In signing the agreement,OESI agreed to pay $275,000 for indepen- dent engineering studies to see if the project is sound,said David Denig- Chakroff,director of rural programs for the energy authority. The idea of converting Unalaska's underground heat into electricity has knocked around for at least a decade.The remote Aleutian island, about 800 miles southwest of An- Location of Makushin Voicano eeeandtheproposedgeothermal° energy plant chorage,relies on diesel generators to power the village of Unalaska and neighboring Dutch Harbor,one of the nation's biggest fishing cen- ters. The proposed geothermal project would involve drilling wells near Makushin Volcano,about 13 miles west of the town,Denig-Chakroff said.Free-flowing,370-degree water Se!K,Unalaska10 -RaeéSawMakushin 'rmrayMakushinBay_"TE6\?Skan Bay\,{% and steam from the wells would heat other liquids that would drive |J ocation of detail Oe Anchorage.¢electricity-producing turbines.XA YTIn1981,the state appropriated $5 Pribilot islands 'e Sesmilliontodrillexploratorywells and conduct feasibility studies,he SEA said.The project was shelved in |ys ; 1988,however,after the studies con-|.**cluded it would be too costly to q Bebuildroadstotheremotevolcanicanoysiteandtolayatransmissioncable-8Utign BERING SPaic "Los sou EET St.George|.0 ceKodiak | Islands Please see Page B-6,POWER Continued from Page B-4 across Unalaska Bay to the village. The idea was rekindled earlier this year when OESI approached the energy au- thority,Denig-Chakroff said.The authority,a wingofthestateDepartmentof Commerce,operates several hydroelectric dams and as- sists rural areas with power production. OESI spokesman Patrick MacMullen said OESI has eight geothermal projects inCalifornia,Nevada and Ha- waii.He said the companyfeelstheUnalaskaprojectis viable. OESI already has worked out a deal with the owner of the volcanic land,Battle Mountain Gold Co.of Hous- ton,Texas,to develop a geo-thermal plant there.Battle Mountain spokesman Les Van Dyke said Wednesday his company bought 1,200 acres from the Aleut Corp. in 1988. Total cost of the projectlikelywouldbearound$75 million,energy authority of- ficials said. If feasible,the project probably would be financed mostly by tax-exempt bonds thority officials,the plant's 12-megawatt output would be enough to cover virtually all the island's electricity needs. Aside from the project's technical challenges,the oth- er key is ensuring there is a market for the power,De- nig-Chakroff said.That means coming to an agree- ment with Dutch Harbor's KEVIN POWELL /Anchorage Day New "huge fish-processing plants,,the biggest power consumers on the island. Unalaska Mayor Frank Kelty said his community of about 3,000 people is tired of the expense and air pollu-tion of diesel power.The town has built up considera- bly in recent years,fueled by the booming commercial fishing industry.issued by the energy author- ity,said Dick Emerman,the agency's senior economist. The authority's board in April passed a resolution Saying it would issue $60 million in bonds if the proj- ect proves workable and beneficial to the state. According to Emerman, the energy authority likelywouldownthepowerplant, but it would be built and operated by OESI.Accord- ing to OESI and energy au-SOPPLIER es stocks C2 C Inside business C5 O Money rates C5 -/USINESSTheAnchorageTimes THURSDAY October 10,1991 _BUSINESS State energy authority signs geothermal pact ASSOCIATED PRESS The Alaska Energy Authority has signed a letter of agreement with OESI Power Corp.for the eventual development of a 12-megawatt geo- thermal power plant project on Una- laska Island. 'Under the agreement announced Wednesday,OESI will submit a de- tailed project development plan.The energy authority will negotiate and execute agreements for the sale of electricity from the power plant. The authority earlier this year au- thorized $60 million in tax exempt bonds to finance the cost of the power plant,transmission line,con- struction support and management, engineering,overhead and construc- tion fees.The financing is expected to be in place by March 3],1992. *The agreement provides for OESI to construct and operate the power plant facilities,which will be owned by the authority.OESI also will de- velop and provide geothermal fluid from its geothermal resource lease- hold. z+The project is to provide base load power to the residents of the city of Unalaska,as well as the shipping and fishing industry at the International Port of Dutch Harbor. *Sparks,Nev.-based OESI ac- quires,develops,operates and sells interests in geothermal power proj-ects in the Western United States,Alaska and Hawaii. Next step for geothermal project:by CAROL STURGULEWSKI :Plans to build a geothermal energy plant ping Makushin volcano require com- mitments from the city and local seafood processors before the project can go any farther. «AtTuesday's City Council work session, ALEUTIAN EAGLE AUG 30,1991 |: representatives from OESI Power Corpo- ration,the state energy authority,and an investment banking firm said it appears the proposed geothermal project is technically feasible.Power sales agreements need to be negotiated to see if the project will work - financially. "We need to look at agreements if we're going to move forward,”said Brent Petrie, director of agency operations at the Alaska Energy Authority."It's going to involve discussions between the (energy)authority and the city,between the City and proces- ” velop,you'd have to generate about seven megawatts,and at the time,there was not enough electrial energy usage here in Unalaska/Dutch Harbor to merit it,”Petrie said. In 1988,Ormat Energy Systems,Inc. (OESD brought up the idea again."We think the situation with electrical usage is much more now than in 1985,and it's time to look at whether a project can be put together,”Petrie said. Dan Schochet,vice president for OESI, said the company has been working in Alaska since 1975.Since the 1980s,it has designed about 10 geothermal plants around the country similar in size to the Makushin proposal. Ina geothermal energy project,Schochet said,pumps extract hot fluid from the ground to power turbines,and the cooled fluid is reinjected back into the earth.Transmis- sion lines would carry the power to Unalaska. Geothermal energy has "almost no envi- ronmental impact,”Schochet said,because fluids stay in the pipes,are reinjected into the ground,and result in no air emissions, cooling towers,or groundwater consump- tion. Schochet said the proposed plant would produce the equivalent of 10 megawatts of "power,predicting that the city electric util- ity would use about 20 percent and the remainder would be sold to industrial users such as seafood processors.City and in- dustrial diesel generators would be retained for backup and peak power needs,he said. To be a financial success,the plant needs guarantees of selling at least eight mega- watts of power.At Tuesday's meeting,city public works director Roe Sturgulewski questioned whether local consumers would use that much.He urged that a study be done to determine the present baseload requirements,as well as predictions of fu- ture power needs. "T don't think,personally,that the eight- megawatt base is there.1 think it's six, possibly seven,”he said.Negotiations be- tween processors and AEA would deter- mine the current use,but factors such as fisheries allocations will affect the city's future needs,and must be studied,he said. City Manager Polly Prchal added that the city also needs to know how much a rate increase residential customers could stand if industrial use died down before the rev- enue bonds were paid off. "However,the other thing that may bal- ance this is some of the other industries that may develop (as aresultof available power), so you're not just a one-industry commu- nity,”she added.OESI has suggested us- Between 1982 and 1985,five test wells were drilled at Makushin,Petrie said.Al- though high-pressure hot water at about 400 degrees was found about 1,500-2,000 feet underground,the resource wasn't mar- ketable,"it appeared that in order to de- sales agreements "*ing waste heat for agriculture or other in- dustry. The cost of meeting anti-pollution re- quirements for diesel generation is another factor,Prchal said.Boosters argue that increasingly tight air quality regulations will make it more expensive for the city utility and local processors to run their diesel-powered plants. When users calculate full costs of their diesel equipment,maintenance,insurance and pollution control costs,"the cost of generating geothermal would be a savings, or least on par with what it is currently,” predicted OESI consultant Jack Wood. Council member Michelle Taylor asked if local power costs would be reduced. "My guess is it would not change the price today,but it would stabilize the price,” because it would not be tied to the cost of oil,Schochet said.Instead,he said,it would be linked to the repayment of debt and operations and maintenance. Petrie said the $76 million project would be financed partly by OESI shareholders, and partly through AEA financing.OESI would build and operate the plant and own the wells,while AEA would own the power plant,roads and transmission lines.Debt would be repaid from revenues,Schochet said,adding that OESI would commit to . operating the plant for the duration of the IN ALEUTIAN EAGLE AUG 30,1991 _30-year project.Financially,the city wouldbeboundbyanysalesagreementitmight negotiate. Ideally,OESI wants to finance the project in early 1992,begin work on roads and infrastructure in the spring,start onsite drilling in summer,and have power ready to supply Unalaska in the fall of 1993. Aconstruction team and drilling engineer willbe at Makushin in two weeks to further explore the area. The next step is to begin working out negotiations.Jim Seagraves,vice president of John Nuveen Co.,AEA's underwriter, said his firm could not underwrite the project without power sales commitments."All the pieces have to be here,and there's a lot of work to get all the pieces together,”he said.If negotiations can't be agreed on, there will be no project,he said. Schochet said attorneys for AEA are drafting up aform of power sales agreement, and it will be given to prospective power buyers for discussion.He said OESI has support from at least one seafood proces- sor,and Wood added that Governor Walter Hickel and area legislators have also indi- cated support. While sales proposals are being reviewed, Petrie said,AEA will probably hire an independentengineering analyst to provide another opinion on the project. UnalaskaMayorPaulFubssupports Phete courtesy ALEUTIAN EAGLE plans for a new 800-foot city dock in Dutch Harbor.While some residents try to develop the town's industry,others focus on social services. Development comes to Dutch Harbor By IMRE NEMETHTonesBusiagssWriterThetwofacesof Dutch Harborarenearashootout,and one may not surviveto tell thevaSnoneside,&gunslinger in black is an in-dustrial juggernaut attracting attention fromhugeshippingcompaniesandfishprocessors.seat eee with prot wetterstaginggroundwithprofitwrittenaltoverits the chief promoter of the social side of thecommunity-won't walk the streets late atnight. "I think the people who live here eitherloveitorhateit,”said Sgt.John Lucking.Hesaidthecashepidemicfromfishandcrabseasonsfuelsacrimeratedoublingevery ear.y Lucking counts himself among the peoplewholovetheisland.After five years wearing a policeman's uniform on Unalaska,the ser- geant said he likes the small town enough tostickaround-at least until he no ionger en- joys it.Crab fishermen just closed out the BristolBayredkingcrabseason.While not a recordcatch,many pockets in Dutch Harbor got lined with greenbacks. Last week,two fishermen danced haphaz- ardly up and down the city dock.When askedwhytheycelebrated,the crabbers said each cleared $55,000 in the past few weeks. Like any rough-and-tumble frontier com-munity,Dutch Harbor and its residential alter ego,Unalaska,found growing up was a ugh phase to live through.The treeless island survived a ng crab boom in the early 60s.But the crab boom wound yon by 1964.It fell far short ofiecurrentbottom-fishing explo- bu that has pulled more than100millionindevelopmentto wore in the past few years. Bottom fishing turned the dial|10,maxing out the pace of welopment.Luckingriceasmanypeople could be ring in Dutch if enough housing tits were available. However,Murray said two-mily households are extremelycity impectionvingspace is an example of the'eriorating quality of life. "Unfortunately,I don't think B're coping all that well withjedevelopment,”she =said.I'wenty-five years ago it was a try small community of 250ativepeopleandafewwhite milies.The Pan-Alaska can- ory,which is now Alyeska Sea-ods,hed another 100 or 80 em- who works as a diving contrac- tor,emerged as Dutch Harbor's main cheerleader for develop- ment.He is also the oldest mem- ber of city government. His administration's accom- plishments include rebuilding the city water and sewer systems, leading the effort to put in a new 800-foot city dock due to be com- pleted next year,extending a welcome mat to'Alaska busi- nesses and working to make the port a major transshipment hub of the Pacific Ocean. "Our big thrust for the last three years was infrastructure to get primary industry,”he said. "Now we're seeing more second- ary,servicetype businesses come in.We have a bakery. We've got 1]restaurants now.” On the down side is the lack of social services,he said. "For instance,our clinic is to- tally inadequate,”Fuhs said,list- ing a new health facility as the community's No.1 priority."Wedon't want a hospital,we want a trauma center.Hospitals are too expensive to maintain.” The trauma center would allow injured people to be stabil- ized and then flown to Anchorage for treatment.Crushed skulls, ripped off arms and other gory injuries are fairly common dur- ing the turbulent fishing seasonsontheBeringSea,he said. The existing clinic was meant for a small town and the non- profit group operating it is com-pletely overwhelmed with theworkioaditisexpectedtohan- die,Fuhs said. While the mayor now gives ahigherprioritytosocialcauses,his energetic pursuit of industryhasbynomeansslowed.Fuhswantsstability.He said the localeconomycouldplummetdramat-ically in the future without diversification.As a result,be is forg- ing ahead on what may be themostsignificantindustrialdevel-opment yet to rock Dutch. cane por officials in the state havetobringDutchHarborintotheglobalshippingcommunityviatheGreatCircle Route.Their efforts appear to be working. Only 10 miles off the route, which links Japan to the West Coast of the United States,Dutch Harbor ts within relative shout- ing distance of its major fisheries markets,Fuhs said.Tapping into a regular system could provide increased commercial opportunities not only for Dutchfishermenbutalsotherestof Alaska. Since summertime,Sea-Land dropped its weekly barge it hadoperatedfromKodiakandre- placed it with regular service ofitsfull-size 710-foot D7 class ves- sel.The subsidiaryof Richmond,Va.-based CSX Corp.negotiatedadealwithAmericanPresidentLinestouseitscranefacilitiesin Dutch Harbor until its new crane can be erected on the new city dock upon that facility's comple- tion next year. Fuhs expects the link to pull a windfallButthe major coup is tyingintotheRussian'bs Northern-Sea TIMES CONT 11-23-90 "4 .es ta vsWorleiehoaaereaatBea The industry Times phote courtesy ALEUTIAN ryeofDutchHarborwouldbettorsurvivethefaterewithdiversification,according toUnalaskaMayorPaulFuhs,who has pushed development in the town. Dutch,"he said."It's almost like the destiny of this place because of its location and harborage.”” Space ts nearly limitless.With 27 miles of harbor and nearly all of it accessible by the huge 1,000- foot vessels,Fuhs guessed it could handle all the trade be- tween three continents. The Soviets are hot on the idea.Earlier this fall at the Northern Regions Conference in Anchorage,Fuhs sat down with Soviet shipping officials to iron out details. "They indicated they would beabletocittwofromRouteandfromTaiwan,Japan,Korea andtheUnitedStateswithice-crush- ing ships in the Soviet fleets of Murmansk Shipping Co.and the Far Eastern Shipping Co."I think that's partly why these guys are coming into each company (Murmansk and Far Eastern)for a total of four,” he said."lt would equate to ser- vice every 10 days.” The Russians keep the North- ern-Sea Route open eight months a year.Fuhs said if year-round we can control what is happening here,”she said."The city has a lot of money.It's a matter of pri- ority.We have a tremendously long way to go."But hopefully we can _Bet mestic disputes and family-ré of Il officers.His boss,ChiaDeanJohnson,just signed up ithingslikeanewgy community center,a library and a@ museum in place so when we have our next bust we'll have something to show for the last boom.” Fuhs said he's hoping a bus-tling trans-shipment sector to the port will facilitate steady growthandridtheislandofitsboom- bust cycles.Cathy Grimnes,president ofOunalashkaCorp.,said develop-ment of land hinges on further expansion of the utilities system. The village Native corporation owns 115,000 acres of land sur- rounding the city but most of its few hs ago."There's a lot of characterthistown,”Lucking said."Thesidays,it's been absolutely crazy.”On an averagenight,an officeronpatrolmakesoneortwiarrests.He responds to two othreefightseveryshift.Sometimes,he even makes «big dru dreams the city council haitodaycomingtrueinthenexfiveveara.. vo. t 4 8 4 D ' é 1 ' 1 t e Ny 6 ' ' ' 6 § 4 t 6 6 8 t 1 v i Li 6 I 4 i 4 i, 6 i? t] i 1 i 1 ' ' A ' i] ' ' t 1 ' ' ' t t ' t 4 4 ' ' a t $ ¢ 4 f] ' y LJ ' 4 C2 Anchorage Daily News 'Geothermal plant to be studiedTheAssociatedPress An economic feasibility'study is to get under way in +September that could lead to .Alaska's first commercial 'geothermal power plant -a 13-megawatt facility at Una- .laska,an official said Mon- 'day. Dave Denig-Chakroff,a 'project manager for the Alas- 'ka Power Authority,said »Monday study costs are not to -exceed $225,000.*."We've had 130 companies »expressing an interest in it,»some from New Zealand and 'France,''Denig-Chakroff said. '"T don't know how many-RFP's (requests for proposal) 'we'll get.I expect there will.be some from joint ventures, a mix of firms from Alaska and other areas.” '.The study go-ahead cameaboutamonthaftertheAPA and two Native organizations agreed on access and royalties associated with the Unalaska geothermal reservoir.'The Aleut Corp.,whichownstheland,and Ounalash-ka Corp.,which holds the _surface rights to propertythatmaybeneededforroads -and power lines,signed the agreement with the APA last Tuesday,July 22,1986 month,Denig-Chakroff said. Among other things,the study is to determine: ethe kinds of equipmentneededtoconvertthewet steam to electricity; *methods to expand the plant if more generating ca- pacity is needed; *environmental questions, including disposal of con- densed steam;*the potential for using geothermal!fluids for agricul-. ture and aquaculture;and ¢requirements for trans- mission lines and support fa-cilities.'We did a preliminary eco- nomic analysis in May of1985.We looked at it in re- spect to diesel,wind and hy- dro power,”Denig-Chakroff said.'"'The potential at Una- laska is so small,wind and hydro are not a good compari- son.We couldn't come close to . meeting the demands withthose. "ermal,”he said. ZS.Ol.Oo CS "The big comparison will be between diesel and geoth- "It was fa- vorable then,but since that time,the price of diesel has come down quite a bit.It's (oil)less expensive now. "But we want the feasibili- ty contractor to go into quite a bit more detail.” The geothermal reservoir is on the Makushin volcano,or about 13 miles west of Una- laska,he said. Unalaska-Dutch Harbor,a community of about 2,000 people on Unalaska Island in the Aleutian chain,needs a long-term power source,De-nig-Chakroff said. "The alternative is to add to their diesel plant.They could do that,but the ques- tion is,would it be more economical than developing a geothermal plant?” Such a plant,if it were to be built,probably would gen- erate 13 megawatts,he said. That compares with.the 90 megawatts that will resultfromtheBradleyLake project,he said. "That would meet all of the needs of the city and the processing plants out there for the forseeable future.”