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Page 10 / RESOURCE REVIEW / February 1984 ten percent each year, or at least to the extent that the cuts would not be recessionary. A serious look at state programs which could be reduced or eliminated is called for, with em- phasis on unnecessary regulatory programs. The Resource Development Council Friday urged Gover- hazardous waste materials, Webber said Alaska cannot af- In order to prevent massive budget cuts in five years, local nor to revise proposed Hazardous Waste ford to have regulations which result in the economic governments should consider following suit with correspon- management regulations to achieve a realistic regulatory demise of many businesses and jobs and do not significant- ding annual budget reductions. program that more accurately reflects the economic and ly contribute to the protection of the environment. Since budget reductions are not going to solve the entire environmental concerns of Alaska. Supporting RDC's claim that the current proposals could problem, the state should consider spending dollars in such a In a telegram that was also sent to Department of En- have a catastrophic economic impact on Alaskans and in- way to create additional revenues farther downstream. In so vironmental Conservation Commissioner Richard Neve, RDC dustry were the Alaska Support Industry Alliance, Alaska By Paula P. Easley doing, the administration and the legislature need to eliminate president Charles Webber said that certain groups would Oil and Gas Association, Alaska Farmers and Stockgrowers the "pork barrel" approach to state appropriations. Alaska have the state administration implement the draft regula- Association, Alaska Loggers Association, Alaska Miners can no longer afford to divide up the pie to the extent that funding of major capital improvements is precluded. tions without fully evaluating their econmic and social Association, Anchorage Chamber of Commerce, Laborers Under an option of reduced budgets and carefully targeted impacts. Local 341, Western Alaska Building and Construction Trade spending to help generate new income, the state would have While agreeing on the need to properly manage truly Council and the Alaska Association of Petroleum Landsmen. to look hard at repealing the Permanent Fund dividend pro- gram and redirecting those funds elsewhere. Evaluation of all 38 state loan programs for cost effectiveness would also be in order. Another option outlined in the paper was that of generating new income through targeted annual ten percent increases in In 1981, 16,794 businesses went bankrupt. In 1982, thanks in large part to the reductions in the capital gains tax The Resource Development Council is seeking a partner- state revenues derived from economic sectors such as that figure grew to 25,346. Taking those numbers by of I978 and the cuts in personal income taxes in I981 . ship between the public and private sectors in a forcefully agriculture, forestry, fishing, manufacturing, transportation themselves, the nightly news portrayed a gloomy picture of The genius of America is not that we are all guaranteed directed project aimed at developing realistic strategies to and mining. Currently, these non-oil revenues account for on- the American economy; dying small businesses closing ly ten percent of the state's income. to succeed whatever we undertake, for we have no such broaden Alaska's economic base. their doors and disappearing. The death of entrepreneur- promise - there is no midas touch. The genius of America, Tentatively named "Project 1995," the proposal would in- Another option includes reducing industry's operatiang ship. volve participation by all industry segments, government, costs, thereby creating higher profits and tax revenues. Pro- of the free market, is that we are all free. Free to make our own choices. Free to succeed. Free to fail. Free to try again. labor, the universities, regional corporations and environmen- posed and existing regulations would be analyzed for their But the bankruptcies did not occur in a vaccum. There tal groups to develop these strategies. While Project 1995 is dollar impacts on business and government enforcement -President Richard L. Lesher are two other numbers you may not have seen reported; the U.S. Chamber of Commerce still in the scoping process, we expect to announce its struc- costs. Since much of the prosperity Alaska enjoys today is from number of new business incorporations. In 1981, 581,242 In Voice of Business #426, July 25, 1983 ture in February. new businesses incorporated. In 1982, 566,942 new com- Our Council's leaders recognize there are numerous oil leases issued in the '60s, the state would do well by exer- panies sprang into life. organizations throughout the state which are struggling to ad- cising the option of finding more oil. dress the problem of Alaska's future in the light of declining If the state is deeply interested in encouraging new oil ex- state revenues. With all of us working together to implement ploration, it should support an orderly schedule of federal on- The past two years have not seen the death or decay of the project, we believe it can be successful. We have all been shore and offshore leases and remove impediments that might American entrepreneurship, but rather a vigorous revival, (Continued from Page 6) wringing the same handkerchief, so to speak, and the time stand in the way. Under such a policy, sales now on the for action is long overdue. schedule would not be delayed and leasing on state tracts The company's proposal would still require construction On January 23 we announced the proposal at an interna- would be encouraged. authority from the Department of Energy, right-of-way ap- tional marine development conference. To summarize, it con- Before broadbased growth can occur in any resource sec- proval from the Bureau of Land Management and Congres- cerns short and long-range strategies for strengthening tor, decisions must be made soon to expand the state's sional approval to export the gas to Pacific Rim markets. Alaska's economy and focuses on the eventual decline in oil transportation, communications and energy facilities. The decisions made in this decade will radically alter industry's Hickel insisted that the TAGS project is more financially revenues. viable than the Northwest project because Alaska's natural While the paper is too lengthy to include in the Resource ability to quickly respond to opportunities in the next. markets for its gas are in the Far East, not the Midwest Review, following is the background from which the proposal We must realize that any efforts to raise taxes on the ''The freeze (nuclear) is as simple as a can where supplies are derived from plentiful Mexican and developed. state's resource industries should be an absolute last resort opener - and useful as a can opener for preventing For a long time many of us rejected the forecasts of declin- to solving the state's fiscal problems. Canadian fields. However, reinstatement of the state personal income tax nuclear war. There is no such thing as a two-sided ing oil revenues with the optimistic view that new production freeze. If 750,000 people demonstrate for a freeze in 'Alaska is just like any other country on earth, it has to would offset losses, but the chances for that in the necessary should be considered as it is one source of increasing seek its natural markets," Hickel said. revenues as industry and the populaton grow. Several hun- Manhattan, then the Kremlin applauds. When seven time frame are diminished. The state's confrontational at- In 1981, for the first time, Pacific commerce was greater titude toward oil development, high industry operating costs dred million dollars of new tax revenues each year could go a people demonstrate in Moscow, they are promptly long way toward financing major capital investments, but for sent to the Gulag Archipelago. You see, while the than Atlantic commerce, Hickel said. "It's been growing and long project lead times and the marginal nature of ever since, it will never go backwards. The future of this discoveries now in place support this contention. it to be politically palatable, government will have to show its terror is certain, the balance is not. We need to de- We concluded that since Alaska can no longer rely on the good faith by running a much tighter ship. fend ourselves with something more stable." part of the world, and America as a whole, is out there." premise that billions of dollars will be received annually in the Some very hard decisions will have to be made in the very - Dr. Edward Teller, in response to the question of Hickel predicted that the TAGS project would not be pur- treasury, actions need to be taken now to prepare for the time near future. It is up to the state's leaders, public and private, whether war might be prevented altogether by the sued if there is no market in Asia for Alaska gas. when revenues are likely to be half what they arelnow. For ex- to accept the challenge of deciding the state's future, and nuclear-freeze movement. 'If there is a market for that gas in Asia, we're only ample, the state ought to begin reducing its overall budget by through Project 1995, it can be done. asking for the right to try."

February 1984 / RESOURCE REVIEW / Page 9 COVER: Over 29 trillion cubic feet of gas remains under the frozen North Slope, 15 years after discovery. A new gas line proposal aims to transport the gas to Pacific Rim countries. See Story, Page 6.

Printed the second week of each month, Resource Review is the official Res monthly publication of the Resource Development Council Box 100516, An- An internationally respected Decker has more than forty years chorage, Alaska, 99510 - (907) The Resource Development Coun- energy executive and the president of of experience with every phase of in- 278-961 5. cil has asked U.S. Department of the American Land Alliance will dustrial energy generation and utiliza- Material in this publication may be Agriculture Secretary John Block to reprinted without permission provided ap- deliver the keynote addresses at the tion, from the operation of coal-fired propriate credit is given. adjust the boundaries of the Admiralty fourth annual International Con- steam-electric plants to the highest Carl Portman Island National Monument to remove ference on Alaska's Resources levels of planning and policy making. Editor & Advertising Manager the Greens Creek mineral deposits February 15-16 at the Anchorage For 38 years Decker was affiliated For advertising information and special rates, contact Carl Portman and surrounding areas from the Sheraton Hotel. with the Dow Chemical Company at 278-9615, monument. Dr. Gerald where he was responsible for In a recent letter addressed to Decker, Presi- company-wide Resource Review encourages its Block, RDC Executive Director Paula coordination of readers to submit articles, announce- dent of Decker ments and letters to the editor for publica- Easley said such action is in the best Energy Interna- power and tion. Send all correspondence to Resource economic interest of Alaska and the tional, and steam genera- Development Council, Resource Review, nation. She said the exclusion of the tion, utilities Box 100516, Anchorage, Alaska 99510. Joseph Gughe- . Resource Development Southeast Alaska lead-silver-zinc- metti of the distribution and Council, Inc. gold deposit from the monument American Land pollution control The Resource Development Council (RDC) would remove the 1985 deadline for is Alaska's largest privately funded non- Alliance, will Dr. Gerald Decker and abatement profit economic development organization exploration of the deposits and permit Surveyor performs his work within sight of a major Southeast mining project. join 25 other speakers from across Joseph Gughernetti activities. working to develop Alaska's natural the operators to conduct more the Northern Hemisphere to focus on resources in an orderly manner and to During his employment at Dow, create a broad-based, diversified economic and environmentally com- there must be a diversification of the greatest and most immediate hope for a northern development strategy. The Decker acquired extensive experience economy while protecting and enhancing patible drilling exploration activities. economic base if Alaska is to have a economic diversity," Easley wrote conference is sponsored by the in the burning of coal, having spent the environment. Easley reminded Block that the stable economy in which it can pros- Block. "To have this diminished by Resource Development Council and 17 years in various aspects of RDC invites members and the general per and contribute to the nation's Greens Creek's inclusion in the Ad- public to its weekly breakfast meeting Alaska economy is largely based on the Alaska Department of Commerce operating a cogeneration system. He featuring local and nationally-known the extractive resource industries and well-being. miralty Island National Monument is and Economic Development. also initiated and coordinated plan- speakers on economic and resource 'Projects such as the Greens counter to the national ethic of en- Over 500 people are expected to development issues. The meetings are almost all of the current economic ac- ning for a $3 billion dual-purpose held on Thursday at 7:15 a.m. in the tivity comes from the oil sector. Creek Joint Venture represent our couraging e~onomicgrowth." register for the conference, which will nuclear power station in Midland, Rondy Room of the Pines on Tudor Road. However, Easley pointed out that cover strategic and economic implica- Michigan. Meeting charge-is $2 and reservations are tions of Alaska frontier development requested by calling 278-961 5. In Thursday's keynote address, Membership Information and factors affecting the State's com- ALA's Gughemetti will spotlight "The The Resource Development Council ex- tends an invitation to all persons in- ew Approac Sierra Club Sues Friend petitiveness in world markets. Energy Sands of Armageddon: The Resource experts from Korea, Japan, Taiwan terested in the responsible development of War." His presentation will outline Alaska's resources to join the Council's (Continued from Page 7) The California Coastal Commission The proposed 4,000-acre develop- and Germany as well as Canada and the effects of radical environmental efforts. For membership information, con- another act by the Knowles ad- has suddenly found itself in an ment is situated at Cascade Ranch, a the United States will cover the latest tact: policies and how such policies have ministration to stifle development. unusual position with an organization major open area between Big Basin developments in Alaska's various Mike Abbott systematically closed or severely cut Financial Development Director They claim the administration frowned that has usually sided with it in con- state Park and Ano Nuevo State ,, ., resource sectors and study critical resource production - from strategic Executive Committee Officers upon new arterials in the past, claim- troversial development rulings. Reserve. The Commission approved issues such as transportation, President...... Charles Webber ing that mass transit would solve the Seeking to reverse approval of a the development, citing that no minerals to nuclear energy - in the Vice President...... Robert Swetnam government policies and resource Vice President...... Joseph Henri traffic problem. Since the mass tran- substantial issues under the Coastal I , Unites States. luxury home residential project in the needs of trading partners. Secretary...... Dan Hinkle sit approach failed to alleviate the traf- coastal zone of San Mateo County, the Act were raised. Discussions on repealing the In Chicago recently, Gughemetti Treasurer...... Darrel Rexwinkel fic congestion, the critics believe the Sierra Club has filed suit against the Jones Act and exporting Alaska oil to said that the failure of the Reagan ad- Past President...... Mano Frey Staff administration is now changing gears Commission and the County in In its suit, the Sierra Club argues the Pacific Rim will also take place. ministration and others to implement among other points that the project Executive Director...... Paula P. Easley to oppose new housing. September. Decker's Wednesday address, on a national energy policy would lead Deputy Director...... James R. Jinks threatens prime agriculture lands, Administrative Manager. .Mary Holmes Knowles' critics contend that the The Coastal Commission's deci- intelligent uses of energy will relate to the United States into a devastating . . . . . destroys the scenic beauty of the San Public Relations Director...... Carl Portrnan administration's new approach sion was viewed by environmentalists the efficient use of Alaska's resources war with the Soviet Union over Research Analyst, ...... Larry Hayden Mateo coast and that no adequate toward development can be compared as evidence of an increasingly .pro- in contrast to other areas where strategic resources. He pointed out Financial Development Director. . .Mike Abbott review of environmental impacts of Kathy Ashby...... Projects Coordinator to opposing the building of additional development stance on the part of the resources have been wasted through that both superpowers will be in the project has been presented. The RDC business headquarters are located at hospitals as a way to keep people Commission under the administration poor management and government direct competition for scarce 444 West 7th Avenue in downtown Anchorage. from getting sick. of Governor George Deukmejian. policies. (Continued on Page 5)

Page 8 / RESOURCE REVIEW / February 1984 February 1.984 / RESOURCE REVIEW / Page 3 Sierra Club A New Approach Toward Development in Anchorage Raps Alaska A decision by Anchorage Mayor planning and zoning commission and Fink said that fighting growth Letter Tony Knowles to deny construction of the platting board to critically evaluate results in rising residential rents and a Turnagain subdivision on the basis the impact of all development pro- housing costs. He said an anti-growth Development of inadequate arterial streets in the posals . approach will result in an increase in 0 u "Nature may lose the battle area may have established a negative Fink holds that much of the traffic the number of accidents on congested for Alaska's lands, as she has in approach toward development in problem and the lack of adequate streets and would make moving about so many of our other states,** Alaska's largest city. arterial roads in the bowl has town a slow and irritating process. --- - -.- unless the Sierra Club Legal Defense In an Anchorage - - - -- "Those of us who BY Fund gets some immediate help. Times editorial, former have been here for some Charles R. Webber In a fundraising letter sent to Speaker of the Alaska time have a right to fight Americans throughout the southern House of Represen- , for that lifestyle," Fink 48 states, Sierra Club's Juneau, tatives, Tom Fink said said. "However, we Alaska attorney Durwood J. Zaelke the administration should ought to be smart warned that "we could very well be anticipating and pro- enough to realize there's lose some of the most beautiful viding for growth, not no choice but to provide The Resource Development Council promises the attendees of its land on Earth, and witness the trying to control or direct for the many new- February International Conference on Alaska's Resources an exciting destruction of pristine wildlife it. Fink insisted that comers. " and educational two days of constructive dialogue and accomplishment. habitat. All in the course of sur- stopping construction of Meanwhile. manv As a delegate to this conference, you will be part of the action as we rendering America's last great more homes or apart- Anchorage, home of 230,000 Alaskans. West ~nchOr& resi- strive together to provide direction for our state and nation in developing wilderness to the bulldozers and ment buildings would no more solve developed because "for too many dents praise the mayor's assertion our resources. It is a complex subject, but the people here can find the chainsaws of the careless devel- the (traffic) problem than did in- years, too many people have fought that roads, schools and utilities right solutions. opers.'* creases in mass transit. new roads. They have also fought should be upgraded before additional On the twenty-fifth anniversary of Alaska statehood, our conference In his fundraising appeal, At least five new subdivisions them because some of the arterials housing developments are built. recognizes the successes of the past and their contributions to the Zaeike assured his readers that pro- opened last year in the Turnagain would be disruptive to abutting prop- However, others believe the mayor's economic progress and well-being of our state and the nation. We ceeds of the new fund drive would be area, intensifying traffic jams along erty owners and some secluded sub- decision was wrong, and is but eagerly anticipate the challenge of helping realize the great oppor- targeted to several key areas "to West Northern Lights Boulevard and divisions. " (Continued onPage 8) tunities yet to come. protect Alaska's lands from ruth- other roads in the area. Those attending the conference from outside Alaska are encouraged less exploitation.** Zaelke The Turnagain Community Council to become involved with the Resource Development Council. Join with specifically addressed the Club's ef- (TCC) asked for a moratorium on Alaskans in charting a course for future development and management forts to blocking logging operations building in the area until the infrastruc- which will in turn stimulate additional economic opportunities. on Admiralty Island, strengthening ture was capable of handling the addi- environmental opposition to the U .S. tional population. However, last fall the Borax molybdenum mine project municipal platting board approved within Misty Fjords National Monu- plats for a new housing development in ment, and preventing herbicide the area, Columbia Park. spraying by the Alaska Railroad. The TCC filed an appeal, which In the largest donation ever made to a conservation group, Consolidation Coal In the case of the logging opera- was rejected by the platting board Company of Illinois has donated 6,621 acres of land to Nature Conservancy. tion, the Sierra Club has filed suit and, subsequently, the assembly. Once part of Consol's Morris surface mine, which was closed in early 1980, against Shee Atika Corporation to stop On December 1, 1983, the the multi-million dollar land gift will allow the Conservancy "to further its impor- plans for logging 23,000 acres of developer appeared before the TCC to tant work of conserving natural resources," said Jarvis B. Cecil, Consol's ex- timber and the construction of a log explain plans for three additions to the ecutive vice president. transfer facility. The Club claims the subdivision. At that meeting, the More than 5,000 acres already have been restored, and the company will operation would render Cube Cove council adopted a resolution opposing complete reclamation on the remaining 1,600 acres. In addition, corn and soy- useless as a haven for young salmon development of those plats, and the beans are now under cultivation on 3,200 acres while pasture lands occupy and as a habitat for Dungeness and mayor followed with his decision to another 1,825 acres. King Crab. stop the development. The national conservation group is devoted primarily to the identification and The Club's actions in Southeast Frank Keen of the Turnagain Com- preservation of- ecologically significant lands and the diversity of life they sup- Alaska, according to Zaelke, are aim- munity Council said his board's op- port. ed at keeping the contested areas as position was based on the impact the Because the donated land does not provide a habitat for a rare species or a they have been for 10,000 years. In proposed density would have on traf- threatened ecosystem, it will probably be traded for funds that could be used to other words, a STOP ALL DEVELOP- fic and the quality of air. Keen ap- buy more natural areas. MENT mentality. plauded the mayor's action, and call- ed on city planners, members of the Page 4 / RESOURCE REVIEW / February 1984 February 1984 / RESOURCE RE VIEW / Page 7 Declining harvests, collapsing tions don't change, the mill is likely to markets and expensive environmental lose another $40 million in fiscal laws combined to make 1983 one of 1985. the worst ever for Alaska's timber in- In addition, both pulp mills may be dustry. forced to spend about $70 million - 'We've seen bad times before, on top of $1 21 million already spent Southeast Timber awaits new markets. but we've never seen them like this,'' - to meet federal water purity stan- says Don Brown of Mud Bay Logging dards. If the mills don't spend the Conference Speakers Company. Like other Southeast money by July, they'll be in violation (Continued from Page 3) Alaska logging companies, Brown's of federal standards. If they do, both resources within the next three years firm scraped the bottom of the barrel will go bankrupt. and that both nations will eventually in 1983. To add insult to injury, the new risk war for the resources of the Last year, Brown harvested only 4 standards will not result in any Middle East. million board feet of timber, compared significant improvements in the en- As president and founder of the to 50 million annually in previous vironment surrounding the pulp mills. American Land Alliance, an organiza- years. This year the company will One of the principal culprits in the tion spawned two years ago as the employ only 30 workers, a drop of ap- depressed market for Alaska is the first national coalition of private prop- proximately 120 over previous years. drop in housing construction in erty rights advocates, the 35-year old "The situation is a lot more far- Japan, a weak market in other states San Francisco Bay area attorney is reaching than most people seem to and a weak worldwide market for outspoken on such issues as runaway think," Brown points out. "It's not pulp. regulatory agencies, private property just a case of some companies losing However, in the years ahead, rights, the environmental movement money. It's a case of a whole industry growth in the China and Korea lumber and restrictive land use policies. going under and the people depen- markets could give Alaska timber a Registration fee for the con- dent on that industry being caught in sizeable boost, provided state firms ference, which includes meeting the middle." learn how to market their timber in the materials, luncheons and receptions, Martin Pihl, comptroller and assis- newer, more rapidly growing Far East is $175. Persons may call 278-9615 tant manager for Louisiana-Pacific markets. to register. pulp mill in Ketchikan (LPK), says he can only hope the situation will get better, because "it can't get much worse." In the 30 years LPK has been in Southeast Alaska, the markets have never been so depress- ed, Pihl says. "Our losses have been substantial, and we're facing another year like '83.'' LPK is currently working on a sale of the firm to the plant's 800 employees. If an employee stock ownership plan can't be arranged, the company may simply close its doors. Meanwhile, Alaska Lumber & Pulp Company in Sitka has sustained millions of dollars in losses over the last few years and is looking at a $50 million deficit for the fiscal year en- ding in March. If markets or condi-

February 1984 / RESOURCE REVIEW / Page 5 A proposal to build an all-Alaska natural gas pipeline may get a boost this month when Alaska's Congressional delegation introduces an amendment that would give Alaska the right to export its natural gas. Addressing a standing-room-only meeting of the Resource Development Council January 9, former Alaska Governor Walter Hickel, a key backer of the Trans-Alaska Gas System (TAGS), said the legislation could clear poten- tial legal hurdles that could block construction of the all- Alaska gas line. The amendment would be introduced dur- ing an expected debate over the extension of natural export restrictions.

The Executive Committee of the Resource Development Council adopted a resolution late in January supporting construction of Trans-Alaska Gas System to complement a future line through Canada. The Council resolution pointed out that the project would help reduce the national trade deficit with Asian nations while providing less reliance on Middle East and Communist countries for energy supplies.

The TAGS would utilize 48-inch pipe as does the oil pipeline.

Hickel disclosed that the project is also making progress in gaining political support from leaders of Japan, Korea and Taiwan, besides the Reagan administration. Early this month Hickel was to meet with heads of five major Korean trading companies to secure markets for liquefied natural gas and help assure equity participation in the project by that country. In September 1983, Hickel along with former Governor William Egan and other executives, created Yukon Pacific Corporation to press for construction of the gas line. As pro- posed, the 800-mile line would carry North Slope natural gas to tidewater at Kenai for liquefaction and sale to Pacific Rim nations, while permitting the construction of Northwest Energy's overland Alaska Highway gas project through Canada and the Midwest. Estimated cost of the project is $26.6 billion in 1992 dollars. A high-pressure 48-inch pipeline would be built from Fairbanks to Kenai, where the gas would be split into its various petrochemical components. A branch at Fair- banks would permit part of the North Slope's 29 trillion cubic feet of gas to be carried down the Northwest gas line. In December, Hickel said that in his view the Federal Energy and Regulatory Commission (FERC) would not have HELICOPTERS,INC. regulatory authority over the project. By bypassing FERC, A Subsidiary of Columbia Helicopters, Inc Yukon Pacific hopes to shave a year or more from the time it 6400 South Alrpark Dr. P.O. Box 6283 Airport Annex Anchorage, Alaska 99503 (907) 243.3404 would take to acquire permits. (Continued on Page 9)

Page 6 / RESOURCE REVIEW / February 1984