Borough set to make pipeline pitch

Taking stock

Posted: Wednesday, February 16, 2000

South peninsula charter operators are raising concerns over the North Pacific Fishery Manage-ment Council's actions on Satur-day. The biggest concern relates to log books and the long-range impact of that data.

The council's motions affect some 1,100 charter operators in Area 2C (Southeast) and 3A (Southcentral) and take into consideration halibut charter guideline harvest levels (GHLs), individual fishing quotas (IFQs) and a moratorium for the halibut charter fleet.

The council based GHLs on the average pounds harvested in 1995-1999. In Southcentral, that figure was reported at 3.91 million pounds.

"Those numbers are taken from a statewide harvest survey and based on preliminary log book information for 1999," said Doug Vincent-Lang, senior fishery biologist for the Alaska Department of Fish and Game.

The importance of the log books came to the forefront again in the council's motion regarding IFQs.

"Participation histories (in the IFQ program) will be based on the 1998 and 1999 (Fish and Game) charter logbooks, as received by February 12, 2000," read the council's motion.

Jeff Cundiff, who has owned Good Time Charters in Anchor Point since 1984, said there was confusion about use of the log book in 1998.

"The first year they made a point of saying they wouldn't even use it because (the log book) was not used correctly. A lot of people heard that and didn't even worry about it," said Cundiff. "I hope they'll use the next two years, too."

David Griener, owner of Kachemak King Sportfishing also said the log books were not a good point of reference.

"I'm like a lot of people. I did not really keep it the way I should have in 1998," said Griener. "It wasn't clear how to keep track. A lot of guys didn't fill them out until January, and then they filled them out and turned them in right at the cut-off date. I'm sure (the numbers) were inflated."

Vincent-Lang said the department made every effort to contact charter operators about the requirement.

"There was a regulation on the Fish and Game books in 1998 and 1999 that operators in marine waters were required to have log books," said Vincent-Lang. "It was in the regulation booklet. Letters were mailed to everyone that was operating out in marine waters of Cook Inlet. In addition, we put out numerous press releases."

Mike Chihuly, owner of Chihuly's Charters in Ninilchik, had other concerns about use of the log books.

"I run smaller groups and encourage release of big halibut," said Chihuly. "So I take a smaller amount of the resource.

"Some of the operators are strictly businessmen. They don't care about the resource," said Chihuly. "If it goes away, they go on to something else. They take every halibut they can. Some of the charters, in my opinion, have that mentality and I hate to see them rewarded for that."

Griener said the catch taken by halibut charters shouldn't be the only data considered.

"What about people that just take people out or operate charters illegally? They aren't touched by this," he said. "There are a lot of things they could have done besides this. This will work, but it does favor the bigger boats. They say it won't, but I think it will."

Also addressed by the council was an areawide moratorium for the halibut charter fleet. The motion resulting from Saturday's action was not to proceed with a moratorium at this time.

Vincent-Lang encouraged operators to turn in any log book numbers they had available.

"It's not too late to turn them in, but there's no guarantee (the operators) will be eligible for IFQs," he said. "But it's certainly better to turn them in than not turn them in and try to appeal it later."

BYLINE1:By Rose Ragsdale

BYLINE2:Morris News Service-Alaska

ANCHORAGE -- The Kenai Peninsula Borough and several of its communities have joined forces to tout the benefits of routing natural gas from the North Slope to Cook Inlet.

The Cook Inlet Pipeline Terminus Group is the latest to weigh in with a formal opinion on how Alaska's estimated 35 trillion cubic feet of known gas reserves on the North Slope should be developed.

"We're trying to make people aware of the benefits of bringing the gas to Cook Inlet," said Borough Mayor Dale Bagley at a news conference at the Pacific Rim Construction, Oil and Mining Exposition and Conference in Anchorage on Tuesday.

Bagley said the group would make its first major presentation on the virtues of a North Slope-to-Cook Inlet route at the conference today.

"There are lots of reasons why a North Slope gas pipeline should come to Cook Inlet, but we're going to concentrate on the three biggest ones," Bagley said.

The three reasons are:

n The Cook Inlet region encompasses 70 percent of the state's 618,000 residents. The inlet's own natural gas reserves, which currently supply the needs of Alaska's largest population center, will some day run out.

n Cook Inlet already has a refinery and a liquefied natural gas plant in Nikiski. Phillips Petroleum, which operates the LNG plant, and partner Marathon Oil Co. have exported LNG to Japan for 30 years. They also recently obtained an extension until 2009 on their permit to export up to 64.4 billion cubic feet per year to Japan. And they have filed for additional authority to export another 10 billion cubic feet of gas to Asia in spot sales over the next two years.

n Kenai, Nikiski and surrounding communities have lots of land available for industrial development, especially of industries that have considered building facilities in the region but shied away because Cook Inlet producers could not guarantee a natural gas supply. One recent example was Midrex, a Colorado company that expressed interest in building an iron ore smelter near Cook Inlet but eventually dropped the idea because of uncertainty about the availability of adequate quantities of natural gas.

Bagley said North Slope gas would open up these and other opportunities for industrial development on the Kenai Peninsula and in the Matanuska-Susitna valleys, where land is plentiful and an infrastructure and labor force already exist to support development.

Bagley said community leaders in Kenai, Nikiski and Soldotna formed the Cook Inlet Terminus Group Jan. 3, and the borough assembly committed $100,000 to a new awareness campaign.

Since then, the group has met with state lawmakers and members of the oil and gas industry, especially the Alaska North Slope LNG Project, a consortium of five companies that is spending $100 million over the next five years to commercialize North Slope gas. Phillips Petroleum, owner of the Nikiski LNG plant, is a member of the consortium.

Steve Alleman, project manager for the consortium, said his group is working on the $20-million first stage of the project, which involves designing an economically feasible approach and does not involve route selection.

"We started with 50 sites, and we've limited it to two -- Cook Inlet and Anderson Bay near Valdez -- but beyond that, we're keeping our options open," Alleman said in a telephone interview Tuesday. "We likely will not address route and site in Stage 1, which ends in June."

Alleman said the consortium favors building a smaller 7 million-ton-per-year LNG project, which could gain market entry more easily in Asia, and expanding it in later years as gas demand increases.

A preliminary cost estimate for such a project is about $6 billion, roughly half the estimated cost of a North Slope-to-Valdez project, which is being promoted by another group of mayors -- the Alaska Gasline Port Authority.

The port authority recently won a tax exemption for its proposal from the Internal Revenue Service that could shave $3 billion off the cost of a 14-million-ton-per-year LNG project with an estimated $12 billion price tag.

Mike Navarre, former Kenai borough mayor, said he and other Kenai Peninsula officials are concerned that the proposed port authority project would end up mainly benefiting the North Slope Borough, the Fairbanks North Star Borough and the City of Valdez, the three communities sponsoring it.

Joining Bagley at the Anchorage news conference, Navarre said environmental and any other concerns about a pipeline to Cook Inlet can be overcome. He also said a port authority should be organized and run by the state of Alaska so it would benefit all Alaskans.

However, if the port authority concept ended up being the method approved by industry and state officials to develop North Slope gas reserves, Bagley said, Kenai Peninsula officials would support it for a Cook Inlet route. He said another $50,000 could be appropriated to help fund creation of a port authority.

Bob Pawlowski, port adviser at the new Port MacKenzie on the west side of Cook Inlet, also spoke in favor of the plan at the news conference. He said Matanuska-Susitna Borough officials support the push for a North Slope gas pipeline to Cook Inlet because it would have to cross the Mat-Su borough.

Access to huge amounts of natural gas would help with the port's aggressive economic development plan, he added.

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