Industries both giant and small were given a spotlight at this year’s Industry Outlook Forum, put on by the Kenai Peninsula Economic Development District and held in Homer this week for the first time in at least five years.
Everyone from small business owners who started in their own homes to representatives of Alaska’s major oil and gas industry updated forum participants about their status and future plans Wednesday at Christian Community Church.
With the forum being held in Homer, local business owners, entrepreneurs and industry representatives were given a platform and were able to share with the greater Kenai Peninsula community the challenges and economic successes of doing business in the Kachemak Bay area.
The day started out with an uplifting story of a couple from Homer who were able to turn their dream into a reality with help from KPEDD, and who in only a year are already starting to outgrow their operation. Casey and Britni Siekaniec own Alaska Salt Co., a family business in Homer that sells specialized cooking salts and salt-based cosmetics on the lower peninsula.
The Siekaniecs got a loan from KPEDD to remodel the lower level of their duplex into an industrial kitchen and office for their business. The couple made their first official sale in the spring of 2017, and by the end of 2018 no longer have the operational capacity to keep up with demand for their products, which are sold through their website and at select locations around the Homer area. Alaska Salt Co. was stationed in a small shop at the base of the Homer Spit during summer of 2018, but has bigger plans going forward.
The Siekaniecs announced they are under contract for a storefront building on the Homer Spit, previously occupied by Lucky Pierre Charters. This new location will fit perfectly with the company’s popular product, Spit Salt. Homer area residents know very well that the reference is, but one audience members questioned whether the Siekaniecs had considered the reaction the name would get from outsiders.
Britni Siekaniec said the name is actually a good marketing tool on its own, because people who don’t know what the Homer Spit is are automatically intrigued by the thought of Spit Salt.
Along with the Siekaniecs, local Homer business owners Rachel Lord, of Alaska Stems, and Eric Engebretsen, of Bayweld Boats, got to share their experiences, ups and downs, and insights from small scale economics.
Engebretsen emphasized the careful balance that’s needed when integrating new technologies into a small business, so that time and money isn’t wasted. Lord highlighted the flower industry, and in particular the peony industry, on the peninsula as a productive market.
Engebretsen said there’s opportunity and a market in the boating sector for others to follow in his company’s footsteps. He mentioned that Bayweld Boats also benefits from the training programs on the peninsula at Kenai Peninsula College’s campuses in Soldotna and Homer and AVTEC in Seward, which funnel young workers into the marine trades.
There to balance the small business, outdoors and agricultural sectors were the big money makers. Representatives from Hilcorp, the Alaska Gasline Development Corp., Alaska Oil and Gas Association and Pebble Partnership updated the crowd on their current projects, future plans and the challenges they face in the state.
AGDC Marketing Manager Kathy Dunn spoke about the much-debated Alaska LNG Project, and also a secondary project called the Alaska Stand Alone Pipeline, which she said is more geared toward benefiting Alaskans specifically.
The Alaska Stand Alone Pipeline (ASAP) is an in-state project which AGDC hopes to design to deliver natural gas from the North Slope to Southcentral regions. It would be a 733-mile, low-pressure pipeline running from Prudhoe Bay to Point MacKenzie.
Most recently, the U.S. Army Corps of Engineers with the Bureau of Land Management, National Park Service, Environmental Protection Agency, U.S. Fish and Wildlife Service, U.S. Department of Transportation and Hazardous Materials, and Alaska Department of Natural Resources, crafted a Supplemental Environmental Impact Statement for the project. It can be viewed at asapeis.com.
“We want you to have that gas to utilize, before it gets exported,” Dunn said. “So the best place to put a pipeline is right down the middle of the state — make sure that communities along that pipeline can get access to that natural gas.”
While the ASAP project is being worked on, it’s still secondary to the Alaska LNG Project in terms of priorities, Dunn said.
“It is solely for bringing gas to Alaskans,” she said. “Whereas the Alaska LNG Project … also has an export component. Now, the benefit of an export component is that it help the numbers work better, because if you’re sharing the cost among just Alaskans, that cost is a little bit more challenging to make the numbers work out.”
Dunn said the corporation has gotten questions and criticism over the decision to place the project’s liquification facility in Nikiski. Valdez was another option heavily pushed for.
“This was decided back when we were still a joint venture with the producers, BP, Exxon Mobile and ConocoPhillips,” Dunn said.
The choice was made among more than 20 different sites around Alaska.
“Every one of those locations was fully vetted, and we do have resource reports — it’s resource report 10 — that addresses that … decision making,” Dunn said. “… We have maintained throughout our process when we took the lead on this project that it (Nikiski) is the preferred site for a variety of reasons.”
On Thursday, the day after Dunn’s presentation to the forum, it was announced that AGDC President Keith Meyer had been dismissed from his position. He has been replaced by interim president Joe Dubler, executive vice president of finance and administration for Cook Inlet Housing Authority.
Both Dunn and Kara Moriarty, CEO of Alaska Oil and Gas Association, touted the number of jobs the industry brings to Alaska. Moriarty said in her presentation that, when breaking down the economic benefits of oil and gas in Alaska by region, it can be argued that 5,000 direct and indirect jobs on the Kenai Peninsula can be attributed to the oil and gas industry. She also attributed about $430 million in revenue for the peninsula due to the industry. Both figures are based on 2016 data.
Shifting to the mining industry, Mark Hamilton, vice president of external affairs for the Pebble Partnership was there to talk project specs, challenges it’s faced in Alaska and next steps. Hamilton read from a presentation that’s also posted on the Pebble Partnership’s website, pebblepartnership.com. Much of the presentation was dedicated to contradicting criticisms of the proposed Pebble Mine in Bristol Bay by its opponents.
Hamilton said repeatedly that the project poses very little threat to salmon in the area. The footprint of Pebble Mine is projected to be 5.3 square miles and 100 air miles from Bristol Bay.
“All of the permitting is trying to answer the question, ‘Can this facility be built with the least margin of impact?’” Hamilton said. “And we’re very confident of that, because we have done the science. We’ve done an enormous amount of science.”
Hamilton decried the Bristol Bay Watershed Assessment released by the Environmental Protection Agency in 2014 as “disgraceful” and called it “fake science.” He referenced a legal battle waged by Pebble against the EPA that was settled in 2017. Hamilton said Pebble “won the settlement.” The actual settlement called for the EPA to withdraw its proposed determination that the project would do great harm to salmon and the environment, and also ordered Pebble to file its federal environmental permit applications for the mine within 30 months from that time.
Hamilton also said that “the minimal impact (of the mine) would be offset by mitigation.”
No industry forum in Alaska could be complete without addressed industries specific to the state. One of the larger employers in Alaska, with a focus solely on Alaska, is the travel industry. Alaska Travel Industry Association President and CEO Sarah Leonard reported that the forecast for 2019 in terms of travel and tourism is looking up.
In 2018, Leonard said visitors spent roughly $2 billion in Alaska. When looking at regions of the state, she pointed out that Southcentral Alaska captures the most visitor spending — $960 million in 2018.
While Leonard said Alaska has an advantage over other states based on its brand and connotation alone — the state is seen as an ideal destination, she said — there are ways the state could improve its marketing to the Lower 48 and abroad.
“Alaska could be more competitive in promoting our state for potential visitors,” she said. “Between 2015 and 2017, the state investment in tourism promotion declined more than 90 percent.”
The state has invested $3 million in tourism marketing for fiscal year 2019, Leonard said. Nationally, she said Alaska ranks second to last in terms of investment in destination marketing. The lowest ranking state is Delaware, at $2.4 million.
“When you have less investment, it’s much harder to gain back that market share … once you’ve lost it,” Leonard said.
A large factor in Alaska’s visitor numbers is the cruise ship industry. Leonard said the tourism industry isn’t seeing the rate of growth for other sectors of tourism increase as fast as the rate of growth in the cruise industry.
Still, the tourism and travel industry continues to be a bright spot in Alaska’s economy, Leonard said. She noted that, as Alaska’s second largest private-sector employer, the tourism industry employed 52,000 people in 2017, according to the McDowell Group.
A report from the Department of Labor predicts the tourism industry will have a 1.7 percent gain in jobs over 2018. Additionally, fall and winter tourism in Alaska has been on the rise, up 33 percent from the 2007-08 season to the 2017-18 season.
Other Alaska-focused presentations included one by Nolan Klouda at the UAA Center for Economic Development, who spoke about how the outdoor recreation touted in the state drives entrepreneurship and gear production. Blue Pipeline Incubator Executive Director Justin Sternberg highlighted the many opportunities for business ventures in the “blue economy,” with focuses on sustainable use of ocean resources. Based in Seward, Blue Pipeline’s purpose is to support and help grow ocean-related, sustainability business in Alaska.
Next year’s Industry Outlook Forum is slated to be held in Seward on Jan. 8, 2020. All presentations from the forum will be posted on kpedd.org by the end of this month for public viewing.