Hi Jay, a couple local items to add to the gloom and doom...
1) This week the Alaska Permanent Fund Corp. announced a per capita dividend of $1,540.76. The principal and payout of the dividend has now dropped for two years in a row because of the falling stock market. The dividend is expected to continue dropping for the next several years. (Note: The fund has 46% of its $23 billion principal invested in the stock market.)
2) Alaska just lost it's one and only foreign coal customer, partly because of competition from China...
Usibelli's last shipment to S. Korea ends era
adn.com
By Paula Dobbyn
Anchorage Daily News
(Published: September 27, 2002) In the wee hours of the morning, as most of the city slept, a trainload of Alaska history rumbled through Anchorage for the last time Thursday.
Packed with about 6,000 tons of coal dug from the Healy hills, an Alaska Railroad train chugged south through the night to dump its final load in the Port of Seward. A waiting freighter will haul the fossilized plant matter to South Korea, where a longtime customer will turn it into electricity.
It's a routine that has played out two to three times a week for 18 years. But this week's shipment from Healy to Seward marked the end of an era for a coal company, a railroad and a port town that together have moved about $250 million worth of Alaska coal to South Korea since 1984.
"It's a sorry time. I know the blood, sweat and tears that went into it," said Bill Noll, an Anchorage businessman who helped lay the groundwork for the first Usibelli Coal Mine export shipment in 1984.
Usibelli and Hyundai Merchant Marine, the South Korean buyer, were unable to agree on a new contract earlier this year. Cheaper foreign coal, mainly from Indonesia, China and Australia, made the Alaska product too costly for the South Koreans. The contract had been under duress for several years, Noll said.
"We couldn't meet their price requirements. The Pacific Rim market has gotten lower and lower," said Steve Denton, Usibelli's general manager.
Usibelli shed 30 employees over the summer, a big bite of its work force of 110, Denton said. It's a tough time for the company, but the goodbyes had already been said by the time the last train departed from Healy on Wednesday afternoon.
"There wasn't a wake," Denton said.
While the shock may be over, the reality of the layoffs is sinking in around the dirt roads of Healy. Usibelli is the biggest employer in Healy, a town of about 1,000 straddling the Parks Highway just north of Denali National Park and Preserve. The mine has provided steady, well-paying jobs in the decades since founder Emil Usibelli discovered the Healy coal beds in 1943. Some people have moved away to find work. Others are making plans, said Shelly Acteson, clerk and treasurer for the Denali Borough.
"It seems like the town is drying up," said Shane Pennington, a cook at the Totem Cafe in Healy. "I know about a dozen families who are talking about moving away."
Besides the money ex-mine employees pour into the community, Healy will lose tens of thousands of dollars in severance tax from the coal exports to Korea, Acteson said.
The end of the contract will mean $4 million less revenue for the state-owned railroad and fewer hours of work for train conductors, engineers and maintenance workers, said railroad spokesman Pat Flynn.
In Seward, the jobs of 12 people who work at the Seward Coal Terminal are hanging in the balance.
"It would be hard to keep the terminal without a coal contract," said Young Jin Park, general manager of the coal terminal.
Park said his bosses in Seoul have yet to announce their plans for the terminal. Hyundai owns 51 percent of the terminal. The Alaska Industrial Development and Export Authority owns the rest. John Wood, a project manager with AIDEA, said it is anyone's guess at this point what will happen with the Seward site.
Tom Reese, a foreman at the terminal since it opened 18 years ago, has advised employees not to wait around.
"I told them several months ago that if they had a reasonable offer somewhere else, don't turn it down. All of them have chosen to stay, and that's been good because I still have one more boat to load," Reese said.
Without coal shipments, the railroad is likely to cut train service or not keep the tracks clear in winter, a move that would hurt Seward's efforts to attract freight business, said city manager Scott Janke. And if Hyundai decides to close the terminal, it would cripple Seward's ability to move cargo, Mayor Edgar Blatchford said.
"If they dismantle the coal loading terminal, it'll be a long time before natural resources are shipped out of Seward," Blatchford said.
The city of Seward has hired Noll as a consultant to try to salvage the contract or find another buyer for the coal. Noll, a policy adviser for the Murkowski gubernatorial campaign, acknowledges it'll be a tough job. He likened it to "going into the second half of a football game a little bit behind."
But when Noll and a South Korean businessman hatched the idea of shipping Alaska coal to Korea two decades ago, most people laughed, he said.
"We didn't take no for an answer," he said. "We did it before, and we can do it again."
An election will be held in South Korea later this year. The new government may be one that takes a broader view of its relationship with the United States and Alaska in particular, Noll said.
In the meantime, Usibelli will continue to supply military bases, Interior utilities and the University of Alaska with coal. The company will also focus its attention on the Alaska Railbelt, said Denton, where energy demands will increase over the next decade.
In Seward, Reese said he's not sweating the uncertainty about the source of his next paycheck. His kids are grown, so at least he doesn't have that to worry about.
"I'll find another job," Reese said. "I'm at peace with this whole thing. If it goes away, it goes away. There is nothing I can personally do to change the outcome, except pray."
Reporter Paula Dobbyn can be reached at pdobbyn@adn.com or 907-257-4317. |
