Chugach Alaska Corporation recently entered its most profitable financial agreements to date. Two ground-breaking land transactions with New Forests are helping Chugach to preserve 115,000 acres of it forested land in Prince William Sound, homeland to generations of its 2,500 Aleut, Eskimo and Indian shareholders. Many residents rely on fisheries and a subsistence lifestyle in the pristine Prince William Sound, where old-growth trees tower, and across 3,800 miles of coastline, tidewater glaciers calve into the ocean.
Through California’s cap-and-trade program — an environmental and economical approach to control greenhouse gas emissions, the primary cause of global warming — this swath of Alaskan timberlands will be used to calculate carbon credits purchased by California companies that exceed their carbon dioxide air pollution limits.
Chugach’s potential payoffs from the carbon offsets are expected to run in the millions for a substantial period of time.
“This is an incredible milestone for our corporation, and certainly Chugach’s largest lands endeavor to date,” said Sheri D. Buretta, who has served as Chugach's full-time Chairman of the Board for 15 years. “One of the unique things about this project is that the minimum commitment is 100 years. This means that the carbon project will benefit shareholders by generating significant revenue over the life of the project, as credits are sold. In addition, there will be opportunities for potential forestry management business development and shareholder hire related to improved forestry management carbon projects around the state.”
In December 2016, Chugach sold its Bering River coal rights to New Forests. In turn, those coal rights were retired via transfer to the Nature Conservancy and with a restrictive covenant held by the local Native Conservancy land trust. Secondly, as part of the agreement with New Forests, Chugach agreed to develop a forest carbon offset project on the 115,000 acres of its forested land in Prince William Sound.
Alaska wasn’t initially permitted to participate in California’s cap-and-trade program. So Chugach led a campaign with the California Air Resources Board to enable Alaska to participate, a right they were granted in November 2015.
A for-profit corporation with a social mission, one of Chugach’s key values is maintaining ownership of its lands. “Our profitability ensures that we can continue to celebrate and perpetuate our heritage, and responsibly own and manage our lands for the benefit of the Alaska Native people of the Chugach region,” Buretta says. “The Bering River Coal Field transaction is a great example of shared prosperity in action, as the profits generated directly strengthen the fabric of our shareholder community by generating revenue, employment opportunities and in-region economic development.”
Chugach joined California’s effort to slow climate change shortly after President Donald Trump’s administration began contesting global warming and eased up on environmental protections. Despite the administration's stance on climate change and environmental stewardship, Buretta is confident in the political support behind California's cap-and-trade program. “Although President Donald Trump has taken steps to roll back some federal environmental regulations, the carbon offset program continues to gain support and momentum at the state level in California,” says Buretta, who will participate in a speaker’s panel at a “Forests as a Climate Solution” symposium on May 16 in San Francisco. The event will explore some of the policy opportunities and challenges related to the carbon credit program, and may offer some insights on future legislation.
Based in Anchorage, Chugach invests in diverse business lines — government services, facilities services, energy services, investments and land and resources projects. The corporation rebuilt from a 1991 bankruptcy, utilizing the SBA 8(a) program — “the missing link of the Alaska Native Claims Settlement Act, as a vehicle to build economic opportunities for our company,” says Buretta. “At the same time, we built a strong infrastructure to operate successfully. Today we are taking that knowledge and transitioning into the competitive market. We are doing what the program was designed to do. In addition, we have reinvested our resources into education, training and jobs for our people.”
In the energy sector, for 24 years, Chugach has provided critical staffing support and oil spill prevention services on the Trans Alaska Pipeline System (TAPS) in the Chugach region through three subsidiary companies: Chugach Alaska Services, All American Oilfield, and Chugach Professional Oilfield Services. (Prince William Sound's largest port is Valdez, at the southern terminus of the Trans-Alaska Pipeline System.) “This [Trans Alaska Pipeline System] is an important contract not only because it provides valuable shareholder employment opportunities, but also because it resides in our region and allows us to protect and preserve the integrity of the Prince William Sound,” Buretta said. “We are continuing to perform exceptionally well on these contracts and are a trusted partner to our customer. Last year, we negotiated a five-year extension (and one option year) for our Tatitlek Chugach Chenega (TCC) joint venture contract with Alyeska Pipeline Services. As of December 2016, Chugach Alaska Services and TCC collectively acquired 1.3 million hours and nearly 4,000 days without a recordable injury or illness,” she added.
This spring, the National Center for American Indian Enterprise Development honored Chugach at its National Reservation Economic Summit (RES) in Las Vegas with the Tribal Enterprise Empowerment Award. “The line-up of award recipients [at RES] this year included some very prominent and influential figures who advocate tirelessly on behalf of the Alaska Native community, and we are proud to stand alongside them,” Buretta said.
A few additional highlights from the past year include:
- In October 2016, Chugach completed its largest acquisition to date, purchasing Chicago-based facilities services provider Rex Electric & Technologies (Rex). Rex expands Chugach’s facilities operations footprint to a new market; and diversifies the corporation’s revenue stream.
- Chugach is continuing to explore other land development opportunities beyond the coal sale and carbon offset project, including the construction of a hard rock quarry in Port Gravina, Alaska. The quarry has the potential to provide materials for infrastructure, development, construction and repair projects throughout Alaska and the Pacific Northwest. Chugach completed permit applications and an environmental analysis related to the project in 2016, taking us one step closer to beginning the project.
- The ANC established Chugach Investment Holdings LLC in January 2016 to manage Chugach’s investment portfolio. Chugach generates financial returns through a portfolio of private equity and real estate investments spanning a range of industries, from healthcare to next generation space products and services.
- Within Chugach’s largest government services business, Chugach secured several new contract awards in the past year including the Northland Job Corps Center, Midway Base Operations Support and Arnold Engineering Development Test Operations and Sustainment.
Chugach employs more than 6,000 employees and generates more than $824 million in annual revenue, positively impacting the Chugach region, which encompasses the communities of Cordova, Seward, Valdez, Whittier, Port Graham, Chenega Bay, Eyak, Nanwalek (English Bay) and Tatitlek. Shareholders receive a number of benefits that not only addressing socioeconomic disparities within the Alaska Native community, but also provide meaningful opportunities for Alaska Native people, including an educational endowment, Settlement Trust and shareholder development and cultural programs:
- Education: Chugach's non-profit arm, Chugach Heritage Foundation (CHF), provides educational and scholarship opportunities to shareholders and descendants. In 2016, CHF served more than 200 shareholders and awarded nearly $770,000 in scholarships. Chugach contributed $2.1 million to the CHF Endowment in 2016, bringing our balance to $6.3 million. Chugach also pledged an additional $24 million in future contributions to CHF. The move ensures we can continue offering these opportunities to future generations.
- Cultural Programs: In 2016, Chugach continued to provide opportunities for our shareholders and their families to connect with their heritage. From Nuuciq Spirit Camp and Russian New Year to artifact repatriation and regional economic development efforts, we are reinvesting in our people and their future.
- Professional Development: In 2016, Chugach employed 90 shareholders, and dedicated nearly $500,000 towards training and growth opportunities through programs including Training Without Walls, Shareholder Business Assistance Program, Alaska Native Executive Leadership Program and Native American Contractors Association.
- Dividends: Shareholder dividends can provide vital savings for education, needed cash in rural Alaska, small business investment, supplementary revenue to household income, or reinvestment opportunities. Chugach's 2016 distribution included $9.0 million in shareholder and Elder dividends.