February 12. 2010 - Anchorage, Alaska

Delivered by Mary Ann Pease, MAP Consulting, LLC

Good Evening – For the record, my name is Mary Ann Pease and I am the owner of a small consulting firm focused on business strategies /communications/ and energy issues for our State. I have been working with numerous utilities, the State and the Municipality and energy companies in Alaska for 25 years. I have worked for several companies or entities that are active in the Inlet. Recently, I have followed the designation of the beluga as endangered and now appear before you to offer comments on the NMFS proposal to place all of the upper Inlet and Kachemak Bay under critical habitat designation.

A critical habitat designation is intended to protect habitat threatened with significant alteration that is essential for the attempted recovery of an endangered species. In almost all other instances where a critical habitat designation is implemented, it is degradation of the habitat that poses a threat to the listed endangered species. Fortunately, that is not the case for the Cook Inlet beluga. The beluga is not endangered in Alaska, and there is a thriving population in the tens of thousands statewide. The Cook Inlet stock of belugas has declined in recent years, but not due to habitat change. The undisputed reason for the decline of the belugas in the Inlet is hunting by natives. Unlike other endangered species, the habitat of the beluga is not threatened or being impacted by human activity. In fact, the population surveys for belugas shows a significant increase in population during and after major human activity in the Inlet such as pipeline construction, oil and gas exploration and production and ongoing shipping. It is clear that the Inlet habitat is not an issue for the recovery of the beluga stock; the problem is solely traced to hunting by natives. Consequently, the habitat issues of the beluga need to be addressed differently than those of the typical endangered species.

NMFS has failed to take this into account in designating critical habitat for the Inlet beluga. Rather than acknowledging the cause of the beluga’s decline and enacting stringent measures to insure no hunting is taking place, NMFS has applied an irrational and overbroad designation of critical habitat for the beluga without any scientific support for how such action may assist the species and with complete disregard for the economic impact on a majority of Alaska’s population. NMFS has to be accountable for its habitat designation and able to quantify the economic impact. The NMFS estimate of a $600,000 economic impact from their critical habitat designation in the Inlet over 10 years is absolutely absurd. No one who has ever worked with the ESA can put forth such a minimal figure with a straight face. Nonetheless, that is what NMFS has presented in an attempt to disguise the enormous economic impact that their habitat designation will have on southcentral Alaska. I am presently working with KABATA on the Knik Arm Crossing and KABATA alone has spent well over $1 million attempting to address issues presented by the critical habitat designation and its anticipated impact of the bridge project. I know that the Port of Anchorage and the oil industry have each spent as much or more than KABATA to date just trying to deal with the critical habitat designation. These amounts do NOT include increased costs to any project that may be imposed by NMFS or that are directly attributable to delay created by the NMFS habitat designation. KABATA has been attempting to get a record of decision from the FHWA for over a year and the only thing holding it up is clearance from NMFS of the project. But NMFS approval has not been forthcoming, the project is presently stalled, and the carrying costs of eh project are dunning into the millions.

I have a fair amount of experience with economic and financial modeling and am appalled that NMFS can present such a trivial number for projected economic impact from the designation of thousands of square of miles of the Inlet as critical habitat in the midst of Alaska’s most populous region. Such unfounded and unsupported assertions call into question the other aspects of the NMFS report on the belugas and their endangered designation. As a government agency, NMFS is expected to be objective, fair, and impartial. Such characteristics are noticeably lacking from the NMFS work on the belugas, and the broad critical habitat designation ignores the root cause of the inlet beluga’s decline.

The critical habitat designation exemplifies a NMFS agenda devoid of rational or science. It appears NMFS has essentially designated any area of the Inlet where a beluga has been seen more than once as critical. There is no differentiation or assessment of levels of human activity or how they might actually detrimentally impact the beluga population. Instead, all of the upper Inlet and Kachemak Bay are listed as critical habitat, without regard to whether or not human activity other than hunting in any of the upper inlet areas adversely affects the belugas. This is contrary to the mandate of the ESA, which requires a legitimate economic assessment of the impact that a critical habitat designation will have on the affected region. For example, alteration of discharge permits for AWWU will require hundreds of millions in modifications of the Anchorage wastewater system. The Port of Anchorage is a strategic military port and also handles over 80% of the freight for Alaskans. The critical habitat designation will halt and alter port modifications as well as everyday port operations. If Alaskans can rely on no more than $600,000 in increased costs from the NMFs critical habitat designation over 10 years, then that is certainly a manageable number. If NMFS is required to adhere to such a number, as it should be as an agency charged with producing accurate studies, then Alaskans would have little to worry about concerning their economic future. But, there is no guarantee in the NMFS economic impact estimate, and their delay and lack of cooperation with Inlet operators to date is a clear message that they will not be working constructively with those entities that operate in the Inlet. And of course there is no accountability from NMFS; they can say one thing in their estimate and act totally differently in enacting their policies.

But Alaskans who live, work and recreate in and around the upper Inlet are entitled to realistic and accurate economic assessments of the impact that a critical habitat designation of all of the upper Inlet will have on all ongoing and planned activities in the Inlet. The critical habitat designation needs to be redone to conform to the economic analysis requirements of the ESA. In the interim, projects should be allowed to proceed given the lack of a demonstrated link between economic activity in the Inlet and the decline of the beluga stock. Alaskans have the right to receive realistic and accurate information from NMFS on the economic impact of the ESA critical habitat designation on human Inlet activities. NMFS has not met this requirement and before it can dictate economic activity under a critical habitat designation, it must be able to justify all aspects of the critical habitat designation in accordance with the mandate of the ESA.