Arctic players talk infrastructure, spill response in Girdwood
GIRDWOOD — Alaska’s need for Arctic infrastructure — fixed and mobile — dominated the discussion at World Trade Center Alaska’s Arctic Ambitions conference Feb. 27 in Girdwood.
State officials and representatives from Arctic nations and their businesses provided insight into what the state and federal governments can do, and who could be possible international partners with them, as economic activity in the region grows.
Former Lt. Gov. and University of Alaska Anchorage Chancellor Fran Ulmer said oil spill response highlights nearly every forum she attends regarding Arctic policy and economic development. Ulmer, who was chancellor at UAA from 2007-11, is currently the chair of the U.S. Arctic Research Commission.
The National Council is set to issue a report in April that will compile research focused on best practices of oil spill response in what she referred to as “icy waters.” She said the report will update previous work done by the U.S. Arctic Research Commission.
Spill response procedures are needed as trans-Arctic shipping activity grows along with Outer Continental Shelf oil exploration, Ulmer said. While Arctic shipping currently represents only about 1 percent of all commercial maritime activity, she said it is growing about 5 percent per year.
“It’s a big increase for a region that has limited infrastructure to support it,” Ulmer said.
Multiple reports have put the number of commercial vessels that traveled the Northern Sea Route along Siberia and through the Bering Strait in 2012 at around 40.
The U.S. need for additional icebreaking capacity is something the members of Alaska’s congressional delegation have spoken about at-length and was noted throughout the conference.
The U.S. Coast Guard has two active icebreakers, the heavy Polar Star and the medium-duty cutter Healy.
As non-Arctic nations such as China and South Korea are investing in icebreaking fleets, state government officials as well as the delegation have said the U.S. is falling behind.
Growing the U.S. icebreaker fleet will likely cost several billon dollars. Until that investment is made, Tero Vauraste, president and CEO of the Finnish maritime support company Arctia Shipping, told the conference attendees that the U.S. and other Arctic nations could look to the Baltic region for icebreakers and general “icy waters” expertise.
He said the region is one of the only areas in the world where there is heavy commercial activity in often ice-choked waters — outside of what occurs on a smaller scale in the Great Lakes. The countries surrounding the Baltic Sea are some of the only one’s in the world that have developed and working plans for managing commerce in Arctic-type conditions, he said.
Arctia operates five icebreakers and offers supports the offshore oil and gas industry that operates in the Baltic Sea, Vauraste said. The company also assisted Shell with its exploration in the Chukchi Sea with two support vessels.
Further OCS exploration by Shell has been suspended indefinitely as the Bureau of Ocean Energy Management deals with the January decision by the 9th U.S. Circuit Court of Appeals finding flaw with the environmental impact statement on which the OCS lease sale was based.
Of the roughly 100 icebreakers operating throughout the world, about 60 were built in Finland, according to Vauraste.
“We are good in hockey, but we’re world champions in icebreakers,” he said, referring to Finland’s victory over the U.S. men’s hockey team in the Olympic bronze medal game.
He also warned against the belief that shrinking summer sea ice will eliminate all the challenges to Arctic business.
“The diminishing of ice does not mean conditions get easier; they get more variation,” Vauraste said.
The need for fixed marine infrastructure in Western Alaska is something the U.S. Army Corps of Engineers and the State of Alaska have been investigating in a joint study for nearly three years. It’s also something Vitus Marine CEO Mike Smith exemplified in his presentation. Vitus Marine orchestrated the fuel shipment to Nome in 2012 with the Russian tanker Renda and the Coast Guard Cutter Healy that captivated observers around the world.
Smith said serving Bristol Bay communities can be extremely challenging as shifting channels at river mouths can make marine charts obsolete nearly as fast as they can be published.
State Sen. Lesil McGuire, R-Anchorage, said at the conference that Senate Bill 140, which she is sponsoring, would expand the power of the Alaska Industrial Development and Export Authority to allow it to partner in financing Arctic infrastructure.
Companies shipping to remote villages in the region often rely on local captains familiar with the latest conditions to help them navigate.
At Nome, where the port is dredged to 21 feet, there are still “real economic implications to having to having a lack of infrastructure,” Smith said.
Vitus Marine is only able to deliver up to 1.8 million gallons of fuel at a time because of the depth of Nome’s port. That means on a contract to deliver 2.5 million gallons two multi-day trips must be made with a tanker that could have made one delivery, adding up to $300,000 to the total cost of the fuel, or more than 10 cents per gallon, he said.
In its presentations to state and federal officials, the Army Corps of Engineers has related the 800-mile infrastructure gap in Western Alaska between Nome and the deepwater port of Dutch Harbor as being similar to the distance between New York City and Jacksonville, Fla.
Corps of Engineers Chief of Planning for the Alaska District Bruce Sexauer said at the Arctic conference that initial plans to issue a recommended deepwater port plan for the Seward Peninsula have been pushed back from this March to early summer as Corps leadership in Washington, D.C., has asked for more investigation of the proposed sites.
Sexauer said the Corps of Engineers is not the only group interested in a port capable of supporting Arctic commercial activity. The study team will be giving a second presentation to a White House committee on their progress in the coming weeks, he said.
The project is viewed by the Obama administration as a matter of national security, he said.
Program manager for the Corps on the port project Lorraine Cordova has said there are 23 iterations of proposed infrastructure development being looked at when the Nome, Cape Riley and Point Spencer sites are combined.
Most of the plans call for the Nome port to be dredged to between 26 feet to 39 feet, Sexauer said, at a projected cost of about $250 million. At those depths response and security vessels could be stationed in Nome or at Point Spencer, which has natural 40-foot depths, but no shore side infrastructure.
He said Cape Riley is being looked at as a possible shallow draft barge facility for resource extraction projects.
The most immediate export prospect in the area is the Graphite Creek prospect 40 miles north of Nome. Leadership in Graphite One Resources, the company developing the graphite claims, have said construction the project, with an initial 50-year life, could start as soon as late 2016.
Elwood Brehmer can be reached at [email protected]