Skagway set to embark on $23M Yukon Gateway Project

Photo/Courtesy/City of Skagway

Skagway will begin work later this year on its long-planned Yukon Gateway Project, a $23 million redevelopment of the historic city’s port and its aging facilities that will broaden Skagway’s role as a transportation “gateway” to Canada’s landlocked, but mineral-rich, Yukon Territory.

The long-run plan is a project that would cost about $80 million when fully developed.

What’s envisioned now, however, are replacements of docks and shore facilities, a deepening and widening of the port, which is currently constricted, and a cleanup of contamination that has been accumulating for decades from shipments of mine ore concentrates, according to Chad Gubala, the city’s consultant on the project.

The contamination has become a real worry. An estimated 80 tons of lead have been found in submerged soils of the port as well as mercury and other contaminants, which now constitute a human health hazard.

Contaminated submerged soils will be removed as a part of the port project but a new concern is that there are now indications of new copper contamination and it is most likely seeping from onshore, possibly from land near the state-owned Skagway Ore Terminal.

Meanwhile, a pending vote of Skagway citizens on accepting a new uplands lease for the White Pass & Yukon Route Railroad, or WPYR, a historic railway now operated for tourism, could affect the project. The new lease is more compact than the existing lease, will provide higher payments to the city and impose tighter requirements on the company for environmental remediation.

There are positives for both the city and WPYR, however. The company’s lease will expire in few years anyway and it will help it with its long-range planning to have the question settled now. But any issue placed before voters is always unpredictable. A special election on the lease is set for Oct. 7.

If voters reject the lease the municipality will still be able to go ahead with parts of the project but it would be better under a new lease. The municipality will have direct control sooner of more of the land now controlled by WPYR under the proposed new, smaller lease.

Meanwhile, Skagway’s prospects will be brightened with the Yukon Gateway project. When it is finished the aged and structurally-weak docks and wharves will be replaced with modern structures, and the port will be deepened and widened so there will be enough room to simultaneously accommodate two cruise ships, including one of the new supersized vessels built to carry almost 4,000 passengers, and a large industrial ship, like an ore ship or bulk carrier, Gubala said.

Modernizing and expanding the port infrastructure will also facilitate expanded year-around general cargo transport service to Yukon, up the Klondike Highway, which will reduce the territory’s current heavy dependence on goods moved long distances by truck up the Alaska Highway from British Columbia and Alberta.

“This shift away from high-cost and high-carbon truck transportation will cut user costs, reduce highway reconstruction (in the Yukon) and significantly reduce the use of diesel fuel, thereby lowering carbon and other emissions,” the city said in a statement on the project.

Yukon Gateway would also broaden services to Skagway’s two current economic mainstays, tourism and the shipping of ore, but also foster new opportunities building a larger year-around economy if Yukon Territory grows economically. The territory has a strong mining industry, although it is now affected by the commodities slump, as well as good oil and gas prospects. Skagway is Yukon’s traditional outlet to the sea, but its port is now limited, which puts limits on future growth, Gubala said.

Skagway itself wants to be less dependent on mining, which is highly cyclical, as well as cruise tourism, which is heavily seasonal, he said.

On the project at hand, the municipality will publish a Request for Proposals for demolition and environmental remediation this fall, after the vote on the WPYR lease, with the intention of having work underway by the end of the year on phase one, Gubala said.  Phase one is expected to take a year or year and a half.

Phase two will include the harbor widening and deepening, and the dredging planned for that will also remove submerged contaminants, after which reconstruction and expansion of docks and wharves will be done.

The project will also put enhanced environmental controls in place for any residual contamination, Gubala said.

Bringing more of the uplands under direct municipal control is a benefit of the shrunken railroad lease. This will result in better coordination of subsequent development as well as environmental oversight through a Skagway port authority that will be created following the project.

Despite the ambitious goals, however, there are complications for Skagway. One is that geotechnical boring conducted last January discovered unstable submerged soils that will require the injection of sand to improve stability, Gubala said. That will add costs.

The second issue that has emerged recently is the indication of contamination in the water of copper and other metals apparently coming from adjacent shorelands, including the Skagway Ore Terminal owned by the Alaska Industrial Development and Export Authority.

Bruce Wanstall, with the state Department of Environmental Conservation’s contaminated sites program, said it is too early blame AIDEA or anyone else for the copper contamination, or even that it is from a continuing source. Studies done to date do not trace the actual migration path of the pollution, and more work needs to be done.

It would seem logical that the pollution likely came from the ore terminal because copper ores have been loaded on ships since 2006, when shipments of ore from the Yukon expanded, but whether the copper is now leaching from onshore contaminated soil or has been in the offshore soils for years is unknown, Wanstall said. Windblown ore dust could have been the agent causing the migration, as well as contaminated rainwater runoff, he said.

Upland site leaseholders as PetroMarine, a bulk fuel operator, have secured DEC permits and have successful mitigation measures in place, Wanstall said, but AIDEA has not secured DEC permits for the ore terminal. The issue is still being discussed, he said.

11/24/2016 - 9:32am