A dynamic event is underway in Arctic Alaska today: one that, if successful, could have a profound effect on our state’s economy. Shell Alaska is preparing to drill for oil this summer in Alaska’s offshore continental shelf. To date, Shell has expended over $7 billion in gearing up for their effort. They anticipate substantially advancing their delineation effort by the end of this year’s drilling season.
A sobering statistic highlights the significance of Shell’s effort: Of the total estimated oil in Alaska—43.8 billion barrels—88.9 percent is on federal holdings, and only 11.1 percent is on state-owned lands. In comparison, the rest of the U.S. oil totals 23.7 billion barrels, according to USGS estimates. Alaska must be allowed to access its federal prospects.
One reason for optimism is the White House and President Obama’s apparent support for Shell’s OCS effort.
In the last few years, public interest has focused more on the Arctic. The fact that Alaska is our only Arctic state, makes it imperative that Alaska, along with Canada, work together in development and protection of the Arctic land and sea mass that we share as neighbors.
Diminishing Arctic ice pack and the impact that it may be having on global warming, along with increased marine traffic, are significant events occurring in the Arctic today. The opportunities for scientific study, engineering technology and ice dynamics are profound. The state of Alaska and our university need to tie in and positively identify with today’s actions in the Arctic.
Not everyone has yet come aboard on the idea of Arctic resource development. Actions by Seattle’s mayor and environmentalists when Shell’s marine armada was in their city a few weeks ago sent a pretty clear message: Shell Not Welcome. Similar demonstrations are expected to occur in Portland with the arrival of a Shell vessel.
Since Shell’s development comes from Alaska’s offshore area, it is appropriate that we move forward and make our case for centralizing supply and maintenance in Alaska. We need to begin an inventory of our own resources and capabilities to determine if we can meet Shell’s requirements.
Why, if Seattle—located 690 miles south of Ketchikan, Alaska’s southernmost city—was found as a satisfactory location to meet Shell’s needs, should they not reduce the distance and consider the capabilities of Alaska’s own growing capacities for marine maintenance? Currently, Alaska’s facilities include shipyards in Seward, as well as facilities in Dutch Harbor and Adak. In Southeast Alaska, Wrangell has two large mobile lifts—a 150-ton and 330-ton—on its own paved shipyard adjacent to a 400-foot concrete city dock. It has an industrial site at the former Alaska Mill site with over 50 acres and a 300-foot piling dock. I do not have details on sites to the west.
The largest marine capability in Alaska is the shipyard in Ketchikan, which is owned outright by the state through its agency the Alaska Industrial Development and Export Authority. The facility is currently under lease to Vigor, which is now the largest operator of marine facilities on the West Coast. The Ketchikan yard includes 25 acres with a 1,000-foot pier. Dry dock No. 1 has the capacity of 9,600 long tons floating dry dock with a 15-ton gantry crane. Dry dock No. 2 has a lift capacity of 2,500 long tons. The yard has covered production facilities and, most important, a workforce of 160 resident Alaskans. Vigor currently is building the two Alaska-class ferries.
Ketchikan can also offer berthing facilities a short distance from Vigor at Ward Cove, the industrial site of the Ketchikan Pulp mill. The site includes an 800-foot concrete dock, 200,000 square feet of warehouse and office space, and 1 million gallon tankage. Ward Cove is the largest and most protected ice-free port located adjacent to a shipyard in our state. It can accommodate existing activities, the Alaska Marine Highway and all of Shell’s needs.
The Port of Ketchikan has four deep-water Panamax-size berths that are used by cruise ships in summer but could be used for winter moorage. Should Shell consider a term commitment for maintenance and support, adaptation of existing facilities could be accommodated and expanded.
I would encourage Gov. Walker to appoint a small task force to review Shell’s requirements, along with the state’s capacity to accommodate them. I would suggest naming experienced private sector individuals who are active in Alaska’s maritime industry.
It is not too early to start our efforts. As Shell’s activities move ahead, the need for maintenance and support may be starting in the next year.
Alaska has the opportunity now to bind its commitment to the Arctic. If Shell is successful, other Arctic leaseholders will follow. Working together with today’s advanced technology, responsible development of our resources can occur. The state stands to be the beneficiary, as will all Alaskans.
Frank Murkowski is a former governor of Alaska and a former U.S. Senator.
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