Legislature(2015 - 2016)CAPITOL 17
03/12/2015 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Nome Port Expansion | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 12, 2015
1:10 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Shelley Hughes, Co-Chair
Representative Louise Stutes
Representative Matt Claman
Representative Dan Ortiz
MEMBERS ABSENT
Representative Charisse Millett
Representative Benjamin Nageak
COMMITTEE CALENDAR
PRESENTATION: PORT OF NOME
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
BRUCE SEXAUER, Alaska District Branch Chief
US Army Corps of Engineers (USACE)
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation on the
proposed Nome Port Expansion Project.
DENISE MICHELS, Mayor
City of Nome
Nome, Alaska
POSITION STATEMENT: Testified during the presentation on the
proposed Nome Port Expansion Project.
JOY BAKER, Port Director
Port of Nome
Nome, Alaska
POSITION STATEMENT: Testified during the presentation on the
Nome Port Expansion Project
JEFF OTTESEN, Director
Division of Program Development
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified during the presentation on the
Nome Port Expansion Project.
ACTION NARRATIVE
1:10:01 PM
CO-CHAIR NEAL FOSTER called the House Transportation Standing
Committee meeting to order at 1:10 p.m. Representatives Claman,
Stutes, Hughes, and Foster were present at the call to order.
Representative Ortiz arrived as the meeting was in progress.
1:10:16 PM
^PRESENTATION: NOME PORT EXPANSION
PRESENTATION: NOME PORT EXPANSION
1:10:32 PM
CO-CHAIR FOSTER announced that the only order of business would
be a presentation on the proposed Nome Port Expansion Project by
the US Army Corps of Engineers (USACE).
1:10:50 PM
BRUCE SEXAUER, Alaska District Branch Chief, US Army Corps of
Engineers (USACE), said he appreciated the opportunity to
present a PowerPoint on the Arctic Deep-Draft Arctic Ports
Navigation Feasibility Study. He stated that the Alaska Deep-
Draft Arctic Port Study got its initiation in the early 2000s to
examine the cost of fishing in Alaska. The USACE asked to have
the scope broadened to review navigational issues throughout
Alaska, which led to a series of meetings that pointed to the
need for navigation permits in the Arctic. In 2007, the US Army
Corps of Engineers entered into a cost-sharing agreement with
the Alaska Department of Transportation & Public Facilities to
examine the need for deep draft port infrastructure in the
Arctic.
1:12:03 PM
MR. SEXAUER recognized Lorraine Cordova, Project
Manager/Economist, Mike Lukshin, P.E., Ports and Harbors,
Department of Transportation & Public Facilities, who serves as
the state's project manager for the proposed Nome Port Expansion
Project.
1:12:19 PM
MR. SEXAUER stated that the City of Nome has been very helpful
in providing significant data and information for this project.
The US Corps of Engineers' (USACE) authority for its involvement
in navigation is provided by the Interstate Commerce clause of
the US Constitution, which states that interstate commerce shall
not be impeded. He identified the US Corps of Engineers'
mission, which is to improve navigational efficiency throughout
the waterways of the United States. In 1970, the Congress
granted the USACE the ability to review any waterway in Alaska
contingent upon funds being appropriated for a specific purpose.
The US Congress has appropriated funds for the USACE to review a
wide variety of items, including examination of the Arctic.
1:13:32 PM
CO-CHAIR HUGHES wondered whether any funds were appropriated
between 1970 and 2007 to study ports along this coastal area.
MR. SEXAUER answered that the USACE has generalized study
authority to look at any port after the Congress authorizes
funding. Thus the USACE has reviewed a wide variety of ports,
ranging from Unalaska, Juneau, and Nome.
1:14:29 PM
CO-CHAIR HUGHES said she was primarily interested in funds for a
port in Western Alaska. She asked whether the USACE has
received funds prior to 2000 for work in the Nome area and if
the work was primarily designated for work in Southeast,
Southcentral, or the Aleutians.
MR. SEXAUER answered that each one of the funding streams was
designated for a specific area. He reported that navigational
improvements in Nome were studied in the 1980s, which lead to
the construction of the project in 2006. In fact, the USACE has
a long standing history with Nome, almost 100 years of history
with Nome, with the first US Army Corps of Engineers (USACE)
project constructed in Nome in 1917. The USACE uses its
authority as one of the tools, along with the appropriations, to
allow the agency to move forward on projects.
1:15:31 PM
CO-CHAIR HUGHES asked if this is the first public presentation
or if the USACE has given other presentations on this topic.
MR. SEXAUER answered that he has given a few press interviews,
noting a wide variety of people have expressed interest. He
stated that the USACE plans on holding a public meeting in Nome
in April to solicit comments, but this presentation today is the
first truly public forum since the study has been released.
1:16:14 PM
MR. SEXAUER stated that the need for Arctic port facility was
identified and in 2011, the USACE entered into a cost-sharing
agreement. He directed attention to the map on slide 2, which
highlighted the wide area the US Corps of Engineers considered
for a deep-draft port, ranging from the mouth of the Kuskokwim,
to the northern border between Alaska and Canada. During the
process, the USACE reviewed how close these ports were to deep
water, natural resources, and existing transportation
infrastructure. This process allowed the USACE to develop a
list of the best locations, including identifying the Nome and
Port Clarence area as the most effective first spot.
MR. SEXAUER turned to "Project Need" [slide 4]. He stated that
the USACE has reviewed the increased vessel traffic coupled with
limited marine infrastructure along Alaska's Western and
Northern shores since it poses risks for accidents and
incidents, increases response times for search and rescue, and
requires international coordination. This relates not only to
vessel traffic in the area, but to the international fleet of
vessels that transit the area. This proposed deep-draft port
project won't necessarily be located where raw oil or goods are
transported although a port facility could support and assist
oil platforms restock their supplies, transport fuel to help
reduce fuel costs to outlying villages, bring in more vessels to
improve search and rescue, and also support international
activities in the Bering Sea.
1:19:21 PM
CO-CHAIR HUGHES asked for specific statistics in terms of the
rate of growth for vessel traffic and where these vessels
initiate travel and their destination.
MR. SEXAUER answered yes. He said that just after the USACE
finished with its 2006 harbor improvements in Nome, Nome began
to experience vessels anchoring out because the docks were too
crowded or there wasn't sufficient depth. The number of vessels
needing to anchor out has steadily increased to the point that
hundreds of vessels per season anchor out awaiting access to the
Nome port facility. In terms of vessels transiting the area,
the USACE has tracked Russia's permits, which has grown from a
few to hundreds of permits per year. He anticipated that those
figures will continue to grow, depending on resource extraction
and ice conditions. At current levels, there was already a
great need for improved port facilities.
1:21:34 PM
MR. SEXAUER directed attention a map of the Nome area [slide 5].
Once the USACE identified the Nome/Port Clarence area as the
first spot to develop port infrastructure, in 2013 the agency
held a charrette, or an intense planning session to identify any
problems, methodology, and alternatives, which essentially has
provided the foundation for the planning process. The USACE
also identified 11 or so potential sites around the Nome and
Port Clarence area, including Cape Nome, Point Spencer, Teller,
and Cape Riley for development. From that charrette, the USACE
focused on three areas including Nome, Cape Spencer and Cape
Riley. As the USACE moved forward with its analysis, it
reviewed the existing fleets, including vessels operating in the
three locations. Although significant vessels use Point Spencer
and Cape Riley, most of these vessels are seeking refuge and
shelter, but are not offloading or on loading goods and
supplies. These vessels are able to perform their current
activities without any additional improvements. The USACE
understood that a wide-variety of improvements are being planned
at Cape Spencer, but at this time the agency believes that a US
Corps of Engineers channel or breakwater wouldn't really improve
conditions at that location. Still, if Point Spencer were to be
developed, it could lead to future needs, he said. Further, the
Cape Riley was considered as a potential spot for extracting
minerals, but the cost of building a road currently outweighs
the benefits, or essentially the time savings of bringing the
goods to Cape Riley versus the Port of Nome, he said.
1:24:29 PM
MR. SEXAUER directed attention to the Nome Proposal [slide 6],
noting the USACE reviewed the vessels using Nome to bring in
supplies and fuel oil, as well as to serve oil industry needs.
MR. SEXAUER said the USACE reviewed potential development
scenarios in the Arctic, noting that the USACE typically takes a
very conservative approach in making any recommendations for
infrastructure after reviewing studies, reports, and activities.
The USACE projected three exploratory oil platforms would occur
over a 50-year timeframe, without including production, which
represented the low-end for potential development. This review
also envisioned using Dutch Harbor for preseason staging and
Nome during the season for restocking food, goods, and crew
occurring since it would be more efficient to do. This
illustrated that other ports play a very important role, he
said.
MR. SEXAUER pointed out the oil industry, oil tankers, and fuel
tankers currently use Nome, as well as smaller vessels that
serve the other villages, noting this constitutes a wide variety
of uses that could benefit from the proposed facility.
1:26:59 PM
MR. SEXAUER reviewed the Nome Proposal [slide 6]. He said the
terminology used by USACE was very important to the agency. He
referred to the plan as the tentatively selected plan, since it
is currently under review by the public and the USACE. He said
the plan will not specifically be the one recommended to
Congress, unless and until all of the reviews are completed.
MR. SEXAUER stated that the tentatively selected plan includes a
photo that depicts the existing Nome Harbor, with the lower
harbor called the causeway, which is where goods are currently
unloads goods [slide 7]. He directed attention to the two docks
visible on the map and stated that the City of Nome is currently
pursuing a third facility to expand. The northern breakwater
provides protection to vessels and a smaller breakwater at the
end provides additional protection from waves that wrap around
from the south and southwest.
MR. SEXAUER reported that the City of Nome calls the proposed
2,150 foot extension of the causeway the "boot" and the causeway
will allow trucks access to load and offload [slide 8]. The
proposed plan also calls for a 450-foot dock that will lie at
the foot of the boot that would be dredged to a depth of 28
feet, which could handle the vast majority of vessels. The
inner area between the causeway and the existing breakwater
dredged area will be expanded to allow larger vessels to turn
around, he said.
1:30:03 PM
REPRESENTATIVE CLAMAN asked what size vessel can use the 22-28
feet dredged area. He further asked how much depth does an oil
tanker going in and out of Valdez draw or a typical barge or
research vessel. He remarked that it didn't seem like the
deepest harbor.
MR. SEXAUER acknowledged that he was correct. He deferred to
Ms. Baker, Port Director of the Port of Nome to provide details
of the types of vessels. He said that the current Port of Nome
serves vessels with a 22-foot draft, including oil tankers that
offload fuel and goods and ocean going barges. He anticipated
that under the proposal, larger tankers will be able to use the
port facility.
1:31:14 PM
REPRESENTATIVE CLAMAN suggested that the term tankers was a very
ambiguous term since some are nearly a quarter-mile long and
draw much more than a 22-foot draft. He was interested in the
types of vessels that the proposed dredging of the Nome port to
28-feet will allow.
MR. SEXAUER, generally speaking, noted the design would
accommodate the existing 450-foot fuel-carrying vessels that
offload fuel. Currently these vessels must come in to the Nome
port facility partially loaded due to the draft limitation;
however, under the proposal these vessels could be full and
still use the dock.
1:32:27 PM
MR. SEXAUER referred to an information paper in members' packets
that discusses implementation and lists some of the preliminary
cost estimates.
MR. SEXAUER directed attention to the fact sheet, stating that
the projected cost for the navigational features, including
breakwaters and dredging was $150 million. He said that 75
percent of the cost would be covered by the US Army Corps of
Engineers (USACE) and 25 percent by a non-federal sponsor. At
this point, the non-federal sponsor for the study is the State
of Alaska; however, the City of Nome has indicated it fully
intends to take on the sponsorship as the project moves into the
further phases of the design and construction. In addition to
the $150 million navigation cost, an additional cost for docks
and facilities is estimated at $61 million for a total cost $212
million. He characterized it as being a sizable project.
1:34:26 PM
MR. SEXAUER reiterated the costs. He stated the projected costs
for the general navigation features under the tentatively
selected plan total $150 million, with $98 million anticipated
as the federal share via the US Army Corps of Engineers (USACE),
with the additional $52 million coming from a non-federal
source. In response to a question, he clarified that the
navigational features consist of work to the breakwater and
dredging the navigable areas, which was the USACE's allowable
participation. The other portions of the project, including the
docks, the utilities, and roadway surfaces are estimated at $61
million for a total project cost of $211 million.
1:36:00 PM
CO-CHAIR HUGHES asked for further clarification on the
federal/non-federal share. She related her understanding of the
federal share of the $211 million was 75 percent federal and 25
percent non-federal sponsor. She suggested that the split
seemed to be 66 percent federal and 33 percent non-federal. She
asked whether this will hold true for docks or if the federal
government will pick up more.
MR. SEXAUER answered that there are two parts to the cost
sharing for the initial construction. When a project is first
constructed, the costs are shared at the 75/25 percent ratio.
Over the 30-year timeframe, the local sponsor must repay an
additional 10 percent, which shifts the total cost to about $52
million over time. He recapped that the 75 percent federal
share related to the upfront cost sharing whereas the 65 percent
represents the final federal cost sharing.
1:37:54 PM
REPRESENTATIVE ORTIZ recalled that he mentioned the community of
Nome would participate in some of the costs. He asked whether
he had any idea how much the community will request from the
state.
MR. SEXAUER answered no. He said that it would likely depend on
how the non-federal share of funding comes together. Typically,
one basic entity will act as the clearinghouse, but he
envisioned that the City of Nome would seek state funds, as well
as funds from private investors. He deferred to the City of
Nome to respond.
1:38:50 PM
CO-CHAIR FOSTER directed attention to a handout just distributed
entitled, "Port of Nome" dated 3/8/2015 prepared by Joy Baker,
Port Director. He explained that the vessels listed on Table 1
were ones that could use the port.
MR. SEXAUER related that the table lists the vessel draft, but
an addition 4-6 feet for safety allowances must also be made,
depending on the type of vessel. He explained that the design
vessels used for the study were the supply vessels used by the
oil and gas industry. These vessels can use the 28-foot draft
and the 450-foot dock, he said, although some vessels will still
need to moor out.
1:40:46 PM
REPRESENTATIVE STUTES said it seems peculiar not to consider
dredging the harbor to accommodate the larger US icebreakers
[with a 30-foot draft]. She asked how much deeper would the
harbor need to dredged to accommodate those vessels.
MR. SEXAUER answered that the decision involved the volumes of
ships and the number of trips. He suggested that the different
between dredging from 22-feet to 23-feet will capture more
vessels. He acknowledged that the benefits continue to accrue
with each additional foot dredged until it reaches a point that
not as many additional vessels or trips will be captured. At
that point the additional cost does not outweigh the benefits
received in dredging the additional depth. He stated that the
USACE recommended the greatest net benefit, which was determined
to be the 28-foot depth.
1:42:54 PM
REPRESENTATIVE STUTES asked for further clarification since
vessels using the infrastructure use the polar route, yet the
proposed Nome harbor would not accommodate the US icebreakers.
MR. SEXAUER suggested that the USACE would defer to the US Coast
Guard to determine its operational practices and needs for
vessels and services. He said that the US Coast Guard has
indicated each one of their vessels can go three months without
needing a re-supply, and whether these vessels will need the
Nome port facilities was questionable to them. He recognized
and acknowledged the importance of achieving the deepest
dredging depth; however, the USACE will make its determination
according to policy compliance as per the rules set forth by the
Congress. While the ultimate decision may change, the USACE
will make the recommendation that will pass muster using
established rules.
1:45:07 PM
REPRESENTATIVE STUTES asked for a ballpark figure of the costs
to dredge the proposed Nome harbor expansion to 35 feet in
depth.
MR. SEXAUER answered that it would cost about $100 million more
to increase the dredging to 35 feet, noting this estimate was
based on preliminary cost estimates of about a year ago.
1:45:39 PM
REPRESENTATIVE CLAMAN remarked that the challenges to develop a
deep water port are not just driven by the current vessels being
served, but that the region envisions more and more ships will
be going through the Arctic as the ice recedes, plus Russia and
other countries are beginning to consider Polar routes to send
larger and larger ships through. He suggested that one reason
to consider a deep water presence in Western and Northwestern
Alaska isn't just to serve vessels that are currently operating
or to serve the communities, but to address the future vessel
needs. He asked for further clarification on the analysis for
bigger ships and future needs.
MR. SEXAUER characterized this project as the amount of dollars
that can be saved for each vessel trip as compared to the cost
of the project. The goal was to make the transportation system
more efficient and more effective.
1:48:09 PM
REPRESENTATIVE CLAMAN asked how much would be saved under this
proposal.
MR. SEXAUER replied that it would depend on the vessels, for
example, those vessels transiting Dutch Harbor to resupply add
an 800-mile round trip as well as several days of additional
travel time.
1:48:44 PM
REPRESENTATIVE CLAMAN asked for further clarification on the
vessels transiting to Dutch Harbor.
MR. SEXAUER answered that one assumption used in this analysis
considered that the oil platforms would be doing exploration,
vessels that traveling to Dutch Harbor to resupply would be able
to make a much shorter trip to Nome to resupply. The USACE
estimated the cost to go to Dutch Harbor versus going to Nome.
In addition, the USACE factored in the cost of shipping goods
and supplies to Nome as compared to Dutch Harbor. These factors
are all considered when evaluating how much money is saved. He
elaborated on the analysis, noting the USACE takes each
individual vessel, including barges using the Nome port, and
assign an hourly cost after researching rates in Alaska and the
Lower 48. The analysis determines how much each vessel cost
savings are throughout the fleet. These cost savings are added
up to determine the net amount saved. In further response, he
said the average annual net benefits for all categories was
$11.5 million, the average annual cost of the project was $9.2
million, and the overall economic savings was estimated at $2.3
million per year.
1:51:39 PM
REPRESENTATIVE CLAMAN asked whether additional maintenance
dredging will be necessary for the proposed Nome proposal.
MR. SEXAUER answered yes, noting those figures were incorporated
into the annualized cost. He said the assumption includes the
anticipated dredging. In response to Representative Hughes, he
agreed that slide 2 depicts the current Nome Harbor.
REPRESENTATIVE HUGHES remarked that compared to road projects,
the proposed Nome Port expansion project costs seemed
reasonable. She asked when the cost benefit analysis was done,
whether it was based on the current growth rate. She asked for
the number of days the Arctic shipping route was available. She
commented that if the port could handle larger vessels it may
spark additional interest.
1:54:19 PM
MR. SEXAUER asked whether her question was that in light of
climate change, what rate of growth was assumed.
CO-CHAIR HUGHES recalled that the USACE estimated the vessel
count for each extra foot of dredging in the proposed port
expansion. She asked how he the USACE determines the vessel
count and if climate change was factored in and if the USACE had
predicted the number of larger vessels that might choose to use
the port and not just consider the size of vessels, as well as
considering the time savings for the route.
MR. SEXAUER explained that the USACE has a rather stringent set
of requirements set forth by the Congress and the administration
on how the USACE should conduct its analysis. He said that the
rate of growth was based on the current rate of growth to
project future vessels. The USACE also considered a flat rate -
no increase in growth - as well as a number of different
scenarios. In terms of climate change, and how that plays into
the analysis, as the ice pack continues to change, he stated
that if the future needs for more depth could be economically
justified, this project could be modified in the future to
accommodate the vessels.
1:56:52 PM
CO-CHAIR HUGHES asked whether the design could accommodate
deeper dredging in the future.
MR. SEXAUER suggested that one limiting factor in the design of
this project was the dock structures. He suggested that the
current dock structures are designed to go to a certain depth.
However, if the dock structures are designed for a much more
significant depth, replacement would not be needed if the
project included further dredging. He acknowledged that some
things can be incorporated into project to plan out into the
future.
1:57:52 PM
CO-CHAIR HUGHES asked for further clarification on whether the
US Army Corps of Engineers (USACE) needs to seek congressional
approval.
MR. SEXAUER answered that the current process includes the
remainder of review. He anticipated the USACE's Chief of
Engineers will approve the project sometime early next year. At
that point the project will be submitted to the Congress for
consideration for authorization in the Water Resource
Development Act. It would next be authorized for appropriation
and would go through the budget process and would compete with
other projects in the US on its merits for funding.
1:59:36 PM
CO-CHAIR HUGHES asked him to predict when it might be authorized
and when construction would begin.
MR. SEXAUER did not know. He suggested that there is a 30-day
review, with an internal meeting via the Civil Works Review
Board, scheduled in November. He did not have a timeline for
when the project might be authorized or when the Congress might
appropriate funds, he said.
2:00:24 PM
REPRESENTATIVE ORTIZ appreciated the complexity of the process.
He asked whether there was an opportunity to consider national
security concerns or that the USCG might like an icebreaker
operating in the area as part of the aforementioned formula.
MR. SEXAUER answered that it would depend on what the
administration and the Congress decided on the authorization and
appropriation decisions. He reiterated that the US Army Corps
of Engineers (USACE) was limited to providing the information in
accordance with federal rules.
2:02:37 PM
REPRESENTATIVE STUTES remarked that it seemed the proposal does
not take into account that the state hopes the Nome proposal
will provide the gateway to the Arctic, or essentially a new
"freeway." She said that investing an additional $100 million
now might save hundreds of millions to later redo it. She
expressed concern that this project seemed short sighted. She
said when Kodiak began work on a hydroelectric project at Terror
Lake over 20 years ago, people thought the community was "nuts"
but in 2014 the community reached 99.7 percent renewable power.
She suggested that if an opportunity exists, the state should
look towards the future. She appreciated that the USACE may be
limited to certain parameters; however, she definitely thought
long range needs should be considered.
2:04:36 PM
CO-CHAIR FOSTER remarked that the USACE and the community are
hoping the project will be good enough to obtain funding, but he
was encouraged to hear Representative Stutes would like to
increase the overall project size.
REPRESENTATIVE STUTES agreed that he was correct.
2:04:52 PM
CO-CHAIR HUGHES said that the legislature is comprised of
visionaries who are looking to the future of Alaska. She asked
for further clarification on any time savings for a vessel
coming through the Arctic route, for example, a vessel coming
from Norway. She also thought the technology has improved
significantly for vessel design and efficiency.
MR. SEXAUER answered that the time savings would be 7 to 10 days
less time depending on the route; however, most of those are
going past the shores of Alaska. The vessels may travel from
Russia to China or are traveling from Norway to Los Angeles.
This port facility won't affect those time savings but would be
in support of the vessels in case a vessel needed to get
repaired. He commented that currently a number of vessels
anchor off inside Norton Sound and at Port Clarence. He
cautioned that the vessels traveling past Alaska do not
necessarily meet the design or purpose of this port, but that
the project was designed to improve the commerce for the area,
the commerce for resource extraction, and to provide for
emergencies.
2:07:26 PM
REPRESENTATIVE CLAMAN asked whether any of the other ports are
in naturally deep-water locations that may not require the same
dredging.
MR. SEXAUER identified Port Clarence as the one natural deep-
draft port. Large ships currently wait in the area, but these
vessels do not offload or load goods or supplies. He offered
his belief that Port Clarence currently does not need dredging
or a breakwater.
2:08:25 PM
REPRESENTATIVE CLAMAN asked whether the reason Port Clarence was
not selected as the preferred site, was due to the
transportation cost of getting goods to Port Clarence. He asked
whether it would be easier to get the ships into Port Clarence.
MR. SEXAUER acknowledged Representative Claman has raised an
important question, which was why select Nome and not Port
Clarence. He agreed that the other types of infrastructure
would be needed at Port Clarence, including access, utilities,
roads, housing, water, fuel, noting that these infrastructure
costs were exorbitant. In fact, if the project site was Port
Clarence, very little of those costs would be borne by the US
Army Corps of Engineers (USACE). He suggested that the USACE
would participate in 75 percent of the channel costs, but the
uplands facility infrastructure would need to be paid for by
someone else. As things develop, there will be a potential need
for a port or harbor facility, but not at this time. In fact,
he raised this as being a similar to other deep draft areas off
Cape Nome and Cape Golovnin, but these areas lack road and other
infrastructure. Thus having a facility with the nexus of
existing facilities made Nome a natural spot. He anticipated
that the USACE plans to perform an analysis in Kotzebue at Cape
Lawson.
2:10:53 PM
MR. SEXAUER, in closing, reiterated that the proposed Nome port
expansion project was the USACE's tentatively selected plan, but
public comment and other input may be incorporated into the
final recommendation. He anticipated that the US Army Corps of
Engineers (USACE) will hold a public meeting in Nome in April.
He highlighted that this project began as a group venture with
stakeholders identifying the need for this project. He welcomed
questions and comments.
2:12:19 PM
CO-CHAIR HUGHES wondered whether there was an executive summary.
MR. SEXAUER answered that the 900-page report contains an
executive summary.
2:13:22 PM
DENISE MICHELS, Mayor, City of Nome, stated that the City of
Nome supports the project. She thanked the US Army Corps of
Engineers (USACE) and the DOT&PF for working with them. She
stated that the City of Nome has always advocated for a deep
draft port dredged to 35 feet and will continue to advocate for
it with the Congress. She explained that commerce will be more
efficient and resource development could provide benefits to the
State of Alaska. In addition, this project would place assets
for search and rescue and environmental response. She cautioned
that that it was important for the region to be prepared,
emphasizing that the land and water subsistence was very
important to the people of the region. She stated that the
deeper draft would be beneficial. She said the city will submit
comments; however, she suggested that dredging to 28 feet might
be phase one and dredging to 35 feet could be phase two.
MS. MICHELS highlighted another issue, national security, since
every other icebreaker - foreign flag - shuttles crew to Nome
while they resupply. In addition, 1,000 passenger cruise ships
stop in Nome. The city began tracking vessel traffic in 1990,
at a time when it had 30 dockings. Last year the Port of Nome
had 446 dockings. She pointed out some of the current dock
uses, including use by the US Army Corps of Engineers (USACE),
oil companies, private sailboats, as well as yachts going
through the Northwest Passage. She said this proposal
represents a good start, staff has been taking notes, and the
City of Nome shares the same concerns that have been raised.
2:17:03 PM
JOY BAKER, Port Director, Port of Nome, expressed appreciation
for all the work the US Army Corps of Engineers (USACE) and
Department of Transportation & Public Facilities (DOT&PF) have
done in this report. She acknowledged the amount of work it
takes to produce a 900-page document, noting the Port of Nome
has been working with the USACE for the past two years. Based
on statistics and chart graph, it's possible to see the increase
in vessel calls at the Port of Nome; however, actually living in
Nome and experiencing the changes first hand provides another
view. She has seen the Port of Nome grow from serving one barge
for a day or two along with a half dozen fishing boats to a dock
that serves multiple barges, fishing boats, recreational
vessels, research vessels, cruise ships, oil tankers and barges,
gravel barges, construction barges, the US Coast Guard, the US
Navy, and Korean and Canadian icebreakers. The US Army Corps of
Engineers (USACE) expansion in 2006 had a considerable impact,
but the growth, demand and need has continued. The Port of
Nome's not only serves to support the local regional cargo,
fuel, and gravel traffic in the region, but it also serves the
Arctic vessel fleet that passes through or is working in the
Chukchi or the vessels are running materials up and down the
coast. The City of Nome resupplies vessels, facilitates crew
changes, and provides fuel, staging, air transportation, and
medical facilities. In fact, the City of Nome not only serves
as the hub for the region, but it serves as the hub for the
Arctic. Although these activities are currently happening and
the growth is visible, she felt confident that this growth will
continue to happen. In fact, the Port of Nome will need to
continue to grow to maintain pace with the demand, she said.
2:20:42 PM
REPRESENTATIVE ORTIZ asked whether the population in Nome has
been growing.
MS. MICHAELS answered yes. She explained that a reality show
related to mining happens so Nome sees an increase in the
summer. She said that the population for the Bering Straits
region has also increased from 3,500 to 3,700. She commented
that this proposal would afford more economic development and
job opportunities for the region.
2:21:30 PM
CO-CHAIR HUGHES asked whether the ships traveling from Europe
stop for fuel in Alaska or if they can continue on to
California.
MS. BAKER answered that the larger vessels refuel in Dutch
Harbor, but many vessels, including US Coast Guard cutters stop
in Nome to refuel, resupply, and change crews. Further, many of
the research vessels that work in the Arctic uses Nome for their
services and these vessels will either do another tour in the
Arctic or will head south for the winter. In response to Co-
Chair Hughes, Ms. Baker answered that the 600-700 tankers can
travel from Europe to California without refueling.
2:22:49 PM
CO-CHAIR FOSTER opened public testimony on the Nome proposal.
2:23:17 PM
JEFF OTTESEN, Director, Division of Program Development,
Department of Transportation & Public Facilities (DOT&PF), said
that he has been involved in the deep-draft Arctic port study
since 2008. He offered to provide information in response to
earlier questions. He estimated that the approximate 3,500
vessels carrying containers travel on the great circle route
through the Aleutians from Asia to North America are fueled by
marine bunker fuel. However, these big ships do not need to
stop in Alaska since not one gallon of bunker fuel is sold in
Alaska. When big transiting through Bering Straits will likely
need to stop would be during a time of distress. At that point
these ships will probably need a tug and a place to anchor to
obtain refuge, which Port Clarence could provide, he said, but
they will not need a place to tie up, since at that point these
ships will need a shipyard for repairs.
MR. OTTESEN said that the targeted need the proposed Nome port
facility expansion would serve was all the smaller vessels that
Ms. Baker spoke to earlier that currently use Nome as their base
of operation. In response to Representative Stutes comments on
benefit-cost analysis, he spoke against that type of analysis.
He said that the benefit-cost analysis was used by the federal
government by law and in practice by the state, which he
characterized as being the scourge of "big thinking." In simple
terms, he described the benefit-cost analysis process as one
that looks at cost of building something compared to the
benefits that will be derived over some period of time,
typically 20 years. The process uses a discount rate to
discount the value, so dollars spent ten years from now do not
cost as much due to the discount rate. He pointed to the Terror
Lake hydroelectric project to illustrate the value of the
dollar. While the discount rate assumes a dollar tomorrow is
worth less than today, which in economic theory is true, the
benefit cost analysis takes us out of "big thinking" and puts us
into "bean counting" and it often thwarts sound decision making,
he said.
2:26:21 PM
MR. OTTESEN turned to the Panama Canal project that was built at
the turn of the last century [1903], in which the Congress
authorized the Panama Canal. Although the initial plan was to
accomplish the [48 mile] canal with 1,500 long 150 foot-wide
channels to accommodate ships, the Congress felt that the
channels were too wide and too long. Thus the Congress limited
the Panama Canal to 100 foot-wide, 1000-foot long channels. At
the time, the largest ships sailing the seven seas were about
400 feet in length. Today, ships are longer than 1,000 feet so
the Panama Canal is being widened, deepened, and lengthened;
however, the initial design lasted 100 years since they were not
so mindful of the benefit-cost analysis. He remarked that
someone had the right idea when the Panama Canal was built.
2:27:16 PM
CO-CHAIR FOSTER, after first determining no one wished to
testify, closed public testimony on the Nome port expansion.
2:28:21 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:28
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HTRA_ArcticPortsAKHouse_Mar12.pptx |
HTRA 3/12/2015 1:00:00 PM |
|
| HTRA_NomeBaseDrawingPLAN 1A-1_450_Mar12.pdf |
HTRA 3/12/2015 1:00:00 PM |