Legislature(2021 - 2022)BELTZ 105 (TSBldg)
02/08/2022 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Regional Infrastructure Accelerator Program & Supply Chain Stability | |
| Presentation: Maritime Resilience Project | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 8, 2022
1:38 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Joshua Revak, Vice Chair
Senator Peter Micciche
Senator Gary Stevens
COMMITTEE CALENDAR
PRESENTATION(S):
REGIONAL INFRASTRUCTURE ACCELERATOR PROGRAM AND SUPPLY CHAIN
STABILITY
- HEARD
MARITIME RESILIENCE PROJECT
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MATT MORRISON, Executive Director
Pacific NorthWest Economic Region (PNWER)
Kirkland, Washington
POSITION STATEMENT: Co-presented a PowerPoint on the Regional
Infrastructure Accelerator Program and Supply Chain Stability.
BRUCE AGNEW, Executive Director
ACES Northwest Network; Transportation Co-Chair
Pacific NorthWest Economic Region (PNWER)
Seattle, Washington
POSITION STATEMENT: Co-presented a PowerPoint on the Regional
Infrastructure Accelerator Program and Supply Chain Stability.
SETH STORSET, Director of Safety
TOTE Maritime Alaska
Tacoma, Washington
POSITION STATEMENT: Presented a PowerPoint focusing on TOTE
Maritime's role in the Maritime Resilience Project.
ACTION NARRATIVE
1:38:04 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:38 p.m. Present at the call to
order was Chair Costello. Senator Gray-Jackson arrived as the
meeting was in progress.
^Presentation: Regional Infrastructure Accelerator Program &
Supply Chain Stability
Presentation: Regional Infrastructure Accelerator Program &
Supply Chain Stability
1:38:37 PM
CHAIR COSTELLO announced the consideration of a presentation on
the Regional Infrastructure Accelerator Program and Supply Chain
Stability.
1:39:46 PM
MATT MORRISON, Executive Director, Pacific NorthWest Economic
Region (PNWER), Kirkland, Washington, began a PowerPoint on
Regional Infrastructure Accelerator Program and Supply Chain
Stability. He said Alaska is an important part of the Pacific
NorthWest Economic Region (PNWER). The other nine jurisdictions
share many of the same issues as Alaska. He related today's
focus would be on the transportation strategy for the Pacific
Northwest binational region.
MR. MORRISON noted that slide 1 identified the presenters,
including himself, Bruce Agnew, Executive Director, ACES
Northwest Network; Co-Chair, PNWER Transportation; and Seth
Storset, the Director of Safety for TOTE Maritime.
1:40:41 PM
MR. MORRISON said PNWER represents the 14th largest economy in
the world.
MR. MORRISON turned to slide 3, depicting a map that illustrated
PNWER's member states and provinces.
PNWER is a public-private partnership chartered by the
states of Alaska, Idaho, Montana, Oregon, and
Washington; the western Canadian provinces of Alberta,
British Columbia, and Saskatchewan; and Yukon and
Northwest Territories.
PNWER is recognized by the federal governments as the
model for regional and bi-national cooperation because
of its proven success. It is the leading forum where
people in the policy world and business world come
together to determine solutions to regional challenges
1:40:55 PM
MR. MORRISON reviewed slide 4, PNWER's Transportation and
Infrastructure Working Group. He identified PNWER's major focus
areas.
Major focus areas
• Innovative Infrastructure Finance
• Autonomous, Electric, Connected, and Shared Vehicles
• Focusing on freight, air transport, and industrial
electrification
• Market Access & Rail Capacity
• Infrastructure Resilience
• Advanced Air Mobility
• Rural Development and Connectivity
• Especially via broadband access
Benefits to Alaska
• Supported Presidential Permit for Alaska to Alberta
(A2A) rail project
• Supported request to USDOT to assist with $25
million to maintain Alaska-Canada Highway connecting
Alaska to the Lower 48
1:41:20 PM
MR. MORRISON stated that one of the working group's current
projects is infrastructure resilience, especially earthquake
resilience. PNWER learned about Alaska's experience from the
state's Division of Homeland Security and Emergency Management.
He described PNWER's Infrastructure Maritime Resilience Project,
which is a linkage between the Port of Anchorage and the Puget
Sound ports. In addition, the group is reviewing the future of
air mobility as electric airplanes become more feasible. He
reviewed the benefits to Alaska. He stated that PNWER has
supported the Alberta to Alaska Rail Project (A2A), and the
Alaska-Canada Highway connection funding.
MR. MORRISON briefly reviewed slide 5, PNWER's 31st Annual
Summit. He noted that PNWER would hold its annual summit in
Calgary, Alberta, starting July 24, 2022.
1:42:42 PM
MR. MORRISON turned to the Regional Infrastructure Accelerator,
PNWER's RIA Program listed on slide 6 and PNWER's RIA Timeline
on slide 7.
MR. MORRISON stated that PNWER was awarded one of five Regional
Infrastructure Accelerator Programs (RIA) in the nation last
Friday. He provided PNWER's RIA timeline from the early 2010s to
2022. In the early 2010s, PNWER advocated for a program to help
identify and streamline multi-jurisdictional transportation
infrastructure projects. PNWER brought legislators to Canada's
provincial governments to examine how public-private partnership
(P3) projects were funded. The provincial governments bundled
their schools, hospitals, and transportation projects and
considered whether a P3 would better serve the public to manage
the project.
1:43:36 PM
MR. MORRISON stated that legislators acknowledged that
municipalities and cities in their districts often don't know
how to manage P3 projects. PNWER worked with its members'
congressional delegations to apply for a 2015 FAST Act
demonstration project under Section 1441 to "establish a
regional infrastructure demonstration program." He noted that
PNWER worked with the U.S. Senate to obtain the appropriation
for five years and funds were finally appropriated in FY 2020.
PNWER obtained technical assistance from the Build America
Bureau (Bureau) and developed a competitive application. As
previously mentioned, PNWER was selected as one of five
accelerators, along with Fresno and San Diego, California;
Chicago, Illinois; and Seattle, Washington. He said he would
turn the presentation over to Bruce Agnew, who has been a
tireless advocate for PNWER's RIA.
1:45:18 PM
BRUCE AGNEW, Executive Director, ACES Northwest Network;
Transportation Co-Chair, Pacific NorthWest Economic Region
(PNWER), Seattle, Washington, presented the portion of the
PowerPoint relating to the Regional Infrastructure Accelerator
Program (RIA) and Supply Chain Stability. He said he had co-
chaired PNWER's Transportation Work with Idaho State Senator
Chuck Linder for the last five or six years.
1:45:45 PM
MR. AGNEW related that his connections to Alaska began in the
1980s when his former boss, Congressman John Miller served with
Congressman Don Young on the former Merchant Marine Fisheries
Committee that had jurisdiction over fisheries, the U.S. Coast
Guard (USCG), and oil spills. He anticipated that RIA would
build some projects in Alaska.
1:46:11 PM
MR. AGNEW reviewed the four goals shown on slide 8. What does
the PNWER RIA do?
The PNWER RIA is a one stop shop for USDOT
infrastructure credit programs and more
RIA accelerates existing state project priorities to
streamline economic return
RIA brings private capital to public-private
partnerships for infrastructure
The PNWER RIA is a go-to leader for multi-state and
corridor projects
MR. AGNEW noted that the U.S. Department of Transportation
(USDOT) infrastructure credit programs were loan programs, not
necessarily grant programs. He emphasized that Congress has
changed the rules for the Transportation Infrastructure
Financing and Innovation Act (TIFIA) program that provides
federal credit assistance to eligible surface transportation
projects. TIFIA has extended its loan repayment schedule from 50
years to 70 years, making this federal credit program much more
attractive to public agencies and investors.
1:46:55 PM
MR. AGNEW said RIA could highlight the economic return from the
project to the country. He said it was essential to ensure that
the funding Congress appropriated goes for nationally
significant projects. He related that PNWER was essentially a
public-private partnership that provided funding for public
projects, which is an important distinction about PNWER's RIA.
Finally, as a multi-state binational partnership, PNWER can
support Alaska projects that connect with Northwest states,
Western Canadian provinces, and territories. He noted that TOTE
would further discuss these connections to Alaska.
1:47:54 PM
MR. AGNEW turned to slide 9, The future of the RIA: A Regional
Center of Excellence.
Identifying Resources
Become a one stop shop for transportation projects
with region-wide impacts, pulling together the latest
information on DOT, DOE, EPA and other funding sources
Accelerating Projects
Work with communities and project sponsors to identify
innovative financing options and begin regionally
important transportation projects
1:48:05 PM
MR. AGNEW explained that funding for projects comes from a
variety of sources. Besides the U.S. Department of
Transportation (USDOT), PNWER could apply for other funding. He
highlighted some potential funding sources often not explored
for major infrastructure projects. For example, the U.S.
Department of Energy has been engaged in numerous clean energy
initiatives. The U.S. Department of Commerce would like to
enhance trade corridors. He noted other possibilities include
the Environmental Protection Agency (EPA) and private sector
funding.
MR. AGNEW highlighted one in particular, the Federal Tax
Opportunities Zone. This program approved by Congress in 2017
allows developers and private capital to take advantage of
capital gains tax deferrals to make investments in
infrastructure. He researched opportunities for Alaska and
identified 35 qualified opportunity zones for private sector
investment in northern Alaska, Western Alaska near Dillingham,
the Aleutians, and Southeast Alaska. He explained that these
opportunity zones are designed to bring public and private
funding to underserved communities in Alaska.
1:49:26 PM
MR. AGNEW noted that while PNWER is currently funded, the second
round of funding is coming up in a month or two.
1:49:30 PM
MR. AGNEW reviewed slide 10, PNWER RIA Program Activities, which
highlighted three projects that PNWER initially identified.
Seaport Emission Reduction
Establish a viable pathway for sustainable CO2
emission reduction in the Port areas of Seattle and
Tacoma via drayage truck electrification
Highway-Rail Grade Separation
Assist the rural community of Spokane Valley, WA to
utilize TIFIA & other loan programs to address a
freight mobility bottleneck
Center of Excellence
Develop capacity within the PNWER RIA to help states
better understand TIFIA, RRIF, PABs, and other loan
programs, and how to navigate the new IIJA funding
sources
MR. AGNEW turned to PNWER's RIA Seaport Emission Reduction. In
the first project, PNWER will work with the ports of Seattle and
Tacoma to electrify their drayage trucks. He explained that
drayage trucks are diesel trucks used to connect freight
containers and bulk cargo at ports to rail yards and
distribution centers. Second, PNWER will work on Highway-Rail
Grade Separation. He said PNWER supports public and private
funding for highway overpasses and underpasses for railroads.
The first project is in East Spokane as part of the Great
Northern Corridor that connects the Northwest ports to Chicago
and the Midwest.
MR. AGNEW reviewed the Center of Excellence program. He stated
that PNWER will help states like Alaska navigate federal grant
and credit programs for transportation infrastructure and
broadband funding. He noted broadband was important to Alaska.
1:50:37 PM
MR. AGNEW reviewed slide 11; How will the RIA work?
Phase 1 - RIA Kickoff
• Convene Advisory Committee
• Establish online presence
• Stakeholder outreach and leadership briefings
• Create & maintain database of funding
opportunities
Phase 2 - Identifying & Funding Projects
• Provide technical assistance for first 2 projects
• Develop funding matrix
• Solicit applications for next round of projects
• Develop long-term sustainability model
Phase 3 - Moving Towards Sustainability
• Implement long-term sustainability model
• Finalize TIFIA, RRIF, or PAB applications for
found 1 projects
• Select second round of projects for acceleration
• Begin acceleration efforts for round 2 of
projects.
1:50:38 PM
MR. AGNEW stated that slide 11 highlighted the three phases of
the RIA process. He reported that this two-year grant ranges
from $1.25 million to $4 million. He said he hopes to make the
RIA process permanent.
1:50:55 PM
MR. AGNEW turned to slide 12, Applying to the PNWER RIA for
Project Acceleration.
Submitting projects for RIA acceleration is a
cooperative process between legislators, community
members, Department of Transportation, and the RIA
team.
We are developing a potential project pipeline that
looks at transportation projects that are identified
but are not top contenders for state funding. Special
attention is paid to projects that have regionwide
implications, or cross-jurisdictional boundaries.
MR. AGNEW said this slide shows a picture of the Haul Road,
[Dalton Highway] in northern Alaska. Projects like these would
be eligible for RIA support, particularly ones that can be
bundled. He related that USDOT is very interested in bundling
projects to have enough economic mass to make it worthwhile to
invest public resources and private money. USDOT is also
interested in metro and rural areas, which would be significant
to Alaska.
1:51:35 PM
MR. AGNEW stated that RIA would bring in the best practices from
the U.S. and Canada. PNWER would like to work with the Alaska
Industrial Development and Export Authority (AIDEA) on projects.
He related that he first learned about IDEA when a PNWER
delegation traveled from Prince Rupert to Ketchikan. At that
time, he toured the Ketchikan Dry Dock and shipyard and learned
that AIDEA invested in the project with Seattle-based Vigor
Alaska. [The shipyard also received numerous federal grants.] He
offered to answer questions on how PNWER could help Alaska
accelerate projects and take advantage of a myriad of public and
private funding sources.
1:52:36 PM
CHAIR COSTELLO congratulated PNWER on being one of five entities
in the country to receive this opportunity. The legislature
previously contemplated a Transportation Infrastructure Fund
accompanied by prioritized projects. Although that fund never
got started, the discussion is critical. She explained that the
legislature usually decides what projects to fund each year.
However, a new legislature might have different priorities. She
asked whether it would be helpful for the legislature to have a
prioritized list of projects.
1:53:46 PM
MR. AGNEW answered yes. He said Alaska has done a great job
securing federal funding for basic infrastructure projects also
in partnership with Alaska Native Corporations. It would be
helpful to have a priority list. The USDOT Build America Bureau
that PNWER partners with recognizes that the $1 trillion in the
federal infrastructure bill won't provide enough funding for all
infrastructure needs. He acknowledged that Alaska has unique
transportation needs.
MR. AGNEW stated that the opportunity to mix public and private
capital into a joint venture is very critical. He said there is
a lot of private capital, which is patient capital since it can
be repaid in the long term, including by pension funds. These
entities don't know the partners, state leaders, or the state
laws. So definitely, if Alaska could form an infrastructure fund
that could mix and match funding sources, it would allow the
state to prioritize projects for federal discretionary grants,
formula grants, and earmarks, which are back in the
congressional discussion.
1:55:19 PM
MR. AGNEW said that PNWER has been meeting with U.S. Senator
Murray, Washington, and others. The congressional delegation
looks to PNWER to vet some of these projects for their economic
impact. He acknowledged that Congress is deluged with requests
from different areas. PNWER can examine a project regarding its
economic impact and its ability to reduce carbon. He suggested
that it would be beneficial. He envisioned this could be an
opportunity for Alaska to form the infrastructure bank or fund,
pursue a prioritized list, and work with PNWER to ensure that
the project moves forward. He noted that PNWER works with
Alaska's Congressional delegation and the entire Northwest
delegation from the other four states, who are in powerful
positions to help get these projects funded.
1:56:14 PM
CHAIR COSTELLO welcomed Senator Gray-Jackson.
CHAIR COSTELLO recalled that he said projects being considered
for RIA would be assessed in terms of its economic return to the
state. It brought to mind the A2A Project. She asked whether a
study would identify the economic benefit of a rail connection.
MR. AGNEW responded that PNWER's relationship with the Alaska
Alberta railroad goes back to PNWER's meeting in Whitehorse.
PNWER's role has supported projects and improvements to the
Alaska-Canada Highway. PNWER has not yet developed the ability
to consider projects in terms of economic return since it is
still setting up the Regional Infrastructure Accelerator.
MR. AGNEW suspected that Alaska would consider the economic
benefits to citizens, and PNWER's role would be the binational
organization examining the economic return of the long corridor
that would stretch over two countries. One of the ideas for
RIA's top three projects, the Center of Excellence, could
develop that expertise to help support the project and provide a
national perspective on its impact and importance.
1:57:56 PM
CHAIR COSTELLO asked for a recap of PNWER's RIA for Senator
Gray-Jackson.
1:58:22 PM
MR. AGNEW stated that before the Infrastructure Investment and
Jobs Act (IIJA), transportation funding was guided by the FAST
Act. The Alaska congressional delegation played a significant
role in the FAST Act. It authorized PNWER's Regional
Infrastructure Accelerator (RIA) to put a system of projects
together that would accelerate infrastructure projects and
highlight their importance to the economy and the environment.
PNWER competed for federal funding, which was appropriated in
2020. He emphasized this was an essential distinction because
PNWER is not involved with the new IIJA funding.
1:59:19 PM
MR. AGNEW said PNWER was one of the five grantees selected, in
part, because PNWER is comprised of five states and five
Canadian provinces and territories. USDOT is very interested in
looking at multi-corridor projects, corridor projects in
transportation and telecommunications, and broadband that
connects metropolitan and rural areas. Further, USDOT is
interested in projects to leverage private investment from a
variety of sources with public sector funding. He highlighted
that Alaska could obtain some gap funding to finish certain
projects. It's one reason he referenced the Haul Road in Alaska,
which would meet the acceleration criteria.
MR. AGNEW said PNWER accelerators help states navigate the
myriad of new federal transportation programs, including
competitive discretionary grants and formula funds via the usual
USDOT processes. Most importantly, RIA provides an opportunity
to marry private equity and capital funds. For example, pension
funds have assets and seek good projects for investments. He
offered that PNWER could help Alaska navigate the funding and
programs. PNWER focused on the Alaska Industrial Development and
Export Authority (AIDEA) because it has been a highly successful
model for the country. He mentioned the successful AIDEA
projects in Ketchikan and the Red Dog mine in Northwest Alaska.
He indicated that PNWER would seek to partner with AIDEA due to
its expertise in financing and engineering. He stated that PNWER
could offer Alaska assistance with projects within Alaska and
projects that cross into Canada, such as those in the Yukon,
Alberta, Northwest Territories, and British Columbia (BC). He
offered PNWER's assistance to help Alaska expand its financing
options.
2:02:03 PM
CHAIR COSTELLO asked Mr. Morrison if he would like to continue.
MR. MORRISON said he thought this was timely since PNWER is just
launching RIA and would be seeking Alaskans to serve on the
advisory board. He said he was happy to present today.
2:02:02 PM
MR. MORRISON began his portion of the PowerPoint on Supply Chain
Stability beginning on slide 14, Maritime Regional Catastrophic
Planning Grant Program for Earthquake Preparedness. He recalled
that in September 2001, commercial pressure was bringing down
the electrical grids. California had brownouts, and 9/11
happened right after PNWER's summit. PNWER discussed these
issues with their legislative leaders. They expressed concern
that if commercial pressures could bring down the grid, a
terrorist could wreak havoc. He related that PNWER had just
mapped the entire electrical transmission grid during one of its
meetings.
2:03:11 PM
MR. MORRISON said that led to the Partnership for Regional
Infrastructure Security, which created the first binational
infrastructure interdependency exercise, where in fact a handful
of terrorists took down the grid for months in the Northwest.
This led to PNWER creating the Center for Regional Disaster
Resilience, which has had an outstanding 20-year history that
PNWER operates. PNWER conducts these exercises several times a
year. Often, PNWER has noted the lack of a good Maritime
Transportation Plan for a catastrophic event such as an
earthquake.
MR. MORRISON pointed out that seismologists predict an [Alaska-
Aleutian and Cascadia] subduction zone 9.0 earthquake will occur
off the coast of Alaska to California, which would destroy
linear infrastructure. He stated he would show a map of how many
bridges PNWER expects would be unusable in the Seattle area for
over two years. He expressed concern that the FEMA plan to
resupply the four or five million people in the greater Seattle
area would be to fly things to Moses Lake and somehow truck
goods to Seattle. After repeatedly pointing out the inadequacy
of FEMA's plan, two years ago, PNWER applied for and received a
$1 million Maritime Catastrophic Planning Grant to reevaluate
maritime shipping and transportation systems in the event of a
catastrophic disruption. PNWER recognized that the Seattle and
Alaska region has a resilient waterway. If bridges are damaged
or destroyed and trucks can't be used, it's essential to have a
clear plan for maritime assets. He expressed delight that
funding for the two-year project was designed to reevaluate
marine shipping and transportation systems for the Port of
Alaska and the Port of Tacoma.
MR. MORRISON reviewed slide 15, Strengthening Connections
between the Port of Alaska and Puget Sound Ports. He stated that
PNWER's two-year program would strengthen the connections
between the communities and evaluate what systems to use if the
catastrophic earthquake happens. He acknowledged that Alaska is
currently discussing structural issues at the Port of Alaska.
2:06:32 PM
MR. MORRISON turned to slide 16, Puget Sound Regional
Catastrophic Planning. He reported that the grant was focused
primarily on Washington state. PNWER has conducted eight or nine
workshops in a nine-county region and is currently holding
workshops to evaluate existing plans in each port. The goal of
the workshops is to determine any gaps, link operational needs,
resource allocation, and organize maritime assets to address a
catastrophic situation.
MR. MORRISON turned to slide 17, Project Purpose, consisting of
a map of the Puget Sound area near Tacoma. He directed attention
to the red dots on a map predicting the bridges that would
likely be unusable for one to two years. The dark red dots
identify the bridges that would take two years to repair or
replace. He stated that members familiar with Seattle know that
I-5 is impassable, as are the major thoroughfares. There is very
little likelihood that trucks could use roadways from Moses Lake
to Puget Sound. Meanwhile, Puget Sound has an amazing waterway
that is resilient to an earthquake, so that's the reason PNWER
wants to understand and organize the maritime assets, so people
can quickly and efficiently use them. He remarked that
communities get no warning when an earthquake occurs.
2:09:06 PM
MR. MORRISON skipped slide 18 and turned to slide 19, Maritime
Disaster Resilience Regional Workshops. He advised members that
PNWER will host a series of online workshops in the next six
months. He said he was excited to see the level of engagement
from the private sector. He related that the maritime industry
has a culture of helping. If a disaster happens at sea and a
ship is in trouble, there are no better friends than mariners.
Mariners must depend on one other.
MR. MORRISON introduced Seth Storset, who has worked for TOTE
Marine for seven years. He has studied ports in Alaska and
Washington state. His job is to think about the long-term
viability of the connection between Alaska and Tacoma.
^Presentation: Maritime Resilience Project
Presentation: Maritime Resilience Project
2:11:13 PM
CHAIR COSTELLO announced consideration of the Maritime
Resilience Project presentation. She noted that the Maritime
Resilience Project PowerPoint will be uploaded to BASIS.
2:11:34 PM
SETH STORSET, Director of Safety, TOTE Maritime Alaska, Tacoma,
Washington, began a PowerPoint focusing on TOTE Maritime's role
in the Maritime Resilience Project. He stated that his
responsibilities are not only safety, but also risk management,
sustainability, compliance, emergency response preparedness, and
business continuity. He said he is grateful for the partnership
with PNWER since TOTE Maritime is a stakeholder. He shared TOTE
Maritime's motto "dedicated, reliable and built to serve." He
offered to give a brief overview of TOTE's parent company to
provide a broader perspective of its capabilities, discuss
business continuity, show potential contingency plans, and
identify needs.
2:12:26 PM
MR. STORSET reviewed slide 2, Saltchuk - Our Parent Company.
• Family owned and managed
• Founded in 1982 with the
• purchase of Totem Ocean
• Trailer Express (TOTE Alaska)
• Our Values: Safety, Reliability,
• Commitment
• Approx. 7,500 employees
• $3 billion in annual revenues
• Investment grade credit rating
• 90% of earnings reinvested
MR. STORSET summarized that TOTE is a family-owned business in
Seattle that started in 1982 and currently employs approximately
7,500 employees.
2:12:54 PM
MR. STORSET turned to slide 3, SALTCHUK FAMILY OF COMPANIES.
Saltchuk includes TOTE, Saltchuk Marine, Northstar, Northern
Aviation Services, Tropical Shipping, and Saltchuk Logistics.
MR. STORSET said Saltchuk is one of the top employers in
Washington State. It reinvests 90 percent of its earnings for
sustainability and continued growth. He related that TOTE
started Saltchuk, which has acquired many other businesses.
Saltchuk marine services include Cook Inlet Tug & Barge, Foss
Maritime, and Young Brothers in Hawaii. Saltchuk Marine is in
domestic shipping as a Jones Act trader. The company also works
in energy, aviation, and logistics, providing many services in
Alaska.
2:13:29 PM
MR. STORSET reviewed slide 3, TOTE Maritime Alaska that provides
a general overview of TOTE Maritime.
Dedicated. Reliable. Built to Serve.
• Ports: Tacoma, WA & Anchorage, AK
• Twice-weekly shipping
• Transit Time: 66-72 hours (1,453 nautical miles)
• Key partnerships with Alaska Railroad and Inland
• transportation
• 46 years of expertise in Alaska
• The most environmentally friendly ships in the
trade
• Extension of the L48 supply chain
• 250 vehicle holds in each of our two vessels:
• Midnight Sun & North Star
MR. STORSET stated that TOTE Maritime ships roundtrip from
Tacoma to Anchorage. Ships are full going to Alaska, but there's
less southbound freight. Usually, people are relocating and
shipping household goods or companies are shipping seafood. TOTE
Marine has two sailings of ORCA class vessels per week, each of
which takes about three days depending on the shoal crossing
into Anchorage. TOTE Maritime has partnerships with the Alaska
Railroad Corporation (ARRC) to serve Anchorage and the state.
2:14:20 PM
MR. STORSET turned to slide 4, Orca Class Vessels, that depicts
a schematic of an ORCA Class Vessel. He directed attention to
the green tanks and compartments. TOTE is in its final week of
converting its first vessel to liquid natural gas (LNG). He
stated that the ship has a dual fuel motor that can use diesel
or LNG. He opined that TOTE is the first in the world to convert
a ship to LNG. He emphasized that TOTE is committed to meeting
environmental standards. He related that TOTE plans to convert
its second vessel next year.
2:14:52 PM
MR. STORSET reviewed the specifications of the ships on slide 5,
ORCA Vessels.
• Built in 2003
• ORCA Class
• Capacity 600 FEU + 250 Vehicles
• 4 main engines (12,000 HP each)
• 2 auxiliaries (6,000 HP each)
• 2 electric motors
• Twin shaft
• 56,000 KW
• 6 decks
• 11.5 stories high
• Overall Length: 839 ft.
• Beam: 118 ft.
• Speed: 24 knots
MR. STORSET stated that the ORCA vessels can also hold 250
vehicles on designated car decks. He characterized these vessels
as extremely powerful and reliable. They will serve Alaska for
years as they basically come out of dry dock as new vessels.
2:15:17 PM
MR. STORSET turned to slide 6, Roll-On/Roll-Off (RO/RO).
• Allows shipper provided equipment to reach state
of Alaska
• Accommodates all sizes of equipment, vehicles and
project cargo
• Fastest and most efficient port turn-around time
MR. STORSET said the Roll-On/Roll-Off operations are different
than the standard container operations that use cranes. TOTE
uses extremely efficient ramps so it has the fastest turnaround
times in port. He reported that this operation performs three to
four times faster than a crane. TOTE can completely discharge
and reload in six hours. This extreme efficiency allows TOTE to
operate just two vessels to provide twice-weekly sailings.
2:15:48 PM
MR. STORSET said TOTE can transport all types of cargo and is
not limited to transporting trailers. It also ships vehicles and
performs military deployments. TOTE has even transported a 100-
foot Christmas tree destined for the nation's capital that came
from Fairbanks. He remarked that although it was a task to get
it on the vessel, it was very cool to ship it.
2:16:06 PM
MR. STORSET reviewed slide 7, PNW and the Alaska Supply Chain.
• Resilience is Key and freight coming out of the
Port of Tacoma is a critical link to the supply
chain of Alaska
• 90% of Alaska's population uses goods that come
through the Port of Alaska (POA)
• 80% of the consumer goods supplying Alaska's
populated areas pass through the POA
• Washington relies on consistent Alaska load backs
for equipment, fish and the state's natural
resource exports
MR. STORSET explained that Alaska is dependent on the Lower 48,
but if an incident or an earthquake happened, Alaska could send
assets southbound to help the Lower 48. He emphasized that the
supply chain is complex.
2:16:58 PM
MR. STORSET reviewed slide 8, Port of Alaska (POA).
• The Port of Alaska Modernization Program (PAMP) aims
to replace Anchorage's aging docks and infrastructure
before it fails.
• Currently, the POA is completing construction on the
Petroleum & Cement Terminal.
• Anchorage Mayor Dave Bronson will be making decisions
about the plan of finance for the remaining
POA enhancements.
• Terminal 2 Design
• Engineering design 2022
• Cargo berth permits 20222023
MR. STORSET said the Port of Alaska dock is in poor condition.
He surmised that a significant earthquake could shut it down. He
emphasized that if the dock cannot hold the load capacity or a
vessel alongside, TOTE vessels cannot use the port.
2:17:27 PM
MR. STORSET acknowledged that the Port of Alaska is working on
this issue, but the timeline to complete the dock repairs is 10
years. This places everyone, including TOTE, in a risky
situation in terms of continuing to provide service to Alaska.
2:17:46 PM
MR. STORSET reviewed slide 9, Business Continuity Plan (BCP).
• The Business Continuity Plan is designed to
maintain functional operations during or shortly
following disruptive events and quickly resume
business functions
• TOTE has a specific BCP in place should the Port
of Alaska in Anchorage become unusable
• Homer Current BCP port
• 4.5 hours South of Anchorage on the Kenai
Peninsula by road
• One ramp operations currently possible
• Seward Preferred BCP port
• 2.5 hours South of Anchorage on the Kenai
Peninsula by road
• Served by Alaska Railroad
• Working with Alaska Railroad to build out a 3-
ramp, TOTE-usable berth
• Estimated to be available in 2023
MR. STORSET said this slide shows the three options TOTE
considered in its plan, including continuing to use Anchorage,
where TOTE's key partners and customers are located. In
addition, TOTE also considered Whittier, Valdez, Homer, and
Seward. Seward stood out as the port to use as a contingency
plan. TOTE has a BCP to complete this project and expand the
cargo dock in Seward. He explained that Seward is ideal because
TOTE partners with the Alaska Railroad Corporation (ARRC), the
southern terminus of the Alaska Railroad. He related that the
Seward Highway could provide a year-round option, but TOTE has
some concerns that would need to be addressed.
2:18:46 PM
MR. STORSET reviewed slide 10, Forward Thinking.
• Proud to work with all our partners now and in
the future
• Committed to reducing our impact on the
environment by
• converting our vessels to using LNG with dual
fuel engines
• Ready to protect customers by deploying business
• continuity plans in the event of supply chain
threats
• Invested in modernizing the Port of Alaska to
ensure
• freight reaches Alaska efficiently
• Deeply connected to the Alaskan communities we
serve by
• giving our time, money and in-kind donations
MR. STORSET stated that TOTE has been working on its business
continuity plan for 10 years. He related that TOTE has been
working on this somewhat independently regarding fuel supplies
and how to mobilize its ramps, but now it has a partner. Even
though using Seward is coming together, many things need to be
decided if a catastrophe occurs, including how to mobilize ramps
and set up mobile communication units to move cargo as quickly
as possible. He cautioned that if an earthquake occurred, moving
TOTE's ramps from Anchorage to Seward could take weeks. He
expressed concern that Alaska will not have weeks. He concluded
that TOTE needs to have a plan to immediately turn its ships and
bring them into Seward without any hesitation.
2:19:43 PM
CHAIR COSTELLO thanked Mr. Storset for his presentation.
2:19:52 PM
SENATOR GRAY-JACKSON said she didn't have any questions but was
happy to see the committee discussing the port. She said she had
been involved in the Port of Alaska issues for many years, so
she was pleased to see things happening. She remarked that Mayor
Bronson requested legislative funding at TOTE's urging. She
thanked Mr. Storset for his role.
2:20:16 PM
CHAIR COSTELLO asked if TOTE was paying for some things to make
Seward more viable. She further asked who he was working with to
make Seward an option.
MR. STORSET answered that TOTE has a partnership with the City
of Seward, Governor Dunleavy, and ARRC.
2:20:55 PM
CHAIR COSTELLO asked to revert to slide 10, Business Continuity
Plan. She wondered if there would be any interruption to
consumers in Anchorage at grocery stores or businesses if the
Port of Anchorage were not a viable option.
MR. STORSET offered his view that some delays would arise
initially if the Seward Highway were impacted. However, since
the rail travel from Seward to Anchorage is 2.5 hours, it would
cut out 14 hours of vessel transit time. He predicted that goods
would arrive in Anchorage and be shipped to Fairbanks in a
shorter timeframe.
2:22:14 PM
MR. MORRISON said that TOTE has focused on how to get the
necessary cargo to Alaska. He highlighted that the Port of
Tacoma is built on fill, and the cranes are unstable in both
Seattle and Tacoma, which is the reason for the RO/RO ramps. He
related that Mr. Storset has been studying the Puget Sound ports
as potential points of access for cargo in case one or more of
the big ports were shut down.
MR. STORSET elaborated that he spent several months visiting
nine different ports in the Lower 48 to determine their
feasibility for use. He reiterated that TOTE is confident Seward
is the best option for Alaska. However, it is more challenging
to decide on in the Lower 48. He assessed ports as far north as
Everett, and found some were acceptable, but others were not,
mainly due to the ramp access. He concluded his presentation by
advising members that there's a good plan in place if something
happens.
2:23:50 PM
CHAIR COSTELLO thanked the presenters.
2:24:21 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee at 2:24 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| PNWER Combined PowerPoint Presentation - SLAC 2.8.22.pdf |
SL&C 2/8/2022 1:30:00 PM |
|
| TOTE Maritime Presentation - SLAC 2.8.22.pdf |
SL&C 2/8/2022 1:30:00 PM |
|
| PNWER Presentation Speaker Bios - SLAC 2.8.22.pdf |
SL&C 2/8/2022 1:30:00 PM |