Trade with Alaska
Alaska's fortunes have fallen with the price of oil, and the ongoing financial woes have set the state on a course for drastic measures to forestall a rapidly approaching budget shortage. Nevertheless, there are rays of sunshine among the dark clouds. A new occupant in the White House could mean an easing of environmental restrictions, which would bring increased resource exploration and extraction, which could also ease some of the pressure on the state coffers.
In early March, Senators Lisa Murkowski and Dan Sullivan met with President Trump to discuss ways in which their state could work with his administration on several issues that could have a big impact on Alaska's future.
The Anchorage Daily News reports that the pair met with the President and his new Interior Secretary Ryan Zinke, at the invitation of the White House. Among other topics, the Senators discussed resource production, icebreakers and oil leases.
"I think he was very enthusiastic about what Alaska does have to offer," Senator Murkowski said. Senator Sullivan said the President seemed motivated to help the state unleash its resources. "One of the things that we were kind of looking at was resource development opportunities that had been, step by step, locked up in the state," Sullivan said. That included discussion on the National Petroleum Reserve of Alaska and the Chukchi and Beaufort seas.
The Senators also discussed expanding the US fleet, Sullivan said, "relative to what the Russians are doing with icebreakers."
Senators Murkowski and Sullivan also discussed possible ways to overturn Obama-era regulations, and described the Obama administration's Arctic actions, with particular notice to his December closure of 125 million acres of Arctic offshore waters to drilling, and the November decision to cancel offshore oil leases.
There isn't much that can be done by executive order, Murkowski said, but there is "a great deal that Secretary Zinke can do. That was why it was important that he be in the meeting as well," she said.
The senators also raised the possibilities for growing Arctic infrastructure, including building out telecommunications, adding a deep-water port and advancing icebreaker capacity, Murkowski said.
Following last year's oil finds in Alaska's Colville River Delta and at Smith Bay, a few hundred miles west of Prudhoe Bay, Spanish oil company Repsol and partner Armstrong Energy last month made the largest US onshore conventional hydrocarbon discovery in 30 years, on Alaska's North Slope.
Two wells, drilled during the 2016-2017 winter campaign on leased state land, confirmed the presence of what could amount to approximately 1.2 billion barrels of recoverable light oil, the company said in a press release on March 9th.
Repsol has been actively exploring Alaska since 2008, and since 2011 the company has drilled multiple consecutive discoveries on the North Slope along with partner Armstrong.
The company says its campaigns in the area have added significant new potential to what was considered a mature basin. Additionally Alaska has significant infrastructure in place, which allows new resources to be developed more efficiently.
The company says the Horseshoe discovery extends the Nanushuk play more than 20 miles south of existing discoveries achieved by Repsol and Armstrong in 2014 and 2015, and could see first production in the area in 2021, with a potential rate approaching 120,000 barrels of oil per day.
Things are also looking up for Alaska's shipyard workers, with a $100 million state contract to build two Alaska-class ferries at the Vigor shipyard in Ketchikan. The forward half to the first ferry, to be christened Tazlina, has been fabricated and moved out of the assembly hall, where shipyard employees are now fabricating the after section, which should be ready to mate with the forward section by mid-summer. Final delivery of the two ferries, the second of which, to be named Hubbard, is expected to begin construction later this year, is slated for the end of 2018.
Vigor, with partner Maritime Works, has announced an innovative training program aimed at developing an advanced manufacturing workforce made up of Alaska residents.
The new initiative, to be called Advancing Alaskan Workers, aims to combat the high turnover rates seen at the Ketchikan shipyard and elsewhere that result when non-Alaskans are recruited to fill a critical skills gap in the state.
The Ketchikan Borough had a population of 13,700 in the last census. In 2016 Vigor employed 191 people at the Ketchikan Shipyard (KSY), up substantially from just 21 employees in 1994. With the two-ferry contract, as well as other large projects forecasted for the future, Vigor and Maritime Works are proactively building up a skilled local workforce to meet the expected demand.
"The maritime sector holds great promise for the future of our state," says Doug Ward, Director of Shipyard Development at Vigor. He says in order to realize that promise the state needs a stable resident workforce.
The Advancing Alaskan Workers project offers structured on-the-job training, leading to industry-recognized credentials and family wage careers. "This is key to providing sustainable opportunities for Alaskans in the Ketchikan workforce as well as providing Vigor's current workforce a path for upgrading skills, advancing to leadership positions and higher earnings," says Cari-Ann Carty, spokesperson for Maritime Works.
The employers leading Maritime Works are also addressing the shortage of qualified Alaskan workers in seafood harvesting, processing, and marine transportation. The team is working with stakeholders including the Alaska Department of Labor and Workforce Development, the University of Alaska, Alaska Construction Academies and Alaska Native groups.
Shipyard employees are excited about the training, with more than 50 employees having registered in the first week.
Even though oil revenues and budgets have suffered in the 49th state, the residents still need necessities, and more than 75 percent of the freight to Southeast Alaska is delivered by Alaska Marine Lines barges.
Last July, Alaska Marine Lines celebrated the launch of its newest barge, Skagway Provider, at Portland Oregon's Gunderson Marine. The heavy deck cargo barge serves the company's customers on the Seattle to Southeast Alaska route.
"Most Southeast communities have no land-route link with either the Lower 48 or the rest of Alaska," says Alaska Marine Lines President Kevin Anderson. "Virtually everything comes in by water – cars, heavy equipment, food and medical supplies – so providing reliable, efficient and safe equipment to serve our customers is extremely important to us."
The 360-foot by 100-foot Skagway Provider can carry 13,200 tons of cargo or about 800 20-foot containers, and shares a design with the company's Sitka Provider, Southeast Provider and Stikine Provider.
The barges are towed by Seattle's Western Towboat, which recently launched their 18th hull from their home base on Seattle's Lake Washington Ship Canal. The Bering Titan was built in-house by a skilled crew working to a well-respected Jensen Maritime design. The 120-foot Bering Titan was delivered in mid December, and left immediately on her maiden voyage. The company's hull no. 19 is already underway.
Alaska isn't out of the woods yet, and the state's budget woes are still a concern. Belt tightening will continue as the state moves back to even financial footing, but with spring comes the hope of new vessels, more freight and increased oil exploration to help revive the state's economy.