Feasibility Analysis: Port Clarence Support Base. June Prepared for: Feasibility Analysis: Port Clare Support Base. Prepared by: March 2014

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1 Feasibility Analysis: Port Clarence Support Base June 2014 Prepared for: Feasibility Analysis: Port Clare Support Base Prepared for Bering Straits Native Corporation and C Maritime Corporation March 2014 Prepared by: Prepared by

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3 Feasibility Analysis: Port Clarence Support Base Prepared for Bering Straits Native Corporation and Crowley Maritime Corporation June 2014 Prepared by

4 Preparers Team Member Pat Burden Mike Fisher Cal Kerr Terri McCoy Project Role Project Director, Principal in Charge Project Manager Lead Analyst and Author Editor Please cite as: Northern Economics, Inc.. Prepared for Bering Straits Native Corporation and Crowley Maritime Corporation. March 2014.

5 Contents Section Page Abbreviations... v Findings Introduction Objectives Project Scope of Work Report Layout Port Clarence, Historical and Potential Uses History Russian Rule U.S. Territory Statehood Status Historical Summary, Current Uses Port Clarence, a Deepwater Port Port Clarence Site Plan Potential Uses Port of Refuge Community Re-supply Intermodal, Cargo Service Marine Services Oil Spill and Vessel Rescue Support Base Market Analysis Bering Strait Traffic AIS Vessel Traffic Data Total Traffic, by Vessel Type and Year Bering Strait, Seasonal and Directional Use, Five Years Vessel Traffic Destination Shipping Services, Village Resupply, Ore Concentrates Trans Arctic Marine Traffic Adventure Tourism Potential Oil and Gas Activity Chukchi and Beaufort Sea Leases, Exploration MAG-PLAN Exploration, Development Scenarios Alternative Ports Shipping, Maritime Transportation System U.S. Coast Guard State i

6 3.4.3 Municipal Oil Spill Response Organizations Oil Field Support and Supply Firms Current Ship, Tug, and Barge Firms Cruise Ships, Recreational Vessels Bulk Transport of Ore, Oil and Gas Fishing Market Summary Results, 2012 Alaska OCS Oil and Gas Exploration Program Review: Shell Oil s 2012 Exploration Program, Department of the Interior Specific Problems, Principles and Prerequisites Government Oversight Port Clarence, Development Criteria for Success Revenue Stream Business Case, Business Plans Possible Development Near Term Mid Term Far Term Norwegian Support Bases, a Model Costs of Support Base Facilities, Services Capital Costs Estimated Capital Costs, Port Clarence, Nome Estimated Camp Costs Dock and Boat Terminal Air Support Base Camp Support Facilities Projected Work Force, OCS Operating Costs Funding Options, Sources Operating Funds, Working Capital Specific Sources of Funds Partners Tenants Grants Financial Firms Port and Shipping Industry ii

7 8 Financial Analysis Balance Sheet Income Statement Regional Benefits Regional hire in the Bering Strait region Scenarios Regional Benefits Cost of Living Port of Refuge Summary, Conclusions Summary Conclusions References Appendix A: Marine Exchange of Alaska Shipping Data Appendix B: Alternative Ports Port Criteria, Attributes Alaska Ports Regional Ports, Russia Regional Ports, Canada Appendix C: Norwegian Support Bases Table Table 1. Market Summary, by Segment, Presence, Use, Revenue Potential, and Risk... 1 Table 2. Potential Oil and Gas Development, Chukchi and Beaufort Seas... 2 Table 4. Summary Data from As-built Site Plan Drawings Table 5. Potential Oil and Gas Development, Chukchi and Beaufort Seas Table 6. Bering Strait Vessel Traffic Count, by Type and Year, Table 7. Chukchi Sea Development, MAG-PLAN Scenarios, Low and High Table 8. Beaufort Sea Development, MAG-PLAN Scenarios, Low and High Table 9. Market Summary, by Segment, Presence, Use, Revenue Potential, and Risk Table 11. State of Alaska Legislative and Capital Grants, 1983 to 2013, Nome Table 12. U.S. Army Corps of Engineers Funding, with Contributed Funds, Nome Harbor Table 13. Forecasted Vessels, Crew, OCS Exploration and Development Table 14. Estimated Operating Costs per Year, Port Clarence Facilities, Services Table 15. Employment by Occupation and Ethnicity in the Bering Strait Region, Average Table 16. Cost of Food and Energy, Anchorage versus Nome, March Table 17. Estimated Bypass Mail Volumes and Support to Communities in the Bering Strait Region, Table 18. Alaska Port Attributes Page iii

8 Table 19. Five Ports, Russian Far East Figure 11. Canadian Arctic Port: Tuktoyatuk Table 21. Western Canadian Port, Tuktoyatuk Harbor Table 22. Summary of Services by Division, NorSea Group Figure Figure 1. General Location Map, Port Clarence Figure 2. Port Clarence, U.S. Coast and Geodetic Chart 16204, Excerpt Figure 3. Site Plan, Port Clarence, As Built Figure 4. Ship Transportation, Current, Bering Strait Figure 5. Bering Strait Vessel Traffic, North and South Bound, by Month, 2009 to 2013, All Years Figure 6. Current and Future Trans-Arctic Shipping Routes Figure 7. Chukchi, Beaufort Sea Leases Figure 8. Diesel Fuel Cost in Bering Strait Communities Relative to Nome (Base Cost), Figure 9. Components of Bypass Mail Air Freight Rates to Bering Strait Communities, Figure 10. Alaska Port Locations Figure 11. Russian Port Locations, Five Selected Figure 11. Canadian Arctic Port: Tuktoyatuk Figure 12. NorSea Group Operations, Norway Figure 13. NorSea Supply Base Figure 14. Vestbase, Norway Figure 15. Heavy Lift Services, Vestbase Figure 17. Tananger Base, 1965, Page iv

9 Abbreviations ACS ADOT&PF AHTS AIDEA AIS AMSA ANCSA ATB BOEM BSNC DMTS USDOI EDA EPA FY LNG LORAN MAG-PLAN MARPOL MMS NOAA NSR NWAB O&M OCS P3 PSV RORO Shell UIC USACE USCG USDA Alaska Clean Seas Alaska Department of Transportation and Public Facilities Anchor Handling Tug Supply Alaska Industrial Development and Export Authority Automatic Identification System Arctic Marine Shipping Assessment Alaska Native Claims Settlement Act Articulated Tug Barge Bureau of Ocean Energy Management Bering Straits Native Corporation DeLong Mountain Transportation System, Red Dog mine U.S. Department of Interior Economic Development Administration Environmental Protection Agency Fiscal Year Liquefied Natural Gas LOng RAnge Navigation MMS Alaska Gulf of Mexico IMPLAN model International Convention for the Prevention of Pollution from Ships Minerals Management Service (now Bureau of Ocean Energy Management) National Oceanic and Atmospheric Administration Northern Sea Route Northwest Arctic Borough, Operations and Maintenance Outer Continental Shelf Public-Private Partnership Platform Supply Vessel Roll on, roll off Shell Oil Company Ukpeagvik Inupiat Corporation U.S. Army Corps of Engineers, Alaska District United States Coast Guard U.S. Department of Agriculture v

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11 Findings This section provides a summary of project findings, using a Question and Answer format, in response to original project objectives, as outlined below. What are this project s objectives and scope? Bering Straits Native Corporation (BSNC), one of Alaska s twelve in-state Alaska Native Regional Corporations, has selected property at Port Clarence in the northwest part of Alaska. BSNC, along with Crowley Marine, asked Northern Economics, Inc. to conduct a pre-feasibility study and address the following: market demand, potential uses, facilities and services, capital and operating cost estimates, funding sources, and possible regional benefits. The project s geographical scope includes regional and northern hemisphere shipping; the project s timelines extend out to 10 and 20 years, depending on the issue. Is there sufficient market demand for BSNC to develop Port Clarence into a maritime support base? The project team believes oil and gas development activities are the only market segment with sufficient potential revenue to support development of Port Clarence within the next 10 years. Table 1 lists major market segments, as developed by the project team, along with presence in or around Port Clarence (in 2013), current use of Port Clarence, revenue potential, and revenue risk. Table 1. Market Summary, by Segment, Presence, Use, Revenue Potential, and Risk Market Segment In Area? Use Port Clarence? Revenue Potential Revenue Risk Vessel Traffic, Local Yes Yes - refuge Low Low Vessel Traffic, Bering Strait Yes Yes - east strait Low High Oil, Gas Exploration No Not 2014 High - in future Moderate Oil, Gas Production No Not 2014 Uncertain Low Federal agencies Limited USCG, NOAA Medium Low State agencies Limited UAF, Research Low Low Municipal agencies Limited Unknown Low Low Oil Spill Response Organizations No Not 2014 Low to medium Moderate Oil Field Support, Supply No Not 2014 High - in future Low Current Tug, Barge Yes Yes - coastal Low Low Cruise Ships, Recreational Boats Limited Less than 5 per year Low Low Bulk Carriers, Concentrates Many Red Dog traffic Low Low Commercial Fishing No Nome and south None Low Note: NOAA = National Oceanic and Atmospheric Administration; USCG = United States Coast Guard Who are potential users and what is the estimated market demand? Potential users are listed in Table 1, with a qualitative estimate of demand. Team members interviewed several individuals working for companies that have oil and gas leases in the Chukchi and Beaufort Outer Continental Shelf (OCS) areas; all indicated that the well-known problems with Shell Oil Company s (Shell s) exploration program in 2012 would have an impact on other operations. Specifically, at least one larger firm disbanded a team originally created to conduct exploration and development drilling on leases. Each of the companies interviewed said they expected greater scrutiny 1

12 and regulation, with potential delays, should OCS exploration prove economically feasible after all changes are known. Table 2 shows a schedule of potential oil and gas development in the Chukchi and Beaufort seas, with exploration drilling re-starting as early as 2015 or as late as 2018, depending on Bureau of Ocean Energy Management (BOEM) regulations and oversight, along with permitting requirements having lead times of as much as 18 months. Table 2. Potential Oil and Gas Development, Chukchi and Beaufort Seas Activity Exploration BOEM Regulations Permitting Exploratory drilling Appraisal wells Development, Production Go/No Go Decision Permitting Engineering Procurement Fabrication First oil Note: Yellow (lighter) cells indicate scheduled activities while green (darker) cells represent possible delay. What are the facilities and services requested or proposed by user type? The projected minimum facilities include an initial dock (open cell, gravel fill), a camp (66-man capacity), and the support costs needed to build preliminary gravel pads, install water and wastewater services, and power the site. One interviewed firm agreed that Port Clarence s deep water was attractive for both fuel and logistics needed to support exploration. If exploration activities begin again, these services may be attractive to medium and smaller sized firms; currently, larger firms generally look to Unalaska/Dutch Harbor (or other locations) for support. In 2012, Shell, for example, carried enough fuel and goods to be selfsufficient for the most part. Unalaska/Dutch Harbor served as a docking harbor. What are the estimated capital and operating costs for the facilities and services? Preliminary capital costs for an initial dock, camp, and support activity at Port Clarence range from $34 million to $72 million with a mid-point of approximately $50 million. Operations and maintenance for this preliminary infrastructure is forecast at $1.4 million per year (approximately three percent of the midpoint capital cost), with possible loan payments of $2.75 million per year using an assumed loan amount of $25 million at 10 percent interest over a 25 year term; the estimated annual revenue requirement is $4.15 million. Further details are listed in the main report, but these amounts suggest only oil and gas companies are likely to generate a minimum of $5 million in revenue per year (rounded). 2

13 Who are likely funding sources? There are several public and private funding sources, depending on stage of development, expected revenues, and the amount requested. Private funding sources include several commercial lenders as well as asset management firms. Public funding sources include the federal Economic Development Administration; the U.S. Department of Agriculture (rural development); and the Alaska Industrial Export and Development Authority. Depending on how active BSNC and its potential partners want to be in development of Port Clarence, internal cash flow is another source for certain activities. BSNC indicates it will look first to the private sector for project funding. What do the pro forma financial statements in support of a financial analysis show? These are very preliminary, with assets consisting of approximately $50 million (dock, camp, support facilities) and a projected $25 million loan at 10 percent interest over 25 years. At these levels, total long-term debt service would be $2.75 million, principal and interest, per year. Income required to meet operations and maintenance, at three percent of the approximately $50 million is $1.4 million per year, along with $2.75 million of debt service, rounded to $5 million per year. As development plans unfold, more precise numbers will be developed; the numbers shown should be considered as order-of-magnitude estimates. What are regional benefits and other possible factors to be considered? Potential regional benefits include employment, a possible lower cost of living, and consideration of Port Clarence as a port of refuge. Team members developed four scenarios, expressing lower to higher employment, to develop estimates of local hire. These are discussed below. Scenario A is based on an operating office, warehouse, and dock facilities, possibly in combination with oil spill and emergency ship response. At this level of minimal operations and caretaking staff, fewer than ten employees are projected. Scenario B would add more staff, should operations expand from four to eight months. Scenario C includes total estimates of 700 to 1,300 staff, many of which could be based at Port Clarence, if it is selected as a support base by the oil and gas industry. The estimate includes full staffing on support vessels, aircraft, and other land-based support facilities, away from Port Clarence. Scenario D reflects increased operations and oil and gas production by the year Estimated shareholder hire could range from under 10 positions filled to over 500, based on forecasted employment and regionally reported current hire numbers. Again, these estimates include staff on all vessels and other support facilities. Cost of living expenses for food, fuel, and supplies might be reduced with economies of scale, after Port Clarence becomes an established support base. However, the team does not expect Port Clarence to significantly reduce costs due to the dispersed location of regional communities, their relative size in relation to Nome, the regional hub, and the extensive use of the current Bypass Mail Program for many goods. Two communities that could benefit from lower fuel prices, due to Port Clarence, are Brevig Mission and Teller. Both would likely need to invest in larger storage facilities to realize these benefits. 3

14 Port of refuge status could generate regional benefits, but spill response and emergency vessel response generate most economic activity during an event such as a spill or a vessel grounding. The increased economic activity from spill and rescue events is not predictable and depends on a rapid build-up of supplies and personnel that reflects the severity of the crisis. 4

15 1 Introduction The Bering Straits Native Corporation (BSNC) is one of Alaska s twelve in-state Alaska Native Regional Corporations; it has selected property at Port Clarence, land formerly occupied by the U.S. Coast Guard (USCG). Though not yet approved for transfer to BSNC, Gail Schubert, President and CEO, stated, in the BSNC newsletter, Agluktuk, for December of 2012 and January of 2013: Another project we are pursuing, which will bring further business opportunities and economic development to the region, is the acquisition of Port Clarence, located on Point Spencer near the Bering Strait. This property was decommissioned by the U.S. Coast Guard in 2010, and we are seeking expedited ANCSA [Alaska Native Claims Settlement Act] conveyance to BSNC through special legislation to be enacted by the U.S. Congress. We have worked closely with Alaska s Congressional Delegation to facilitate this conveyance. Beyond Port Clarence and the Rock Creek Mine, management will continue pursuing opportunities in our region designed to provide jobs and economic development for our shareholders, descendants and other residents of the region. BSNC s 2012 Annual Report also noted that managers focused on developing strategic business relationships with large commercial companies in view of the anticipated increase in marine traffic through the Bering Strait (BSNC, 2012). In March of 2013, BSNC and Crowley asked Northern Economics, Inc., Anchorage, to submit a proposal for conducting a feasibility study of development at Port Clarence. An agreement to proceed was signed on April 2 and a draft report was submitted in the fall of 2013; additional data and revisions are included in this final document. 1.1 Objectives This feasibility study addresses the following topics: 1. Determine if there is sufficient market demand for BSNC to develop land it may acquire at Port Clarence into a maritime support base; 2. Identify potential users and estimated market demand; 3. Identify facilities and services requested or proposed by user type; 4. Estimate capital and operating costs for the facilities and services; 5. Identify likely funding sources; 6. Provide pro forma financial statements in support of a financial analysis; 7. Identify regional benefits and other possible factors to be considered. 5

16 1.2 Project Scope of Work Figure 1 is a general location map, showing Port Clarence, approximately 60 nautical miles northwest of Nome and due west of Teller, Alaska. Figure 1. General Location Map, Port Clarence. Source: Google Earth, Accessed April

17 1.3 Report Layout There are ten report sections: Section 1. Introduction. Section 2. Port Clarence, Historical and Potential Uses. The project area holds a unique geographic location in the Bering Strait; historical and potential uses of the area are presented in this report section. Section 3. Market analysis. Specific market segments and their potential use of Port Clarence are listed in this section. Section 4. Results, 2012 Alaska Outer Continental Shelf (OCS) Oil and Gas Exploration Program. Implications of Shell Oil Company s (Shell s) experience are discussed in this section. Section 5. Port Clarence, Development. Possible development at Port Clarence is contained in this section. Section 6. Costs of Support Base Facilities, Services. Both capital and operating and maintenance costs are approximated and discussed in this section. Section 7. Funding Options, Sources. Section 8. Financial Analysis. Pro forma investments and operations costs are included in this section. Section 9. Regional Benefits. Potential regional benefits to citizens and BSNC shareholders are analyzed here. Section 10. Summary, Conclusions. Section 11. References. Appendices. There are three appendices: Appendix A lists Marine Exchange of Alaska Shipping Data for years 2009 through 2013; Appendix B lists alternative ports; and Appendix C provides background on Norwegian support based for the oil and gas industries. 7

18 2 Port Clarence, Historical and Potential Uses Port Clarence occupies a unique deepwater location in the northwestern part of Alaska. This report section provides more information about Port Clarence itself and its suitability both as a port and a support base, services it has provided for approximately 150 years. 2.1 History Port Clarence s protected harbor likely served Alaska s Native inhabitants before contact with European cultures. Following that contact, Port Clarence grew to significance during the later years of Russian rule, along with marine use during Alaska s early years as a U.S. territory, and, eventually, statehood Russian Rule Port Clarence served as a port of refuge for whaling vessels, starting in the middle 1800s, while the area was still owned by Russia (Bockstoce, 1995): In the first decades of the fishery whaleships seldom used Port Clarence even though it is the best harbor in the region. A few whaleships visited Port Clarence in 1851 and, in 1852, the bark Harvest put in, hoping to find a British naval ship willing to take several insubordinate sailors. By the mid-1860s whaleships visited Port Clarence more frequently because it was the location of a rendezvous for a number of native groups. They met there to barter among themselves and with the ships of both the Russian-American Company and independent operators. Trade had already become a sideline for a number of whaling captains and they were drawn there, too. It was not until about 1884 that Port Clarence became the central summer refitting port for the Arctic fleet and its rise had as much to do with the fleet s increased dependence on tenders as it did with its being one of the best harbors in the Arctic U.S. Territory In the 1870s, after Alaska was purchased by the United States, Port Clarence served as a resupply site for whaling ships needing water and coal, and as a trading station for vessels hauling whale oil, bones, and furs south. Most vessels of the era required water, wood, and coal, with steamers taking on 100 to 150 tons for their boilers and sailing vessels taking on 10 to 15 tons for food preparation. Coal was piled at Port Clarence, after it was mined and hauled south from Cape Lisburne, an area with coal seams but also with more dangerous ice conditions. After a ship was stove in by ice at Point Hope, in 1890, the New Bedford ships also began using Port Clarence for their resupply, and for the remainder of the century, virtually all vessels of the fleet called there (Bockstoce, 1995). Ships reached Port Clarence in early July, and upon arrival: There they smoked ship [ed. closed all vents and lit smudge fires] to kill rats, carried out repairs, topped up their water tanks, and usually took on from the tender about two hundred tons of coal, as well as fresh fruit and vegetables. Other further supplies were loaded at Point Barrow By the middle of September, most ships headed south, except for those that elected to overwinter. 8

19 Port Clarence was known as a reindeer station in 1906, serving as a landing point for reindeer transported from Siberia to the Territory of Alaska (USCG, 1979) as part of the program started in The site and its herd of reindeer became part of the Overland Expedition of 1897, sent north to marooned whalers near Point Barrow. In 1899, the Harriman Alaska Expedition visited Port Clarence, taking photographs. The first chart of the coastline was published in Statehood Status Later, the USCG selected Port Clarence as a LORAN (Long Range Navigation)-C navigation site, with quarters, fuel tanks, generators and a 1,350 foot antenna, completed in The station went on the air in December 1961 and operated until June The antenna, known as the tallest structure in Alaska, was demolished in July of 2010 (loran-history.info, 2012). Although the LORAN-C antenna is gone, deep water still provides refuge for larger vessels, including certain tanker classes. It is likely that Port Clarence will continue to serve as a resupply point, along with providing minor ship repair services, and it could be used as a transshipment area for goods and supplies. 2.2 Historical Summary, Current Uses Uses of Port Clarence over the past 150 years are exactly those that are likely to continue: Protected harbor (Port of Refuge) Trading center (OCS Support Base) Communications Center (USCG LORAN-C site) Historical, current, and potential uses of Port Clarence focus on the ocean, its vessels, and oceanborne resources such as fish, coal (energy), and supplies (water). It is one of the region s only deepwater ports, discussed in the next section. 2.3 Port Clarence, a Deepwater Port The U.S. Coast Pilot 9, Chapter 8, notes the following about Port Clarence (USCP, 2013): Port Clarence, a large bay indenting the Seward Peninsula about 35 miles SE of Cape Prince of Wales, provides the only good harbor close to the Bering Strait. The bay is formed by a low sandspit which extends from the mainland in an N direction for about 10 miles to Point Spencer. The highest elevation on the spit is a round knoll near the S end, 24 feet above sea level. This knoll is inconspicuous except at close range. An airstrip is on the northern end of the spit. Point Spencer light, 22 feet above the water is the only conspicuous landmark to aid the navigator. The channel between Point Spencer and Point Jackson is 4 miles wide and free of dangers, with depths of 7 to 8 fathoms. The N half of the bay has a general depth of 7 fathoms as close as 1 mile from shore with depths shoaling gradually to the beach. The average tide at Port Clarence, like Nome, is approximately two feet. Currents are approximately 1 to 2 knots with velocity in the entrance to Port Clarence generally 0.5 knots with speeds up to 1 knot setting west or north. The Coast Pilot also notes the presence of Brevig 9

20 Mission on the north shore of Port Clarence about 11 miles northeast of Point Spencer. Teller is a village about 12 miles east of Point Spencer. Figure 2 is a portion of Chart (NOAA, 2013), showing parts of Port Clarence, Point Spencer and the soundings directly off Point Spencer, in fathoms and feet. 1 Figure 2. Port Clarence, U.S. Coast and Geodetic Chart 16204, Excerpt Source: NOAA, Office of Coast Survey. 1 A fathom is six feet, or 1.83 meters. Seven fathoms is 42 feet (or 12.8 meters); eight fathoms is 48 feet (14.6 meters). 10

21 Table 3 illustrates the types of vessels and their maximum drafts based on ship characteristics obtained from FleetMon, and using ship data collected by the Marine Exchange of Alaska. These data were collected from transponder-equipped vessels that traversed the Bering Strait (in both directions) from 2009 to Table 3. Maximum Vessel Draft, 2009 to 2013, Bering Strait, in Meters Vessel Type AHTS 6.0 AHTS/Icebreaker ATB Tank Barge Bulk Carrier Cargo Cargo/Training 6.5 Container Crude Oil Tanker Dredging 11.0 Drill Ship 12.5 Fish/Research Fishing General Cargo Icebreaker Landing Craft LNG Carrier 11.5 Military 8.8 Other 2.0 Passenger Pleasure 4.4 Product Tanker Reefer Research RORO Sailing 0.0 Tanker Towing Tug 10.0 USCG Cutter Yacht Note: AHTS is Anchor Handling Tug Supply. ATB is Articulated Tug Barge. Source: Marine Exchange of Alaska and Northern Economics, Inc. analysis. 11

22 At its charted depths, virtually all vessels that passed through the Bering Strait from 2009 to 2013 could be anchored at Port Clarence, assuming the vessels were at average draft (or less). The following types of vessels might not be able to use Port Clarence at full draft: Bulk carriers (such as those southbound from Red Dog) Large tankers, including product and crude oil vessels Certain types of research vessels and drill ships Port Clarence Site Plan Figure 3 is a site plan of Port Clarence, prepared from an as-built series of drawings provided to BSNC. It illustrates Point Spencer, along with the runway and site of the former LORAN-C antenna, adjacent to buildings used to house staff and materials. Total area consists of 2,646 acres, according to USCG surveys; the source U.S. Geologic Survey topographic maps are 1:63,360 quadrangles, Teller A-4 and B-4. Figure 3. Site Plan, Port Clarence, As Built Source: USCG, August

23 Table 4 summarizes data from the as-built plans, showing building area and tank capacities. Table 4. Summary Data from As-built Site Plan Drawings Facility Name, Title Square Feet, Gallons Buildings Nbr 1 Administration 7,840 Nbr 2 Barracks 9,550 Nbr 3 Water Boiler Sewage 8,950 Nbr 4 Signal Power 7,210 Nbr 12 Fitness Gym 1,300 Nbr 13 Gasoline Dispensing 134 Nbr 10 Generator Bldg. 3,412 Nbr 5 Old Transmitter 2,378 Nbr 7 Transmitter 3,980 Total Building Area Square Feet 44,754 Water Tank Water System, gallons 250,000 Fuel Tanks Tank 10 Boiler, day tank, gals 546 Tank 1 Fuel tank (42 gal/bbl) 106,008 Tank 2 Fuel tank (42 gal/bbl) 106,008 Tank 3 Fuel tank (42 gal/bbl) 106,008 Tank 4 Fuel tank (42 gal/bbl) 106,008 Tank 5 Fuel tank (42 gal/bbl) 106,008 Total Fuel Gallons 530,586 Source: USCG, Rev August 2005 Discussions with BSNC indicate the on-site USCG facilities will need considerable replacement or rehabilitation before the area would meet USCG or commercial needs. 2.4 Potential Uses As noted, Port Clarence served as a supply base for mariners in the 1800s, with some degree of emphasis on the inter-modal use of the area. Fuel (coal) and cargo were tendered to the area by larger ships and then reshipped by smaller vessels. Similar uses can be expected today, but the team learned that almost all uses for the foreseeable future are driven by oil and gas exploration. Project team members conducted research, including economic models developed for OCS work and determined that there are two separate groups of potential users at Port Clarence. First, local vessels that run north and south from Nome (primarily) use Port Clarence for anchoring and refuge. Most of these vessels carry fuel, cargo, and supplies from regional hubs such as Nome and Kotzebue to smaller villages located on and near the shore. Second, users tied directly to oil and gas activities use the port in a similar manner; however, as the northernmost deepwater port, they could expand their use for such activities as vessel resupply, oil spill response, and crew quarters as shifts rotate in and out of the Chukchi and Beaufort Seas. 13

24 While the first group of users is a consistent and continuing set of users each year, the amount of potential use (and potential revenue) is low. Most vessels buy fuel and other supplies at their home port, generally Nome but also Kotzebue, and purchase enough for round-trip durations. The second set of potential users consists of purpose-driven oil and gas vessels that head for leased offshore tracts in the Chukchi and Beaufort seas. This group has potential for much greater use (and revenue) with Crowley suggesting ice-breakers could generate up to a 10-month season, versus the approximately 4-month season that currently exists Port of Refuge Port Clarence provides protection from high seas, strong winds, and severe weather. While a great help to mariners, Northern Economics agrees with BSNC and Crowley that generating revenue from this attribute would require more infrastructure, such as a dock. Without a dock (or pier), vessels seeking fuel, potable water, food or other supplies would need to lighter these items and that additional work and delay is a disincentive, to the benefit of home-port vendors (such as those at Nome and Kotzebue) Community Re-supply Deeper water means larger vessels, potentially lower per-unit transportation costs, and perhaps less reliance on air freight for certain items. Fuel is one commodity that could be delivered in larger quantities to a tank farm at Port Clarence, stored, and then distributed via smaller vessels and barges. The largest single fuel consumer in the area is the Red Dog mine, with major tankage on site. A working fuel inventory arrangement with Red Dog could increase supplies with lower costs per gallon, but sustained oil and gas activities would be needed to recover any new investment. To a limited degree, stored fuel at Port Clarence would compete with existing suppliers at Kotzebue and Nome, though Crowley is a major vendor in both areas. Port Clarence s deeper water would allow fuel tankers to enter the area, with their lower per-unit costs of fuel. By comparison, Nome, Kotzebue, and Red Dog refuel with lightering vessels (and barges) Intermodal, Cargo Service Along with fuel, other supplies, especially those that could be held in unheated warehouses, might be stored at Port Clarence and redistributed to villages and firms as needed. Again, current use levels are likely insufficient to justify large capital expenditures, but confirmed oil and gas discoveries could set the stage for more investment. If ice-free shipping begins to flourish, Port Clarence could serve as a transshipment point for cargo, containers and other goods and equipment Marine Services Information about weather, ice, and storms is critical to operations in the area. The ability to service the industry with such information may justify investment if the services are offered at a lower cost than current suppliers or with better accuracy. The USCG provided these types of services on a 24/7 basis when the station was operational. 14

25 2.4.5 Oil Spill and Vessel Rescue Team members talked with staff of Alaska Clean Seas (ACS), the designated oil spill service firm at Prudhoe Bay. ACS was also the designated oil spill advisor for Shell s 2012 drilling program. ACS staff agreed that Port Clarence might be a staging area for both oil spill and vessel rescue supplies; however, the costs of such equipment, along with maintenance, resupply, and dispatch, are high and cannot be done on a speculative basis. ACS noted its owners, including Shell, represent the major oil producers at Prudhoe Bay; each contributes a significant part of the ACS annual budget. ACS owns an estimated $75 million of equipment and supplies including containment boom, 96 vessels and mini-barges, along with 85 full-time staff and a minimum of 115 qualified response personnel that can be dispatched as required. Duplicating even a small portion of this investment would require one (or more) identified contracts; Northern Economics asked interviewees about such services. In general, port-based oil spill response firms are required during production, with on-ship staff and supplies during exploration drilling Support Base Potential services for a support base vary with vessel and user needs. One comparable location is the camp at Umiat, a former U.S. Navy base that is now owned by the UIC Corporation. The company provides a list of services offered at Umiat, including camp and logistical support for: Exploration and drilling sites Secure staging of materials Fuel distribution Material receiving and forwarding Equipment rental Forklift service Warehousing Communications Expediting Crew changes Catering Office administration Communications These services are illustrative of what might be offered at Port Clarence. 15

26 3 Market Analysis Development at Port Clarence depends on markets to sustain both the level of capital investment needed (discussed further in Section 6) as well as ongoing operations and maintenance costs. Northern Economics used a range of capital costs, from $20 million to $100 million, to direct research and interviews; these costs are based on other, less complex support bases in Alaska (i.e., Umiat) and in Europe, especially along the Norwegian coast. Results Team members conducted research, attended meetings, and interviewed several key people with knowledge and awareness of vessel activity within the Bering Strait area. Although several noted increased shipping activity within the area, consistent with report findings, there are no known local or regional operations, outside of oil and gas exploration, that could sustain steady revenue for Port Clarence. Several noted the very limited current window for ice-free shipping, estimated at approximately four months, June through the end of September. The team believes Port Clarence development and revenues must be directly linked to oil and gas exploration in order to justify capital expenditures for a dock, tank farm and other support activities. Oil and Gas Potential Development Table 5 illustrates potential oil and gas development activities by category from 2013 through the year These are best estimates, based on research and interviews, along with the team s understanding of possible delay. Table 5. Potential Oil and Gas Development, Chukchi and Beaufort Seas Activity Exploration BOEM Regulations Permitting Exploratory drilling Appraisal wells Development, Production Go/No Go Decision Permitting Engineering Procurement Fabrication First oil Note: Yellow (lighter) cells indicate scheduled activities while green (darker) cells represent possible delay. 3.1 Bering Strait Traffic Figure 4 illustrates vessel traffic through the Bering Strait, recorded from vessel transponders and collected by the Marine Exchange of Alaska in Juneau and others, including the World Wildlife Federation (WWF), which publishes geographical information. 16

27 Figure 4. Ship Transportation, Current, Bering Strait Source: WWF, accessed February Note: The image displays all traffic for four seasons, 2013, with WWF editing in high traffic areas AIS Vessel Traffic Data Northern Economics asked Crowley to assist in collecting data on traffic through the Bering Strait. Crowley obtained five-year vessel traffic records for the years 2009 to 2013, providing the data for this analysis. The reports provided to Crowley by the Marine Exchange of Alaska are attached as Appendix A. 17

28 Northern Economics prepared an Excel database from these data, using several other sources to verify spelling, vessel size, and type. Information available from FleetMon provided considerable assistance in editing and checking base data. This traffic analysis is important for potential development of Port Clarence as it is the main market for near-term services, should a port be developed. AIS transponders are on-board equipment and settings are normally revised for each trip segment. Menus allow vessel staff to pick attributes such as Cargo and General Cargo, for example, with little distinction between these two categories (and others). Team analysts reviewed data from the five years of vessel traffic records and edited spelling, type of vessel, and other obvious errors. In addition, AIS data structure has evolved over the five years and some recorded data categories are new or very similar in name (as another example, the differences between Towing and Towing long/wide are slight, if any, for purposes of this report). AIS traffic recorders may collect several trip segments for a single vessel; the number depends on how long the vessel stays within the area, its direction, and different ports of call Total Traffic, by Vessel Type and Year Table 6 summarizes results of vessel traffic counts, by vessel type, for the years 2009 to 2013, in both directions, north and south, through the strait. Ship traffic through the Bering Strait, both northbound and southbound, has increased each year since

29 Table 6. Bering Strait Vessel Traffic Count, by Type and Year, Vessel Type AHTS 20 AHTS/Icebreaker 2 8 ATB Tank Barge Bulk Carrier Cargo Cargo/Training 3 Container 1 1 Crude Oil Tanker 2 1 Dredging 3 Drill Ship 2 Fish/Research 4 2 Fishing General Cargo Icebreaker Landing Craft LNG Carrier 1 Military 5 N/A 1 Other 6 Passenger Pleasure 3 Product Tanker 1 5 Reefer 1 1 Research RORO Sailing 2 Tanker Towing Tug 50 USCG Cutter 2 9 Yacht Total Note: AHTS is Anchor Handling Tug Supply, ATB is Articulated Tug Barge, and RORO is Roll On, Roll Off. Source: Northern Economics, adapted from Marine Exchange of Alaska report provided to Crowley Marine, 2013 Traffic in 2012 reflects the exploratory drilling program that Shell conducted in the Chukchi, especially the support vessels used for anchor tending, supply and towing (i.e., tugs). That said, there were major increases in bulk carriers, general cargo vessels, and the first LNG tanker (southbound). Both USCG and research traffic increased as well. Overall, 2012 total traffic of 314 vessel trips is an increase over the 222 recorded in

30 Although that number was projected to decline during the past year, final counts for 2013 actually show an increase to 349 trips, reflecting increases in Bulk Carriers and Cargo vessels as well as tankers (37 in 2013 compared to 17 in 2012 and 1 in As shown, over the five years, there are two main types of vessel traffic through the Bering Strait: bulk carriers and towing vessels. Bulk carriers are defined as Ships specifically designed for bulk carriage of ore with additional faculties for alternative, but not simultaneous, carriage of oil or loose or dry cargo (AMSA, 2009). Bulk carriers include those ships that carry zinc and lead concentrates from the Red Dog port site to smelters throughout the world. Towing vessels include tug and barges, whether designed for towing or pushing. There are many in the local area and others were contracted in 2012 for support of Shell s OCS activity Bering Strait, Seasonal and Directional Use, Five Years Vessels transiting the Bering Strait do so mainly in the four months of July through October, as shown in Figure 5. Note that these figures include five years of traffic counts. The majority of vessels travel north in July, with approximately equal numbers of north and southbound traffic in August; southbound traffic peaks in August and declines through October. 300 Figure 5. Bering Strait Vessel Traffic, North and South Bound, by Month, 2009 to 2013, All Years North South Source: Northern Economics adaptation of data from the Marine Exchange of Alaska. 20

31 A primary destination for northbound vessels is Red Dog, consisting mostly of bulk carriers but also several refueling vessels. Several vessel tracks were recorded in June and five (or more) in October, with the remaining counted in July, August, and September. No other destination recorded this many vessels. In addition, bulk carriers haul lead and zinc concentrates from Red Dog to a number of locations throughout the world, including Australia. The majority of southbound vessels sailed to Nome, primarily during the three months of July, August, and September. Consistent with comments from the Marine Exchange, these vessels are considered U.S.-based local traffic, such as landing craft and other smaller supply vessels, along with support tugs. The vessel traffic shown includes a limited number of cruise ships; passengers must be lightered to shore as there are no cruise ship docks in the area. Like areas east of Canada, including Greenland, Alaska is seeing increases in passenger, yacht, and recreational vessels. These numbers will continue to increase gradually Vessel Traffic A recent USCG document on Arctic Strategy (USCG, 2013) classified vessel traffic in three ways: Destinational shipping into or out of the Arctic, such as village resupply or ore concentrates shipped from Red Dog s port site Trans-Arctic shipping using Arctic waters as a route (e.g., Northwest Passage, Northern Sea Route) Adventure tourism cruise ship and yacht traffic, limited at the current time, but growing Vessel traffic through the Bering Strait from 2009 through 2013 consists of vessels from all three segments above. The most consistent component of the three is related to destinational shipping village resupply and concentrates shipments from the Red Dog port site Destination Shipping Services, Village Resupply, Ore Concentrates Shipping services of all types are currently supplied by vendors in vessel home ports such as Kotzebue, Nome, and, for certain vessels, Unalaska/Dutch Harbor or even the Lower 48 states. Two countries account for most of the vessel traffic in the Bering Strait: Russian and the US. Russian Vessel Traffic Bering Strait traffic records for the years 2009 to 2013 indicate Russian Federation vessels deliver supplies, carry passengers, and haul fuel to the following five main ports of call: 1. Pevek 2. Nome (mainly passengers) 3. Vladivostok 4. Providenya 5. Uelen In general, Russian-flagged vessels are cargo ships (including general cargo), passenger ships, and tankers. More specific data are included in Appendix B. 21

32 U.S. Vessel Traffic Vessel traffic on the east side of the Bering Strait is similar to Russian traffic, with the exception of vessel support focused on two major economic developments, Red Dog (zinc and lead mining) and Prudhoe Bay (oil and gas). The top four ports of call on the eastern portion of the Being Strait are: 1. Nome 2. Kotzebue 3. Red Dog 4. Prudhoe Bay U.S. vessel types differ from those used on the western part of the Bering Strait. The two most common recorded vessels are towing (tugs, whether towing or pusher types) and landing craft. Tugs provide assistance in the area, especially for bulk-carriers offshore of the Red Dog port site. Landing craft provide an efficient way to haul goods, supplies, and larger cargo to remote communities as well as Red Dog and Prudhoe. As expected, Shell activity in 2012 funneled a number of specialty vessels into the Bering Strait from drill ships to vessels that assisted with anchor handling. The number and type of services that could be provided at Port Clarence are speculative but identifiable. Currently, ships and barges use Port Clarence as a port of refuge. Its deeper water allows safe anchorage for vessels with drafts up to 35 feet (or more) to wait for storms and bad weather to dissipate. Smaller vessels can lighter fuel, cargo, and equipment to villages in the area and head into Port Clarence during these destination trips. Discussions on search and rescue, as well as oil spill and vessel emergencies continue with the USCG taking the lead on these. USCG helicopters are staged at Kotzebue (2013) and could be relocated to Nome or Port Clarence as needs or potential risks dictate. Current use at Port Clarence is considered minimal. Each service that could be offered by BSNC and its partners would require a corresponding capital investment at Port Clarence; one example is a dock to offer vessels safe and stable anchorage while refueling or transferring crew and cargo Trans Arctic Marine Traffic In March 2013, the U.S. Army Corps of Engineers, Alaska District (USACE) and the State of Alaska, Department of Transportation and Public Facilities (ADOT&PF) published results of a joint research project on locations for an enhanced Alaska Deep-Draft Arctic Ports system (USACE, 2013). That report, among others, summarized efforts, beginning in 2008, to evaluate over 900 port and harbor needs throughout Alaska. In a broader context, the 2009 Arctic Marine Shipping Assessment (AMSA) published results of current and future Arctic marine activity, under the auspices of the Arctic Council. The Council was formally established under the Ottawa Declaration of 1996 as a high-level intergovernmental forum, promoting cooperation, coordination and interaction among the Arctic states (Arctic Council, 2009). Members include Canada, Denmark (including Greenland and the Faroe Islands), Finland, Iceland, Norway, the Russian Federation, Sweden, and the United States of America. 22

33 Besides enhanced traffic awareness and research, the AMSA recommended the following infrastructure enhancements throughout the Arctic: Ice navigation training Navigational charts Communications systems Port services Ability to handle ship waste Ice centers, for accurate and timely information Places of refuge Icebreakers The U.S. is acting on certain of these issues and Port Clarence is an area that is uniquely located to provide certain services to vessels using these several sea routes. Alternative Ports Alternative ports in Alaska include the Port of Dutch Harbor and Adak, as well as Nome. Dutch Harbor serves containerized vessels, tankers, and others on the Great Circle route between North America and Asia; Dutch Harbor is approximately 800 nautical miles south of Port Clarence. Adak was a former U.S. Navy port that is often mentioned as a possible transshipment point for containerized cargo. As proposed, ice-strengthened ships would be used only in the Arctic, with cargo transshipped from Adak (or Dutch Harbor) in more conventional vessels (KUCB, 2013). Nome lies just south of Port Clarence and has access to fuel, fixed wing air service, and a port with water depths of approximately 19 feet. Northern Sea Route While many in North America are familiar with the Northwest Passage from the Atlantic to the Pacific Ocean via waters off the northern shores of Canada, there are other routes. The Northern Sea Route (NSR) extends along the waters north of Russia s arctic shore, with traditional traffic extending from Murmansk (on the west) toward ports and destinations east and south to Siberian and Asian markets. The NSR is sometimes separated into east and west segments, starting from ports at and near Murmansk; it is also known as the Northeast Passage in Europe (Ragner, 2008), with Europeans first searching for a shorter route to Asia in the sixteenth century. The first recorded passage was 1879 by a Finnish-Swedish explorer, Adolf Nordenskiold, when he reached the Bering Strait on a steamer after overwintering once. Russian activity began in the 1920s and expanded in the 1930s; more recently, China made its first commercial voyage in 2013 (Barents Observer, 2013); the first Chinese vessel to traverse the NSR was the icebreaker Snow Dragon (Xuelong) in Figure 6 illustrates both primary routes, along with a potential trans-arctic shipping route one that depends on future ice conditions. Note that Port Clarence is at the junction of the Northern Sea Route, the Northwest Passage and any future trans-arctic shipping route. 23

34 Figure 6. Current and Future Trans-Arctic Shipping Routes Source: Arctic Portal, accessed May

35 3.1.7 Adventure Tourism From 2009 to 2013, approximately 75 trip segments have been recorded in the Bering Strait area for vessels such as: Passenger vessels such as the Professor Khromov, from the Russian Federation Cruise ships, such as the Hanseatic and The World, from the Bahamas Yachts, from the Cayman Islands, Bahamas, Marshall Islands and South Africa Sailing vessels, from Belgium, Finland, and the UK While these types of vessels are not common, recorded trip segments ranged from 17 in 2009 to 5 in 2012; in 2013, however, the number jumped to 30, likely reflecting increased interest in the area along with the absence of oil and gas exploration. 3.2 Potential Oil and Gas Activity Forecasting potential oil and gas activity in the Chukchi and Beaufort Seas is problematic, following Shell s problems with their 2012 program. Interviews and research suggest that, at a minimum, there will be greater scrutiny and further federal regulation for any future exploration. There are no approved exploration permits for Given a minimum of 18 months to secure these permits, it will now be 2015 or later before any substantive exploration can occur in the two major OCS lease areas. The following sub-sections provide more detail on what this activity might consist of, based on an economic model developed for BOEM by Northern Economics. 25

36 3.2.1 Chukchi and Beaufort Sea Leases, Exploration Figure 7 displays oil and gas leases held by companies in both the Chukchi and Beaufort Seas. For 2012, the number of vessels reflects the OCS exploration that Shell conducted in Burger Prospect, shown in the figure. Figure 7. Chukchi, Beaufort Sea Leases Source: U.S. Department of Interior, March 8, MAG-PLAN Exploration, Development Scenarios Northern Economics used BOEM s economic model (MAG-PLAN) to evaluate development scenarios for OCS activity, using model inputs of: Seismic survey activities Geohazard survey activities Geotechnical survey activities Exploration (and delineation) wells 26

37 Table 7 illustrates exploration and development activities for the Chukchi Sea at two scenarios: low and high activity levels. A key assumption is that Shell will defer exploration and development activities until 2014 or later; this rescheduling is shown in both of the following tables. Activities shown reflect exploration and delineation only, based on input from industry representatives. Oil and gas production for any discoveries is forecasted to start in 2026 (Chukchi) or 2027 (Beaufort). Low Scenario Table 7. Chukchi Sea Development, MAG-PLAN Scenarios, Low and High Chukchi Seismic Survey Activities 1 1 Geohazard Survey Activities 1 1 Geotechnical Survey Activities 1 1 Exploration Wells High Scenario Seismic Survey Activities 1 1 Geohazard Survey Activities 1 1 Geotechnical Survey Activities 1 1 Exploration Wells Source: Northern Economics, BOEM MAG-PLAN model Table 8 illustrates results from similar model runs, for the Beaufort Sea, at two levels of activity, with 2014 set for the first exploration wells (these model runs were made in 2013). Low Scenario Table 8. Beaufort Sea Development, MAG-PLAN Scenarios, Low and High Beaufort Seismic Survey Activities 1 Geohazard Survey Activities 1 Geotechnical Survey Activities 2 Exploration Wells High Scenario Seismic Survey Activities Geohazard Survey Activities Geotechnical Survey Activities Exploration Wells Source: Northern Economics, BOEM MAG-PLAN model Oil and gas vessel traffic through the Bering Strait in 2012 reflects the level of traffic expected during the early years for three of the four possible scenarios shown (Chukchi both; Beaufort low). A high exploration and development scenario in the Beaufort Sea would create more traffic, up to an estimated doubling (or more). In particular, increased traffic during the years 2016 to 2020 would be at least twice, perhaps as much as three times the 2012 traffic levels. Again, this should be viewed against the current hiatus in drilling and the lack of permits for 2014 activity. 27

38 3.3 Alternative Ports There are a number of other ports in the Arctic, from Canada, to the North Slope of Alaska, and across the Bering Strait to Russia. BSNC requested a listing of alternative ports, and that listing by location, service, and port characteristics is contained in Appendix B. 3.4 Shipping, Maritime Transportation System Recent evidence of less polar ice during the summer focused attention on potential shipping activity in the Arctic Ocean, including routes near land (i.e., NSR) and the Northwest Passage. This section summarizes recent publications and discusses how this new focus could impact Port Clarence. These activities could positively impact Port Clarence and generate more interest in the area; however, the team believes revenues are speculative and not defined to the degree that most lenders require U.S. Coast Guard The USCG s recent strategic publication (USCG, 2013) notes that the United States is an Arctic nation, due to Alaska s location and that status requires several factors for long-term success: Public-private relationships, including the oil and gas industry, shipping companies, mining and fishing enterprises, adventure tour operations and others, both in North America, Russia, and other countries. Federal agency coordination between USCG, Department of Homeland Security, Department of the Interior (USDOI), Environmental Protection Agency (EPA), National Oceanographic and Atmospheric Administration (NOAA), Department of Transportation, Department of Defense and others, including BOEM. International cooperation and governance, including the Arctic Council, the International Maritime Organization, North Atlantic Treaty Organization (NATO), the Commission on the Limits of the Continental Shelf and other forums. The 1982 Convention on the Law of the Sea (which the U.S. has not signed) provides the structure necessary for international cooperation. A key statement from the USCG suggests: the use of mobile assets and seasonal presence, supplemented by existing shore-based infrastructure, will be the preferred strategy for Coast Guard operations during periods of peak activity. There are a variety of federal departments and agencies with interest in the area, including the USCG, NOAA, Federal Aviation Administration, USDOI, National Marine Fisheries Services, National Weather Service, EPA, U.S. Fish and Wildlife Service, and others. Northern Economics talked with USCG staff and NOAA researchers to determine their level of interest in commercial development of Port Clarence. Both of these agencies suggested that lower costs of resupply were important and if Port Clarence could provide less expensive fuel or supplies, they would be interested. Contacts were unable to offer estimates of current costs, referring instead to others in the agencies. 28

39 3.4.2 State ADOT&PF maintains a continuing interest in Port Clarence due to its deepwater capabilities and potential support for search and rescue, oil spill remediation, and resource development. In particular, the state maintains a large network of air strips in most parts of Alaska; the Port Clarence airstrip is in good repair and could be a candidate for similar use Municipal Two boroughs are located in the general area: the North Slope Borough (headquartered in Barrow) and the Northwest Arctic Borough, based in Kotzebue. Both boroughs, like the state, are concerned with public safety, public services, and potential resource development, especially related to employment. 3.5 Oil Spill Response Organizations During Shell s 2012 OCS activity, ACS, based in Anchorage and Prudhoe Bay, provided oil spill contingency advice to Shell, though ACS did not provide equipment. Instead, Shell carried its own spill response equipment and supplies on board various vessels and relied on contractors for any needed support. ACS s primary focus is on-land spill recovery. Shell staged equipment caches along Alaska s northwest coast in selected villages and hired local residents to monitor and care for them. Other oil companies are likely to do the same during their exploration activities, though the amount of equipment is less than that required during production. Discussions with ACS suggest they may be interested in stocking oil spill equipment and supplies at Port Clarence once OCS exploration restarts. However, the spokesman noted there are considerable funds required to support this potential use; it is not something for a start-up company with limited capital. In 2012, the needed equipment, supplies, and first responders supported drilling efforts from a variety of vessels. This may continue until there is more certainty of what equipment and supplies may be needed and the nearest staging site. 3.6 Oil Field Support and Supply Firms Recent exploration was almost 100 percent supported by watercraft, along with helicopters and fixedwing aircraft needed for crew changes and, at the end of the year, for rescue and salvage operations. These firms are likely to provide the economic base for future Port Clarence operations, once a developable amount of oil and gas is confirmed. As with other potential users, deep water attracts these firms, since the majority of their services are water-borne. 3.7 Current Ship, Tug, and Barge Firms Tugs, lightering vessels, and barges comprise the majority of vessel use within the project area; many use Port Clarence as a port of refuge for waiting out storms and heavy weather. These vessels could provide Port Clarence with an annual revenue stream, depending on what services and goods Port Clarence decides to offer. The current 4 to 5 month open water season limits possible Port Clarence use, though Crowley notes ice-breakers could extend the season to 10 months. At present, most regionally-based vessels refuel at their home port, generally Nome. 29

40 3.8 Cruise Ships, Recreational Vessels There are a limited number of cruise ships, yachts, and other vessels that traverse the Bering Strait. Within the Arctic, the western shore of Greenland is seeing a considerable number of cruise ships each year; customers may come from either North America or Europe. The Bering Strait region can expect similar increasing interest. 3.9 Bulk Transport of Ore, Oil and Gas Red Dog recently closed one open-pit mine and expanded its operations to another; the Bering Strait will continue to see major shipping efforts during June through October with current mine plans extending to the year In addition, there are other potential ore deposits but they are considered speculative and undefined at this time Fishing At present, research in Arctic Ocean fisheries continues, but no commercial fishing is permitted. If sustainable fish stocks are identified, commercial fishing could provide a revenue stream from processing and shipping, much like Unalaska/Dutch Harbor. If opened to commercial fishing, the region would likely see an influx of at-sea processors initially, until such time as onshore processing and a source of power for the significant needs of processing facilities could be developed Market Summary Shell s suspension of drilling activities has influenced other oil and gas producers, making a quantifiable analysis of market potential difficult. Table 9 summarizes the team s view on market potential for the near term, with two qualitative projections, one for revenue potential and another for revenue risk. Table 9. Market Summary, by Segment, Presence, Use, Revenue Potential, and Risk Market Segment In Area? Use Port Clarence? Revenue Potential Revenue Risk Vessel Traffic, Local Yes Yes - refuge Low Low Vessel Traffic, Bering Strait Yes Yes - east strait Low High Oil, Gas Exploration No Not 2013 High - in future Moderate Oil, Gas Production No Not 2013 Uncertain Low Federal agencies Limited USCG, NOAA Medium Low State agencies Limited UAF, Research Low Low Municipal agencies Limited Unknown Low Low Oil Spill Response Organizations No Not 2013 Low to medium Moderate Oil Field Support, Supply No Not 2013 High - in future Low Current Tug, Barge Yes Yes - coastal Low Low Cruise Ships, Recreational Boats Limited Less than 5 per year Low Low Bulk Carriers, Concentrates Many Red Dog traffic Low Low Commercial Fishing No Nome and south None Low Source: Northern Economics research 30

41 Market segments in the table represent the various current and potential users of goods and services at Port Clarence. The next column identifies presence in the area of Port Clarence. The third column attempts to estimate use of Port Clarence in 2013, again, based on the best available information. The fourth column provides the team s estimate of revenue potential, both now and at some point in the future. For example, both oil field exploration and support are ranked as High, but in the future. Low revenue potential suggests little to no revenue from this segment in the near term. Potential risk is the last column and rankings listed underneath it reflect the team s expectations of generating revenues for BSNC. As an example, oil and gas exploration are considered to have high revenue potential (in the future) and low risk, once operating. Oil and gas production, on the other hand, has uncertain revenue potential and high risk; if oil and gas is found in commercial quantities, operators will look to nearby, low-cost, vendors and suppliers. Port Clarence may be farther away than other locations though its deepwater resource may mitigate that risk. 31

42 4 Results, 2012 Alaska OCS Oil and Gas Exploration Program Project team members initially used the BOEM MAG-PLAN software to project two levels of possible oil and gas activity in the OCS. However, results from the model differed in a significant fashion from known permitting and public announcements of further exploration efforts in 2013 and beyond. Team analysts reviewed published documents and conducted interviews with those who hold OCS leases in the Chukchi and Beaufort seas. Results of these interviews were significant, with major issues bulleted below. These items present both a challenge and opportunity for future drilling operations. The challenge is addressing the myriad issues in a manner that is convincing to both internal and external stakeholders. The hurdle is gaining resolution in a timely manner, one that will allow a restart of exploratory drilling in the next three to five years. Results from interviews: Impacts from Shell s well-publicized problems in 2012 reach far and wide. One major oil company disbanded their OCS exploration team, waiting for additional regulations and oversight at some point in the future. Costs for the expected regulations and oversight are unknown and could, at the extreme, remove much of the incentive to drill. A smaller firm, with extensive experience in the Arctic, suggests a minimum of 18 months are required to obtain necessary permits, which means 2015 is perhaps the earliest they could mount an exploration program. Another person interviewed suggested 2017 might be a start for exploratory drilling if all requirements are met, but 2018 might be a more prudent year for planning. Those who were interviewed had mixed responses to possible use of Port Clarence; almost all interviewees referred to logistical hurdles and problems to be solved. Generally, larger firms meant larger exploration efforts and they were more likely to suggest Unalaska/Dutch Harbor as a supply base; smaller firms expressed more interest in Port Clarence for fuel as well as possible support. All those interviewed suggested any plans for constructing infrastructure should be placed on hold; no firm or individual suggested quick decisions or sound plans that could be used to develop a dock or other infrastructure at Port Clarence. 4.1 Review: Shell Oil s 2012 Exploration Program, Department of the Interior Team members felt a review of Shell s 2012 oil and gas exploration would provide a very real ongoing context for the industry segment that has the most to potentially contribute to development at Port Clarence. The USDOI published a report on March 8, 2013, containing a review of Shell s 2012 Chukchi program. The team included: Members of the Bureau of Safety and Environmental Enforcement BOEM PricewaterhouseCoopers LLP, safety and operational management National Marine Fisheries Services 32

43 National Weather Service NOAA USCG EPA U.S. Fish and Wildlife Service Alaska-based team members included: State Department of Natural Resources State Department of Environmental Conservation Alaska State Legislature Mayor, North Slope Borough Arctic Slope Regional Corporation Alaska Eskimo Whaling Commission Specific Problems, 2012 Report authors noted several specific problems, listed below: 1. Arctic Containment System. The system was designed as a dome to be placed over a hydrocarbon leak at the seafloor, to collect, process, flare, and store hydrocarbons as needed. The dome failed tests at the end of August and also in September, effectively keeping Shell from drilling into hydrocarbon-bearing zones. 2. The Arctic Challenger. This is an ice-class barge built in 1976 and was proposed as the surface support system for the containment system. It failed to pass USCG certification and classification until October 2012, causing it to lose the entire 2012 drilling season. The USDOI report noted that Shell did not become involved in the process until June Floating drilling rigs: Noble Discoverer and the Kulluk. The Noble Discoverer finally passed Coast Guard inspection on June 20, receiving a Certificate of Compliance; it is the vessel that dragged its anchor at Unalaska/Dutch Harbor and, after review and updating company guidance, left Unalaska/Dutch Harbor on August 25, The AHTS Vessel Aiviq was towing the Drill Rig Kulluk and lost the towing connection to the rig. The Kulluk subsequently grounded on December 31st off Sitkalidak Island near Kodiak. 4. Other problems. Shell received numerous air permit violations due to Shell s failure to provide adequate oversight to verify the data from its contractor. The report also noted weaknesses in Shell s management system, particularly in the area of contractor oversight, and especially risk management Principles and Prerequisites Authors of the USDOI review recommended seven principles and prerequisites for safe and responsible offshore exploration drilling in the OCS. They note five apply to industry and two relate to government oversight. Also, the authors note that Shell fell short of successfully addressing all but the last of the principles. 33

44 1. All phases of an offshore Arctic program must be integrated and subject to strong operator management and government oversight. These include preparation, drilling, and maritime and emergency response operations. 2. Arctic offshore operations must be well-planned, fully ready, and have clear objectives in advance of the drilling season. 3. Operators must maintain strong, direct management and oversight of their contractors. 4. Operators must understand and plan for the variability and challenges of Alaskan conditions. 5. Operators must have respect for and coordination with local communities. Authors recommended two specific tasks for Shell: a. Shell should develop, and submit to USDOI, a comprehensive and integrated operational plan describing in detail its future drilling program. b. Shell should commission and complete a full third-party audit of its management systems. These tasks will take Shell a number of months to complete, if they accept the recommendations, and they will potentially further delay any restart of OCS drilling operations. In particular, the scope of the full third-party audit will determine how lengthy this task will be. The audit is not a condition of permitting future exploration activities; however, its omission may weigh heavily on granting future permission to explore the Chukchi and Beaufort OCS. 4.2 Government Oversight Report authors made two recommendations for those involved with government oversight: 1. Continued strong coordination across agencies is essential. 2. Industry and government must develop an Arctic-specific model for offshore oil and gas exploration in Alaska. Authors noted: As Shell s 2012 experience has made absolutely clear, the Arctic OCS presents unique challenges associated with environmental and weather conditions, geographical remoteness, social and cultural considerations, and the absence of fixed infrastructure to support oil and gas activity, including resources necessary to respond in the event of an emergency. Shell s 2012 drilling program was subject to a number of Arctic-specific conditions and standards including, among others, deployment of subsea containment systems as a prerequisite to drilling into hydrocarbon-bearing zones, limitations on the Chukchi Sea drilling season to provide time for open-water emergency response, a blackout on drilling activity during the subsistence hunts in the Beaufort Sea, and deploying pre-laid boom around vessels during fuel transfers. Shell also undertook additional measures, such as agreeing to transport out drilling muds and cuttings from its Beaufort Sea operation instead of discharging them into the ocean [emphasis added]. Examples include: (1) access to systems with the ability, in the event of a loss of well control, to cap the well and contain hydrocarbons at the source of the discharge; and (2) the availability of a rig, located in the Arctic, that is capable of promptly drilling a relief well. Both of these areas are fundamental to safe and responsible operations in the Arctic, where existing infrastructure is sparse, the geographical and logistical 34

45 challenges of bringing equipment and resources into the region are daunting, and the time available to mount response operations is limited by changing weather and ice conditions at the end of the season [emphasis added]. Government and industry should continue to evaluate the potential development of additional Arctic-specific standards in the areas of drilling and maritime safety and emergency response equipment and systems [emphasis added]. 35

46 5 Port Clarence, Development Both Nome and Port Clarence emerged from the port selection process used by the USACE and ADOT&PF, winnowed down from a larger list of 14 areas (USACE, March 2013). Evaluation criteria were: 1. Port Proximity to Mission (Oil and Gas, and Mining as Key Drivers); 2. Intermodal Connections; 3. Upland Support; 4. Natural Water Depth; 5. Navigation Accessibility (wind, wave, ice conditions); 6. Other Factors (Sovereignty, Roads, Environmental/NEPA, Maintenance, Harbors of Refuge, Land Ownership) In addition, project participants evaluated the potential of Public-Private Partnership, or P3, often used to describe either a government service or private business venture where there are partnerships between government (federal, regional, local) and one (or more) private companies. Examples include toll roads (turnpikes), including the road from Red Dog to the port site west of the mine, as well as the Valdez Port Authority, the Skagway Ore Terminal, and others. P3 organizations are now the dominant organizational structure for container terminals. 5.1 Criteria for Success Researchers for the Deep-Draft Arctic report suggested seven key factors for a successful P3, two of which are noted in greater detail below Revenue Stream A clearly defined revenue stream is a critical factor for successful development at Port Clarence (USACE, 2013). Authors of the Alaska Deep-Draft Arctic Port System Study suggest: While the private partner may provide a portion or all of the funding for capital improvements, there must be an identifiable revenue stream sufficient to retire this investment and provide an acceptable rate of return over the term of the partnership. The income stream can be generated by a variety and combination of sources (fees, tolls, availability payments, shadow tolls, tax increment financing, commercial use of underutilized assets or a wide range of additional options), but much be reasonable assured for the length of the partnership s investment period [emphasis added]. Northern Economics believes Port Clarence could generate a revenue stream from OCS activities if they restart in future years; there is less clarity about non-ocs revenue streams Business Case, Business Plans Once a potential revenue stream is identified, developers can start to craft business cases for infrastructure and services that help sustain or enhance revenues, along with business plans to integrate and manage them. 36

47 At Port Clarence, as a guide, there are both historical and potential uses, ranging from intermodal services (e.g., historic coal piles in the 1890s) to fuel and cargo transfers from larger vessels (tenders, tankers) to smaller ones. The overall management of Port Clarence will come under the support and structure of a business plan, ranging from market analysis to sales to fixed assets and, eventually, debt retirement and potential expansion of existing facilities. The project team developed more specific development options and possibilities, discussed in the following section. 5.2 Possible Development There are two general levels of possible development at Port Clarence. First, there is a basic or minimal level of activity needed to keep the air strip operational and free of snow; and, second, there are expanded activities from OCS activity. After review, Northern Economics believes these development activities may be grouped into nearterm, mid-term, and far-term time frames Near Term BSNC anticipates land transfer by the end of 2014, though this is uncertain. Once the corporation gains control, the most likely near-term opportunities are tied to OCS exploration and development. This is likely to occur in one form or another for the next seven years (from 2014 to 2021). Oil companies such as Shell, ConocoPhillips, Statoil and Eni will need support bases for their work in the Chukchi and western Beaufort seas. Proximity to lease holdings is a major cost factor, balanced by the ability to deliver cargo and personnel to the nearest air strip or helicopter pad. As noted in earlier report sections, in 2012, Shell sent a fleet of vessels through the Bering Strait to their leases in the Chukchi Sea; Port Clarence is approximately 440 nautical miles south and west of the proposed sites and there are other communities closer but with arguably shallower water. The distance from the Chukchi lease areas is approximately 1,300 nautical miles to the well-equipped Port of Dutch Harbor. Custodial Management Once BSNC obtains title to lands at Port Clarence, it may need some minimum level of caretaking and maintenance to keep equipment and facilities operational. There is precedent at Umiat, south of Prudhoe Bay. The Ukpeagvik Inupiat Corporation (UIC), based in Barrow, owns the Umiat camp, located on the Colville River. Among its subsidiaries, UIC owns the Umiaq Company, a resource development firm that offers support bases at Umiat and Point Barrow. The camp and camp services are leased to other companies working in the area; for example, Linc Energy is the last firm noted at the camp. UIC also provides services to the Bureau of Land Management and the Alaska Department of Fish and Game. Established in 1944, Umiat has a gravel airstrip, accommodations, a kitchen, and dining area, along with office space, communications, a tank farm, and warehouses for storing and maintaining equipment and holding supplies. Revenues from custodial management are likely minimal, speculative, and less than able to support the capital costs needed to rehabilitate the area. 37

48 5.2.2 Mid Term Mid-term development will be driven by oil and gas exploration and could last up to ten years before a decision is made to proceed to oil and gas production. Team discussions and interviews suggest no infrastructure should be developed at this time. Interviewees noted high uncertainty associated with the current drilling hiatus. Regulations, revised permitting requirements and likely challenges in the public arena as well as legal court challenges all contribute to the wait and see recommendation Far Term The far term refers to production of oil and gas, if it is found in commercial quantities and activities proceed to production. One interviewee noted exploration budgets were, by nature, subject to wider variation than production budgets. If Port Clarence had the necessary services and supplies in, say, 10 years, its location at an estimated 900 miles north of Unalaska/Dutch Harbor would make more of a difference than during exploration and development activities. 5.3 Norwegian Support Bases, a Model North Sea oil and gas development provided the stimulus for the development of several support bases on the west coast of Norway. BSNC and Crowley requested a summary of these results; that summary is included in Appendix C. 38

49 6 Costs of Support Base Facilities, Services Capital costs for new or renovated facilities at Port Clarence may be estimated in a number of ways, depending on the facility. One possibility is the State of Alaska s construction cost survey, as well as RH Means publications on construction costs in remote Alaska locations. For purposes of capital cost estimating, team members obtained dock costs from BSNC, along with camp costs (66-man camp) from ATCO, Ltd., a Canadian-based firm that manufactures modular housing, offices, and warehouses. 6.1 Capital Costs MAG-PLAN reports, based on extensive research and interviews with industry, suggest the following types of onshore facilities are needed for exploration and development as well as early stages of production (BOEM, 2012): Construction Camp (Accommodations) Air Support Base Supply Boat Terminal Oil Export Terminal LNG Export Plant and Terminal Production Base Only the first three appear feasible for near-term and mid-term development at Port Clarence, since oil and gas discoveries, if confirmed, will more specifically suggest where oil export and any associated LNG or production base will be built. MAG-PLAN analyses suggest Wainwright as the nearest onshore location for flight services, such as search and rescue, helicopter crew changes and limited resupply missions. Crowley commented that the percentage of on-time crew changes for Shell s 2012 operations, at 24.8 percent, was substantially less when compared to the same metric for Gulf of Mexico operations, at 90 percent or greater. This suggests at least two things: first, Alaska offshore plans need more flexibility than the Gulf of Mexico, and, second, increased capital costs may be offset by reduced delays and lower operational costs Estimated Capital Costs, Port Clarence, Nome Table 10 summarizes estimated capital costs for Port Clarence, based on discussions with BSNC and other research. These costs are for a limited start-up base, suitable for preliminary estimates. Clearly, as market demand grows, Port Clarence infrastructure could be increased based on client needs. The cost amounts shown are bracketed with the -30 percent to +50 percent cost variance as noted by the Association for the Advancement of Cost Engineering for this type of early cost estimate. In addition, a contingency of 20 percent of costs is added to reflect the high uncertainty of estimates at this time. 39

50 Table 10. Estimated Capital Costs, Port Clarence Cost Center Average $ Low Amount $ High Amount $ Dock 20,000,000 14,000,000 30,000,000 Camp 3,500,000 2,450,000 5,250,000 Support 16,500,000 11,550,000 24,750,000 Sub-total 40,000,000 28,000,000 60,000,000 Contingency, 20% 8,000,000 5,600,000 12,000,000 Total 48,000,000 33,600,000 72,000,000 Source: Northern Economics By way of comparison, Table 11 lists State of Alaska grants to Nome, totaling approximately $19 million for the years This amount does not include a $182 million total grant request submitted by the City of Nome to the State legislature in January of 2012; parts of this amount may be included in the grants listed for 2013 within the table. Table 12 outlines Nome harbor federal grants, administered by the U.S. Army Corps of Engineers. Table 11. State of Alaska Legislative and Capital Grants, 1983 to 2013, Nome Name Year Award ($) Remaining ($) Cape Nome Quarry/Rock Loading Facility/Nome Port ,000 0 Port Facility ,000,000 0 Port ,900,000 0 Port Project ,500,000 0 Port facility ,000,000 0 Port Improvements/Upgrades ,703 0 Port of Nome Boat Harbor and Sand Storage Building ,325 0 Harbormaster Office ,000 0 Port Construction Project ,000 0 Port Construction ,994 0 Harbor and Dock Construction and Renovation ,000 0 Port Design and Construction ,000,000 6,454,563 Port of Nome Improvements , ,000 Total 19,154,022 6,954,563 Source: State of Alaska, grants database 40

51 Table 12. U.S. Army Corps of Engineers Funding, with Contributed Funds, Nome Harbor Cost Center Account Code Appropriation Cost General Investigation, Preconstruction Engineering, Design CWIS , ,458 General Investigation, Preconstruction Engineering, Design, Contributed CWIS , ,487 Construction, General CWIS ,362,534 42,666,955 Construction, General, Contributed CWIS ,654,546 4,571,192 Operations and Maintenance CWIS ,373,507 33,440,205 Operations and Maintenance, Contributed CWIS , ,500 Construction, General CWIS ,000 13,000 Total 83,193,030 81,480,797 Note: CWIS = Civil Works Information System Source: U.S. Army Corps of Engineers documents indicate the first project at Nome began in 1919 with major dredging starting in 1979; annual maintenance continued until 1989 when it was halted until Fiscal Year (FY) 1992 when it resumed. Annual dredging quantities range from 30,000 cubic yards (FY 2007) to 75,219 cubic yards (FY 2012), with related costs from $0.6 million to $1.5 million (FY 2012, again). The total amount spent (or allocated) to date on Nome harbor, for the State and U.S. Army Corps of Engineers, is approximately $100 million Estimated Camp Costs Current buildings at Port Clarence date back approximately 50 years to 1961, when the former LORAN-C station came on line. Discussions with BSNC indicate they would need major overhaul and upgrade to be suited for current use. Estimated replacement camp costs, for a 66-man camp, are projected at $3.5 million, using a North Slope per-bed cost of $52,500. This cost compares well with a quote obtained in September from ATCO. ATCO quoted a total cost of $2.84 million for camp modules delivered to Seattle, units that are designed to meet Alaska conditions at Port Clarence. Adding $0.7 million for transportation from Seattle to Port Clarence would total $3.5 million, for a remarkably similar cost. There would be additional site costs to prepare gravel pads, plumb water and wastewater and provide communications and other needed site preparation Dock and Boat Terminal A very preliminary cost for a dock and mooring space is $20 million, based on discussions with BSNC and Crowley. Dock design is based on open-cell, sheet-pile construction, similar to that used at the Red Dog port site and other places in Alaska. Boats and barges would be able to tie-up to this dock; as currently envisioned, a maximum length of approximately 600 feet is projected. 41

52 6.1.4 Air Support Base The air support base referenced in the MAG-PLAN is designed to accommodate Search and Rescue helicopters as well as smaller units such as the Hughes 500 and Robinson R44, both of which have been used for mining exploration. The estimated capital cost for an air support base is approximately $150 million (MAG-PLAN 2012). Barrow already has Search and Rescue capability that can serve both the Beaufort and Chukchi, so upgrading Port Clarence is projected at one-third of the projected capital cost or $50 million, for both fixed-wing and helicopter operations. Port Clarence is further from leased areas (and drill rigs) than Wainwright or Barrow so Port Clarence s proposed air base would likely be used for transient helicopters and, more likely, fixed wing operations, given the existing landing strip. The air support base could need a small terminal capable of accommodating crew changes from vessels and the facilities at Port Clarence Camp Support Facilities Like the existing buildings, the camp s fresh water and sewage systems will need upgrading or replacement. Part of these costs is included with accommodations and camp development, and another $16.5 million is projected to cover these costs. Final costs will be developed as camp facility and design is completed Projected Work Force, OCS Table 13 projects vessels and crew required for exploration and development activities in the OCS, by company. Data for these estimates came from interviews with oil companies, service and support firms, and published reports for both exploration and oil spill response. In most cases, crew size is an approximate mid-point of a range of workers. For example, ice class AHTS estimates ranged from 38 to 58 staff, with a mid-point of 48. Table 13. Forecasted Vessels, Crew, OCS Exploration and Development Shell ConocoPhillips Vessel Type Number Est. Crew Total Persons Number Est. Crew Total Persons Example Ice Management Ice breakers Ice class AHTS M/V Nordica Platform Supply M/V Perseverance Tug and Barge Arctic Endeavor Oil Spill Response Vessel M/V Nanuq Oil Spill Response Tug and Barge Aiviq Oil Spill Tanker Work boats, landing craft Large crew change boats Tug and Tank Barge Total Note: M/V = motor vessel. Source: Northern Economics, MAG-PLAN

53 6.2 Operating Costs While capital costs are generally a single, aggregated amount, operating costs may include a number of specific costs such as power, water and wastewater, communications, repairs, maintenance, replacement, and insurance. Operating costs may also be projected on the basis of a percentage of capital costs, based on architectural and engineering experience. Typical amounts are in the one to three percent of capital expense per year for operations and maintenance (O&M). Table 14 brackets the estimated O&M costs with, for example, a range of $200,000 to $600,000 for the $20 million dock. Table 14. Estimated Operating Costs per Year, Port Clarence Facilities, Services Dock Camp Support Subtotal Contingency Total Estimate ($) Estimated Capital Cost 20,000,000 3,500,000 16,500,000 40,000,000 8,000,000 48,000,000 Operating Cost, 1% 200,000 35, , ,000 80, ,000 Operating Cost, 3% 600, , ,000 1,200, ,000 1,440,000 Source: Northern Economics Overall, given the costs and contingencies presented, O&M costs could range from approximately $500,000 to $1.4 million, per year. 43

54 7 Funding Options, Sources Capital assets may require external financing; the amount and use of these financing requirements will direct which source(s) BSNC may use. There are many in Alaska and the U.S., as well as offshore lenders that work with the oil and gas industry. As one example, the Alaska Industrial Development and Export Authority (AIDEA) funded the Delong Mountain Transportation System (DMTS) road and port for Teck Alaska's current zinc and lead mine north of Kotzebue. AIDEA currently lists the DMTS as an asset on their balance sheet, with an approximate value of $195 million (AIDEA, 2012). Loans on capital infrastructure depend on the asset and the earnings stream generated from that asset or group of assets. Until a revenue stream is identified, BSNC may want to maintain a list of interested lenders. 7.1 Operating Funds, Working Capital Operating funds for working capital and normal day-to-day operations generally come from internal cash flow, commercial banks, or joint venture partners. 7.2 Specific Sources of Funds Specific sources of funds are listed and discussed below; at this early stage in the definition of Port Clarence these are primarily descriptive Partners BSNC has actively sought business partners in several of its ventures, including a 50 percent ownership in Banner Wind, a percent ownership in Unaatuq, LLC which owns Pilgrim Hot Springs near Nome, and a 50 percent ownership in 4600 Debarr, LLC (growing to 100 percent in February of 2012). Joining with others to spread risk of development and operations at Port Clarence is another possibility for BSNC. Discussions suggest regional port development at Port Clarence may be a way to eventually manage and expand its operations Tenants Port Clarence tenants may also help BSNC finance operations, through lease agreements and up-front lease payments. Again, these will depend on final terms and conditions of use; their uncertainty reflects the very uncertain nature of oil and exploration in the area Grants As an ANCSA regional corporation, BSNC can also request financial assistance for port and harbor development from the federal EDA (Economic Development Administration), the USDA, and potentially other sources. BSNC may also elect to seek certain grants from the State of Alaska. 44

55 7.2.4 Financial Firms The Deepwater study (USACE, 2013) lists the following firms as having experience in P3 projects: Goldman Sachs Guggenheim Partners Deutsche Bank AIG Macquarie Mantauban SA Babcock & Brown Infrastructure Contacting these firms (or others) may be premature. However, discussions could suggest what each of the possible lenders or developers would need to know before further arrangements are made Port and Shipping Industry The USACE also identified members of the shipping industry (USACE, 2013) that may be a source of capital funding: CMA-CGM Eurogate Holding Ness Natie Eurokai Hutchinson Port Holdings PSA Corp Maersk Line Neptune Orient Lines Nippon Yusen Kaisah Pacific and Orient At this stage of market analysis, it appears many of these firms would be most interested in port operations or container and cargo shipments. These activities are most likely to occur during oil and gas production, not necessarily exploration. 45

56 8 Financial Analysis The team developed a range of needed infrastructure to help identify approximate order of magnitude capital costs. Table 10 provides details for a minimum list of requirements at approximately $50 million, with a range from $33.6 million to $72 million. Proposed capital assets include a dock and start-up camp, with support funding for needed water and waste water, construction, and communications, utilities, etc. 8.1 Balance Sheet The estimated $50 million of assets at Port Clarence could be developed and financed by public agencies (EDA, AIDEA) or private, commercial banks. The amount of loan financing, loan length, and interest rate on the note will depend on the operator s ability to demonstrate successful operations over the necessary time. For discussion purposes, a $25 million note (which is 50 percent of $50 million) over 25 years at 10 percent interest per year requires an annual payment of $2.75 million (rounded). 8.2 Income Statement The operations and maintenance cost per year for a minimum start-up facility (camp, dock, support), as listed in Table 14 at the 3 percent level is $1.4 million (rounded). This amount, with the required pro forma loan payment of $2.75 million suggests minimum revenue of $4.15 million per year. This break-even amount does not reflect other costs for the necessary goods and services, nor does it reflect their revenues. For discussion purposes, again, a minimum of $5 million per year of operating revenue should be considered during development planning at Port Clarence. 46

57 9 Regional Benefits This section analyses potential regional benefits for consideration in planning development of Port Clarence, including benefits from regional hire, a lower cost of living, and from a port of refuge. 9.1 Regional hire in the Bering Strait region The project s regional benefits from hiring a local work force from the Bering Strait region are difficult to quantify at this early stage, but a qualitative sense of the magnitude of the effects can be provided. Team members developed four scenarios, from Scenario A to Scenario D, reflecting a range of activity from low employment (initial development) to more significant employment Scenarios The four scenarios are listed below. Scenario A is based on an operating office, warehouse, and dock facilities, possibly in combination with oil spill and emergency ship response. At this level of minimal operations and caretaking staff, fewer than 10 staff are projected. Scenario B would add more staff, should operations expand from four to eight months, due to icebreaking, reduced ice cover or a combination of both. Scenario C includes estimates of 700 to 1,300 staff, many of which could be based at Port Clarence, if it is selected as a support base by the oil and gas industry. Not all of these workers would be based on Port Clarence; the estimate includes full staffing on support vessels, aircraft, and other land-based support facilities. Scenario D reflects increased operations and oil and gas production by the year Estimated shareholder hire could range from under 10 positions filled to over 500, based on forecasted employment and regionally reported current hire numbers. Again, these estimates include staff on all vessels and other support facilities Regional Benefits The regional benefits from hiring a local work force under scenarios A and B would be limited. The construction of the dock, fuel tanks, and minimum facilities could provide some small but short term benefits, whereas during operation and maintenance activities, the need for a local work force would be minimal. The only potential significant regional benefit from local hire would occur under scenarios C or D, where the oil and gas industry moves into development and production activities out of the Chukchi and Beaufort Seas and makes a firm decision to use Port Clarence as a support base. Under Scenario A, the site at Port Clarence would need an office, warehouse, and dock facilities, as well as possible additional resources to support on-water oil recovery and vessel rescue operations. The work force needed for maintaining these facilities would be limited. Oil spill response and vessel rescue activities in case of an incident would require specialized personnel probably subcontracted from an oil spill removal (or equivalent) organization. The number of personnel needed to support a response depends on numerous factors (see USCG 2013 for details) but they would be most likely non-locals. 47

58 Under scenario B, the needs for operation and maintenance of the dock and fuel tanks would only be around 5 to 10 full time workers for 8 months and 1 or 2 caretakers rotating during the winter. Under scenario C, the total employment needed by the oil and gas industry activities could be between 700 and 1,300 personnel for about 5 years. Under scenario D, total employment could start at 900 and gradually increase to 1,800 during the production phase by A significant opportunity for local hire would be achieved if BSNC included shareholder and local resident hiring preferences in the contract with the oil companies that wish to use Port Clarence. Many of the workers to fill the needed jobs are currently available in the Bering Strait area. Out of more than 3,600 people in the local workforce, approximately 900 residents work in occupations involving natural resources, construction, maintenance, production, transportation, and material moving (see Table 15). Table 15. Employment by Occupation and Ethnicity in the Bering Strait Region, Average Employment Category Total workers Native workers Native/Total (%) Management, business, science, and arts 1, Service Sales and office Natural resources, construction, and maintenance Production, transportation, and material moving Total 3,611 2, Source: Northern Economics using U.S. Census Bureau s ACS 2013 In addition, 733 working-age residents of the region (630 of which were Alaska Native) were unemployed in 2012 (U.S. Census Bureau 2013). Many of these residents may already have the required skills (or could be trained). However, some skilled jobs may require the contractor to hire workers from other areas of the state or outside Alaska. A goal of shareholder hire of 20 to 40 percent of the workforce appears reasonable for BSNC given the evidence of other local hire agreements in Alaska and around the world. In Alaska, Donlin Gold, LLC has established a good track record of hiring residents of the Calista Corporation region. For example, nearly 90 percent of employees in recent years at the Donlin Gold camp have been regional shareholders and descendants. (Donlin Gold 2013). According to a recent study by ISER, of all the employees at the Red Dog Mine property in the Northwest Arctic Borough, 58 percent are shareholders or spouses of shareholders of NANA Corporation, the ANCSA regional corporation which owns the Red Dog property. With respect to other examples around the world, The Voisey s Bay mine sets the high mark for Canada with an Aboriginal hire rate of 54 percent (AETG 2008), followed by Ekati diamond mine at 50 percent (BHP Billiton 2011) (ISER 2012). The above-mentioned ISER study emphasizes the importance of concrete goals and incentives to ensure that Alaska Native employment is a priority for the project operator, and identifies the following main obstacles to successful Alaska Native employment: lack of skills and work experience required, and scarcity of opportunities to upgrade existing skills; racism and a tendency for managers to have other priorities over Alaska Native employment and training when allocating financial and other resources; alienation and loneliness; reluctance of Alaska Native people to forgo land-based 48

59 activities such as hunting and fishing that may conflict with regular wage employment; lack of suitable accommodations; and a failure to address the needs and priorities of Alaska Native employees. 9.2 Cost of Living The cost of living in the Bering Strait region is considerably higher than that in urbanized Alaska. This is due primarily to the area s remoteness and widely dispersed population, and thus a relatively higher cost for transporting goods. In Nome, the regional center, the cost of groceries for a family of four is 81 percent higher than in Anchorage, and the price of energy (electricity, home heating fuel, gasoline, lumber, and propane) averages 83 percent higher (see Table 16). Table 16. Cost of Food and Energy, Anchorage versus Nome, March 2013 Anchorage Nome Commodity ($) Nome Index to Anchorage (100) Food at home for a week Electricity (1,000 kwh) Heating oil #1 (per gallon) Unleaded gas (per gallon) Propane (per gallon) Lumber (2'' x 4''x 8') Source: ADOLWD 2013 using UAF 2013 The cost of living in rural villages is in turn even higher than in the regional hub of Nome. For example, in 2013, diesel fuel prices in 15 BSNC communities averaged 17 percent higher than in Nome (see Figure 8). Transportation costs are a main factor in these differences, as the other components of prices (cost of crude oil, refining, taxes/subsidies) are similar across communities. 49

60 Figure 8. Diesel Fuel Cost in Bering Strait Communities Relative to Nome (Base Cost), % 130% 120% 110% 100% 90% 80% 70% Source: Northern Economics using ISER 2013 Transportation costs can be reduced, in principle, by exploiting economies of scale associated with an increase in barge and air traffic to and through the region. This can be accomplished if the proposed project brought large volumes of fuel and other supplies and significantly increased air traffic to transport personnel from regional hubs and Anchorage. However, in this particular case, it would be unlikely that the project would be able to achieve the necessary volumes and efficiencies required to significantly lower the cost of living in the region. First, the communities in the region are dispersed and small, which prevents economies of scale. Secondly, many Bering Strait communities benefit from shipping rates that are lower than the true cost of shipping thanks to support from the Bypass Mail Program (see Table 17 and Figure 9). It would be difficult for a private organization to achieve transportation costs low enough to reduce the currently available prices of goods. Exceptions excluded from the Bypass Mail Program are fuel, hazardous materials, and heavy construction materials. 50

61 Table 17. Estimated Bypass Mail Volumes and Support to Communities in the Bering Strait Region, 2010 Community 2010 Population Bypass Mail Volume (000 lbs) Tin City Golovin Wales White Mountain Teller Elim Brevig Mission Gambell Shishmaref Savoonga 671 1,054 Nome 3,598 6,983 Total 7,329 12,035 Source: Northern Economics, Inc calculations based on BTS data 2010 Figure 9. Components of Bypass Mail Air Freight Rates to Bering Strait Communities, 2010 Nome Savoonga Shishmaref Gambell Brevig Mission Elim Teller White Mountain Wales Golovin Tin City $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Parcel post rate paid by consumer to USPS ($/lb) USPS Bypass Mail Program implicit support ($/lb) Source: Northern Economics, Inc calculations based on BTS data

62 Brevig Mission and Teller are the only communities that are located close to Port Clarence and the only two that could potentially benefit from lower fuel prices within the proposed project. Brevig Mission is a village of 417 residents located approximately 11 miles to the northeast from the northern end of the runway at Port Clarence. It is approximately 65 miles northwest of Nome. The community is accessible by air and sea and, in the winter, over land or ice. Brevig Mission does not have a harbor or dock, but receives cargo barges. Regular air service is available from Nome, and charters are provided from Nome and Teller (ADCCED 2012). Teller is home to approximately 250 residents and is located on a spit between Port Clarence and Grantley Harbor. A gravel road of 72 miles open only during the summer months links the community with the City of Nome. Teller is accessible by air and sea, but there is no dock; goods are lightered from Nome and offloaded on the beach (ADCCED 2012). However, to benefit from lower fuel prices, these communities would need to invest in storage facilities and infrastructure since delivery by sea is seasonal and requires storage. The limits to potential benefits from the project are apparent considering that the prices of diesel fuel in Brevig Mission and Teller are currently only 8 and 19 percent higher than in Nome, as shown in Figure 8 above. 9.3 Port of Refuge A port of refuge means a location where a ship in need of assistance can take action to enable it to stabilize its condition, reduce the hazards to navigation, and protect human life and the environment. The main benefits of a port of refuge are the potential reductions in spill frequency and severity, vessel and cargo damage, human fatalities and/or injuries, and environmental damage. With modern ships carrying large volumes of hazardous cargo and fuel, a disabled ship can pose a significant threat to the marine environment and interests of an affected coastal state. Even limited exposure to cold air and water temperatures quickly reduces chances of survival for shipwrecked individuals in lifeboats and rafts (USACE 2008). Moreover, studies point to the many long-term and unexpected negative effects of ship-based pollution, such as oil spills, on Alaska coastal ecosystems (Li and Boufadel 2010; Peterson et al. 2003). The lack of ports of refuge and emergency response resources on Alaska s North Slope is likely to become a particular area of concern given the increased number of freight ships, cruise ships, oil and gas tankers, mineral cargo vessels, and resupply barges that may be passing through the Bering Strait and plying the waters of the Arctic Ocean within the next couple of decades. Already, the number of vessels in the region exceeds the emergency response capabilities of local communities (NEI 2010). Compared to other ports in the region, Port Clarence has the advantage of natural deep water and suitable physical characteristics for a port of refuge, but lacks the needed infrastructure. The project team notes the high cost of pre-staging equipment, supplies, and personnel for potential oil spills or vessel emergency response. 52

63 10 Summary, Conclusions Northern Economics, Inc. conducted a pre-feasibility analysis for Bering Straits Native Corporation and Crowley Marine, focusing on Port Clarence, located approximately 60 nautical miles northwest of Nome. This report section summarizes project results and the project team s conclusions Summary Port Clarence was the site of a navigation LORAN-C site for the USCG from 1963 until it was decommissioned in June of It has an airstrip suitable for fixed-wing aircraft and several buildings dating back to its earliest days. A major advantage of the site is its nearby deep water, approximately 6 8 fathoms (36 48 feet), depending on specific location. The area is generally ice-free from early June through the second or third week of October each year. Team members reviewed background information, including vessel passage through Bering Strait from 2009 to 2013, as recorded from ship transponders that broadcast vessel name, date, destination, and other identifying information. Potential markets for the proposed Port Clarence Support Base included public and private companies and agencies. A key market is the oil and gas sector, especially as it related to exploration of the OCS in the Chukchi and Beaufort seas. Capital costs for the proposed support base range from $34 million to $72 million, with a mid-point estimate of $50 million. Operating and maintenance costs were projected at three percent of the capital cost of $1.4 million on a $50 million base. In addition, estimated funding was projected at 50 percent equity and 50 percent debt, the latter $25 million principal generating loan payments of $2.75 million per year. Overall, the team feels a revenue stream of approximately $5 million per year is required to advance initial development of a dock, camp, and support facilities (communication, water and wastewater, power, and fuel). Funding sources include a number of private firms, along with possible public economic development agencies, both state and federal. Team analysts also reviewed alternative ports in North America (Alaska and Canada) as well as ports in the Russian Far East; a summary of results is listed in Appendix B. In a similar area, Norwegian support bases have grown to service their off-shore oil and gas developments, including production wells. A summary of research relating to those facilities is included in Appendix C Conclusions There are no known local or regional operations, outside of oil and gas exploration, that could provide steady revenue for a Port Clarence Support Base, especially at the level of $5 million per year. To a large extent, local and regional needs are met at Nome and Kotzebue, on the east side of Bering Strait, and by similar facilities in Siberia, including Pevek and Providenya, on the west side. The team believes Port Clarence development and revenues must be directly linked to oil and gas exploration in order to justify capital expenditures for a dock, tank farm, and other support activities. 53

64 Port Clarence is also an ideal site for both search and rescue operations, if necessary, as well as oil spill response. However, the team believes these are very difficult events for which to plan and remain speculative as revenue streams. Discussions with current oil spill response organizations suggest very high levels of equipment and supplies are needed to meet spill plan requirements, up to $75 million for one location. 54

65 11 References Alaska Department of Commerce, Community, and Economic Development (ADCCED) Community and Regional Affairs, Community Information Database. Accessed October 25, Available at Alaska Department of Labor and Workforce Development (ADOLWD) Alaska Economic Trends, July Accessed October 23, Available at Alaska Dispatch, Russian tanker loaded with diesel fuel collides with Arctic ice flow, Arctic Sounder, Carey Restino, September 13, Alaska Industrial Development and Export Authority (AIDEA), Financial Statements: Year Ended June 30, Marine Exchange of Alaska, Juneau, Alaska. Accessed June Arctic Council, Arctic Marine Shipping Assessment, Arctic Portal, Akureyri, Iceland. Accessed June Barents Observer, Murmansk Search and Rescue Center in the Pipeline, accessed March Bering Straits Native Corporation (BSNC), Newsletter, December 2012 and January 2013, accessed April 2013 Bockstoce, John R., Whales, Ice, & Men, The History of Whaling in the Western Arctic, University of Washington Press, Seattle, 1995 (corrections). BSNC, 2012 Annual Report, filed with the State of Alaska, Department of Commerce, Banking and Securities division BSNC, BSNC Region Land Status, accessed April 2013 Bureau of Ocean Energy and Management (BOEM), MAG-PLAN Alaska Update, prepared for BOEM by Northern Economics, IMV Projects, Inc. and Eastern Research Group, Inc., May 31, Crowley Maritime, Alaska operations, May Donlin Gold, Carrers Accessed October 23, Available at FleetMon Explorer, Maritime Open Community, Vessel Database and AIS live tracking, Rostok, Germany, accessed, June Google Earth, Port Clarence, accessed April Institute of Social and Economic Research (ISER) Shareholder Employment at Red Dog Mine. ISER Working Paper April Accessed October 22, Available at Institute of Social and Economic Research (ISER) Alaska Fuel Price Projections , Excel model R7 Prototype. June Accessed October 22, Available at KUCB, Unalaska Community Broadcasting, Arctic Shipping on the Rise, July 23, 2013, 55

66 Li, Hailong and Michel Boufadel Long-term persistence of oil from the Exxon Valdez spill in two-layer beaches. Nature Geoscience 3: Loran-history.info, Loran Station Port Clarence, Fact Sheet, accessed June National Oceanic and Atmospheric Administration, Office of Coast Survey, accessed June Noble, Dennis L., U.S. Coast Guard, Fog, Men and Cutters: A Short History of the Bering Sea Patrol, , accessed June Northern Economics, Inc (NEI) Alaska Bypass Mail: Preparing for Change. Prepared for Alaska Department of Transportation and Public Facilities, Division of Statewide Aviation. March Peterson, Charles, Stanley Rice, Jeffery Short, Daniel Esler, James Bodkin, Brenda Ballachey, and David Irons Long-Term Ecosystem Response to the Exxon Valdez Oil Spill. Science 302(5653): Ragner, Claes Lykk, The Northern Sea Route, translated from the Swedish, accessed in June University of Alaska Fairbanks (UAF), Cooperative Extension Service U.S. Army Corps of Engineers. Alaska Regional Ports 905(b) Reconnaissance Study. Available at 20Ports%20905b%20FINAL_May2008.pdf. May U.S. Army Corps of Engineers, Alaska Department of Transportation and Public Facilities, Alaska Deep-Draft Arctic Port System Study, March U.S. Bureau of Ocean Energy and Management (BOEM), 2012, MAG-PLAN Alaska Update, Northern Economics, Inc., IMV Projects, Inc., Eastern Research Group, Inc., May 31, U.S. Census Bureau, American Community Survey (ACS) Accessed October 21, Available online through the Alaska Department of Labor and Workforce Development at U.S. Coast Guard (USCG) Guidelines for oil spill removal organization classification program. Accessed on October 22, Available at asp U.S. Coast Guard, Port Clarence Overall Site Plan, drawings dated August U.S. Coast Pilot 9, Chapter 8, Chart 16204, June 2, U.S. Department of the Interior, Review of Shell s 2012 Alaska Offshore Oil and Gas Exploration Program, March 8, U.S. National Geospatial Intelligence Agency, World Port Index, Publication 150, Maritime Safety Information, accessed June World Wildlife Federation, Norway, Mapping the changing Arctic landscape, accessed June

67 Appendix A: Marine Exchange of Alaska Shipping Data Appendix A - 1. Data from 2009 to Appendix A - 2. Data for

68 58

69 REPORT OF RECORDED TRANSITS BERING STRAIT 2009, 2010, 2011, 2012 Marine Exchange of Alaska

70 In 2009 the Marine Exchange of Alaska commenced monitoring and recording marine traffic transiting through the Bering Strait. The Marine Exchange used the recording feature in its vessel tracking software PACTRACS to monitor this traffic. AIS signals from vessels transiting the strait were monitored by receiving antennas in Gambell and Savoonga on St. Lawrence Island in the Bering Sea and the village of Wales on the Alaska mainland. A summary of the traffic recorded is shown in the table below. YEAR NORTHBOUND TRANSITS SOUTHBOUND TRANSITS

71 Figure illustrates traffic density of vessels transiting the Bering Strait. The majority of the traffic transits through United States water between Wales on the mainland and Little Diomede Island on the U.S. side of the International Dateline. A small amount of traffic is bound for the Russian Arctic and a small fraction of this traffic is taking the Northern Sea Route across the top of Russia to or from Europe.

72 This figure shows the distribution of north and southbound traffic which transited the Bering Strait east and west of the International Dateline. Notice that there is a discrepancy in the number of reported transits for 2010 between this figure (338 vs. 242) and the data table at the beginning of this report. The discrepancy is due to the fact that the table at the beginning of this report is a refined number taking into account and eliminating duplicate recordings of vessels transiting the strait. Sometimes the system will count vessels more than one time as they pass across the passage line which indicates that more vessels have transited than have actually completed the voyage. The following pages contain breakdowns of the traffic by type of vessels transiting and lists of actual vessels recorded transiting in each navigating season.

73 Bering Strait Observed Traffic Summary 2009 From 6/10/2009 to 11/8/2009 All Northbound Traffic Observed All Southbound Traffic Observed 136 transits 126 transits Total Transits 262 Transits by Ship Type Ship Type Northbound Southbound Comments Bulk Carriers Red Dog Traffic Buoy Tenders 1 1 USCGC SPAR USCG cutters 1 Alex Haley Fishing 2 1 Westward Wind General Cargo 1 1 Russian Icebreakers 5 3 USCG & Canadian Landing craft US Flag Passenger different Research different RORO/Container 2 2 Russian Tankers ships 1 RT Tugs & Barges All US Yacht 1 Cayman Islands TOTALS

74 Bering Strait Observed Traffic Summary 2010 From 6/13/2010 to 9/6/2010 All Northbound Traffic Observed All Southbound Traffic Observed 128 transits 114 transits Total Transits 242 Transits by Ship Type Ship Type Northbound Southbound Comments Bulk Carriers Red Dog Traffic Crude Oil Tanker 1 Fishing 5 3 General cargo 4 6 Icebreakers 9 3 US, RU, CA, SE Landing craft All US Flag Passenger 4 4 Product tankers 1 3 Research RORO/Container Russian Tugs & Barges All US Flag USCG Cutter 1 1 SHERMAN Yacht 2 Cayman Islands TOTALS

75 Bering Strait Observed Traffic Summary 2011 From 6/20/2011 to 11/29/2011 All Northbound Traffic Observed All Southbound Traffic Observed 124 transits 115 transits Total Transits 239 Transits by Ship Type Ship Type Northbound Southbound Comments ATB Tank barge 1 1 Bulk Carriers Red Dog Traffic Buoy tender 1 2 Container 1 Crude oil tanker 1 Fishing 2 1 General cargo 9 6 Icebreakers 6 5 Landing craft Passenger 6 6 Product tankers 2 4 Reefer 1 Research 8 5 RORO 2 1 Tugs & Barges Unknown 1 Russian Yachts 3 TOTAL

76 Bering Strait Observed Traffic Summary 2012 From 6/26/2012 to 11/18/2012 All Northbound Traffic Observed All Southbound Traffic Observed Total ship traffic 154 transits 162 transits 316 transits Transits by Ship Type Ship Type Northbound Southbound Comments AHTS Shell Drilling AHTS/icebreakers 6 4 Shell Drilling Bulk carriers Red Dog Container 1 Drilling ships 2 2 Shell Drilling Fishing 8 7 General Cargo Russian Icebreakers 11 7 Landing craft 7 6 US local Passenger 2 LNG Carrier 1 Northern sea route Research Tankers 8 13 RORO 2 2 Reefer 1 Towing Vessels US Local USCG Cutters 6 Misc 3

77 REPORT OF RECORDED TRANSITS BERING STRAIT 2013 Marine Exchange of Alaska

78 This figure shows the distribution of north and southbound traffic which transited the Bering Strait east and west of the International Dateline. Sometimes the system will count vessels more than one time as they pass across the passage line which indicates that more vessels have transited than have actually completed the voyage. The following pages contain breakdowns of the traffic by type of vessels transiting and lists of actual vessels recorded transiting in 2013.

79 Time MMSI IMO Name Latitude Longitude Callsign Nav. Status ROT SOG COG Heading Draught Length Width Ship Type Direction Destination Cargo Type Country 14 Oct :42 UTC KUNASHIR UBSI9 Engine Cargo North PEVEK Undefined ru 17 Sep :15 UTC LE SOLEAL FIHV Engine Passenger North CAPE DEZHNEV Undefined wf 14 Jul :48 UTC PROFESSOR KHROMOV UBNR Engine Passenger North ANADYR' Undefined ru 25 Oct :42 UTC SELENGA UBSH8 Engine Cargo North PEVEK Undefined ru 23 Aug :44 UTC PROFESSOR KHROMOV UBNR Engine Passenger North UELEN Undefined ru 10 Aug :13 UTC MIKHAIL DUDIN HNU8 Engine Cargo North SZCZECIN (POLAND) Undefined mt 14 Oct :45 UTC PARAMUSHIR UGZM Engine Cargo North PEVEK Undefined ru 22 Jul :25 UTC IGOR ILINSKIY UITP Engine Cargo North LAVRENTIYA Undefined ru 11 Oct :50 UTC BUKHTA SLAVYANKA UCPV Engine Tanker North ARKHANGELSK Undefined ru 23 Sep :16 UTC INZHENER TRUBIN UBCJ2 No command Cargo North NOVYY PORT Undefined ru 05 Aug :55 UTC DIOMID UFLP Engine Cargo North PEVEK Undefined ru 24 Aug :44 UTC IGOR ILINSKIY UITP Engine Cargo North M.SHMIDTA Undefined ru 11 Aug :35 UTC PROFESSOR KHLJUSTIN UDFX Engine Cargo North PEVEK Undefined ru 01 Nov :26 UTC LEDA DV UFHI Engine Tanker North PEVEK Undefined ru 26 Oct :48 UTC ARKADIY CHERNYSHEV UBSH5 Engine Cargo North PEVEK Undefined ru 16 Oct :48 UTC NORDIC ODYSSEY FIF4 Engine Cargo North PORI FINLAND Undefined pa 07 Aug :41 UTC PROFESSOR KHLJUSTIN UDFX Engine Cargo North PEVEK Undefined ru 26 Jul :16 UTC GEROY UBJA Engine Cargo North BILLINGS Undefined ru 06 Sep :56 UTC TOBOL UBZG2 Engine Cargo North PEVEK RUSSIA Undefined ru 05 Sep :35 UTC ZEPHYR_ FXN4 Engine Other North EAST SIBERIAN SEA Undefined pa 27 Oct :50 UTC BEREG MECHTY UIIC Engine Cargo North PEVEK Undefined ru 28 Sep :12 UTC PALLADIY UFGB Engine Tanker North TIKSI Undefined ru 29 Oct :06 UTC VASILIY GOLOVNIN UGWJ Engine Cargo North RUVVO>RUPWE Undefined ru 07 Sep :40 UTC GEROY UBJA Engine Cargo North UELEN Undefined ru 23 Jul :44 UTC BUKHTA SLAVYANKA UCPV Engine Tanker North ARKHANGELSK Undefined ru 03 Aug :45 UTC LEV YASHIN UBRH7 Engine Cargo North RU PWE Undefined ru 13 Aug :39 UTC GEROY UBJA Engine Cargo North MYS SHMIDTA Undefined ru 30 Sep :06 UTC Engine N/A North Undefined cy 21 Oct :11 UTC VASILIY BURKHANOV UGSI Engine Cargo North VOSTOCHNYY PEVEK Undefined ru 25 Jul :42 UTC BREMEN C6JC3 Engine Passenger North CAPE VANKAREM Undefined bs 14 Aug :44 UTC AVATAR UBGI5 Engine Tanker North PEUEK Undefined ru 22 Jul :21 UTC ADMIRAL MAKAROV UGSN Engine Other North RUPWE Undefined ru 10 Aug :48 UTC VARZUGA UGTL Engine Tanker North PEVEK Undefined ru 08 Sep :25 UTC ALDAN UBSF2 Engine Cargo North PEVEK Undefined ru 30 Jul :52 UTC ALDAN UBSF2 Engine Cargo North PEVEK Undefined ru 27 Oct :13 UTC ALDAN UBSF2 Engine Cargo North PEVEK Undefined ru 02 Jul :53 UTC AZZURA VRAC6 Engine Cargo North RED DOG USA Undefined hk 28 Jun :48 UTC F.D. ISABELLA CTV7 Engine Cargo North RED DOG.ALASKA Undefined uk 18 Oct :28 UTC FEDERAL TWEED V7YW4 Engine Cargo North RED DOG Undefined mh 30 Aug :35 UTC PACIFIC HICKORY J7AQ6 Restricted Tug North DIOMEDE ISLANDS Undefined dm 27 Jul :42 UTC THRUSH V7VF2 Sailing Cargo North RED DOG USA Undefined mh 18 Jul :26 UTC NAVIOS HOPE EAX3 Engine Cargo North RED DOG, USA Undefined pa 25 Jul :11 UTC LEDA DV UFHI Engine Tanker North UYALEN Undefined ru 06 Sep :58 UTC VEGA ROSE EIO9 Engine Cargo North RED DOG_ALASKA_USA. Undefined pa 13 Oct :42 UTC VEGA ROSE EIO9 Engine Cargo North RED DOG_ALASKA_USA. Undefined pa 11 Jul :45 UTC HAKUTA EWH4 Engine Cargo North US RDB Undefined pa

80 25 Sep :46 UTC PROPONTIS SZGY Engine Tanker North Category A gr 29 Aug :33 UTC FEDERAL TIBER V7YW2 Engine Cargo North Undefined mh 27 Sep :25 UTC SPAR DRACO LAFO6 Engine Other North Undefined no 04 Aug :26 UTC SPAR DRACO LAFO6 Engine Other North RED DOG,USA Undefined no 23 Aug :10 UTC FEDERAL SPEY V7WT2 Engine Cargo North REDDOG,ALASKA Undefined mh 07 Sep :21 UTC CAPE DAWSON V7SU5 Engine Tanker North KOTZEBUE Undefined mh 24 Jul :32 UTC CALEDONIAN SKY C6ZO2 Engine Passenger North NOME Undefined bs 09 Jul :51 UTC NORSEMANII WDD6688 Engine Undefined North RESEARCH Undefined us 04 Jul :03 UTC NORSEMANII WDD6688 Engine Undefined North BERING STRAIGHT Undefined us 08 Jul :28 UTC OSHORO MARU JDVA Engine Other North >RESEARCH AREA Undefined jp 14 Jul :05 UTC CHUKCHI SEA WDE2281 Engine Towing North SHISHMAREF Undefined us 28 Jul :09 UTC ATLAS ISLAND FPU3 Engine Cargo North RED DOG,ALASKA Undefined pa 01 Aug :57 UTC AQUAPRIDE D5CP5 Engine Cargo North RED DOG ALASKA Undefined lr 30 Oct :30 UTC FENNICA OJAD Engine Other North HELSINKI Undefined fi 02 Jul :08 UTC SEAEAGLE HA3271 Engine Cargo North RED DOG ALASKA Undefined mt 08 Oct :59 UTC CG HEALY NEPP Engine Dredging North DUTCH HARBOR ALASKA Undefined us 06 Sep :57 UTC VLADIMIR IGNATYUK UGTP Engine Ice Breaker North CHUKCHI_SEA Undefined ru 11 Aug :24 UTC SUMIHOU FVU6 Engine Cargo North RED DOG USA Undefined pa 27 Aug :03 UTC GEO ARCTIC UGXK Engine Other North OFF SHORE Undefined ru 20 Jul :51 UTC FROSTI CFL3773 Engine Fishing North ARTIC Undefined ca 20 Oct :40 UTC GEO ARCTIC UGXK Engine Other North CHUKCHI SEA Undefined ru 28 Aug :30 UTC MALMO HQH9 Engine Tanker North RED DOG MINE AK Category A mt 24 Jul :10 UTC SEAJOY HGN7 Engine Cargo North ALASKA Undefined mt 06 Jul :17 UTC NORSEMANII WDD6688 Engine Undefined North BERING STRAIGHT Undefined us 19 Jul :34 UTC POLAR PRINCE CFK9552 Engine Cargo North CARTWRIGHT NL Undefined ca 11 Jun :50 UTC NORSEMANII WDD6688 Engine Undefined North ST.PAUL Undefined us 02 Aug :38 UTC OCEAN TITAN WDB9647 Sailing Towing long/wide North KIVALINA Undefined us 06 Aug :22 UTC KEY CALLA A8WS8 Engine Cargo North US RDB Undefined lr 22 Aug :12 UTC ARAON DSQL7 Engine Other North ARCTIC SEA Undefined kr 05 Jul :12 UTC ANNIKA N VRIN4 Engine Cargo North RED DOG,ALASKA Undefined hk 14 Sep :39 UTC NORDIC ORION FDS9 Engine Cargo North BEAUFORT SEA Undefined pa 31 Aug :08 UTC ISLAND TUGGER CFH8596 Engine Towing North DIOMEDE ISLANDS Undefined ca 17 Oct :33 UTC NORDICA OJAE Engine N/A North HELSINKI Undefined fi 18 Aug :34 UTC NORDICA OJAE Engine Other North BURGER Undefined fi 30 Jul :56 UTC NORDICA OJAE Engine Other North CHUKCHI SEA Undefined fi 16 Sep :58 UTC BILLION TRADER DYIP Engine Cargo North RED DOG ALASKA, USA Undefined ph 09 Aug :08 UTC FENNICA OJAD Engine Other North CHUKCI SEA Undefined fi 27 Aug :04 UTC FENNICA OJAD Engine Other North CHUKCHISEA Undefined fi 29 Sep :03 UTC FENNICA OJAD Not defined Other North DUTCH HARBOR Undefined fi 02 Sep :13 UTC MY OCTOPUS ZCIS Engine N/A North CAMBRIDGE BAY Undefined ky 17 Jul :31 UTC FENNICA OJAD Engine Other North CHUCKCHI Undefined fi 17 Aug :27 UTC NEPTUNE PIONEER EKH6 Engine N/A North Undefined pa 07 Aug :34 UTC BREMEN C6JC3 Engine Passenger North PT BARROW Undefined bs 22 Aug :13 UTC AQUILA WCS6941 Engine Undefined North PUGET SOUND Undefined us 25 Aug :13 UTC CAPE DAWSON V7SU5 Engine Tanker North KOTZEBUE SOUND Undefined mh 20 Jul :35 UTC NOKEA WDD9274 Engine Tug North BETHEL Undefined us 26 Sep :21 UTC NOKEA WDD9274 Engine Tug North KOTZ Undefined us

81 29 Aug :37 UTC CAPE DAWSON V7SU5 Engine Tanker North KOTZEBUE Undefined mh 16 Oct :06 UTC SIR WILFRID LAURIER CGJK Engine SAR North DUTCH HARBOUR Undefined ca 07 Aug :04 UTC BRISTOLEXPLORER WCZ9010 Engine N/A North CHUKCHI SEA Undefined us 12 Aug :39 UTC MT LIQUID SILVER A8SO5 Engine Tanker North KOTZEBUE Undefined lr 25 Aug :22 UTC RIMAR V7HQ3 Engine Tanker North KOTZEBUE SOUND Undefined mh 20 Jul :56 UTC ISLAND TUGGER CFH8596 Engine Towing North TUKTOYAKTUK NWT Undefined ca 17 Jul :16 UTC ISLAND SPIRIT WDB6620 Engine N/A North WAINWRIGHT Undefined us 01 Jul :53 UTC CG POLAR STAR NBTM Engine Military North Undefined us 28 Aug :06 UTC NOKEA WDD9274 Engine Tug North BARROW Undefined us 07 Jul :15 UTC CG SPAR NJAR Engine Military North KODIAK Undefined us 29 Jul :16 UTC LAUREN FOSS WDG8426 Engine Towing long/wide North PT THOMSON Undefined us 29 Jul :48 UTC BARBARA FOSS WYL4318 Engine Towing North PT THOMPSON AK Undefined us 07 Aug :05 UTC ISLAND SPIRIT WDB6620 Engine N/A North WAINWRIGHT Undefined us 26 Aug :37 UTC MYSTICETUS Not defined N/A North Undefined us 26 Aug :37 UTC NORSEMAN WDC6817 Engine Undefined North CHUKCHI SEA Undefined us 22 Jul :57 UTC PACIFIC AVENGER WDD9275 Engine Towing long/wide North NUNIVAK Undefined us 05 Jul :14 UTC JOHN BRIX WDD9277 Engine Tug North RED DOG Undefined us 26 Jun :02 UTC STACEY FOSS WYL4909 Engine Towing North RED DOG AK. Undefined us 01 Sep :03 UTC MIRAI JNSR Engine Other North >OFF BARROW Undefined jp 03 Aug :53 UTC NANIQ WDF7990 Reserved Other North BETHEL Category D us 20 Jul :20 UTC SAM B WDD5741 Engine Undefined North WAINRIGHT Undefined us 25 Aug :05 UTC MICHAELA ROSE GDQF Engine Pleasure North Undefined uk 26 Jun :39 UTC SANDRA FOSS WYL4908 Engine Towing long/wide North RED DOG AK. Undefined us 29 Jun :32 UTC ALASKA MARINER WSM5364 Engine Towing long/wide North RED DOG MINE AK Undefined us 07 Jul :35 UTC SAM B WDD5741 Engine Undefined North KOTZEBUE Undefined us 13 Jul :43 UTC NORSEMANII WDD6688 Engine Undefined North RESEARCH.AREA Undefined us 13 Sep :29 UTC NACHIK WDE7904 Engine Towing North NOME Undefined us 21 Aug :41 UTC BRISTOLEXPLORER WCZ9010 Engine N/A North CHUKCHI SEA Undefined us 28 Jul :47 UTC WESTWARD WIND WCX9055 Anchor Other North SEWARD Undefined us 24 Aug :33 UTC ALASKA MARINER WSM5364 Engine Towing long/wide North RED DOG AK Undefined us 18 Jul :49 UTC QUALIFIER WDC5369 Engine Passenger North RED DOG Undefined us 16 Oct :50 UTC SEA HAWK WDD9287 Engine Tug North AKUTAN Undefined us 26 Jun :57 UTC IVER FOSS WYE6442 Engine Tug North RED DOG PORT AK. Undefined us 25 Jul :30 UTC UNITED CHALLENGER VHC6 Engine Cargo North RED DOG Undefined sg 05 Jul :44 UTC POLAR ENDURANCE WDG2085 Engine Towing North KOTZEBUE Undefined us 25 Aug :34 UTC SEA HAWK WDD9287 Engine Tug North RED DOG Undefined us 13 Aug :51 UTC ALASKA KNIGHT WDD6948 Engine Fishing North FISHING Undefined us 29 Jul :24 UTC NORSEMANII WDD6688 Engine Undefined North CHUKCHI Undefined us 19 Jul :02 UTC SIR WILFRID LAURIER CGJK Engine SAR North CHUKCHI SEA Undefined ca 20 Jul :05 UTC ISLAND VIKING WDG5991 Engine Tug North DUTCH_HBR ALASKA Undefined us 02 Aug :42 UTC PACIFIC FREEDOM WDD9283 Anchor Towing long/wide North BETHEL Undefined us 15 Jul :16 UTC PACIFIC FREEDOM WDD9283 Anchor Towing long/wide North BETHEL Undefined us 31 Aug :28 UTC ISLAND SPIRIT WDB6620 Engine N/A North WAINWRIGHT Undefined us 31 Jul :44 UTC SIKU WCQ6174 Engine Towing long/wide North WAINWRI Undefined us 28 Jul :28 UTC SEA HAWK WDE8543 Engine Cargo North SHISHMAREF AK. Undefined us 13 Aug :49 UTC CAVEK WDF7988 Reserved Other North KOTZEBUE Category A us 26 Jun :04 UTC SIDNEY FOSS WYL5445 Engine Towing North RED DOG AK Undefined us

82 03 Sep :57 UTC POLAR STORM WDE8347 Engine Towing long/wide North KOTZEBUE Undefined us 19 Aug :49 UTC SAM B WDD5741 Engine Undefined North KOTZEBUE Undefined us 25 Jul :52 UTC NUNANIQ WRC2049 Engine Other North WESTERN AK Undefined us 29 Jul :10 UTC MILLIE CRUZ WDF7432 Moored Towing North NOME Undefined us 23 Jul :04 UTC NACHIK WDE7904 Engine Towing North KOTZEBUE Undefined us 20 Jul :08 UTC ARCTIC_BEAR WBP3396 Not defined N/A North RED DOG Undefined us 31 Aug :09 UTC SAM B WDD5741 Engine Undefined North KOTZEBUE Undefined us 14 Sep :31 UTC SAM B WDD5741 Engine Undefined North KOTZEBUE Undefined us 31 Aug :45 UTC MAIA H WYX2079 Engine Towing long/wide North BARROW Undefined us 23 Jul :19 UTC GRETA WDF3298 Engine Other North ARCTIC COAST Undefined us 06 Jul :15 UTC ALULAQ WDG6925 Engine N/A North ALASKA WESTERN Undefined us 13 Aug :23 UTC ISLAND VIKING WDG5991 Engine Tug North WAINWRIGHT Undefined us 29 Sep :55 UTC SEA HAWK WDE8543 Engine Cargo North KOTZEBUE AK Undefined us 22 Jul :53 UTC NUNANIQ WRC2049 Engine Other North KODIAK Undefined us 20 Oct :08 UTC NORSEMAN WDC6817 Engine Undefined North CHUKCHI SEA Undefined us 14 Jul :31 UTC SAM M TAALAK WCX5321 Engine Other North WESTERN ALASKA Undefined us 03 Sep :10 UTC SAM M TAALAK WCX5321 Engine Other North WESTERN ALASKA Undefined us 30 Aug :23 UTC SESOK WDE7899 Engine Tug North LISBURNE Undefined us 05 Jul :02 UTC NUNANIQ WRC2049 Engine Other North KODIAK Undefined us 29 Jul :41 UTC EMMETT FOSS WDG8362 Engine Towing North P0INT THOMPSON,AK Undefined us 22 Aug :40 UTC CHUKCHI SEA WDE2281 Engine Towing North DUTCH HARBOR Undefined us 22 Aug :20 UTC ISLAND VIKING WDG5991 Engine Tug North KOTZEBUE Undefined us 25 Jul :36 UTC MAIA H WYX2079 Engine Towing long/wide North POINT LAY Undefined us 07 Aug :17 UTC SESOK WDE7899 Engine Tug North KOTZEBUE Undefined us 12 Sep :53 UTC ISLAND VIKING WDG5991 Engine Tug North KOTZ Undefined us 31 Aug :17 UTC ISLAND VIKING WDG5991 Engine Tug North CAPE NOME Undefined us 03 Sep :17 UTC NANIQ WDF7990 Reserved Other North KOTZEBUE Category D us 07 Aug :30 UTC NANIQ WDF7990 Reserved Other North BREVIG Category D us 10 Nov :44 UTC LEDA DV UFHI Engine N/A South Undefined ru 05 Nov :28 UTC ARKADIY CHERNYSHEV UBSH5 Engine Cargo South VLADIVOSTOK Undefined ru 17 Sep :45 UTC LE SOLEAL FIHV Engine Passenger South CAPE DEZHNEV Undefined wf 19 Jul :42 UTC PROFESSOR KHROMOV UBNR Engine Passenger South ANADYR' Undefined ru 02 Aug :39 UTC BREMEN C6JC3 Engine Passenger South CAPE DEZHNEV Undefined bs 01 Sep :31 UTC PROFESSOR KHROMOV UBNR Engine Passenger South UELEN Undefined ru 18 Aug :32 UTC PROFESSOR KHROMOV UBNR Engine Passenger South LAVRENTIYA Undefined ru 21 Oct :24 UTC KUNASHIR UBSI9 Engine Cargo South VLADIVOSTOK Undefined ru 08 Aug :06 UTC IGOR ILINSKIY UITP Engine Cargo South LAVRENTIYA Undefined ru 06 Oct :27 UTC EKARMA PJLK Engine Cargo South Undefined an 25 Nov :46 UTC BUKHTA SLAVYANKA UCPV Engine Tanker South P.KAMCHATSKIY Undefined ru 11 Nov :33 UTC VASILIY GOLOVNIN UGWJ Engine Cargo South RUVVO Undefined ru 16 Oct :47 UTC KASLA UDWA Engine Tanker South KORF Undefined ru 07 Aug :32 UTC DIOMID UFLP Engine Cargo South UELEN Undefined ru 15 Aug :10 UTC LEV YASHIN UBRH7 Engine Cargo South RU PVX Undefined ru 10 Sep :41 UTC AVATAR UBGI5 Sailing Tanker South NAKHODKA Undefined ru 24 Aug :20 UTC PROFESSOR KHLJUSTIN UDFX Engine Cargo South VLADIVOSTOK Undefined ru 30 Oct :43 UTC SELENGA UBSH8 Engine Cargo South Undefined ru 13 Sep :05 UTC IGOR ILINSKIY UITP Engine Cargo South NOVOYE CHAPLINO Undefined ru

83 18 Sep :15 UTC SIMUSHIR UBRI5 Engine Cargo South PETROPAVLOVSK Undefined ru 28 Aug :15 UTC MARINOR LAGQ7 Engine Tanker South DAESAN. SOUTH KOREA Category B no 02 Oct :21 UTC NARVA UDOP Engine Cargo South Undefined ru 19 Aug :37 UTC SCF YENISEI A8JA2 Engine Tanker South CHIBA Undefined lr 23 Aug :21 UTC GEROY UBJA Engine Cargo South BERINGOVSKIY Undefined ru 02 Oct :56 UTC HAREN V2QD6 Engine Cargo South PROVEDENIYA Undefined ag 10 Oct :01 UTC PROFESSOR KURENTSOV UAMM Engine Other South SAKHALIN_ISLAND Undefined ru 15 Aug :15 UTC KUNASHIR UBSI9 Engine Cargo South PROVIDENIYA Undefined ru 20 Sep :26 UTC BUKHTA SLAVYANKA UCPV Engine Tanker South P.KAMCHATSK Undefined ru 06 Oct :47 UTC ARCTIC AURORA V7AU7 Engine Tanker South FUTTSU Undefined mh 15 Oct :44 UTC POLARIS UBDF Engine Passenger South Undefined ru 24 Aug :34 UTC NORDIC ODYSSEY FIF4 Engine Cargo South QINGDAO CHINA Undefined pa 12 Sep :39 UTC TOBOL UBZG2 Engine Cargo South P KAMCHATSKIY Undefined ru 10 Sep :26 UTC KUNASHIR UBSI9 Engine Cargo South VLADIVOSTOK Undefined ru 19 Sep :34 UTC SEAGRAND UBPI5 Engine Cargo South BERINGOVSKIY Undefined ru 06 Sep :47 UTC ARKADIY CHERNYSHEV UBSH5 Engine Cargo South RROVIDENIYA Undefined ru 10 Sep :41 UTC GEROY UBJA Engine Cargo South UELEN Undefined ru 16 Aug :13 UTC VARZUGA UGTL Engine Tanker South Undefined ru 04 Nov :42 UTC BEREG MECHTY UIIC Engine Cargo South LAV Undefined ru 08 Nov :44 UTC EGVEKINOT UFIB Engine Tanker South MAGADAN Undefined ru 14 Jul :28 UTC VARZUGA UGTL Engine Tanker South NAHODKA Undefined ru 11 Nov :25 UTC TOBOL UBZG2 Engine N/A South P.KAMCHATSKIY Undefined ru 05 Nov :16 UTC ALDAN UBSF2 Engine Cargo South P.KAMCHATSKIY Undefined ru 05 Aug :57 UTC PROPONTIS SZGY Engine Tanker South JAPAN Category A gr 04 Aug :28 UTC ALDAN UBSF2 Engine Cargo South VLADIVOSTOK Undefined ru 23 Aug :10 UTC GEO ARCTIC UGXK Engine Other South NOME (ALASKA) Undefined ru 13 Sep :51 UTC ALDAN UBSF2 Engine Cargo South VLADIVOSTOK Undefined ru 11 Oct :57 UTC MARI UGLAND LAGV6 Engine Tanker South MAILIAO TAIWAN Undefined no 20 Jul :37 UTC FORTUNE SUNNY VREL9 Engine Cargo South PANAMA CANAL Undefined hk 30 Aug :08 UTC PACIFIC HICKORY J7AQ6 Restricted Tug South DIOMEDE ISLANDS Undefined dm 11 Oct :00 UTC STENA POLARIS ZCEB4 Engine Tanker South YOSU Category A bm 23 Jul :35 UTC NORDIC ORION FDS9 Engine Cargo South LANSHAN Undefined pa 08 Jul :05 UTC AZZURA VRAC6 Engine Cargo South AKITA JAPAN Undefined hk 06 Jul :43 UTC F.D. ISABELLA CTV7 Engine Cargo South CA VAN Undefined uk 17 Jul :38 UTC SCF PROVIDER A8YG8 Engine Tanker South ULSAN. KOREA Undefined lr 28 Jul :45 UTC SEAJOY HGN7 Engine Cargo South VANCOUVER_CANADA Undefined mt 10 Sep :20 UTC VEGA ROSE EIO9 Engine Cargo South CHN_LIANYUNGGANG. Undefined pa 24 Oct :40 UTC FEDERAL TWEED V7YW4 Engine Cargo South VANCOUVER BC Undefined mh 09 Oct :52 UTC MAPLE HILL EET7 Engine Cargo South AU TSV Undefined pa 02 Aug :59 UTC UNITED CHALLENGER VHC6 Engine Cargo South BALBOA,PANAMA Undefined sg 15 Jul :33 UTC HAKUTA EWH4 Engine Cargo South PA BLB Undefined pa 26 Aug :34 UTC FEDERAL SPEY V7WT2 Engine Cargo South PANAMA Undefined mh 03 Sep :03 UTC FEDERAL TIBER V7YW2 Engine Cargo South HACHINOHE Undefined mh 03 Oct :23 UTC SPAR DRACO LAFO6 Engine Other South Undefined no 12 Aug :58 UTC SPAR DRACO LAFO6 Engine Other South JP AXT Undefined no 09 Jul :53 UTC NORSEMANII WDD6688 Engine Undefined South RESEARCH Undefined us 08 Sep :59 UTC HANSEATIC C6KA9 Engine Passenger South NOME Undefined bs

84 27 Oct :06 UTC CG HEALY NEPP Engine Dredging South DUTCH HARBOR ALASKA Undefined us 09 Sep :15 UTC AQUILA WCS6941 Engine Undefined South PUGET SOUND Undefined us 30 Jun :21 UTC NORSEMANII WDD6688 Engine N/A South Undefined us 07 Aug :29 UTC ATLAS ISLAND FPU3 Engine Cargo South VANCOUVER CANADA Undefined pa 09 Aug :29 UTC AQUAPRIDE D5CP5 Engine Cargo South LIANYUNGANG Undefined lr 30 Sep :32 UTC VLADIMIR IGNATYUK UGTP Engine Ice Breaker South Undefined ru 04 Sep :18 UTC MALMO HQH9 Engine Tanker South DUTCH HARBOUR Category A mt 18 Jul :57 UTC OSHORO MARU JDVA Engine Other South >RESEARCH AREA Undefined jp 30 Aug :41 UTC ISLAND TUGGER CFH8596 Engine Towing South DIOMEDE ISLANDS Undefined ca 30 Oct :59 UTC GEO ARCTIC UGXK Engine Other South Undefined ru 17 Sep :53 UTC FROSTI CFL3773 Engine Fishing South ARTIC Undefined ca 13 Sep :13 UTC LE SOLEAL FIHV Engine Passenger South DIOMEDE Undefined wf 16 Sep :08 UTC CG HEALY NEPP Engine Dredging South SEWARD ALASKA Undefined us 24 Aug :19 UTC MT LIQUID SILVER A8SO5 Engine Tanker South KAMCHATKA Undefined lr 25 Jul :41 UTC CALEDONIAN SKY C6ZO2 Engine Passenger South NOME Undefined bs 04 Jul :54 UTC NORSEMANII WDD6688 Engine Undefined South BERING STRAIGHT Undefined us 19 Aug :32 UTC OCEAN TITAN WDB9647 Sailing N/A South NOME Undefined us 28 Sep :56 UTC ARAON DSQL7 Sailing Other South NOME Undefined kr 10 Sep :17 UTC BRISTOLEXPLORER WCZ9010 Engine N/A South CHUKCHI SEA Undefined us 14 Aug :54 UTC KEY CALLA A8WS8 Engine Cargo South PA BLB Undefined lr 08 Aug :34 UTC NORDICA OJAE Engine Other South DUTCH HARPOR Undefined fi 25 Jul :10 UTC NAVIOS HOPE EAX3 Engine Cargo South PANAMA CANAL Undefined pa 20 Sep :56 UTC BILLION TRADER DYIP Engine Cargo South VANCOUVER,BC Undefined ph 13 Sep :35 UTC NORDICA OJAE Engine Other South DUTCHHARBOR Undefined fi 10 Jul :35 UTC ANNIKA N VRIN4 Engine Cargo South HACHINOHE/JAPAN Undefined hk 02 Oct :54 UTC NOKEA WDD9274 Anchor Tug South DUTCH Undefined us 24 Jul :36 UTC CG POLAR STAR NBTM Engine Military South Undefined us 13 Jul :59 UTC SEAEAGLE HA3271 Sailing Cargo South PANAMA Undefined mt 29 Sep :05 UTC FENNICA OJAD Engine Other South DUTCH HARBOR Undefined fi 29 Sep :02 UTC FENNICA OJAD Engine Other South DUTCH HARBOR Undefined fi 08 Aug :56 UTC FENNICA OJAD Engine Other South NOME Undefined fi 07 Sep :03 UTC LADY M I I V7UL4 Engine Pleasure South NOME Undefined mh 20 Aug :35 UTC FENNICA OJAD Engine Other South DUTCH HARBOR Undefined fi 17 Oct :25 UTC VEGA ROSE EIO9 Engine Cargo South VANCOUVER Undefined pa 31 Aug :00 UTC CAPE DAWSON V7SU5 Engine Tanker South NOME Undefined mh 08 Sep :11 UTC NOKEA WDD9274 Engine Tug South NOME Undefined us 20 Aug :38 UTC NEPTUNE PIONEER EKH6 Engine Cargo South AU TSV Undefined pa 18 Oct :16 UTC GEO ARCTIC UGXK Engine Other South NOME Undefined ru 10 Sep :26 UTC CAPE DAWSON V7SU5 Engine Tanker South NOME Undefined mh 16 Sep :37 UTC CAPE DAWSON V7SU5 Engine Tanker South KOTZEBUE Undefined mh 27 Aug :12 UTC CAPE DAWSON V7SU5 Engine Tanker South NOME Undefined mh 17 Aug :17 UTC SUMIHOU FVU6 Engine Cargo South CA VAN Undefined pa 16 Oct :06 UTC SIR WILFRID LAURIER CGJK Engine SAR South DUTCH HARBOUR Undefined ca 11 Sep :39 UTC PT. THOMPSON WBM5092 Engine Towing long/wide South NOME Undefined us 21 Aug :28 UTC NOKEA WDD9274 Engine Tug South PORT CLARENCE Undefined us 19 Sep :47 UTC RIMAR V7HQ3 Engine Tanker South NOME Undefined mh 13 Aug :29 UTC BARBARA FOSS WYL4318 Engine Towing South DUTCH HARBOR AK Undefined us

85 25 Jul :16 UTC ISLAND SPIRIT WDB6620 Engine N/A South WAINWRIGHT Undefined us 24 Jul :38 UTC NORSEMANII WDD6688 Engine Undefined South NOME Undefined us 12 Jul :42 UTC SAM B WDD5741 Engine Undefined South KOTZEBUE Undefined us 21 Sep :40 UTC ISLAND VIKING WDG5991 Engine Tug South HOMER Undefined us 14 Aug :13 UTC LAUREN FOSS WDG8426 Engine Towing long/wide South PORT CLARENCE Undefined us 04 Oct :58 UTC MIRAI JNSR Restricted N/A South >US DUT Undefined jp 26 Aug :12 UTC QUALIFIER WDC5369 Engine Passenger South NOME Undefined us 13 Oct :39 UTC NORSEMANII WDD6688 Engine Undefined South RESEARCH.AREA Undefined us 15 Aug :49 UTC ISLAND SPIRIT WDB6620 Engine N/A South DUTCH HBR Undefined us 20 Sep :25 UTC ISLAND TUGGER CFH8596 Engine Towing South TUKTOYAKTUC Undefined ca 20 Oct :01 UTC SEA HAWK WDD9287 Engine Tug South AKUTAN Undefined us 15 Sep :00 UTC HANSE EXPLORER V2EI4 Engine Pleasure South HONOLULU Undefined ag 13 Sep :25 UTC ISLAND SPIRIT WDB6620 Engine N/A South WAINWRIGHT Undefined us 04 Sep :02 UTC SEA HAWK WDD9287 Engine Tug South RED DOG Undefined us 26 Oct :52 UTC IVER FOSS WYE6442 Engine Tug South SEATTLE WA. Undefined us 20 Sep :55 UTC CINDY MOZEL CZ9636 Not defined Tug South Undefined ca 12 Jul :29 UTC POLAR ENDURANCE WDG2085 Engine Towing South NAKNEK Undefined us 08 Sep :57 UTC ALASKA KNIGHT WDD6948 Engine Fishing South FISHING Undefined us 19 Aug :56 UTC ISLAND VIKING WDG5991 Engine Tug South WAINWRIGHT Undefined us 30 Oct :49 UTC NORSEMAN WDC6817 Engine Undefined South CHUKCHI SEA Undefined us 23 Aug :36 UTC PACIFIC FREEDOM WDD9283 Engine Towing long/wide South PORT CLARENCE Undefined us 18 Jul :05 UTC JOHN BRIX WDD9277 Engine Tug South RED DOG Undefined us 03 Aug :26 UTC SAM B WDD5741 Engine Undefined South NAKNEK Undefined us 19 Aug :54 UTC BRISTOLEXPLORER WCZ9010 Engine N/A South CHUKCHI SEA Undefined us 08 Jul :05 UTC CG SPAR NJAR Engine Military South KODIAK Undefined us 07 Sep :46 UTC POLAR STORM WDE8347 Engine Towing long/wide South Undefined us 24 Oct :58 UTC SIDNEY FOSS WYL5445 Engine Towing South RED DOG PORT OPS Undefined us 25 Oct :17 UTC SANDRA FOSS WYL4908 Engine Towing long/wide South SEATTLE WA Undefined us 08 Jul :14 UTC CG SPAR NJAR Engine Military South KODIAK Undefined us 28 Jul :27 UTC PACIFIC FREEDOM WDD9283 Anchor Towing long/wide South BETHEL Undefined us 31 Jul :02 UTC PACIFIC AVENGER WDD9275 Engine Towing long/wide South KOTZ Undefined us 24 Jul :52 UTC NUNANIQ WRC2049 Engine Other South WESTERN AK Undefined us 25 Aug :58 UTC SAM B WDD5741 Engine Undefined South NOME Undefined us 26 Oct :39 UTC STACEY FOSS WYL4909 Engine Towing South SEATTLE. Undefined us 06 Jul :41 UTC NORSEMANII WDD6688 Engine Undefined South BERING STRAIGHT Undefined us 08 Aug :55 UTC MAIA H WYX2079 Engine Towing long/wide South NOME Undefined us 07 Sep :21 UTC SIKU WCQ6174 Engine Towing long/wide South Undefined us 21 Sep :10 UTC NANIQ WDF7990 Reserved Other South KOTZEBUE Category D us 10 Sep :11 UTC CAVEK WDF7988 Reserved Other South NOME Category A us 05 Sep :39 UTC SAM B WDD5741 Engine Undefined South KOTZEBUE Undefined us 10 Sep :33 UTC PERD PAS LE NORD NICOLAS Engine Sailing South Undefined be 24 Aug :35 UTC NACHIK WDE7904 Engine Towing South PORT CLARENCE Undefined us 23 Jul :53 UTC SAM M TAALAK WCX5321 Engine Other South WESTERN ALASKA Undefined us 06 Aug :28 UTC NANIQ WDF7990 Reserved Other South BETHEL Category D us 12 Jul :38 UTC NUNANIQ WRC2049 Engine Other South KODIAK Undefined us 24 Jul :18 UTC ARCTIC_BEAR WBP3396 Not defined N/A South NOME Undefined us 17 Sep :39 UTC MAIA H WYX2079 Engine Towing long/wide South NOME Undefined us

86 24 Sep :49 UTC NUNANIQ WRC2049 Engine Other South WESTERN AK Undefined us 08 Sep :18 UTC SAM M TAALAK WCX5321 Engine Other South WESTERN ALASKA Undefined us 06 Aug :29 UTC SEA HAWK WDE8543 Engine Cargo South NOME Undefined us 02 Sep :20 UTC SESOK WDE7899 Engine Tug South NOME Undefined us 03 Oct :25 UTC SEA HAWK WDE8543 Engine Cargo South KOTZEBUE AK Undefined us 27 Aug :27 UTC ISLAND VIKING WDG5991 Engine Tug South CAPE NOME Undefined us 11 Oct :22 UTC ALASKA MARINER WSM5364 Engine Towing long/wide South DELTA_TUG FRASER R. Undefined us 24 Aug :02 UTC SESOK WDE7899 Engine Tug South PORT CLARENCE Undefined us 30 Aug :18 UTC NANIQ WDF7990 Reserved Other South BREVIG Category D us 09 Sep :47 UTC ISLAND VIKING WDG5991 Anchor Tug South KOTZ Undefined us 02 Aug :10 UTC ISLAND VIKING WDG5991 Engine Tug South DUTCH_HBR ALASKA Undefined us 03 Jul :34 UTC ALASKA MARINER WSM5364 Engine Towing long/wide South SEATTLE Undefined us 16 Jul :52 UTC CHUKCHI SEA WDE2281 Engine Towing South PT CLARENCE Undefined us 26 Sep :55 UTC ARKTIKA OH2558 Engine Sailing South Undefined fi 15 Aug :54 UTC MILLIE CRUZ WDF7432 Moored Towing South NOME Undefined us 02 Sep :17 UTC GRETA WDF3298 Engine Other South NOME Undefined us 27 Aug :43 UTC ALASKA MARINER WSM5364 Engine Towing long/wide South JUNEAU AK Undefined us 23 Aug :21 UTC CHUKCHI SEA WDE2281 Engine Towing South DUTCH HARBOR Undefined us 14 Aug :26 UTC EMMETT FOSS WDG8362 Engine Towing South SEATTLE Undefined us 24 Sep :33 UTC SAM B WDD5741 Engine Undefined South ANCHORAGE,AK. Undefined us 18 Oct :01 UTC NORSEMAN WDC6817 Engine N/A South Undefined us

87 Appendix B: Alternative Ports There are alternative ports in Alaska, Canada, and the Russian Far East. This appendix provides information on those ports, their current attributes, and discusses whether or not these attributes are significant. The next section provides background and perspective on port criteria, as recorded by one U.S. agency for all world ports. Port Criteria, Attributes The National Geospatial-Intelligence Agency maintains the World Port Index, a database that contains the location and physical characteristics of, and the facilities and services offered by major ports and terminals worldwide (approximately 3,700 entries). The data are offered for download in several types of files, from a MS Access database to an ESRI shape file. Another firm uses the agency s databases to provide a more user-friendly on-line system called World Port Source (World Port Source, 2013). The firm adds maps and satellite images, for 4,764 ports in 196 countries on its web site. Northern Economics used both sources for this analysis, and the criteria used for alternative ports are listed by number and definition below; several do not have definitions from the source documents and they are used in the conventional sense (e.g., tide refers to tidal ranges). 1. LATITUDE The position of each port, expressed in degrees and minutes, is generally obtained from the best-scale chart available 2. LONGITUDE. The position of each port, expressed in degrees and minutes, is generally obtained from the best-scale chart available 3. MEDICAL FACILITIES An indication that there is some form of medical facilities in the port that will accommodate seamen. 4. HARBOR SIZE The classification of harbor size is based on several applicable factors, including area, facilities, and wharf space. It is not based on area alone or on any other single factor. 5. SHELTERED AFFORDED The shelter afforded from wind, sea, and swell, refers to the area where normal port operations are conducted, usually the wharf area. Shelter afforded the anchorage area is given for ports where cargo is handled by lighters. 6. MAXIMUM SIZE VESSEL L indicates that a ship of over 500 feet (152.4 meters) long may be accommodated. M indicates ships less than 500 feet (152.4 meters) long may be accommodated. 7. TYPE HARBOR The term harbor is used for the principal water area of the port. Harbors are classified as being coastal natural, coastal breakwater, open roadstead, etc. Typical harbor types are illustrated in the forepart of this volume. 8. TURNING AREA An indication that a turning basin or other water area for turning vessels is available in the port. 9. TIDE 10. ICE 77

88 11. SWELL 12. CHANNEL DEPTH The controlling depth of the principal or deepest channel at chart datum is given. The channel selected should lead up to the anchorage if within the harbor or to the wharf/pier. If the channel depth decreases from the anchorage to the wharf/pier and cargo can be worked at the anchorage, then the depth leading to the anchorage is taken. 13. CARGO PIER DEPTH The greatest depth at chart datum alongside the respective wharf/pier is given. 14. MEAN TIDE The mean range in meters is normally given for all ports outside of United States (U.S.) jurisdiction, but the mean rise is substituted if range data is not available. Note. The mean range is given in feet for all U.S. ports and ports under U.S. jurisdiction (Trust Territories, etc.). 15. ANCHORAGE DEPTH The depth in the anchorage is the least depth in the best or principal anchorage. The depth listed reflects a general depth in the anchorage rather than an isolated shoal spot. 16. OIL TERMINAL DEPTH the greatest depth at chart datum will be shown. 17. PILOTAGE The necessity or advisability of taking a pilot is given. In some cases, pilotage may be compulsory. 18. TUGS Indicates whether tugs are available for docking or anchorage assistance. 19. QUARANTINE PRATIQUE For vessels arriving from overseas a quarantine clearance is required by the First Port of Entry. 20. TELEPHONE 21. RADIO 22. AIR 23. TELEGRAPH 24. RADIO TEL 25. RAIL 26. WHARVES 27. ANCHORAGE Only where actual anchorage conditions have been reported. 28. LIFTS Available, type, lifting power 29. CRANES Available, type, lifting power 30. LONGSHORE 31. ELECTRICAL REPAIR 32. STEAM 33. SHORE POWER 34. NAVIGATION 35. PROVISIONS 36. FUEL OIL 78

89 37. WATER 38. DIESEL OIL 39. ENGINE 40. REPAIRS 41. DRYDOCK The general size and type of the largest underwater repair facilities in the port 42. GARBAGE DISPOSAL Indicates whether garbage can be disposed of at the pier or by lighters at the anchorage or mooring. 43. DIRTY BALLAST Pertains to a port that has sufficient facilities for receiving oily and/or chemically contaminated dirty ballast. Alaska Ports Alternative ports, within the criteria used by market participants, are shown in Figure 10. These include local, regional, and Southcentral ports. A total of eight Alaskan ports are shown and described further in Table

90 Figure 10. Alaska Port Locations Source: World Port Source, from U.S. National Geospatial-Intelligence Agency, World Port Index. 80

91 Table 18. Alaska Port Attributes Attributes Adak Bethel Port of Dutch Harbor Kotzebue Nome Port Clarence Red Dog St. Paul St. Michael Latitude N N N N N N N N N Longitude W W W W W W W W W Medical Facilities Yes Yes Yes Yes No Clinic Yes Harbor Size Small Very small Small Very small Small Very small Very small Very small Very small Shelter Fair Fair Poor Fair Poor Poor Poor Maximum Vessel 500'+ Harbor Type Breakwater River Coast, Natural Coast, Natural Open, Roadstead Coast, natural Pier, jetty Open, Roadstead Open, Roadstead Turning Area Yes Yes No Tide No No No No No No No No Ice No No No Yes No Yes No No Swell Yes No No No No No No Channel Depth 76 feet 43 feet 8 feet Cargo Pier Depth 38 feet 8 feet Mean Tide 4 feet 4 feet 2 feet 2 feet 2 feet 2 feet 2 feet 3 feet 4 feet Anchorage Depth 38 feet 28 feet 43 feet 48 feet 18 feet Oil Terminal Depth 38 feet 73 feet Pilotage Advisable Yes Yes, Req'd Yes, Req'd Yes Yes Tugs Quarantine: Pratique Yes Yes Telephone Yes Yes Yes Radio Yes Yes Air Yes Yes Yes Yes Yes Airstrip Yes Yes Telegraph Yes Yes Yes Yes Yes Radio Tel Yes Yes Yes Yes Yes Yes Rail Wharves Yes Yes Yes Yes Anchor Yes Yes Yes Yes Yes Lifts 81

92 Attributes Adak Bethel Port of Dutch Harbor Kotzebue Nome Port Clarence Red Dog St. Paul St. Michael Cranes Longshore No Yes Yes Electrical Repair Yes Yes Yes Steam No No No Shore Power No Yes Yes Navigation Yes Yes Yes Yes Provisions Yes Yes Yes Yes Yes Fuel Oil Yes Yes Yes Yes Water Yes Yes Yes Yes Diesel Oil Yes Yes Yes Yes Engine No No Yes Repairs Limited Limited Drydock Garbage Disposal Yes Yes Yes Dirty Ballast Source: National Geospatial-Intelligence Agency, accessed May

93 Regional Ports, Russia Figure 11 illustrates the location of five Russian ports: 1. Pevek 2. Providenya 3. Egvekinot 4. Anadyr 5. Beringovsky Figure 11. Russian Port Locations, Five Selected Source: World Port Source, from U.S. National Geospatial-Intelligence Agency, World Port Index. Russians have acknowledged the necessity of monitoring vessel traffic, through the Northern Sea Route, especially for emergency vessel response. For example, on September 13, 2013, a 453-foot Russian-flagged tanker (Nordvik) struck an ice flow and began taking on water (Alaska Dispatch, 2013). Russian officials said this is an example of the need for more emergency response in Arctic areas. In 2013, so far, Russian administrators have issued permits for more than 400 ships to traverse all or parts of the NSR. Further, Russians allocated more than $27 million to establish up to 10 search and rescue centers across the NSR by 2015, extending from Murmansk in the west to Providenya, closest to Alaska, on the east (Barents Observer, 2014) 83

94 Pevek is one of the more likely areas to serve Russian and trans-nsr traffic in the future; more details about that port and the other four areas are available in Table 19. Table 19. Five Ports, Russian Far East Attributes Beringovsky Egvekinot Pevek Providenya Ust Kamchatsk Latitude N N N N N Longitude W W E W E Medical Facilities Yes Yes Harbor Size Small Small Very small Very small Small Shelter Good Good Fair Maximum Vessel 500'+ Harbor Type River port Pier, jetty Coast, Natural Coast, Natural River, natural Turning Area Yes Tide Ice Yes Yes Swell Yes Channel Depth 33 feet 73 feet 8 feet Cargo Pier Depth 18 feet 23 feet 8 feet Mean Tide 2 feet 2 feet Anchorage Depth 38 feet 38 feet 38 feet Oil Terminal Depth 18 feet 23 feet Pilotage Advisable Yes, Rqd Tugs Assist Quarantine: Pratique Yes Telephone Radio Yes Yes Air Yes Telegraph Yes Radio Tel Rail Wharves Yes Yes Anchor Yes Yes Yes Lifts 0-24 ton 0-24 ton Cranes Mobile Mobile Longshore Yes Electrical Repair Steam Shore Power Navigation Provisions Yes Yes Fuel Oil Yes Yes Water Yes Yes Diesel Oil Yes Engine Repairs Limited Limited Emergency Drydock Garbage Disposal Dirty Ballast Yes Source: National Geospatial-Intelligence Agency, accessed May

95 Regional Ports, Canada Figure 12 shows the location of the sole Canadian Port, Tuktoyatuk, considered to be a regional facility. Specific details are listed in Table 20. Figure 12. Canadian Arctic Port: Tuktoyatuk Source: World Port Source, from U.S. National Geospatial-Intelligence Agency, World Port Index. 85

96 Table 20. Western Canadian Port, Tuktoyatuk Harbor Attributes Tuktoyatuk Harbor Latitude N Longitude W Medical Facilities Yes Harbor Size Very small Shelter Fair Maximum Vessel Harbor Type Coast, Natural Turning Area Tide Ice Yes Swell Channel Depth 13 feet Cargo Pier Depth 13 feet Mean Tide 1 foot Anchorage Depth Oil Terminal Depth 18 feet Pilotage Advisable Yes Tugs Assist Quarantine: Pratique Yes Telephone Yes Radio Yes Air Yes Telegraph Yes Radio Tel Yes Rail Wharves Yes Anchor Yes Lifts Cranes Longshore Electrical Repair Steam Shore Power Navigation Provisions Yes Fuel Oil Yes Water Yes Diesel Oil Yes Engine Repairs Major Drydock Small Garbage Disposal Yes Dirty Ballast No Source: National Geospatial-Intelligence Agency, accessed May

97 Appendix C: Norwegian Support Bases At a meeting with Crowley and BSNC, Northern Economics was directed to examples of supply bases, one in Norway and another in Nova Scotia. Team members went to websites and compiled a list of services and goods offered at the two bases; results from Norwegian development over the past several decades are considered a better development model for BSNC and Crowley. The NorSea Group The NorSea Group ( operates supply bases and logistical centers at nine locations in coastal Norway, as shown in Figure 13. Figure 13. NorSea Group Operations, Norway Source: accessed July 2013 The group offers services in five different areas: Supply Base and Port Operations Total Integrated Logistics Infrastructure and Facilities Maritime Logistics Services Project Logistics These are discussed in the following sections. 87

98 Supply Base and Port Operations Figure 14 illustrates one of NorSea s supply bases, at an unstated site, with berthing, water depth for most vessels and a wide variety of service providers for the offshore oil and gas industry. Figure 14. NorSea Supply Base Source: accessed July Total Integrated Logistics NorSea maintains a logistical center that provides, coordinates, and delivers supplies, aircraft, and offshore vessel support services, along with waste management, cargo container units, transportation, fuel, and other services. One of NorSea Group s subsidiaries, Maritime Waste Management, offers the industry a way to meet national and international standards. Services include: Waste transport, management, and reporting Personnel training, tank cleaning, and recycling or ultimate disposal Actions that meet OSPAR 2 Best Available Technology and Best Environmental Practices requirements Infrastructure and Facilities Supply bases provide facilities for operations, warehouses and workshops, laydown yards, and office space. Figure 15 is an aerial view of Vestbase, Norway, showing its infrastructure and berthing areas. 2 The OSPAR Commission is the mechanism by which fifteen governments of the western coasts and catchments of Europe, together with the European Community, cooperate to protect the marine environment of the North-East Atlantic ( 88

99 Figure 15. Vestbase, Norway Source: accessed July 2013 Maritime Logistics Services Maritime Logistics Services is a wholly owned subsidiary of the NorSea Group that provides marine resources, both shared and dedicated, with dispatch and management of supply vessels, vessel identification, and specialized vessels for offshore supply, rescue, oil recovery and firefighting. Project Logistics NorSea s project logistics group provides pipe handling along with the skills and services from the groups 10 supply bases along the Norwegian coastline. Sample projects include: Mobilization and demobilization of anchor handling vessels Subsea support services Transshipment projects Wind power projects Inspection, repairs and maintenance Rig or platform decommissioning projects Preservation (upgrade) projects Heavy lift operations 89

100 Figure 16 illustrates heavy lift cranes at NorSea s Vestbase. Figure 16. Heavy Lift Services, Vestbase Source: accessed July

101 Summary Table Table 21 summarizes the services, by division, offered to the oil and gas industry by NorSea Group. Table 21. Summary of Services by Division, NorSea Group Division Services Supply Base and Port Operations Berthing Water depth Strong quayside (area adjacent to wharf) Cranes Transport equipment Bunkers Potable water Dry bulk Wet bulk Total Integrated Logistics Logistics center Waste management Integrated operations Logistics professionals Multiuser terminal services Integrated logistic services Infrastructure and Facilities Property development Property rental Facility Management Maritime Logistics Schedule and manage supply vessels Sublease and buy spare capacity Marine planning, vessel ID, cargo needs Vessel management, rig moves, barge handling, towing Vessel provisions, dedicated or pool, standby rescue, oil recovery Fire fighting Project Logistics Pipe handling Other: Supply base, Indonesia Mob/demob anchor handling vessels Subsea support Transshipment Wind power Inspection, repairs, maintenances Decommissioning Preservation Heavy lift Services Source: Northern Economics, adapted from July

102 Supply Base Development Figure 17 illustrates how one of NorSea s supply bases grew, in 45 years, from 1965 to These photos are illustrative of how Port Clarence may grow, given development of oil and gas in the outer continental shelf. Figure 17. Tananger Base, 1965, 2010 Source: accessed July