Crowley VP: “I hate to say it won’t happen, but it doesn’t look good at the moment for getting our last (fuel) deliveries up to our terminal in McGrath”

by

Sep 13, 2009

Since 1896 Crowley Maritime Corp., then known as Black Navigation, has been moving fuel and freight in Arctic Alaska during the short window between break-up and freeze-up. Each year they race against the clock to deliver millions of gallons of fuel across Bush Alaska.

This year there was a delay in re-opening Tesoro’s Black Nikiski refinery on Alaska’s Kenai Peninsula after an annual maintenance break so Crowley contracted to import a third of its fuel supply, 24 million gallons, from a South Korean refinery. Chartered tankers hauled 570,000 barrels, roughly equal to three quarters of the daily throughput of the trans Alaska pipline, to the “Drill, Baby, Drill” state.

And if anyone wonders why fuel prices are higher in the Bush, Crowley VP Craig Tonga explains why in today’s Alaska Dispatch:

The tankers held steady in the deep waters off the Seward Peninsula as Crowley barges lightered cargo for transport into the shallow ports along the Alaska coastline. As many as three barges are needed to offload the fuel under optimum conditions – but as Crowley is well aware, that’s not a scenario to be counted on offshore Alaska. A storm could hit and pound the waters for seven days straight, trapping the fuel ship at a cost of $50,000 or more a day while barges linger at port. And such costs weigh into the final prices rural Alaskans pay for their fuel, Tornga says.

Crowley also buys fuel from Flint Hills Resources’ North Pole refinery but getting Alaskan fuel to Alaskans is also challenging.

Fuel from Flint Hills’ refinery in North Pole begins its journey to the Bush on rail tankers, ending up at the shores of Cook Inlet, where it’s loaded on barges. From barges the fuel is transferred to offshore vessels, and then to terminals. In Kotzebue, for example, fuel may be shifted to a river barge destined for communities up the Koyuk River, and then possibly trucked before it ends up in village fuel tanks.

Western and northern Alaska beyond Dutch Harbor lack ports deep enough to accommodate the draw of a loaded oil vessel. So the tankers sit well back from the shores and a fleet of smaller vessels lighters fuel off the tankers, shooting out to communities with deliveries. In some places, beaches have no docks. Barges are stuck waiting for the tide to change. In others, docks lack headers for offloading fuel, and crews have to reel out up to 1,000 feet of 4-inch hose to move the product to storage tanks. To serve a few communities, Crowley’s ships carry ramps, a crane and a truck; the truck is offloaded to the beach, where it’s filled to 5,000 gallons before making a drop down the road.

Stricter EPA regulations will drive the price up further in coming years but for now the focus is on getting the fuel to the villages in time this year.

In the Interior, nights are already dropping below freezing, and the Kuskokwim River at McGrath — about five feet shallower than normal at this time of year — has started to freeze.

“I hate to say it won’t happen, but it doesn’t look good at the moment for getting our last deliveries up to our terminal in McGrath,” Tornga said. “Finishing the season is very contingent on how soon it’s going to freeze up, and (if we are) going to have enough water in those rivers to make the deliveries.”

Is anyone else wondering why Alaska is so eager to pump its natural gas to us down here in the lower forty-eight when it could be put to much better use in its own backyard?

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5 Responses to “Crowley VP: “I hate to say it won’t happen, but it doesn’t look good at the moment for getting our last (fuel) deliveries up to our terminal in McGrath””

  1. Nan (aka roswellborn) Says:

    “Is anyone else wondering why Alaska is so eager to pump its natural gas to us down here in the lower forty-eight when it could be put to much better use in its own backyard?”

    Yes! And have been, for some time now.

  2. Jim Says:

    ADN has an interview with AG Sullivan:

    http://www.adn.com/news/alaska/rural/story/934102.html

    The Attorney General indicated the subcabinet has met three times. The Department of Law told me the subcabinet had met (as of a couple weeks ago) six times since January 2009. Perhaps the subcabinet met three times alone, and another three times with its Advisory Panel.

    I’d be sad if some villages, especially on the Kuskokwim, don’t get all their winter fuel delivered before freeze-up. I don’t think there would be any excuse for that. However it is good the State seems to be trying harder this year, and the new governor is obviously more focused on rural issues. They still have a lot of work to do and a long ways to go before they repair the former governor’s damage.

  3. Jim Says:

    Not entirely on the fuel delivery topic, but on the rural subcabinet, here is what an ADN reader from Unalakleet posted in comments to today’s article that I cited above, regarding today’s subcabinet visit to Unalakleet– why am I not surprised? Didn’t the State tell the people of Unalakleet they were coming? (I don’t know, but what a waste if they didn’t). Did they invite the public or just their friends?

    Anybody got friends in Kotzebue? It is my understanding the subcabinet will be there tomorrow, September 15.

    ADN discussion quote below:

    pingumiut wrote on 09/14/2009 12:26:31 PM:
    News to me–a public hearing in Unalakleet today!?! I live in Unalakleet and there was no local public notice about this public hearing (I read about it in today’s ADN). The rural subcabinet has no clue–why schedule a hearing on the last day of moose season–do they wish to exclude people participating in subsistence activity? Why was no local notice given? There are no announcements posted in town nor is it on the local/regional AM radio stations. These “dignitaries” will fly-in, show face, and fly-out. Much like Palin did here on her farewell tour. Only the invited local Palinistas will attend this hearing–the rest of us will be busy living life.

  4. Martha Unalaska Yard Sign Says:

    There is a major disconnect going on with the state – no wonder they are having trouble framing what this subcabinet needs to do to help Rural Alaskans. We’ve heard this almost every time they have visited the villages. No or very little advance notice, being late without letting anyone know – this needs to change. Now the last day of moose season for a visit, so much for thinking ahead in rural terms! Finding common ground and developing mutual courtesy between rural and urban Alaskans is imperative.

    We need a Rural Ambassador more than a Rural Advisor. C’mon State of Alaska – you can do this, we know you can!

  5. Jim Says:

    Here is an earlier announcement at the Anchorage Daily News:

    http://www.adn.com/news/alaska/story/931898.html

    This is the only pre-announcement I could find. Perhaps local newspapers in Kotzebue and Unalakleet also had announcements. I could not find any public announcements on the State’s website.

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