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For decades, the Port of Alaska has been the main entry point for the majority of Alaska goods.

But the Anchorage facility must modernize to sustain this critical service into the future.

So the infrastructure that this port depends on is very much in urgent need of update.

What does the full project entail?

How much will the upgrades cost and when will it be completed?

We'll learn more right now on Alaska INSIGHT.

Good evening.

Nearly 60 years ago, Anchorage became the main point of entry for building materials, consumer goods and military support.

After Seward's port was destroyed by the tsunami triggered by the 1964 earthquake, there are many advantages to having the main port in the state's largest city.

But as we'll learn tonight, there are also challenges.

Before we get to that discussion, we'll start off with some of the top stories of the week from Alaska Public Media's collaborative statewide news Network.

Alaska is getting a huge boost in federal money to build water and sewer systems in Alaska native communities.

The Indian Health Service is sending $440 million.

The money comes from the infrastructure bill Congress passed in 2021 and from earmarks, US Senator Lisa Murkowski requested in the annual appropriations bills, as well as regular federal budget.

Charissa Williar, the director of the Sanitation Facilities Program for the Alaska Native Tribal Health Consortium, says the money will pay for projects in 42 communities around the state, including six villages that will get piped water for the first time.

Williar says a key aspect of the project is that local people will be trained to build them with opportunities to become licensed plumbers, electricians or carpenters.

Construction is likely to begin in two or three years after the design is complete.

Once these projects are done, Williar said, fewer than 30 Alaska villages will still be without piped running water and flush toilets.

Repairs are complete to a severed fiber optic cable, affecting Internet and cell phone service in much of northern and western Alaska.

GCI announced the repairs in an email to customers on Monday, 14 weeks after the cable was cut by sea ice in the Arctic Ocean west of Prudhoe Bay.

Many people in the affected regions experienced spotty Internet and cell service and at times no Internet connectivity at all.

The company that built and owns the cable Quintilian originally anticipated service would be restored in eight weeks, but that timeline slipped several times when the cable initially broke.

GCI switched customers to the company's satellite and TERRA Networks, which allowed for some connectivity.

GCI is now transferring customers back to the faster fiber optic service that connects to the Quintilian Cable.

The National Oceanic and Atmospheric Administration's vessel Okeanos Explorer is docked in Seward after finishing a five month research expedition of Maritime Alaska.

The expedition surveyed maritime regions throughout the state, including the Gulf of Alaska, the Aleutian Trench and the Kodiak Buoy Seamount chain.

Specimens collected during the Alaska expedition include a previously unknown species of coral and a seastar that may fall under a new genus.

During the expedition, the vessel mapped more than 187,000 square kilometers of Alaska's ocean floor, roughly the size of Washington State.

The Oceana's explorer's next expedition will focus on the waters of the Pacific Islands.

You can find the full versions of these stories and more on our website.

Alaska Public dot org or get breaking news alerts right to your phone by downloading the Alaska Public Media app.

Now on to our discussion for this evening.

The Port of Alaska escaped the devastating 1964 earthquake relatively unscathed, which left it poised to take up much of the state's cargo traffic as other communities rebuilt.

60 years later, nearly 90% of all goods entering the state move through the port.

Now it's undergoing a massive modernized ocean project to keep it protected from natural disasters, erosion and heavy use to fully grasp the scope of this project.

I toured the port with director Steve Ribuffo We really don't get a sense of how huge it is until you're down here and small.

We start in the port's office building on the main terminal next to where the port's main users, Matson and Tote, conduct their business.

Let me kind of walk you through as Port Director Steve Ribuffo explains.

Those companies can't pause operations while the port is under construction.

We can't just ask the people that are coming here now to go find someplace else to go and come back when we're done because, well, number one, there is no place else for them to go.

The challenge was how do we keep enough of the old open while we're building the new?

Step one was to move the port's petroleum and cement terminal, and in May, the first ship started to dock there.

Now that's opening up a room to start working on the first new dock.

This is the kind of vessel that Matson brings in.

These new docks will be wider and sturdier with larger cranes closer to industry standards.

Ribuffo says that's in part because the current docks aren't big enough for many of Matson's ships.

The booms on these only go out so far.

They're far enough to cover the width of this vessel.

But anything bigger, even in their inventory when it comes here, they either have to load it so that they don't have to reach all the way to the other end.

Or if they do, they've got to pull it away from the dock, turn it around, come back.

I imagine carries its own set of risks.

Anytime you're moving it, every time you move something that big as close to something this old.

There's always risk.

And that's the other main reason for the rebuild.

The port is old.

And as U.S. Transportation Secretary Pete Buttigieg noted in a recent visit, it's deteriorating.

The infrastructure that this port depends on is very much in urgent need of update.

The original terminals were constructed before many of us were born, and for after the better part of a century, as we've seen firsthand in today's visit, their very foundations are beginning to corrode and come apart.

Buttigieg noted a nearly $70 million grant the port received from his department in 2022.

Overall, the modernization project boasts a price tag approaching $2 billion in overall pile.

It's a permitting thing.

It's a cost thing.

But despite the cost, Ribuffo says the port sees relatively little traffic, at least compared to the lower 48.

We get a utilization rate on the dock.

We have now of less than 40%, which means 60% of the time.

But looking out the window and there's nothing going on yet because you don't need any more than that to support the population.

The number seems low, and with Alaska's population growth slowing or even reversing, Ribuffo says port activity isn't likely to increase any time soon.

The upgrades, though, aren't to expand, but to stay viable.

We've got to upgrade what we have because this is not state of the industry.

It is getting harder and harder every year to find parts to fix these.

An investment now to carry Alaska into the future for years to come.

What a great way to set up a deeper discussion about this massive project.

Steve Ribuffo star of the video story you just watched.

And of course also the director of the Port of Alaska is here to more thoroughly describe the need, the work plan and the timeline for completion.

Welcome.

Morning.

It's great to be here.

Thanks so much for joining us.

I did want to note that we invited the mayor, Mayor Bronson, or someone from his administration to join us, but they were not available.

So Steve, turning to you, as I just mentioned, the mayor was invited, couldn't be here.

But Mayor Bronson is supportive of the direction that things are moving in and the current design and plan.

Is that correct?

Very much so.

In fact, I we down at the port have appreciated the fact that for as long as we've been involved with this program, there hasn't been a mayor who hasn't been supportive of this.

I think it's very easy to get folks to appreciate how important this port is to not only Anchorage, but the entire state.

And just take one tour of the place and you can cement that opinion in your head pretty darn fast.

It's a critical piece of infrastructure that needs a lot of work.

And in our case, most of it is beyond the point of fixing.

And you and you do have to replace the facility.

And it's not a it's not a hard story to convince people is the right way to go.

So backing up some the main port for Alaska wasn't Seward until the 1964 earthquake, which was an opportunity for Anchorage city leaders who wanted the port to be in Anchorage and had already started building.

Correct.

That's correct.

The initial reason for putting a port in Anchorage was to see how much of what was always going into Seward, how much of that you could entice away from having to go through the supply chain.

Of course, you know, of course, of events to get to Anchorage, if it could come here directly, because this is where the population center was, then they could better serve the citizens that live close by, close by the port area.

So that was the initial intent of it all, was to just siphon off some of that business that was going into Seward.

It was never to replace Seward as the port of entry for the state, but Mother Nature sort of changed things for everybody.

Yeah, certainly did.

The port doesn't get any local tax money.

How is revenue generated and does the port make enough to pay its own freight?

Forgive the pun.

Yeah.

And that's a you know, that's a question that a lot of people have because they they don't understand the business model that we operate under.

There are four departments in a municipality that fall into a category called enterprise and utility departments, which means and the port is one of those.

And that means that we are required to generate enough revenue to cover all of our expenses without the requirement for property tax dollars to come down and augment what we need to manage the place.

We also are required to pay the city a payment in lieu of taxes every year, just like a business.

It's called a MESA, a municipal enterprise service assessment.

And we also pay a dividend to the city every year as well.

So we have to generate enough money to cover all of our own expenses, plus those financial obligations back to the city every year.

And since the 1964 earthquake, we have done that faithfully and without fail.

Every year, about a decade ago, contracted work on port infrastructure failed.

The city sued and just last year was awarded full damages of $367 million.

Has the Maritime Administration or mayor ad paid up though the Oregon to the federal organization that had the failed design and this in a city sued.

Do you have those funds now to do this work?

Yeah, that's a good question.

You would love to think lawsuits settle as fast as they do on TV shows.

But the fact of the matter is these things will drag out for quite a while.

Good news, bad news.

You're right.

We were awarded in the lower court $367 million, which was every penny we asked for.

So we must have made a compelling enough argument for the judge in that at that level to to see that there was a legitimate reason for us to get reimbursed off the case, as most do have, has gone to appeal.

And it's the Department of Justice who who represents the maritime administration in this action.

So they filed for the appeal within the time they were allowed to do so.

And the appeal process is now playing itself out.

So we haven't seen any of the money yet.

And in a lot of our planning, we haven't assumed we're going to see any of the money anytime soon, so that when it does come, it's going to be a big relief to what we would have otherwise had to put in place for financial plans.

But but in the meantime, we're waiting for that portion of the appeal process.

That is the oral arguments in front of the court, of federal claims in front of the appeal judges.

And once that happens, then everything that the court needs to make its final decision, they'll have.

And it's just a matter now waiting for them to make their ruling.

So we if we can get into oral arguments before the end of this year, then we're kind of hoping that by the end of first quarter, 24, it's all going to be resolved behind us and we'll know what that settlement amount will actually be based on the initial court proceedings.

Are you confident that you'll still prevail through the appeals?

Yeah, I am.

And I am for a couple of different reasons.

Number one is if we had a compelling enough case for the judge in the lower court to give us every dime we asked for, and when we took a look at what the arguments, the arguments that were presented during the appeal process, we saw nothing different than what was presented in the first place.

So it's going to be kind of hard to think that there's going to be some different opinion that's going to come out of this after the court reads what the ruling from the lower court was.

So I'm pretty confident we will come away with pretty much all of it.

All right.

As we saw in the opening story last spring, vessels started docking at the new concrete and petroleum dock.

What else was worked on over this summer and what does next year's work plan?

Cement.

Cement and petroleum.

Cement.

Not concrete.

Not concrete.

Darn it.

Got that wrong.

Yeah.

Comes out of it.

Comes out of the ship as powder.

Right?

Yeah.

You don't want any sooner than you really need concrete.

You wouldn't be offloading concrete.

No, it'd be pretty heavy too, so.

But what's going on this year is.

And the petroleum cement terminal construction was what we called phase one of the modernization program.

So now we're in phase two and phase two has a to a portion and A to B portion.

So we're in the two way portion now, and that has to come before we can do any in-water construction to create a new dock.

And what we're doing in this current phase is two things.

Yeah.

When you when you came down and toured, you walked through our our office building.

Our office building sits on the oldest part of the dock and it sits on the dock and we need to get off of that dock because that's the first part of the port that's going to get demolished so that we can start at the southernmost part of the existing facility to demolish and replace with the new.

So we have to get off of the dock and under construction now, which is our new office building.

It started last year.

We're hoping to see it finished in time to be out into the new one by March or April of 2024.

The other thing that's going on is a process we call North Extension stabilization.

Step one.

You mentioned that there was, you know, the Merritt lawsuit is a is coming out of the fact that the whole North and part of the port that was created as the first part of the old expansion project, the construction was poorly done.

The engineering had flaws.

So it was very unstable and unusable for any kind of business needs.

So a good chunk of that has to come out.

And this north extension stabilization step one is taking out that that first portion of unstable area north of the existing dock have to do that for for two reasons.

Number one, you don't want another earthquake come along and put all of that soil and all that steel in the water.

So all of that has to come out and be stabilized.

And the reason why you have to do that first is because if we start construction on the new dock south of the portion of the dock that we have to leave open, then you've created a dangerous situation for those ships that have to come in and out.

There's land blocking them on one side.

There's construction blocking them on the other side.

And so you're asking them to kind of parallel park in a bathtub and not so bad in the summertime by comparison.

But throw in the ice in the wind in the wintertime and it's going to be darn near impossible to safely put anything in and out.

But if we take that area on the north end off, then you've created more maneuvering space to the north of the part of the dock We're going to leave left so ships can safely get in and out.

The project, of course, is huge.

You're talking you're moving your entire office building, setting it back farther away from the dock.

But the actual footprint of this modernization will be, if I'm understanding correctly, will be smaller than the original proposal.

Yes, it's going to be a little bit smaller as we see the design today.

You know, the first cargo dock is still in the design process.

We just it just reached 35%.

We hope to see 65% by the end of the year, which is enough of a design to go out to bid for the construction on it.

As we finish, as we finish it and get it to a kind of blueprint stage so you can begin construction.

But overall, as we have the plan today, it's going to be about 500 feet shorter than than what it is we have now.

And the reason for that is that you have to make nowadays, you have to make a business case for that which you're going to build, because at the end of the day, you construct it, you better have the revenue to maintain it.

And if you build more than you have the revenue to maintain, then shame on you.

You know, you've created you've created a situation where you can't keep up with the repairs that you have to do because you're not making enough income to cover the maintenance and repair expenses that you're going to need.

So we spent a lot of time painfully figuring out what the right size is to continue to support the kinds of vessels that are coming here and that we know are going to come here in the future, but not overbuild it because that's a nice thing to do.

Yeah, well, I was kind of surprised when we were talking down at the port facility that you said, you know, we use this less than 40% of the time.

Yes.

60% time.

We're looking out the window.

Has that made it harder to get support for this massive amount of funding that you know?

Well, no, it doesn't.

And the reason is because if we were simply talking about the mission we have in support of commerce, we could wax philosophical about just that question all day, every day.

Some people have told us that, you know, business is such that you should just build one dock until these guys come in on different days, you know, But there's whole supply chain reasons why you can't do that anyway.

So that was another reason why.

Okay, then let's not build more than we then we actually need to have.

But we have two other missions too.

We have a mission in support of the Department of Defense, Right?

We are one of 18 commercial strategic seaports.

And we also have a mission in support of FEMA and the State Department of Homeland Security and Emergency management, because there's not a single disaster response and recovery plan written for Alaska that doesn't assume this port is above the waterline and will be part of where all those disaster relief supplies are going to come in to us to help to help solve the big problem.

So when you put put the whole decision in the context of all of that, it may not be something that you need every day, but you're going to kick yourself in the backside when you if you actually do need it.

And it's not there because we have to be prepared to take it.

In that disaster response scenario, for example, we have to be prepared to take anything that the shipping industry is going to throw at us to come up here to be part of the relief effort.

And military vessels are pretty big in size.

The ones that are that come up here to transport the army in and out of the port are over 1000 feet long.

When they drop their ramps on the dock.

And we have to continue to be able to have enough dock to do that as well.

And we tend to focus a lot on the commercial mission and only on the commercial mission because frankly, that's the one that pays the bills.

That is where most of the revenue generates from.

But you can't put the decisions that you make through the infrastructure for this port.

In just that context.

You have to you have to expand it when going through the design phase and building for the future.

I believe you said that the design is considering the potential of up to four feet of sea level rise.

Yeah, in fact, a new petroleum cement terminal has exactly that factored into its final design.

We added four feet to the height of the wharf piles because it's a 70 year design and in 70 years we stay.

Engineers have done the math and they've looked at what sea level rise forecasts are, and it could be anywhere from two, from 2 to 4 feet.

So let's air on the high on the high side for this.

And so we added four feet to the height of the dock and we will do that on the cargo docks as well.

It's, you know, if you're looking for a facility that has to have both resiliency and redundancy, you have to factor all of those things into that.

That's that number really stayed with me after our visit at the port, because that's that's kind of a profound thought.

As we saw earlier, US Transportation Secretary Pete Buttigieg toured the port in August, said that the $68 million that was awarded last year through the Port Infrastructure Development Program was the largest single award in the country.

Did the secretary signal that more federal funds will be coming this way?

I think we've made we did a very good job of convincing him of how important this is.

And we have also had the opportunity to to have visitors from our friends at the other end of the Alaska supply chain from Washington State, from their delegation in Washington.

They've come up here.

I know Senator Maria Cantwell, who who sits on the opposite side of the aisle from Senator Dan Sullivan, but the two of them are in lockstep on the importance of the Port of Tacoma to Alaska and the port of Alaska as the other end of the supply chain.

And they are sort of partners in crime, touting the importance of both these both these facilities at the federal level.

So we're tickled to death that we have that kind of support.

We will continue to go after every single possible grant dollar we can that the federal government makes about makes available for ports to compete for.

And we've been very successful so far.

It was a huge deal for us, and I applaud the folks that put all the effort into writing that grant to get the biggest one that was awarded last year.

That's that's huge.

And we've gotten a lot of phone calls.

You know, you're asking what the secret source was.

So we've been able to, you know, kind of share some of that with our colleagues out there.

An interesting thing about the the big infrastructure program is ports overall didn't fare as well with respect to what their piece of the pie is going to be.

When you compare that to what highways are getting in airports and railroads and the like.

You mean because those particular modes of transportation are part of the Dot's formula program, they're getting the lion's share of all of that infrastructure, money, ports don't participate in that formulary.

So what we got was bigger pots of grant dollars to go after.

And well, why just last week we found out from DOT and that we are on a we're we had we had a compete to get permission to apply for one of their Tiffy grants.

Yeah go figure.

Right.

Yeah.

And the tip your grant is it's a grant program.

The DOT has very low interest rate, very, very appealing payback terms of 5060 years to pay them back.

And it even has a little vehicle in it that says that.

Oh, and you won't have to, you know, you don't have to pay for the first five years.

We'll have to we'll have to leave it there.

Thank you so much, Steve.

Thanks for helping us better understand this project.

You're welcome.

Whether it's light bulbs, crackers, fishing line, new boots or food for your cat, just about anything and everything you may need in your daily life is shipped into our remote state.

We have the joy of living in a beautiful place.

But the challenge of importing nearly all supplies that don't come from the land or water a modern port facility is critical for sustaining a modern Alaska economy for decades to come.

That's it for this edition of Alaska INSIGHT.

Visit our website, Alaska Public dot org for breaking news and reports from our partner stations across the state.

While you're there, sign up for our free daily Digest so you won't miss any of Alaska's top stories of the day.

We'll be back next Friday.

Thanks for joining us this evening.

I'm Lori Townsend.

Good night.