New shipping trade route opens with Williams Port
• Barge shipments from Homer to Iliamna-area villages first step in regional trade
By Naomi Klouda
Following fuel prices last year that rose to $9.25 per gallon in several remote villages across the Inlet, an arrangement between a small Native corporation and Homer Enterprises allowed this year’s gasoline and heating fuel prices to level off at a more manageable rate.
The villages of Iliamna, Newhalen, Kokhanok, Pedro Bay and Nondalton paid less this winter for fuel, with an adjusted cost of $6.75 for gasoline and $6.50 a gallon for No. 2 fuel in Kokhanak and various prices in the other villages that gave a better break over the previous winter’s costs.
“What made our prices higher the last three years was that we had to fly in the fuel after the (Crowley) shipping company quit coming here,” said Kokhanok Village Administrator Nathan Hill. “And now the price of fuel has dropped statewide, in conjunction. Another big factor was that we could only buy 2,000 gallons at a time.”
Kokhanok loaded up with 50,000 gallons of diesel and 5,000 gallons of gas in two shipments this summer and fall from the Iliamna Development Corp.
Each of the other four villages on the rim of the 70-mile Iliamna Lake also received the barged fuel and are set for the winter after the IDC was able to deliver 22 barge loads of freight and fuel this summer-fall.
As scientists complete environmental studies during pre-feasibility work at the Pebble Project, one of the plans discussed was using Homer as a possible staging area for receiving construction and other supplies for the proposed mine. Small enterprises such as IDC’s barge investment are working out some of the kinks ahead of time, though that wasn’t the initial goal.
IDC, the for-profit village corporation headed by Lisa Reimers, has expanded to provide economic opportunities for the region through its jobs program. In addition to construction contracts, it handles most of the hiring for the Pebble Project, which has now employed some 120 people for most of the past four seasons. Now, thanks to a $1.72 million loan for the barge, tank farm and equipment, IDC purchased the Polar Bear Barge, hoping to make freight and fuel less costly. Transportation comprises road travel and barging on waterways.
“Homer provides the closest link we have to the road system and to bulk fuel. It’s the most obvious spot there is,” said Steve Reimers, project manager for the Iliamna Development Corp. “The less transportation you do with fuel, the less expensive it is. Homer is the closest spot.”
The 150-foot Polar Bear Barge has critical timing requirements set by mother nature. The barge must leave after high tide from Homer, and be there in front of the port by the next high tide at Williams Port.
That’s a 24-hour turnaround time, with tides running 12 hours apart.
Crowley Transportation used to take a barge through the Kvichak River, but apparently found it wasn’t cost effective.
“It was unsafe and it was expensive. I don’t blame Crowley for abandoning it,” Reimers said. “We chose another route to get away from the headache.”
This route uses a combination of the 17-mile road from Williams Port to the villages, and a barge.
Several issues remain to be sorted out to simplify the prospect, such as developing port support services at Williams Port.
“It takes a project, no matter what it is, to get an economy out there,” Reimers said. “It takes a big contract and economy to sustain the plan. Otherwise, the business plan fails fast.”
Volume is the key.
Shipping fuel into the area entails small volume, but once Pebble was added into the picture, “suddenly the volume is different,” Reimers explained. “There’s no mine, but it allows us to haul lumber, propane, fuel – anything that makes a living out there cheaper and easier is what we are trying to do.”
This brings a purchasing-power that small villages – each with a population hovering at 100 or less – never had before, he said.
The barge handles helicopter fuel for the Pebble Project and ships in some equipment. Reimers said the villages are IDC’s biggest customers, though it took a Pebble contract “to make the business plan work,” he said.
Reimers estimates the fuel purchases in Homer around $650,000 for this first season, hauling 22 barge loads. Since the pick-up point is Homer, other commerce is taking place as well, such as orders placed at Spenard Builders Supply here for lumber to be sent to the villages.
“I agree that Homer has become the staging area,” Reimers said. “We’re looking at the lay of the land, we’re flying people back and forth. And we buy a lot of hotel rooms.”
The Homer Port and Harbor also benefits in dockage wharfage fees, said Harbor Master Bryan Hawkins.