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Should Alaska take the lead in financing new icebreakers?

Alex DeMarban
U.S. Coast Guard photo

Gov. Sean Parnell says the state might be interested in helping finance a new icebreaker so the U.S. can make up lost ground in the race for Arctic dominance.

That's the gist of the governor's response to a lengthy letter from Rep. Don Young offering ideas on how Alaska can help the cash-strapped federal government put costly new icebreakers off Alaska's increasingly busy northern coasts.

With the nation's icebreaking fleet reduced to a single working ship -- its two large icebreakers are undergoing repairs or being decommissioned -- the state and U.S. government should consider sharing costs to make new icebreakers a reality, Young suggested in a Feb. 7 letter to Parnell. New or refurbished icebreakers will cost hundreds of millions of dollars.

More ships are plowing through the Bering Strait as sailing seasons lengthen in the warming but often ice-choked Arctic. The U.S. Coast Guard predicts traffic will continue growing as shipping, resource development and tourism expands. But the Healy, a "medium duty" icebreaker that escorted a Russian fuel tanker to Nome this winter, is the Coast Guard's lone functioning icebreaker.

'Creative financing'

"Without access to heavy icebreakers, we will be unable to adapt to historic changes in the Arctic," Young wrote. "Icebreakers are critical for ensuring safe shipping and resource operations and providing for field research opportunities."

He continues: "Given the current fiscal climate in D.C., funding the acquisition of new vessels presents a significant challenge. It is clear that we must consider creative financing and ownership options to move forward."  

In addition to helping bankroll the project, the state should also think about owning an icebreaker with private firms. The state could refurbish the Polar Sea or the Polar Star. It could then lease its icebreakers to the Coast Guard and National Science Foundation, wrote Young.

Last fall, Young introduced legislation calling on the federal government to lease two large icebreakers for at least 10 years from private entities that own and operate the ships. The ships must be built on American soil, according to the bill, which remains in the House Transportation and Infrastructure Committee.  

Parnell wrote Young back in a March 15 letter: "You must be as dismayed as I am to see the federal mission in the Arctic to assist marine trade, provide search and rescue, and provide law enforcement through ice-breaking services diminish so significantly."

Parnell said the state won't subsidize US responsibilities such as icebreaking. But it is willing to help the federal government improve its ice-breaking capability.  

"We can look at all the ways the state can be supportive and helpful, such as financing," Parnell wrote.

Parnell's letter didn't address the kinds of "financing" the state could provide. A request to his office seeking clarification wasn't returned Wednesday evening.

Would Shell be a client?

Jim Hemsath, deputy director at the Alaska Industrial and Development Authority (AIDEA), said the financing agency hasn't been involved in discussions with the governor about paying for icebreakers. But one option could include state-issued bonds, a concept that wouldn't necessarily involve AIDEA, he said. The agency could be involved by assessing the market for an icebreaker, he said.

Would Shell, for example, consider renting an icebreaker when it begins exploratory drilling, possibly this summer?   

"Too early to comment on the commercial appeal of an Alaska-owned Arctic vessel," said Curtis Smith, a Shell spokesman, in an email.  

A new icebreaker could cost $900 million, while refurbishing the Polar Sea or Polar Star could run $500 million apiece, according to the Congressional Research Service.

Michael Terminel of shipbuilder Edison Chouest Offshore said his company might be interested in working with the state in developing an icebreaker if it won that right through a competitive bidding process.

Edison, based in Cut Off, La., has built four icebreakers, including the Nanuq and Aiviq, to support Shell's proposed drilling operations in the Beaufort and Chukchi seas. The Aiviq was built relatively quickly and for a little more than $200 million -- considerably less than the Coast Guard estimates for a new icebreaker.

"We're open to looking at all business opportunities," Terminel said.

Chouest companies have been huge donors to Young and other members of the Alaska delegation.   

Some state lawmakers, such as Sen. Lesil McGuire, have also called for Alaska-owned icebreakers.

Contact Alex DeMarban at alex(at)alaskadispatch.com