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Polar Pioneer: An Economic Boon For Dutch Harbor

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Polar Pioneer: An Economic Boon For Dutch Harbor

By Emily Schwing, KUCB – Unalaska | June 29, 2015

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Billions of dollars worth of drilling equipment and support vessels operated by Royal Dutch Shell are sitting out in the Bay in front of Dutch Harbor this week. The company has plans to take most of that equipment north for exploratory drilling operations later this summer. Many of the local businesses benefit from the oil giant’s presence.

Dutch Harbor is a busy place this time of year.

“The flights are all full, the hotel is full, vehicles – trucks for rent – companies that rent vehicles – they’re all rented.”

City Mayor Shirley Marquardt says the bustle isn’t unusual. She compares it to the uptick in business the community last saw when the pollock fishery took off in the 1980s and 90s.

“… and you had the big at-sea processor fleet show up, these big boats participating in this massive fishery and they’re all coming into town and said ‘we need everything.’”

But this year, much of that business can be attributed to oil giant, Shell.  Spokeswoman Megan Baldino says 15 company personnel have been in Dutch Harbor for at least the last two weeks.  Now that the company’s drill rig has arrived, she expects even more people to come and go.

“We can expect on average about 35 in bound passengers a day and about 15 outbound, over the next two to three weeks.  It’s important to remember those are averages and on any given day the numbers could be lower or higher.”

Baldino says Dutch Harbor will serve as a logistics hub as the company carries out its exploratory drilling plans further north in the Chukchi and Beaufort Seas over the next two years.

“Some of the activities include resupply, crew change, refueling and transfer and storage of material. These are probably pretty typical things people see from other projects although obviously having a drill rig in our near Dutch is going to be new for some people.”

Because flights to and from the island are limited, the company has contracted Anchorage-based Ravn Alaska to fly personnel in and out on an almost daily basis.  Charlotte Siegreen is Ravn’s spokeswoman.

“It’s usually around one or two a day for the next couple of weeks.”

There’s only one airline that flies commercially into Dutch Harbor.  Siegreen says it’s not yet clear if Ravn will consider regularly scheduled flights to Dutch Harbor when its contract with Shell ends.

“We’ve always said that we continue to look for new opportunities in different markets, but we don’t have an immediate plans to make any scheduled service changes, but we’re always looking.  I can say that.”

With the influx of so many people, Shell has booked a block of rooms at the Grand Aleutian Hotel.

“We are full.”

Lori Smith is the General Manger of Hospitality for Unisea, the seafood producer that owns the Grand Aleutian and nearby Harbor View hotels. She says May and June have been busier in comparison to previous years.

“We had a small conference, there’s a lot of construction groups in town as well as Shell Oil at the hotel.”

But Smith says the oil company has been careful to relinquish rooms it is not using to free up space in a community where housing is extremely limited.  Mayor Shirley Marquardt says her administration has worked closely with Shell to ensure their presence doesn’t have a negative impact.

“We’ve been very up front and very honest with Shell from day one, of ‘if you’re not going to hire people…. From a company that… and they’re going to be living and based out of Unalaska… do not come into town and jack up prices and kick people out of their homes.”

Marquardt says so far, housing prices have remained stable.  She says it’s unclear how the job market might change.

“It’s too early to tell. When they were here the last time they did hire a lot of local folks for security and logistics.”

Megan Baldino says Shell has contracted a number of local companies for work this summer.

“The majority of labor provided by our contracting partners are local hires at OSI, Delta Western, Grand Aleutian, Horizon Lines, Northstar.  So, there are some areas we bring in people who we’ve trained to certain competency requirements. But in the future there are plans to train and utilize local staffing so we can meet those needs locally.”

The city doesn’t have a system to attribute tax revenue directly to the oil company’s presence, but city officials say they expect an uptick in revenue collected from both bed and fuel taxes.

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