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Ecology and economics: a new mix?

Cleaning up a cleaner environment, a changing scene for environmental contractors.

Any number of choices might have had a better outcome than attempting to move the Japanese freighter Kuroshima from its perilous anchorage near Dutch Harbor the afternoon of November 26. Winds of 80 knots pushed the ship onto the shore near Second Priest Rock. Shortly thereafter, the hull ripped open spilling 39,000 gallons of bunker-grade fuel into the water - hence, Alaska's second largest oil spill! In a scene vaguely reminiscent of the Exxon Valdez spill of 1989, environmental cleanup crews began mucking about a 3,500-foot stretch of beach and the shores of nearby Summer Lake.

A month after crews began cleanup efforts at the Kuroshima site, a tanker truck overturned, dumping 300 gallons of fuel oil onto the streets of Juneau. Snow berms contained most of that oil, but some of it slipped down storm drains which lead to nearby Gastineau Channel. Crews responding there deployed an oil containment boom near the storm drain outlet in the channel and began sopping oil from the streets with absorbent pads.

These are but two incidents in one year of Alaska's environmental cleanup operations. And spills are only one facet of an industry that has broadened to 15 categories, which include soil and groundwater remediation, cleaning up old industrial and military sites; removing hazardous/toxic wastes and fuel storage tanks, training personnel and recycling.

At $218.5 million per year, environmental cleanup is one of Alaska's newest industries. About half of that money will be spent in pass-through contracts with various departments of the military this year. The remainder will go to underground tank remediation, and various Superfund site projects.

Someone's Got To Do It

While even the pessimist might admit this serendipitous industry creates employment for contractors and vendors, statistics on the number of jobs are mired in details. Because many environmental contractors are listed among the state's 4,800 general or specialty contractors, their numbers slip between the cracks at the State of Alaska's Division of Occupational Licensing. Likewise, the data was soft at the Alaska Department of Environmental Conservation, the Environmental Protection Agency and various offices at the Alaska Department of Labor. Two years ago, Alaska Business Monthly counted 118 contractors in the business after generating a mail-out survey of contractors known to work in the industry. Even that survey contains a margin of error because not all queried parties responded.

Nowadays, the number of cleanup contractors appears to be waning. In using the 1997 mailing list to complete this year's survey, Alaska Business Monthly found only 82 respondents. It wasn't that survey recipients didn't take the time to complete the questionnaire and mail it back; many of the surveys returned to ABM headquarters were marked "Moved. Left no Address", suggesting that either these entities closed their doors, consolidated with other companies or moved elsewhere.

Changing Industry

Theories abound about how the industry may be changing. One argument has it that Alaska's major cleanup contracts have matured from early phases, which included assessment or consultation, and have now moved into the physical removal of materials.

Eric Evered, manager of Alaska operations for Jacobs Engineering Group Inc., offers the idea that companies "specializing in remedial investigations on the front end of projects" may have run out of work. "Much of that work has been completed," he says, adding that in the future, operations and maintenance contracts at cleaned up sites will require even less workforce.

With 14,000 offices worldwide, Jacobs Engineering, a company diversified in engineering and construction, transitioned into environmental work in the '80s, came to Alaska in 1990 and has been awarded a Total Environmental Restoration Contract (TERC) with the U.S. Air Force to clean up sites at Dutch Harbor, Akutan, Cold Bay, Kodiak, Haines and elsewhere around the state.

Changes to the TERC program in 1995 allowed the government to lump assessment and remediation phases together so that one contractor might complete all aspects of the job under a single bid. This enabled the government to shop for a better bargain. "Typically the contracts were let in four steps," Evered says of TERC projects prior to 1995. "Each step might take five years to complete," he adds, hypothetically. "But TERC enables the government to combine those steps."

Though it's questionable whether streamlining the TERC program contributed to a reduction in the number of environmental contractors - making them subcontractors or replacing them with subcontractors, the new model surely means less money In reports by the U.S. Army Corps of Engineers, (USAGE) which oversees Alaska's TERC program, the savings on some projects have been immense: At Akutan, the government saved more than $6 million in costs and five years in the scheduled time of a cleanup project consisting of barging and recycling 60,000 gallons of bunker-grade fuel, and demolishing six 200,000 gallon storage tanks. "Because this project was so successful," the November, 1997 report concluded, "the Alaska District USAGE is considering modifications to its Formerly Used Defense Site (FUDS) program cleanup process so that more sites can be closed-out over a shorter period of time."

Local Hire Improves

Cutting down on the total amount of work time to complete a job didn't necessarily narrow the number of jobs available to local contractors. In fact, a provision in the language of the new program mandated local hire and was a consideration in awarding Jacobs the bid. After winning the 1995 contract, Jacobs subcontracted with more than 460 Alaskan companies and work went to entities like Radian, Shannon and Wilson, Inc., Wilder Construction Co. and Philip Environmental. In the USACE report on subcontracting, awards to small businesses comprised 77 percent of a total $19.9 million spent on various projects, but in Alaska 88 percent of the money went to 49th State companies.

The reworked TERC has not been the only program to promote local hire. Changes in the way state agencies conduct operations in non-TERC, non-Superfund projects have lead to a greater efficiency and the promotion of local companies and jobs. The precedent was set two years ago, when the EPA led a non-TERC Air Force project requiring the removal of 1,750 barrels from old dumpsites near King Salmon.

Because the sites contained mostly hydrocarbon pollutants - and lacked lead, PCB's, battery acid and other hazardous materials - it was exempted from designation as a Superfund project. Sidestepping the Superfund allowed the U.S. Environmental Protection Agency (EPA) to act as the lead agency in a three-part agreement with the Alaska Department of Environmental Conservation (ADEC) and the Air Force in the remediation. The three agencies then hired Bristol Environmental Services, (BES) a wholly-owned subsidiary of Bristol Bay Native Corporation and Nugget Construction Inc., both of Anchorage. These two entities entered a joint venture agreement to clean up the barrels and build a water treatment plant.

By the time the two-year, $10.5 million project was complete, the state had realized an expedient way to clean up old barrels; and local hire was running near 100 percent. "This has really put not only BES, but Nugget on the Alaska map," says Bristol Environmental's Rick Rydell.

Rick Albright, director of EPA Alaska operations in Anchorage agrees that it was a winning combination. "It not only employed people locally," says Albright of the 70-or-so jobs the project created. "But it helped them understand and accept the cleanup. They felt better about it."

What's To Come?

If some suggest that someday environmental cleanup contracts will be a thing of the past, a low flight over rural Alaska should reveal the final cleanup frontier: solid waste. In many villages, household garbage blows out of shallow pits and across the tundra, or blows out to sea and winds up on a remote beach.

The ultimate solutions will embrace some form of consolidation, but even that appears futuristic, given the distance and the lack of roads between most villages. In a testament to the futility, the state appealed for an exemption from national standards under the Land Disposal Program Flexibility Act of 1996. "We've got additional flexibility, a legal basis for what we're doing anyway," says Heather Stoddard, the state's director of solid wastes. Nonetheless, there has been some progress, says Stoddard and her associates. Though it isn't required under its designation as a Class III landfill, the dump at Thorne Bay, on Prince of Wales Island, in Southeast Alaska, boasts of an operator on duty, controlled access, and the pit undergoes a daily soil covering with a (bull) dozer.

Nearer thriving transportation routes, some former landfills like those near Big Lake, Butte, Sutton, Trapper Creek and Willow have become transfer stations, where the garbage falls into dumpsters. The loaded dumpsters are trucked to the Central Landfill located between Palmer and Wasilla. Central Landfill serves as the main depository for solid wastes collected from as far north as Gracious House on the Denali Highway and as far east, as a small transfer site near Lake Louise on the Glenn Highway. Batteries and other hazardous substances are dropped off in a separate area for shipment to other facilities or recyclers, some of which are in the Lower 48. On the last Saturday of each month, Central Landfill will accept up to 220 pounds of household chemicals running the gamut from acids to pesticides to wood preservatives.

To play upon the cliche that time is money, time may eventually bring money - and the proper infrastructure to support solid waste removal at Alaska's more remote towns and villages. For three years, Ketchikan has been barging its garbage in containers South to Tacoma, where it hits the rails, rolls east and ultimately gets dumped at a mega landfill in eastern Washington. The city entered into a 5-year contract with Regional Disposal Company which subcontracted with Alaska Marine Lines to do the hauling.

Where the Money Is

Henry Friedman, an engineer with CH2MHill, an architectural/engineering firm that is also involved in environmental work, makes it clear that Alaska's solid waste quandary is unique. He can foresee a day when public sentiment, tax dollars and a creative governmental programs might function by way of equalizing subsidies, much like the U.S. postal system. (You pay 32 cents whether you mail a letter across the street or across Alaska.) "I make the argument that it may not be economical to have electrical power in rural villages, but they have programs to make their utilities work," he says. "If it's important enough, I think you can develop a program to make it work."

Tracking down sources and amounts of funding for various government projects can be as complex as counting environmental contractors. Funding for a TERC, for instance, may come from a number of sources all channeled through the Department of Defense. The annual budget for the TERC program in Alaska ranges between $15 million and $18 million, according to Michael Redmond, TERC manager for the USACE. But he cautions that TERC's are only a small slice of the big funding picture. In Fiscal Year 1997 (FY-97), the total U.S. budget appropriated for USACE environmental cleanup tallied to $58 million.

The major conduit for most military cleanup money is the Defense Environmental Restoration Program (DERP). Fort Richardson and Fort Wainwright have received $66.8 million and $85.6 million respectively up through FY 97, which puts them at a little over the halfway mark for their respective totals of $152 million and $117 million.

U.S. Government A Top Polluter

Although funding and program directives are precarious at some sites, the money continues to trickle down to many of the Formerly Used Defense Sites (FUDS) around Alaska. "The active sites are coming near the end," says Pat Richardson, spokesperson with the USACE and located at Anchorage's Elmendorf Air Force Base. However, she adds that despite cutbacks in government spending the level for FUDS sites will likely remain steady for the next 8 to 10 years. In the short-term, the FY-98 budget calls for spending $55.8 million on FUDS this year, a 54 percent gain over FY-97.

Several of the jobs come with sticker prices ranging from $2 million to $10 million, and many are at various levels of completion. Cleaning up the old tank farm and the soil around the power plant at Whittier will cost $19 million between now and FY-05.

Among bigger FUDS fish to fry, the Air Force Auxiliary Field at Amchitka could receive $46 million between now and 2030, the year of estimated completion. Barring unforeseen budget constraints, sites at Attu should see $12 million through FY-06, with the brunt of spending slated for FY-00 and FY-01.

Cleaning up the Air Force sites around King Salmon has been projected to cost in the neighborhood of $80 million by the time the work is complete in 2027. This year's expenditures for a final cap and monitoring program for North and South Barrel Bluffs will tally $2.8 million. Work at Sparrevohn Air Force Station, an $8 million project, which began in 1996, continues this year with $1.9 million appropriated for FY-98. The Air Force site at Murphy Dome will receive $3.1 million in FY-98. Continued remedial action at Cape Lisburne radar site this year will cost $3.9 million.

Fort Greely and Fort Richardson top the Army sites in terms of cleanup funding; Fort Rich, a $105 million project should see $9.7 million this year, according to plan estimates. Fort Greely, a $72 million job, expected to be complete in 2014, will receive an estimated $2.4 million for FY-98.

RELATED ARTICLE: Fewer Spills, A Cleaner Alaska?

Not all environmental contracting ventures have been as successful - particularly when it comes to cleaning up spills. The Oil Pollution Act of 1990 (OPA-90) brought about the proliferation of Oil Spill Response Organizations (OSRO's), which invested large capital sums in cleanup equipment. They then charged subscribing companies a percentage of their operating budget, a one-time donation for equipment, and required proof that companies are financially able to reimburse OSROs for cleanup expenses in the event of a spill. However, Alaska's relatively clean record since the Exxon tanker spilled 11 million gallons of crude oil into Prince William Sound forced many firms to restructure or close their doors. "It's a tough world," says Larry Dietrick, of the prevention emergency response program with ADEC. "To make OSRO's viable you've got to have a spill."

A change in the way the Air Force receives money for jobs involving demolition and restoration, lumps the two operations together under one funding source. The money for the program, called 'Clean Sweep,' comes through the Environmental Restoration Account (ERA, formerly called DERA), and is funneled through the Air Force 611th Engineer Squadron at Elmendorf Air Force Base, Anchorage, under funding for the Department of Defense (DOD).

Clean Sweep was conceived in conjunction with cleanup efforts at Air Force bases in Hawaii. Combining demolition and remediation with cleanup efforts means bigger jobs for contractors.

"The work is always going to be there, but (funding both simultaneously) makes it easier for the government," says Chris Pleiman, Clean Sweep's program manager.

As of February, the Air Force hadn't yet closed on any bids under the new program, but upcoming work includes the demolition of 80,000-square feet of buildings and soil work near Kotzebue.

Alaska the Clean

So are the agencies and environmental contractors making headway toward a cleaner Alaska? Can we drink the water at King Salmon, grow a garden near Galena?

Not by a long shot, according to Pamela Miller, the project director for Alaska Community Action on Toxics. It's an outgrowth of a Greenpeace program that began in 1994. She says that at "most of these sites, contaminants have not been properly inventoried. We're talking about everything from fuels, and I mean a lot of fuels, to chlorinated solvents, PCB's, pesticides, herbicides and in some cases, radioactive materials" Miller claims.

The other problem is one of monitoring the cleanup processes. "The military is allowed to hire its own contractor to conduct and implement the sampling without public or scientific oversight," Miller charges. "it's a case of the fox watching the hen house."

Miller and her associates have catalogued and mapped more than 2,000 toxic sites around Alaska - military and otherwise - and their main complaint is that the ADEC and EPA have allowed the polluters to walk away. "The trend here is toward risk management, which is a very poorly founded tool, rather than the removal of the problem: the toxics."

But barring any major oil spills, and as contractors make headway on various projects, DEC's Rick Albright beckons all to 'behold Alaska the clean'. "There's no question about it," he says. "A lot of military base cleanups are getting near the end of the road; and with the better handling of hazardous materials, you're not going to get the hazardous waste you've had in the paste. You're looking at a much cleaner Alaska."
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Title Annotation:Alaska's environmental contractors
Publication:Alaska Business Monthly
Date:Mar 1, 1998
Previous Article:Arctic Slope Construction, Inc.
Next Article:Oil spill prevention and response.

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