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Could Arctic oil shipping revitalize economic fortunes for Aleutians?

Kristjan B. Laxfoss photo

ADAK -- Signs of a huge investment in the past abound here in this Aleutian Islands community more than 1,000 miles from Anchorage, Alaska's largest city and center of commerce. The huge storage buildings, long docks for ships, and stylish suburban housing for thousands of military personnel and families are nearly all empty, following the end of the Cold War between the United States and former Soviet Union. The Naval Air Facility closed in the 1990s because of the absence of an enemy that made the remote site's high maintenance costs worthwhile, thanks to fear as a funding source.

Now, the new owners see a model for the future in Memphis, Tennessee, and they're not talking about going to Grace Land, even though some skeptics might consider hopes for the future of Adak as about as realistic as sightings of Elvis Presley.

The Memphis model is Fed Ex, though the product isn't the home delivery of little cardboard boxes, it's the trans-Arctic shipment of 40-foot shipping containers on the over-the-top route on ice-class merchant vessels.

The Aleut Corporation hopes that oil and shipping companies will become big businesses an island where the most prominent private sector presence was a restaurant serving Big Macs to the Navy pilots who non-violently dueled with Russian military aircraft in the sky separating the neighboring nations.

The base was turned over to The Aleut Corporation which hopes for the large-scale conversion into the civilian economy. When the military ran the show, Adak's most famous feature may have been a creature of the private sector, a fast food chain restaurant.

McDonald's distinctive architecture was clearly visible in a driving tour of the island Sunday, even without the trademark golden arches. Now known by the locals as "McIcicle," it remains in the hot food business as a galley for a company in the frozen fish business, Icicle Seafoods.

The island's main business now is a fish processing plant operated by Icicle in a giant warehouse known as the "Blue Shed," facing the waterfront and a long cement-surfaced wooden dock. Adak harbormaster Elaine Smiloff hopes to see Shell Oil offshore support boats arriving soon for a seasonal layover, after Arctic oil exploration efforts shutdown for the winter.

Will Shell Oil boats overwinter in Adak?

Adak's future as an oil support hub and marine cargo transshipment hub was discussed and debated last week at the Regional Wellness and Self Governance conference, sponsored by the Aleutian Pribilof Island Association at the Grand Aleutian Hotel in Unalaska.

Aleut Corporation chief executive officer David Gillespie said he's hopeful that some Shell boats will overwinter in Adak, saying there's about 30 vessels up north now.

The corporation is planning a joint venture operation for oil support in Adak with Offshore Systems Inc., and that relationship was questioned by shareholder Tom Robinson of Unalaska. He complained that the Native corporation was surrendering control to a "special interest," and said O.S.I. is partially owned by Trident Seafoods.

"Who owns OSI?" Robinson asked. "Here we are, just handing it over to them."

Gillespie defended the relationship as necessary and benefical, saying that gaining acceptance as an oil company contractor isn't easy.

"OSI has a relationship with Shell that we don't have," Gillespie said. "I'm not saying we're giving away the store to them forever." OSI runs a private dock operation in Unalaska for fishing vessels and Shell boats, and the oil rig Kulluk.

"Exclusive doesn't mean forever," Gillespie said.

Trident was also blasted by representatives from another island at the conference. Akutan attendees said they were insulted at not being invited to the dedication of the new airport on neighboring Akun island, although Trident officials. Trident runs a huge seafood processing plant at Akutan.

"Nobody from the village was invited," said Akutan tribal administrator Jacob Stepetin. He said the dedication was attended by representatives from Kiewit construction which built the airport, the state transportation department, Trident, as well as State Rep. Bryce Edgmon, D, Dillingham.

"We were so mad," Stepetin said. So now, the village has planned another dedication for today, Sept.20, he said. "To heck with you guys. We'll do our own. We were the ones who applied for it, and nobody got invited. We were all mad."

Another business opportunity for Adak involves increased marine shipping between the Atlantic and Pacific on the over-the-top route, now that the Arctic Ocean is losing its ice covering for longer times during the course of a year.

According to that scenario, container ships from Asia would offload cargo in Adak onto ice-class container ships bound for Europe and New York, saving thousands of miles off the present course through the Panama Canal, Gillespie said.

"The Aleutians are directly on the way," he said, comparing Adak to Memphis, Tennessee where Fed Ex operates an air freight cargo hub.

The one Aleutian port with major shipping activity now is in Unalaska, where some locals might be getting the Adak blues again, fearing loss of business to a regional competitor. But Adak's gain won't be their loss, he said.

"It doesn't mean stealing work from Dutch Harbor," Gillespie said. "There's more than enough work to go around."

Memphis wasn't the only big comparison made recently for the future of the Aleutians as an economic hot spot. Anchorage and New York philanthropist Alice Rogoff predicted that in 30 years, Dutch Harbor could see as much world shipping activity as the Asian island nation of Singapore, she said at a reception at the Museum of the Aleutians several weeks ago, funded by the Unalaska City Council.

The Unalaska council also contributed $25,000 for last week's wellness conference, plus up to $7,500 for a community banquet at the hotel, for a maximum of $32,500.

The Pribilof Islands would also like a piece of the action from new oil support and shipping activity, said Gregory Fratis Sr., of St. Paul. He said the village Native corporation, TDX has flat land available for storage.

This article was originally published in The Dutch Harbor Fisherman and is reprinted here with permission. Reporter Jim Paulin can be reached at jpaulin(at)reportalaska.com