Part I — final

THE LUTAK DOCK

AN UNNECESSARY PROJECT RISKING THE CHILKAT AND CHILKOOT WATERSHEDS

INTRODUCTION

All of the information in this document is excerpted or summarized from technical reports, historical documents, public records, and news stories dating back more than a decade. We have provided sources and underlined links to those sources to make it easier for you to look further into each issue raised. We have added bold type and arrows throughout for clarity and emphasis. We believe that this information is important for citizens and taxpayers to know, and relevant to the future of the Haines and Klukwan communities and the health of the landscape.

Please reach out with your questions or concerns.

"Haines may be in a position to take greater economic advantage of the Yukon mining industry. If port infrastructure capable of handling mineral concentrates is developed in Haines to meet the needs of the Palmer Project, that same infrastructure could serve Yukon mines. "

— Economic Baseline Report, Haines Economic Development Plan, June 2018, pg. 62

This goal (to develop port infrastructure capable of handling mineral concentrates) has been identified in numerous Haines Borough reports over the years. And as you'll see, this underlying objective has been intrinsically linked to the development of the Lutak Dock.

"THIS IS STRICTLY ABOUT MEETING THE NEEDS OF HAINES RESIDENTS AND HAVING REDUNDANCY FOR THE FREIGHT AND FUEL BARGES THAT DELIVER GOODS FOR HAINES RESIDENTS. IT IS NOT ABOUT MEETING THE NEEDS OF ANY MINING INTERESTS..."

— Haines Borough manager Annette Kreitzer (at the April 7, 2022 Planning Commission meeting)

A brief history Lutak Dock

The U.S. Army built the Lutak Dock in 1953 to supply construction materials for the 626-mile HainesFairbanks pipeline, a Cold War-era project that delivered fuel to military bases in the interior. The tank farm, now a contaminated site, supplied the fuel for the pipeline.

Photo from the National Archives

1977

The Army gave the Lutak Dock to the City of Haines. The cathodic protection system that the Army maintained and operated over the years was turned off after the City of Haines took ownership of the dock due to the associated operational costs.

1983

The City of Haines added a barge transfer ramp (ro-ro) to the face of Lutak Dock, which is what the town used to receive its freight.

In2014,PND Engineersand EchelonEngineering producedareport describing deteriorationatthe dock.

PND concluded in 2014 that the Lutak Dock had “reached the end of [its] credible 60year service life.”

PND explained that a “source of significant risk to the structure arises from failure of the ‘tee’ connection between the lower closure arc(s), and main arcs themselves” in addition to the risk arising from the “damage at 5 of 11 closure arcs that arose after the 2002 repair,” the “splitting failure at Closure Arc 7.5,” and “[o]ther structural weaknesses.”

THE RO-RO DOCK WAS FAILING BUT HAS SINCE BEEN REPLACED

After its installation in 1983, the old ro-ro lasted many years but eventually began to degrade. By 2017, with both the old ro-ro and the old Lutak Dock failing, Haines and Klukwan needed a way to receive freight reliably, and the Lutak Dock project was a top community priority. But now...

1. OUR FREIGHT NEEDS ARE MET

HOW DO WE KNOW THIS? In this chapter, we will cover:

A. Alaska Marine Lines (AML) built a new roll-on roll-off (ro-ro) dock in 2020

B. The new ro-ro has been in use since 2020 with no interruption in barge deliveries (even when it partially sank in 2021)

C. The borough has a 30+ year agreement with AML for the use of the dock, including that other users may use the dock

D. The Lutak dock face was closed in 2020

This is a closeup of AML's new ro-ro dock.

Before the 2020 construction and implementation of the new ro-ro dock, the Lutak Dock project was essential for supporting our local freight deliveries. Even though the situation has changed and we now have an operational freight dock, many people still believe we need the dock project to prevent local and regional supply chain disruptions.

2020

AML reached an agreement with the Haines Borough in 2018 for the construction of a new ro-ro ramp. AML constructed the ramp in 2020 for $2.6 million.

AML barge securely using the new ro-ro

Photo by Turnagain Marine

AML'S NEW RO-RO DELIVERS OUR FREIGHT

The new ro-ro is on the Borough-owned tidelands parallel to the dock. The borough has a 30-year lease with AML for the use of the uplands. According to the agreement, the use of the ramp cannot be restricted by AML and must remain open to other users.

The new ro-ro has been delivering our local freight since 2020 when the face of the Lutak Dock was closed. No weight is currently put on the dock face. Even potential users of a rebuilt dock, including the company logging the Baby Brown timber sale, and the folks at opentug.com, have said they can use AML's ro-ro ramp for their purposes.

OVERVIEW OF THE DOCK

This is an overhead view of the Lutak Dock and the nearby ro-ro dock. Out of sight to the left is the AMHS ferry dock. As you can see, AML's new ro-ro dock is attached to the land, not to the Lutak Dock. AML uses one fender on the Lutak Dock to tie up its barge. However, an engineer from Turnagain Marine has confirmed that the addition of one dolphin on the southeast side of the ro-ro could be installed to render the ro-ro entirely independent of the Lutak Dock.

There is a large heavily reinforced concrete slab called the pass-pass in the central section of the dock. The pass-pass allows forklifts to pass containers or other large or odd-shaped items back and forth via from dock to barge, so it's redundant to the ro-ro. Delta Western's fuel barge ties up to the fenders along the center of the Lutak Dock and pumps fuel up to the tanks on the hill. There are guardrails that prevent heavy equipment from going near the face of the dock where the sinkholes have historically developed.

Recent view of the Lutak Dock

Photo by KHNS

Diagram by Lynn Canal Conservation

Who are the Lutak Dock's main customers?

From 2012-2018, the data shows an average of 69 dockings per year from 2 customers.

CUSTOMER

Alaska Marine Lines

Delivers freight weekly

TYPE OF BARGE

CARGO BARGE

Maximum draft: 22 ft

Displacement: 22,000 short tons

Delta Western

Delivers fuel 15-20 times/year

FUEL BARGE

Maximum draft: 19 ft

Displacement: 15,000 short tons

THE DOCK'S CURRENT CUSTOMERS

Delta Western is one of the dock's two current customers. They deliver fuel 15-20 times a year. Delta Western's operations were largely left out of the monetized benefits described in the Borough's benefit-cost analysis.

AML delivers freight weekly, using the ro-ro for docking its barges and the mainland surface of the dock (uplands) to store shipping containers.

According to the Haines Harbormaster, during his tenure, the Lutak Dock's uplands have been used only twice to store and transport contaminated soils from the highway project and twice to transport junk cars/metals. Southeast Road Builders used the dock's uplands in the summer of 2022 to stockpile and transport rock.

WHAT ABOUT DELTA WESTERN?

The quote on the facing page is from a 2018 Economic Baseline Report by Haines Economic Development Corporation (HEDC), prior to AML's construction of the new ro-ro. It suggests that Delta Western's operations would likely be able to continue even in the case of Lutak Dock failure.

No portion of the closed-off part of the dock is used by Delta Western’s fuel barges or fuel trucks.

Delta Western has not responded to questions about how its operations would be affected by no action. There is a wide range of possibilities between no action and the multimillion dollar, industrial-scale dock project currently in development.

"Should Lutak Dock not be repaired and suffer a failure that renders the dock inoperable...Delta Western...would likely be able to continue to use its tank farm and related fuel infrastructure even in the absence of repairs."

— 2018 HEDC Economic Baseline Report, pg. 46

2. THE BOROUGH IS PURSUING AN ORE DOCK

HOW DO WE KNOW THIS?

In this chapter, we will cover:

A. All of the Borough's commissioned designs facilitate Handymax ships

B. Multiple identified customers expressed desire/intent to transfer ore

C. Internal documents and public records show more than a decade of planning to transfer ore over the Lutak Dock

D. Borough documents advocate for infrastructure projects (Highway project, Klehini River bridge, Porcupine Road, etc.) that support ore transfer plans

Although many decision-makers and members of the public have firmly believed that the dock project is solely about meeting local needs, records from at least the past 12 years show a more complex story with mining interests as a consistent force behind the scenes.

HandymaxaretwicethesizeofAML'sfreightbargeorDelta Western'sfuelbargeandhavedoublethedisplacement(seepg.18)

Handymax ships

Length: 105 ft x 625 ft

Displacement: 40,000-50,000 short tons

Draft: Require a (consistent) draft of 35-40 ft (deeper than is currently available at the Lutak Dock)

Used for the bulk transport of mineral ores, coal, cement, timber, steel, fertilizer, and grains

Currently, the Lutak Dock does not serve Handymax ships, which are used to export and transport enormous amounts of dry bulk materials.

WHAT ARE HANDYMAX SHIPS?

An understanding of what Handymax ships are used for is crucial for understanding the slides to come. Handymax ships are massive, international shipping carriers used to export and transport dry bulk commodities like mineral ore concentrates. Handymax ships are used at Skagway's port for Yukon mineral export.

Handymax ships cannot currently use the Lutak Dock, but we don't need Handymax ships for anything we currently import or export locally. Despite the lack of local need, the Borough has consistently required contractors to design the new Lutak Dock to accommodate Handymax ships.

Handymax ships require expensive, heavy duty mooring dolphins and/or a dock face capable of supporting their full displacement.

Handymax bulk carrier ships are significantly larger tha the 360 ft x 100 ft cargo bar that currently deliver freigh Haines. Handymax is also t design vessel used in the conceptual plans for Skagway's ore terminal, and you'll see, in all past and current designs for the Lutak Dock.

Footage from Understory (Wild Confluence Films)

2010:

Drilling done by Constantine leads to first resource estimate for Palmer Project

TIMELINE OF HAINES BOROUGH COMMUNICATIONS RE: ORE DOCK

2012: Port Development Steering Committee

2016-2018

The Borough commissions an assessment regarding the Lutak Dock's potential to be developed into a deepwater port

Haines Borough

Comprehensive Plan

MOU with Prophecy

Platinum

R&M retained by Haines Borough, releases a report outlining five dock design options (all dock options would accommodate Handymax ship)

2020: AML pays for the construction of a new ro-ro dock and the face of the Lutak Dock is closed (and has not reopened since).

2021

Haines Borough applies for a $20M RAISE grant

2022

Northern Economics

Port Development Report

HEDC 2018 Economic Baseline Report connects Yukon mines, the Palmer Project, and the Lutak Dock

December weather event shows geohazards in Lutak Inlet

Haines Borough commissions a Jobs Analysis and Benefit-Cost Analysis to support its RAISE grant application .

AML signs MOU with Haines Borough

AIDEA expresses interest in moving Skagway's old ore port infrastructure to the Lutak Dock

3/24/22 PHAC meeting with Yukon mining reps brings the topic into the public eye Haines Borough retains R&M and Turnagain Marine, begins progressive design-build dock project with contracted consultant .

TIMELINE

This timeline is just a brief snapshot of the more relevant communications, studies, and reports commissioned by the Borough (or the Yukon) regarding the Lutak Dock and its use as an ore transfer facility.

The idea of attracting Yukon mines to use the Lutak Dock goes back more than a decade. There is ample and compelling evidence to this effect, but for the sake of space, we've included only some of the most relevant.

Exploratory drilling by Constantine Metal Resources leads to the first resource estimate for the Palmer Project

In 2010, two events coincided-Constantine made the first resource estimate for The Palmer Deposit and the renewed interest in the Lutak Dock as a deepwater port.

Haines Borough commissions an assessment of the Lutak Dock's potential to be developed/expanded into a deepwater loading port

"Develop conceptual plans for a deep draft dock and loader to handle ships with 36 feet of draft (Handymax)"

This memo accompanied the 2012 Northern Economics

Port of Haines: Potential for Development report.

MAY 31, 2012

"The Haines Borough recently launched a Haines Port Development Steering Committee. Three residents have since formed the Haines Port Development Council - described as a private-sector cooperative research group - with a similar aim to encourage Yukon Territory mines to ship through Haines."

— Chilkat Valley News

CHILKAT VALLEY NEWS ARCHIVES

This excerpt is from one of the dozens of CVN articles regarding ore transfer over the Lutak Dock going back more than a decade.

The second group mentioned in this 2012 CVN article was composed of "trans-boundary private and government entities with a mutual interest in the Port of Haines and its strategic assets and potential beneficial uses."

Also in 2012, the Comprehensive Plan identified the need to ensure that the Haines Highway and its bridges are able to handle ore transport. Since then, the $100 million highway project and $8 million "Palmer Project bridge" over the Klehini River have been funded and (mostly) completed.

SEPTEMBER 2012

Haines Borough 2025

Comprehensive Plan

OCTOBER 9, 2014

At the Haines Port Development Council's second summit, DOT planner

Hughes told the panel that with respect to mining in Haines, his agency had identified more than $100 million in improvement needs. Those include rebuilding of the Haines Highway...(including replacement of Wells Bridge), [and] resurfacing 3.5 Mile to Sixth Avenue.

Hughes also mentioned replacement of the Klehini River bridge (Steel Bridge), an $8.3 million project that he called the “Palmer Project bridge. ” The new bridge will be designed next summer. Construction of the bridge would occur in 2016-17, he said.

— Chilkat Valley News

In 2016, the Haines Borough began developing plans for the Lutak Dock. The borough commissioned R&M Consultants to do a study and come up with new dock designs, all of which include Handymax as a design vessel.

Note: R&M is currently the Borough's Owner Advisor for the Lutak Dock Replacement Project (and wrote the Borough's 2021 RAISE grant.)

Design 1B

This is R&M's 2016 design 1B showing a Handymax as well as a cargo barge.

Though they have more than enough capacity to supply local needs, local cargo barges are 1/2 the size of Handymax ships with a much smaller capacity.

2016 'LUTAK ORE TERMINAL' MINE EXPORT MEMO

As part of the Lutak Dock Design and Development Project R&M was directed to investigate the potential for including mineral export infrastructure at the Lutak Dock site. R&M's report contained a Mine Export Memo which outlined how the Borough could export the Palmer Project's ore at the 'Lutak Ore Terminal.' Many of the design features were modeled on Skagway's ore terminal. Constantine was a stakeholder at the meetings.

NOTE: R&M's memo doesn't review the containerized bulk handling system which doesn't require a concentrate storage building or a conveyor. (This technology is discussed on page 45.)

MARCH 2, 2017

"AML is very familiar with the cost to marine facility... the proposed cost to r never be recovered by wharfage char that moves over the facility...we sug brainstorming for the project with a g

— Letter from Alaska Marine Lines, Appendix D

AML was the one stakeholder voice that suggested that the Borough might not ever pay off the facility with user fees and that it should consider a smaller dock.

R&M Design

R&M's PHASED DESIGN

This is the phased design that emerged in 2021. This is the design submitted with the borough's RAISE grant application.

The phased design involved the demolition of the dock face and replacement of the vertical dock face with an angled rock slope, catwalk, and expensive, heavy duty mooring dolphins, as well as other features. It, too, would accommodate Handymax ships.

This image is from the fourth phase of R&M's design from June of 2021 showing uplands uphill of the dock.

UPLANDS

The forested area to the right of the fuel tanks contains the 23 acres the borough proposed to clear and level during "phase 4" of R&M's June 2021 design plan. If the Borough wanted to develop a site for a concentrate storage building (CSB), this site might be workable, although it is steep, potentially unstable, and prone to significant rockfall. It would require building an ore loader that would stretch across the Lutak road (an idea diagrammed in R&M's 2016 Mine Export Memo shown on page 36 of this book. In that memo, R&M found that "In order to accommodate the CSB and related operations, additional uplands near the Lutak Dock would need to be developed. The total size of this could be 7 to 10 acres.")

Phase 4 was not included in design plans available to the public after opposition from the community, yet it was still mentioned in the 2021 Jobs Analysis the Borough submitted with their RAISE grant application.

Note: The 'fuel barge' and 'cargo barge' shown in the top lefthand corner reflect the only vessels that currently utilize facilities at the Lutak Dock.

HANDYMAX: THE CONSISTENT DESIGN VESSEL

The use of a Handymax as a design vessel continues throughout the 2021 and 2022 designs.

We have yet to see a design proposal for the Lutak Dock that would NOT accommodate Handymax ships.

Note: The Lutak Dock does not currently accommodate Handymax ships, due to the depth of the sea floor and other issues. Since the Borough took ownership of the Lutak Dock, nothing has been shipped in or out of Haines via Handymax ship.

AIDEA LOOKS TO HAINES FOR NEW ORE PORT

In 2021, AIDEA began looking to Haines for the location of a new ore port, anticipating the potential end to their lease with Skagway for use of their ore terminal.

A few months later, after the community had expressed opposition to an ore port in Haines, the borough submitted a $20M federal RAISE grant application mentioning "transshipment of ore."

— Haines Borough

FY 2021 RAISE grant application, pg. 1

“This deepwater port ...could support the... transshipment of ore..."”

2021 Jobs Analysis

"The following are businesses and projects that are anticipated to benefit from further investments and expansion of the Lutak Dock:

...

The Palmer Project

... According to Constantine's CEO Garfield McVeigh, while Constantine had originally envisioned shipping ore from Skagway, an ore terminal in Haines would make more sense for the company.

...

Yukon Transshipment/Mining

....Haines may be able to take advantage of the developments in the Yukon mining industry. If port infrastructure capable of handling mineral concentrates is developed in Haines, the infrastructure could serve Yukon mines."

SUPPORTING DOCUMENTS

The Borough submitted a Jobs Analysis (completed by Northern Economics) with their RAISE grant application. It noted, "The Borough is also planning on subsequent phases (Phase 3 and 4) that will involve further expansion of uplands areas to accommodate additional users... "

It also highlighted potential future users of a rebuilt and expanded Lutak Dock. The list included The Palmer Project and Yukon mines

$5M MATCHING FUNDS

FEBRUARY 2022

The Borough submitted a funding request for $3.2 million from the state:

"The Lutak Dock also plays a crucial role in the economic viability of the region. Key mineral mines in the Yukon territories, and other northern regions need access to maritime shipping as a cost effective way to bring their products to market. "

MATCHING FUNDS

In November 2021, the Borough was selected as a RAISE grant recipient. The Borough was required to contribute ~$5 million in matching funds.

The Borough decided to put down $2.4 million from the Lutak Dock Enterprise Fund and ask for the remaining $3.2 million from the state. In the Borough's grant application request to the state, it mentioned shipping ore for Yukon mines.

MARCH 24, 2022 PORTS & HARBORS MEETING

Borough officials met with Yukon mining officials for over 2 hours. The presence of the mining officials was not posted on the meeting's agenda and thus was unknown to the public.

The mining officials discussed in detail how the rebuilt Lutak Dock could meet the needs of Yukon mines. Kells Boland (chair of the Yukon

Joint Transportation and Mining Committee) described how Skagway's increasing focus on cruise ships complicates Yukon mineral export plans. He described how a new system called containerized bulk handling could avoid the costs of ore concentrate storage buildings and a shiploader while utilizing the Lutak Dock for mineral export.

(Listen for yourself in the audio clip to the right)

MARCH 24, 2022 Ports & Harbors Meeting

Containerized Bulk Handling, described in detail by Yukon mining reps at the 3/24/22 meeting.

BACKGROUND

Yukon Joint Transportation and Mining Committee chair

Listen to the full meeting here

Kells Boland

HAINES CAN MEET YUKON MINES' NEEDS

The Yukon mining officials also gave feedback on R&M's Lutak Dock design plans (at the time, the Borough was moving forward with the design from page 40, which involved demolishing the dock face).

From the designs, Joel Schirrif, Yukon tidewater engineer, said that current plans would work for mineral export, but described their ideal situation:

To extend the dock face out for a deeper draft, to be able to utilize the entire dock face, and project completion by 2024.

MARCH 24, 2022 Ports & Harbors Meeting

Mining reps looked over and gave feedback on R&M's 2021 Lutak Dock design

IDEAL SITUATION:

Extend dock out 10-15 ft to get a deeper draft

IDEAL SITUATION:

600 ft dock face to allow for multi loading points for a ship

AUGUST 2022

Turnagain'sNewConcept

MEETS YUKON REQUESTS:

extends the dock out maintains the 630 ft length of the dock (+ reclaims one cell)

Completion date: Dec 2024

DESIGN CHANGES

Since the RAISE grant application and award, the Borough has made dramatic changes to the Lutak Dock project based on concepts developed by a new contractor, Turnagain Marine Construction.

Turnagain's design perfectly meets the specifications requested by Yukon mining interests at that 3/24/22 meeting, including the deeper draft accomplished by pushing the dock face out and maintaining the entire 630 foot (now 700 feet, since the 65% design changes came out) dock face. Their request for project completion is 2024.

Turnagain's 65% plan

Even though previous engineering firms had determined that encapsulation was risky, the Borough is now proposing to encapsulate the old decaying dock and build a new dock on top of it.

Turnagain's basis of design tells us that they are designing for a Handymax ship and very heavyduty mobile harbor cranes, as well as a dock surface that can withstand extremely heavy loads.

"THIS IS STRICTLY ABOUT MEETING THE NEEDS OF HAINES RESIDENTS AND HAVING REDUNDANCY FOR THE FREIGHT AND FUEL BARGES THAT DELIVER GOODS FOR HAINES RESIDENTS. IT IS NOT ABOUT MEETING THE NEEDS OF ANY MINING INTERESTS..."

— Haines Borough manager Annette Kreitzer (at the April 7, 2022 Planning Commission meeting)