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Sunken Debt

by Mar 13, 2019Environmental, Magazine

New legislation to address Alaska’s abandoned vessel problem

Because the Icy Mist had adequate insurance coverage, the owner was able to hire Resolve Marine to scuttle the boat in the Bering Sea.

Dan Magone | Resolve Marine

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Alaskans depend on boats for numerous reasons, from commercial fishermen using them to make a living or commercial tugs and barges moving freight and fuel to subsistence users catching fish to feed their families and recreational boaters spending time on the state’s pristine waters. But what happens when a vessel comes to the end of its useful life? How do boat owners dispose of unneeded or damaged vessels?

In many cases, they don’t. In Alaska, as in a number of other states, abandoned vessels are a huge issue. Steamboat Slough outside Bethel, for example, is home to many abandoned boats, from fish processing vessels to dismantled barges that are waiting for time—or state or federal agencies—to end them.

“When you talk about abandoned vessels, what has frequently happened is that at the end of its useful life, the owner wanted to get rid of it because it had become a liability,” explains Dan Magone, Alaska operations manager of Resolve Marine Group. “They find someone who will buy it for a song.” Unfortunately, these novices have no idea what they’re getting involved in. They buy it dirt cheap, thinking they got a great deal, and then find out they don’t have the resources to deal with it. Insurance requirements to make it seaworthy can cost a fortune.

“The boat ends up getting tied to a dock or along a river and gradually gets in worse shape. Sometimes it sinks,” he adds. “And more often than not, the person who now owns it has no insurance and no assets. And you’re talking hundreds or thousands of dollars, even millions to solve the problem. So there the boat sits.”

“There are cases where a vessel is moved from one harbor to another all the way up the West Coast,” adds Bernie Rosenberger, diving operations manager for Alaska at Global Diving & Salvage. “As the owner can’t pay the fees, they keep moving it toward Alaska, with the boat getting sold for $50 on a bar napkin. It ends up here, and the person who owns it can’t pay to dock it. They’re driven out of the harbor, the boat is put on anchor, and sometimes it sinks.”

Unlike some other states, Alaska doesn’t have a title system for vessels, and though they are supposed to be registered, there’s no real way to track ownership. The state also doesn’t require hull, pollution, or liability insurance, and doesn’t require inspections for seaworthiness before a vessel can be sold.

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Passing the Buck

When the owner has no assets, an abandoned vessel becomes someone else’s problem—whether that’s the landowner on whose property it sits, the harbormaster, or the city or borough where the boat was left. Eventually, responsibility may trickle down to taxpayers.

“Coming up with the money to remove the boat is the big problem, and in many cases, it ends up being the government’s responsibility, especially if there’s oil onboard,” says Magone. “The Coast Guard has a pollution fund that provides a pod of money for incidences, including raising a wreck if the wreck poses a significant threat of environmental damage. If that isn’t an option, the state or federal government might come up with a funding scheme, but this is challenging to do.”

According to Rosenberger, tapping the pollution fund is a last resort. “Though there are several billion dollars in it, it’s typically not used because the Coast Guard prefers that the owner be responsible, and they give them every opportunity,” he explains. “But in the case where the owner isn’t responding rapidly enough or there’s a significant threat to the environment, they ‘federalize’ the case and that’s when we step in.”

Rosenberger adds that there are no real standard protocols for removing abandoned boats. “It depends on where the vessel is—whether it’s on federal, state, or city land—and on what legal methods are available to enforce its removal,” he says.

If a vessel sinks at a dock or catches fire, there is a more immediate response in order to protect the environment from lasting damage. Salvage companies are called in to capture any oil and to deal with public health and safety issues like ammonia or lead on board.

“There is seldom any hesitation on the part of the municipality, state, or Coast Guard when something like this happens,” Magone says. “The problem comes when it is no longer an emergency—when the boat is just derelict and nobody wants it. It’s a pariah.”

Magone gives the example of two tugboats that got loose in Adak and ended up on a jetty. Because they carried 20,000 gallons of fuel and were a significant risk to the environment, the Coast Guard hired Resolve to pump off the fuel, paying for it from the pollution fund. “When there was no longer a significant risk of pollution, they had us put the boats back on the rocks where we found them,” says Magone. “Six months later, they had sunk to the bottom of the harbor.”

The 96-foot wooden tugboat Challenger was being used as a live-aboard when it sank in the Gastineau Channel, posing a navigational and environmental hazard. Global removed fuel and other contaminants, raised the vessel, and then towed it ashore for proper disposal.

Global Diving & Salvage

In addition to leaking oil and hydrocarbons in the water, abandoned boats can adversely affect the environment in many ways. “Boats have sewage tanks, lube oil, and batteries on board; one vessel we salvaged had twenty-nine car-sized batteries that had to be removed,” says Kerry Walsh, marine casualty project manager for Global Diving & Salvage. “There’s also fiberglass and paint and pieces of the boat that disintegrate onto the beach and in the water. But the damage doesn’t always happen immediately.”

The Princess Kathleen, a 369-foot transport vessel that ran aground outside Juneau more than sixty years ago, is a prime example. “When the Princess Kathleen sank, no one thought it was a big deal; in fact, it became a hot scuba spot,” says Rosenberger. “But as it deteriorated, it began leaking thick Bunker C fuel; globs came to the surface after every storm.”

In 2010, Global Diving & Salvage was engaged to survey the wreck—with the caveat to disturb as little as possible because it was a historic site. After studying the Princess Kathleen, the company determined that there was a high risk of environmental danger.

“We ended up removing more than 130,000 gallons of thick, heavy oil from the vessel, along with 2,500 pounds of solid waste and 218,000 gallons of oily water,” says Walsh. “This would have been a huge environmental issue if the hull had been breached. Something like an earthquake could easily have broken it open.”

Global’s team works to defuel the wreck of the Princess Kathleen which ran aground on Point Lena in 1952; crews removed more than 130,000 gallons of bunker oil and other petroleum products from the wreck.

Global Diving & Salvage

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Salvage or Scuttle?

In most cases, if money is found to remove the boat, it is scuttled instead of scrapped though it must first be thoroughly cleaned and pass an EPA inspection before being towed out to deeper water.

“Cleaning a vessel includes removing all of the pollutants and removing or triple rinsing all of the piping,” says Magone. “It’s a very involved process, but it’s still cheaper than cutting it up. By the time you strip the insulation; cut up the joinery work, piping, plastic pipes, and more; and ship it to the scrap market in Seattle, it costs more than the metal is worth.”

It can also be expensive to tow the boat to deep enough water. “You can’t just sink it anywhere because it could be obstructive to fisheries,” says Magone. “But if you drop it in a mile deep, it doesn’t affect anyone.”

Becoming a commercial truck driver requires a written test, a driving test, and a health exam. The training to pass those tests can come from school or on-the-job training.

In Palmer at NIT, which is the largest CDL training provider in Alaska, new drivers typically take a $9,000 class that covers 240 hours and is usually taught over six 40-hour weeks, says Crum. The class curricula include learning to shift and steer large trucks, using air brakes, inspecting vehicles and cargo, and backing trucks into docking stations. Students practice on the eighty-acre Alaska State Fair parking lot before moving on to public roads.

Last year NIT graduated 146 long term truck driving students (usually new drivers looking to break into the industry) and 271 students who came to the school for a refresher class or just to take the driving tests.

After the 130-foot derelict landing craft Sound Developer sank in the marina in Cordova, Global was contracted by the US Coast Guard to raise the vessel and remove petroleum products and contaminated silt from its tanks.

Global Diving & Salvage

The Ocean Clipper ran aground near St. Paul Island without adequate insurance coverage for removal. It sat for years before NOAA received the funds to hire Resolve Marine to remove it.

Dan Magone | Resolve Marine

When companies look for drivers to hire, they look for experience and critical thinking, Crum says. Critical thinking is essential because, by the nature of the job, truck drivers must be independent.

“Every employer is going to take you on a road test,” Crum says. “With somebody watching you, you’re going to have to get in and drive the truck.”

These tests are usually done “cold” without the driver getting to practice on the company’s truck. The examiners look for employees who can quickly master unfamiliar equipment, Crum says.

Entry level trucking jobs often involve driving within a city, hauling freight such as produce, water, trash, or lumber, he says.

More experienced drivers can get typically higher-paying jobs hauling freight longer distances or working on construction jobs. With additional training, truckers can get qualifications to drive specialized cargos such as hazardous materials and double-trailer trucks.

Holding Owners Responsible

In October 2018, SB92, the Derelict Vessel Act, was signed into law by then-Governor Bill Walker with the goal of overhauling Alaska’s ineffective laws on abandoned and derelict vessels and improving enforcement efforts to identify and hold boat owners responsible. The bill was based on the work of the state’s ad-hoc Derelict Vessel Task Force, sponsored in part by the Alaska Clean Harbors program and Cook Inletkeeper.

Rachel Lord, executive secretary of the Alaska Association of Harbormasters and Port Administrators, explains the impetus behind the act. “In 2012, two boats were kicked out of harbors in Kodiak and weren’t allowed to dock elsewhere, so they ended up in Jakolof Bay where they sunk,” she says. “While this was not a unique situation, its location caused commercial oyster farms to have to be shut down, and, politically, this was a very sensitive area because it was in Homer’s backyard.”

While small changes were made to Alaska’s vessel law in 2012 and 2013, it wasn’t until 2014 that numerous stakeholders, including state agencies, tribal organizations, municipalities, and Alaska legislators, attended a derelict vessel working group where it was determined that the state’s outdated laws needed to be rewritten; law firm Birch Horton Bittner & Cherot offered pro bono assistance. In 2018, SB92 became a reality.

“The law does a lot of things,” says Lord. “The first is that it helps the state track down ownership of vessels by expanding registration requirements and introducing a titling program for boats over 24 feet in length. Registration only costs $24 every three years, but it’s not about the revenue—it’s a tracking issue and one more path to hold a person responsible for their vessel.” The legislature did provide a titling exemption for vessels under 24 feet because they were concerned about the burden on individuals.

The bill was also rewritten to streamline definitions of derelict and abandoned boats and to tighten up the definition of ownership. “Now the last person to sign the document title can clearly be held accountable,” says Lord.

Because boats are protected under federal maritime laws, they are treated differently in the courts than cars or houses. “Boat owners are afforded more rights under federal law, and SB92 provides more appropriate due process, as well as clarifies issues for those who impound the vessels,” explains Lord.

One critical component of the effort is the creation of a derelict vessel prevention program designed to help prevent these types of problems from occurring.

“No one in the country has enough money to deal with derelict vessels, so we need to think more creatively,” says Lord. “The bill allows us to pilot a voluntary vessel turn-in program and to create a point person from the Department of Natural Resources who can help maintain this focus. Scrap and salvage have a long way to go in Alaska, and the ability to haul boats out is a challenge. But we’re seeing programs like this work in Washington and California; those states are saving money by having boats turned in before they sink.”

The law went into effect on January 1, 2019. While Lord expects that it may move slowly, she is encouraged that change is finally on its way.

“When we started the task force, the state was pushing us to deal with the problem on a municipal level, but we didn’t have the resources; the fleets around Alaska can’t absorb the costs of these derelict boats,” she says. “But over time, everyone has come to appreciate that it is not an ‘us’ versus ‘them’ thing—we all need to work together cooperatively to solve the problem.”

Alaska Business December 2023 cover
In This Issue
Alaska Business Top Docs
December 2023
This year marks the first annual publication of the Alaska Business Top Docs, a directory of the best doctors practicing in Alaska as nominated by their peers. To gather this information, we invited local, licensed doctors to tell us which of their peers they think excel in providing healthcare to Alaskans through an online survey.
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