Thirsty California: A Potential Market for Alaska Water?

In Sitka, raising the hydroelectric dam at Blue Lake has created not only a source of renewable energy, but an even larger reserve of fresh water. The bulk water presents a business opportunity.

With a contract deadline looming that could terminate its exclusive rights, Alaska Bulk Water hopes to deliver on long awaited promises to ship tankers of water and to make California its first customer.
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Garry White came to Sitka in 2008 and has ridden the wave of the bulk water venture. But new developments in infrastructure and capital are giving him hope that bulk water shipments to California will happen this year. (Emily Kwong/KCAW)
Garry White came to Sitka in 2008 and has ridden the wave of the bulk water venture. But new developments in infrastructure and capital are giving him hope that bulk water shipments to California will happen this year. (Emily Kwong/KCAW)

In April, California Governor Jerry Brown gave a speech in the Sierra Nevada Mountains. The formidable snowpack, which melts to provide ⅓ of California’s water supply, was nowhere to be seen. The earth was brown and bare.

“People should realize we’re in a new era. The idea of your nice little green grass getting lots of water every day – that’s going to be a thing of the past,” Brown says.

The Governor goes on to impose the first mandatory water restrictions in state history, cutting urban use by 25 percent.

“Water coming out of a temperate rain forest…frankly, I think our water is better tasting than anyplace else in the world,” said Garry White, the Executive Director of the Sitka Economic Development Association. “I’m kind of a water snob now.”

We’re driving through the Tongass Forest, which averages around 100 inches of rain a year. The bulk water (and emphasis on bulk) was enough to incentivize a short lived bottling venture, called True Alaska Bottling.

“It was on Alaska airlines. It got on cruise ships. It got into Hollywood movies,” said White. “If you look at the movie the Duplex,  Ben Stiller’s got a bottle of it sitting next to his nightstand.”

And California is exactly where White hopes to send Sitka’s water again. Not bottled in plastic, but delivered in ships.

We hop out of his truck. Unfurled at our feet, like a glittering blue carpet, is Sawmill Creek, the freshwater outlet stream from Blue Lake, which provides hydropower and drinking water to the city of 9,000. The water from Blue Lake is so plentiful that household use is not metered and so clean that it’s not filtered before it goes to the tap. While it sounds like an Evian commercial, for White it’s a business opportunity.

“It’s a tough venture, but if people are thirsty enough and need the water enough and it makes fiscal sense, it can happen,” said White.

Sitka already built the infrastructure to draw the water from the lake to the shore. It’s behind us – a giant red nozzle poking up out of the ground. From there, a floating pipeline will carry the water into containers or bags loaded on big cargo ships. Just like oil. Sitka set the price point for water at 1 cent a gallon and can legally export 95 billion gallons a year. If you do the math, that’s quite a bit of money.

“If we move all 9.5 billion gallons a year, that’s 95 million dollars that could come into this community,” said White. “That’s huge.”

The challenge, of course, is actually getting the water to market.

Sitka’s vision of a bulk water business began 15 years ago, when the pulp mill closed. The city acquired rights to the land and to the water and in 2006, signed a 20-year contract with True Alaska Bottling, which is now called Alaska Bulk Water.

We put in performance criteria that said after 24 months from the beginning of the contract, they had to move a certain amount of water or the city at their option could terminate the contract.

The 24 months passed. And?

“No water was moved,” said White.

So, the city renewed the contract, but under the condition that Alaska Bulk Water pay a non-refundable fee for water credits.

The contract has been extended four times (in 2008, 2009, 2011, and 2012) and to keep it, Alaska Bulk Water spent $1.5 million and must ship 50 million gallons by December 8th. Still, no water has been moved. But White says that recent developments give him hope that water will finally leave the island this summer.

“I’ve always been ‘I’ll believe it when I see it,’” said White. “But when I see our current partners putting real money down to go out and put in a mooring buoy system and hire engineers to design it and going out and getting their Army Corps permit, doing all the right things and continuing to invest in the venture, then it’s no longer a 30,000 view of it. It’s starting to get down to the details.

Terry Trapp, the Chief Executive with Alaska Bulk Water, declined to be interviewed in detail for this story. But over the phone with KCAW, he said the company hopes to have the operation up and running this July.

In the meantime, White says there is a lot of trouble shooting to be done. For instance:

“When you show up to a receiving port with 10, 20, 30 million gallons of water, what do you do with it? Right? You got to have a place to store it. You got to be able to recharge aquifers. That’s a huge part of this venture that needs to be figured out.”

The bulk water ships are too large to dock, so the plan is to anchor them to mooring buoys in Sawmill Cove and run a floating pipeline that will carry the water from the shoreline system. (Emily Kwong/KCAW photo)
The bulk water ships are too large to dock, so the plan is to anchor them to mooring buoys in Sawmill Cove and run a floating pipeline that will carry the water from the shoreline system. (Emily Kwong/KCAW photo)

In addition to storage on the California side, it’s unclear what kinds of ships will be used. If those ships aren’t flagged as American, their passage from Sitka to California violates the Jones Act, which prohibits the transport of goods by foreign vessels. White is looking to Alaska Bulk Water and several engineering firms to tackle these and other issues.

White also wonders if, even at 1 cent a gallon, water is too expensive to transport at a reasonable cost.

KCAW: What do you say to Sitkans who are like, ‘No way. No way is this actually gonna happen. This is crazy sounding.’

White: I’ve been in that boat. But as you see somebody work out any type of problem that’s a lofty goal, it’s encouraging to see those baby steps that get you closer down the path.

In order to hold onto this contract, Alaska Bulk Water pledged to ship $50 million gallons by December 8th of this year.