A broken belly pan on the Ore Terminal’s ship loader has created cause for concern after a report of possible spillage into the harbor, and has given the Alaska Department of Environmental Conservation reason to call a meeting between the Municipality of Skagway, White Pass and Yukon Route railroad, Mineral Services, Inc., and the Alaska Industrial Development and Export Authority.

According to an incident investigation report from Mineral Services, Inc., tugboat captain Mike Korsmo reported airborne ore dust to Skagway Borough Manager Scott Hahn at 6:30 a.m. on July 8. The report states Korsmo was concerned the dust was being discharged directly into Skagway’s harbor.

MSI Health, Safety and Environmental Coordinator Craig Franke conducted the investigation, and after interviewing employees on the dock, concluded that no ore had fallen into the water.

According to the report, while lowering the ship loader, employees heard an impact and loud screech. MSI President Dave Hunz investigated and observed a damaged piece of sheet metal. During the shuttle-out process, the damaged section had become hung up on the structure of the loader and peeled back.

The report states the belly pan was located over the open ship hold, and while some residual ore from a previous load-out fell onto the hatch cover, it was not able to contact the surface of the water. Approximately eight five-gallon buckets of ore were taken back by wheelbarrow.

Hunz said the incident occurred at 3:20 a.m. and repairs were finished by 9:40 a.m. He said no ore touched the water as the broken pan was positioned over the ship’s closed hatch.

“We had everything contained,” he said. “The height where we were working on the dust pan and the ship deck was approximately eight feet.”

The dustpan was replaced with one on site, with all repairs completed before ship loading began.

Franke’s report stated no evidence of ore or dust on the dock surfaces, and concluded that the dust observed by Korsmo was from the replacement of the damaged belly pan.

The report states, “Given the location of the damaged and replacement belly pan, it is virtually impossible for the opening to have ever been over any open water surface. The pan is at the outer end of the conveyor line, and the ship loader cannot physically be shuttled in close enough to the dock for the damaged section to be over the water.”

It further states that given the position of Korsmo’s boat and line of sight restrictions, it would have been impossible to make any report of ore contact with the water.

Korsmo parks his tug at the end of the ore dock. While on standby to meet the cruise ships, he said he looked up and saw big clumps of ore coming off the top of the loader and hitting the deck of the ship. He confirmed that because of his angle, he couldn’t see anything hit the water.

“But it looked to me like there was enough material coming out that it could hit the water,” he said. “I did look into the water later to see if there was any stuff floating around, the tug sits at the end of the dock. I didn’t see anything in the water.”

According to Korsmo, he didn’t report the incident to the municipality, but to Dr. Chad Gubala over breakfast. As of our print date, Korsmo has yet to be contacted by the city.

Mayor Mark Schaefer and Hahn reported the incident to ADEC Environmental Program Manager Kara Kusche, who issued a letter that same day to the MOS, AIDEA, White Pass and Mineral Services, requesting a meeting to discuss sediment cleanup in the harbor.

According to the letter, the purpose of the meeting is to discuss solutions to current roadblocks hindering harbor cleanup, the plans that responsible parties have for said cleanup and the time frame in which it will occur. By the meeting’s close, next steps will be identified.  Kusche did not respond for comment.

The meeting is set to occur on August 8 or 9, in either Anchorage or Skagway.

Schaefer and Skagway Borough Attorney Bob Blasco met with Kusche and John Halvorson of ADEC on June 20 to discuss the condition of the port.

According to a report from Blasco, the meeting addressed how and when the remediation would be completed and explained the municipality’s need for access from White Pass to do so.

“It became clear to us that Halvorson and Kusche did not know that White Pass and AIDEA were insisting on a new lease before they would allow access and before they would participate in any remediation,” the report states.

An attorney representing ADEC said the remediation needed to be decoupled from the possibility of new leases and said ADEC can choose to hold them responsible.

“We agreed and invited their assistance,” the report states.

The meeting also addressed ongoing contamination at the Ore Terminal, to which Halvorson replied that ADEC has no test data indicating contamination above acceptable levels.

“In general, the meeting was positive and cooperative. Now that ADEC and the Department of Law understand our situation—not being allowed access without a lease—it seems they will be more proactive with White Pass and AIDEA.”

Following the meeting, Schaefer received a letter from ADEC on June 29, advising the municipality of its liability for contamination at the Skagway Ore Terminal.

AS 46.03.822 defines who is financially responsible or liable for the investigation and cleanup of any release or threatened release of a hazardous substance, as an owner or operator of the property or facility from which the release occurred and/or owner or operator of the property at which the hazardous substance came to be located. The municipality falls under both definitions.

During a July 7 assembly meeting, Schaefer said he was a little baffled by the letter, and asked the assembly to hold off on signing any institutional controls, which all other parties have signed.

“Initially after our DEC meeting, we thought maybe we could sign off on the institutional controls, but now after this letter, we don’t think we know that at all. We think we need to have another conversation,” he said.

The controls are a set of regulations created in the late 1980s that provide additional regulations to the site. ADEC requested the parties sign off on the controls again as a way to reiterate them.

Assemblyman Tim Cochran said the letter is standard protocol and was received when the ferry float sank and when notice of violations were given.

“Whether there was a spill or no spill, if there is potential they send that letter out,” he said.

But even if it is standard, Cochran agreed that the assembly should follow up before signing anything.

In an interview, Schaefer said he assumes the August meeting will be a continuation of the conversation that’s already been had: who’s responsible for what and what they’re going to do about it.

“They can name us, but we didn’t contaminate anything,” he said. “It’s our property and somebody else got it dirty.”

According to the US Environmental Protection Agency’s website, to be exempt from the EPA’s Superfund liability, landowners must meet the criteria of a bona fide prospective purchaser (BFPP), innocent landowner or contiguous property owner.

A BFPP must perform all appropriate inquires before purchasing the property and must demonstrate no affiliation with a liable party. They must be in compliance with land use restriction and must not impede the effectiveness or integrity of institutional controls, must be taking “reasonable steps” with respect to hazardous substances affecting a landowner’s property, must provide cooperation, assistance and access, must comply with information requests and administrative subpoenas and must provide legally required notices.

Innocent landowners are purchasers who acquire property without knowledge of contamination on the property, governments acquiring contaminated property involuntarily or through the exercise of eminent domain authority by purchase or condemnation, or are inheritors of contaminated property.

Lastly, contiguous property owners must follow similar guidelines to BFPPs. The CPO liability protection is in place for landowners who own property that is or may be contaminated, but is not the original source of the hazardous substance contamination.

Whether the municipality falls under any of EPA’s exemptions remains to be seen.

“They made it very clear that they could care less what we’re doing with anybody else,” Schaefer said. “They have a regulatory issue in front of them, and that’s all they see.”