SitNews - Stories in the News - Ketchikan, Alaska


Fuel Prices in Southeast Alaska
By Capt. Dan Nutt


January 06, 2009

Having noticed a few letters concerning the fuel prices and how that is related to the barges that bring the fuel, I wanted to clarify a couple points and hopefully provide a better picture of the fuel transportation issue for you.

The tugs and fuel barges work for the petroleum distributor and do not have an financial interest in the fuel carried onboard. Therefore, it is incorrect to state that the fuel facilities "buy" their fuel from the barge.

We, the barge operator, negotiate a transportation agreement with the fuel distributor. We haul fuel for Delta Western, Petro Marine, Anderes Oil, and similar companies. The transportation rate we charge our customers can be computed in several different ways, but is normally negotiated annually and reflects the market price of tug and barge services at the time of our negotiations.

The transportation cost is a small component of the cost of a gallon of fuel carried by barge. This is due to the large quantities of oil carried at one time. The barge PM 230, which services many ports in SEAK carries a maximum of 25,000 barrels, which is equivalent to about a million gallons. Barge transportation is very efficient, in that you can spread the cost of the transportation of the barge load over that million gallons. The cost of transportation has increased due to the cost of the fuel needed to transport it. Depending on the transportation agreement, either the tug operator or the customer has to not only transport the fuel, but also has to buy fuel to run the tug.

The passage of OPA-90 in the wake of the Exxon Valdez incident required that all single hull barges be replaced with double hulls by January 1, 2015. The capital investment and shipyard time required to bring new equipment into the system means that we have already started replacing many of our older barges, which also affects the transportation rate.

As a barge operator, our primary focus is SAFETY! Aside from the usual labor and benefits, our costs include training the crew for normal operations and emergencies, maintaining the equipment, and providing for a spill response system in SEAK that is required by Federal and State law. Nearly 1.5 million dollars a year is spent by the barge operators and fuel distributors to maintain the spill response capability in SEAK.

Weather and other delays are very costly and can affect the cost of fuel significantly.

Barge transportation remains the safest, most versatile, and most cost efficient mode of fuel transportation anywhere in the United States. As barge operators, we take very seriously the responsibility we have to deliver your fuel as safely and efficiently as possible.

I hope this helps to explain some of the issues I have seen raised. Feel free to drop me a note if you have any other questions.


Capt. Dan Nutt
Regulatory Manager
K-Sea Transportation
Seattle, WA

About: "Regulatory Manager for K-Sea Transportation, a tug and fuel barge operator in Southeast Alaska."

Received December 24, 2008- Published January 06, 2009


Viewpoints - Opinion Letters:

letter Webmail Your Opinion Letter to the Editor



Note: Comments published on Viewpoints are the opinions of the writer
and do not necessarily reflect the opinions of Sitnews.


E-mail your letters & opinions to
Your full name, city and state are required for publication.

SitNews ©2008
Stories In The News
Ketchikan, Alaska