True Alaska Bottling sends a notice of dissolution to S2C Global, which rejects disbanding their joint bulk water export company.
By Brett Walton
Circle of Blue
Last week in Sitka, Alaska, the city assembly voted to extend—by six years—a bulk water export agreement with its sole water rights contractor, despite comments suggesting there has been a rift between the contractor and its partner in their venture to open a market for regular trade in shipped water from North America to India and the Middle East.
At a January 13 board meeting for Sitka’s industrial development zone—which houses the water export infrastructure—Terry Trapp, the chief executive of True Alaska Bottling, told the five-person board that his company was severing its relationship with S2C Global Systems and dissolving the joint venture, formed in 2008, to export Sitka water, according to the meeting’s minutes.
In addition, Trapp told the Sawmill Cove Industrial Park Board that True Alaska, which holds the rights to 2.9 billion gallons per year from Sitka’s Blue Lake reservoir, would enter into direct negotiations with potential buyers in India and the Middle East. These negotiations are currently led by S2C. Because of insufficient facilities abroad and construction work that still needs to take place in Sitka, Trapp did not expect any exports to take place before 2012.
Yet the end of the partnership, named Alaska Resource Management, may not be a fait accompli. S2C’s president Rod Bartlett told Circle of Blue in an email that, as the main shareholder, S2C had not consented to dissolving the joint company. Additionally, as of his last conversation with True Alaska, Bartlett said that he still anticipates selling Sitka water.
Trapp told Circle of Blue in a phone interview that True Alaska’s lawyer had sent a notice of dissolution to S2C’s legal representative, but that he would have to follow up on whether it had been received. He declined to comment on why the notice was sent.
Last July, S2C announced the creation of a ‘water hub’ in India, which would serve as a distribution center for water shipped in 80-million-gallon tankers from Alaska using True Alaska’s water rights. No water has yet been shipped, and many water experts are skeptical that a regular sea-borne trade will ever materialize, since desalinated water is significantly cheaper and does not rely on foreign sources.
S2C has had no sales and is operating at a loss of $5.6 million dollars since its inception in 2004, according to its most recent filings with the Securities and Exchange Commission.
True Alaska first received rights to Sitka water in 2006, and its failure to meet minimum export deadlines led to several contract renegotiations with the city assembly. Passed on January 25, the latest 6-year contract extension is the company’s third, stipulating a $150,000 penalty payable over two years.
Brett writes about agriculture, energy, infrastructure, and the politics and economics of water in the United States. He also writes the Federal Water Tap, Circle of Blue’s weekly digest of U.S. government water news. He is the winner of two Society of Environmental Journalists reporting awards, one of the top honors in American environmental journalism: first place for explanatory reporting for a series on septic system pollution in the United States(2016) and third place for beat reporting in a small market (2014). Brett lives in Seattle, where he hikes the mountains and bakes pies. Contact Brett Walton