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Why $272 million for Port MacKenzie rail extension is really a bargain

Patty Sullivan

While Alaska works on increasing the throughput in the oil pipeline and on pinning down a natural gas project, it has another important resource development project underway — the Port MacKenzie Rail Extension.

The 32 miles of new track from the mainline at Houston to Port MacKenzie will be more than transportation infrastructure -- as valuable as that is. The extension makes tremendous mineral development possible. What kind exactly?

• Minerals including copper, molybdenum, zinc, silver, and lead have been identified along a 100-mile-wide corridor of the Alaska Railroad from Mat-Su to Fairbanks and beyond. Professor Paul Metz of the University of Alaska Fairbanks with the Department of Mining and Geology estimates that production from these mines could add up to nearly $1 billion a year. Fieldwork by Metz’ graduate students contributed to  miners developing Fort Knox.

• A 1.6 billion-ton deposit of limestone is near Livengood, 50 miles northwest of Fairbanks at the junction of the Dalton and Elliott highways, could be developed into a cement industry for Alaska. Demand is high enough that the U.S. has had to import cement.

• A new gold deposit near Livengood may be more than twice the size of Fort Knox and worth some $18 billion. If developed, it could employ more than 500 people and need large volumes of supplies to operate, Metz said.

• Even the producing gold mine, Fort Knox, may be able to cut its transportation costs using Port Mackenzie Rail.

So why isn’t more mining happening now with the rail mainline already in place? Because low-grade materials are extremely sensitive to transportation costs. When track is put in place, Port MacKenzie will be 141 miles closer by rail to the Interior than other Alaska deepwater ports. This minimizes the cost of transporting materials in and out, making new mines possible.

Exporting bulk resources

Bulk exports require large vessels to reduce the shipping costs. Port MacKenzie has plenty of water depth without dredging. In 2010, the JP Azure, reportedly the deepest draft vessel to ever navigate Upper Cook Inlet, tied up safely at Port MacKenzie. The ship’s draft descended 45.3 feet. Even at low tide, the massive ship still had another 15 feet of water below it.

Space is unique at Port MacKenzie. No other Alaska port has 14 square miles of zoned industrial area for the staging of bulk resources.

In addition, Port MacKenzie will have the longest industrial rail loop in Alaska -- 110 railcars. The long loop allows the entire length of the train to remain connected, providing for more efficient cargo offloading.

Ice is no problem to operations either. In November, thick pancakes of ice glided past Port MacKenzie as a ship was loaded with scrap metal, bound for South Korea, a new international export for Alaska.

The open-cell sheet-pile design of the port is the framework of bridges and docks throughout the Pacific Northwest, Texas, and Alaska. The design was well executed at Port MacKenzie, said Marc VanDongen, port director for Port MacKenzie. Since it was built in 1999, the sheet-pile barge dock hasn’t shifted, according to VanDongen, a 24-year veteranof the U.S. Army Corps of Engineers, who served four years as the deputy commander of the Alaska District.

Fuel, another commodity

Fuel will be another commodity moved by rail through Port Mackenzie. Six bulk fuel storage tanks with a combined capacity of at least 5 million gallons are planned to be under construction next year. The company, Central Alaska Energy, will supply a premium fuel that has a finite supply in Alaska, ultra low sulfur fuel.

This is the fuel required by the Environmental Protection Agency for the heavy equipment in Fairbanks and on the North Slope. Only Valdez and Nikiski supply it now. Port MacKenzie is poised to store and distribute this low-sulfur diesel fuel.

Bridges for fish, game

Recently, one critic of the project said the rail link would hurt fish. If you read the 650 pages of the environmental document that accompanies the Port MacKenzie rail extension, you’ll see the project has gone beyond the standard for fish passage and hydrology protection. The project crosses eight streams; seven of them support salmon. Nearly all the crossings have been oversized to preserve sensitive fish habitat. For example, a stream just five-feet wide that feeds into the Little Susitna River, has a five-span bridge arcing over it for 140 feet – allowing both fish and wildlife to pass while mitigating the potential for massive flooding.  

The project is also putting in 110 culverts along the entire route to maintain cross drainage. The Alaska Department of Fish and Game reviewed and authorized all the crossings. This is clearly environmentally responsible development.

Recently, Alaska voters approved adding $30 million to the Port MacKenzie Rail Extension via a general obligation bond for statewide transportation projects. Also, $116 million has been appropriated by the Alaska Legislatur over the years, with strong support by Gov. Sean Parnell. Already, more than 4.7 million cubic yards of soil has been moved on the project. By summer, three contractors could be at work on different segments, creating about 200 construction jobs.

Ultimately, the benefits in jobs, new industry, and revenues will far outweigh the $272 million investment for the rail extension. The shorter haul distance and lower transportation costs, the large staging area, the longest industrial rail loop, the deep water dock—Port MacKenzie Rail offers it all.

Patty Sullivan has been public affairs director at the Matanuska-Susitna Borough for the last seven years. She previously reported on the Mat-Su for six years from a Valley bureau for KSKA radio.

The views expressed in the above commentary are the writer's own and are not necessarily endorsed by Alaska Dispatch. Alaska Dispatch welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary(at)alaskadispatch.com.