MacKenzie Rail Extension would spur local and state economies

Compass: Other points

By JOHN MOOSEY and CHRIS AADNESENMarch 5, 2012 

It's time to build the Port MacKenzie Rail Extension. The 32-mile rail link will connect the Alaska Railroad near the city of Houston to the deep draft facilities at Port MacKenzie. This nearly flat grade and shorter route from Interior Alaska to tidewater has the potential to deliver Alaska's resources more economically than any other transportation option available today.

Resource development requires low transportation costs. There are approximately 1,000 known mineral deposits near the Alaska Railroad. These known deposits of lead, zinc, copper, molybdenum, silver and other minerals could be developed into viable working mines with the construction of the Port MacKenzie Rail Extension. Studies done at the University of Alaska Fairbanks estimate the value of mineral production from just three of those mines at $85 billion over the next 100 years.

Additionally, this type of mineral production is projected to generate $300 million per year in state taxes, royalties and fees for 60 years. According to the University of Alaska Anchorage Institute of Social and Economic Research, it could create 3,000 new construction jobs and 4,000 new mining jobs.

Well-established mines, including Fort Knox outside Fairbanks, recognize the value and have joined more than 30 key supporters across the state, asking Alaska legislators to invest in this critical transportation infrastructure project. Kinross Gold, USA, owner and operator of the Fort Knox Mine, says the Port MacKenzie Rail Extension will reduce the $5 million in freight transportation costs it faces every year, making the company more competitive.

Usibelli Coal Mine has also indicated that it needs two ports to handle future export growth and believes that Port MacKenzie would complement current operations at the Port of Seward.

As development goes forward, Port MacKenzie will complement the Port of Anchorage. The ports are only two miles apart across Cook Inlet. While the Port of Anchorage is highly valued for importing consumer goods for Alaskans, Port MacKenzie focuses on moving bulk resources. The Mat-Su population grew 50 percent in the past decade. Its ever-increasing growth and the tens of thousands of daily commuters connect the Mat-Su Borough and the Municipality of Anchorage as a regional economy. Bill Popp of the Anchorage Economic Development Corp. points this out in a letter: "Anchorage economy benefits both directly and indirectly from a healthy and growing statewide economy. This project is an important step towards assuring a brighter economic future for Alaska."

Increasingly important are the 9,000 developable acres at Port MacKenzie. This is space for the fabrication of value-added products, space for assembling sizable projects such as oil field modules, and space for businesses to grow.

Two new companies have already positioned themselves with long-term leases near the proposed rail link.

PacArctic, a subsidiary of Koniag, Inc., one of Alaska's 13 regional Native corporations, is a logistics and transportation company. Freight going to Interior Alaska, armor stone for the proposed Susitna-Watana dam, or tower components for wind projects could be hauled by rail from Port MacKenzie. PacArctic CEO King Hufford says customers are lining up with barge traffic alone.

Central Alaska Energy has plans to import fuel, store it at a new tank farm for distribution and ultimately provide greater competition in the regional fuel market. CAE is currently designing a separate spur at Port MacKenzie to transport ultra-low-sulfur diesel and unleaded gasoline to Interior Alaska, serving a greater number of Alaskans with more affordable fuel.

Finally, the Port MacKenzie Rail Extension stands to reduce transportation costs for any gas pipeline project due to the proximity and gentler grade to the Interior. It will save state dollars in the long run by diverting industrial and commercial traffic off our roads and onto the rail.

The Matanuska-Susitna Borough and the Alaska Railroad have partnered to build the Port MacKenzie Rail Extension. This critical infrastructure project will stimulate sustainable economic development in Alaska far into the future. It's time to build it.

John Moosey is manager of the Matanuska-Susitna Borough. Chris Aadnesen is president and CEO of the Alaska Railroad Corp.

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