Legislature(2007 - 2008)BARNES 124

02/14/2008 01:00 PM House TRANSPORTATION


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Audio Topic
01:07:00 PM Start
01:13:30 PM Overview: Alaska Truckers Association
02:02:21 PM Overview: Gas Line Preparedness
02:56:07 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- LOCATION CHANGE --
+ Overview: Alaska Truckers Association TELECONFERENCED
+ Gasline Preparedness TELECONFERENCED
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                       February 14, 2008                                                                                        
                           1:07 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kyle Johansen, Chair                                                                                             
Representative Anna Fairclough                                                                                                  
Representative Craig Johnson                                                                                                    
Representative Wes Keller                                                                                                       
Representative Mike Doogan                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mark Neuman, Vice Chair                                                                                          
Representative Woodie Salmon                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEWS:  ALASKA TRUCKERS ASSOCIATION; GASLINE PREPAREDNESS                                                                   
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
AVES THOMPSON, Executive Director                                                                                               
Alaska Trucking Association, Inc. (ATA)                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented an overview and answered                                                                       
questions about the Alaska trucking industry.                                                                                   
                                                                                                                                
HARRY McDONALD, President                                                                                                       
Carlile Transportation Systems                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions on the Alaska trucking                                                                
industry.                                                                                                                       
                                                                                                                                
JIM JANSEN                                                                                                                      
Lynden Transport                                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions about the Alaska                                                                      
trucking industry.                                                                                                              
                                                                                                                                
EDDIE WALTON                                                                                                                    
Horizon Lines                                                                                                                   
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     Answered  questions  about   the  Alaska                                                             
trucking industry.                                                                                                              
                                                                                                                                
JOHN REEVES, Special Assistant to the Commissioner                                                                              
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities                                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Presented   an  overview   and  answered                                                             
questions  on  the  statewide  infrastructure  needs  to  support                                                               
Alaska gas pipeline construction.                                                                                               
                                                                                                                                
MARY SIROKY, Legislative Liaison                                                                                                
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities                                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Answered  questions  on   the  statewide                                                             
infrastructure to support the Alaska Gas Pipeline.                                                                              
                                                                                                                                
FRANK  RICHARDS,   Deputy  Commissioner  of  Highways   &  Public                                                               
Facilities                                                                                                                      
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities                                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Answered  questions  on   the  statewide                                                             
infrastructure to support the Alaska Gas Pipeline.                                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  KYLE JOHANSEN  called  the  House Transportation  Standing                                                             
Committee  meeting  to  order at  1:07:00  PM.    Representatives                                                             
Johansen, Doogan,  Fairclough, Johnson,  and Keller  were present                                                               
at the call to order.                                                                                                           
                                                                                                                                
^OVERVIEW:  ALASKA TRUCKERS ASSOCIATION                                                                                       
                                                                                                                                
CHAIR JOHANSEN announced  that the first order  of business would                                                               
be  an  overview  from  the  executive  director  of  the  Alaska                                                               
Truckers  Association and,  second,  the committee  would hear  a                                                               
presentation  on how  the state  is readying  itself for  the gas                                                               
line.                                                                                                                           
                                                                                                                                
AVES THOMPSON,  Executive Director, Alaska  Trucking Association,                                                               
Inc. (ATA), gave the following presentation:                                                                                    
     Thank you  Mr. Chairman.   My name  is Aves  Thompson -                                                                    
     that's A-V-E-S.   I  am the  executive director  of the                                                                    
     Alaska Trucking  Association.  With me  today are three                                                                    
     members of our trucking  association, three of our more                                                                    
     than 200  member companies that are  represented by the                                                                    
     association.  As  you can see on the  slide there we're                                                                    
                                                           th                                                                   
     celebrating  50 years  of  service.   This is  our  50                                                                     
     anniversary.   It's an exciting  year for us  and we're                                                                    
     pleased to have the opportunity  today to talk a little                                                                    
     bit about  trucking and what  trucking does  in Alaska,                                                                    
     kind of the impacts it  has, and help you to understand                                                                    
     some of  the issues.  As  I said, with me  today is the                                                                    
     president of  our trucking  association this  year, Mr.                                                                    
     Eddie Walton, who is with  Horizon Lines.  I'd like him                                                                    
     to come  up here.   This is Mr.  Walton.  Also  with us                                                                    
     today is  Mr. Harry McDonald of  Carlile Transportation                                                                    
     Systems and Mr. Jim Jansen of Lynden Incorporated.                                                                         
                                                                                                                                
     What I'd like  to do with your  blessing, Mr. Chairman,                                                                    
     is to  start through  this PowerPoint  presentation and                                                                    
     keep  it  as  informal  as  possible.    If  there  are                                                                    
     questions of us  or me, I'd deflect them  to our guests                                                                    
     here  who  can  help  us understand,  from  a  business                                                                    
     perspective, what trucking is all about in Alaska.                                                                         
                                                                                                                                
CHAIR JOHANSEN asked the members of the group to identify                                                                       
themselves for the record.                                                                                                      
                                                                                                                                
[The individual group members identified themselves.]                                                                           
                                                                                                                                
MR. THOMPSON continued:                                                                                                         
                                                                                                                                
     The mission  of the  Trucking Association is  to foster                                                                    
     and promote  the interests of the  trucking industry in                                                                    
     Alaska and  we do that  in a number  of ways.   You can                                                                    
     read that  - I  don't need  to go  through that.   We'd                                                                    
     like to say good stuff -  trucks bring it.  If you wear                                                                    
     it, dribble it,  play it, trucks bring it.   It is just                                                                    
     as  simple  as  that.     At  some  point  or  another,                                                                    
     everything that you have has been  on a truck.  We have                                                                    
     a  lot  of  different  modes of  operation  within  our                                                                    
     organization.  We haul freight,  we haul fuel.  This is                                                                    
     one  of our  member  companies.   This  is  one of  our                                                                    
     member companies.   We haul  freight in  short doubles.                                                                    
     We haul  freight in  long doubles.   We haul  big stuff                                                                    
     and heavy stuff.   This is in support of  oil fields at                                                                    
     the North Slope and other  places and some of the heavy                                                                    
     transformer   equipment   that   has  gone   into   the                                                                    
     electrical generating plants here and there.                                                                               
                                                                                                                                
     So if  you look at  the national freight  forecast, you                                                                    
     can see that tonnage will be  up over the next 12 years                                                                    
     and this  is a  couple of  years old,  but at  the same                                                                    
     time  you  can see  that  there's  an upward  trend  of                                                                    
     freight moving  nationally.   Of course  as we  look at                                                                    
     freight,  air freight  will grow  the fastest  and it's                                                                    
     estimated  in this  study  that by  the  year 2015,  64                                                                    
     percent  of all  freight will  move by  truck.   Just a                                                                    
     couple of  weeks ago the American  Trucking Association                                                                    
     announced  that in  the year  2006, 69  percent of  all                                                                    
     freight  had  been  moved  by  truck.    So  there's  a                                                                    
     significant increase in truck traffic.                                                                                     
                                                                                                                                
     This is  a Federal  Highway Administration  [FHA] chart                                                                    
     that was developed  in the year 2000, 2001, so  it is a                                                                    
     little bit old but it  helps to demonstrate how freight                                                                    
     flows  on  the  water  from Alaska  to  the  Lower  48.                                                                    
     You'll see  that the long  blue line  from Southcentral                                                                    
     there  down  to  California  ports  is  typically  oil.                                                                    
     That's moving South and the  freight originated here in                                                                    
     the Puget Sound  area.  Some spills  off into Southeast                                                                    
     Alaska  and  a good  portion  comes  into the  Port  of                                                                    
     Anchorage.                                                                                                                 
                                                                                                                                
     Some  overland routes  where the  trucks operate  - and                                                                    
     you  can  see this  is  the  Alaska Highway  coming  up                                                                    
     through Edmonton,  I think that's Fort  Nelson.  Here's                                                                    
     the Haines Highway coming on to  Alaska.  Some of it is                                                                    
     going straight  up to the  North Slope and to  the west                                                                    
     of the Deadhorse area.                                                                                                     
                                                                                                                                
     In that same freight  analysis shows the average annual                                                                    
     daily truck traffic  counts.  As you can  see, the high                                                                    
     traffic  counts are  in  urban  areas of  Southcentral.                                                                    
     Here's  the urban  area of  Juneau.   Truck counts  are                                                                    
     high and,  of course,  the freight corridors  along the                                                                    
     Parks Highway  and also down  to Delta Junction  - some                                                                    
     of  that  is military  traffic  moving  down that  way.                                                                    
     Then you can see it also goes on up to Prudhoe Bay.                                                                        
                                                                                                                                
     Now this  was the traffic  counts in 1998.   You'll see                                                                    
     that the volume there was  10 million tons with a value                                                                    
     of $8  billion dollars.   That  study estimated  by the                                                                    
     year 2020,  the volume  would more  than double  to $21                                                                    
     million and the  value of that freight  would more than                                                                    
     triple.                                                                                                                    
                                                                                                                                
1:13:30 PM                                                                                                                    
                                                                                                                                
MR. THOMPSON continued:                                                                                                         
                                                                                                                                
     So you  can see the  lines get heavier, the  traffic is                                                                    
     heavier and even  the traffic on up to  the North Slope                                                                    
     is heavier.   So it gives  you kind of an  idea of some                                                                    
     growth patterns and where this is headed.                                                                                  
                                                                                                                                
     Some economic factors.   Fuel prices.   Our tonnage has                                                                    
     increased  and  profit  margins  continue  to  be  low.                                                                    
     Truck sales have slowed down a  little bit.  I think we                                                                    
     have  a  driver  and  technician  shortage  that  we're                                                                    
     trying  to address.    The  association's been  working                                                                    
     with a couple  of coalitions in Anchorage  to help with                                                                    
     some vocational  training and trying  to reach  out and                                                                    
     let people know  that there are good  jobs available in                                                                    
     the  transportation  and,  particularly,  the  trucking                                                                    
     industry.  Insurance premiums are  still rising and new                                                                    
     laws  and   regulations  have   dramatically  increased                                                                    
     costs,  and we  see that  in engine  specifications and                                                                    
     fuel requirements.   Changes  in fuel  and a  number of                                                                    
     other things have contributed to that.                                                                                     
                                                                                                                                
1:14:50 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  asked if  most of the  laws and  regulations that                                                               
have increased  costs are federally  driven or whether  the state                                                               
has contributed to the problem.                                                                                                 
                                                                                                                                
MR.  THOMPSON  replied  most  of the  laws  and  regulations  are                                                               
federally driven and pertain to emissions and controls.                                                                         
                                                                                                                                
MR.  McDONALD  added that  a  lot  of  new security  and  license                                                               
requirements have  been established.   A bill  in Congress  is an                                                               
attempt to  diminish some  of those  requirements.   U.S. Senator                                                               
Murkowski may co-sponsor the bill in the Senate.                                                                                
                                                                                                                                
MR.  THOMPSON said  new driver  training  requirements are  being                                                               
considered at  the federal level.   The trucking  association and                                                               
industry do not  oppose driver training, but they  are looking at                                                               
the requirements to make sure they are not overkill.                                                                            
                                                                                                                                
CHAIR  JOHANSEN asked  whether  training  opportunities exist  in                                                               
Anchorage and  Fairbanks that directly employ  people in Alaska's                                                               
transportation companies.                                                                                                       
                                                                                                                                
MR. McDONALD said  the Teamsters run a school  and another school                                                               
is located in Palmer.  Many companies do in-house training.                                                                     
                                                                                                                                
CHAIR JOHANSEN  asked if ATA believes  the training opportunities                                                               
are adequate.                                                                                                                   
                                                                                                                                
MR. McDONALD said  the ATA has seen a severe  shortage of trained                                                               
workers in  the last few  years; the  same thing is  happening in                                                               
the continental U.S.                                                                                                            
                                                                                                                                
1:17:53 PM                                                                                                                    
                                                                                                                                
MR. THOMPSON told members he is  a trained economist and that his                                                               
reading shows that freight is very flat right now.                                                                              
                                                                                                                                
MR. JANSEN reported  that Lynden's volume is off  25 percent this                                                               
year, predominantly on the North Slope.                                                                                         
                                                                                                                                
REPRESENTATIVE  DOOGAN  said  members  have  heard  a  lot  about                                                               
increased activity  and how the  oil patch has driven  prices up.                                                               
He asked whether  the downturn is the result of  coming off of an                                                               
upsurge.                                                                                                                        
                                                                                                                                
MR. JANSEN said 2007 was a  big year so Lynden's freight level is                                                               
still above 2006.                                                                                                               
                                                                                                                                
1:19:16 PM                                                                                                                    
                                                                                                                                
MR. THOMPSON continued his presentation:                                                                                        
                                                                                                                                
     Some  facts about  trucking  in  Alaska.   Thirty-eight                                                                    
     percent  of the  manufactured  freight commodities  are                                                                    
     transported  by  truck.   As  with  many parts  of  the                                                                    
     United States,  many communities  in Alaska  are served                                                                    
     exclusively  by  truck  and   we've  talked  about  the                                                                    
     multiplier effect.  It is  calculated that trucking has                                                                    
     that multiplier effect in Alaska three to four times.                                                                      
                                                                                                                                
     Eighty-five percent of  Alaska's freight enters through                                                                    
     the Port  of Anchorage.   Trucks  deliver more  than 90                                                                    
     percent  of   that  freight.    Trucking   means  jobs.                                                                    
     Trucking employs  over 21,000 people, one  out of every                                                                    
     14  civilian jobs,  workers.   Trucking pays  more than                                                                    
     $900 million  in wages annually.   Trucking consists of                                                                    
     several  thousand family  owned and  corporate trucking                                                                    
     businesses,   most  of   which  have   fewer  than   10                                                                    
     employees, a  lot of Mom  and Pop operations.   So it's                                                                    
     not just the large  companies that we're talking about.                                                                    
     We're talking  about small, medium,  and even  a little                                                                    
     larger companies  that make  their living  in trucking.                                                                    
     They pay  their drivers, they pay  their administrative                                                                    
     help.     They  pay  their  warehouse   people  and  it                                                                    
     generally makes  a contribution to  the economy  of the                                                                    
     state.                                                                                                                     
                                                                                                                                
     The average  annual trucking wage, and  this comes from                                                                    
     the   Alaska   Department   of  Labor   and   Workforce                                                                    
     Development,  in   2006  the  trucking   industry  wage                                                                    
     average was  $45,792, which is about  10 percent higher                                                                    
     than the state's average annual  wage so we're proud of                                                                    
     the work  that we do  and we're  happy that we  can pay                                                                    
     the wages that we do.                                                                                                      
                                                                                                                                
     Speaking of jobs, about the  mid-90s the decisions were                                                                    
     made  to construct  "truckable"  oil  field modules  in                                                                    
     Anchorage.   The  Alaska Department  of Transportation,                                                                    
     industry, and  the designers of  the oil  field modules                                                                    
     from the  oil companies  got together  and sat  down to                                                                    
     say okay,  if we're going  to build them here,  how are                                                                    
     we going  to move them.   So we worked our  way through                                                                    
     it, set the limits,  set the general parameters, worked                                                                    
     with  the  bridge  design  folks  so  that  we  weren't                                                                    
     tearing out the  bridges.  As you can see,  this one is                                                                    
     probably -  this is one of  Harry's.  You want  to tell                                                                    
     them what that one is about?                                                                                               
                                                                                                                                
1:21:54 PM                                                                                                                    
                                                                                                                                
MR. McDONALD told members they were looking at a 105 ton oil                                                                    
module at 46 Mile of the Elliot Highway.  Many improvements have                                                                
been made on that highway.                                                                                                      
                                                                                                                                
MR. THOMPSON continued:                                                                                                         
                                                                                                                                
     But you  can see,  in order  to get  up the  hill you'd                                                                    
     need  some help.   All  of those  tractors are  pushing                                                                    
     and,  in some  cases,  as you  go  downhill they're  in                                                                    
     front of them, aren't they?                                                                                                
                                                                                                                                
MR. McDONALD said they tie one back.                                                                                            
                                                                                                                                
MR. THOMPSON continued:                                                                                                         
                                                                                                                                
     It's  an example  of how  industry and  government were                                                                    
     able to work together  to create virtually thousands of                                                                    
     jobs.  It  would be fair to say, I  believe, that there                                                                    
     are hundreds  and hundreds of  modules that  have moved                                                                    
     in the last 15 years - thousands perhaps.                                                                                  
                                                                                                                                
MR. McDONALD commented the number is definitely in the hundreds.                                                                
                                                                                                                                
MR. THOMPSON said it has been a good source of employment for                                                                   
Alaskans and continued his presentation:                                                                                        
                                                                                                                                
     In  2004  Alaska had  a  little  over 14,000  miles  of                                                                    
     public roads  and all the  motors used have  traveled 5                                                                    
     billion  miles on  these  roads  and trucking  traveled                                                                    
     about 10  percent of  that.   We look  at the  taxes in                                                                    
     relation to  - truckers paid  more than $90  million in                                                                    
     overall state  and federal highway taxes  and fees, and                                                                    
     while  trucks   only  constitute  10  percent   of  the                                                                    
     traffic,  truck  taxes  and  fees  constitute  over  49                                                                    
     percent of  all state  highway user fees.   This  is to                                                                    
     demonstrate  that  we  think   that  we're  making  our                                                                    
     contribution through the tax  regimes and that there is                                                                    
     a fair relationship there.                                                                                                 
                                                                                                                                
1:23:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN asked if the ATA's statistics only include                                                                
long haul outfits.                                                                                                              
                                                                                                                                
MR. THOMPSON said the statistics cover all commercial vehicles.                                                                 
                                                                                                                                
MR. McDONALD remarked that 50 percent of its work is local.                                                                     
                                                                                                                                
MR. WALTON noted that the volume  of Horizon Lines going north to                                                               
Fairbanks is  about 2 percent of  the volume that comes  into the                                                               
Railbelt.   Another 2  or 3  percent is  trucked south  to Kenai,                                                               
Soldotna and Homer.                                                                                                             
                                                                                                                                
MR. THOMPSON continued his presentation:                                                                                        
                                                                                                                                
     An example  of the cost  of doing business is  that you                                                                    
     decide  you're going  to  buy a  new  tractor and  this                                                                    
     number  is  probably a  little  bit  old now  with  the                                                                    
     purchase price of $140,000.   And, before you even turn                                                                    
     the key,  we need  to pay a  12 percent  federal excise                                                                    
     tax.   We need  to pay  the federal  heavy use  tax and                                                                    
     Alaska  registration fees  and some  other state  fees.                                                                    
     And  before  you even  get  the  vehicle out  the  door                                                                    
     you've  got nearly  $160,000 in  it.   These folks  are                                                                    
     making  huge investments  in their  companies and  they                                                                    
     are  making investments  to provide  jobs for  drivers,                                                                    
     jobs  for mechanics,  warehouse and  generally to  move                                                                    
     the freight.                                                                                                               
                                                                                                                                
     Nationally, truck  safety is  good and  getting better.                                                                    
     The  crash rates  have reduced  over the  past -  since                                                                    
     1988  by almost  50 percent.   Federal  statistics show                                                                    
     that truck fatalities have fallen  for each of the past                                                                    
     four years.   Nationally,  they are about  almost 5,000                                                                    
     commercial  vehicle  involved fatalities  annually  and                                                                    
     that is about 10 percent of  the total so we still have                                                                    
     some carnage  on our  highways and  we're trying  to do                                                                    
     our part to reduce that.                                                                                                   
                                                                                                                                
     So if  we look at  Alaska we  find that, on  a national                                                                    
     basis,  of all  fatal  crashes  involving a  commercial                                                                    
     vehicle at  the national  level, the percentage  is 100                                                                    
     percent.  In Alaska that  number is 6.4 so we're pretty                                                                    
     proud of that  number.  The fatality rate  in Alaska is                                                                    
     lower than  the national  average.  If  we look  at all                                                                    
     crashes  nationally, commercial  vehicles are  involved                                                                    
     in  5 percent  of the  total crashes.   In  Alaska that                                                                    
     number drops  to 2 percent  so probably that  number is                                                                    
     low, Mr. Chairman.                                                                                                         
                                                                                                                                
CHAIR JOHANSEN asked why the number of accidents has declined.                                                                  
                                                                                                                                
1:27:04 PM                                                                                                                    
                                                                                                                                
MR. McDONALD related his belief  that has occurred because trucks                                                               
are safer and easier to  drive, improved roadways, and because of                                                               
more company  training.  Carlile's trucks  are all electronically                                                               
controlled for  speed.   They are  monitored by  satellite, which                                                               
allows  Carlile  to  address any  driver  problems  it  observes.                                                               
Alaska's safety statistics are better  than the national average,                                                               
he noted.  Drivers are under  more scrutiny in Alaska because the                                                               
volume of trucks is lower so they are more visible.                                                                             
                                                                                                                                
MR. WALTON  said Horizon  Lines drivers  are employees  but owner                                                               
operators.  They are electronically  governed for speed.  Horizon                                                               
has  training and  safety  meetings to  remind  employees of  the                                                               
importance of  safety.   Every incident  that occurs  reflects on                                                               
the  company.   Horizon  Lines started  a  C-Vision program  with                                                               
federal money.   In conjunction  with that, DOT&PF  received seed                                                               
money.   The level of  inspections has also increased,  which has                                                               
forced companies to step up their safety programs.                                                                              
                                                                                                                                
1:29:39 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN said the legislature  passed legislation on safety                                                               
zones.   He  asked whether  ATA has  identified any  particularly                                                               
dangerous areas and whether ATA interacts with DOT&PF.                                                                          
                                                                                                                                
MR. McDONALD said  the most dangerous area he is  aware of is the                                                               
Cooper Landing  area.  That  is a  very scenic, narrow  and windy                                                               
road  with a  lot of  traffic congestion,  especially during  the                                                               
summer.   A  by-pass  for  commercial traffic  should  be a  high                                                               
priority in the near future.                                                                                                    
                                                                                                                                
MR. THOMPSON continued his presentation:                                                                                        
                                                                                                                                
     Mr. Chairman,  I think part of  - I don't want  to call                                                                    
     it a problem but part  of our current situation is that                                                                    
     we're   asking   for   multi-use  for   our   highways,                                                                    
     particularly  the  Seward  Highway  as  you  go  south.                                                                    
     We're trying  to run line-haul freight  down that major                                                                    
     freight   corridor  and   we're   competing  with   the                                                                    
     tourists,  we're   competing  with  the   sheep,  we're                                                                    
     competing  with the  folks that  are  walking back  and                                                                    
     forth across the highway and  it's a pretty scary thing                                                                    
     because you  come around the  corner and if  you're not                                                                    
     prepared   for  that,   why   the   results  could   be                                                                    
     catastrophic.  There are a number of places like that.                                                                     
                                                                                                                                
     We are  asking a lot  of our highways.   Cooper Landing                                                                    
     is  a  good example.    If  we  had  a bypass  ...  the                                                                    
     tourists who  are going to  Homer can get  there, folks                                                                    
     who are  going with freight  to Kenai and  Soldotna and                                                                    
     Homer can get there but yet  the folks who want to stop                                                                    
     in and  have a Cooper  Landing experience can  still do                                                                    
     that.   Mt. McKinley  Park, Litter Gulch,  for example,                                                                    
     are other good examples.   At some point in our future,                                                                    
     we're going to have to address those kinds of issues.                                                                      
                                                                                                                                
     I went  to a meeting  - there's  a little piece  of the                                                                    
     Seward Highway  through [indisc.].   They're  trying to                                                                    
     make some design  plans and some changes  there and the                                                                    
     community residents,  of course,  don't want  to change                                                                    
     much  and they  don't  want widening,  they don't  want                                                                    
     unlimited  access.   Everybody  wants  access to  their                                                                    
     driveway onto the Seward Highway  and that creates some                                                                    
     potential conflicts that are just  scary.  So those are                                                                    
     the issues that we continue  to talk with DOT about and                                                                    
     they're  generally responsive.    They recognize  those                                                                    
     and  they're doing  I think  what they  can within  the                                                                    
     limits of their ability as well.                                                                                           
                                                                                                                                
     We talked  about truck inspections.   They've increased                                                                    
     dramatically.  The  out-of-service rates have decreased                                                                    
     and   an   out-of-service   condition   is   where   an                                                                    
     enforcement officer has determined  that it's unsafe to                                                                    
     move that vehicle until it  is fixed or towed away with                                                                    
     a  proper towing  vehicle so  that's the  definition of                                                                    
     out-of-service so we've seen that rate go down.                                                                            
                                                                                                                                
REPRESENTATIVE  DOOGAN commented  that  DOT&PF  has talked  about                                                               
addressing the Cooper Landing situation  for many years but every                                                               
time DOT&PF  devises a  plan, it  blows up.   He opined  that the                                                               
last proposed route  ran north of the river, but  DOT&PF ran into                                                               
landownership problems.                                                                                                         
                                                                                                                                
1:33:47 PM                                                                                                                    
                                                                                                                                
MR. THOMPSON said he thought DOT&PF bumped into federal agency                                                                  
problems, such as with the Park Service.                                                                                        
                                                                                                                                
REPRESENTATIVE DOOGAN jested that he thought "land ownership"                                                                   
was good code for federal agencies.                                                                                             
                                                                                                                                
MR. THOMPSON continued his presentation:                                                                                        
                                                                                                                                
     This  is kind  of a  busy slide  but the  bars are  the                                                                    
     number of inspections  and the blue line  is the number                                                                    
     of  violations per  inspection.   So the  only point  I                                                                    
     want to make with this is  back in 1997, if you stopped                                                                    
     a truck to inspect it  you would expect, on average, to                                                                    
     find five violations.   In 2006 if you  stopped a truck                                                                    
     for an inspection, you would  expect on average to find                                                                    
     1.3   violations,   so   that's   a   pretty   dramatic                                                                    
     improvement.                                                                                                               
                                                                                                                                
     We have some  issues and some concerns.   Of course our                                                                    
     biggest  concern is  the gas  pipeline.   That's number                                                                    
     one on our  list.  The National Highway  System is near                                                                    
     and dear to our hearts.   That's our workplace.  That's                                                                    
     where  our  drivers  go  to  work  everyday  and  we're                                                                    
     interested  in  it  being  a  safe,  modern,  efficient                                                                    
     highway where  we can  operate safely  and efficiently.                                                                    
     It doesn't  do us  any good  to operate  efficiently if                                                                    
     we're  unsafe because  if  we  operate unsafely,  we're                                                                    
     going to end up out of business.                                                                                           
                                                                                                                                
     Weight restrictions are an issue.   I just plucked this                                                                    
     out of a file.   It's a weight restriction review chart                                                                    
     from the  Department of Transportation.   It identifies                                                                    
     all  of those  areas and  the fine  print in  the lower                                                                    
     right  hand  corner  identifies   each  of  the  little                                                                    
     stretch in  the milepost  and everything.   What's been                                                                    
     happening on  the Parks Highway  is that over  the last                                                                    
     six to eight years, there were  about 60 to 80 miles of                                                                    
     substandard    highway    and   the    Department    of                                                                    
     Transportation  has  been  whittling that  down.    Our                                                                    
     objective here is to bring all  of that highway up to a                                                                    
     standard  where  it will  not  be  necessary to  impose                                                                    
     weight  restrictions  because  weight  restrictions  is                                                                    
     that phenomena that occurs  each spring during seasonal                                                                    
     freeze and thaw.   The roadbed for  the highway becomes                                                                    
     much more  susceptible to damage  and so  therefore DOT                                                                    
     reduces the  amount of  weight that  can be  carried on                                                                    
     the truck and it costs  money and it costs the consumer                                                                    
     money.   People still need groceries  in Fairbanks and,                                                                    
     if we have a  10 or 15 mile or 30  mile stretch of road                                                                    
     that is  restricted effectively, that limits  the whole                                                                    
     length of the route.  We  can't carry a full load up to                                                                    
     that point and  then ferry it through and  then move it                                                                    
     on.   You lose all the  efficiency so one of  our large                                                                    
     objectives  is  to  bring  that  Parks  Highway  up  to                                                                    
     standard so that  we can eliminate the  need for weight                                                                    
     restrictions.  It just recaps what I just said.                                                                            
                                                                                                                                
CHAIR  JOHANSEN  said when  the  committee  met in  Ketchikan,  a                                                               
shipper  commented on  the weight  restrictions  of the  transfer                                                               
bridges  to the  Alaska Marine  Highways.   The shipper  said the                                                               
load level  on the highway  has increased yet  the infrastructure                                                               
has not kept up.   He asked if that is a  concern and whether ATA                                                               
has discussed the  structure of transfer bridges  with the Alaska                                                               
Marine Highway folks.                                                                                                           
                                                                                                                                
1:38:08 PM                                                                                                                    
                                                                                                                                
MR. JANSEN thought  the general feeling in  the trucking industry                                                               
is  that  bridges  and roadways  need  continued  improvement  to                                                               
accommodate larger  trucks.  The  only way the  trucking industry                                                               
can control costs is to get bigger payloads.                                                                                    
                                                                                                                                
CHAIR JOHANSEN  thought that  was the  shipper's point  and asked                                                               
whether ATA has worked with DOT&PF on that issue.                                                                               
                                                                                                                                
MR.  McDONALD  replied  that philosophically  it  is  similar  to                                                               
going to  Ketchikan.   A truck  can haul a  full load  within one                                                               
mile of a  dock but a small portion  at the end may have  a 50 or                                                               
75 percent restriction, so the  full load cannot be legally moved                                                               
the last mile.   The same situation exists on  the Parks Highway.                                                               
It has a small stretch of  substandard road, maybe 50 miles, with                                                               
no available  bypass so  it restricts  the process.   Substandard                                                               
roads at  the docks  in Southeast also  restrict full  loads from                                                               
being delivered.                                                                                                                
                                                                                                                                
1:40:03 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  asked if  the ATA  has identified  the restricted                                                               
areas and is attempting to get them opened up.                                                                                  
                                                                                                                                
MR.  McDONALD said  ATA has  worked with  DOT&PF during  the last                                                               
year and has made some progress.                                                                                                
                                                                                                                                
1:40:24 PM                                                                                                                    
                                                                                                                                
MR.  JANSEN said  two components  of  that situation  have to  be                                                               
considered.    The  first  is the  improvement  of  the  physical                                                               
structure  of  road  building so  that  weight  restrictions  are                                                               
unnecessary.   The  second  component  is for  DOT&PF  to find  a                                                               
balanced, common  sense approach.   He pointed  out that  after a                                                               
tug and  barge travel  800 miles from  Seattle to  Petersburg, an                                                               
employee might decide  to impose a 75  percent weight restriction                                                               
so a customer  one-quarter mile away cannot pick  up his freight.                                                               
He noted  the shipper/DOT&PF relationship  has improved  over the                                                               
past two years so those issues are now worked out more easily.                                                                  
                                                                                                                                
CHAIR JOHANSEN remarked that is good to hear.                                                                                   
                                                                                                                                
MR. THOMPSON continued his presentation:                                                                                        
                                                                                                                                
     Maintenance and operations - it's  the key itself, safe                                                                    
     and productive highways  and so ... there  are times it                                                                    
     can  mean  the  difference   between  life  and  death.                                                                    
     Maintenance  will  extend  the   service  life  of  the                                                                    
     highways and ensure a safe workplace for our drivers.                                                                      
                                                                                                                                
     We've advocated  state general funded  capital projects                                                                    
     programs the last  few years.  We  continue to advocate                                                                    
     that.   We  do see  there's a  transportation endowment                                                                    
     fund bill.   It looks like  it might be a  great start.                                                                    
     I don't  know if the details  are going to allow  it to                                                                    
     work.   The thing that  was so, sort of,  attractive to                                                                    
     us is that that might  be a mechanism whereby you could                                                                    
     provide  a stable  and reliable  funding  source for  a                                                                    
     state capital projects program.                                                                                            
                                                                                                                                
     There are  some highway projects listed  in the general                                                                    
     obligations bond bill  that we feel need  to be funded.                                                                    
     We take no  position on whether it should  be bonded or                                                                    
     whether  it should  be general  fund  financed, but  we                                                                    
     just feel  that the  projects are  important.   We also                                                                    
     noted just recently  a bill has been  introduced in the                                                                    
     Senate that  would provide some $25  million for bridge                                                                    
     repairs and replacement and we  think that is a step in                                                                    
     the right  direction.   All of these  things kind  of -                                                                    
     they're multipurpose or multi-benefit  - I guess is the                                                                    
     way I'd say  that.  We talk  about weight restrictions,                                                                    
     we  talk about  safe highways,  we talk  about pipeline                                                                    
     preparedness,  and  we  talk   about  any  other  mega-                                                                    
     projects.  It's going to  require the movement of large                                                                    
     amounts of  freight and equipment.   Our  highways need                                                                    
     to be  in shape to  handle those kinds of  projects and                                                                    
     so as  we do these  things, as we propose  and advocate                                                                    
     for  them,  we're not  doing  it  just for  the  weight                                                                    
     restrictions or  just for  this or just  for that.   We                                                                    
     feel it  will be a  benefit to  all of the  citizens of                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
     Some other  issues -  congestion.   We talked  a little                                                                    
     bit  about   the  Seward  Highway  and   Anchorage  and                                                                    
     Wasilla.    That's  an interesting  dynamic.    In  the                                                                    
     morning and the  evening there's a lot  of traffic that                                                                    
     moves back and forth between  Wasilla and the Valley so                                                                    
     to  speak, and  Anchorage.   Denali Park  - that's  the                                                                    
     Glitter Gulch  mentioned, and then Seward  Highway and,                                                                    
     of  course, access  in our  urban areas,  truck routes,                                                                    
     city streets and shopping malls.                                                                                           
                                                                                                                                
1:44:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN noted that changes were made in the                                                                       
roadway at Denali Park.  Turn lanes were constructed in an                                                                      
attempt to  allow through  traffic a  safer route.   He  asked if                                                               
that has benefited the trucking industry.                                                                                       
                                                                                                                                
MR. McDONALD  said the main  highway has stoplights,  which isn't                                                               
the ideal situation.  However,  it is better than nothing, though                                                               
an overpass for the park traffic would be better.                                                                               
                                                                                                                                
REPRESENTATIVE DOOGAN asked if ideally  the ATA would like to see                                                               
separate roadways through that section.                                                                                         
                                                                                                                                
MR. McDONALD  said yes, or  an overpass to eliminate  the traffic                                                               
lights on the main highway.                                                                                                     
                                                                                                                                
MR. WALTON indicated  that a tremendous number  of tourists cross                                                               
that  highway going  to and  from [Denali]  Park.   Getting those                                                               
people and cars off of the  highway and on to a pedestrian bridge                                                               
and overpass would be much safer.                                                                                               
                                                                                                                                
REPRESENTATIVE  DOOGAN  said  several  government  agencies  went                                                               
through  a lengthy  process before  any  changes were  made.   He                                                               
asked  whether any  government effort  is  currently underway  to                                                               
address those issues.                                                                                                           
                                                                                                                                
MR. THOMPSON replied he is not aware of any.                                                                                    
                                                                                                                                
1:45:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER acknowledged  that drivers  traveling from                                                               
Anchorage to Fairbanks  must be very frustrated  with the Wasilla                                                               
area.                                                                                                                           
                                                                                                                                
MR. THOMPSON  agreed that the  Wasilla area  is a problem.   Over                                                               
time, more  and more traffic  signals have been  installed, which                                                               
increasingly   slows   travel    time.      Understandably,   all                                                               
neighborhoods want access to the  highway.  Again, the problem is                                                               
the expectation  of being able  to use that highway  for multiple                                                               
uses.                                                                                                                           
                                                                                                                                
CHAIR JOHANSEN questioned whether the  bypass for the railroad is                                                               
intended to funnel commercial traffic through the Wasilla area.                                                                 
                                                                                                                                
REPRESENTATIVE KELLER  thought that  DOT&PF anticipated  the need                                                               
to  expand  the  highway  to   eight  lanes  through  Wasilla  to                                                               
accommodate all traffic unless a bypass was built.                                                                              
                                                                                                                                
1:47:39 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN acknowledged that project is on the radar.                                                                       
                                                                                                                                
MR. THOMPSON said the ATA would support a bypass to get through                                                                 
that area.  He then continued his presentation.                                                                                 
                                                                                                                                
     Highway safety, we would propose  to continue to create                                                                    
     and construct those physical  safety improvements.  One                                                                    
     of the things  that has happened over  the last several                                                                    
     years  is  the  ...  railroad  crossings  so  that  you                                                                    
     separate  the  grade crossing  from  the  rail and  the                                                                    
     highway.     We think  that is  a good  physical safety                                                                    
     improvement  and,  as  those projects  come,  we  would                                                                    
     encourage  that those  kinds of  things  be built  into                                                                    
     that.  And, as Harry  pointed out, an elevated crossing                                                                    
     at Denali Park  to separate the local  traffic from the                                                                    
     through  traffic  -  those kinds  of  things  would  be                                                                    
     helpful.                                                                                                                   
                                                                                                                                
     Improvements  in   terms  of  straightening   out  some                                                                    
     curves, or  making them not  quite as sharp  and giving                                                                    
     you a  little better  line of sight,  and that  sort of                                                                    
     thing   -  we're   interested   in  increasing   safety                                                                    
     awareness  for  all  motorists.    The  state  and  the                                                                    
     federal DOTs tell  us that somewhere between  60 and 70                                                                    
     percent of all  commercial vehicle-involved crashes are                                                                    
     caused by the  other driver so we,  the Alaska Trucking                                                                    
     Association,  the  American Trucking  Association,  and                                                                    
     the Federal  Motor Carrier Safety  Administration, have                                                                    
     programs  like "Share  the Road."    We have  America's                                                                    
     road team to stay  out of the no zone.   The no zone is                                                                    
     where  the truck  driver  is looking  into  his or  her                                                                    
     mirrors, there  are spots where  they can't see.   They                                                                    
     are blind  spots so stay out  of those no zones.   They                                                                    
     are effective  and we think  that there needs to  - the                                                                    
     Highway Safety Office in DOT  does a pretty good job of                                                                    
     that and we encourage the continuation of that.                                                                            
                                                                                                                                
     In conjunction  with that,  we would  support increased                                                                    
     traffic   enforcement  and   correct  some   behavioral                                                                    
     problems   perhaps.     Technological  vehicle   safety                                                                    
     improvements are coming.  They  are at this point quite                                                                    
     expensive  and things  like  alarms  and following  too                                                                    
     close  or things  like  that, all  of  these whiz  bang                                                                    
     things you  can put on  your truck but they  are costly                                                                    
     and  we'd  encourage that  there  may  be some  way  to                                                                    
     incentivize that to say here,  try it out, let's see if                                                                    
     that works.                                                                                                                
                                                                                                                                
     We  talked   about  driver  shortages.     Fuel  prices                                                                    
     continue to  be of concern.   This  is just a  chart to                                                                    
     illustrate the  volatility of fuel  prices.   One other                                                                    
     point  there is  that fuel  can  be 25  percent of  the                                                                    
     operating expenses for  a truck.  Is  that a reasonable                                                                    
     number Harry?                                                                                                              
                                                                                                                                
1:50:55 PM                                                                                                                    
                                                                                                                                
MR. THOMPSON continued:                                                                                                         
                                                                                                                                
     And  currently fuel  supplies seem  to be  adequate but                                                                    
     there's  only  one  refinery.   We  were  talking  this                                                                    
     morning with  some other supplier that  might be coming                                                                    
     on line - the ultra low sulfur diesel.                                                                                     
                                                                                                                                
MR. McDONALD  said he  was unsure of  the situation  with another                                                               
fuel supplier.   He  pointed out  that one  issue with  ultra low                                                               
sulfur diesel  versus low  sulfur diesel  is that  the Petro-Star                                                               
Refinery has  an exemption to  continue to sell low  sulfur fuel,                                                               
so as new trucks are phased  in, trucks built after 2007 can only                                                               
burn  low sulfur.   The  older trucks  can continue  to burn  any                                                               
fuel.  Drivers  must be careful about choosing  the correct fuel.                                                               
That has been a problem in  Prudhoe Bay but next year Prudhoe Bay                                                               
will use  100 percent  ultra low sulfur  diesel.   Fairbanks will                                                               
continue to have the 500 part fuel available until 2010.                                                                        
                                                                                                                                
1:52:18 PM                                                                                                                    
                                                                                                                                
MR. JANSEN  added that when  the ultra low diesel  regulation was                                                               
promulgated, the cost of fuel  for trucks increased substantially                                                               
because   only    one   supplier   is   available    in   Alaska.                                                               
Simultaneously consumption went down.                                                                                           
                                                                                                                                
MR. WALTON  clarified that  consumption increased.   He  said the                                                               
spot price last week was $3.32.   The least refined diesel is the                                                               
most  expensive fuel  at the  pumps.   Fuel costs  have increased                                                               
substantially,  especially  for users  of  diesel  number 1  fuel                                                               
because the efficiency is low and the price is high.                                                                            
                                                                                                                                
MR. THOMPSON  said for  the sake of  comparing changes  in engine                                                               
and fuel specifications, it would  take 60 clean diesel trucks to                                                               
equal the soot  emissions of 1 truck sold in  1988. Over the last                                                               
15 years,  engine emissions have  been reduced by 98  percent but                                                               
that has  come at a high  price.  He  said his point is  that the                                                               
trucking   industry  has   made   a   contribution  to   emission                                                               
reductions.  He continued his presentation:                                                                                     
                                                                                                                                
     We want  a highway system that  encourages development.                                                                    
     We  want  to  maintain  and  enhance  the  truck  size,                                                                    
     weight,  and permitting  productivity  gains that  have                                                                    
     been achieved over the last 20  years.  We have some of                                                                    
     the best, I believe, size  and weight laws, and some of                                                                    
     the best  permitting practices  perhaps in  the nation.                                                                    
     It  allows for  the movement  of heavy  equipment under                                                                    
     controlled  conditions.     Both  the  state   and  the                                                                    
     industry  are meeting  their responsibilities  in terms                                                                    
     of  protecting  the  infrastructure,  as  well  as  the                                                                    
     motoring public.                                                                                                           
                                                                                                                                
     And then,  of course,  we need to  be sure  to identify                                                                    
     necessary   transportation  improvements   for  freight                                                                    
     movement.   As we look  at new  projects we want  to be                                                                    
     sure   that   the   movement  of   freight   is   given                                                                    
     consideration in the planning  for that project or that                                                                    
     change.                                                                                                                    
                                                                                                                                
1:55:19 PM                                                                                                                    
                                                                                                                                
MR. THOMPSON continued:                                                                                                         
                                                                                                                                
     We're here,  we're proposing to use  the transportation                                                                    
     fund  to fund  the capital  projects program,  fund the                                                                    
     projects  listed in  the [general  obligation] GO  bond                                                                    
     bill, improve  maintenance and focus our  federal funds                                                                    
     on the National Highway System.   Finally, we'd like to                                                                    
     say if  you've got it, the  truck brought it.   This is                                                                    
     just about the only thing not delivered by a truck.                                                                        
                                                                                                                                
1:55:44 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN asked if members  had any questions and wished Mr.                                                               
                   th                                                                                                           
Thompson a happy 50   anniversary on behalf of the committee.  He                                                               
then commented that the  House Transportation Committee sponsored                                                               
legislation last year  for the truckers related  to licensing and                                                               
asked if the change has been beneficial.                                                                                        
                                                                                                                                
MR.  THOMPSON said  it has.     He recalled  the bill  dealt with                                                               
commercial  driver's license  issues  and  updated penalties  and                                                               
sanctions.  It also brought  the Division of Motor Vehicles (DMV)                                                               
and  commercial driver's  license (CDL)  program into  compliance                                                               
with  the federal  motor  carrier safety  requirements.   It  has                                                               
called  attention   to  the  severe  sanctions   associated  with                                                               
commercial  driver's  license  violations.   A  number  of  those                                                               
require license suspension  for 60 days upon  a first conviction,                                                               
suspension for 120  days upon a second conviction,  and denial of                                                               
the commercial driver's  license upon the third  conviction.  The                                                               
ATA notified  companies and drivers.   No problems  have occurred                                                               
because of the change.                                                                                                          
                                                                                                                                
1:58:22 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  asked Mr. Thompson  to let the committee  know if                                                               
any unintended consequences arise.                                                                                              
                                                                                                                                
1:58:43 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:58 p.m. to 2:02 p.m.                                                                       
                                                                                                                                
^Overview: Gas Line Preparedness                                                                                              
                                                                                                                                
2:02:21 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN announced  that the final order  of business would                                                               
be an overview of gas line preparedness.                                                                                        
                                                                                                                                
2:02:35 PM                                                                                                                    
                                                                                                                                
JOHN REEVES,  Gas Pipeline Transportation Coordinator,  Office of                                                               
the   Commissioner,  Department   of   Transportation  &   Public                                                               
Facilities,  thanked the  committee for  inviting him  to give  a                                                               
presentation.       He   introduced   Frank    Richards,   Deputy                                                               
Commissioner, and  Mary Siroky,  of DOT&PF.   He told  members he                                                               
would  discuss  what DOT&PF  is  doing  to  prepare for  the  gas                                                               
pipeline.  He noted he would  refer to the RISE report, which was                                                               
included in his handout.  He began his presentation:                                                                            
                                                                                                                                
     So far  the state's planning has  included developing a                                                                    
     list of  needed infrastructure.   The RISE  Report that                                                                    
     I'm referring  to was done in  2005.  It was  done when                                                                    
     the  last  gas  line  was being  proposed  by  Governor                                                                    
     Murkowski.   Since that  time, since  I came  on board,                                                                    
     we've taken that report to try  to glean out of it what                                                                    
     those projects are that we  actually do need.  In 2005,                                                                    
     2006, DOT  and the producers in  [Department of Natural                                                                    
     Resources] DNR  met to  talk about  those needs.   They                                                                    
     had  a highway  use  agreement, which  ended after  the                                                                    
     primary.     It  discussed  work  on   identifying  the                                                                    
     infrastructure  that is  needed.   They understood,  or                                                                    
     came  to an  understanding, of  the logistics  plan for                                                                    
     the gas pipeline:   the ports of entry,  the routes and                                                                    
     models  of transport,  the size,  weight and  number of                                                                    
     the loads, and the major staging areas.                                                                                    
                                                                                                                                
     The RISE  evaluation approach  was to  keep all  of the                                                                    
     alternatives in mind and to look  at all of the modes -                                                                    
     the  ports, the  airports, the  roads and  highways and                                                                    
     rail.    They  were   considering  both  pre  and  post                                                                    
     construction   needs  and   what   does  the   pipeline                                                                    
     construction need:  what impacts  the system, what will                                                                    
     construction  cause and  who is  going to  pay for  the                                                                    
     upfront  work  and   who  is  going  to   pay  for  the                                                                    
     aftermath?                                                                                                                 
                                                                                                                                
     The basic transportation issues  are that this gas line                                                                    
     will  be different  than the  TAPS.   The entire  thing                                                                    
     will be buried.   That means there is going  to be more                                                                    
     earth work and more truck  loads.  The pipe is heavier.                                                                    
     The  oil  pipeline  is  about 5/8  inch.    I've  heard                                                                    
     anything from  .5 inch to  1.25 inches, schedule  75 to                                                                    
     schedule  80 pipe  for the  gas line.   That's  because                                                                    
     it's  a higher  pressure  line.   There's  going to  be                                                                    
     greater  use of  large  modules, more  ports of  entry,                                                                    
     higher  background  traffic,   more  pavement  at  risk                                                                    
     because there  just is  more pavement  now than  we had                                                                    
     back during the pipeline.                                                                                                  
                                                                                                                                
2:05:27 PM                                                                                                                    
                                                                                                                                
MR. REEVES continued:                                                                                                           
                                                                                                                                
     And  there's  going  to   be  a  just-in-time  delivery                                                                    
     approach.   In  other words,  we should  have had  this                                                                    
     yesterday.                                                                                                                 
                                                                                                                                
     There's a  picture in there  of - the planning  to date                                                                    
     has  been route  neutral.   One thing  we have  come to                                                                    
     [conclude] is  that the gas  line will go  from Prudhoe                                                                    
     to  at least  Fairbanks.   After  that, it's  anybody's                                                                    
     guess.  It's  probably going to rest  on your shoulders                                                                    
     to decide where that's going to be.                                                                                        
                                                                                                                                
     You can  see the ports  of entry  are - the  main ports                                                                    
     are  going  to be  the  Seward  and Valdez  and  Haines                                                                    
     entries.                                                                                                                   
                                                                                                                                
2:06:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  asked why Mr. Reeves  stated that most                                                               
of the pipeline will be buried.                                                                                                 
                                                                                                                                
MR. REEVES related  his understanding that is  what the producers                                                               
have said.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  DOOGAN commented  that  during  the AGIA  meeting                                                               
process  last year,  the testimony  was  that more  of this  line                                                               
could  be  buried, which  is  preferable,  because it  would  not                                                               
defrost the ground.                                                                                                             
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH expressed  concern  that corrosion  is                                                               
detected when  a leak occurs but  that will be more  difficult to                                                               
see below ground.                                                                                                               
                                                                                                                                
2:07:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN  said maybe  the owners  will use  the pigs                                                               
this time.                                                                                                                      
                                                                                                                                
MR. REEVES continued:                                                                                                           
                                                                                                                                
     So far to date, and  I started working in November, I'm                                                                    
     the  transportation  coordinator.    My job  is  to  go                                                                    
     through  the almost  $7 billion  of projects  that were                                                                    
     included in the  RISE Report and figure  out which ones                                                                    
     are  really  needed.     It's  like  a   pile-up  on  a                                                                    
     playground  and there  are  different  levels of  need.                                                                    
     There's a - do we need it  for the oil pipeline?  Do we                                                                    
     really need  it for  this pipeline?   Included  in that                                                                    
     RISE Report was  an addition for the railroad  to go to                                                                    
     Canada for  $2 billion.   Do we  need that for  the gas                                                                    
     line?  I  don't know.  In my review  I don't think it's                                                                    
     necessary.   I'm here  to build  a gas  line.   I'm not                                                                    
     here to build a railroad.                                                                                                  
                                                                                                                                
     The need again - like if  my wife needs a dishwasher or                                                                    
     if  my kids  need to  download  some music  off of  the                                                                    
     Internet, I think  that there's a way that  we can both                                                                    
     work something  out.   But I better  make sure  that my                                                                    
     wife gets  what she  needs.  We  need some  things done                                                                    
     more than  we need other things  done and so my  job is                                                                    
     to prioritize those projects and  figure out which ones                                                                    
     aren't really  necessary.  To  do that, we're  going to                                                                    
     have to  look at the routes.   We need to  know how big                                                                    
     the pipe is, where it's going.                                                                                             
                                                                                                                                
     We've  done  a lot  of  the  key  work on  bridges  and                                                                    
     passing  lanes.   You've seen  that if  you've been  up                                                                    
     along   the  Parks   Highway  between   Delta  on   the                                                                    
     [Richardson].   Delta  Junction  North, Delta  Junction                                                                    
     East,   everything   in    common   to   the   pipeline                                                                    
     alternatives  is the  bridges.   I  think  most of  the                                                                    
     bridges, it's  my understanding,  on the  Parks Highway                                                                    
     have  now been  rebuilt.   We're  looking  good on  the                                                                    
     Parks  Highway.    What the  guys  were  talking  about                                                                    
     earlier about  the overweight, that  rings a  bell with                                                                    
     me because  I was  in the  freight business  during the                                                                    
     last  pipeline  and  specifically in  the  air  freight                                                                    
     business and handled pretty much  almost all of the air                                                                    
     freight that went north of  the Alaska Range.  What I'm                                                                    
     seeing  here is  that  trend is  going  to increase  in                                                                    
     terms of air freight.                                                                                                      
                                                                                                                                
     The bridges  are going to be  replaced.  A lot  of them                                                                    
     have  been replaced.   The  highway work  - we've  done                                                                    
     some things  around Fairbanks and I'm  sure that you've                                                                    
     seen a  lot of  things done  around the  Anchorage area                                                                    
     that's being  done.  Richardson  Highway - we  put some                                                                    
     passing  lanes   in  and  last  year   the  North  Pole                                                                    
     interchange is done.   There's still some  more work to                                                                    
     be  done.   There's  a question  here  about the  weigh                                                                    
     station at Fox and [indisc.]  verify they have the new,                                                                    
     latest  inroad scale  things installed  around the  Fox                                                                    
     area, much to the delight of the truckers.                                                                                 
                                                                                                                                
2:10:10 PM                                                                                                                    
                                                                                                                                
MR. REEVES continued:                                                                                                           
                                                                                                                                
     Visible progress.   The Elliot  Highway.   There's some                                                                    
     pictures   there  of   the  new   realignment  in   the                                                                    
     Washington Creek  bridge that  was just replaced.   The                                                                    
     Dalton Highway  is always  being worked  on.   It's the                                                                    
     main industrial artery  for the state.   There are some                                                                    
     bridges  that need  to be  rebuilt.   The Tanana  River                                                                    
     bridge bids  in 2008.   The Johnson  River bridge  - we                                                                    
     still  don't know  when that  is going  to be  bid out.                                                                    
     Several   Alaska   Highway    segments   need   to   be                                                                    
     rehabilitated and a  new weigh station at  Tok in 2008.                                                                    
     There's a picture of the  Robertson River bridge on the                                                                    
     Alaska Highway.  When you  see some of those loads that                                                                    
     - the previous presenter showed  you that some of those                                                                    
     loads just can't get across  a bridge like this.  Other                                                                    
     highways  - the  Parks Highway,  major logistics  route                                                                    
     from  Cook  Inlet  ports,  module  fabrication  -  they                                                                    
     talked  mostly about  the  weight  restrictions.   That                                                                    
     needs  to  be addressed.    Several  bridges that  have                                                                    
     recently been rehabilitated - like  I said earlier most                                                                    
     of the Parks  Highway bridges are done.   There is some                                                                    
     work being bid in Haines  and the environmental work is                                                                    
     being done right now.                                                                                                      
                                                                                                                                
     Some  key  chokepoints  [are] Atigan  Pass,  Fairbanks,                                                                    
     North  Pole,  Delta  Junction,  the  Alaska  Range  and                                                                    
     Thompson Pass,  Haines and Haines Highway  and then, of                                                                    
     course,  Anchorage to  Wasilla.   There's  an issue  of                                                                    
     financial  responsibility  but  who is  going  to  pay.                                                                    
     There's  a  note  here  that FERC  ruled  in  1980  the                                                                    
     pipeline traffic  is part of  the ordinary  highway use                                                                    
     so that  you can't penalize  or treat the  pipeline any                                                                    
     differently than you would anybody  else.  And then the                                                                    
     Pass tells  us that  pavements in  a project  like this                                                                    
     will  be obliterated.    There has  been  some talk  of                                                                    
     okay, rather than rebuild a  road now, go ahead and get                                                                    
     the  gas line  built  and then  rebuild it  afterwards.                                                                    
     That's  not a  bad way  to think  of things  sometimes.                                                                    
     Will we have to wait for  an EIS to decide what's going                                                                    
     to happen?                                                                                                                 
                                                                                                                                
     The  [Statewide   Transportation  Improvement  Program]                                                                    
     STIP funds are  tapped out.  Funding  levels decline in                                                                    
     2009.  New  earmarks are less likely.   Urban and other                                                                    
     needs are  great.   STIP money  cannot be  converted to                                                                    
     the  gas pipeline  on  a wholesale  basis.   The  state                                                                    
     general fund  has been sought for  the Washington Creek                                                                    
     bridge,  the Shaw  (ph)  Creek  bridge, the  Richardson                                                                    
     Highway  passing  lanes.   The  Parks  Highway sees  no                                                                    
     closure relief and the Dalton Highway five-year plan.                                                                      
                                                                                                                                
2:13:02 PM                                                                                                                    
                                                                                                                                
MR. REEVES continued:                                                                                                           
                                                                                                                                
     Financial responsibility  - issues  to be  discussed or                                                                    
     major  activity  sites  access,  such  as  turn  lanes,                                                                    
     camps,  pipe   staging  yards,  weigh   station  bypass                                                                    
     technology.    It  may   improve  state  and  carriers'                                                                    
     efficiencies.  Safety features  needed - truck pullouts                                                                    
     to  allow  more  passing, module  movements,  [indisc.]                                                                    
     bridges and more passing lanes.                                                                                            
                                                                                                                                
     There  are some  other  issues.   The  size and  weight                                                                    
     issues  -  extra  maintenance  and  operations  support                                                                    
     during  construction, safety  and law  enforcement, and                                                                    
     then  the  aviation needs  north  of  the Yukon  River.                                                                    
     There's a picture of them  there of - it's probably the                                                                    
     same module that they had  a picture of only farther up                                                                    
     the road heading north.                                                                                                    
                                                                                                                                
     I'd  like  to  thank  you  for having  me  and  I'd  be                                                                    
     delighted to answer any questions you guys might have.                                                                     
                                                                                                                                
2:14:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH asked  if  the  committee requested  a                                                               
copy of the Reis report.                                                                                                        
                                                                                                                                
CHAIRMAN JOHANSEN said he believes so.                                                                                          
                                                                                                                                
MARY  SIROKY, Legislative  Liaison, Office  of the  Commissioner,                                                               
Department of  Transportation &  Public Facilities,  told members                                                               
she  will bring  copies  to committee  members tomorrow  morning.                                                               
She apologized for the delay.                                                                                                   
                                                                                                                                
REPRESENTATIVE   FAIRCLOUGH   asked   Mr.  Reeves   whether   the                                                               
consultant that put together the  plan of needs prioritized those                                                               
needs.                                                                                                                          
                                                                                                                                
MR. REEVES  said the  plan contains  three levels  of priorities.                                                               
All of the  projects are needed but some are  not as important as                                                               
others.                                                                                                                         
                                                                                                                                
2:15:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH asked  Mr. Reeves if, in  his review of                                                               
the Reis Report, it accurately  reflects the most important needs                                                               
in Priority 1.                                                                                                                  
                                                                                                                                
MR.  REEVES   replied  if   the  decision   was  his,   he  might                                                               
reprioritize some  of the projects  in Priority 1.   For example,                                                               
the railroad to  Canada was a Priority 1 project.   That reflects                                                               
"the pile  up on the  playground," meaning the attitude  could be                                                               
that every  desired project  should be  thrown into  the pipeline                                                               
plan.  He said everything is in the plan already.                                                                               
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  stated her  belief  in  the need  for                                                               
roads  and infrastructure  improvements.   She asked  whether the                                                               
committee would look at a  funding source or whether DOT&PF would                                                               
do it.  She furthered:                                                                                                          
                                                                                                                                
     I mean $500  million doesn't get us anywhere  and I had                                                                    
     to  smile  about an  appropriation  in  the Senate  for                                                                    
     bridges in  the $20 million  because that is a  drop in                                                                    
     the  bucket to  fix anything.    I say  that tongue  in                                                                    
     cheek.  Bridges  cost - you can't even  get an overpass                                                                    
     for under $1 million.                                                                                                      
                                                                                                                                
2:17:31 PM                                                                                                                    
                                                                                                                                
MR. REEVES opined that the costs are ridiculous.                                                                                
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH said  she  appreciates the  governor's                                                               
look at  the need to  create an  endowment or permanent  fund for                                                               
infrastructure; however she believes  $500 million is inadequate.                                                               
She questioned whether this committee  should form a subcommittee                                                               
to further  investigate funding  possibilities or  whether DOT&PF                                                               
is doing that.                                                                                                                  
                                                                                                                                
MR. REEVES  maintained that $500 million  is a lot of  money, but                                                               
it  will cost  a  lot more  than  that.   The  work  on the  main                                                               
corridor on  the Dalton Highway  from Prudhoe to the  border will                                                               
cost well over $500 million.                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  said, in  general, 5 miles  of highway                                                               
work, depending  on the  terrain, costs  $5 million  plus.    She                                                               
said her interest is in finding  a way for legislators to look at                                                               
that budget  increment and determine how  to plan for all  of the                                                               
needs.                                                                                                                          
                                                                                                                                
2:19:48 PM                                                                                                                    
                                                                                                                                
MR. REEVES deferred to Mr. Richards for an answer.                                                                              
                                                                                                                                
FRANK  RICHARDS,   Deputy  Commissioner  of  Highways   &  Public                                                               
Facilities,   Office   of   the   Commissioner,   Department   of                                                               
Transportation &  Public Facilities,  told committee  members the                                                               
Administration  is  determining  the overall  needs  through  Mr.                                                               
Reeves' work and  then will look at  possible funding mechanisms.                                                               
The goal will be to  have the transportation infrastructure ready                                                               
for a  pipeline project.   The window of opportunity  to complete                                                               
that work is fairly small if the deadline is 2015 or 2016.                                                                      
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH  noted that with  fuel costs at  $6 per                                                               
gallon in  rural areas, this  is not the  time to consider  a gas                                                               
tax increase.   However, it continues to haunt  her that Alaska's                                                               
gas tax has not been addressed  for many years and, under current                                                               
structure,  the state  gets  a $1  to  $5 or  $6  return on  that                                                               
investment  at  the  pumps.    She noted  the  governor  is  also                                                               
considering  taking away  tire taxes,  among other  things.   She                                                               
said she looks forward to hearing DOT&PF's potential solution.                                                                  
                                                                                                                                
REPRESENTATIVE  DOOGAN referred  to  the  infrastructure map  and                                                               
said some  of the work  is justifiable because of  normal traffic                                                               
wear  and tear.    DOT&PF  could safely  look  at those  projects                                                               
before a route is chosen.   He pointed out the project from Delta                                                               
south  is more  problematic because  if the  all-Alaska route  is                                                               
chosen for  the gas line,  improvements will not be  necessary on                                                               
that part of the highway.   He asked whether Mr. Reeves is saying                                                               
that  if  the committee  must  decide  which projects  should  be                                                               
funded now, it should focus on the truly route-neutral projects.                                                                
                                                                                                                                
2:23:07 PM                                                                                                                    
                                                                                                                                
MR. REEVES  said his personal  opinion is that the  pipeline will                                                               
go from Prudhoe to Fairbanks  so, with limited pipeline funds, he                                                               
would concentrate on the projects on the Haul Road.                                                                             
                                                                                                                                
MR.  RICHARDS related  his agreement  with Mr.  Reeves' statement                                                               
and noted  the truckers just  identified the Parks Highway  as an                                                               
existing  corridor  that  provides   freight  movement  into  the                                                               
interior  of  Alaska and  the  oil  fields.    He said  from  his                                                               
perspective that is  an existing highway corridor  that should be                                                               
upgraded,  especially  since  that  would  eliminate  the  weight                                                               
restrictions.  Carlile,  Lynden and Horizon would  like DOT&PF to                                                               
meet that  level of  standard so that  a roadway  embankment that                                                               
would not  be impacted by  heavy weight  pipe would be  in place.                                                               
He advised that if Port MacKenzie is  used as a port of entry, no                                                               
existing road network  is capable of handling  the freight loads.                                                               
The Knik-Goose Bay Road in Wasilla  is already over capacity.  He                                                               
explained, "So if we look  potentially on an alignment similar to                                                               
what  the railroad  is looking  at from  Willow on  down to  Port                                                               
Mackenzie for their  expansion, there might be a need  for a road                                                               
corridor through that as well.                                                                                                  
                                                                                                                                
2:25:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN said  he  asked  because the  construction                                                               
materials will  need to be  distributed throughout the  length of                                                               
that route.   That will start at Valdez, Anchorage,  or Seward or                                                               
another port.   He questioned if one assumes DOT&PF  is not going                                                               
to  concentrate on  the Dalton  Highway  and wants  to spend  the                                                               
funds so  that it gets  "a double barrel  bang for the  buck," at                                                               
what point either one of those highways might be overbuilt.                                                                     
                                                                                                                                
MR. RICHARDS  clarified that the  Parks Highway north  of Wasilla                                                               
is  one of  the  highest accident  areas with  a  high number  of                                                               
fatalities.   The  build-out  of that  road  to National  Highway                                                               
System  (NHS) standards  with four  lanes would  cost about  $100                                                               
million.  To get trucks through  there as a two-lane road, DOT&PF                                                               
would have to mill off  existing pavement, improve the embankment                                                               
and  resurface  the   road.    The  difference   would  be  doing                                                               
rehabilitation work  to allow for  freight traffic but  not doing                                                               
other safety improvements DOT&PF would want to do.                                                                              
                                                                                                                                
REPRESENTATIVE DOOGAN asked  about the price tag  for the [bigger                                                               
project].                                                                                                                       
                                                                                                                                
MR. RICHARDS estimated  about $18 to $20 million based  on a cost                                                               
of $1.5 million per mile for 12 miles.                                                                                          
                                                                                                                                
2:27:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN  asked whether  work on the  highway system                                                               
between a port  and Fairbanks would be done  that would otherwise                                                               
be unnecessary without the new pipeline construction.                                                                           
                                                                                                                                
MR.  REEVES said  yes  and  repeated that  once  the corridor  is                                                               
established, many answers  will become obvious.  He  said when he                                                               
referred to the  Haul Road as being an obvious  answer right now,                                                               
he was considering  the steel pipe that will be  transported.  If                                                               
that comes  into Seward,  it will most  likely be  transported by                                                               
rail to Fairbanks.   If Port Mackenzie was in  play, transport by                                                               
rail would  be even better.   Also, trucking the pipe  north from                                                               
Port  Mackenzie would  involve  a  lot of  congestion.   He  said                                                               
millions of  tons of  steel will  be freighted  to build  the gas                                                               
line.    In  response  to Representative  Doogan's  question,  he                                                               
explained  the Glenn  Highway between  the  Richardson and  Parks                                                               
Highways is in  the Reis Report because of a  possible spur line.                                                               
If the  spur line is  not built,  those projects are  still great                                                               
projects.   He  pointed out  that when  he spoke  about the  Haul                                                               
Road, he was  speaking about the section between  the Yukon River                                                               
and Fairbanks,  which he believes  is the most dangerous  part of                                                               
that road.                                                                                                                      
                                                                                                                                
2:30:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN  expressed concern that the  price tag will                                                               
be high and  that even with the high oil  revenue, the state will                                                               
not be able  to pay for all of  it.  He said he  has no certainty                                                               
of a gas  pipeline and especially no certainty as  to the timing.                                                               
When he  sees DOT&PF's request  for construction money,  he wants                                                               
to  be  able  to  determine whether  funds  are  being  allocated                                                               
reasonably despite the pipeline.                                                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON asked how  much freight will enter through                                                               
Haines.  He  pointed to a bid  for work on the  Haines Highway in                                                               
2008  and asked  how  much of  that is  related  to the  pipeline                                                               
strategic plan.                                                                                                                 
                                                                                                                                
MR. REEVES explained  that all ports of entry  were considered in                                                               
the report.                                                                                                                     
                                                                                                                                
2:32:46 PM                                                                                                                    
                                                                                                                                
MR.  RICHARDS pointed  out  the  Haines Highway  is  part of  the                                                               
National Highway  System so that  work was  previously scheduled.                                                               
Haines and Skagway  provide the only port  access between Alberta                                                               
and from Tok eastward.                                                                                                          
                                                                                                                                
2:35:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked if the  Alaska portion is  77 miles                                                               
from Haines to the Canadian border.                                                                                             
                                                                                                                                
MR. RICHARDS said that is correct.                                                                                              
                                                                                                                                
REPRESENTATIVE JOHNSON asked whether  the Canadians are doing any                                                               
preparation work between Beaver Creek  and the border and whether                                                               
coordination with the Canadians has taken place.                                                                                
                                                                                                                                
MR. REEVES  reiterated that the pipeline  route remains uncertain                                                               
and  that he  believes the  Haines project  was included  in 2005                                                               
when the  producers' pipeline  was proposed.   Haines was  one of                                                               
three ports of entry.   He pointed out that a  lot of the freight                                                               
could be barged directly to  Prudhoe Bay during certain months of                                                               
the year.  He  said that will be up to the  builder and that many                                                               
of these  decisions can  be made  once a  commitment to  make the                                                               
pipeline has been made.                                                                                                         
                                                                                                                                
MR.  RICHARDS  said  he  had   a  teleconference  scheduled  this                                                               
afternoon  with his  Yukon Territory  counterpart to  discuss the                                                               
highway system and future development for a pipeline.                                                                           
                                                                                                                                
REPRESENTATIVE  JOHNSON said  he was  wondering if  the Canadians                                                               
are planning for alternate routes as  well.  He said he just does                                                               
not see  Haines as  an important  part of a  strategic plan.   He                                                               
wants to be  cautious about not including  projects that pipeline                                                               
readiness will not require.   He expressed concern about spending                                                               
billions of dollars for a pipeline that may not get built.                                                                      
                                                                                                                                
2:37:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER  asked  Mr.  Richards  if  the  number  he                                                               
provided to  upgrade the road from  Wasilla to Big Lake  is for a                                                               
two-lane road and whether he said the cost would be $90 million.                                                                
                                                                                                                                
MR. RICHARDS clarified he was  talking about upgrading to a four-                                                               
lane  road with  frontage roads.   The  upgrade to  NHS standards                                                               
with  the  higher traffic  volumes  would  require larger  dollar                                                               
amounts.    In his  response  to  Representative Doogan,  he  was                                                               
trying to articulate the bare  minimum necessary for the truckers                                                               
to  legally  drive over  the  existing  roads with  the  existing                                                               
capacity, which  is a two-lane road.   He noted the  pipe freight                                                               
will weight  more than a legal  load.  To transport  the pipeline                                                               
freight, the  roadways need to  be able  to handle more  than the                                                               
existing legal load requirements.                                                                                               
                                                                                                                                
REPRESENTATIVE  KELLER questioned  why the  railroad idea  is not                                                               
being considered.  He thought  extending Alaska's railroad to the                                                               
Canadian system was a fantastic  idea, especially when looking at                                                               
oversized loads.                                                                                                                
                                                                                                                                
2:39:59 PM                                                                                                                    
                                                                                                                                
MR. REEVES  said when he received  the report he was  tasked with                                                               
determining which  projects are absolutely necessary  for the gas                                                               
line.  The goal was to bring a  $7 billion work product down to a                                                               
more  manageable amount.   The  railroad extension  cost is  $1.2                                                               
billion  in 2005  dollars plus  another $500  million to  go from                                                               
Fairbanks to  Fort Greeley.   The Priority  1 projects add  up to                                                               
$3.9  billion so  he  was able  to almost  halve  that number  by                                                               
removing the  railroad projects.   He said  he has  dismissed the                                                               
railroad project as necessary because  his assumption is the goal                                                               
is to build a gas line.   That project will require almost all of                                                               
the workers in the state and  more.  Building the railroad at the                                                               
same  time cannot  be done.   He  said he  would like  to have  a                                                               
railroad  extension  from  Fairbanks  to  Canada  but  that  will                                                               
require rail  cars to  haul freight  everyday.   Other industries                                                               
need to  be opened up to  do that.  He  related his understanding                                                               
that the purpose of the railroad  extension was to move the pipe.                                                               
That can be done in other ways.                                                                                                 
                                                                                                                                
2:42:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER asked  if the  right-of-way costs  are not                                                               
included in the $1.2 billion.                                                                                                   
                                                                                                                                
MR. REEVES answered  that is correct.  He said  he likes the idea                                                               
of  improving Port  MacKenzie to  tie  into the  railroad.   That                                                               
would  require a  short spur  from Port  MacKenzie to  Willow and                                                               
would prevent adding more congestion to the Ship Creek area.                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN  said  keeping Port  MacKenzie  open  will                                                               
require dredging.                                                                                                               
                                                                                                                                
MR. RICHARDS clarified  that the costs cited by  Mr. Reeves would                                                               
only extend  the railroad  to the border;  an extension  from the                                                               
border south could cost another $6 billion.                                                                                     
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  asked  whether a  strategy  has  been                                                               
developed  to  prioritize  the projects  outside  of  a  pipeline                                                               
proposal being successful first.                                                                                                
                                                                                                                                
MR. RICHARDS said  the only funds DOT&PF is sure  of at this time                                                               
are  the STIP  dollars,  and  that applies  through  2009.   When                                                               
looking at the gas line  preparedness projects, DOT&PF is looking                                                               
at  the projects  that  are  currently STIP  funded  and then  at                                                               
future projects with no secure  funding sources.  The fund source                                                               
is to  be determined.  The  reauthorization has not been  set yet                                                               
so the  only other funds  available to DOT&PF are  bonds, general                                                               
funds or a new mechanism.  He concluded:                                                                                        
                                                                                                                                
     The  baseline question  is yes,  we're looking  at what                                                                    
     are  the  transportation   priority  projects  that  we                                                                    
     currently  have  and  show as  needs  for  Alaskans  to                                                                    
     improve   our  transportation   and  rehabilitate   our                                                                    
     existing  transportation  assets  and then  looking  at                                                                    
     those above and  beyond that we would need  to put into                                                                    
     play for gas line construction.                                                                                            
                                                                                                                                
2:45:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FAIRCLOUGH responded:                                                                                            
                                                                                                                                
     ...  I know  that I'm  a freshman  and so  please, just                                                                    
     correct  me  kindly  if  you  could,  but  we  are  the                                                                    
     transportation committee  and we are  the appropriation                                                                    
     arm  of  the House  in  making  recommendations and  it                                                                    
     seems  to me  if we  do  have a  study and  we have  an                                                                    
     individual  at   DOT  who  is  trying   to  make  those                                                                    
     recommendations,   that    we   might   have    a   few                                                                    
     recommendations of our own in  a time of increased cash                                                                    
     flow  from oil  to help  us transition.   Maybe  that's                                                                    
     our, in one  of the proposals that we listen  to in our                                                                    
     sessions,  the bridge  to  help us  get  there and  I'm                                                                    
     wondering why  or if it  is possible, Mr.  Chairman, if                                                                    
     we got  together as a  group and analyzed  the projects                                                                    
     and looked  for set  aside money,  not spending  it but                                                                    
     setting  aside in  some way  an  appropriate amount  of                                                                    
     money  in  addition  to the  governor's  proposed  $500                                                                    
     million to  indeed have a  plan ready  to go to  fill a                                                                    
     10-year   proposal   on  infrastructure   for   Alaska.                                                                    
     Infrastructure  for the  gas pipeline  is not  the only                                                                    
     thing that  is suffering  in our state  right now.   We                                                                    
     have  Representative Salmon,  who  is not  in his  seat                                                                    
     right now but  would speak about access  in more remote                                                                    
     areas and  we had  Emmonak on  the floor  talking about                                                                    
     the  need   for  an  increased  runway   out  in  their                                                                    
     community.  It  seems like this committee  could, and I                                                                    
     don't mean to joke about  a subcommittee, or maybe it's                                                                    
     the  full   committee  to  talk  about   what  are  the                                                                    
     priorities.   If we're  going to  have a  healthy ferry                                                                    
     system, what do  we need to invest so that  we give the                                                                    
     right boards  the right boundaries  for DOT to  look at                                                                    
     that ferry  system?  What  are the right  boundaries to                                                                    
     reinvest in  our infrastructure  and bring those  up so                                                                    
     that  they're not  in a  deteriorating mode  across the                                                                    
     state  so  that people  can  access  food supplies  and                                                                    
     transportation and public safety?   So, I just throw it                                                                    
     out for the chairman to  talk about as DOT goes through                                                                    
     their  recommendations  and   their  process  with  the                                                                    
     Administration.   In the end it  comes to us to  make a                                                                    
     recommendation yea or  nay and I would like  to roll up                                                                    
     my  sleeves  and  get  to  work  on  some  good  fiscal                                                                    
     strategies on  how we might  approach a  looming dollar                                                                    
     [shortage] - we're not going  to have the dollars to do                                                                    
     that if  we don't  plan now.   There's a  bubble coming                                                                    
     and I don't want to be  on the other side of the bubble                                                                    
     saying we  should have,  we could  have and  we didn't.                                                                    
     Thank you Mr. Chairman.                                                                                                    
                                                                                                                                
2:47:59 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  noted not only Representative  Fairclough but all                                                               
committee  members  are  freshmen.   The  committee  is  open  to                                                               
discuss  fiscal   strategies  and  those  discussions   could  be                                                               
dovetailed into  both the  endowment bill  and the  bonding bill.                                                               
He  said whatever  this committee  does will  go straight  to the                                                               
Finance  Committee.   He  said  he looks  forward  to the  fiscal                                                               
strategy discussions.  He thought  everyone would be in agreement                                                               
that delving deeper into the topic would be beneficial.                                                                         
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  noted  with   the  oil  pipeline  and                                                               
potentially  with the  gas pipeline,  prices get  driven up  with                                                               
pre-planning.   The market gets  overheated.  If the  market gets                                                               
too hot,  the cost of  Alaska's infrastructure needs  will double                                                               
or  triple.    Therefore,  aside   from  waiting  for  the  need,                                                               
legislators need to  plan the timing so that Alaskans  are put to                                                               
work.                                                                                                                           
                                                                                                                                
REPRESENTATIVE JOHNSON  said a Pacific Northwest  Economic Region                                                               
(PNWER)  executive   committee  was  aggressively   pursuing  the                                                               
railroad during its visit to Juneau.  He asked:                                                                                 
                                                                                                                                
     So I would  like to think about if we  spend $2 billion                                                                    
     on a railroad, how much of  the $3 billion that we have                                                                    
     extra  would we  not need  to spend  if we  could carry                                                                    
     lighter loads  or - I  mean if we  spend $2 and  we can                                                                    
     save $1 or a number on  the other end, instead of doing                                                                    
     all of  this up  to pipeline  standards, has  that ever                                                                    
     been looked at?  I  mean it's an algebraic equation and                                                                    
     if you spend  the $2 on the railroad  and the Canadians                                                                    
     come through,  then there's certainly money  out of the                                                                    
     $3 that we  don't have to spend.  So  has anyone looked                                                                    
     at that aspect of it at  all?  I don't think taking the                                                                    
     railroad off of the table is a good idea.                                                                                  
                                                                                                                                
MR. REEVES said he took the  railroad out of the equation because                                                               
his task was to  look at the needs for the gas  pipeline.  He has                                                               
not heard a justification for  extending the railroad so that the                                                               
gas line can be  built.  He said it could be  necessary but he is                                                               
not sure  of that.   The road from  Prudhoe to Fairbanks  is very                                                               
important,  no  matter which  route  the  gas  line takes.    The                                                               
legislature will soon know whether  an applicant will be issued a                                                               
license,  possibly by  April 1.   He  expressed concern  that the                                                               
pipeline builder can  pull out at any time during  the first five                                                               
years.   If that happened,  the state would  not want to  "have a                                                               
whole bunch  of, I'll  say, Valdez  grain silos  sitting around."                                                               
He sees  the railroad  extension as competing  with the  gas line                                                               
project given a limited workforce.   He would be happy to see the                                                               
gas line  built first and a  railroad afterward.  He  pointed out                                                               
if the gas  line provides low cost energy,  jobs, and value-added                                                               
industries, then the railroad would have more to carry.                                                                         
                                                                                                                                
2:53:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON pointed  out that  license issuance  does                                                               
not mean that  a gas pipeline will be built.   He cautioned about                                                               
anticipating low  cost energy because  the gas pipeline  will not                                                               
be a  low-cost project.   Energy  will be  abundant but  not low-                                                               
cost.                                                                                                                           
                                                                                                                                
MR.  REEVES said  he used  that  phrase tongue  in cheek  because                                                               
people were  saying Alaska  would have  the cheapest  gasoline in                                                               
the nation  when the oil  pipeline was built.   He noted  that he                                                               
hopes the state negotiates a better deal this time.                                                                             
                                                                                                                                
REPRESENTATIVE  KELLER said  one focus  of the  Pacific Northwest                                                               
Economic  Region is  to improve  the north-south  infrastructure.                                                               
He emphasized  the importance  of the need  to keep  working with                                                               
the Canadians.                                                                                                                  
                                                                                                                                
2:55:56 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN thanked the speakers for their presentations.                                                                    
                                                                                                                                
2:56:07 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Transportation Standing  Committee meeting was adjourned  at 2:56                                                               
p.m.                                                                                                                            

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