Legislature(2007 - 2008)BARNES 124
02/14/2008 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Overview: Alaska Truckers Association | |
| Overview: Gas Line Preparedness | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
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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