Legislature(2013 - 2014)SENATE FINANCE 532
01/29/2014 09:00 AM Senate FINANCE
| Audio | Topic |
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| Start | |
| Presentation: Rural Transportation Infrastructure Development - Innovative Solutions to Local Transport Needs | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
January 29, 2014
9:05 a.m.
9:05:28 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:05 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
James Armstrong, Staff, Senator Pete Kelly; Mike McKinnon,
Owner and Manager, McKinnon and Associates; Mike Hoffman,
Executive Vice President, Association of Village Council
Presidents; Christine Klein, Chief Operating Officer,
Calista Corporation.
SUMMARY
PRESENTATION: RURAL TRANSPORTATION INFRASTRUCTURE
DEVELOPMENT - INNOVATIVE SOLUTIONS TO LOCAL TRANSPORT NEEDS
9:05:38 AM
Co-Chair Kelly discussed the agenda for the day.
JAMES ARMSTRONG, STAFF, SENATOR PETE KELLY, introduced a
video as a joke.
Co-Chair Kelly highlighted the topic for the meeting. He
noted that it could be difficult to locate an
infrastructure project that took care of multiple issues.
9:08:54 AM
^PRESENTATION: RURAL TRANSPORTATION INFRASTRUCTURE
DEVELOPMENT - INNOVATIVE SOLUTIONS TO LOCAL TRANSPORT NEEDS
9:09:27 AM
MIKE MCKINNON, OWNER AND MANAGER, MCKINNON AND ASSOCIATES,
introduced his colleagues. He communicated the intent of
the presentation. He provided detail about the role the
Department of Transportation and Public Facilities (DOT)
played in transportation infrastructure in the state. He
read opening remarks titled "Rural Transportation Project
Development" (copy on file):
We are here to present on recent developments in local
and regional transportation project delivery by
request of the committee. We would like to make a
short introduction and then turn to a series of slides
to talk about projects.
First, though a few words about the role DOT&PF plays
in rural Alaska transportation infrastructure. DOT&PF
has developed transportation projects in just about
every rural community, especially with regard to the
aviation system. The runways that they have built over
the last 30 years, especially the upgrades in the last
10 years, have created an exceptional runway network.
This is not only a vital community service, the runway
upgrades have also allowed rural air carriers to
invest in new aircraft and navigation systems that are
growing their businesses and significantly improving
safety and service levels.
The project teams in the regional offices who work on
these projects have also brought their expertise to
local and regional level road projects. Projects over
the last 15 years include reconstructing the state-
owned main roads in most rural hub communities, and
road projects that came to the department through its
project selection processes and through directed
appropriations under the 2005 SAFETEA-LU highway
reauthorization act and other legislation.
DOT&PF has also built many small community roads in
the last 20 years, focusing on high-value health-
related roads serving landfill, water source and sewer
system developments. And, the department works with
coastal communities on port and harbor projects, and
has a continuous effort underway to improve and
maintain Alaska Marine Highway System shoreside
facilities. The role of DOT&PF in rural Alaska is far-
reaching and their teams are expert in their tasks.
Yet, with a primary mission of major infrastructure
development and repair, DOT&PF will not be able to
address community road needs in the near future.
In 2005, partly in response to local needs, SAFETEA-LU
included new funding for rural Alaska communities
through the Tribal Transportation Program, and the
Denali Commission. More recently new highway bills
provided additional funding through, economic recovery
and stimulus programs. The state has participated in
most of these programs through matching fund
appropriations and direct grants to communities and
tribal organizations. Collectively, these funding
sources have provided rural communities with an
opportunity to improve local transport systems.
Over the last 8 years, rural roads and waterfront
development projects across the state have totaled in
the range of $50,000,000 a year. While a significant
portion of this funding has gone to communities along
the road system and coastal communities served by the
Alaska Marine Highway System, about half has gone to
communities off the road network in western and arctic
Alaska.
Some larger communities quickly developed the ability
to manage local road projects, but in most cases,
boroughs and regional tribal non-profit organizations
have taken the lead in project development.
They developed transportation departments, and through
training and hiring, now have a solid record of
successful local and regional road projects. The
regional tribal non-profits, including ICAS, which
works with the North Slope Borough; Kawerak, based in
Nome and AVCP, based in Bethel; have developed good
working relationships with the Federal Highway
Administration (FHWA) who provides technical support
and most coordinate their work with DOT&PF, DCCED and
other state agencies who provide funding and technical
support. In addition, Regional Native Corporations
have contributed to success of these relatively new
programs through technical support and in some cases,
local road building materials supply.
9:15:19 AM
Mr. McKinnon finished providing prepared remarks:
Most important, in remote areas where shipping in
gravel and other road building material can cost 40%
of overall project costs, communities and
transportation departments have come up with some very
cost-effective solutions to standard road
improvements, which we will review this morning.
Co-Chair Kelly relayed that there were two parts to the
project. He detailed that one related to the Kalskag Road,
which had implications for energy costs for rural Alaska,
Fairbanks, and a large portion of the state. He asked the
Mr. McKinnon about information related to "hubbing."
Mr. McKinnon replied that the topic was related to three
things. The first item was about cost-effective solutions
to local transportation needs. The second item related to
connecting roads between communities. The third item
focused on the Yukon-Kuskokwim energy and freight corridor
project, which was the effort by western Alaska to focus on
infrastructure towards the Railbelt and the Fairbanks
transportation hub.
Mr. McKinnon provided a PowerPoint presentation titled
"Rural Transportation Infrastructure Development: Local
Roads, Community Connectors, Regional Fuel and Freight
Transport: Goal-Vehicle Fleet Appropriate Solutions" (copy
on file). He turned to slide 1 showing a dirt road in
Akiak. He relayed that since the 1980s all-terrain vehicles
(ATVs) had become the vehicle fleet of villages in western,
southwestern, and Arctic Alaska. Trails and pedestrian
facilities had gradually become wider and were currently
ATV roads. The image showed the typical mid to up-river
country where fine materials (usually sands) created an
environment where no drainage existed; the roads were
health and safety hazards.
9:17:50 AM
Mr. McKinnon moved to slide 2 showing a picture of a road
in Emmonak, Alaska, located in the delta downriver country.
In general the soils were very fine, but rain was
considerably more prevalent. The ATV and truck roads had
serious drainage problems especially in communities that
had water/sewer haul systems, which could equate to
considerable health hazards.
9:18:26 AM
Mr. McKinnon turned to slide 3. He pointed to the upper
left image showing a road in Koyuk, Alaska. He discussed
that local roads tended to get some elevation, drainage put
in place, a good compacted base, and a dust palliative on
the surfacing. He communicated that paving was too
expensive and chip seal and other inexpensive surfacing
materials broke down too quickly; gravel roads with a dust
palliative (calcium chloride) were the most cost-effective
in rural Alaska. The challenge was that roads like the one
shown on slide 3 cost around $3 million to $4 million per
mile; the cost was prohibitive in many cases. However, due
to light traffic, the roads would last in good condition
for 10 to 12 years before needing to be rebuilt; it was
possible to get 15 to 20 years out of a road, but the
startup costs were expensive.
9:19:46 AM
Mr. McKinnon turned to slide 4 titled "Board Roads." He
explained that in lower delta country it was too
challenging to put a gravel road in place. As the ATV fleet
emerged the first effort had been to build small-scale
board roads primarily used for hauling water and sewer and
as pedestrian connectors. The roads had quickly broken down
and over the past five to eight years AVCP [Association of
Village Council Presidents] had been a leading organization
in the engineering of longer lasting ATV roads in tundra
country. He discussed that the new roads were constructed
with local labor and were made with materials that could be
maintained in a cost-effective way (slide 5 showed road
construction in Tuntutuliak, Alaska); the roads cost
approximately $1.5 million per mile. Training that went
into the building of roads helped with housing and other
construction.
9:21:19 AM
Mr. McKinnon pointed to slide 6 that showed a completed
project in Selawik, Alaska. The road technique was widely
used in coastal and tundra regions of Alaska and
represented one of the ways that local communities worked
with engineering groups and regional tribal organizations
to develop a cost-effective way to address transportation
needs.
9:21:55 AM
Mr. McKinnon addressed how to bring communities together on
slide 7 titled "ATV Roads." He relayed that the Alaska
villages of Tununak and Toksook had discussed building a 7-
mile road to connect the two communities on Nelson Island.
The road would have cost $24 million and was not feasible.
However, ATV roads cost approximately $300,000 per mile and
the road between Tununak and Toksook had been completed
recently for $2.1 million.
Co-Chair Kelly asked for a comment on how the side-by-side
ATVs impacted transportation in rural Alaska [shown on
slide 7]. Mr. McKinnon replied that ATV roads were safer,
reduced driver fatigue, reduced wear and tear on vehicles,
and significantly reduced fuel use. The farthest practical
distance for an ATV driver was between 10 and 12 miles. The
ATVs shown on slide 7 were slightly heavier, but they could
be enclosed; the distance between communities could be up
to 20 miles and could be cost-effective and comfortable for
drivers.
Co-Chair Kelly asked for verification that the cost could
be reduced from $3 million per mile to $300,000 per mile to
accommodate ATVs traveling short distances. Mr. McKinnon
replied in the affirmative. He added that the solution was
appropriate to the current vehicle fleet.
Co-Chair Kelly observed that many communities in rural
Alaska did not need roads that could accommodate pickup
trucks; roads could be engineered for the existing ATV
fleet. Mr. McKinnon answered that a family in one of the
villages probably had a snow machine, skiff, and an ATV,
which was a very appropriate way to respond to the
conditions. He stated that the ATV road program had been
successful in accommodating needs in rural areas.
9:25:02 AM
Senator Dunleavy discussed the costliness of the new ATVs
and surmised that rural residents may ship pickup trucks
that were less costly out to villages. He noted that the
roads were not constructed for heavier trucks. He wondered
how to prevent the potential problem.
Mr. McKinnon answered that it was not practical to drive
trucks on the ATV roads because the roads would break
apart. He noted that the vehicle fleet evolution would
create the need for various types of infrastructure in the
future; however, in the current environment the solution
provided a good balance between access and cost.
9:26:32 AM
Mr. McKinnon moved to slide 8 showing images of geo-grid
roads in Kwigillingok, Alaska, which cost approximately
$300,000 per mile. Materials for the roads could be shipped
in and assembled and maintained by locals. He stated that
the issue of capacity was addressed by the technology
itself; manufacturers worked with rural communities to
ensure that projects were successful. Kwigillingok had a
board-road system and ATV roads, which were used for three
purposes including local streets, skiff launching area
access, and roads between communities.
9:27:40 AM
Mr. McKinnon addressed slide 9 showing four images of
bridges. He discussed the challenge of getting over water
courses. The upper photos showed a bridge outside of Kobuk,
Alaska; previously residents had driven through the creek
to access jobs in the Ambler mining district. Driving over
the creek particularly in the spring and winter presented a
safety hazard. The new bridge had been flown to the
community and constructed for $250,000. He communicated
that the bridge had changed the nature of transportation
between jobs and the community. The lower images showed a
road development between Tununak and Toksook Bay. The image
on the lower left showed the old way of crossing water
courses and the lower right image showed new bridges that
had been constructed. He added that the $2.1 million for
the 7-mile road included the cost of the bridge structures.
9:28:47 AM
Mr. McKinnon directed attention to slide 10 showing a
subsistence access road out of Hooper Bay. He explained
that the road stabilization came from regrowth of tundra
into the grid material. The road shown on slide 10 was
three years old and was heavily used. He shared that once
traffic became significant a second lane of the product
could be added; a safety zone could be created in areas
where traffic increased. There road material provided a
real solution to connecting communities and accessing
subsistence-use areas.
9:29:47 AM
Mr. McKinnon moved to slide 11 that showed an image of a
forested hillside road in Southeast Alaska. The road was
eight feet wide, had a drainage system, and could
accommodate ATVs passing one another and a pedestrian. He
turned to slide 12 titled "Community Connector Roads." The
slide included a list of road projects throughout Alaska.
He mentioned the Noatak to Red Dog Mine road. Road
construction from Stevens Village to Dalton Highway had not
moved forward because building on the river bottom would
have cost approximately $7 million per mile. He pointed to
the Atmautluak-Kasigluk-Nunapitchuk ATV road connectors in
Yukon-Kuskokwim region. He noted that the Calista
Corporation had worked on community clustering and
community connection. He relayed that the first generation
connections would lay the base for future development.
9:31:15 AM
Mr. McKinnon pointed to slide 13. He discussed the Noatak
to the Red Dog Mine route and shared that DOT had developed
a good alternative. He stated that the idea was a good
future project that would cost approximately $100 million.
He detailed that the mine received inexpensive fuel by
ship; 300,000 gallons of fuel per year would be available
for Noatak. A serious look had been taken at snow-cat
operations for winter-haul; he believed winter-haul
deserved more attention until roads became more cost-
effective or appropriate.
9:32:12 AM
Mr. McKinnon directed attention to an image of Hooper Bay
on slide 14. The image showed a basin that was only
available at high tide. He detailed that the Alaska Village
Electric Cooperative had worked with AVCP and the Denali
Commission to dredge the basin for materials that were used
in a tank farm in the village. The basin was primarily used
for commercial Halibut fishing vessels.
Senator Olson thought the image on slide 14 was of Nunavik,
Alaska. Mr. McKinnon corrected that the picture was of
Mekoryuk, Alaska.
9:33:03 AM
Mr. McKinnon addressed slide 15 showing a tram project
built by the Bureau of Land Management (BLM) in the 1950s
between a lake and a slough providing access to an inlet.
MIKE HOFFMAN, EXECUTIVE VICE PRESIDENT, ASSOCIATION OF
VILLAGE COUNCIL PRESIDENTS, interjected to speak to slide
15. He referred to safety and the reduction of energy
costs. The project had been brought to AVCP by the
villages. Slide 15 showed a tram that had been built in the
1960s, which had become dangerous over the years.
Subsequently the villages had asked for the project to be
included in the Denali Commission; the project had been
completed the past summer. The new tramway was 400 feet and
allowed for the crossing to Chevak and the Yukon River into
the prime subsistence area. He shared that people were
happy with the change. He relayed that AVCP worked to find
projects that would help as many communities as possible.
9:35:18 AM
Co-Chair Kelly asked how long the tram was. Mr. Hoffman
replied that the tram was 400 feet long. Co-Chair Kelly
asked where the tram was located. Mr. Hoffman answered that
the tram was located outside a village near Baird Inlet.
Senator Hoffman remarked that there was no road map in the
area.
Mr. McKinnon discussed that the project was an example of
local communities working with the regional tribal
organization and with other tribal organizations and
boroughs to come up with vehicle fleet appropriate
solutions for transportation. Slide 16 showed the winter
construction of a launch ramp in Wainright, Alaska. The
ramp had been designed to provide search and rescue access
at all stages of the tide. He detailed that skiffs and
other vessels had not been able to access the water at all
tides. The project was an example of evolving cost-
effective projects.
Mr. McKinnon pointed to four images of barges on slide 17.
He detailed that barges were the primary source of freight
for rural communities including fuel, construction
materials, and containers. The lower right image showed the
Bethel barge landing. He relayed that the tug companies
were tremendous experts at their line of work; the work was
challenging and expensive. He explained that tugs kept
their power on and held the barge into shore the entire
time. Shoaling occurred in the area and presented a
navigation hazard in rivers and sloughs. He pointed to
other worker safety and transfer issues.
9:38:09 AM
Mr. McKinnon communicated that subsequently local
communities had expressed the need for mooring points
(slide 19). He had worked with the engineering and
construction firm STG Incorporated to develop a mooring
point system. He described the system as a 30-foot piling
cut off below ground with a large chain attached; the
barges could tie onto the chain. The design was developed
to prevent snow machines from accidentally striking above
ground objects. The mooring points had been installed in
approximately 30 to 45 communities. The barge companies
were happy with the installations that had improved worker
safety and had reduced environmental impacts and shoaling.
9:39:18 AM
Co-Chair Kelly pointed to slide 21 titled "Yukon-Kuskokwim
Freight and Energy Corridor" and remarked that an easier
name for the project was needed. Mr. McKinnon replied that
one consideration was Portage Mountains Corridor.
Mr. McKinnon looked at slide 21 and relayed that the
corridor was a major regional project that sought to
combine the Yukon and Kuskokwim River fuel and freight
markets and to direct the markets back to a transportation
system that was centered in the Fairbanks transportation
hub.
Senator Bishop asked about permit requirements for the
boardwalk and/or mats. Mr. McKinnon replied that it had
become clear that communities were not interested in a
drawn out environmental process where "difficulties rule
the day." The communities were interested in finding a
solution to the transportation problems. He stated that
there seemed to be a fairly straight forward environmental
process. He continued that ATVs in particular could cause
environmental damage if they did not have a grid structure
built to drive on. He communicated that environmental
agencies, the Fish and Wildlife Service, the National Park
Service, and others had been cooperative and productive in
the building of elevated board and ATV roads that reduced
environmental impact.
Senator Bishop expressed his desire to learn more about
issue further at a later time.
9:42:03 AM
Vice-Chair Fairclough pointed to the image of a bridge
outside of Kobuk. She referred to Mr. McKinnon's testimony
that the bridge provided jobs to Ambler and cost $250,000.
She wondered if the bridge met DOT standards and if ATV
roads had been adopted under the those standards.
Mr. McKinnon replied in the negative. He explained that the
standards that applied to the structures were drawn from
national park and recreation uses. He used Perseverance
Trail in Juneau as an example where a similar bridge may be
found. The standards applied to trails and not roads. He
did not know if DOT had adopted or developed similar
standards. He added that the project (outside of Kobuk) had
been done with the Northwest Arctic Borough and the Denali
Commission.
Vice-Chair Fairclough observed that the old boardwalk
standard was horizontal and had changed to vertical. She
asked if the change was an evolution of design. Mr.
McKinnon replied that the change occurred in response to
heavier vehicles and increased traffic. He explained that
the boardwalks needed to be large enough to accommodate
pedestrians and two vehicles passing each other. The
boardwalks were larger and were developed with a piling
system with an adjustable cap that would enable issues such
as permafrost to be dealt with in the future.
Vice-Chair Fairclough asked if the grid was rubber-based.
Mr. McKinnon replied that the grid was made of nylon. Vice-
Chair Fairclough wondered if the material was pliable. Mr.
McKinnon answered that the material was rigid but it was
flexible over the length of the eight-foot sections. He
explained that the material may be doubled up in boggy
areas. The grid would flex with a vehicle, but clampings on
each end reinforced the structure to make it sound.
Vice-Chair Fairclough asked where the material was
manufactured. Mr. McKinnon replied that the material was
made in the U.S. He did not know the specific location.
Vice-Chair Fairclough wondered if the material could be
manufactured in Alaska. She thought that extra tires could
be used in the structures if the material was made of
rubber.
Senator Bishop noted that there was a supplier and
manufacturer in Fairbanks.
9:46:14 AM
Senator Olson asked about impacts the materials had on
permafrost. Mr. McKinnon answered that there were no
adverse impacts on permafrost. He detailed that the
structures had been used extensively in Barrow and there
had been no negative impacts there or in tundra areas.
Senator Olson discussed dealing with tides in the barge
industry. He wondered how barges were dealing with the
issue. Mr. Hoffman answered that the structures were used
for rivers and ocean locations; they were more effective on
the rivers. He used the Kwethluk River as an example where
barges had to deal with the tide and the river activity.
Barges held with their engines. There had been a number of
villagers tossed from their boats in the night as a result
of hitting shoals. The issue was one of the primary reasons
for working to put the mooring points in. The mooring
points worked out in Tununak, Hooper Bay, Nunavik Island as
well. He discussed that barges wanted to get in and out on
the tides; everyone was cognizant of the timing of the
tides. He added that the mooring points did help with the
tides.
9:48:52 AM
Mr. McKinnon communicated that the barge operations were
expertly run, but they did contribute significantly to the
cost of fuel and freight delivery in western and Arctic
Alaska. The communities in the Kuskokwim area had asked
AVCP to look at the Portage Mountains route that had been
in place for generations; the route was between the Yukon
and Kuskokwim Rivers at their narrowest locations. The
state had provided a grant for reconnaissance engineering
on the project and had subsequently provided a grant for
the corridor planning. He explained that the corridor plan
was a new step in the Federal Highway Administration's
(FHWA) project development process for major projects. The
administration had been challenged by the fact that
sometimes ideas were taken to the National Environmental
Policy Act (NEPA) and NEPA was then used as a way to find a
transportation solution. He elaborated that FHWA had
promoted and AVCP had adopted an interim step called the
Corridor Plan that allowed for the investigation of a
practical solution; the solution was then taken into the
design and NEPA process.
Mr. McKinnon turned to slide 22 titled "Railbelt-Based
Transportation System." The proposal was to use existing
barge operations and to connect the Yukon and Tanana Rivers
back to the Fairbanks transportation hub.
9:50:54 AM
Mr. McKinnon looked at slide 23 titled "2014 Select
Corridor for Design." He communicated that the Portage
Mountains connection provided near to corridor material
sites along the entire length, which was unique from
typical construction in western Alaska; the Portage
Mountains represented a unique geologic feature that may be
the reason the rivers had remained separate. The last six
to seven miles were on the river. He mentioned that
material would be brought from the Portage Mountains to
address the floodplain zone. He stated that six miles was a
reasonable haul distance for material. He noted that along
the corridor mountain zone there were two to three miles of
typical material haul. The availability of material began
to point at the idea that the construction project was
practical.
9:52:17 AM
Mr. McKinnon moved to slide 24 related to design criteria.
He wanted to build a commercial vehicle road; the route
would be seasonal coinciding with the barge operation. The
route would not be open to ordinary vehicles because
pliability was reduced if commercial freight and fuel
operation were the only vehicles on the road; safety was
also enhanced significantly. He shared that there were many
operational characteristics about a commercial vehicle road
that pointed favorably in the project's direction. The
barge port in Kalskag was in place and port on Paimiut
Slough would require sheet pile supporting and would have
upland staging. The project was looking at a barge-to-barge
pipeline transfer system. Additionally, there would be a
small diameter pipeline buried for the use of fuel
transfers.
9:53:23 AM
Mr. McKinnon looked at slide 25 and shared that LiDAR and
aerial surveys had been completed the prior year. The
surveys created a 3-D digital terrain model of the existing
ground. The product was currently available for the entire
design process; it allowed for the development of corridors
to very specific standards without further expensive survey
work. The tool would allow for the development of specific
cost estimates and would help deal with environmental,
cultural, and engineering issues early on in the process.
9:54:34 AM
Mr. McKinnon moved back to slide 23 titled "2014 Select
Corridor for Design" to address different design corridors.
The focus had been on Corridors B and C; Corridor D was a
component of Corridor C. The challenge with Corridor D was
the absence of a port on the Kuskokwim River. Two ports
would need to be constructed. Additionally, the terrain was
lower and had a larger floodplain. Corridor E was state-
selected land originally designed to access a mining
district to the northeast. The corridor was still in
consideration in the event that land issues or other
withdrew Corridors B and C from the running.
Co-Chair Meyer asked about Corridor B that went partly
through the Yukon Delta National Wildlife Refuge. He
wondered if it was a concern. Mr. McKinnon replied that
originally there had been a Corridor A that had gone
through the refuge. He explained that AVCP had worked
closely with the U.S. Fish and Wildlife Service and had
eliminated the corridor. Very careful decisions to move
Corridor B out of the U.S. Fish and Wildlife Service
managed area had been made; the corridor had been moved to
Calista and Kuskokwim Corporation land.
Mr. Hoffman elaborated that AVCP had worked with the U.S.
Fish and Wildlife Service since the project's inception.
Fish and Wildlife had relayed that it would not have a
significant issue if the corridor moved over five miles
(out of the refuge). The organization had partnered with
Fish and Wildlife and kept it informed of every step of the
project.
9:57:15 AM
Senator Bishop asked if Corridor B or C offered a better
cut and fill opportunity that would allow for a less
expensive road. Mr. McKinnon replied that Corridor B was on
outstanding road-building land. He referred to photos on
slide 26; the left photo showed the foothills of Corridor B
and the right photo showed foothills in Corridor C.
Mr. McKinnon noted that the Kuskokwim River communities
directly served by the project could grow over time. The
communities were moving approximately 17 million gallons of
fuel and freight annually; the Yukon was moving about 10
million. The goal was to look at the business model of
combining the markets and bringing them to the Railbelt to
find a cost-effective way to move fuel down the rivers. He
added that there was a 35-mile link between the rivers,
which was a very reasonable distance to move fuel and
freight (especially by pipeline). The objective was to
select one of the corridors by December 2014; there was a
series of criteria primarily related to engineering,
environmental, local uses, and cost.
9:59:32 AM
Mr. McKinnon finished on slide 27 titled "Yukon-Kuskokwim
Freight and Energy Corridor." Once the corridor plan was
complete the project would move into the design phase,
which was planned for completion in 2019.
Co-Chair Kelly asked how the project would impact the
Railbelt. He mentioned an Anacortes route versus an
Interior route that would provide fuel to the areas. Mr.
McKinnon replied that there were 3,000 miles between
Anacortes and Bethel, 2,000 miles between Anchorage and
Bethel, and 800 miles between Bethel and Fairbanks. He
expounded that transportation security was an emerging
issue. Trying to prepare western and Arctic Alaska to
participate in the natural gas economy evolving in the
state that would be focused on the Railbelt was a project
goal. Part of the business plan investigation was to look
at the cost-effective opportunities that natural gas could
provide to the refineries in the Fairbanks area and to
produce gasoline and diesel for instate use.
Co-Chair Kelly pointed out that without gas the plan did
not buy the state much due to the higher cost of refining
in Fairbanks rather than Anacortes. Mr. McKinnon answered
that AVCP and the region recognized that the project would
prepare Alaska for the natural gas economy. He added that
the caveat was that a generation of opportunity was lost if
project design was not ready when construction
opportunities presented themselves. The objective was to be
as prepared as possible to position the state for changes
that may arise resulting from gas arriving in Fairbanks.
Co-Chair Kelly asked for verification that when fuel
arrived at the mouth of the Kuskokwim and Yukon Rivers it
had to wait for ice to flow out. He wondered if the issue
was a problem. Mr. McKinnon answered that it got
complicated quickly. He detailed that when a mainline barge
was brought into Kuskokwim Bay it had to wait for seasonal
ice to move out. He pointed to navigation hazards between
the area and Bethel; therefore some of the fuel had to be
lighted off to villages along the way. He stated that
holding a mainline barge for lightering was cost
prohibitive and inefficient. Once the barge reached Bethel
it was offloaded and redistributed upriver and downriver
throughout the season.
Co-Chair Kelly surmised that the plan would need to
anticipate a road or railroad from Nenana to Tanana.
10:03:25 AM
Mr. McKinnon answered that three strategies were currently
under consideration. The first was to use the current
Nenana barging system that would require a fuel pipeline or
railroad to transport fuel to the location from refineries.
The second option was to go to the laydown yard at a bridge
on the Yukon River; there were some navigation issues that
would need to be looked at between the bridge and Tanana.
Third, DOT was currently looking at an option that would
involve an extension of the Elliot Highway to a point
across the river from Tanana. One strategy would be to
truck fuel to the barge landing at the terminus of the
extended Elliot Highway.
Co-Chair Kelly observed that the laydown yard option at the
Yukon River was attractive because it was in place. He
noted that it was a long distance between the yard the next
village that would need fuel. Mr. McKinnon responded in the
affirmative. Once fuel made it on the barge the
transportation was more efficient than highways. He noted
that getting the fuel on the barge was the key.
Co-Chair Kelly asked about the amount of fuel. Mr. McKinnon
replied that the fuel was 27 million gallons. Co-Chair
Kelly asked about truck traffic that would be required to
get the fuel from a refinery in Fairbanks to the Yukon. Mr.
McKinnon did not currently have the answer; there was
currently a team working to determine the information.
Co-Chair Kelly asked if the traffic would be substantial.
Mr. McKinnon replied that there would be significant
traffic. He detailed that it would be most effective to
move fuel by pipeline or rail to the barge terminus.
Co-Chair Kelly asked if a barge could get through the
confluence of the Yukon and Tanana Rivers. He thought the
area was shallow and difficult. Mr. McKinnon believed there
was a four-foot draft.
Senator Bishop interjected that the area was called Squaw
Crossing; there was currently a barge company that
navigated the area daily with fully loaded fuel barges. He
elaborated that it may be necessary to wait several days to
find a channel because of changes that occurred on the
eight-mile wide delta.
10:06:55 AM
Co-Chair Kelly asked about dredging the area as an option.
Mr. McKinnon replied that the option would be looked at as
part of understanding the feasibility of each of the three
strategies. He relayed that that the study would look at
navigation improvement, hazard elimination on the Yukon
near the Dalton Highway, and dredging the Tanana River.
Co-Chair Kelly discussed the different options available to
transport the fuel. He asked for verification that all
three options listed were currently under consideration.
Mr. McKinnon answered that the options were all currently
on the table. He pointed out that the system was designed
to take advantage of existing methods of transport and
existing vehicle fleets to the extent practical. He added
that the road in the Portage Mountains would be seasonal
like the Klondike Highway out of Skagway used to be. Use of
the road seasonally would create cost-efficiencies and
reduce environmental impacts.
Co-Chair Kelly wondered if freight was a significant
consideration. Mr. McKinnon believed that annually there
were approximately 12,000 tons of construction materials
that moved on the Kuskokwim and 7 million to 8 million on
the Yukon. He elaborated that moving the material out of
Fairbanks by barge could be very practical if the costs of
materials located in Fairbanks were absorbed in the cost of
getting the entire supply of products going to Fairbanks in
place. He added that the freight haul provided some
opportunities.
10:10:02 AM
Co-Chair Kelly referred to talk about pipelines in
different areas, generating power, and running transmission
lines related to the potential opportunity with natural
gas. He remarked that the proposal was the first he had
seen that would include a major portion of rural Alaska in
the benefits of natural gas in relatively quick time. He
observed that it would be a shame if the state was not
ready to take care of rural Alaska when it had billions of
cubic feet of gas coming down the Railbelt. He thought the
proposal may work and could lower fuel costs.
Senator Hoffman believed people needed to realize that the
AVCP region was very large and was the rough equivalent of
the size of Washington State. He added that Bethel served
56 communities in the area. He believed the project could
be a significant game changer for the communities on the
Kuskokwim and Yukon Rivers. He referred to several energy
studies conducted by Donlin Creek LLC using peat and
barging fuel from the up the Kuskokwim, which would require
four large barges daily when the river was running. He
continued that the organization was looking at building a
24-inch gasline from Cook Inlet to Crooked Creek at the
cost of several billion dollars. He believed that it was
not unfeasible to look at the project as a potential for
the organization. He reiterated that the project would be a
great game changer for communities on the Kuskokwim River.
He noted that the project could be expanded in the future
to transporting building materials, freight, groceries, and
other commodities to western Alaska by rail. He
communicated that the people of the region were excited
about the project.
10:13:13 AM
Senator Bishop communicated that the Instate Energy
Committee was focusing in on the intertie delivery of
Liquid Natural Gas (LNG). He expressed support for the
discussed project. He discussed that the project would
provide a contingency in the event of navigation hazards or
low water on the Kuskokwim River. He was also looking at
the delivery of micro LNG on the state's river systems and
to coastal communities.
Vice-Chair Fairclough was interested in cost estimates
related to the corridor project. She asked about the number
of people that would benefit from the project versus the
gallons or weight on the freight under consideration. Mr.
McKinnon answered that the reconnaissance cost for the
road, pipeline, and ports was in the range of $125 million.
He relayed that it was not unreasonable to think about the
idea of only building the pipeline in the first generation
of work, which would be a winter construction project; it
would cost around $60 million. He shared that the port
facilities were cost-effective and were probably in the $8
million range. The ports would be constructed with enough
piling to support a barge for the duration of a transfer.
Vice-Chair Fairclough asked if $60 million was for the
pipes. Mr. McKinnon replied that the figure was for the
pipeline. He expounded that the estimate was rough and the
company was working on solidifying numbers. There were
25,000 people in the Calista region and about 12,000 in the
western Doyon region. The project would serve approximately
12,000 people in the Calista region and over time the
project could serve the entire region.
10:16:39 AM
Vice-Chair Fairclough asked whether assumptions included
other projects in the area providing alternative energy.
She wondered whether Alaska Energy Authority (AEA) projects
had been considered. She referenced the 27,000 gallons of
fuel discussed by Mr. McKinnon and noted that the state was
working to displace the fuel with other renewable projects
in the area.
Mr. McKinnon replied that there were two components to
Vice-Chair Fairclough's point. First, the Calista region
was moving rapidly towards alternative energy connecting
through switching devices to upgraded diesel power plants,
which would reduce fuel consumption. Additionally, the
housing programs were making major improvements to
weatherization and fuel use by individual homes. He
continued that the Calista region population was growing
rapidly; therefore, the projections showed slight increases
in the use of fuel over time.
Vice-Chair Fairclough discussed the impact on the private
sector barging fuel. She wondered what would happen to
private sector businesses when the state began to provide
lower costs. She wondered if the private sector would
continue to do business and act as a backup. Mr. McKinnon
answered that the question was part of the initial
development plan. He elaborated that in the initial
generation of work it was expected that the coastal barge
operations would continue and that the project would focus
on the Yukon and Kuskokwim Rivers. The substantial
population in the Calista region lay on the coast primarily
due to available resources. The AVCP project goal was to
create a port authority or a private operation to run the
Portage Mountains facility. There had been substantial
conversations with the barge operators whose view was that
they could continue to provide current services and they
looked forward to finding out what could be done with the
Portage Mountains corridor. He added that current operators
on the Yukon River also worked on the coast.
10:20:21 AM
Vice-Chair Fairclough acknowledged the state's goal in
providing low cost energy to rural Alaska. She was
interested in the financial return if the project only
benefitted 12,000 people. She pointed to migration from
rural communities and noted that the state wanted to
encourage individuals to live where they wanted. She
wondered about the age demographic in the communities and
if future generations would continue to benefit.
Mr. McKinnon replied that the population was young and
growing. He relayed that future generations would benefit
from the project. He reminded the committee that the number
of people served would be the combination of the
populations in the Yukon and Kuskokwim River areas; by
combining the markets the price per gallon could drop
significantly and both rivers would benefit. The Calista
AVCP region had a young population with stabilized villages
and growth projected in the future.
Co-Chair Kelly remarked that there had been migration in
rural Alaska and that Bethel was growing tremendously. He
believed the growth would continue. He surmised that the
state needed to accommodate migration to rural regions
since economics had encouraged it. He believed the
migration was a good thing. He acknowledged pitfalls and
troubles that occurred as populations adjusted.
Additionally, there was a much larger population on the
Railbelt that would benefit from the project. He noted that
it was unfortunate that the state was allowing much of the
region to buy fuel from somewhere else when it was produced
in-state; he understood that it was currently too
expensive. He wondered if the project could succeed and
work under the current system if only a pipeline was built.
He detailed that currently there was not natural gas
available to produce the refined products in Fairbanks. He
discussed that Nenana had been a barge hub for many years.
He noted that the population served would also include
mines in the area. He believed the population the project
would serve was larger than 12,000 to 25,000 people.
10:24:01 AM
Co-Chair Meyer wondered if it was possible to partner with
mining companies in the region such as Donlin Creek and
others. He noted that there was no sense in building two
pipelines in the area. He did not know whether the Denali
Commission was involved and wondered about Native
corporation involvement. He believed that with partnerships
the project cost could be reduced for the state.
Co-Chair Kelly discussed the financial impact to capital
and operating budgets and communities. He believed moving
ahead with the next steps of the pipeline was appropriate.
He was interested to learn about the next step costs
related to the pipeline. He believed the design was $13.9
million. He asked for verification that the money was not
in the current capital budget.
Senator Hoffman confirmed that the project design money was
not in the current capital budget.
Co-Chair Kelly assumed that the design and money for the
next steps of a pipeline would be significantly reduced. He
was interested to see the information by the end of the
current session in order to help determine a plan B, which
could be a pipeline on its own. He believed most of the
objectives were served through a pipeline.
Mr. McKinnon agreed. He planned to have the information for
the committee by March 2014. He believed the NEPA and
associated design could be accomplished for a capital cost
of approximately $6 million. The discussion was currently
underway with the Fairbanks, Bethel, and Seattle, WA
business communities relating to a pipeline versus the full
project development. He relayed that project stage
development was not unusual.
10:27:18 AM
Senator Dunleavy asked about estimated annual maintenance
and operations costs over time. Mr. McKinnon answered that
cost estimates were derived from the DOT standard of
$10,000 per lane mile; by that estimate the costs would be
approximately $800,000 per year. The caveat was that the
road would be seasonal; there would be break open costs and
costs for three months of operation each year. He believed
the number would be much lower than the $800,000, but the
information had not yet been determined.
CHRISTINE KLEIN, CHIEF OPERATING OFFICER, CALISTA
CORPORATION, was not prepared to talk about specific
projects and understood that the purpose of the current
conversation was to cover different concepts for rural
Alaska; she believed Mr. McKinnon had successfully outlined
the concepts. She remarked that the region was remote and
vast and without significant infrastructure. The subject
was complicated by land issues; there were approximately 50
communities within a park region, which made solutions
difficult. She discussed the importance of looking at site
specific solutions; the departments and agencies had not
been very successful in the area because they were held to
federal standards. She discussed return on investment for
Calista shareholders and its support for the project;
however, energy came first for the organization. She
addressed that Mr. McKinnon and Mr. Hoffman had worked to
illustrate that the project looked at the entire region and
how it may integrate with other regions of the state in
addition to the multi-modal aspect. She relayed that the
organization focused primarily on projects that would
impact the entire region, had an economic benefit, and
would help the people of the region from a business
perspective. She encouraged the state to complete existing
projects in the queue.
10:30:57 AM
Co-Chair Kelly communicated that his meeting Mr. McKinnon
and hearing about the project had come before the committee
because of Fetal Alcohol Syndrome (FAS). He detailed that
FAS was a statewide problem and was particularly acute in
rural Alaska. He was involved in an initiative to reduce
FAS; it had become painfully obvious that there were lower
level needs that were not met in rural Alaska. He discussed
that when taking on an issue such as FAS the first thing
that needed to be fixed were lower level issues. He
stressed the importance of energy costs. He encouraged the
presenters to talk to the committee about "hubbing" and
noted that in order to help someone it was necessary to
transport them to a medical facility in another location.
He acknowledged that transportation could not always occur
if it involved flying from village to village to reach
Anchorage. He thanked the presenters for the presentation.
Senator Olson looked at proposed corridors and wondered
which one Ms. Klein (as a former DOT employee) favored. He
pointed out that Aniak was a major hub community with a
large airport; therefore he wondered why Corridor E was not
the favored option. Ms. Klein replied that unfortunately
the feasibility assessment engineering report had not yet
been completed; it was necessary to wait for the
information before a determination was made.
Co-Chair Kelly discussed the schedule for the following
day.
ADJOURNMENT
10:34:21 AM
The meeting was adjourned at 10:34 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 012914 Rural Roads Primary.pdf |
SFIN 1/29/2014 9:00:00 AM |
Rural Transportation Infrastructure Development |
| 012913 Mike McKinnon Opening Remarks.pdf |
SFIN 1/29/2014 9:00:00 AM |
Rural Transportation |