9th Circuit stops work at Port MacKenzie; 200 workers idled


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Work on the Port MacKenzie rail extension was stopped Oct. 1 by a panel of judges from the U.S. 9th Circuit Court of Appeals.

A 2-1 decision granted an emergency motion for stay until a review is completed of the Surface Transportation Board’s November 2011 order allowing the project to move forward.

The 32-mile rail extension would connect Houston and Port MacKenzie at a cost of about $272.5 million. Port MacKenzie is a deepwater port, with about 9,000 acres, or 14 square miles, of industrial staging and storage.

Alaska Survival, Cook Inletkeeper and the Sierra Club filed the petition for review in January, and the emergency motion for stay Sept. 21. The Surface Transportation Board, a federal regulatory body for railroads, and U.S. government are respondents in that case, and the Alaska Railroad Corp., Matanuska-Susitna Borough, and the State of Alaska are listed as respondent-intervenors.

According to the motion, the court finds a “serious question” regarding whether the Surface Transportation Board, or STB, complied with the National Environmental Policy Act, or NEPA, in determining the “purpose and need” of the project in the final environmental impact statement, or EIS.

The Oct ruling states: “The court further finds that the balance of hardships tips sharply in petitioners’ favor, that petitioners are likely to suffer irreparable harm in the absence of a stay, and that a stay is in the public interest.”

Oral argument for the case, which has now been expedited, is scheduled to begin Nov. 8 in San Francisco.

Mat-Su Borough Public Affairs Director Patty Sullivan said the stay likely means the borough can’t proceed with a bid that was out for work on a third segment of the project.

“We’re definitely disappointed,” Sullivan said.

Sullivan said the borough is considering an appeal of the stay, but could also wait and argue the full case in November.

Stopped work means a loss of about 200 jobs, about 70 on each of three different contracts. Those range from jobs out in the field, to associated office work. Work on three segments was planned for this fall: a section of rail at tidewater, one near the Parks Highway at Houston, and a segment running north from Ayrshire Avenue to just south of Papoose Twin Lakes.

In total, the project is supposed to create about 3,000 construction jobs and 4,000 mining jobs. The project was scheduled for completion in 2016, but Sullivan said she didn’t know exactly how the stay will affect the project’s timing. Some right of way and permitting work can continue despite the stopped of on-the-ground efforts.

The STB allowed the Alaska Railroad to construct and operate the rail extension from Port MacKenzie to Houston as long as it completed certain environmental mitigation measures and used the environmentally-preferable route.

On Sept. 10, the U.S. Army Corps of Engineers issued a permit authorizing the railroad to fill 95.8 acres of wetlands as part of its effort to create the rail extension.

Cook Inletkeeper Executive Director Bob Shavelson said the nonprofit is still considering appealing that decision as well. Much of the nonprofits’ concerns center around wetlands impacts.

The nonprofits contend that the STB decision allowing the project to move forward violated NEPA and the statutes authorizing that body to waive certain requirements for some projects.

The alleged NEPA violations were in the framing of the EIS for looking too heavily at the Railroad’s corporate objectives rather than a balance of corporate, governmental and public objectives, lack of evaluation of a project design without the road component, and an EIS that didn’t have enough ground-level studies.

Judges Stephen Reinhardt and Kim Wardlaw wrote the majority opinion, with Carlos Bea dissenting. Reinhardt was appointed to the court by President Jimmy Carter in 1979. Wardlaw was appointed by President Bill Clinton in 1995, and Bea joined the court in 2003, an appointee by President George W. Bush.

In his dissension, Bea said there is no “serious question” regarding NEPA compliance raised in the complaint, and that petitioners did not exhaust their ability to get a stay from the Surface Transportation Board, as is the usual protocol.

The majority opinion said a federal rule means that requesting a stay from the STB is not a prerequisite for the court to issue one, and that the petitioners demonstrated that a stay from the STB would have been “impracticable.”

Bea’s dissenting opinion counters that the petitioners did not submit evidence that getting a stay from the STB would have been “impracticable,” and had no grounds other than speculation.

Bea’s opinion also asserts that the STB did consider the alternatives preferred by the nonprofits that they say were not fully considered as part of the EIS process.

Shavelson said the stay bodes well for the November hearing.

Sullivan, however, said that because the stay was issued by just three judges, the case could still fare well when considered by the full court.

 

Molly Dischner can be reached at molly.dischner@alaskajournal.com.

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