2020 Forecast: Ferry system front and center; Ambler road decision; and fixes at the Port of Alaska
The decisions made by state and federal officials in 2020 could go a long ways towards reshaping the Alaska’s transportation and logistics networks for decades to come.
Those in the state Department of Transportation are currently evaluating ways to overhaul the Alaska Marine Highway System and drastically curtail the ferry system’s reliance on annual state operating funding.
In October, DOT officials said they had received a draft report from Anchorage research firm Northern Economics examining various operating structures that could be employed to reduce costs but also enable better long-term planning for the system with an aging fleet of vessels.
A final copy of the report was initially expected in December but has yet to be published.
The Northern Economics report is the second ferry reform study commissioned by DOT in recent years. Former Gov. Bill Walker’s administration partnered with the Southeast Conference to commission a study conducted by the McDowell Group in 2017 that recommended the system be shifted from a sub-agency of DOT to a public corporation, similar to the Alaska Railroad Corp., with a board of directors comprised of expert stakeholders.
The groups concluded the public corporation model could help limit political influences on the system, thereby allowing leadership to maximize operational efficiencies through more effective long-range planning. However, current DOT Commissioner John MacKinnon has said the public corporation concept alone does not lead to adequate operational cost reductions.
MacKinnon has hinted at the prospect of turning the ferry system — with 35 ports of call from Bellingham, Wash., across Alaska’s south coast to Dutch Harbor — into several municipal-owned port authorities, although that would likely require significant investments in purpose-built vessels as well to maximize the operational benefits of the model.
MacKinnon and other administration officials have pegged the coming year for implementing the first structural reforms recommended by the forthcoming report.
Gov. Mike Dunleavy on Dec. 11 proposed a $3 million increase to the AMHS operating budget for fiscal year 2021, which starts July 1, but it would not be enough to substantially improve ferry service levels in many communities. According to budget documents, some coastal communities could be left without ferry service for upwards of six months even with the potential funding boost.
A handful of coastal communities are going without service for months at a time under the current $45 million general fund ferry budget.
It’s unclear at this point how service levels could be significantly improved even if lawmakers agree to boost ferry funding in the 2021 budget, given DOT officials have laid up half of the vessels in the 12-ferry fleet due to lack of funding for repairs.
Additionally, the department has yet to publish a draft of the summer 2020 ferry schedule, which must go out for public comment before it can be finalized and bookings for May-September can begin. The draft ferry schedule for the upcoming summer has been published in late October or early November in recent years.
An AMHS spokesman did not respond to questions in time for this story.
Legislative leaders have said they plan to revive debate on an increase to the state’s motor fuel taxes in the upcoming session that starts in January. The Walker administration first proposed raising Alaska’s general gas tax — which at 8 cents per gallon is the lowest in the country — in 2015. The proposal gained some traction at the time but eventually stalled amid broader budget debates.
Port of Alaska
In Anchorage, municipal and port leaders have agreed to resume the first major construction work at the Port of Alaska since 2010 next spring. The work will be focused on a new, roughly $210 million petroleum and cement terminal.
While representatives from companies that use the port have urged the Anchorage Assembly and Mayor Ethan Berkowitz’s administration to hold off on the work until a funding plan for the broader port modernization project is finalized, municipal officials have stressed that building the fuel and cement dock in a new location is the first needed step in a series of challenging logistics to rebuild the port while keeping it operational.
The Bureau of Land Management is evaluating a state plan for a new road that could lead to the development of several mines hundreds of miles north in Interior Alaska.
The final environmental impact statement and a permit decision for the Alaska Industrial Development and Export Authority-sponsored Ambler Road are expected in the first half of next year.
The industrial use road would run west from the Dalton Highway north of Fairbanks about 210 miles to a series of mining claims and prospects on the southern flank of the Brooks Range. Using a toll road concept, AIDEA would finance the basic gravel road — with an estimated construction cost between $280 million and $380 million — via revenue bonds that would be repaid by the mining companies that would use it to develop the multiple metal prospects in the 75-mile long mining district near the end of the road.
Area village and Tribal governments have objected to the plan, arguing the development activity would disrupt wildlife populations locals depend on for subsistence harvests; however, state officials contend the mines would bring jobs to the economically-depressed region.