Port MacKenzie rail will generate jobs, $1 billion a year in mineral production

Port MacKenzie is the answer to the local demand to diversify our economy. The Port MacKenzie rail extension is one of the answers to our state’s reliance on dwindling oil revenues from the North Slope.

In the June 18 Frontiersman, Grace Whedbee provided a Spectrum column regarding the test shipment of coal from Port MacKenzie. Ms. Whedbee also addressed the port and rail extension. Unfortunately, Ms. Whedbee’s column contained inaccurate information that needs to be corrected.

The early June test coal shipment from Port MacKenzie was part of a feasibility study being completed by Usibelli Coal Mine in cooperation with J-Power, a Japanese power company. Virtually all the costs associated with this coal test shipment (ships, ship’s pilots, tugs, the use of the conveyor, trucking the coal to Port MacKenzie, the coal, security and electricity) were paid for by the two private companies. The Mat-Su Borough did not pay for any of these expenses. Instead, the borough received wharfage and dockage fees while the vessel was in port and coal was loaded.

The test coal shipment was a great success and clearly demonstrates Port MacKenzie can berth capesize vessels and load coal safely and efficiently. This test shipment will likely lead to future coal shipments through Port MacKenzie that will significantly contribute to the borough’s general fund and the local economy. In fact, some seven to nine vessels per year are expected to call on Port MacKenzie. This means $818,440 in dockage and wharfage fees would be earned by the port on this activity alone.

Ms. Whedbee also commented on other aspects of the port, including its use in winter, its overall cost feasibility and its use for the Wishbone Hill Coal Mine. Contrary to Ms. Whedbee’s comment, Port MacKenzie is a year-round port. Panamax-size vessels have docked during winter to take on wood-chip cargoes bound for Asia. These dockings took place with temperatures at minus-15 Fahrenheit and in ice-filled waters. In no case has the port lost a customer due to safety concerns. Quite the opposite, actually. In June, the largest ship ever in Upper Cook Inlet pulled alongside the fenders at Port MacKenzie and tied up easily. Because of the ship’s deep draft, 45.3 feet, it would not be possible for it to berth at the Port of Anchorage. And of course, it is Port MacKenzie that is in the business of exporting bulk natural resources. The Anchorage port imports consumer goods we rely on every day. The two ports complement each other in our regional economy.

Port MacKenzie has already been a tremendous success in its early years. The port has demonstrated its capabilities to export wood chips, sand and gravel, scrap metal and coal, and to import cement. The fact that Usibelli and J-Power spent thousands of dollars on the successful test of the port, speaks volumes. This private-sector endorsement is growing. Three major oil companies, tank farm operators, oilfield service companies and Chinese investors have recently walked the deep-draft dock and researched the potential for their business at Port MacKenzie. The vice president of CH2M Hill expresses in a borough video that nowhere else except at Port MacKenzie is there the space for tremendous staging and construction required for projects such as sealift modules.

The Legislature and Gov. Sean Parnell see the value of investing in the coming Port MacKenzie rail extension. Parnell recently signed into law a $35-million appropriation for Port Mac rail, which will move the statewide project to construction. The rail will stimulate new mines along the rail corridor to Fairbanks and Livengood. Port MacKenzie will be able to efficiently export large volumes of commodities such as coal, limestone, fuel, lead, zinc, molybdenum and other minerals. A billion dollars a year in mineral production is projected by a University of Alaska Fairbanks mining professor whose maps and surveys predicted the gold mine at Fort Knox. Also, a 1.6-billion-ton deposit of limestone near Livengood gives our state the potential to export cement. In addition to the revenues to the state from taxes, royalties, licenses and permits, some 2,000 construction jobs will be created and some 3,000 mining and spinoff jobs per year will be created.

Please find all the studies on the economic development page of the borough website, matsugov.us. View the video on Port MacKenzie rail at matsugov.us/publicaffairs.

John Duffy is Mat-Su Borough manager.