John MacKinnon

GUEST COMMENTARY: Perfect storm hitting Alaska Marine Highway System

Over the past 18 months, Alaska’s ferry system faced unprecedented challenges: a reduced budget, a strike, unanticipated mechanical and structural issues with five aging ships, and a global pandemic. This spring, as the pandemic hit, the Alaska Marine Highway System had four of those ships scheduled to enter service, a workable budget in place and expected sufficient revenue to provide reliable ferry service throughout the year. Due to the dramatic decline in revenue as commerce all but stopped, the financial impacts on AMHS have been severe. Because ticket sales support the AMHS operating budget, we’re now facing a shortfall of almost $45 million. This shortfall, caused by the pandemic, equates to a budget cut of the same amount. The resulting winter schedule is not what we expected to provide. It’s not what Alaska’s coastal communities consider to be a satisfactory level of ferry service. Last winter, the system was hit hard with unexpected mechanical issues. Now, our ships are in good shape, but there are not enough funds to operate them. When our draft winter operating schedule came out, there were some complaints that we didn’t provide enough time for comment. The reality is we accept comments year-round, and we frequently adjust our schedules to accommodate requests from communities. One point to keep in mind is that most of this year’s community and school events we build our schedule around have already been canceled. Right now, AMHS needs to finalize its winter schedule so travelers can begin making reservations for our October through April travel season. In addition to the budget issues we’re facing, pandemic conditions have added a whole new level of complexity to running our ships and keeping passengers and crew safe from another outbreak. I applaud AMHS for its outstanding response to the challenges created by COVID-19. It’s been incredibly complicated to coordinate everything, but we’ve managed to run the mainline route since late June without an outbreak. With the insidious menace of COVID-19, it’s not a matter of if, but when an outbreak will occur on an AMHS vessel, so we count every week of successful operation a blessing in these very challenging times. Our crew has done an exceptional job following protocol, and that’s been the key to continuing operations. A recent incident occurred aboard the M/V Matanuska when a group of passengers learned en route that they had been in close contact with a COVID-19 positive person before they boarded the ship. Matanuska’s crew followed protocol — the affected passengers were quarantined in their cabins with meals delivered for the duration of the voyage. When several of those passengers later tested positive for the virus, we promptly tested the entire crew. Thankfully, all 47 crew received negative results and Matanuska returned to service, but not without a one-week delay, considerable cost and lost revenue. What could have easily resulted in a shipboard outbreak and weeks of the entire ship in quarantine was averted by a quick and reasoned response from a well-trained crew. This pandemic has affected nearly every aspect of our lives and will continue to do so for some time. The incident on the Matanuska is just one example of the commendable job AMHS is doing — they continued providing ferry service when it didn’t seem feasible. But in the midst of the pandemic, we have to accept the fact that fewer travelers mean less revenue, and reductions in service are required to keep the system afloat. At the Department of Transportation and Public Facilities, we take our responsibilities seriously for all of Alaska’s communities – those on the road system, the 35 serviced by AMHS, and the 140+ that are neither on the road system nor on the ferry routes. The AMHS Reshaping Work Group has met regularly over the last six months, receiving input from a diverse group of stakeholders who either compete with, operate, or rely on our ferry system. I look forward to the work group’s final report, and to implementing fundamental changes to keep reliable ferry service running in Alaska for the long term. John MacKinnon is Commissioner of the Alaska Department of Transportation and Public Facilities.

GUEST COMMENTARY: Alaskans deserve process, not knee-jerk opposition, to Ambler Road

A recent House Resources committee hearing on the Ambler Mining District Industrial Access Project served as a reminder how prevalent a role outside environmental groups play in Alaska politics, particularly when it comes to mining projects. Perhaps nowhere else in America do environmental groups spend as much time, money and effort to insert a voice into how — or even if — we manage our own resources. Knee-jerk opposition to resource development often ignores the needs and best interests of Alaskans. It also discounts that these projects, in this case a potential road leading to a mining district in Northwest Alaska, make huge regional economic contributions to fund education, healthcare, and opportunity for future generations of our state. The Red Dog Mine, one of the largest lead and zinc mines in the world, has been in operation since the 1980s. It’s the only non-government tax contributor to the Northwest Arctic Borough and plays a critical role in supporting important services, especially schools. Since mining began at Red Dog over 25 years ago, more than $140 million has been provided to the borough. During that same period, over $880 million has been provided to the state and over $695 million to the federal government. Seven hundred-fifty Northwest Arctic Borough jobs are connected to Red Dog; accounting for roughly $75 million in annual wages. In addition, over $160 million is spent annually on goods and services from Alaska-based businesses. The economic and social benefits that the Red Dog Mine has brought to the region go on and on. Roughly 150 miles to the east of Red Dog is the mineral rich Ambler Mining District. The topic of recent legislative hearings was the feasibility of an access road being pursued by the Alaska Industrial Development and Export Authority, or AIDEA. The road project is important because it would allow responsible development of mineral resources used in everything from solar panels to windmills and electric cars. The Ambler Access Project road alone would create hundreds of local jobs during the construction phase. Once built, providing industrial-only access to known mineral deposits, mining development could account for thousands of direct jobs during mine construction and operations. The benefit to the region would be a multiple of the long-term positive benefits the Red Dog Mine has brought. Despite the significant employment and economic benefit potential the project represents, the House Resources hearing included testimony from naysayers, arguing about the economics of the advanced-stage exploration project and challenging the return on investment of a proposed private toll road paid for with other people’s money. The Wilderness Society representatives, while generally stating support for the access road itself, had a lengthy presentation disagreeing with the economic model presented by AIDEA. AIDEA still has a lot of work to do, and they have detailed the rigorous process necessary to finalize a financing package for private investors interested in purchasing bonds to build the access road. Similarly, Trilogy Metals just finished a pre-feasibility-level study that demonstrates robust project economics, and as the Wilderness Society testified, more drilling work is needed at the potential mining projects. That work will continue this summer with recent news that the mining companies pursuing these opportunities have the funds in hand to do that. AIDEA and its proposed Ambler Access Project are going through the National Environmental Policy Act, or NEPA, process to complete scoping requirements for an environmental impact statement, or EIS. This includes comments from the public relative to concerns and issues that must be addressed in the permitting process. This is followed by a draft EIS; another public comment period; a final EIS; a third public comment period; and then ultimately a record of decision. Nothing can be built before then. The NEPA process is incredibly rigorous, incorporating local input into project design and decision making, and has always resulted in a better project. At the end of the day, Alaskans should support this process to ensure that — once all the facts are made available — those who stand to be most affected by the road have a say in how it’s designed and developed. Nobody is building a road or a mine at this point, and none of the numbers are final, but Alaskans, especially residents of the region, deserve this process to play out. They deserve to hear all ideas, concerns and options for the road moving forward. What they don’t deserve is to have another resource project shut down by outside special interest groups before all the facts are available and the permitting process complete. John MacKinnon is the Executive Director of AGC of Alaska, a construction trade association representing over 640 companies in Alaska. Jim St. George is the President of AGC of Alaska. He is founder of STG Incorporated, an Anchorage-based construction management and services company specializing in heavy industrial construction projects in rural Alaska.
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