Cutting unaffordable megaprojects could save Alaska millions of dollars

As the Dunleavy administration prepares its first budget, the governor and his staff would be wise to review the history of state transportation megaprojects during the past 15 years. Realistically examining and canceling unaffordable projects would save the state millions of dollars on planning, as well as billions of dollars in construction costs.

Successive Alaska governors and legislatures have appropriated nearly $400 million in federal and state funds to transportation megaprojects, including the Knik Arm and Gravina bridges, the Juneau Access road and the Interior roads to Umiat and Nome. The projects’ need for billions of dollars in construction costs, however, ensured their demise.

Previous Republican governors have taken the lead in canceling these fiscally irresponsible projects. Gov. Sarah Palin canceled Ketchikan’s Gravina bridge, Gov. Sean Parnell canceled the road to Nome, and Gov. Bill Walker canceled the other bridge and road megaprojects.

There are two ongoing megaprojects that should be reconsidered by the Dunleavy administration: the sub-Arctic Ambler road and the Arctic Strategic Transportation and Resources (ASTAR) project. Both would cost billions of state — not federal — dollars to construct, with little revenue in return even if tolls were levied.

The Ambler road would be a non-public, 200-plus mile road facilitating development of the Ambler mining district. The resulting mine or mines would pay very little in taxes to the state. The companies exploring for minerals in the region have not committed to repay via tolls the more than $20 million that the state already has paid contractors and the federal government for road planning, nor the hundreds of millions of dollars in expected construction and operational costs — snow clearing in this remote region is expensive. One mining company, Trilogy, testified before the House Resources Committee last April that its mine would be profitable enough that the company could fund the Ambler road without state assistance at then-current copper prices.

ASTAR would benefit the oil companies that want to drill in the Arctic National Wildlife Refuge and the National Petroleum Reserve-Alaska. The current Dunleavy budget includes $10.1 million as an ASTAR “slush fund” of miscellaneous items to promote oil development in the Arctic. The budget disingenuously characterizes the ASTAR subsidies to industry as needed to “develop resources that empower Arctic communities.”

In contrast to these unaffordable megaprojects, the state has an existing infrastructure project requiring major investment. The Port of Anchorage provides cargo for 85 percent of Alaska’s population, but it needs upgrades and maintenance. The state also needs to appropriate significant funds to repair earthquake-damaged roads and schools in Southcentral Alaska, and to complete the rail line to Point MacKenzie.

As a fiscal conservative and the lead decision-maker for state expenditures, Gov. Mike Dunleavy should be wary of pursuing costly new megaprojects that cannot be completed under any realistic state budget scenario. With relatively low oil prices and a state deficit of more than a billion dollars each year, now is the time to cancel the Ambler and ASTAR megaprojects and save the state millions in planning and billions in construction costs, whatever the political consequences.

Lois Epstein, P.E. is the Arctic Program director for The Wilderness Society in Anchorage and the former Director of the Alaska Transportation Priorities Project. She is an Alaska-licensed engineer with degrees from Stanford and MIT. Since 2010, she has issued four reports on Alaska megaprojects titled “Easy to Start, Impossible to Finish,” versions I-IV.

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