Benefits of the Southcentral Rail Extension to the Municipality of Anchorage

The proposed Southcentral rail extension to Port MacKenzie is likely to generate significant economic benefits for the residents of Anchorage. These benefits are due to a combination of reduced transport costs, the ability to ship bulk commodities over shorter distances, and economical access to industrial land. We considered and analyzed these benefits under a set of assumptions about job creation, transportation costs, land use considerations and future mineral development. Our major findings include the following: Jobs • Port MacKenzie. The rail extension will generate new jobs for Anchorage workers by stimulating industrial development and jobs at Port MacKenzie. Under a base case scenario with a rail extension and ferry service, Anchorage residents would gain 730 average annual jobs and $50 million of annual income during the period of 2013 -2017 from industrial development at Port MacKenzie. Hundreds more jobs would be gained after 2017. The rail extension will play an important role in this process. For example, it will allow coal exports through the port as early as 2013, generating more than 100 jobs. • New Mines. Major new mines shipping concentrate via the rail extension would generate thousands of new jobs, and a significant fraction of these jobs would be held by Anchorage residents. Our detailed analysis of the potential employment from five specific mining projects indicates that more than 2,000 average annual jobs would be created in Anchorage or held by Anchorage residents once the mines are fully developed. Most of these jobs would be in mining and in professional sectors that pay good wages. Also, during initial mine development, many of the jobs would be in construction and fabrication. • Rail Construction. The construction of the rail extension would generate up to 3,000 total jobs, and ongoing operations would generate up to 150 total jobs. It is likely that many of these jobs would be held by Anchorage residents. • State Revenues. State mining taxes generated from new mines will boost the Anchorage economy. Estimated tax revenues and royalties would grow steadily, reaching$267 million per year by 2040. A large share of these potential tax revenues, roughly proportional to Anchorage’s share of state population, would likely flow into the Anchorage economy, sustaining hundreds of direct jobs and reducing property tax burdens that would otherwise stifle private sector job creation. Regional Competitiveness • New Economic Opportunities. Port MacKenzie and the rail extension, operating together, are a significant new strategic asset for the entire regional economy. This infrastructure will create expanded opportunities for mineral, timber, and energy resource development, and the export of bulk commodities by rail through Port MacKenzie constitutes a new economic sector for the Southcentral regional economy. As the region’s commercial and financial hub, Anchorage will gain jobs and income from all of this activity. • More Efficient Land Use. The rail extension allows for higher-valued use of land in Anchorage. The rail extension will allow for railroad-dependent industrial development to take place at Port MacKenzie. This development would allow limited existing industrialzoned land throughout Anchorage to be used for other, higher-value uses such as commercial development, while still meeting the regional economy’s need for industrial land. Fiscal Benefits • New State Revenues. As noted above, revenues to the State of Alaska from new resource development would grow steadily, reaching $267 million per year by 2040. These revenues will reduce the need for other taxes, stimulating capital formation and job creation by the private sector. • Higher Local Tax Base. Local governments will also see higher tax revenues from a higher-valued property tax base. The stimulated new development will increase the tax base and reduce the need to raise taxes on homeowners or existing businesses. Other Benefits • Port of Anchorage. The industrial and mineral development stimulated by the rail extension to Port MacKenzie will likely increase both the volume and the value of cargo going through the Port of Anchorage. For example, if large mines are developed, the goods and equipment used by the mines for development and operations will flow through Anchorage. • Rail Shipping Costs. The unit cost of shipping on the Alaska Railroad is likely to fall as fixed costs of roadbed maintenance and administration are spread over a higher volume of shipments.Matanuska - Susitna Borough Economic Development DepartmentIntroduction / Two Municipalities, One Regional Economy / Overview of Potential Benefits to Anchorage from the Rail Extension / Benefits from Construction and Operation of the Rail Extension / Benefits from Industrial Development at Port MacKenzie / Benefits from Employment of Anchorage Residents due to Railroad-Dependent Mineral Development / Appendix: Notes on Methodolog

Propane from the North Slope: Could It Reduce Energy Costs in the Interior?

Could propane from the North Slope cut energy costs in Fairbanks and other Interior communities that heat buildings or generate electricity with fuel oil or naphtha? The Alaska Natural Gas Development Authority (ANGDA) thinks it could. That’s because a North Slope producer has agreed to sell ANGDA propane for considerably less than what it might otherwise cost, if there were a natural gas pipeline. Propane is a component of North Slope natural gas—and right now there’s no way to get that gas to market.* Naphtha and fuel oil, by comparison, are refined from oil—so their prices are closely tied to the volatile price of crude oil. ANGDA hopes getting a price break on propane could make it cheaper, at least until a pipeline is built—and it asked ISER to analyze the potential effects of one idea.Alaska Natural Gas Development Authorit

Alaska Fuel Price Projections 2008 - 2030

We generated Low, Medium, and High case fuel price projections for the years 2008-2030 for the following fuels: • Incremental natural gas in Southcentral Alaska delivered to a utility-scale customer • Incremental diesel delivered to a PCE community utility tank • Incremental diesel delivered to a home in a PCE community • Incremental home heating oil purchased in Anchorage, Fairbanks, Juneau, Kenai, Ketchikan, Palmer, and Wasilla This memorandum provides documentation of the assumptions and methods that we used. Two companion Excel workbooks contain the detailed projectionsAlaska Energy AuthorityIntroduction / General methods and assumptions / Natural Gas / Fuel Oil / Reference

Benefit-Cost Assessment of the Port Mackenzie Rail Extension

Costs We assume that the Port MacKenzie rail extension would cost $275 million to construct.1 This is a conservative estimate based on a range of between$200 million and 300 million for different route options. The time horizon runs 50 years from 2012 to 2061. O&M costs are assumed to be 1.5 million per year, with a net present value of $26.1 million. The net present value of all costs using a 5$301.1 million. Benefits The rail extension would provide two distinct types of benefits: 1) It reduces the cost of rail transportation; and 2) It is likely to stimulate significant new mines and other major development. These benefits come from a diverse mix of potential projects – thus a strength of the rail extension is that its economic viability does not depend on any one project. Reduced transportation costs Relative to Seward, using the extension would save 140.7 miles per one-way trip.3 Assuming an average cost savings of 6 cents per ton-mile and a 5.0% real discount rate, we estimate that using the extension would save $572 million in avoided rail costs, avoided port costs, and avoided railroad and road upgrades. These savings are shown in the table and figure on the following page. In addition to the above, we estimate that about 22,000 train crossings of Pittman Road and other roads would be avoided by the extension, saving motorists up to 64,000 vehicle-hours of travel time delay between now and 2061.Matanuska- Susitna BoroughExecutive Summary / Introduction / Benefits from Reduced Transportation Costs / Fiscal benefits to State of Alaska / Community and Regional Economic Impacts / Reference

UAA Inventory: Greenhouse Gas Emissions From Transportation

As a signatory of the American College and University Presidents Climate Commitment, UAA has agreed to conduct an inventory of its greenhouse gas (GHG) emissions. This inventory serves as a baseline against which to measure the effectiveness of GHG emissions reduction projects. To fulfill the Commitment UAA agreed to conduct an inventory of its Scope 1 and 2 emissions, as well as some Scope 3 emissions. In addition to signing the Presidents Climate Commitment, UAA signed the Talloires Declaration in April 2004. The Talloires Declaration is a statement of principles and practices for using higher education to promote sustainability. Scope 1 emissions are defined as direct GHG emissions occurring from sources that are owned or controlled by the institution. Scope 2 emissions are indirect emissions generated in the production of energy purchased by the institution. Scope 3 emissions are indirect emissions that are the consequence of the activities of the institution, but occur from sources not owned or controlled by the institution. Pursuant to the Commitment, this study estimates the levels of two types of Scope 3 GHG emissions – commuting by students and employees, and university-funded air travel. Scope 1 and Scope 2 GHG emissions are being estimated in a separate study. Two models were developed and used: a UAA commuter model and a UAA air travel model.Office of Sustainability, University of Alaska Anchorag

Alaska Fuel Price Projections 2009-2030

Alaska Energy AuthorityIntroduction / General Methods and Assumptions / Natural Gas / Fuel Oil / Reference

Benefits of the Cook Inlet Ferry to the Municipality of Anchorage

The purpose of this study is to examine the economic benefits of the Cook Inlet Ferry to the Municipality of Anchorage. The Cook Inlet Ferry is currently being built at the Ketchikan, Alaska shipyard. The U.S. Navy has financed construction of the ferry as a prototype military landing craft for northern, ice-filled waters. The Matanuska-Susitna Borough paid for Ferry engineering, design, and outfitting with federal transit monies. Following short-term Navy testing of the craft, it will be transferred to the Borough to provide ferry service in Cook Inlet. The Borough will provide operating and maintenance information to the Navy on an ongoing basis. The Borough will operate the ferry, which will provide regular service between Anchorage and Port MacKenzie as well as service to other points on Cook Inlet. The Ferry is expected to be operational by 2010.Matanuska - Susitna Borough Economic Development DepartmentIntroduction / Two Municipalities, One Regional Economy / Potential Benefits of the Cook Inlet Ferry / Economic Impacts on Anchorage of Industrial Development at Port MacKenzie / Conclusion / References / Appendix: Notes on Methodolog

Components of Alaska Fuel Costs: An Analysis of the Market Factors and Characteristics that Influence Rural Fuel Prices

Many Alaskans face extremely high, volatile fuel prices. Little is publicly known about the actual structure of Alaska’s rural fuel markets and what drives prices at the community level. The Alaska State Senate Finance Committee asked economists at the University of Alaska Anchorage, Institute of Social and Economic Research (ISER) to investigate rural Alaska fuel markets and identify policy options that could be considered for legislative action to reduce fuel prices. This study is both an update and an evolution of previous ISER Components of Fuel Costs studies.1 It does not include road-accessible communities.Alaska State Legislature Senate Finance CommitteeAcknowledgements / Executive Summary / Introduction / Western Alaska Fuel Market / Ice Free Coastal Alaska Fuel Market / Community Fuel Survey Results / Policy Options / References / Glossary of Terms / Appendix A. Results of Community Fuel Price Survey January 201

Economic Impacts of the South Denali Implementation Plan

This study estimates the economic effects of carrying out the South Denali Implementation Plan. The plan provides for construction of new visitor facilities in the South Denali Region. ISER economists used the IMPLAN input-output modeling system to project the jobs, income, and sales due to 1) initial construction activity; 2) ongoing operation and maintenance expenses; and 3) additional visitation and visitor spending attributable to the new facilities. The model results include the effects at the Mat-Su Borough and statewide Alaska levels. Local area impacts are also estimated. Suggested Citation: Colt, Steve, Fay, Ginny, Szymoniak, Nick. 2008. Economic Impact of the South Denali Implementation Plan. Prepared for the National Park Service, Denali National Park and Preserve and the Matanuska-Susitna Borough Planning and Land Use Department. Anchorage: University of Alaska Anchorage Institute of Social and Economic Research.National Park ServiceExecutive Summary / Introduction / Economic Impact Analysis / The Project Plan / Baseline Situation / Scenarios of Future Activity / Result

Alaska Community Fuel Use

The goal of this project was to estimate the amount of fuel used for space heating and electricity production by communities in Alaska. No comprehensive Alaska fuel use data exist at the community level. Community fuel consumption by type of fuel and end use is needed to estimate the potential economic benefits from demand- and supply-side investments in fuel use reduction projects. These investments include weatherization and housing stock improvements; improved lighting, appliance and space heating efficiencies; waste heat capture; electric interties, and alternative energy supply options such as wind and hydroelectric generation. Ultimately the Alaska Energy Authority (AEA) and others can use this information to rank and select a suite of projects that provide the largest gains in fuel reductions at the lowest long-term costs and the highest returns on investment over the life of the projects. Study communities consisted of Power Cost Equalization (PCE) eligible communities. Communities in the North Slope Borough were excluded because fuel subsidies offered by the borough result in different patterns of energy use by households.Alaska Energy Authorit