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Frontier tracks: the Northwest Alaska Railroad.

For years, mining advocate Steve Borell has touted the virtues of building a great railroad stretching from the rich coal fields of the western Brooks Range to a deep-water port on Norton Sound. Ocean freighters could then more easily transport the huge volumes of coal and other minerals to Pacific Rim and European markets.

Borell, executive director of the Alaska Miners Association, has taken on the railroad as a personal project, willing to discuss the idea with anyone who will listen.

"It's going to take a lot of (mining) projects to make this work," he says, "and it's going to take a lot of people saying 'I see an opportunity here.' It's going to require a massive, massive effort."

If international markets are the target, Borell contends, a railroad and deep-water port are necessary for two basic reasons. For one, the use of freighters would be limited farther north because of the heavy ice conditions and shallow water.

"And when you're talking about coal, you're talking about a commodity that is low value and very high volume, and your transportation system has to be efficient," he adds.

Borell has gained an important ally in Arctic Slope Regional Corp. (ASRC), the Native group that holds title to most of the available coal reserves in the Brooks Range. ASRC hasn't endorsed the railroad but is giving it a serious look, along with other transportation options.

"In my opinion, it's a lot more realistic than some of the other alternatives, particularly for the long haul," says John McClellan, head of2 ASRC's International Business Development group.

Both McClellan and Borell believe their idea for a northwest Alaska railroad as a transportation link for hauling coal and hard-rock minerals to the international marketplace is more plausible than one examined in a recent study commissioned by the Alaska Industrial Development Export Authority (AIDEA).

Prepared for AIDEA by CH2M Hill and Sandwell Inc., "The Northwest Alaska Resource Development Transportation Alternatives Study" looks at the viability of building a $3.1 billion to $3.3 billion railroad and world-class port facility to handle 10 million to 15 million tons a year of coal and other minerals.

The 710-mile rail corridor would begin at ASRC's Aluaq Mine, proceed east along the north side of Lookout Ridge, turn south near the junction of the Colville and Kuna rivers, cross the Brooks Range, and then head south through the Noatak National Preserve toward Ambler. The route would then follow the eastern boundary of the Selawik Wildlife Range and then proceed southwesterly through the Seward Peninsula to tidewater at Cape Nome.

The AIDEA report says project development would require long lead times, from nine years to 12 years for the railroad and from six years to eight years for the port facility, primarily because of environmental protection regulation,

permitting and rights-of-way acquisition, and concerns with impacts on subsistence lifestyles.

Moreover, the study concludes coal alone would not justify the cost of a major railroad in the region, adding that the estimated 40 percent to 60 percent shortfall in revenue would require a large capital grant or government subsidy. And even with the addition of hard mineral mine development, the study says it's doubtful inflation and future coal prices would increase enough to cover project costs.

Says Borell, "My concern with the AIDEA study is that it's more of a Cadillac approach than is necessary. It's a gut feeling that there's got to be a better way, another route. There has to be a cheaper way to get over there."

While strictly in the "conceptual" stage, Borell concedes, his proposed route for a railroad is much shorter than AIDEA's (less than 400 miles) and would pass mainly over lands owned by the state and Native corporations. By steering around federal lands locked up in parks, refuges and wilderness areas, prolonged fights with government regulators and environmentalists could be avoided.

Borell says project success hinges largely on the cooperation of the three Native corporations in Northwest Alaska -- Bering Straits, NANA and ASRC. He adds, "I know that without them pushing it, it will never happen."

With 13 years of experience working in the coal industry, Borell also believes the expertise and financial clout large mining companies can bring to the project are critical to its success.

He suggests ASRC, for example, set aside "blocks" of coal reserves to lease to mining companies, even if it means they are competing directly with ASRC operations.

"They could say we need the additional political clout of your having an interest up here, because we believe that is what it's going to take to get a railroad," explains Borell.

Meanwhile, ASRC's McClellan says the corporation continues to explore marketing and transportation options for its abundant coal reserves, including a Borell-type railroad that would cross private and state lands only. In taking such an approach, he explains, a railroad could be built in two years to five years.

Adds McClellan, "This also would be of great benefit to private landowners and the state of Alaska, in the way of jobs and other economic benefits. Anything moving across federal land withdrawals will be very difficult."

Starting at the Chukchi Sea and extending 300 miles east, there are estimated deposits of up to four trillion tons, representing more than 9 percent of the world's coal reserves. And it's all located on lands owned by ASRC, one of 13 Native corporations established under the Alaska Native Claims Settlement Act. 8 In addition to international markets, ASRC is looking to fill potential energy needs in Alaska, including rural villages and Cominco's Red Dog zinc/lead mine near Kotzebue. But the largest markets by far are in Asia and northern Europe. Although the corporation's first mine development site at the so-called Deadfall Syncline is located just six miles from the coast, it is 300 miles north of the Arctic Circle, where ice-free shipping lasts only a few weeks each year.

Various schemes have been investigated to the get the coal to market, including the use of former Soviet ice-breakers to maintain a northern route to Europe. ASRC's new mine is located a6djacent to the proposed Arctic sea route.

However, Borell believes a railroad leading to a more southern port would greatly extend the shipping season and provide a more reliable coal source for what he sees as the prime markets, Japan and Korea. But a railroad, he adds, also would open land-locked areas of western Alaska to other forms of mining.

In the meantime, the state should be looking for the best route for a railroad even if portions of it do pass over federally protected lands, Borell says. If the state is going "to lose some blood over land issues in Alaska," including the possible loss of the oil-rich coastal plain of the Arctic National Wildlife Refuge (ANWR), then Borell says the state ought to be holding a few bargaining chips.

"When the horse trading starts to take place ... Alaska can say it wants a two-mile wide strip of land through that place, or we are going to take you to court and fight you for the rest of your life," Borell says.
COPYRIGHT 1993 Alaska Business Publishing Company, Inc.
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Author:Tyson, Ray
Publication:Alaska Business Monthly
Date:Sep 1, 1993
Words:1190
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