Commissioner Marc Luiken Alaska Department of Transportation & Public Facilities Commissioner Marc Luiken North to Alaska 7 September 2017

Overview Alaska DOT&PF Alaska Railroad Alaska Ports Why a rail connection? Conclusion

Alaska Facts The coast line of Alaska is equal to the coast line of the continental United States. Alaska is the largest state; if Alaska were cut in half, Texas would be the third largest state. Alaska’s 591,004 sq. miles Alaska is the furthest north, west and east state in the Union Alaska has more coastline than the entire CONUS

Alaska Department of Transportation & Public Facilities DOT&PF Assets 1/17/2013 5,619 center line miles of roads/highways 242 State Airports, 2 IAPs 10 Ferries, 35 Ferry Terminals 25 Harbors 7 Weigh Stations 82% of Alaska’s communities are only accessible by air or water 2% of Alaska’s land mass is accessible by road Longest ferry system in North America, 3500 miles, key link for 33 Alaskan communities Integrity ∙ Excellence ∙ Respect 11/14/2018

Alaska Railroad Corporation ORGANIZATION History, Ownership & Operation Federal Government built the railroad 1914-1923 in order to open the territory to development State purchased railroad in 1985 for $22.3 million Independent corporation managed by a 7-member board of directors appointed by the Governor State law mandates self-sustaining operations and responsibility for financial and legal obligations Mission Provide safe, quality transportation land real estate services Operate profitably and be self-sustaining Foster economic development (includes new and improved infrastructure, such as rail extensions) Assets 656 total miles of track 863 freight railcars (owned) 44 passenger railcars 51 locomotives + 2 power cars Yards: Seward, Anchorage, Whittier, Fairbanks

Alaska Railroad Corporation FINANCIAL (as of 2015) 2015 Assets: $1.09 billion 2015 Revenue: $183.8 million ($50 million in grant revenue) 2015 Net Income: $10.9 million 2016 Budgeted Net Income: $9.3 million BUSINESS LINES Freight Business 2015 Freight: 4.29 million tons Alaska’s current rail link to the Lower 48 and Canada is through the Alaska Rail Marine, a rail barge service operating between Seattle and Whittier. Passenger Business 2015 Passengers: 475, 034 The Alaska Railroad offers year-round regularly scheduled rail transportation. Real Estate Business Real estate holdings: 36, 228 acres 38% (13,738 acres) for track and bed right of way 12%(4,520 acres) for railroad operations 50% (17, 970 acres) for long-term lease or permit use The railroad hauls natural resources including coal, gravel and petroleum products; as well as major commodities including industry chemicals and supplies, dry goods, hazardous materials, pipe, lumber, heavy equipment and large specialty items. The Alaska Railroad is the first railroad in the US to be authorized to transport LNG.

Alaska Railroad Corporation Railroad has one major river crossing south east of Fairbanks complete – Tanana River ROW is mostly federal (DoD) or state land to Delta Junction This project was completed in 2012 in anticipation of continuing the railroad south to Delta Junction US DoD supplied much of the funding as this rail line provides a link to a major training area south of Fairbanks.

Alaska’s Ports Alaska currently has three year round ports connected by rail: Port of Anchorage – deep water Seward Port – deep water, ice free Whittier Port – deep water, ice free One port nearly connected by rail: Port MacKenzie – deep water Other ports of interest to Canada: Port of Valdez – deep water, ice free Port of Skagway - deep water, ice free, connected to Carcross, YT via narrow gage rail Haines Port – deep water, ice free

Port of Anchorage The Port of Anchorage is the major intermodal deep-water port in Alaska. Fully operational year round, and located only a few miles away from one of the busiest cargo airports in the US. Port facilities include: Three General Cargo Terminals, 2,100 ft. of dock face Two Petroleum Product Terminals with 600 feet each of berthing space Loose cement offloading capability Intermodal connections via rail, road and air Operating depth at all berths (except barge berth): dredged to -35 feet below MLLW Maximum length and breadth: No limit On-dock Transit Shed with 27,000 square foot heated storage/office space Rail mounted, electric Container Cranes: (2) 30 ton and (1) 40 ton Bulk Petroleum Valve Yard . Foreign Trade Zone The Municipality is a grantee of the Anchorage Foreign Trade Zone 160, the only activated FTZ in the State of Alaska. Anchorage Foreign Trade Zone (FTZ) No. 160, the only activated FTZ in the State of Alaska. POA Director tells me the port is operating at 60% capacity right now – room to grow. Three General Cargo Terminals, 2,100 ft. of dock face, container, roll on\roll off, break bulk capabilities Two Petroleum Product Terminals with 600 feet each of berthing space with four 2,000-bbl./hr.-product pipelines each Loose cement offloading capability via pneumatic pump and pipeline Intermodal connections via rail, road and air Operating depth at all berths (except barge berth): dredged to -35 feet below MLLW Maximum length and breadth: No limit On-dock Transit Shed with 27,000 square foot heated storage/office space Rail mounted, electric Container Cranes: (2) 30 ton and (1) 40 ton Bulk Petroleum Valve Yard capable of multiple simultaneous  marine/shore and/or inter-user shore side transfers.

Port of Seward DOCK FACILITIES A high percentage of Seward Port users make Intermodal connections through Alaska Railroad terminus on the waterfront. Annually, more than 186,000 people and all types of cargo enter Seward via the railroad dock facilities Docks are directly connected to the railroad Dock facilities and railroad support freight routes around the state Port also contains an ore loading facility, previously used for coal. POA Director tells me the port is operating at 60% capacity right now – room to grow.

Port MacKenzie INFRASTRUCTURE Additional and future facilities 550’ long, 14.7 acre barge dock with gravel surface to -20 Mean Low Level Water (MLLW) 1200’ long deep draft dock, -60 MLLW Bulk commodity loading capability – 2000 tons/hour Additional and future facilities Rail connection with a rail loop at the port: will be the longest industrial loop in the state for efficient on and offloading 14 square miles of industrial area—no other Alaska port has the space POA Director tells me the port is operating at 60% capacity right now – room to grow.

Why a Rail Connection Alaska is still isolated – limited connections by road, air, water Manufacturing is limited Stunted state’s economic growth Rail connection would provide a 4-5 day link between major US and Canadian markets – opens another access to Asian and world markets Shorten delivery of bulk, durable, and other commodity goods Lower shipping costs Help reduce the cost of living in Alaska Rail connection would also ultimately allow Alaska’s resources quicker access to markets in Canada and Lower 48 Alaska’s ports have capacity Most ports on the west coast of North America are at or exceed existing capacity Alaska’s proximity advantage: 3000 km closer to major Asian ports than Port of Los Angeles 1800 km closer than SEATAC 7-9 days sailing time Direct route

Summary Alaska’s strategic location make it a key location for intermodal transportation networks and import/export of bulk commodities Alaska has intermodal transportation network and port facilities with capacity in place to help ship Canada’s commodities to Asia and the world Alaska and Canada need a rail connection to help make this a reality Alaska is interested in working with entities in Canada who want to make this rail connection a reality. Alaska will work with US Department of State on cross border issues as /when necessary