Alaska Journal of Commerce
Work on the Port MacKenzie rail extension was stopped Oct. 1 by a panel of judges from the U.S. 9th Circuit Court of Appeals.
A 2-1 decision granted an emergency motion for stay until a review is
completed of the Surface Transportation Board’s November 2011 order
allowing the project to move forward.
The 32-mile rail extension would connect Houston and Port MacKenzie at a
cost of about $272.5 million. Port MacKenzie is a deepwater port, with
about 9,000 acres, or 14 square miles, of industrial staging and
Alaska Survival, Cook Inletkeeper and the Sierra Club filed the
petition for review in January, and the emergency motion for stay Sept.
21. The Surface Transportation Board, a federal regulatory body for
railroads, and U.S. government are respondents in that case, and the
Alaska Railroad Corp., Matanuska-Susitna Borough, and the State of
Alaska are listed as respondent-intervenors.
According to the motion, the court finds a “serious question” regarding
whether the Surface Transportation Board, or STB, complied with the
National Environmental Policy Act, or NEPA, in determining the “purpose
and need” of the project in the final environmental impact statement, or
The Oct ruling states: “The court further finds that the balance of
hardships tips sharply in petitioners’ favor, that petitioners are
likely to suffer irreparable harm in the absence of a stay, and that a
stay is in the public interest.”
Oral argument for the case, which has now been expedited, is scheduled to begin Nov. 8 in San Francisco.
Mat-Su Borough Public Affairs Director Patty Sullivan said the stay
likely means the borough can’t proceed with a bid that was out for work
on a third segment of the project.
“We’re definitely disappointed,” Sullivan said.
Sullivan said the borough is considering an appeal of the stay, but could also wait and argue the full case in November.
Stopped work means a loss of about 200 jobs, about 70 on each of three
different contracts. Those range from jobs out in the field, to
associated office work. Work on three segments was planned for this
fall: a section of rail at tidewater, one near the Parks Highway at
Houston, and a segment running north from Ayrshire Avenue to just south
of Papoose Twin Lakes.
In total, the project is supposed to create about 3,000 construction
jobs and 4,000 mining jobs. The project was scheduled for completion in
2016, but Sullivan said she didn’t know exactly how the stay will affect
the project’s timing. Some right of way and permitting work can
continue despite the stopped of on-the-ground efforts.
The STB allowed the Alaska Railroad to construct and operate the rail
extension from Port MacKenzie to Houston as long as it completed certain
environmental mitigation measures and used the
On Sept. 10, the U.S. Army Corps of Engineers issued a permit
authorizing the railroad to fill 95.8 acres of wetlands as part of its
effort to create the rail extension.
Cook Inletkeeper Executive Director Bob Shavelson said the nonprofit is
still considering appealing that decision as well. Much of the
nonprofits’ concerns center around wetlands impacts.
The nonprofits contend that the STB decision allowing the project to
move forward violated NEPA and the statutes authorizing that body to
waive certain requirements for some projects.
The alleged NEPA violations were in the framing of the EIS for looking
too heavily at the Railroad’s corporate objectives rather than a balance
of corporate, governmental and public objectives, lack of evaluation of
a project design without the road component, and an EIS that didn’t
have enough ground-level studies.
Judges Stephen Reinhardt and Kim Wardlaw wrote the majority opinion,
with Carlos Bea dissenting. Reinhardt was appointed to the court by
President Jimmy Carter in 1979. Wardlaw was appointed by President Bill
Clinton in 1995, and Bea joined the court in 2003, an appointee by
President George W. Bush.
In his dissension, Bea said there is no “serious question” regarding
NEPA compliance raised in the complaint, and that petitioners did not
exhaust their ability to get a stay from the Surface Transportation
Board, as is the usual protocol.
The majority opinion said a federal rule means that requesting a stay
from the STB is not a prerequisite for the court to issue one, and that
the petitioners demonstrated that a stay from the STB would have been
Bea’s dissenting opinion counters that the petitioners did not submit
evidence that getting a stay from the STB would have been
“impracticable,” and had no grounds other than speculation.
Bea’s opinion also asserts that the STB did consider the alternatives
preferred by the nonprofits that they say were not fully considered as
part of the EIS process.
Shavelson said the stay bodes well for the November hearing.
Sullivan, however, said that because the stay was issued by just three
judges, the case could still fare well when considered by the full
Molly Dischner can be reached at email@example.com.