Important Alaska Railroad chugs toward end of line
Los Angeles Times
September 26, 1982

An Alaska Railroad train moves through a gorge on the Nenana River near Healy

Talkeetna, Alaska - For 59 years and 470 miles, the Alaska railroad, the northernmost railroad on the continent, has rolled through the lives and land of Alaskans.

Take Patricia Smith, 32. The other day, with her 3-week-old daughter strapped in a baby tote against her chest, she boarded Alaska Railroad train No. 4 after an overnight visit to Talkeetna for supplies and a doctor's appointment.

Twenty-five minutes later, seemingly in the middle of nowhere, but actually and precisely at milepost 244.6, the train stopped to let her down, to return to her home, an isolated cabin that lacks sewer, running water and access by road.

The train is the Smith family's link with civilization.

Or take roger and Melinda Evans, standing by the tracks at milepost 238.4 and waving their arms to hail the only train in America that makes unscheduled "flag stops."

Or take the Usibelli coal mines at milepost 362.3 near Healy. The mines will supply 220,000 tons of coal to South Korea this year, an amount that will increase fourfold in the next two years as Alaska seeks to build a Pacific Rim export market for coal.

The railroad makes it possible.

It is difficult to overstate the importance of the Alaska Railroad in the state's past and present. Anchorage, the state's largest city, was founded to build the railroad, which was intended to open the wilds to development and settlement, and did. even today, two-thirds of the state's population lives in an area defined by it: the Railbelt.

Yet the railroad's future is uncertain.

The Seward-to-fairbanks line is the only railroad owned and operated by the federal government. That has been its good fortune in the past but may be its misfortune now. U.S. taxpayers have put more than $60 million into it since 1975, according to the General Accounting Office, but the Reagan administration wants to end that federal support Oct. 1.

That has produced a deadlocked debate in washington over a year-old plan to transfer the railroad and its costs to the state. It is a debate of far-reaching importance for Alaska and the nation.

How it is resolved may well determine when - or whether - many of Alaska's vast mineral resources will be tapped and thus whether remote, unsettled areas will face development by man.

New rail routes, some stretching hundreds of miles, will be critical, and perhaps essential, for significant amounts of mining to occur in this road-poor state. The railroad's receipts cover its current operating costs, but it lacks the 42.5 million to 43 million needed to build each new mile of track.

"The main deterrent to hard-rock mineral mining is lack of transportation," said the state's commissioner of transportation, robert W. Ward.

The current congressional debate is over two major questions:

"If the state of Alaska can afford to give away $1,000 to every resident, it can afford to pay something for this railroad," says Rep. John F. Seiberling, D-Ohio, referring to state oil dividend payments now being mailed to everyone who has lived in the state for at least six months.

Seiberling is chairman of the House Interior Committee's subcommittee on public lands and national parks, which has approved legislation requiring the state to pay 75 percent of the railroad's value either in cash or by returning some state and to the federal government.

Alaska officials oppose the bill and favor one passed by the Senate Commerce Committee calling for a cash-free transfer. It would nonetheless require the state to assume the railroad's liabilities, including an estimated 4100 million in necessary maintenance that has been delayed for lack of funds.

"A transfer that does not involve payment of cash does not mean that there is no payment," Ward said, explaining the state's view. Where maintenance, operating and modernization costs and pension liabilities are added up, he said, "it may be cash-free, but it is not cost-free. It's a ton of money."

Or as Gov. Jay S. hammond's press secretary, Chuck Kleeschule, asks, "Why should we have to pay for the privilege of dumping money into it?"

"We would like to receive the railroad, but not at any price," said John Katz, state commissioner of natural resources. "we're prepared to walk away from it if we have to."

Hammond and others are also concerned about another major question, whether the claims of Alaska natives to some of the railroad's 38,000 acres of land could leave the railroad economically weakened or unable to expand. The claims arise from the historic Alaska Native Claims Settlement Act of 1971, which was designed to compensate natives for their loss of traditional lands.

The state wants the railroad's land, and it wants the federal government to compensate natives for any claims eventually found valid. Those who disagree contend that the claims involve only a relatively unimportant share of the railroad lands, which could easily be given up.

The dispute goes on despite widespread agreement that the railroad, which accounts for all but 21 miles of rail line in the state, is critical to the state's future.

"Alaska has enormous potential for economic development, especially in minerals that require rail transportation," the General Accounting Office reported last February. "There are many obstacles to such development, including high costs and high risk, environmental considerations and lack of transportation.

"The railroad's continued federal ownership inhibits its even seriously exploring the feasibility of development projects because the needed capital would have to come from federal appropriations.

The railroad expects to make a profit, of $8.5 million this year, and as long as revenue covers costs, it can run in some fashion, carrying sightseers and climbers to Mount McKinley, frozen food to isolated residents and construction materials to Anchorage and Fairbanks.

But such revenues do not guarantee that the railroad can continue to open new land to development and provide money-losing passenger operations, two traditional services that give the line its flavor and make possible a peculiarly Alaska way of life.

Currently, profits on freight operations make up for loses on passenger service, and two years ago the federal government provided a one-time subsidy of $1.5 million for passenger service. A 1981 study for the state concluded that "passenger train service in Alaska must be re-evaluated."