Econ 919 — Investing in infrastructure

Aug 20, 2021

Credit Photo: Sabine Poux/KDLL

Alaska’s senators joined most of their colleagues last week in voting for a massive infrastructure bill that would combine $550 billion in new spending, plus $1 trillion in previously approved spending, to update highways, salmon passageways and other facilities around the U.S. 

The bill still has to clear the House. But Larry Burton, chief of staff for Republican Sen. Dan Sullivan, said he thinks there’s a lot for Alaskans to look forward to in the bill. He briefed a crowd of sportfishermen at the Kenai Classic Roundtable on Recreational Fishing in Soldotna on Wednesday.


“Getting infrastructure built in our state can help us unlock our potential," Burton said.

A large chunk of the $3.5 billion Alaska could receive would go toward buffing up infrastructure in the more rural parts of the state, from improving water infrastructure and broadband to supporting ferries that travel to the state’s more isolated communities. 

But Southcentral, and its salmon, stand to benefit, too.

About a billion dollars in the plan would go toward replacing failing culverts. 

When poorly designed or in disrepair, culverts can block salmon from swimming upstream. The Kenai Watershed Forum has identified nearly 300 culverts that cross state-cataloged salmon streams on the Kenai Peninsula and has found nearly half of them do not provide adequate passage for salmon.

“A lot of the culverts we have on our roads are old galvanized that are failing," said John McKinnon, Commissioner for the State’s Department of Transportation. "The aluminum ones last a little longer than the galvanized ones. And a lot of those are failing. It’s a very expensive process to replace that because, of course, the inconvenience to the public (when) we have to close off one lane.”

There's also money in the bill for the Pacific Coastal Salmon Recovery Fund, a federal grant program geared toward reviving salmon populations on the West Coast.

Coastal erosion projects are included in the bill. That piqued Kenai City Manager Paul Ostrander’s interest. 

"Things are … starting to become a little real on the bluff project," he said at an August Kenai City Council meeting.

Ostrander said the infrastructure bill could help fund the city’s long-sought bluff erosion project. That project, currently in the design phase, would stabilize 5,000 feet of quickly eroding bluff along the Kenai River. 

Kenai is working with the Army Corps of Engineers on the project. The city will have to foot its own local match in addition to the federal contribution.

“So now we realize that this thing likely is going to really happen," Ostrander said. "So administration needs to double our efforts on determining how, exactly, we’re going to schedule and structure a match that’s going to be necessary for the city.”

The bill provides $18 billion in loan guarantees toward Alaska LNG — the project that would take natural gas from the North Slope of Alaska down to a proposed plant in Nikiski, for liquefaction and export. 

The project is estimated to cost $38.7 billion and has so far been without a stable source of funding, which has left it in a state of limbo. The state corporation spearheading the project has requested money from the federal government and is looking for private investors.

Burton said the loan guarantees are a big push for the project.

"That’s quite a chunk of change, an opportunity there," Burton said.

Local ports and airports would receive funds from the package, as well. Kenai Municipal Airport Manager Eland Conway said his team is meeting next week to talk about potential airport improvement projects.

The Seward Harbor is in a similar boat. Seward City Manager Janette Brower said the city has maintenance and expansion projects in the works. But she said the parameters of the funding are still big question marks.

Seward could also benefit from funding for the Coast Guard.

Peninsula residents might also see money from the bill through funding for the Forest Service and for hydropower and marine energy research. The nearly 3,000-page bill is online at congress.gov.