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Railroad Fears More Cutbacks After Flint Hills Closure

By Dan Carpenter, Oil, Gas, Native Issues, Corporations and Subsistence Multimedia Reporter, dcarpenter@ktuu.com
Published On: Feb 12 2014 11:09:56 PM AKST

Railroad Fears More Cutbacks After Flint Hills Closure

ANCHORAGE -

A week after a North Pole refinery announced it will be closing its doors, the impact of the closure is being felt elsewhere in Alaska, especially at the Alaska Railroad.

The railroad said Wednesday that the impact of the Flint Hills refinery closing will be very significant, with millions in revenue lost. The railroad released its projections for next year after learning it would lose big business from its largest customer.

“I've said in the past that as Flint Hills goes, so goes the Alaska Railroad,” said Alaska Railroad President Bill O'Leary

O’Leary said the company expects to lose 50 percent of its business from the refinery, totaling $11 million in lost revenue.

“This latest news is more disturbing, in that the Anchorage to Fairbanks freight trains (are) the backbone. The petroleum haul is the backbone of that service,” he said.

The railroad says it cut close to 300 jobs over the past five years and made cuts to services after losing previous business. Now the transportation company is once again looking for ways to stay competitive. The Flint Hills closure could mean more layoffs at the railroad.

When asked whether or not the railroad will be looking to cut labor costs, O’Leary said that “labor is certainly a significant portion of the railroad's cost structure and at this point we're looking everywhere we can to see what we can do for cost reduction and revenue generation.”