ANCHORAGE, Alaska - Gov. Sean Parnell will ask legislators for $8 million
for preliminary work that could lead to construction of a 90-mile road to oil
and gas reserves in the northern foothills of the Brooks Range.
Parnell
wants the money for permitting and environmental work for a road that could
reach Umiat along the Colville River, where a reservoir holds 250 million
barrels of prized light, sweet oil and the potential for more. A road also would
provide year-round access to the Gubik natural gas complex east of the
river.
Estimated construction costs are $360 million.
Underwriting
the cost of a road for the petroleum industry will lead to jobs and speed up
production from the region, Parnell said.
"Transportation costs limit
access and impede development," Parnell said. "We're going to change that and
get more private-sector jobs in the process."
Pamela Miller, Arctic
program director for the Northern Alaska Environmental Center in Fairbanks, said
Friday people would want to weigh in on the best route for such a road. She also
questioned whether the road investment and annual maintenance would make it
cost-effective.
"You need all these pieces to understand the benefits of
throwing scarce transportation dollars for a road to serve the oil companies,"
she said. "I'm just looking for facts right now."
Preliminary figures put
the cost at $225 million for 75 miles of road to the Gubik complex. It would
take 15 more miles of road and a bridge across the Colville River - $90 million
for the bridge and $45 million for the additional road - to reach Umiat on the
east side of the National Petroleum Reserve-Alaska.
Umiat is 175 miles
southeast of Barrow and 330 miles northwest of Fairbanks. The new road would
stretch west from the Dalton Highway, the mostly gravel "haul road" that lets
trucks reach Prudhoe Bay from the interior Alaska road system.
Alaskans
have been aware of petroleum at Umiat since before statehood when pools of oil
were spotted seeping to the surface. Oil and gas reserves were confirmed
starting in 1946, said Joe Balash, an energy aide to Parnell.
Parnell
said the road, which crosses mostly state land, eventually could be expanded to
the National Petroleum Reserve-Alaska, which holds an estimated 12 billion
barrels of oil and 73 trillion cubic feet of natural gas.
Development at
Umiat or Gubik would required a pipeline to reach the trans-Alaska
pipeline.
Officials from Renaissance Alaska LLC, owner of several Umiat
leases, told Petroleum News in September that a key issue in moving ahead with
its holdings was the price of crude and what other companies in the area were
doing. Shared baseline environmental studies and a shared right of way could
reduce project costs. Company officials also expressed hope for the state road,
which could share a pipeline corridor.
Former Gov. Sarah Palin made the
same road money request last year. Palin quit in July, and Parnell replaced her.
He is seeking a four-year term in the 2010 election.
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