Parnell proposes road to foothills petroleum deposit

Gov. wants $8M for permitting, prep work on new 90-mile road

Posted: Sunday, December 13, 2009

ANCHORAGE - 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.

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