Susitna access road and bridge a boondoggle, critics say. Actually, they open access to new natural gas prospects

The Susitna Access Project, a road to open up lands in the western parts of the Matanuska Susitna Borough, has been derided by critics as a boondoggle.

However, it turns out that part of the project, an 18-mile road to the Susitna River and a bridge across the river, seen as a first phase of the project, is pretty important.

It has initially been described as providing access for recreation, and that’s true. But Hilcorp Energy, the major natural gas producer in Southcentral Alaska, said the road could be vital in moving heavy equipment like drill rigs to reach gas exploration sites on the west side of Cook Inlet.

Luke Saugier, Hilcorp’s Alaska senior vice president, told state legislators in a briefing in Juneau that the company is currently impeded in efforts to reach promising onshore natural gas prospects on the inlet’s west side.

Winter ice impedes barge movements to the area and without a year-around road to get to the area, and particularly across the Susitna River, access is extremely limited and costly. The proposed road and bridge would solve a good part of the problem. “It would be very helpful to us. There are potential gas finds in the area,” Saugier told the House and Senate Resources committees in a joint hearing on Cook Inlet gas.

Federal highway authorities recently raised questions about the 18-mile road and bridge when the state included it in its four-year Surface Transportation Improvement Plan, or STIP. The plan guides federal funds made available for new highway and bridge projects, as well as other infrastructure.

The questions have now been resolved, said Shannon McCarthy, spokesperson for the state Department of Transportation and Public Facilities, or DOTPF. A revised plan for questioned projects in the STIP including that for the Susitna River access is being submitted to federal highways officials, she said.

Issues raised over the Susitna road and bridge dealt mainly with which federal program would be the source of funds in documents prepared for the projects, McCarthy said. The merits of the projects were not questioned.

Critics have focused on the lack of public benefits for the $83 million cost of the project and its use federal infrastructure funds for the road and bridge. But given an urgent need to find new sources of natural gas for Southcentral communities, that public benefit would seem to be established.

Homes and businesses in yhe Matanuska Borough and Anchorage, where half the state’s population resides, depend on gas for the heating of buildings as well as most of the region’s power generation.

But gas from the existing Cook Inlet Basin fields will start declining in 2027 and will be in serious decline by 2030, according to the state Division of Oil and Gas, which monitors oil and gas fields.

While there is undeveloped gas in the Inlet it be expensive to develop without state subsidies. Imported liquefied natural gas, or LNG, is being considered as a supply “bridge” by utilities the region, but it will not be available until about 2030 and will cost twice what gas produced in the Inlet costs, according to Enstar Natural Gas Co., the regional gas utility.

There are prospects for new gas finds including on the Inlet’s west side, but access is a problem. The new 18-mile road and bridge could help, Saugier said.

The 18-mile road and bridge are the first part of a much larger West Susitna Access Project, however, and there is vigorous debate and uncertainty over sections to be built west from the bridge. The ultimate plan is for an approximate 110-mile industrial road to the Skwentna area and further west to where mining companies are exploring gold discoveries.

While the state transportation department will manage the construction of the initial 18-mile road and bridge the longer extension to the west would be developed by the Alaska Industrial Development and Export Authority, the state’s economic development finance corporation.

While AIDEA is engaged in conceptual studies of how this project could be built no financing for construction can be done until mining companies find enough ore to build one or more mines. The companies would then sign agreements with AIDEA that would allow the road to be financed.

No state money would be used for construction. The mining companies would pay for it though tariffs, or user fees, for ore shipped over the road.