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State drops plans for road to Umiat Study of proposal began with roads to resources under former Gov. Murkowski; EIS work dropped in October by Parnell administration Kristen Nelson Petroleum News
Plans for a road from the Dalton Highway to the Umiat oil field were terminated by the administration of former Gov. Sean Parnell.
The U.S. Army Corps of Engineers said in a Jan. 5 Federal Register notice that it has ended work on an environmental impact statement for the project. The Corps had published notice of intent to prepare an EIS for the project in May 2011.
The Corps said that in the summer of 2013 the Alaska Department of Transportation and Public Facilities decided to re-evaluate plans for future EIS work on the project and in response to that decision the Corps suspended work and closed the EIS project. The Corps confirmed in October with DOT&PF had the state no future plans to proceed with the project and the Corps terminated work on the EIS, although it said withdrawal of the permit application by DOT&PF and termination of the EIS process does not prevent the state from reapplying at a later time.
The road project has yielded criticism from local groups worried about the impact of the road on rural life and from those who categorized the project as “corporate welfare.”
Linc working Umiat Linc Energy Ltd. acquired a controlling interest in the Umiat oil field in June 2011. The U.S. Navy discovered the field in 1946, but the field is far from infrastructure and has never been developed. Producing oil from Umiat would likely require a 100-mile road and a pipeline to take oil to a connection with the trans-Alaska oil pipeline.
Plans for development of roads in remote parts of the state began under the administration of former Gov. Frank Murkowski, a program called roads to resources.
While Linc would like the state to build the road, the company has said it believes the field would be economic without it.
Linc had planned a five-well exploration program for 2012, but ultimately postponed the program because of “logistical and weather issues” including “low snow levels which affected snow road development.”
Weather complicated plans for 2013 and Linc was unable to start the Umiat No. 18 well until March 2013.
In 2014, after analyzing Umiat No. 18 samples, Linc cancelled a flow test at the well and in 2014 drilled a horizontal well, the Umiat No. 23H - a flow test from that well produced a sustained rate of 250 barrels of oil per day.
Linc said last year that while Umiat development is a ways off, initial development could include as many as 70 wells.
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