02/10/2004 01:31 PM Senate TRA
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                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                       February 10, 2004                                                                                        
                           1:31 p.m.                                                                                            
TAPE(S)04-02                                                                                                                  
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator John Cowdery, Co-Chair                                                                                                  
Senator Thomas Wagoner, Co-Chair                                                                                                
Senator Gene Therriault                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Georgianna Lincoln                                                                                                      
Senator Donny Olson                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
^OVERVIEW - NUIQSUT ICE ROAD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 304                                                                                                              
"An Act naming the Jack Coghill Bridge to the Interior."                                                                        
                                                                                                                                
     MOVED HB 304 OUT OF COMMITTEE                                                                                              
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 304                                                                                                                  
SHORT TITLE: JACK COGHILL BRIDGE TO THE INTERIOR                                                                                
SPONSOR(s): REPRESENTATIVE(s) COGHILL                                                                                           
                                                                                                                                
05/07/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/07/03       (H)       TRA, STA                                                                                               
05/12/03       (H)       TRA AT 5:30 PM CAPITOL 102                                                                             
05/12/03       (H)       Moved Out of Committee                                                                                 
05/12/03       (H)       MINUTE(TRA)                                                                                            
05/13/03       (H)       TRA RPT 5DP                                                                                            
05/13/03       (H)       DP: FATE, OGG, KOHRING, MASEK, HOLM                                                                    
01/13/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
01/13/04       (H)       Moved Out of Committee                                                                                 
01/13/04       (H)       MINUTE(STA)                                                                                            
01/16/04       (H)       STA RPT 7DP                                                                                            
01/16/04       (H)       DP: GRUENBERG, SEATON, HOLM,                                                                           
01/16/04       (H)       LYNN, COGHILL, BERKOWITZ, WEYHRAUCH                                                                    
01/20/04       (H)       TRANSMITTED TO (S)                                                                                     
01/20/04       (H)       VERSION: HB 304                                                                                        
01/21/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/04       (S)       TRA, STA                                                                                               
02/10/04       (S)       TRA AT 1:30 PM BUTROVICH 205                                                                           
                                                                                                                              
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Ken Donajkowski, Manager,                                                                                                   
Health, Safety and Environmental                                                                                                
ConocoPhillips Alaska                                                                                                           
Anchorage AK                                                                                                                    
POSITION STATEMENT: Nuiqsut Ice Road overview.                                                                                
                                                                                                                                
Ms. Ruth Germany-Bice                                                                                                           
BP Alaska                                                                                                                       
Anchorage AK                                                                                                                    
POSITION STATEMENT: Nuiqsut Ice Road overview.                                                                                
                                                                                                                                
Mr. Jerry McDonald, General Manager                                                                                             
Carlisle Transportation                                                                                                         
No address provided                                                                                                             
POSITION STATEMENT: Nuiqsut Ice Road overview.                                                                                
                                                                                                                                
Mr. Richard Schmitz                                                                                                             
Staff to Senator Cowdery                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on HB 304 for the sponsor.                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-2, SIDE A                                                                                                             
                                                                                                                                
CO-CHAIR   THOMAS  WAGONER   called  the   Senate  Transportation                                                             
Standing Committee meeting  to order at 1:31 p.m.  and handed the                                                               
gavel  to Co-Chair  Cowdery. Present  were Co-Chairs  Wagoner and                                                               
Cowdery. Senator Therriault arrived at  2:00 p.m. The first order                                                               
of  business to  come  before  the committee  was  a power  point                                                               
presentation by  John MacKinnon, Deputy  Commissioner, Department                                                               
of Transportation and Public Facilities (DOTPF).                                                                                
                                                                                                                                
DEPUTY  COMMISSIONER  MACKINNON,  DOTPF, introduced  one  of  his                                                               
senior  planners, Mike  MacKinnon,  who would  deliver the  power                                                               
point  presentation  that documents  a  year  of history  on  the                                                               
Colville River  Road project.  The purpose of  the project  is to                                                               
increase domestic oil supply, improve  the state economy, improve                                                               
the North Slope Borough's climate  for business opportunities and                                                               
decrease Nuiqsut's  fuel costs and  provide access to  the Dalton                                                               
Highway.                                                                                                                        
                                                                                                                                
CO-CHAIR COWDERY  asked if the  southern route was  more feasible                                                               
because of its proximity to the gas field.                                                                                      
                                                                                                                                
DEPUTY COMMISSIONER  MACKINNON replied that it  was decided after                                                               
months of  study that  this route  was the  least environmentally                                                               
sensitive and follows  good material sources on  a regular basis.                                                               
It avoids many  of the subsistence areas critical  to the Nuiqsut                                                               
residents.                                                                                                                      
                                                                                                                                
CO-CHAIR COWDERY asked how wide the corridor would be.                                                                          
                                                                                                                                
DEPUTY  COMMISSIONER  MACKINNON replied  that  it  would be  wide                                                               
enough to accommodate a pipeline, about 200 ft.                                                                                 
                                                                                                                                
CO-CHAIR  COWDERY asked  what the  total cost  of the  project is                                                               
estimated to be.                                                                                                                
                                                                                                                                
DEPUTY COMMISSIONER  MACKINNON estimated  the cost  to be  in the                                                               
$150 million to $200 million range, depending on the design.                                                                    
                                                                                                                                
CO-CHAIR WAGONER asked where the money would come from.                                                                         
                                                                                                                                
DEPUTY COMMISSIONER MACKINNON replied  that he doesn't anticipate                                                               
using federal highway funds at  this point. However, this project                                                               
lends itself very  well to private financing of  some sort. State                                                               
bonds could  be used for a  finance-design-build-operate contract                                                               
with a consortium  that would pay for the project  with tolls. He                                                               
related  that one  major oil  company spends  about $5.5  million                                                               
every year to  build a 20-mile ice road to  Nuiqsut for about 100                                                               
- 120 days  of use. An all-year road would  be worth considerably                                                               
more.                                                                                                                           
                                                                                                                                
MR. KEN  DONAJKOWSKI, Health,  Safety and  Environmental Manager,                                                               
ConocoPhillips  Alaska, said  that ConocoPhillips  doesn't oppose                                                               
the  road,  but had  requested  a  road  to access  the  National                                                               
Petroleum Reserve Alaska  (NPRA). However, ConocoPhillips doesn't                                                               
require it in  connection with its exploration  efforts there. He                                                               
emphasized  three  key  matters  that must  be  addressed  as  an                                                               
integral component of the project first:                                                                                        
                                                                                                                                
     The first  one is that  increased security risk  is our                                                                    
     first concern  and is a  direct consequence  of parties                                                                    
     other than  the current  oil field operators  and their                                                                    
     contractors  being the  attendant beneficiaries  of the                                                                    
     Colville River Road.  So, by virtue of  this road being                                                                    
     an extension of existing  infrastructure rather than an                                                                    
     independent  route  means  that  parties  not  directly                                                                    
     under  the  auspices  of a  current  operator,  BP  and                                                                    
     ConocoPhillips, will  be driving  on roads  with direct                                                                    
     access to the existing oil field facilities.                                                                               
                                                                                                                                
CO-CHAIR COWDERY asked who would be doing that.                                                                                 
                                                                                                                                
MR. DONAJKOWSKI replied all other  explorers and other users that                                                               
haven't been determined yet.                                                                                                    
                                                                                                                                
CO-CHAIR  COWDERY asked  if  ConocoPhillips  intended to  provide                                                               
funding for the road.                                                                                                           
                                                                                                                                
MR.  DONAJKOWSKI  replied  no  and said  he  understood  that  BP                                                               
wouldn't  either.   He  added   that  additional   potential  for                                                               
terrorist attacks  needed to be  thoroughly assessed on  the road                                                               
extension and  appropriate mitigation  should be included  in the                                                               
scope  of  the project.  The  safety  of  those who  would  drive                                                               
through the  oil fields  is as important  as the  security issue.                                                               
Employees  and  contractors  who  are  associated  with  existing                                                               
fields have direct  access to information on  road conditions and                                                               
hazards  through radio  communication,  safety training,  vehicle                                                               
polices, etc.  that are  provided by  the operators.  Even access                                                               
that  is restricted  to  industrial route  use  will pose  unique                                                               
challenges    to    maintaining    vehicle    safety.    Existing                                                               
infrastructure would  have to  be upgraded  and must  be factored                                                               
into the overall project cost.                                                                                                  
                                                                                                                                
Finally,  he  said  that  any  related  capital  and  incremental                                                               
maintenance costs must  not be borne by the  owners and operators                                                               
of  the existing  field and  that some  cost recovery  mechanism,                                                               
such as a user fee, must be established.                                                                                        
                                                                                                                                
MR. DONAJKOWSKI emphasized  that the Colville River  Road and the                                                               
connecting  oil  field  infrastructure   must  be  restricted  to                                                               
industrial use with the exception of use by residents.                                                                          
                                                                                                                                
CO-CHAIR WAGONER  asked Ruth Germany-Bice  what BP  thought about                                                               
construction of this project.                                                                                                   
                                                                                                                                
MS.  GERMANY-BICE,  BP  spokeswoman,  replied  that  BP  did  not                                                               
request  the  road nor  does  it  plan  on participating  in  the                                                               
consortium for  construction of the  road. BP would  probably not                                                               
use  the road  because it  isn't  doing any  exploration in  that                                                               
area.                                                                                                                           
                                                                                                                                
CO-CHAIR WAGONER asked who other  than ConocoPhillips is or plans                                                               
to do work in the NPRA. There was no answer.                                                                                    
                                                                                                                                
MR.  JERRY MACDONALD,  General Manager,  Carlisle Transportation,                                                               
said he  had been operating  on the road  to Nuiqsut for  quite a                                                               
few years and supported having  the road extension built. He felt                                                               
that it  would reduce environmental  impacts and  increase safety                                                               
for the  users. Now, village  residents drive wherever  they want                                                               
to get  to the oil field  infrastructure, either up the  river or                                                               
across  the tundra.  People  have  had to  get  rescued half  way                                                               
there. He said  that use of the  road 90 to 100 days  per year is                                                               
pretty optimistic. Last year it was open only 30 days or so.                                                                    
                                                                                                                                
CO-CHAIR WAGONER asked how deep the river is in that area.                                                                      
                                                                                                                                
MR. MACDONALD replied about 20 ft.                                                                                              
                                                                                                                                
CO-CHAIR WAGONER asked how much the bridge is estimated to cost.                                                                
                                                                                                                                
DEPUTY COMMISSIONER MACKINNON answered $100 million.                                                                            
                                                                                                                                
CO-CHAIR WAGONER  said he thought  that a ferry could  operate on                                                               
the river.                                                                                                                      
                                                                                                                                
DEPUTY  COMMISSIONER   MACKINNON  replied   that  the   Corps  of                                                               
Engineers Environmental  Impact Statement  (EIS) would look  at a                                                               
ferry as one of the alternatives to the project.                                                                                
                                                                                                                                
DEPUTY  COMMISSIONER MACKINNON  replied that  is not  a practical                                                               
alternative  because of  the short  open water  season, but  more                                                               
investigation would be done on that consideration.                                                                              
                                                                                                                                
SENATOR THERRIALUT joined the committee at 2:00 p.m.                                                                            
                                                                                                                                
CO-CHAIR WAGONER thanked everyone  for their testimony and closed                                                               
the hearing.                                                                                                                    
                                                                                                                                
           HB 304-JACK COGHILL BRIDGE TO THE INTERIOR                                                                       
                                                                                                                                
CO-CHAIR WAGONER announced HB 304 to be up for consideration.                                                                   
                                                                                                                                
MR. RICHARD SCHMITZ, staff to  Senator Cowdery, said he was asked                                                               
by the  Senator to present  this bill for  Representative Coghill                                                               
who was out of town. He referred  the committee to a map where he                                                               
pointed out the  Jack Coghill Bridge's location. Right  now it is                                                               
called Bridge 316.                                                                                                              
                                                                                                                                
CO-CHAIR COWDERY moved to pass HB 304 from committee with                                                                       
individual recommendations and zero fiscal note. There were no                                                                  
objections and it was so ordered.                                                                                               
                                                                                                                                
There being no further business to come before the committee,                                                                   
CO-CHAIR WAGONER adjourned the meeting at 2:05 p.m.                                                                             
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