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Borough moves to help pipeline

Public land to be onshore route for Cook Inlet Oil project

Posted: December 5, 2013 - 9:50pm  |  Updated: December 6, 2013 - 9:37am
Photo by Greg Skinner/Peninsula Clarion Kenai Peninsula Borough Land between Cook Inlet and the Kenai Spur Highway, selected by the Cook Inlet Oil Corp. for an oil pipeline route originating on the west side of the inlet and ending in the Nikiski Industrial Area. The assembly reclassified the former gravel set aside for public use as "utility" land in preparation to lease the property to the oil company.
Photo by Greg Skinner/Peninsula Clarion Kenai Peninsula Borough Land between Cook Inlet and the Kenai Spur Highway, selected by the Cook Inlet Oil Corp. for an oil pipeline route originating on the west side of the inlet and ending in the Nikiski Industrial Area. The assembly reclassified the former gravel set aside for public use as "utility" land in preparation to lease the property to the oil company.

The Kenai Peninsula Borough Assembly on Tuesday approved a resolution to reclassify 4.7 acres north of Kenai to make the land usable in a Cook Inlet Energy pipeline project.

As part of the consent agenda, during the regular meeting, the assembly passed the resolution reclassifying the acreage located at the corner of the Kenai Spur Highway and Katlins Way to “utility/transportation” land. The move opens the bluff-top land for lease as a pipeline corridor to deliver crude oil to the Nikiski Industrial Area from the Cook Inlet Energy’s Kustatan Production facility on the west side of Cook Inlet.

The company seeks to build the pipeline as a cost savings measure over the current practice of barging oil across to Nikiski for refining, according to documents filed with the state.

The proposed lease with Cook Inlet Energy was introduced as Ordinance 2013-35 during the assembly’s Policy and Procedures Committee work session earlier in the day and officially during the regular meeting. The lease ordinance is up for public hearing during the Jan. 7 regular assembly meeting.

The resolution and ordinance were sponsored by Borough Mayor Mike Navarre.

The borough land was not Cook Inlet Energy’s first choice in a location to bring the pipeline ashore. Original plans on file with the state showed Cook inlet Energy’s preferred location for the pipeline’s transition onshore to pass through state-owned tidelands just north of the Arctic Slope Regional Corporation’s Dock at Rig Tenders Road in Nikiski. Revised pipeline plans, filled with the Alaska Department of Natural Resources in October, list the borough-owned land as the chosen site.

A call to Cook Inlet Energy asking if the revised location at the borough-owned site is the company’s only remaining onshore option, was referred to Chief Executive Office David Hall. Hall did not calls for comment.

Construction is set to begin next spring.

“It’s not a foregone conclusion,” Navarre said of the lease being approved by the assembly in January.

Barring any unforeseen information, which shows the pipeline passing through borough land to be a bad idea, the lease approval is likely. Navarre said the pipeline makes good sense in that it eliminates barge and tanker traffic and the risks associated with those methods of oil delivery.

A borough staff report describes the land as an abandoned former gravel pit on a steep bluff, which erodes at a rate of 2.2 feet a year. The site sits above the beach, which is used “intensively” for commercial, recreational and personal uses, such as beach combing, camping and boat launching. The surrounding bluff-top land is largely undeveloped residential and the beach below is home to Shore Fishery Leases.

The lease value to the borough is estimated to be $5,000 a year.

Borough lands manager Marcus Mueller and said that public notice of the proposal given within a half-mile radius drew no comment fro the public.

According to a document from the borough lands office Cook Inlet Energy proposed the reclassification and lease.

The state is in the process of issuing permits for the same project, Mueller said.

Cook Inlet Energy wants to build the bluff portion of the pipeline as part of the Trans-Foreland Pipeline Project and move ashore from a 26-mile underwater 8-inch pipe that will deliver crude oil from the west side of the inlet then down the Kenai Spur Highway to the Nikiski Industrial area for refinement.

Responding to a question by Assembly President Hal Smalley, Mueller said for a period of time the land was talked about as potential public access to the beach below — which the state patented as perpetual public access. However, Mueller said his assessment was that “direct beach access was not feasible.” It is too steep for direct road access. The elevation difference between the highway and the beach is about 80 feet spread over the 600-foot distance the slope would end up at 13.5 percent, he said.

Regardless of the borough assessment on access impossibility, the land holds at least two trails accessing the upper portion above the beach. One on the north boundary of the property holds a graded trail used by snowmachines and foot traffic. Another on the south boundary is slightly steeper and well used.

The proposed lease with Cook Inlet Energy does not contemplate public use, Mueller said.

The old gravel pit has set like that for a long time and no one has applied for a permit to do anything with it, Navarre said.

Before agreeing to put the resolution on the evening’s consent agenda, District 6 assembly member Sue McClure said the project was contingent on Ordinance 2013-35 passing in January

Reach Greg Skinner at greg.skinner@peninsulaclarion.com

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