The Alaska and federal transportation departments have inked a deal allowing the state to assume permitting responsibility on federally funded projects, which should speed environmental reviews and save government money, according to the agencies’ leaders.

The memorandum of understanding, or MOU, will shift environmental assessment and environmental impact statement drafting from U.S. DOT sub-agencies to the state Department of Transportation and remove duplicative federal processes and “interagency squabbling,” DOT Secretary Elaine Chao said during a Thursday afternoon press conference in Anchorage.

Alaska Transportation Commissioner Marc Luiken said the agreement will hopefully save money on large projects by spending less on studies — leaving more for construction.

“We see the opportunity to accelerate project delivery,” Luiken said at the briefing.

The State of Alaska will still follow the National Environmental Policy Act processes with oversight from its federal counterparts, but will issue its own decisions at the end of the reviews.

“Every federal regulation, every federal law still has to be abided by, but we’re just the lead agency,” Luiken added.

The standard 90-10 federal-state split on funding for large highway and airport projects still applies regardless of who is leading the studies, so the state will not be adding cost burdens, he clarified.

Sen. Dan Sullivan, long an ardent critic of the layered federal regulatory process for construction projects, said it should provide more jobs for Alaskans by allowing more important infrastructure projects to move forward.

“It’s a new era of state and federal cooperation,” Sullivan said.

The MOU will be published in the Federal Register Friday and likely take effect in late October after a public comment period.

Chao stressed the agreement as a way to add jobs to a state in a recession.

“Infrastructure feeds economic development,” she said.

Cooper Landing bypass

The trio used the long-studied and proposed Sterling Highway bypass around the narrow, windy section of highway through Cooper Landing as a prime example of what can happen when multiple federal agencies are left to work on a major road project.

However, they also announced the U.S. Fish and Wildlife Service, an Interior Department agency, has agreed to consider a swap with Cook Inlet Region Inc. of Kenai National Wildlife Refuge acreage for some of the Alaska Native corporation’s property that could facilitate the bypass route many Alaska leaders want.

A spokesman for CIRI could not immediately be reached for comment on the proposal.

The first draft EIS for rerouting the Sterling Highway around Cooper Landing was completed in 1982 but did not lead to construction. A second draft was published in 1994 before again stalling, according to the Alaska DOT’s website on the project.

Publication of a final EIS this year left the state at odds with the Federal Highway Administration, which chose a route different than that preferred by many on the Kenai Peninsula, Gov. Bill Walker’s administration and the congressional delegation.

The $250 million “G South” alternative selected by FHWA would add a third bridge over the Kenai River in the area and therefore not mitigate risks to the river from accidents such as tanker spills that the more northerly $205 million Juneau Creek option would, they contend.

The Juneau Creek route would also use less of the existing highway corridor.

In July, Walker, Sen. Lisa Murkowski, Sullivan and Rep. Don Young sent a letter to Chao and the Secretaries of Interior and Agriculture urging them to have their agencies rethink the alternatives.

Walker commended Chao for agreeing to relook at the Cooper Landing bypass options in a statement from his office.

“It is critical to the safety and health of both Alaskan motorists and our world-class salmon fisheries that this complicated project move forward,” Walker said. “The current road alignment does not meet current highway standards, is congested, and due to its proximity to the river has an increased risk of spills that would harm salmon in the Kenai and Russian rivers. I thank Secretary Chao for allowing all options for this project to be considered.”

The Interior and Agriculture departments had allegedly been hesitant to sign off on the Juneau Creek option, as it would send the highway through additional Chugach National Forest and Kenai National Wildlife Refuge lands.

Reach Elwood Brehmer at elwood.brehmer@alaskajournal.com.