About 50 miles from Barrow, Caelus Energy Alaska said the company’s Smith Bay site could produce “200,000 barrels per day of light, highly mobile oil.” If their claim is true, it could be one of the biggest oil discoveries Alaska has ever seen and could help sustain the oil industry, which has had a bleak outlook for years.

Screen Shot 2016-10-04 at 10.19.00 AM

The release does not say if a third-party firm has analyzed the site, but said the discovery came after two wells were drilled earlier this year and 126 square miles of 3-D seismic exploration.

“Caelus estimates the oil in place under the current leasehold to be 6 billion barrels. Furthermore, the Smith Bay fan complex may contain upwards of 10 billion barrels of oil in place when the adjoining acreage is included. Due to the favorable fluids contained in the reservoir, Caelus expects to achieve recovery factors in the range of 30-40%,” the release stated.

The Alaska Oil and Gas Association (AOGA) called the discovery a “potential game changer.”

“Caelus’ announcement that it is sitting on six billion barrels of oil on State of Alaska leases is huge, exciting news for an industry and state eager to receive it. The Smith Bay project has the potential to solve a lot of problems: Alaska needs the revenue such a huge field would provide; Alaskans need the hundreds of jobs required to develop a large-scale project; the economy needs the hundreds of millions of dollars that will be spent to pursue this development; and the Trans Alaska pipeline needs the increased throughput. Everybody wins under this scenario,”AOGA president and CEO Kara Moriarty said in a statement.

But getting the oil out of Smith Bay and through the Trans-Alaska pipeline, about 125 miles away, isn’t an easy task. Between building a connecting pipeline, road and processing plants, Jim Musselman, CEO of Caelus, estimates it will take $8-10 billion to bring the project online by the end of 2022.

The company is looking for taxpayer support to do it.

“We’re hopeful that the people of Alaska will realize that this is going to be terribly important for them to help us with this,” Musselman said in an interview Tuesday. “And you know, tax credits, I think they get a bad knock but we wouldn’t have drilled Smith Bay without this. Frankly, if there are no tax credits or if the program that’s been suggested is put in place, Smith Bay probably doesn’t get developed.”

In turn, Caelus calculates the project could bring as many as 2,000 jobs during its construction.

“The industry has suffered in this low price environment,” Moriarty said. “We’ve lost about 3,000 jobs over the last 18 to 24 months, so if we could get a project like this sanctioned and moving forward, that would really be a shot in the arm for Alaskans.”

Gov. Bill Walker praised the discovery Tuesday, but others in state government are less optimistic.

“I’ve been on the Senate Resources Committee for eight years and I’ve had a lot of companies come before us and tell us they’ve made big finds and told us they were going to have huge amounts of oil in the next couple years and we’re still waiting for a lot of that to happen,” said Sen. Bill Wielechowski.

With the state facing a multi-billion dollar budget shortfall, Walker and many legislators, including Wielechowski, want to change the current oil tax structure to ensure Alaska reaps a larger share of profits.

“We need to make sure that we’re getting the maximum benefit of the resource as the constitution requires us,” Wielechowski said.

Getting a project of this size online could take some delicate discussion between a small company like Caelus and Alaska’s top leaders. In a statement Tuesday, Walker said “My administration will continue to work with the industry to identify new development opportunities in Alaska’s oil and gas sector, and provide appropriate investment incentives given our current fiscal climate.”

However, Walker’s office did not respond to KTVA’s request for more information about the incentives to which Walker referred.

KTVA 11’s Liz Raines and Megan Edge contributed to this report.