Alaska Division of Oil and Gas Director Kevin Banks said 13 people asked the state to reconsider its June 28 decision to grant a license to Usibelli Coal Mine. The agency determined on Wednesday that seven of those requests had concerns that should be addressed.
Upon review, DNR Commissioner Tom Irwin will have the opportunity to either reject the license, accept it again or modify its terms.
Banks said there’s an open-ended timeline for Irwin to make a decision, but he doesn’t expect the issue to linger. The preliminary finding for the proposed exploration license was issued in 2005, but other priorities at DNR have stalled the process for years.
“I think the parties involved would prefer we get moving,” Banks said. “It’s been an embarrassingly long time as it is.”
Some of the issues raised included requests for larger setbacks next to creeks and watersheds, while others wanted an expanded comment period or greater rights for residential subdivisions.
The Denali Citizens Council, a Healy-based environmental organization, asked that areas already designated by the state for public recreation and wildlife habitat in the Stampede townships be set aside. If that recommendation were accepted, about one-sixth of the licensing area would be restricted, said DCC President Nancy Bale.
“This would be bringing some pretty industrial development to the west side of the (Nenana) River,” Bale said. “It’s a pretty significant departure for Usibelli.”
The current license area includes a combination of public and private land surrounding the Parks Highway between miles 248-300 — roughly between Healy and Rex — in which the state owns the mineral rights. According to a DNR report, the area has “high potential” for the discovery of methane or other shallow gas, along with a lower possibility of deeper conventional gas reserves.
If gas is discovered in the area, Usibelli will have to go through a permitting process before it can extract it.
Steve Denton, Usibelli’s vice president for business development, said exploration in the area has become a back-burner issue in recent years. Instead, Usibelli Energy has been involved in a partnership with Doyon Ltd. and other companies to search for gas beneath 500,000 acres of Alaska Mental Health Trust Land in the Nenana Basin.
“We need to take it off the shelf now and take a fresh look at it,” Denton said.
Coal-bed methane exploration has been a touchy issue among Alaskans in the past.
Shallow gas extraction became contentious in the Mat-Su Valley in 2003, when a Colorado company was awarded leases in the area. The licenses allowed exploration on private land, since the state typically still owns mineral rights beneath those areas. Some residents felt that conflicted with their property rights.
The public outcry led to a recall petition against Sen. Scott Ogan, who was working as a paid consultant for Evergreen Resources. The company abandoned its plans for Mat-Su exploration in 2004, and Ogan resigned from the Legislature, citing health issues.
Denton said Usibelli is aware there could be similar concerns about property rights in the Healy area. The Denali Borough assembly passed an ordinance in 2008 mandating setbacks for industrial gas-development equipment from residential property lines.
“I think it’s the same concerns, basically, and the same kind of constituency — people who want to buy 5 acres, but want to control 5,000,” he said.
Denton said the populated areas west of the Nenana River are where property rights controversies are most likely to emerge. He said the areas on the east side of the Nenana, where most coal mining is underway, is considered more amenable to finding pockets of gas.
Bale said the DCC isn’t opposed to development for gas, a relatively clean energy source, and said Usibelli has been good for the area. She thinks a ruling is possible that will leave all parties relatively satisfied.
“I think a decision can be made that can work for everyone,” she said. “I’m optimistic.”
Contact staff writer Jeff Richardson at 459-7518.
Their technique is to run up the price of oil relative to the gas to cause people to convert.
You all need to remember the state owns the oil, gas, coal etc. They expect to sell the gas for a profit. Probably, 10 or more times it's cost to fund state government.
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bjnal
The Borough government hasn't even completed the most basic of planning requirements as written in the Borough Charter! The comprehensive plan is to be reviewed every two years. It's been done once, in over twenty years. there still is no real viable and enforcable regulations to guide development of sub divisions. They are running into problems with land classification and definition of the same.
Perhaps if we actually had a planning philosophy in place, we would have some strength in what we say in protest! But, we just don't get it! If the people of this Borough, want absolutely nothing to change, it has to be reflected in the planning efforts! Why is it so hard to understand that we need to plan for what we want or we are destined to accept what we get?
Quite frankly, I wish DCC was our Borough government. At least they work at accomplishments in a real sense. No one else can get off dead center! Are the major aquifers of importance now and for the future? You bet! Are they identified and mapped? Lets see, that would be a big NO!
I could put 60 homes on my place, according to the Borough's regulations now in place. Sixty homes, 60 wells, 60 septic systems, etc. If I ever did something that stupid, I should just take the money and run. But run to where? I like this land just like it is but it can't stay like this without some concerted effort by the residents, to insure that it retains such a wonderful quality of life. Those that fear planning, should look up the definition and understand it! If you leave doors open or unlocked, some one will always waltz right in! If it isn't in writing, it does not exist! It's as simple as that!
Tanana Basin Area Plan
The 1991 Tanana Basin Area Plan identifies the following management intent for state land along the Stampede Trail, Management Unit 4E:
General. State land in this unit is to be retained in public ownership for multiple use management. The emphasis is on managing recreation and maintaining fish and wildlife habitat. All state land in this unit is open to mineral entry.
Fish and Wildlife. Fish and wildlife habitat is designated a primary use in subunit 4E1 (area west of Panguingue Creek subdivision). The western half of this subunit is extremely high value habitat as a calving and winter range for the McKinley caribou herd. The remaining area is prime-rated habitat for caribou, moose, grizzly bear, and furbearers. Other important activities are big game hunting, trapping, and wildlife viewing.
Minerals. The area between Dry Creek and the Teklanika River has potential for coal bearing formations. Proximity to Denali National Park may inhibit mineral development; however, mineral entry, coal prospecting, and leasing will be allowed.
Recreation. Recreation is designated a primary use in this unit. Important recreation sites include Eight Mile Lake and Stampede Road Historic Trail. Activities include backpacking, camping, and hunting.
He boxes them and dismisses them as the sort "who want to buy 5ac and control 5,000ac". But what the people in the area are asking is to have some modicum of control over the use of the lands they own and use, that the quality and values that they paid for [when they purchased from the State] not be degraded, and the quality of their homes and lives not be reduced, so that Usibelli can possibly gain a monetary profit. That's a lot of extra value that will get sucked out of these people's lives and homes along with the gas, for the sake of Usibelli's [and Denton's] private gain.
But Denton, and Usibelli, appear to have no qualms about taking all that from these people's homes and recreational lands, even though they do not own, and will not be even leasing, any of that along with the mineral resource. I believe that many people besides those who reside in the immediate area enjoy the public lands on the west side of the Nenana River for recreation, hunting, etc.
Oldowl is correct; this type of gas extraction *has been shown* to suck the water table down drastically, emptying private wells, disallowing gardens, drying the land. And he's correct about the fire risk also, and that risk just increases as the water table sinks.
The **people** of this State own ALL the [mineral] resource. It does not belong to the State 'government'; it is merely our representative, supposedly managing the resources solely for our benefit. Surely we should be able to, at the very least, control what goes on under our feet, under our homes, under our private property? Water is the most basic of natural resources, and one of the most essential ones.
This type of development is totally wrong for the Denali Borough which has fires every year in this exploration area. The fire last August near Rex was blamed on fire in a coal seam. They were afraid this spring that one burning near Usibelli would get into the coal beds. These fires are nearly impossible to extinguish. When coal seams are dewatered, ambient air is drawn into the coal bed which supplies oxygen necessary for spontaneous combustion and can cause an underground fire in the coal seam. Also this is a dry area where residents drill deeply and expensively for their water wells. The average well for cbm pumps more than 17,000 gallons of water per day to release the methane - that is 6.2 million gallons per year per well. (meic.org). Residents have valid concerns about this type of development. In Montana water tables have dropped as much as 200 feet. Denton's comment is rather arrogant in my opinion because development near one's property can affect a wide area of land. Usibelli just opened their second mine in the area and want to control as much of the area as they can.
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Mushroom: are you aware that at atmospheric conditions, methane is a gas? How can you "release into water" a gas? Methane is a non-toxic gas. Swamps release lots of methane. So do cows. Even humans release methane.
Denton is an idiot for that statement. It's more like Usibelli wants to own none of the land but control resource extraction from all of it. Locals just want them to stay on the other side of the river...the side designated for mining and that type of development. The side that they themselves stated at public meetings had by far the most potential for Coal Bed Methane development. The Tanana Basin Area Plan states a different use for the Wolf Townships, recreation and habitat. The true value of that land is recreation for locals, hunting, and tourism. Anyone with an ounce of brain power can see what CBM has done to places in Wyoming and other states. A conflict with local use and residential property? That's a big YES.