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Alaska village fights gas exploration Sleetmute files opposition papers in Anchorage Superior Court; appeal holds up DNR license for Holitna Energy Co. Wesley Loy For Petroleum News
An Interior Alaska village is challenging a proposed natural gas exploration license for the Holitna basin.
A lawyer for the Native Village of Sleetmute, a community of 72 people on the Kuskokwim River about 10 miles northwest of the 26,791-acre license area, on Feb. 10 filed papers in Superior Court in Anchorage opposing the license.
Sleetmute argues the Alaska Department of Natural Resources failed to give adequate notice and opportunity for public comment prior to its Dec. 9 decision to award the license to Holitna Energy Co., based in Eagle River.
Sleetmute also argues that DNR, in reversing its 2006 denial of the license, “failed to take a hard look at the salient issues raised when Holitna Energy Company substantially changed the scope of the proposed license as part of its request for reconsideration to include only natural gas exploration instead of coal bed methane exploration.”
Sleetmute’s Anchorage lawyer, John Starkey, added: “DNR had no legally sufficient information or substantial evidence to reverse its previous finding that the license lacked public support.”
Wildlife, pollution concerns Residents of Sleetmute and neighboring villages have raised myriad concerns about proposed exploration activity in the license area, where no drilling has occurred thus far.
The villagers believe exploration could disturb moose and caribou important to residents as food, and could foul fresh water supplies.
In approaching DNR again for the lic\\ense, Holitna Energy made a major change to its plans, relinquishing its rights to coalbed methane.
DNR Commissioner Tom Irwin agreed with the company that forgoing coalbed methane “significantly reduces the scope of the license application and avoids many potential environmental effects in the license area,” DNR’s Dec. 9 license decision said.
The commissioner and state Oil and Gas Director Kevin Banks held that issuing an exploration license to Holitna Energy for natural gas only “is in the state’s best interest.”
But DNR can’t issue the license until Sleetmute’s appeal runs its course, Banks told Petroleum News on March 23.
Gas potential, markets DNR uses exploration licensing as a way to supplement the state’s conventional oil and gas leasing program.
Licensing spares companies the upfront cost of bidding in a lease sale, and encourages exploration in areas far removed from Alaska’s main petroleum provinces, the North Slope and Cook Inlet.
One recent study indicated “a poor potential for commercial quantities of oil in the Holitna Basin and poor to fair potential for commercial quantities of gas,” DNR’s Dec. 9 license finding said.
“In the absence of well and seismic subsurface data, the basin stratigraphy is poorly understood and largely extrapolated from surrounding surface outcrops and other Tertiary basins in central Alaska,” the finding said.
A gas discovery potentially could serve local users. Holitna gas also has been mentioned as a potential fuel source for the proposed Donlin Creek gold mine northwest of Sleetmute. That project would require an average electricity load of 127 megawatts, or roughly the demand of the city of Fairbanks.
Donlin’s energy mix at this point includes on-site diesel generators plus a wind farm, and any reliance on undiscovered Holitna gas is purely “speculative,” Donlin Creek spokeswoman Mary Sattler told Petroleum News.
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