HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS PETROLEUM NEWS BAKKEN MINING NEWS

Providing coverage of Alaska and northern Canada's oil and gas industry
September 2008

Vol. 13, No. 37 Week of September 14, 2008

Yukon Flats EIS delayed to fall of 2009

Appraisals for the patchwork of tracts earmarked for a possible land swap between Doyon and Fish and Wildlife are proving complex

Alan Bailey

Petroleum News

It emerged at the end of July that continuing work on land appraisals was likely to delay into the winter completion of the environmental impact statement for the proposed land swap between Doyon Ltd. and the U.S. Fish and Wildlife Service in the Yukon Flats Wildlife Refuge in Alaska’s interior. The EIS was originally slated for completion in the fall.

But now it seems that the estimated delay of just a few months in EIS completion was unduly optimistic — on Sept. 3 Fish and Wildlife announced that it does not now expect a record of decision in the EIS until the fall of 2009.

Fish and Wildlife blames the complexity of the land appraisals required for the EIS for the delay. This is one of the most complex land exchanges in the history of the refuge system, Larry Bell, assistant regional director for external affairs for the U.S. Fish and Wildlife Service, told Petroleum News Sept. 5.

Bell said that rather than periodically deferring the likely EIS completion date, Fish and Wildlife has now set what it believes to be a realistic schedule.

“We feel very confident we can have it done by the fall of ’09,” Bell said.

Lowland area

The Yukon Flats consists of an approximately 15,000-square-mile lowland area around the Yukon River between the trans-Alaska oil pipeline and the Canadian border. The 8.6 million-acre Yukon Flats Wildlife Refuge, administered by the U.S. Fish and Wildlife Service, lies within the lowlands. Doyon and some Native village corporations own a patchwork of surface and subsurface land amounting to about 2 million acres inside the refuge perimeter boundary.

A sedimentary basin with petroleum potential, the Yukon Flats basin, lies under the flats. And motivated by the potential for oil and gas development in the region, Doyon has been trying to engineer the land swap with Fish and Wildlife, to consolidate its land holdings in the deepest part of the basin.

Under the terms of an agreement in principle Doyon would acquire about 110,000 acres of refuge lands over the deepest part of the basin, and an additional 97,000 acres of adjacent subsurface land. The refuge would acquire a minimum of 150,000 acres of Doyon full-fee land. And Doyon would also re-allocate about 56,000 acres of remaining entitlement within the refuge to locations outside the refuge.

Also Doyon would pay Fish and Wildlife a portion of any oil and gas revenues from land obtained in the swap. Fish and Wildlife would subsequently have the right to use that money to purchase up to an additional 120,000 acres of Doyon land.

Equivalent value

Under federal regulations, Fish and Wildlife has to exchange refuge land of equivalent value to the Native land that the federal government obtains for the refuge. So, government land appraisals of all land that is potentially involved in the swap are critical in determining exactly what land would be exchanged — the federal government uses a prescribed formula to assign a dollar value to the land, based on factors such as the land’s wildlife and other resources.

The Department of the Interior’s Appraisal Services Directorate is responsible for the land appraisals. The directorate contracted out the appraisal work and is now reviewing the appraisal results, Bell said. Once the directorate is satisfied that the appraisals comply with the government rules the directorate will submit the appraisals to Fish and Wildlife.

Fish and Wildlife must then use the land valuations in combination with a plethora of other information that it has gathered to prepare a set of lands swap options, potentially including an option not to do the swap. Any options that do involve swapping land will have to ensure that the land is swapped on an equal value basis. Achieving “equal value” could be done through the appropriate selection of tracts to be swapped, or by using a combination of land selections and balancing amounts of money, Bell explained.

In the final EIS the regional director of Fish and Wildlife will decide on a preferred option. A record of decision will be published in the Federal Register and the U.S. Congress will then have 30 days to consider the decision.

Becomes a proposal

The decision will, in effect, become a proposal to Doyon for the exact terms of the land swap, Bell said. Doyon would have to decide on whether to agree to that proposal, he said.

The land swap has provoked considerable controversy. On the one hand, oil and gas development could provide an income for some Yukon Flats residents and dividends for Doyon’s Native shareholders. On the other hand, some Yukon Flats residents have expressed strong concerns about the potential impacts of oil and gas development on the subsistence culture in the region. Fish and Wildlife says that it has received more than 100,000 comments on the land swap proposal.

And some residents of the Yukon Flats have expressed concern that because of the escalating price of oil the land appraisals may result in the Native corporations relinquishing a larger area of surface land than they had originally anticipated. And the oil price situation also appeared to be a significant complicating factor in the land valuations themselves.

Bell said that the first 150,000 acres of Doyon land would be committed to the swap. But there are additional parcels of Doyon land identified in the land swap agreement that might be transferred, as needed, to meet the equal land value exchange requirements.

James Mery, Doyon’s senior vice president, lands and natural resources, told Petroleum News in July that although the price of oil might translate into an increase in the acreage of land that could be transferred to the refuge that did not imply an unlimited commitment of land that Doyon would transfer.

“We are not going into this at any price or cost,” Mery said.






Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.