Katalla appeal denied by Forest Service

Kay Cashman, PNA publisher & managing editor

An appeal of the Forest Service’s decision to approve oil and gas drilling at Katalla has been denied, Forest Service officials told Petroleum News Alaska March 13.

Cascadia Wildlife Project, Eyak Preservation Council and Gabriel Scott had appealed a Dec. 12 decision by Chugach Forest Supervisor Dave Gibbons to approve the plan of operations submitted by the Cassandra Energy Corp. to conduct exploratory oil and gas drilling at Katalla, 56 miles southeast of Cordova and the site of Alaska’s first commercial oil production in 1902. On March 10 the regional forester appeal officers upheld Gibbons’ decision.

The Anchorage-based independent hopes to directionally drill two wells from private land (Oil Claim No. 1). One will be drilled to a bottomhole location on Oil Claim No. 1; the other will be drilled “3,000 feet due east” to a bottomhole location in the subsurface that is controlled by Chugach Alaska Corp., a regional Native corporation, Cassandra President Bill Stevens told PNA March 13. The surface location under the second well is part of the Chugach National Forest.

The delay created by the appeal has pushed drilling from summer to fall, Stevens said.

“We’re still waiting for actual issuance of a special use permit, which has to come from Forest Service. They have 15 days from their March 10 decision to issue it, although it is my understanding that it might be issued sooner.” (PNA was unable to reach Forest Service officials to confirm this.)

Stevens said the Katalla project has lost several potential investors because of the amount of time it took to get the necessary federal and state permits.

The next step, Stevens said, will be to finalize project financing.