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Vol. 12, No. 34 Week of August 26, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Permitting for Mat-Su CBM in progress

Public hearing scheduled for borough permit for Fowler Oil and Gas coalbed methane prospect; drilling planned for the spring

Alan Bailey

Petroleum News

The old adage of the devil being in the details seems applicable to any oil and gas development project. And Fowler Oil and Gas (Alaska)’s proposal to drill for coalbed methane in farmland between Palmer and Wasilla in Alaska’s Matanuska-Susitna Borough is no exception to that rule.

The company has been identifying all of the issues relating to its planned well at the Kircher unit at the corner of Bogard Road and Trunk Road, Arlen Ehm, president of Fowler Oil and Gas (Alaska), told Petroleum News Aug. 22.

“I want to avoid future problems,” Ehm said.

The company is particularly anxious to communicate with Mat-Su Borough residents, to resolve any local concerns — a previous attempt to develop coalbed methane in the borough collapsed amid acrimonious arguments between the would-be developer, the local residents, the borough and the state about land access and potential pollution.

Borough permit

Following that previous debacle, the borough introduced regulations for coalbed methane development. Fowler Oil and Gas has applied for a conditional use permit under those regulations — the borough has scheduled a public hearing on Oct. 1 for the permit application, with a possible carry-over hearing on Oct. 15.

“We’ve met all the (regulatory) requirements of the borough but people are asking questions,” Ehm said.

The company is also moving ahead with permit applications with the Alaska Department of Environmental Conservation, the Alaska Department of Natural Resources and the U.S. Army Corps of Engineers. And as an essential prelude to some of the permitting the company is conducting a land survey at the proposed drilling site.

Given the permitting timeframe, it is unlikely that drilling could start before November. And, because the company does not wish to incur the complications of starting a new well in the middle of the winter, drilling will not now begin until the spring.

“I didn’t want to go out there and rig up, spud in the coldest and darkest months of the year,” Ehm said. “You pay at least 150 percent when you try to push something through in the middle of the winter.”

But the company does plan to move equipment into a barn at the site during the winter. That will avoid having to try to truck in heavy equipment during spring break-up, when road load limits are reduced, Ehm said.

Horizontal drilling

One key element in Fowler Oil and Gas’ approach to coalbed methane development is the use of horizontal drilling technology. The drilling contractor will drill a single vertical well to a depth of about 3,500 feet. Perforated horizontal wells sidetracked from that central well will then thread out through each coal seam penetrated by the vertical well.

The horizontal drilling technique will enable access to thousands of horizontal feet of coal seam from a single surface wellhead, thus eliminating the need for the profusion of surface wellheads that has blighted some coalbed methane developments, while enabling adequate production rates from a single well.

Patented technology will eliminate the water disposal problems that have often plagued coalbed methane production in the past, Bob Fowler, CEO of Fowler Oil and Gas, told Petroleum News in May. A downhole electric submersible pump will draw water drained from the coal into the bottom part of the vertical well, to dispose of the water into relatively deep sandstone formations, below the level of the coal. Thus, no produced water will reach the surface or enter the water table.

During drilling operations, Fowler Oil and Gas plans to use hospital mufflers to reduce noise from the drill rig, Ehm said. And once the well goes into production, the wellhead equipment will be hidden inside a small barn-like enclosure. Gas production will not require the use of compressors, so that there will be no compressor noise.

No state CBM regulations

One issue that Fowler Oil and Gas has encountered with its proposed drilling scheme is the lack of state regulations for coalbed methane development. For example, current regulations for natural gas wells assume the development of conventional gas, with one well in a 640-acre area, Ehm said. But a single coalbed methane well will only drain a radius of 300 feet, he said.

Another regulatory issue is an Alaska Oil and Gas Conservation Commission requirement to measure the amount of water that is injected underground. Making that type of measurement would require produced water to be brought to the surface, thus defeating the underground water disposal arrangement in the well and introducing risks of water spillage.

“We don’t want to bring it to the surface,” Ehm said. “We want to leave it down there.”

Ehm thinks that Alaska could adopt existing coalbed methane regulations from another state.

“We’re not the first ones to use these lateral wells,” Ehm said. “There are thousands of (coalbed methane) wells in the Lower 48 that use them.”

Private land

The Kircher unit is in homestead land where the landowner owns both the surface and subsurface rights.

“We’re drilling only on acreage owned by the people that own the surface,” Ehm said.

But the mix of rural, urban, farming and forest land in the neighborhood of the drilling site does present some challenges in permitting the well, planning the project and gaining local support.

For example, Ehm is anxious to allay possible fears about any impact on local water wells from the Fowler Oil and Gas operations. The project will not require particularly large amounts of water and any water use has to be permitted by the Alaska Department of Natural Resource — DNR protects people’s water rights, Ehm said.

“They tell us how much water we can take,” he said.

And among the pesky details that the company needs to resolve are permitting of any modifications to the driveway into the drill-site property, and ensuring that the plans for road access and the power supply can accommodate a pending re-alignment of Trunk Road.

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