Usibelli Coal Mine Inc. completed the HC No. 1 exploration well in September 2014.
The 1,265-foot well followed more than a decade of regulatory and legal wrangling over the coalbed methane program in the Middle Tanana basin, near the town of Healy.
Although the company has been engaged primarily in coal mining operations since Emil Usibelli and his partner T.E. Sanford began operating in the region in 1943, the company has recently been interested in using the nearby methane in coal seams to fuel operations.
In April 2004, the company requested an exploration license, which allows for exploration in areas excluded from the annual areawide lease sales. In an August 2005 preliminary best interest finding, the Department of Natural Resources determined that the potential benefits of exploration outweighed the possible adverse impacts.
The decision came as a different coalbed methane exploration program was abandoned in the Matanuska Valley over concerns about the potential for environmental harm. In 2006, the Denali Borough Assembly banned natural gas exploration over some 40 percent of the proposed exploration license area, an action the state considered to be illegal. The Denali Citizens Council asked the state to exclude all lands west of the Nenana River.
In June 2010, the Department of Natural Resources approved the program, under its original specifications - and even easing some of requirements for mitigating impacts.
The Denali Citizens Council appealed the ruling to the Alaska Superior Court, saying that the state failed to show why shrinking the proposed license area would render the project uneconomic and challenging the changes to the proposed mitigation measures. The court rejected the appeal in February 2014, which allowed Usibelli to proceed with exploration.
Four-well programIn July 2014, Usibelli permitted a four-well program along an abandoned airstrip seven miles east of Healy to explore shallow natural gas prospects in the region. The plan called for drilling one well toward the end of summer and returning the following summer to conduct additional testing of the initial well and drill as many as three delineation wells.
The company said it would conduct the program on lands mined in the 1950s and 1970s and would utilize existing roads to reach the proposed Healy Creek Site No. 1 pad. The 150-foot by 150-foot pad was built on a fill area previously used as an airstrip to support mining operations. The pad is smaller than most gas exploration pads because shallower coalbed methane exploration wells require smaller rigs, according to the company.
While Usibelli is primarily interested it reducing its internal energy costs, the company has said it would consider selling gas to other companies if it found large enough volumes. A major discovery would be a boon to the Interior, which currently relies heavily on diesel fuel and heating oil and has been the center of state-backed efforts to truck liquefied natural gas from the North Slope until a major pipeline is completed.