Mat-Su coalbed methane plan advances

A state commission has taken steps that advance a private company’s plan for drilling coalbed methane in the Matanuska-Susitna Borough but the project faces other regulatory hurdles.

The Alaska Oil and Gas Conservation Commission in late February approved all but one request by Fowler Oil and Gas Corp. for waivers from certain state regulations.

The denial centered on the size of a pipe used to funnel potentially dangerous gas or muddy cuttings away from a well as it’s drilled. Arlen Ehm, a petroleum geologist who wrote the waiver request for Fowler, said the denial could be solved by using a bigger pipe. Ehm, the former Fowler president, resigned Feb. 1, saying he had not been paid.

The commission approved waivers from state regulations governing blowout protection, well spacing and hydrogen sulfide detection equipment.

Company chief executive Bob Fowler did not return a call for comment.

Still at issue is the company’s financial stability. Commissioner Dan Seamount said it’s unclear whether the commission may consider that in permitting decisions.

“We’re checking into that right now,” Seamount said.

“We’re just trying to tighten up a lot of the uncertainties we have,” Seamount said. “Just off the top of my head, I’d say there’s probably other agencies that can worry about that.”

If a company abandons a well, the state requires a $100,000 bond to cover the cost of capping the well and restoring the area to the landowner’s satisfaction, Seamount said.

Fowler wants to drill a well in a privately owned hay field but cannot do so until the commission approves a permit. Before a permit is issued, Fowler must provide a $100,000 bond and the company has not done so, Commissioner Cathy Foerster said.

In its order Feb. 25, the commission said none of Fowler’s waiver requests jeopardize water and that state regulations protect underground aquifers that supply drinking water. The order also called current regulations “an effective means for dealing with the coalbed methane operations.”

Bob Fowler last year said he hoped to start drilling this spring.

His company still needs permits from other state agencies, including the Department of Environmental Conservation and Division of Mining, Land and Water, Ehm testified in January. Fowler also will need a permit to inject water from his well back into the ground.

—The Associated Press