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State, borough, will work on Alaska coalbed guidelines Government project team, public process will be used to evaluate what is needed Kristen Nelson Petroleum News Editor-in-Chief
Coalbed methane development is new to Alaska, and the state is taking steps to provide surety to both residents and to Evergreen Resources, which is testing coals north of Anchorage for development, that authority is in place to ensure the development is “done right.”
Those were the words Alaska Department of Natural Resources Commissioner Tom Irwin used in a statement issued following a public meeting in Wasilla Oct. 13. There has been considerable concern in the Matanuska-Susitna Borough area north of Anchorage because of the large amount of acreage either leased or in the lease application stage for shallow gas drilling.
Pat Galvin of the department’s Division of Oil and Gas, who will head up an agency team to look at existing authority and appropriate guidelines for coalbed methane development, told Petroleum News Oct. 14 that the state wants to make sure that before developments go forward, “that we have looked at what needs to be in place in order to make sure that it’s done right.”
Galvin was one of a group of state officials who recently toured Lower 48 coalbed methane operations.
They found two patterns, he said: one where development was done without good oversight and more recent development where both regulators and the industry have done a better job.
In some of the early coalbed methane developments, he said, a large number of companies came in and developed areas “where the state and local authorities hadn’t really come to grips with how this development should move forward.” That was what the officials saw in the Powder River basin in Wyoming, he said.
Evergreen Resources’ operations in the Raton basin in Colorado, he said, are a later generation of development.
“They’re the operations that we did see that we really were impressed by. Evergreen operates — that we saw — out of Trinidad, Colorado, in the Raton basin, and those operations, to us, were very impressive.”
The “later generation of coalbed methane” was done in a “very responsible way,” Galvin said, and was “sensitive to the local population in minimizing its impact.”
That is what the state wants to see in Alaska, he said.
But as companies come into the state to develop coalbed methane, “we can’t just rely on the companies’ good practices. We need to have some standards in place to ensure that these companies are going to do things in a way that is appropriate.”
And on the other side of the coin, Evergreen — and other companies which come to Alaska to do coalbed methane development — need to know what the guidelines will be.
Evergreen needs to know what the regulatory framework will be as it makes “decisions on whether to move forward with a full-scale development … They need to have some certainty as well,” Galvin said.
The state wants to take advantage of this period before there are any full-scale development proposals to put controls in place, so that both residents and companies have that surety, he said. Project team Galvin will head up a project team of state agencies and the Matanuska-Susitna Borough. The project team will “write specific guidelines to be followed by DNR when exercising its discretionary authority over coalbed methane development on state leases,” Commissioner Irwin said in the department’s Oct. 13 statement. The team will include representatives from Natural Resources, the Department of Environmental Conservation, the Alaska Oil and Gas Conservation Commission and the Matanuska-Susitna Borough.
The team will also report to Irwin on whether or not existing state and local laws and regulations governing coalbed methane development are adequate. That authority is spread out among the agencies, Galvin said, and the project team will look at both existing authority and what additional authority might be needed.
The goal right now is to develop guidelines to be used in permitting, “to frame the issues” and guide how decisions are made under existing authority, but part of the guidelines development process will be to determine “whether or not regulations or other authorities are needed in order to properly control coalbed methane development.”
Irwin said the department expects to hold a series of public workshops in November and December. Before public workshops are held, Galvin said, the project team will prepare draft guidelines, “as a starting point for discussions, (to) let people have something to respond to.” The public workshops will be held to take recommendations, and then the guidelines in draft form will go out for public review. Coring, pilots will move ahead The department is putting a hold on approving shallow gas leasing applications — at Healy and in the Holitna basin as well as in the Mat-Su — until the guidelines process is complete.
Jim Hansen, leasing manager at the Division of Oil and Gas, told Petroleum News Oct. 15 that the division still has a lot of administrative work to do on the applications, and will wait until the guidelines are complete. That way, he said, guidelines developed for the Mat-Su can be used as a template in other parts of the state.
Irwin said that two coalbed methane activities will be allowed to move forward while the department works on its guidelines.
One is the geologic testing that Evergreen has planned for this winter, including drilling core holes to take geologic samples.
The other is two additional pilot projects — up to four wells each — that Evergreen has proposed.
The pilots, Irwin said, are nearly through the permitting process. The department is waiting for confirmation that surface use agreements have been signed by the surface owner, “and will only allow these pilot projects to proceed with signed surface owner agreements.”
Irwin characterized these activities as “necessary for Evergreen and the state to obtain valuable data to evaluate the future of coalbed methane” in the Matanuska-Susitna area.
“There is no substitute for good data — environmental, social, geologic and economic,” Irwin said.
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