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Bill to streamline permitting shallow gas permitting passes House
Kristen Nelson PNA Editor-in-Chief
The House has approved a bill which its sponsor, Rep. Vic Kohring, R-Wasilla, says will streamline the permitting process for drilling shallow coalbed methane wells. Kohring said Feb. 12, after the House voted 37 to zero to pass House Bill 69, that shallow gas wells should bypass drilling regulations that apply only to deeper oil wells. He estimated that approval time for shallow well applications will change from one or two years to 30 to 60 days with passage of the bill.
A legislative summary of HB 69 said it “ensures that the Alaska Oil and Gas Conservation Commission has the authority and discretion necessary to regulate shallow gas drilling while also providing for human safety and environmental protection.” The bill allows for approval of variances from the commission’s regulations by professional staff of the commission, the state agency which issues drilling permits.
Evergreen: permitting a challenge Mark Sexton, president and chief executive officer of Evergreen Resources Inc., parent company of Evergreen Resources (Alaska) Corp. which drilled its first shallow gas wells at the Pioneer unit in the Matanuska-Susitna Borough last year, told legislators Feb. 6 that permitting and leasing experiences have been “a challenge” for the company, which first bought shallow gas leases in Alaska in 2000 and acquired the Pioneer unit in 2001. Permitting takes 30 days in Colorado — where the company operates hundreds of shallow gas wells in the Raton Basin — but “considerably longer in Alaska,” he told the House Special Committee on Oil and Gas.
He said the problem in Alaska was not the regulators, but the regulations.
Sexton said it took six months longer than expected before the company could drill in Alaska. He said John Tanigawa, Evergreen’s Alaska project manager, prepared paperwork for the company’s eight Alaska wells that would have permitted 80 wells in Colorado.
Sexton said Evergreen is “willing to work within the rules,” but “we can’t get out job done” under the existing system. We can drill 10 to 20 wells a year, he said, “but 40-60-80-100 wells a year wouldn’t be possible. … We could never attempt to do that in Alaska under the existing regulatory environment.”
A hundred wells could be drilled Sexton told Petroleum News Alaska in 2001 that if the company gets good results from its initial wells it could drill in the neighborhood of 100 wells at Pioneer. If the Pioneer field proves up, it will have a 20 to 30 year production life and could likely employ as many as 500 people, including contractors, he told PNA in November.
HB 69 says that notwithstanding statutory requirements for “fixing a date for a hearing and causing notice of the hearing to be given, for an action under this chapter that involves the exploration for or development of shallow natural gas or coal bed methane and that has application to a single well or a single field, upon the request of a lessee or operator, a member of the professional staff of the commission designated by the commission may, where operations might be unduly delayed, approve a variance from the commission’s regulations that apply to the well or field…”
In response to question from Rep. Beth Kerttula, D-Juneau, about the public notice issue, Tanigawa said that the issues addressed are technical issues where the commission has authority to grant exceptions. Commission tracks permit times The commission tracks time to issue drilling permits and reports that to the Legislature. The accompanying graph was prepared for the Legislature as part of the commission’s overview. The average time to process permits has been 11 days and 17 days in the most recent quarters.
Drilling permits issued to Evergreen took an average of 10 days and sundry permits for well activities (operation shutdown and well stimulation) took an average of two days.
This compares favorably, the commission noted, with a recent average of 32 days for some 200 recent shallow gas drilling permits issued to Evergreen in Las Animas county in Colorado, where the company drills in the Raton Basin.
Evergreen also needed conservation orders from the commission for wells which were less than 1,500 feet from a property line and closer than 3,000 feet to wells drilled to the same pool, a requirement when the company has not applied for pool rules for a field. The company applied Sept. 7 and the commission ruled — after a public notice period which allowed for a hearing if one were requested — on Oct. 29.
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