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Bill to expand coal lease acreage moving Measure would double allowed acreage, in line with federal change Kristen Nelson Petroleum News Editor-in-Chief
A bill doubling the acreage companies can hold in coal leases or permits is moving in the Alaska Legislature.
House Bill 283, which expands maximum coal lease acreage from 46,080 acres per company to 92,160 acres, moved out of House Resources May 5. The bill, sponsored by Hugh ‘Bud’ Fate, R-Fairbanks, chair of House Resources, has a zero fiscal note and goes now to House Rules.
“This legislation is vital to our company if we plan to expand operations outside of the Interior of Alaska,” Charlie Boddy, vice president governmental relations for Usibelli Coal Mine, told the committee. Usibelli Coal proposed a new 200 megawatt coal-fired power generation facility only after securing additional leases in the Healy area, he said, but “that leasehold acquisition brought our leased state acreage holdings to 37,952 acres.”
Boddy said Usibelli Coal Mine believes Alaska has “great potential for export, both domestically and internationally” and that the change in lease acreage “will afford ourselves and others the opportunity to pursue those options.”
Zero fiscal note The Department of Natural Resources supplied a zero fiscal note for the bill. The department said it supports the bill, noting: “The change in allowable acreage is consistent with a recent change in federal law that increased the aggregate acreage of federal coal leases held by one company.”
In response to a question from Carl Gatto, R-Wasilla, on the significance of the amount of acreage, Boddy said the bill changes the lease limit from two full townships to four full townships. Boddy said Alaska is “probably one of the few states that has any limitation on state leaseholds.” The caveat to that, he said, is that most state probably couldn’t put together 46,000 acres of leasable coal. Most of the coal Usibelli would compete against in the western United States, he said, is on Department of the Interior land, where the allowable acreage was increased in 2001.
Boddy said both Usibelli and Bob Stiles with the DRven Corp. which has property at Beluga across from Anchorage could ship from tidewater to West Coast markets.
The bill, he said, would give Usibelli “the opportunity to advance coal that would probably be closer to tidewater that our Healy operations, to be able to look at penetrating some of those markets.”
After 17 years of shipping coal to South Korea Usibelli could no longer compete in that market, he said: “We simply could not meet the market conditions by shipping coal from the Interior of Alaska.”
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