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Time short for Alaska’s shallow gas bills
Larry Persily Petroleum News government affairs editor
The Alaska Legislature is moving closer to changing the state’s shallow gas leasing program from non-competitive, over-the-counter sales to competitive leases with best-interest findings, but lawmakers are running out of time.
The Legislature faces a constitutional adjournment deadline of May 11, with two shallow gas, or coalbed methane, reform bills ready for votes by the full House. But if the reform effort is to succeed this session the bills will need to pass the House and then the Senate, all in the little more than one week left before adjournment.
The House Finance Committee — the last public hearing before a bill moves to the floor for a vote by the full chamber — approved the two shallow gas leasing measures April 28.
House Bill 531 would end the non-competitive, shallow gas leasing program and replace it with the state’s existing exploration licensing program that requires competitive bids and best-interest findings to ensure an overall review of drilling and production effects on lease areas and residents. The bill is a permanent solution to the controversy surrounding over-the-counter shallow gas leasing, said the bill’s prime sponsor, Rep. Beverly Masek, R-Willow, whose district includes many of the leases.
But it doesn’t go far enough to solve the problem with leases already issued, said a critic of shallow gas leasing: “If we were a hungry man and wanted a steak, this bill is more like a breakfast sausage,” Myrl Thompson, a resident of the area, said in his testimony on House Bill 531 before the Finance Committee April 28. Bill would protect rural mining interests House Finance also amended the bill to allow applicants to convert their shallow gas lease applications to the state’s exploration licensing program without going through a competitive bid process. The conversion would apply only to shallow gas applications filed by this summer. The intent is to protect mining interests in rural areas that look to shallow gas as an option for power generation at the mine site.
The other bill, House Bill 395, would take steps to protect water quality and surface property owners’ rights in areas of existing leases. It also would repeal a law adopted last year that allows the state Natural Resources commissioner to override municipal land-use rules affecting shallow gas development.
House Finance members amended the measure to specifically state that several of the bill’s requirements would apply to leases already in place, including water well testing, setbacks from property lines for compressor stations, noise and bonding to protect surface property owners.
Opponents of the shallow gas leasing program had pushed for legislation to buy back the almost 300,000 acres under lease, but most lawmakers showed little interest in a buyback and instead worked to improve provisions for future leasing and to add some protections for existing lease areas.
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