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THE EXPLORERS 2005: Usibelli wants to look for coalbed methane
Alan Bailey Petroleum News
Usibelli Coal Mine Inc. has operated a successful coal mining business in the Healy area of Alaska for many decades. But the company wouldn’t be averse to finding some coalbed methane in the same general area as the coal mine, Steve Denton, Usibelli’s vice president for business development, told Petroleum News. That’s why in April 2004 the company applied for a state exploration license covering a 208,630-acre area that straddles the Parks Highway on the east side of the Denali National Park. The company had earlier bought about 15 leases in the same area, under the state’s now-defunct shallow gas leasing program.
“I think that we could potentially make a very small project make sense here,” Denton said. “For instance if there was a small quantity of gas that was just enough to supply say our own heat and electricity needs.”
However, a more substantial gas find might supply other markets.
“If there’s more gas to be found, certainly we would entertain any other markets that it might fit into,” Denton said.
Usibelli’s exploration license application proposes a work commitment of $500,000 over a period of 10 years.
The Healy basin The proposed license area includes Tertiary and Quaternary non-marine rocks of the Healy basin, an offshoot of the Nenana basin to the north. The existence of substantial coal seams associated with Usibelli’s Healy coal mine in the southern part of the area points to the likely presence of dry natural gas in the subsurface. But relatively little is known about the subsurface geology and Usibelli doesn’t know whether the area contains commercial quantities of gas.
“We don’t have any seismic at this point in time,” Denton said. “Really what we have is … some coal exploration that’s done for the purpose of taking cores for coal mining activity. And we have seen some minor gas shows in some of the areas where we’re getting down deeper than we’d typically mine.”
Preliminary finding On Aug. 31, 2005, Alaska’s Division of Oil and Gas issued its preliminary best interest finding for the proposed exploration license. The director of the division concluded that the potential benefits of the proposed license outweigh the possible adverse impacts, and that “the exploration license will best serve the interests of the State of Alaska.”
The public review period for the preliminary finding ends on Oct. 31, after which date the division will prepare a final best interest finding. The division expects a final decision on the license proposal in November 2005.
The preliminary best interest finding specifies numerous mitigation measures to minimize impacts of gas exploration and development on the flora and fauna, as well as minimizing impacts on local residential, recreational and commercial activities.
Public perceptions Denton recognizes the public perception that “coalbed methane exploration is this real dastardly sort of endeavor.” But Denton thinks that coalbed methane’s poor reputation emanates from techniques used a couple of decades ago. Modern techniques can eliminate the horrible scenarios that resulted from early coalbed methane development, he said.
“I think it’s like any other new industry it takes a little bit of a learning curve for people to figure out how to manage the industry in a manner that minimizes impacts,” he said. “I think that the industry’s much further along than it was two decades ago.”
And a large part of the proposed license area lies well outside any populated regions in an area already impacted by coal mining, he said.
But details of how gas exploration in the Healy area will progress won’t emerge until after an exploration license has been issued.
“It’s pretty much the infant stage of this thing,” Denton said.
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