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May 2004

Vol. 9, No. 21 Week of May 23, 2004

Montana senator issues ultimatum

Baucus opposes plans for coalbed methane, coal mining in southeastern British Columbia

Gary Park

Petroleum News Calgary Correspondent

United States Senator Max Baucus has tossed some spikes on British Columbia’s road to coalbed methane riches.

The senator from Montana is trying to draft U.S. Secretary of State Colin Powell for a campaign to protect the wilderness area of Montana’s Flathead Valley, 16 years after he successfully led a crusade to stop coal mining in British Columbia’s portion of the valley.

In a recent letter, Baucus told Powell that plans to offer coalbed methane leases and open a coal mine within two years in southeastern British Columbia could endanger Glacier National Park, the Flathead River system and the “clean, clear waters of Flathead Lake (that) serve as the backbone of the economy of northwestern Montana.”

He said that if the British Columbia government pushes ahead with its plans, “They are asking for a fight.”

Baucus reminded Powell that in 1988 the International Joint Commission, a U.S.-Canada advisory body that oversees cross-border water issues, rejected a proposed coal mine in the British Columbia Flathead Valley because of the downstream pollution that the project would cause.

He asked whether an application by Cline Mining for a coal mine would fall under the same ruling.

Plans for coalbed methane leasing a concern

As well, Baucus said he was concerned about the British Columbia government’s intentions to offer leases for coalbed methane projects that can produce large volumes of saline water.

The city council of Fernie, in southeastern British Columbia, welcomed the U.S. interest because the community’s concerns have been ignored by the provincial government.

The council recently asked the province to delay any action on coalbed methane tenures until there had been a full assessment of the environmental, economic and social consequences.

Bill Bennett, a government member of the British Columbia legislature, said he is convinced coalbed methane can be extracted without harming the environment.

Meanwhile, Derek Doyle, chairman of the British Columbia Oil and Gas Commission, told a Canadian Institute gas symposium in Vancouver May 12 that the province is moving in a “careful, cautious” way towards coalbed methane development.

He said that not only is there no coalbed methane production in the province “we don’t have any development that’s in a feasibility stage.”

Commission would issue approvals for experimental work

While the commission is ready to issue approvals for experimental work, he said any companies that have their eyes on commercial projects will have to provide the regulator with a “detailed analysis of the operation.”

Doyle rejected a plea by Mark Simpson, coalbed methane manager for Nexen, for British Columbia to follow Alberta’s lead and conduct public meetings across the province to develop coalbed methane regulations.

He said British Columbia is already organized to hold open houses and meet with groups, individuals and landowners on specific coalbed methane projects and has extended its regulations to include coalbed methane and related water disposal.

Doyle said that under new legislation, water extracted during coalbed methane production must be injected into water that is already more polluted, or safely disposed of at the surface.

The commission’s objective is to ensure that industry is responsible for healing and restoring the land.

Of the companies pursuing coalbed methane interests in British Columbia, Petrobank Energy and Resources plans on taking the first step towards commercial production by drilling a well this July near Princeton, in southwestern British Columbia, on a 12,000-acre basin that it believes could have a recoverable resource of 161 billion cubic feet.

Trident Exploration has identified potential coalbed methane development on two properties covering 32,000 acres in northeastern British Columbia.






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