Assembly urges buyback of shallow gas leases

At issue is state of Alaska-owned mineral rights on southern Kenai Peninsula

The Associated Press

Alaska Gov. Frank Murkowski and the Legislature should buy back shallow gas leases on the southern Kenai Peninsula and start the gas leasing process from square one, according to the Kenai Peninsula Borough Assembly.

By a 6-3 margin Dec. 16, the assembly approved a resolution urging the buyback, particularly of leases within the Homer Bridge Creek Watershed and other environmentally sensitive areas around Homer.

The measure passed over the objections of some assembly members and representatives of the borough administration who said urging a buyback would send a message to the oil and gas industry that the borough opposed development.

Assemblyman Gary Superman of Nikiski voted against the resolution and called for its reconsideration in January.

Assembly members Milli Martin, who lives outside Homer, and Chris Moss of Homer sponsored the measure. Both said the state’s public process has been flawed, the public was not given adequate notice of sale and many residents were not aware of their lack of say over subsurface mineral rights beneath their homes.

“People are asking that when something is proposed, that they at least be notified,” Martin said. “By and large, the public wasn’t aware of it.”

Many became aware of gas leases only after they’d been let in June. Given the inadequacy of the state’s process, a buyback was the right thing to do, she said.

Assembly members say it’s an issue of good government

“The issue isn’t whether we are sending a message to the oil companies that we are not going to develop the lower peninsula,” he said. “It’s more a message of what’s good government.”

Good government, he said, means good public participation.

“You may not agree with what comes out of it, but the main thing is that you have that opportunity to participate,” he said.

The shallow gas leases involve eight blocks totaling roughly 22,000 acres between Anchor Point and Homer on which the state owns subsurface mineral rights. Lapp Resources acquired the leases earlier this year and has sublet six to Unocal.

According to Diana Lewis, a natural resources specialist with the Alaska Division of Oil and Gas, Lapp paid a $500 lease application fee and $1 per acre for the right to explore for and tap gas in the state’s subsurface holdings.

Besides asking for a buyback, the resolution asked the Legislature to amend state law to eliminate the ability of the state to waive local land-use regulations without advance public notice and hearings and to require adoption of “clear and high standards” that must be met before local laws can be waived.

The resolution also asks that state law regarding where and how such shallow gas leases are advertised be amended to include requiring publication of notices in local newspapers, not just a paper “of general circulation.”

Among issues raised by residents upset at the prospect of shallow gas development through their surface holdings was that notices were published in the Anchorage Daily News, but not in the Homer News or Homer Tribune, two widely read local weeklies.

The assembly rejected extensive amendments supported by the administration and essentially written by Bill Popp, borough oil and gas liaison, that would have softened the resolution’s language.

The amendments would have urged the state to put a moratorium on gas development while addressing public concerns through “a thorough set of workshops and public hearings” leading eventually to gas development guidelines. A similar moratorium has been applied in the Matanuska Valley, where drilling in shallow gas leases already is under way. That action was a direct response to public protest.

The proposed amendments also included reserving the right for the assembly to return to the issue and advocate a buyback if the results of the public process were deemed unsatisfactory.

The amendments failed 5-4.