Assembly holds CBM ordinance decision

MAT-SU -- The Mat-Su Borough Assembly agreed Thursday to do more work on the proposed ordinance addressing coal-bed methane production in the borough.

More than 60 borough residents testified, most in favor of the ordinance. Many commended the assembly for their willingness to take action, citing beliefs that the state had failed in its duty to residents.

"In a state where property rights are held to be sacred, we currently have virtually none when it comes to these leases," Willow resident James Carter said. "We've been poorly served by our state legislators and state officials."

About 10 at the meeting testified against the ordinance, as did Evergreen representative Corri Feige and Alaska Oil and Gas Association executive director Marilyn Crockett. Feige asked assembly members to wait until the state standards regarding CBM development in Mat-Su were done, and asked the assembly to rethink the proposed ordinance.

"In our view, if this ordinance passes in its current form," Feige said, "it's tantamount to a ban on coal-bed methane development."

Others opposing the ordinance encouraged the borough to think of the potential income opportunities.

"If you don't have development, taxes go up, and people with property have to sell," said Terry Olson. "If we don't have a tax reduction because of development, then we're going to have to develop more land so people can live."

Those in favor of the ordinance suggested allowing CBM development may devastate the borough's tourism- and recreation-reliant economy.

"I fly for K2 Aviation … and I tell tourists that's urban sprawl down there along the Parks Highway," said Montana Creek resident Rick Horstmann, referring to development near Denali National Park. "I don't know what I'm going to tell them if I have to fly them over CBM fields -- that's sure not what they came to Alaska for, and it's not why I came here."

After public testimony wound to a close, assembly members discussed the proposed ordinance and agreed to air their thoughts on what was proposed before making changes to the document. Through the process, several assembly members said they would prefer to see an ordinance that did not appear to prohibit CBM development wholesale, but allowed development in more remote, less-densely developed areas.

"One of the problems is, from my point of view, this ordinance is about preventing CBM development in the borough, and it doesn't have to be," said Assembly Member Talis Colberg. "To say the only way you can develop is to apply for a variance is a foul way to do business … I think it would be better served having staff draw it up differently rather than say it must be this ordinance or fail … it doesn't have to be this particular document and it doesn't have to be tonight."

"This is the caution I emphasized from the very beginning on this," Assembly Member Bruce Bush said. "Reasonable minds should be allowed to sit down and have a reasonable discussion. If you start rushing through something, you always make mistakes -- I'm not for not regulating the industry, but I would like to see the state's regulations."

Assembly Member Betty Vehrs suggested maybe the assembly's hard work in drafting the ordinance wouldn't be worth it in the long run. Curious about the economic benefits CBM development could bring, Vehrs said, she asked former Sen. Scott Ogan how local communities could benefit from development through taxes or royalties. Using a calculation method Ogan provided, Vehrs said, she added up how much it appeared the borough could benefit from 676 wells. The amount, she said, was less than half a mill, or about $1.6 million. The borough's areawide mill rate is 11.8, and Vehrs said the benefits of CBM development could bring that to about 11.3 mills.

"It's not adding up, to me," Vehrs said. "I want economic development, but not at the expense of our quality of life."

Assembly Member Bill Allen said he, too, would have to rethink his interest in the industry, and asked Borough Manager John Duffy to begin work on a cost-benefit analysis of the impacts and potential benefits of CBM development.

Assembly members agreed unanimously to postpone the ordinance to a 6 p.m. special meeting on Oct. 14, and vowed to work on amendment to the ordinance that would make development in remote areas possible while restricting development in urban areas and neighborhoods.

"I think, for one of the first times, I really appreciated everyone's input and think you're thinking in the right direction -- and I applaud you," said Annette Harpster, a borough resident who often attends assembly meetings.

Feige said while Evergreen wasn't in favor of the original borough ordinance, she believed there may be hope in the direction the assembly appeared to be headed.

"Anything that tends to make it more balanced and more workable," Feige said, Evergreen would be amenable to.

Contact Rindi White at rindi.white@frontiersman.com.