Coal-bed methane proposal tests Borough regs

July 20, 2007

By Russell Stigall/Frontiersman

MAT-SU - New drilling technology could allow a local oil and gas company to produce industrial quantities of methane from coal seams under the Mat-Su Valley while meeting the strict guidelines of the Mat-Su Borough coal-bed methane ordinance.

&#8220The entire Cook Inlet area is full of coal,” said Jim Fowler of Fowler Oil and Gas. &#8220There's much more coal here than in the Powder River Basin in Wyoming, with much higher gas content. Methane could be a tremendous boost to the local economy.”

Coal-bed methane became a contentious issue in the Valley when Evergreen Resources was awarded CBM leases in the Mat-Su area in 2003. Public outcry against Evergreen's project led to a 2004 Mat-Su Borough ordinance that regulates coal-bed methane extraction.

Fowler said his company is often incorrectly compared to Evergreen.

&#8220Our technology is very different,” he said.

Frankie Barker, environmental planner for the Mat-Su Borough, said Fowler Oil and Gas submitted an application to the Borough in the spring. Due to the complexity of the project, the Borough asked Fowler to deliver additional information and hired a third-party environmental firm to review Fowler's application.

The Mat-Su Borough has a coal bed methane ordinance unique among boroughs, Barker said. &#8220I believe ours is more specific in the terms of our requirements.”

Those regulations protect against some of the damaging consequences of traditional coal-bed methane extraction. In the Borough, the water used to mine the methane cannot be released on the surface to potentially join ground or other water supplies. Also, the traditional method of fracturing layers of coal underground is not allowed. When fractured, the layers can collapse and cause giant sinkholes and contaminate nearby drinking water. The noisy, high-pressure pumps used to fracture the coal seams are also not allowed.

The Borough has followed its regular conditional use permit process with Fowler's application, Barker said, adding Fowler's application is the first test of the Borough's regulations.

The process so far has been smooth thanks to Fowler, who has been forthcoming in providing additional information and clarity, Barker said.

Under his proposal, Fowler's first pilot project will take place on 840 acres of forest and farmland owned by the Kercher family at corner of Bogard and Trunk roads. Unlike traditional CBM extraction, Fowler's process does not fracture the coal seam and includes pumping water back down below the coal bed. He also proposes to use a lower pressure pump.

The Borough has sent public notices to the more than 1,000 landowners and residents who live in a 1-mile radius of the Kercher property. The 45-day review process will end Aug. 8, and Fowler's application will be before the Mat-Su Borough Planning Commission Aug. 20.

Fowler's paperwork won't be over then, however.

&#8220It is quite a process,” Barker said. &#8220He needs to get agreements from the land owners” about royalties and land reclamation. &#8220In the case of this project, the land owners are not requesting any reclamation.”

Though Fowler has produced documents that pass the Borough's regulatory test, approval of the application is not guaranteed.

&#8220There are a lot of people who are legitimately concerned,” Barker said. &#8220This is a new technology that has not been tested out in the Valley.”

To make sure Fowler meets in real life the standards set in his documentation, the Borough will stay involved in the gas producer's project, as it does with other conditional use permits. Fowler also must meet coal bed methane standards of the U.S. Department of Natural Resources.

&#8220We expect a very large quantity, commercial quantities of gas,” Fowler said about the pilot well at Bogard and Trunk roads. &#8220That is what we see coming out of the first one.”

Fowler's drill is made up of different pieces of drilling technology, he said.

&#8220No one has put together all the pieces that meet the requirements of the Mat-Su Valley,” he said. &#8220We're not asking the Borough for any variances. We have to put together a drilling program that meets all the permitting requirements.”

One concern with Evergreen's failed plan was the company's plan to use hydraulic fracturing, or fracing, to get at more methane in the coal seams.

Fowler Oil and Gas' procedure does not fracture, Fowler said.

&#8220Anyone in their right mind will not fracture the coal anymore,” he said. &#8220It is just too environmentally damaging.”

Fowler Oil and Gas can avoid fracing due to the difference between horizontal drilling and vertical drilling, he said. The drainage area around a vertical pipe has a radius of about 150 feet, while multi-layer horizontal drilling can access 640 acres with one well.

&#8220That is a square mile,” Fowler said.

The well is housed in a 10-foot by 10-foot barn-like shed. A horizontal drilling system looks like an inverted Christmas tree - one vertical well with many branches.

Fowler is offering royalties to surface and subsurface owners. Fowler Oil and Gas documentation estimates profits for owners of surface and subsurface to be between $1,000 and $6,000 per acre per year for the next 50 years. Fowler has approached only private owners of large parcels of surface and subsurface rights.

Another advantage Fowler said his process can boast is it does not bring water to the surface. Drillers separate gas from water below ground and inject the water into porous sandstone below the coal.

&#8220You've seen pictures of the Powder River Basin? We didn't want that for the Valley,” Fowler said.

It appears that Fowler Oil and Gas' horizontal drilling and low-pressure gas extraction plan deals with many of the issues faced in past CBM extraction schemes, said Kathy Wells of Friends of Mat-Su.

&#8220If he can do this the way he says he is going to do this and it doesn't harm the water or disrupt the land and he gets gas to go directly in the Enstar Line, then it would be a win-win situation,” Wells said. &#8220And we all know we need the energy, the gas.”

Contact Russell Stigall at 352-2267 or russell.stigall@frontiersman.com.