Coal lease sale put off

November 8, 2005

DARRELL L. BREESE\Frontiersman reporter

CHICKALOON - A competitive bid lease offering for nearly 16,500 acres of land managed by the Alaska Mental Health Trust Authority for coal exploration and development in the Northern Matanuska River Valley has been postponed for administrative review.

The sale was originally scheduled to open Wednesday, but has been delayed while the Mental Health Trust land office reviews the offering and lease procedure.

The original deadline for bids was set for Dec. 5; a new deadline will be set following the conclusion of the administrative review.

&#8220We're formulating an official response to public input gathered and will reschedule to offering after the review process is complete,” Mike Franger, senior resource manager with the Trust's minerals and oil and gas offices, said Monday. &#8220We'll probably have another public-comment period based on the decision reached from the public comments already collected.”

&#8220We don't have a concrete date set at this point,” Franger said. &#8220It likely won't be until sometime after the first of the year, with the holidays and year end approaching.”

The purpose of the sale is to secure binding commitments to explore unencumbered Trust coal estate in the Cook Inlet area, and to provide for certain terms and conditions for development in case economically viable coal reserves are discovered.

The lease will grant the lessee the right to explore and mine for coal, but extraction of coal bed methane and peat are reserved to the Trust land office. The initial term of the leases will be 10 years and the leases may be continued only if there is continuous production on the leased parcels.

&#8220It's important to note that the parcel in question was originally conveyed to the Trust with the potential for generating revenue from mineral extraction,” Franger said.

&#8220We had the public-comment period to ensure that we go about the process fairly and to allow for environmental and development concerns to be heard. It is our goal to be responsible in the whole process.”

Contact Darrell L. Breese at 352-2267 or darrell.breese@ frontiersman.com.