Congress dropped the ball on coal-bed methane drilling

Spectrum, by Tony Knowles

Washington recently had a chance to pass sound energy legislation that would tap Alaska's proven energy supply, renew a commitment to meaningful conservation, and forge national mission to develop renewable fuels. The opportunity was theirs to develop resources, create jobs and protect private property rights. They failed. Instead, the worst parts of a left-for-dead energy bill were attached to legislation on its way through the U.S. Senate now on a collision course with disaster for Alaska property owners.

The latest version of so-called energy legislation from Washington contains almost nothing in the way of energy policy and plenty in the way of taxpayer-funded giveaways to Outside special interests. Not surprisingly, Alaska got skunked.

There was nothing in the bill to open the coastal plain of the Arctic National Wildlife Refuge for development. The bill contained nothing to encourage development of the 15 billion barrels of heavy oil on the North Slope and nothing to promote renewable energy sources or conservation. The Senate did manage to slip in some incentives to encourage construction of a gas pipeline. But before we get too excited, leaders from both the House and Senate have promised to strip them out before the bill becomes law.

Perhaps the most disturbing news to the people of Alaska, specifically in the Mat-Su and the Kenai Peninsula, the bill contains provisions which will further encourage coal-bed methane drilling in Alaska.

Washington's bill contains a $2 billion authorization for deployment of clean coal technology. It calls for a $3 tax credit per barrel of liquid fuels and thousand cubic feet (mcf) of gas to stimulate supply of unconventional fuels which includes coal-bed methane. In English, that means a company can come into Alaska and set up a compressor station in your backyard at very little financial risk.

It will likely come as no shock that the bill made no mention of the rights of private property owners in Alaska or anywhere else. If you are unlucky enough to be sitting on any of the 300,000 acres leased for drilling in Alaska, there's not a thing you can do about Evergreen Resources, Pioneer Natural Resources or anyone else coming to drill on your land.

In 1996, I supported legislation to promote coal-bed methane development in places like Fort Yukon, a rural area with an overwhelming need for alternative sources of fuel. We had an open process and were headed in the right direction for the right reasons. The bill passed the legislature 58-2 and specifically said that that "gas may be identified and developed at low cost for the direct benefit of residents of remote or sparsely populated areas."

Unfortunately, the bill and the process were hijacked by some who had apparently all along had their sights set on the property rights of Valley and Peninsula residents. In 2003, House Bill 69 passed the legislature and gave the Department of Natural Resources the authority to "approve a variance from the commission's regulations that apply to the well or field without providing notice and opportunity to be heard." Translated, that means no one has to ask your permission to drill on your property and that's the law of the land.

I do not and will not support even one nickel worth of tax credits being extended to any company that does not obtain a willing seller agreement to explore for coal-bed methane on private property, and certainly not $2 billion worth. After all, Evergreen Resources paid just a little over $1 per acre for all of the leased land in Alaska. Seems like a sweetheart deal on its own without $2 billion more from the taxpayers.

I have also supported the state of Alaska buying back leases in the Mat-Su, Homer and Kenai. Buyback is nothing new in Alaska. Jay Hammond did it for oil leases in Kachemak Bay and my administration convinced the federal government to do the same in Bristol Bay. It's the right thing to do -- and we need to do it before it's too late.

I have also supported and continue to support the Alaska Property Owners Bill of Rights. Alaskans cherish our private property rights and we are under siege now as we never have been before. I have encouraged other Alaskans to sign the Bill of Rights on my Web site and so far, hundreds have done so.

With the price of fuel in rural Alaska nearing and in some places eclipsing $6 per gallon, no one disputes a clear need for an alternative fuel source in parts of the state. Drilling rigs and compressor stations parked in backyards from Palmer to Homer is not the way we accomplish that goal.

Tony Knowles is a candidate for the U.S. Senate.