DNR puts new leases on hold

"Coal seams don't understand land ownership patterns."

That one phrase, from Alaska Department of Natural Resources Commissioner Tom Irwin at a meeting at Tanaina Elementary School Monday, probably best sums up the conflict between local property owners who wouldn't mind having coal-bed methane development on their property, those who are afraid of the consequences of such development, and the company seeking to move forward in developing, according to DNR, about 140,000 acres of leases, some of which they currently hold and some pending, in the Valley.

Irwin, at the meeting, announced that his department and other state agencies will be working with the Mat-Su Borough to develop guidelines for coal-bed methane development within the borough. While those regulations are being developed, Irwin said, new leases will not be issued and new work is being put on hold.

"We're going to do exploration; we're going to do development, test holes. We'll get data from that. We're not approving leases," Irwin said after the meeting. During the meeting, he said Evergreen Resources would be able to move ahead in two areas -- geologic testing Evergreen had planned to have done over the winter and work on two four-well pilot projects, with landowner approval. "We want and need this all to go forward," Irwin said. "It's going to provide the very data needed to analyze [the project]."

Pat Galvin, with DNR's division of oil and gas, said the decision not to approve any additional leases isn't necessarily a moratorium.

"We're committed to not issuing any shallow natural gas leases that have been applied for, that are pending approval, until we have completed this process," Galvin said Wednesday. But, he added, the research into title holdings and other information necessary to approve those pending leases -- a lengthy process in itself -- will continue while the guidelines are developed. "We don't really think that it's going to result in that decision being put off any longer than it would normally. We don't really see it as a moratorium."

At the meeting, the audience was asked to address specific concerns they'd like to see addressed through DNR or other state regulations. Many of the same concerns residents have brought up at other meetings were mentioned -- setback requirements, noise levels, the need for further study of potential methane migration, the need for more comprehensive data relating to the area's water table and more. By the end of the meeting, DNR staff had compiled a pages-long list of points the residents said they'd like to see included in future CBM regulations.

Mark Myers, DNR's director of the division of oil and gas, said Monday's meeting was the beginning of a process that will likely stretch over the next few months.

"We will spend the time, we will hear your comments and we will see you through the process," Myers said. "This meeting is to start that process."

Irwin told the audience he and some of his staff had recently returned from a trip to Colorado, Wyoming and Montana, where they toured CBM well-sites, talked to local county commissioners, local officials and a mix of landowners who received mineral royalties and those who did not, as well as with people representing the industry, state governments and the federal Bureau of Land Management. Although reluctant to discuss the specifics of the trip and take time away from the intent of the meeting, Irwin said he'd talk more about the trip later, likely at upcoming workshops.

"We did learn a lot, from start to finish," Irwin said.

Galvin said he's been assigned to put develop guidelines pertaining to how CBM is developed in the Valley.

"Tonight really is the kickoff of this process," Galvin said. The proposals collected at the meeting, he said, would be compiled and draft recommendations will be created by the project team. Currently, the project team is made up of representatives from DNR, the Department of Environmental Conservation, the Alaska Oil and Gas Conservation Commission and the Mat-Su Borough. Several at the meeting asked that at least one person be on the team representing the public's concerns, but Galvin said the makeup of the project team isn't likely to change.

"The project team was put together to have representatives from state and local entities who have some sort of oversight in making decisions pertaining to CBM," Galvin said, adding that the workshops were intended to be the conduit for public involvement. "It shouldn't be seen as a preclusion, because it really is a public process."

Workshops, Galvin said, will be held around the area in November and December, where people can review the recommendations and take part in coming up with ideas to resolve conflicts. DNR staff will put the information together into a set of draft guidelines that will direct the decisions DNR makes, he said, and public hearings will be held before that document goes to Irwin's office.

"We're not here to try to resolve issues," Galvin told meeting attendees. "We have to establish the process to make those decisions. We want this to be a public process."

Irwin, after the meeting, said DNR had planned to go through the process of making guidelines for CBM development in the area eventually. It wasn't, he said, a process borne from public opposition to the development.

"It accelerated it," Irwin said of the opposition. "People need to be listened to. On the other hand, there's other folks in other parts of the state saying 'Will you please hurry up so we can have it here?.' But we don't want to make some of the mistakes made elsewhere."