Gas could fuel fair upgrades

MAT-SU — The Alaska State Fair is looking to fuel up for the future.

The Alaska State Fair Board of Directors has decided to move forward with a plan that could establish a coal-bed methane drilling operation on a secluded part of the state fairgrounds in Palmer. The project will be undertaken by Fowler Oil and Gas Corp.

“We need to look elsewhere, other than gate receipts for revenue and we’re doing that,” said Ray Ritari, general manager of the Alaska State Fair.

With a budget of nearly $5 million to operate the annual fair, Ritari said the fair needs to find additional sources of revenue to help cover costs associated with a laundry list of upgrades needed at the fairgrounds.

“Our sewer system was built in an era when there was one-third of the load that is put on it now,” Ritari said.

Under the fair board’s agreement with Fowler Oil and Gas, the state fair would receive a percentage of the profit from natural gas extracted from a well on a one-acre site on the fairgrounds, Ritari said. Just how much that could translate to is undetermined.

In addition to the sewer system, the fairgrounds also needs electrical, drainage and fire safety upgrades to meet current codes standards, he said. “The list goes on and on as far as infrastructure needs, and they’re not insignificant.”

The Farm Exhibits Building alone needs about $1 million in renovations to get it into code compliance, the manager said. Tires are kept on the roof to keep it from blowing away. Ritari estimates another $250,000 is needed to beef up the fairgrounds’ electrical systems.

“We do meet code [with electrical], but it’s not where we want it to be and where our customers expect it to be,” he said. “We’re trying to come up with another revenue source. To run the fair on gate receipts is fine, but it doesn’t pay for the infrastructure we need.”

The decision to allow Fowler Oil and Gas to drill for coal-bed methane comes after fair officials were approached by the company. Ritari said. Following eight months of environmental, legal and operational reviews of the proposed project, the board recently agreed to allow Fowler to start the initial planning process.

Not only would the methane operation provide an additional source of income, but fair officials are also considering a more direct use of the resource, Ritari said. For example, the fair could use the gas to cover some its own fuel needs.

“We’re trying be creative and provide an asset to the community,” Ritari said.

Although the board approved of the initial plan, Ritari said there is still a lot of work to be done before drilling begins. First, the corporation must drill a separate well located on the Kircher family farm near Trunk and Bogard roads. After that well is drilled, fair officials will make a decision on whether or not to give the plan a final green light.

Bob Fowler, CEO of Fowler Oil and Gas Corp., said the company has approval from the Matanuska-Susitna Borough to drill the first well, but final approval must be obtained from the state. The company hopes to get state approval by January and drilling could start in the spring. The Kircher well is expected to produce 380 billion cubic feet of natural gas.

Although the fairgrounds project is one of the better-known methane projects in the Valley, Fowler said it’s not the only place to find coal-bed methane deposits.

“The entire Cook Inlet Basin is one big coal field,” Fowler said. “It’s one of the largest gas fields in North America, excluding the North Slope.”

With that in mind, Fowler said he hopes to tap into some of those natural resources to provide gas for many years to come. The company plans to apply for Borough approval of the fairgrounds well next fall. The exact amount of gas in the fairground deposit hasn’t been determined; Fowler believes it is a substantial amount.