Let's get back to the basics on coal-bed methane …

Spectrum, by Sen. Tom Wagoner

The rhetoric about shallow gas drilling in the Mat-Su Borough and Kenai Peninsula Borough has escalated to the point where some background information for rational discussion of the issue is required. I'm especially concerned about four areas -- history, public notice, local planning, and state interests versus private interests.

Historical: Most of the resources -- surface and subsurface -- are owned by the state of Alaska. In fact, that was a primary concern when the Alaska Statehood Act was being debated. It was decided that in order for this new, remote, sparsely populated state to be able to govern and provide for itself, it needed resources for financial stability.

Alaska was allowed to select more than 100 million acres of land as an economic base for the new state. It was granted the right to all minerals underlying these sections and in fact is required to retain this mineral interest when conveying interests in the surface estate. If it fails to do so, the rights revert to the federal government.

These mineral interests support the Alaska Permanent Fund Divided check that each Alaska gets annually. It's the subsurface mineral rights in the entire state that fuels the dividend program for all Alaskans, not just those in Prudhoe Bay.

Public Notice: The notice process is being used as a basis for requesting a lease buy back for the Southern Peninsula (the KPB Assembly acted 12-13-03 on Res. 2003-19.) in the Mat-Su, criticism from local entities included allegations regarding insufficient notice to allow for comment. Criticism on the southern Peninsula included allegations that citizens were unaware of the state's interests.

In 1996, the state's Lease Sale 85A (Cook Inlet) offered lands in which (1) the state owned surface and subsurface estate, and (2) the state owned only the subsurface while surface rights were owned privately or owned by a municipality. That lease sale affected the southern Peninsula and was widely debated, published and noticed.

The Cook Inlet Area Wide Plan, completed in 1999, was also widely debated, published and noticed. It is the basis of lease sales for 10 years under a program initiated by former Gov. Tony Knowles.

Perhaps people who have just moved to the Homer area were unaware of these mineral holdings, but I can't imagine anyone else saying they didn't know they didn't own the subsurface rights to their land -- at least, not with a straight face. Public notice was provided in both of the above via the Anchorage Daily News, the Peninsula Clarion, and the Homer News.

I asked the Division of Oil and Gas to provide a brief outline of their process for the recent Shallow Natural Gas Lease Program, here's that outline (note that the Peninsula Clarion was involved because the lease area included Nikiski, not just the southern Peninsula):

The original SNG applications received in February 2000 for the Mat-Su and Kenai Peninsula required a 60-day comment period under AS 38.05.177 & 3 9.05.945 (specifically, one day in a newspaper of statewide circulation and one day in a newspaper in the area affected) and a full Alaska Coastal Management Program review. The public notice that was issued was a combined notice for the purposes of the comment period and the ACMP review, it was published in the Anchorage Daily News, the Frontiersman and the Peninsula Clarion. Additional requests for comments, postmaster letters, etc. were also sent out. The public notice was also posted on the division, department and state Web sites. The division actually added an additional stop in the review process by circulating a draft ACMP Consistency Analysis and Director's Decision to all who had commented in the original notice process. That additional step was done as this was a new program that had not gone through the ACMP process before.

I point out that those notices were also sent to numerous individuals and entities, and included the Kenai Peninsula Borough, the Mat-Su Borough, and the mayors of the cities within those boroughs.

Local Planning: As a former mayor, I am particularly offended by allegations that the local planning and zoning authority was preempted with HB 69.

Further, assertions that it was "rushed through" the Senate are patently absurd -- the record clearly shows that it was referred to Senate Resources on Feb. 14, 2003 and passed out of that committee on March 28, 2003.

I chaired the final hearing before Resources and I also was involved in the language that was inserted regarding the local planning authority. The Alaska Municipal League had expressed concerns with the language in the draft bill and so I had my staff prepare an amendment for inclusion in the bill.

The amendment used language in an existing statute (AS 35-30.030) and says, quite simply, that if the Department of Natural Resources clearly demonstrates an overriding state interest, waiver of local compliance requirements may be granted by the commissioner.

Quite frankly, my understanding was that AML was in contact with affected municipalities (including the MSB) and that they supported my amendment versus the previous draft language. I obviously did not find it to be onerous.

I'm certain that some municipalities would prefer to have no state involvement, but that is simply not acceptable. My own borough assembly has suggested (by passage of Reso, 2003-129) that they are better equipped to handle this type of development. I find that to be an intriguing concept from a second-class borough that has no zoning authority.

Let's talk about local control. I'm confident that if we left the good people in the Homer area in charge, they would never provide for this resource that benefits all of us -- including them.

Instead, they want to have their Peninsula neighbors (Nikiski, Kasilof, Ninilchik, etc.) as well as other areas of the state to take any risk and then share in the benefit of the tax base generated by those risks.

Oh, and still take their permanent fund dividend check, of course.

State interests/private interests: As I mentioned before, HB 69 includes language based on an existing statute (AS 35.30.030) that provides for a waiver of local requirements when there is an overriding state interest.

This language complies with the Constitution, Article VIII, Section 2, which states that the Legislature shall provide for the utilization, development and conservation of all natural resources belonging to the state, including land and waters, for the maximum benefit of its people.

The Constitution also states (Article VIII, Section 16) that no person shall be involuntarily divested of his interests in lands or improvements affecting either -- except for a superior beneficial use or public purpose and then only with just compensation.

For those of you who have taken the time to read this missive, I thank you.

My concern about this matter is great. As I stated before, my own assembly (the KPB) saw fit to support a resolution in support of buying back the leases in the southern Peninsula. I'm ashamed of that resolution and applaud the three members who refused to be muscled: Gary Superman, Grace Merkes and Paul Fischer.

There is a simple question to be asked now -- who is going to pay for these "buybacks?" Which project that is on the Peninsula's priority list is going to be removed to let this new priority take its place?

Here's a suggestion: perhaps those people who support it should step forward and turn in their permanent fund dividend check.

Tom Wagoner is a Republican senator for District Q.