Northern Mat-Su residents tackle CBM issues

SUNSHINE -- About 50 residents from the northern Susitna Valley, along with a few from other Mat-Su regions, holed up in the Susitna Valley High School's library Wednesday to learn more about land leased for coal-bed methane development in their area. Although they came away armed with more knowledge, many still had unanswered questions when the meeting ended after more than two hours of questions.

About 300,000 acres of land in the Mat-Su have been leased for potential coal-bed methane development, stretching from Chickaloon to Trapper Creek, primarily along the highway system. Another 860,000 acres are proposed for lease in the upper Susitna Valley, although those leases have been placed on hold, pending the outcome of the Department of Natural Resources' public workshop sessions held around the Valley in February and March.

Tom Kluberton, a member of the "Y" Community Council, helped organize the program and served as the event's emcee. The event incorporated presentations from state and borough officials, a representative from Friends of Mat-Su, a geologist and an economist. Although Corri Feige, manager of governmental affairs and public relations for Evergreen Resources Alaska had agreed to make a presentation, a last-minute conflict apparently precluded her attendance.

Residents at the meeting voiced several concerns, many similar to questions raised at previous CBM forums and throughout DNR's public workshop series.

"What is the liability of the state if they [drillers] come in and the groundwater gets contaminated?" asked Chris Hagar, principal at Talkeetna Elementary School. Rindi "Does the state accept liability?"

DNR Division of Oil and Gas representative Pat Galvin said it's his department's job to accept a portion of the liability.

"It's our responsibility to make sure the activity taking place on state land is done in a responsible way," Galvin said. But as to who bears the responsibility for damage to the land as a result of the drilling process, Galvin said, that's a discussion taking place in Juneau.

Jim Sykes, who's running for U.S. Senate but has taken part in many of the CBM forums, asked Galvin and Alaska Oil and Gas Conservation Commission representative Bob Crandall if it was true that 90 percent of the variances requested by developers was approved.

Galvin said DNR doesn't have a variance process, and Crandall said AOGCC's variance decisions are driven, in part, by public comments. He said he didn't have an estimated percentage of approvals.

"One of the key elements in spacing variance applications is that we need to notify all of the landowners … if someone comes forward and objects … it would make approval much more difficult. In my opinion, it will make it much more difficult for the developer to obtain a spacing variation where there are a large number of properties."

Sykes also asked whether it was possible to develop a way for property owners to find out all the information they need about CBM in a single place.

"The perception is that DNR is or should be the oil and gas regulators," Galvin said in response. "When it comes to a decision to drill on non-DNR land, it does become a different sort of role. For core holes, AOGCC had the permit, but they only look at issues dealing with the subsurface; they had no authority on issues of surface [property issues]."

He agreed that it would be best to have one area serve as a clearinghouse of information, but didn't have any direct answers as to how that could take place.

Denise Chappel, a Sunshine resident, asked why the state appears to be under an obligation to develop subsurface minerals, regardless of whether it fits into the existing community uses.

Galvin said there is no obligation to develop the subsurface -- the question is generally whether it's in the best interest of the area to tap into mineral rights.

"It's not a question for DNR as an agency that administers law to make -- it's been taken out of our hands," Galvin said. He explained that the shallow-gas leasing legislation and HB 69 changed the best-interest finding process, allowing any development that was within the best interest of the state, not of specific areas. Legislation currently moving forward in Juneau, he said, changes that.

"DNR has made it clear that we very much support those bills -- the shallow gas program is not one we much anticipate administering," Galvin said.

Caswell Lakes resident Brandon Stevens said he was concerned that neither interim nor post-drilling reclamation would take place if drilling takes place in the area.

Crandall said AOGCC required a $200,000 bond for drilling statewide, in addition to other incentives, to ensure the land is restored after use.

"The bond is not there to fund restoration, but it's there in case the company disappears before reclamation takes place," Galvin said.

FOMS board president Chris Whittington-Evans countered that statement, saying that no bond could replace disturbances in some areas, and bringing the land back to its original state may prove impossible in some areas.

"Given the amount of wetlands, et cetera, it is never going to be the way it was," Whittington-Evans said.

A Talkeetna resident addressed one point that was in the forefront of several people's minds at the meeting -- the controversy over fracturing fluids used to help stimulate gas production.

"It doesn't make sense -- I couldn't dump chemicals out on the ground or put them in you well, but if you put them deep enough, somehow it's OK," the Talkeetna man said.

Crandall said most fracturing fluids are non-toxic, because water-based materials work better to fracture coal seams, and listed several cases in which only water-based fluids are used.

"Since I don't know -- and can't know for two years -- what goes in, who knows what's happened," the Talkeetna resident said. "I find it all deeply disturbing."

Whittington-Evans noted that, as yet, no one has put forward a law to stipulate that only non-toxic chemicals be used as a part of the fracturing process. Galvin disagreed.

"The issue is not whether a company tells Bob," Galvin said. "The question is, is the public aware? It is proprietary, did they talk about the secret herbs and spices? What it comes down to for me is, if AOGCC does their job. With that, whatever they put down there never, ever, has contact with our drinking water."

Mat-Su residents will soon be getting another opportunity to make their questions and desires known -- the newly released Mat-Su Borough CBM ordinance is now posted at the borough's Web site, and Galvin said work is progressing on compiling the comments obtained at the public workshops held recently. Information about DNR's changes, Galvin said, should be available next week.