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This page was last updated 04/27/04

Lower Peninsula Shallow Natural Gas Leases & Shallow Coal Bed Methane

The State of Alaska in mid 2003 issued shallow natural gas leases in the lower Kenai Peninsula.  This leasing program has raised numerous questions and concerns among property owners whose property is affected by these leases.  The following represents some of the more common questions and topics of concern to local property owners with resources and information identified by the Kenai Peninsula Borough that address those questions and concerns.  Analytical and media reports and articles contained in this web page are intended to offer information from other governmental & non-governmental sources and do not necessarily represent opinions or positions of the Kenai Peninsula Borough.

DOG Banner

State Division of Oil & Gas Mat-Su Valley Coal Bed Methane Project Website

Section Updated 04/27/04

The Department of Natural Resources, in partnership with the Matanuska-Susitna Borough Government, has scheduled a series of public workshops in the Mat-Su area to take public input, discuss issues and disseminate facts related to shallow natural gas and coal bed methane development in an effort to develop regulations, guidelines and standards for future shallow natural gas development within the Mat-Su Borough.  The State of Alaska intends to hold similar workshops in the Homer area after the completion of the current schedule of meetings in the Mat-Su Borough.  The following is process map describing the steps that will be taken to develop enforceable standards for controlling the methods and means used to develop shallow natural gas and coal bed methane in the Mat-Su and Homer regions:

The following are recaps of the various workshops.  

This section will be updated as new reports and documents become available.  Click on either of the links above to go directly to the Division of Oil & Gas.

***New Information***

The following document is a recently release set of draft enforceable standards to control methods and means used to develop coalbed methane in the Matanuska-Susitna Borough.  These standards would only apply within the borders of the Matanuska-Susitna Borough.

 

Draft Enforceable Standards for Coalbed Methane Development: Mat-Su (528KB)
February 5th Press Release: New Workshop Dates Added (114KB)
February 4th Workshop Issues List (45KB)
January 28th Workshop General Comments (65KB)
January 28th Workshop Public Information Recommendations (97.5KB)
January 28th Workshop Public Notice Recommendations (109KB)
DNR Public Workshop Announcement 10/13/03 (136KB)

Recent Media Articles 

New Section Added 01/06/04

ADN Editiorial "The Road From Here" 01/11/04 (114KB)
ADN Editiorial "Room to Improve" 01/10/04 (111KB)
Peninsula Clarion Editorial "Public Process Flawed..." 01/09/04 (168KB)
Peninsula Clarion Article "Borough Buyback Request Stands 01/09/04 (194KB)
ADN Editiorial "Avoidable Water Woes" 01/09/04 (112KB)
ADN Article "Kenai Borough Affirms Call for Lease Buyback" 01/08/04 (151KB)
ADN Editorial "Good Guys, Bad Guys" 01/08/04 (113KB)
ADN Editorial "Ownership Rights" 01/07/04 (115KB)
ADN Editorial "Coal bed Methane" 01/06/04 (114KB)
Assembly Member Milli Martin Opinion Letter 01/05/04 (72KB)
Senator Tom Wagoner Opinion Letter 12/29/03 (61KB)
ADN Article "Your Land, States Gas" 11/09/03 (226 KB)

November 10th Public Information Meeting 

On November 10th, a public information meeting was held at the Homer High School Commons.  Representatives from various State agencies attended this meeting to answer written questions and to take public comments.  This three hour meeting is the first of a series of meetings that the State of Alaska will participate in over the next few months, though the next meeting will likely not take place until a similar series of similar meetings are completed in the Mat-Su region.

Below are links to the Public Information Meeting notice and the list of written questions that were submitted to the panel at the November 10th meeting.  Time did not allow for answers to these written questions in advance of the meeting.  

November 10th Public Information Meeting Notice (111KB)
November 10th Public Information Meeting Agenda (106KB)
November 10th Public Information Meeting Written Questions (107KB)

Is my property on a shallow natural gas lease?

UPDATED 11/25/03

The Kenai Peninsula Borough GIS Department has recently generated a set of maps for the eight lease tracts on the lower Kenai Peninsula.  These maps were generated using the legal descriptions contained within the lease agreements issued by the State of Alaska.  

The maps now linked to this site are newly updated to show all tracts with shallow gas leases, even if they don't belong to the given ADL lease block referenced on the map.  If a tract is highlighted, then it has a shallow gas lease.

Our thanks to the Kenai Peninsula Borough GIS Department for this latest update to these maps.

Click on the links below for detailed maps of the eight lease tracts using Acrobat Reader

01/12/04

Please note that maps may not render correctly when first downloaded.  If you have this problem, save the map to your hard drive and then reopen it from your computer.  This should solve any problems with blank areas on the maps.

Area Lease Map (157 KB)
Tract Detail Map #1 (677KB) Tract Detail Map #2 (272KB)
Tract Detail Map #3 (380KB) Tract Detail Map #4 (366KB)
Tract Detail Map #5 (191KB) Tract Detail Map #6 (369KB)
Tract Detail Map #7 (402KB) Tract Detail Map #8 (411KB)

What is shallow coal bed methane (CBM) and how is it developed ?

CBM development is the process of extracting methane gas trapped in underground coal seams.  The process involves using a drilling rig similar to those used to drill water wells.  Exploration & production in Alaska involves drilling multiple wells in a given area, removing the water from the coal seams using pumps while simultaneously pumping and gathering the low pressure, odorless, pure methane gas that is emitted by the coal seams as the water is removed.  CBM development in Alaska is still experimental and has yet to be proven as an economic method for producing natural gas for utility and industrial purposes.

A detailed discussion of the history and issues related to CBM development in the lower 48 states is provided by clicking on the following link:

University of Colorado, School of Law Coal Bed Methane Primer (2,554KB)

Evergreen Resources CBM drilling operation in the Mat-Su Valley (2003)

Does CBM development produce large quantities of water and what happens to that water after it is pumped out of the ground? Is my water well at risk?

As a general rule, a CBM well produces thousands of gallons of water daily during its initial production stage.  A typical well will initially produce a ratio of 95% water and 5% methane by volume.  Over time, that ratio must flip to produce 5% water and 95% methane if the well is to become economic. The quality of the produced water varies widely in the lower 48 states.  The quality ranges from better than most bottled water you can buy in a store to highly contaminated with salts and dissolved metals.

In Alaska, re-injecting produced water generated from onshore oil & gas operations in Class II reinjection wells has been the disposal method of choice required by the State of Alaska for the oil & gas industry for decades.  This reinjection places produced water back into the ground into layers of porous materials at depths that are several thousands of feet underground below potable water tables and aquifers used for providing drinking water.

The following link offers a more detailed view of issues and methods for dealing with produced water and protecting drinking water supplies in the lower 48 states.

Ground Water Protection Research Foundation:  Handbook on CBM Produced Water (8,468KB)

What are my rights as a property owner? 

Can I say "No" to development on my property?

Alaska is what is known as a "split estate" property rights state in which there can two distinct owners of a given parcel of land.  There is the surface owner and the sub-surface owner.  Surface property owners include home owners and businesses as examples.  The rights of a surface owner do not include ownership of mineral resources such as oil, natural gas, coal or other mineral types of resources.  Those minerals are owned by the sub-surface owner.  There are a limited number of sub-surface owners in Alaska.  They include the State of Alaska, the Federal Government, Native Corporations and a few private owners who received a Federal patent prior to Statehood.  Under the provisions of the Statehood Act, the State Constitution and Alaska State Supreme Court case law, the sub-surface owner's rights have 'dominance' over the surface owner's rights.  However, State statutes do require that companies wanting to drill on someone's surface property must try to work out a surface entry agreement with the property owner.  If a surface entry agreement cannot be agreed on, then the exploration company has the right to petition the State for a bond hearing at which the State holds a public hearing to determine the value of a bond the exploration company must post to compensate the surface property owner for "damages" resulting from the exploration company doing work on the surface.  A bond hearing is an extremely rare occurrence as the State will only hold this kind of hearing if there is no other economic location or means to access a given subsurface mineral prospect.

To better understand this issue, click on the following links:

Kenai Peninsula Borough Split Estate Memorandum, October 15, 2003 (250KB)

Alaska Statehood Act, Section 6, "Selection of public lands, fish and wildlife, public schools, mineral permits, mineral grants, confirmation of grants, internal improvements, submerged lands"

Wyoming Split Estate Initiative Website

Where can I find more information about CBM?

The topic of coal bed methane development is very complex and there is too much information on this topic to be covered in this web site.  To help provide additional resources related to this topic, the following is a list of various documents and websites offering different perspectives and information about CBM development.

State of Alaska

House Bill 364 Sponsor's Statement (80KB)
House Bill 364 Sponsored by Rep. Seaton (Companion SB  250 Sponsored by Sen. G. Stevens) (71KB)
(1976) Senate Bill 720 Authorizing the Buy Back of Oil & Gas Leases in Kachemak Bay (403KB)
Text of House Bill 69 (75kb)
Press Release by Representative Vic Kohring (33KB)
DNR Sample Mitigation Measures for Shallow Gas Leases (138KB)
Press Release by DNR: Public Process to Establish Coal Bed Methane Development Guidelines (137KB)
Alaska Department of Natural Resources, Division of Oil & Gas Website
Alaska Department of Environmental Conservation Website
Alaska Oil & Gas Conservation Commission Website
Alaska Department of Revenue, Tax Division Website

Kenai Peninsula Borough

KPB Resolution 2003-129 Supporting Shallow Gas Lease Buyback (359KB)
Online Code of Ordinances
Kenai Peninsula Borough Website

Other Governmental Agencies

This Section Last Updated 03/28/04

**New** "Shallow Coalbed Methane Primer" U.S. Department of Energy, February 2004 (6.18 MB)
Matanuska-Susitna Borough Resolution 04-021 "Recommendations to the Governor" (200KB)

University of Chicago, Argonne National Laboratory Report: "Environmental Drivers for CBM Research & Development" (239KB)

BBC Research and Consulting Report: "Measuring Impacts of CBM Wells on Property Values" (602KB)
University of Montana Report: "Coal Bed Methane- Frequently Asked Questions" (650KB)
U.S. Geological Survey Fact Sheet: "Coal Bed Gas Resources of the Rocky Mountain Region" (988KB)

Oil & Gas Industry

Evergreen Resources Website
Unocal, Alaska Website
Lapp Resources, Inc. Website
Marathon Oil Company Website
Black Diamond Energy, Inc. Website
Anadarko Petroleum Corporation Website
EnCana Corporation Website
Wolverine Energy, L.L.C. Website

Non-Governmental Organizations

Oil and Gas Accountability Project Website
PowderRiverBasin.org Website
Coalbed Methane Coordination Coalition Website
Biodiversity Conservation Alliance Website
Cook Inlet Keeper Website
Northern Plains Resource Council Website

All reports and documents presented in this website are available via U.S. Mail upon written request to:

Bill Popp, Oil & Gas Liaison

Kenai Peninsula Borough, 43335 Kalifornsky Beach Road, #16, Soldotna, AK 99669

907-262-6355 ~ fax 907-262-6762 ~ bpopp@borough.kenai.ak.us

The preceding  materials are assembled from numerous sources and are provided here in an effort to improve the availability of public information. The Kenai Peninsula Borough has made a significant effort to eliminate problems and errors from these data, but shall make no expressed or implied warranties (including warranties of merchantability and fitness) with respect to the character, function, or capabilities of this data or its appropriateness for any user's purposes. In no event shall the Kenai Peninsula Borough be liable for any incidental, indirect, special, consequential or other damages suffered by the user or any other person or entity whether from use of this data, any failure thereof or otherwise, and in no event will the Kenai Peninsula Borough's liability to the person using this data or anyone else exceed the fee paid for this data.

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