Action Alert:

Overview:

The Alaska Department of Natural Resources Division of Oil and Gas has issued a Preliminary Best Interest Finding (BIF) for a Proposed Healy Area Gas Only Exploration License.  Usibelli Coal Mine, Inc. is the applicant of the exploration license which spans 208,630 acres. 

It is in the best interest of Alaska to grant the exploration license, given there is great need for natural gas in the railbelt region. The Healy Basin’s proximity to existing infrastructure and increasingly tight gas supplies in Southcentral and Interior Alaska underscore the importance of encouraging exploration in this area.

Additional information, including a copy of the BIF is available at:

http://www.dog.dnr.state.ak.us/oil/products/publications/healy/healy_toc.htm

Action requested:

RDC encourages its members to submit comments supporting issuance of the exploration license for gas exploration in the Healy Basin.

Deadline for comments is Monday, October 31.

Comments should be submitted to:

Jonne Slemons, Permitting Manager
550 W. 7th Ave., Ste. 800 
Anchorage, AK  99501 
Fax:  907-269-3484 
E-mail:  jonne_slemons@dnr.state.ak.us

Points to include in your comments:

• The State should issue the license without excluding any areas of State owned land in the license area.  Some of the deepest areas of the basin are located in areas were private surface ownership exists. These deep areas may hold the greatest promise for conventional gas reservoirs.  Existing protections for surface owners are adequate to address possible conflicts between surface and subsurface uses.
• The State should encourage surface owners and exploration companies to work together in advance to reach mutually agreeable solutions to mitigate conflicts between surface and subsurface users.
• The Healy area represents an excellent opportunity to demonstrate the feasibility of shallow gas development because of its proximity to existing infrastructure and markets.  Experience and knowledge gained in the Healy area could have positive far-reaching effects on shallow gas development throughout Alaska, in addition to providing diversity of supply for the South-central and Interior regions.
• There are very few domestic water wells completed in potential gas-producing areas and in most cases hundreds of feet separate the bottom of such wells from potential gas producing zones.  Where conflicts may exist, the State has appropriate controls in place to eliminate or mitigate potential impacts on domestic water wells.
• The setback restrictions from rivers (1⁄2 mile from the Nenana River for permanent facilities) and fish bearing streams (500 feet for permanent and temporary facilities) are excessive.  Because this is a gas only lease and the potential for encountering oil is extremely remote, setbacks for facilities do not need to be any more stringent than for any other industrial facility.  Hotels, power plants, interties, mine facilities, railroad lines and bridges, permanent roads and bridges, gravel operations, helicopter tour operations, residential structures and other large permanent facilities are all located on the banks of the Nenana River in the license area.  Construction was allowed for those facilities and operations at those facilities are conducted safely.  The same applies for smaller fish bearing streams.  The 1⁄2 mile setback to the Nenana River is also inconsistent with the Tanana Basin Area Plan and with any viable plan of operations from ever being implemented for the entire license area. 
• 500-foot setbacks for drill pads and 1,500-foot setbacks for compressor stations from residential structures are excessive in many instances.  These setbacks will effectively eliminate exploration and development over wide areas.  The State should use other strategies to mitigate the effects on residents and promote true multiple land and resource use.
• The requirement for attaining the consent of all surface property owners within a subdivision to allow the construction of any drill pads or compressor stations within any portion of the subdivision is excessive.  This is in addition to the 500-foot and 1,500-foot setbacks already included and poses an excessive restriction on a surface owner’s right and ability to benefit from allowing subsurface development operations on their property.
• Summer exploration activities, including seismic work should be allowed on a case by case basis.  Much of the area has extensive pre-existing road and trail systems and is well drained foothills terrain where summer travel over the surface can be done with minimal damage to the surface.  Because of the steep terrain, temporary roads are sometimes required to access exploration sites and summer construction of those roads is much safer and more cost effective.
• On-site cuttings and mud disposal should be allowed where non-toxic drilling mud is used.  Shallow drilling may eliminate the need to use chemicals for drilling mud conditioning, and simple mineral additives to increase mud weight can be disposed of in reserve pits, covered and reclaimed to provide permanent and safe disposal.

Deadline for comments: Monday, October 31, 2005