Coal Bed Methane in Alaska

According to the U.S. Geological Survey, the in-place coal bed methane (CBM) resources in the Lower 48 are estimated to be more than 700 trillion cubic feet (Tcf), but less than 100 Tcf may be economically recoverable. Alaska , itself, is predicted to have 1,000 Tcf of CBM. It is unknown how much of that is economically recoverable. The State is currently issuing exploratory leases allowing lessees to see if this potential source of energy can be recovered. Therefore, it is important to examine all aspects of this issue prior to development. If it is done, it must be done taking into account a wide range of environmental concerns.

What is Coal Bed Methane?

Methane itself is gas that when burned for energy has cleaner burning emissions than oil or coal. That can be a plus because methane is used much in the same way as natural gas. However, concerns arise around the extraction of methane from coal seams (hence the term coal bed methane) due to possible impacts on water quality, wildlife, and property owners rights. If extracted prior to coal mining, coal bed methane is recovered by installing a wellhead about every 80 acres. Roads are built to construct each well pad. Methane is extracted by pumping out large amounts of groundwater causing a change in pressure that allows gas to flow to the wellhead. The wells are connected through a pipeline with a compressor station for every 10 wells. Gas is trucked from the station to the power plant where it is used to generate electricity or to other markets.

Water Quality & Quantity Issues

Because such large quantities of groundwater are displaced to bring methane to the surface, aquifers and local wells could be impacted by a loss of water levels and methane pollution. Often water is reinjected following methane extraction. Surface pollutants could contaminate the water. On the flip side, naturally occurring salts and heavy metals in groundwater can contaminate the ecology of a region if water is allowed to run-off from a site.

Currently, the State of Alaska does not require reclamation of water from CBM sites. The only standard for the water is that it is not allowed to be discharged directly into a point source (such as a lake or a river) (A.S. 46.03.100 (f) (3)). If not reinjected, use of the displaced water needs to be addressed.

Possible approaches to the water issue are to require it to be stored in lined ponds and treated before being released. Monitoring for water quality needs to be an integral component of any plan. Public disclosure of the chemicals used in the CBM drilling process is also necessary for the protection of water sources and wildlife.

Wildlife Issues

The process of developing CBM can contribute to noise, dust and traffic because an infrast4cture needs to be created to extract the gas and transport it to market. The infrastructure developments can cause habitat fragmentation disturbing wildlife or causing them to relocate. In the Lower 48, contaminated water discharged into holding ponds during drilling operations has poisoned both wild and domestic animals.

Private Property Issues

Although private property owners may own the surface rights to the land over coal bed methane resources, the State of Alaska maintains the right to sub-surface mineral rights. It is important for property owners to be involved in exploration and development discussions from the beginning with no decision being made without their approval. The State requires a minimum environmental insurance bond of $25,000 be established for each lease site (A.S. 38.05.177). However, some sites may be in production for more than a decade. A property owner needs to ask themselves if this is a sufficient amount to reclaim disturbance from years drilling and production.

In 2003, the Alaska Sate Legislature passed HB 69 which allows the state to preempt many opportunities for public comment. For example, it allows the Alaska Department of Natural Resources (DNR) to approve a variance from regulation to the CBM well or field without providing public notice and opportunity to be heard (A.S. 31.05.060), and permits DNR to approve a waiver of local planning authority appeals and requirements relating to compliance with local ordinances and regulations.

Since CBM development is new to Alaska , we have the responsibility to approach it cautiously, and consider all aspects and impacts of drilling activities. Funding should be set aside for collecting baseline data on the geologic and hydrologic features of leased areas. Baseline studies allow for restitution in situations where environmental and health problems result from CBM activities. By developing clear State regulations now, Alaskans can learn from mistakes in the Lower 48 and offer the highest level of protection to all the natural resources in the State.

Where is Alaska 's Coal Bed Methane?

A recent DNR study identified three areas of high CBM potential in Alaska : (1) the western North Slope Basin including the northern half of the National Petroleum Reserve-Alaska, (2) the Alaska Peninsula near the village of Chignik , and (3) Yukon Flats Basin northeast of Fairbanks . Other potential CBVM areas include the Tanana Basin and Susitna Basin , south of Fairbanks and North of Anchorage, respectively. DNR's Division of Oil and Gas is the state agency charged with issuing leases for CBM exploration and drilling. CBM falls into the shallow natural gas program because it is found within 3,000 feet for the surface.

Current Alaskan Coal Bed Methane Activities

Matunuska Susitna Borough

In 2003 Evergreen Resources was awarded CBM leases in the Matanuska Susitna Borough area. Property owners were alarmed to find that State law allowed for permitting of these leases with no public notice. Public outcry against this practice led the Alaska Department of Natural Resources to hold a series of public meetings for the purpose of developing operating standards for these leases.

After more than a year of controversy surrounding these leases, Pioneer Natural Resources announced on September 30, 2004 that the Mat-Su leases acquired through their merger with Evergreen Resources would be relinquished to the State. Despite the return of the leases, the Mat-Su Borough Assembly took steps in October 2004 to prevent a situation of this magnitude happening in the future. The Borough Assembly passed an ordinance making it illegal for a shallow-gas driller to operate on private land without compensation. Click here to link to the MatSu Borough Ordinance

Healy

According to the Denali Citizens Council, In August 2004 the Usibelli Coal Mine, Inc. submitted applications for oil and gas exploration licenses covering several areas in the vicinity of Healy.  Last year Usibelli applied for CBM exploration leases in eight areas.  However, recent changes in state law closed down the existing shallow gas program and mandated a best interest finding process similar to the one currently used for conventional oil and gas leases.  The Alaska Department of Natural Resources is considering holding a public, informational meeting on this process in Healy in November 2004. 

Interior Alaska

A partnership between the U.S. Department of Energy, the Bureau of Land Management, the Alaska Division of Geological and Geophysical Surveys, the University of Alaska Fairbanks , and the U.S. Geological Survey is examining the potential for shallow-gas development near the village of Fort Yukon . The project is intended to assess the economic feasibility of extracting CBM for use in remote villages. Drilling of exploratory wells began in August of 2004. The Northern Center will monitor the progress of these activities.

CBM Resources
Oil & Gas Accountability Project
http://www.OGAP.org

Cook Inlet Keeper
http://www.inletkeeper.org

Denali Citizens Council
http://www.denalicitizens.org

Powder River Basin Resource Council
http://powderriverbasin.org

High Country Citizens Alliance
http://www.hccaonline.org

Wyoming Outdoor Council
Http://wyomingoutdoorcouncil.org

Alaska Department of Natural Resources
http://www.dog.dnr.state.ak.us/oil

What Can You Do?

• Join the Northern Alaska Environmental Center Arctic Action E-Mail list: through this list NAEC will keep you updated on CBM activities in Interior Alaska. Contact info@northern.org to join.
• Educate yourself on the issue. It's only through diligence on the part of the public that we can make sure CBM, if pursued at all, is pursued correctly.
• Let the Alaska Department of Natural Resources know of your concerns.

Correspondence can be addressed to Director Pat Galvin
Division of Oil and Gas
550 W. 7 th Ave., Suite 800
Anchorage , Alaska 99501-3560

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