Legislation would revamp coal-bed methane leasing program

Posted: Thursday, May 06, 2004

Three bills that recently passed the House would rewrite the state's coal bed methane leasing program and replace the fast-track leasing program with more conventional oil and gas leasing.

Supporters of the bills say they want to correct the shallow gas program's shortcomings.

Landowners complain, however, that the problems on existing leases can't be fixed without tearing them up and starting over.

Leaders of citizen groups organizing around the issue say the bills don't do enough to protect surface-property owners on the more than 300,000 acres of methane leases already sold under the fast-track program.

They said they are disappointed that the Legislature has not responded to calls for buying back those leases and starting over under a new law.

Last year, legislators presented the new program to promote large-scale leasing of shallow natural gas prospects as a milestone in streamlined pro-development policies.

But landowners in the Matanuska-Susitna Borough and Homer protested the sale of drilling rights in their neighborhoods with little public notice and few regulatory safeguards.

One of this year's proposed bills would scrap the new program and substitute a system like the one used to lease subsurface rights for conventional, deeper oil and gas wells. It would require the state to study in detail any new lease offerings and make a "best interest finding" before going ahead.

The second bill would set standards for setbacks, noise limitation, water testing and reclamation.

The third measure would tighten terms for the existing leases and says that the 22,000 acres of controversial Homer-area leases can't be renewed if leaseholders have not proven their economic viability within three years.

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