Willow Area Community Organization (WACO) Informational Flyer Prepared by the CBM Ad Hoc Committee Steve Charles, Chair Revised Edition -- March 2004 Coal Bed Methane...CBM...Shallow Gas What does it mean for Willow? Most of the ground beneath our homes and property in Willow has been leased by the state for development of shallow gas or methane. This newsletter is to help inform you of possible changes that could happen to you, your property and our community. What is Coal Bed Methane? Coal Bed Methane or CBM is a form of natural gas that is trapped in coal seams. The methane is held in the seams by pressure from groundwater. How is the methane developed? Wells are drilled to coal seams down to 3000’ to remove the water, reducing the water pressure and allowing the gas to flow. The wells are usually arranged in a grid pattern with wells initially spaced every hundred to one hundred sixty acres. Over time, new wells may decrease the spacing to twenty acres. Each well requires it’s own access road, pumps, and generators. Production of CBM also involves the technique of “fracturing” the coal seams with high pressure fluids which allows the water and gas to move to the well more easily. These fluids can be toxic. Compressor stations are then needed to transport the gas via pipeline to a central location. These gas lines cannot be “tapped” for local use and Enstar, the local natural gas supplier, has no plans of extending their lines to Willow at this time. What are my property rights concerning gas development? Although private property owners own the surface, usually the state or sometimes a private party owns the mineral rights to the subsurface. This issue is known as “split estates.” Property owners may negotiate with CBM developers for access to the subsurface but they cannot deny access. Such access can include tree and ground clearing, gravel pad, road and pipeline building, well drilling, pump and compressor placement, and waste pits. If an agreement cannot be reached between the property owners and the developer then a bond is required to cover potential harm to the property. Where could it be developed? As seem on the image below, much of the subsurface of land within WACO boundaries has been leased by Evergreen Resources, based in Colorado. Evergreen is one of many companies that could purchase and develop the leases. Under present law, any company applying for a lease specifies the area to be leased regardless of it’s present or best use. How did all this come about? In 1996, Rep. Ogan introduced and the legislature passed House Bill 394 expediting the leasing of state owned subsurface for CBM development. It was intended to encourage gas development in rural areas. In 2003, Rep. Kohring sponsored and helped to pass HB69 which streamlines the leasing process by removing CBM gas leasing and development from conventional oil and gas regulations. This bill also allows the state to approve a waiver of local government ordinances related to CBM if there is an “overriding state interest.” Where has CBM development taken place? Extensive development has taken place in the Powder River Basin of Wyoming, and the San Juan and Raton Basins of New Mexico and Colorado. CBM development is new to Alaska. What are potential economic impacts? job creation, although often requiring specialized personnel. negative impacts on recreational and tourism based businesses. increase in local economy from employees using local businesses. increased expenditures for local infrastructure due to increased traffic use. increase in state revenues (gas company keeps 87.5% to 93.75%). decrease in property values loss of access to recreational areas. What are potential environmental impacts? lower water tables (each CBM well pumps up to 15,000 gallons/day). possible contamination of surface and subsurface in disposing of the water water quality varies, but is usually saline) or by the use of fracturing fluids. methane seepage into private well water. methane venting from the ground. loss of scenic values. wildlife habitat disruption and fragmentation. dust and emissions from increased traffic. emissions and noise from generators and gas compressor stations. What’s going on now? Evergreen is currently exploring the Willow area for CBM development by drilling five “core holes.” Their future plans call for more core holes and, possibly pilot wells. The Alaska Department of Natural Resources, along with the Alaska Oil and Gas Commission and the Mat-Su Borough, have sponsored five public workshops this winter to develop guidelines for shallow gas development. At present, DNR is processing the results of the workshops and will issue their recommendations this March. There will be three public meetings in Sutton, Wasilla and Su Valley High School to take comment on their recommendations. The state legislature is currently developing legislation dealing with CBM management in response to public concerns in the Mat-Su and Homer areas.  Web sites and other information sources: Alaska Department of Natural Resources: www.dog.dnr.state.ak.us/oil Information on CBM in the Valley: www.gasdrillingmatsu.org Evergreen Resources, Inc.: www.evergreen-res.com Friends of Mat-Su: www.foms.net Updates on current CBM legislation: www.alaska.net/~jrc/cbm.html Cook Inlet Keeper: www.inletkeeper.org Powder River Basin Resource Council: www.powderriverbasin.org Wyoming Outdoor Council: www.wyomingoutdoorcouncil.org CBM Information Center located in the lobby of the Willow Community Building.     This informational flyer prepared by CBM ad hoc committee Steve Charles, Chair, Willow Area Community Organization