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SB 250 "Natural
Gas Leases On The Kenai Peninsula" |
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Home | 2004 CBM Bill Table | Sponsor's Statement | Bill Text |
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How Much for that Lease in the Window? Sen. Gary Stevens’ (R-Kodiak) SB 250, which initiates a buyback of the eight shallow gas leases on the Kenai Peninsula and institutes a moratorium on new leases in the Kachemak Bay region, was heard in Senate State Affairs on Tuesday. The hearing was dominated by the testimony of Mark Myers, Director of the Division of Oil and Gas, who asserted that while he agrees the public notice and leasing process in the Homer region wasn’t ideal, the cost of the buyback could exceed $200 million for $4,000 worth of leases.The hearing was further muddled by the distinction between coal bed methane (CBM) and shallow natural gas. It seems the majority of the gas prospects in the Homer area are shallow gas, which doesn’t produce the same volume of wastewater as CBM, but requires more intrusive traditional drilling methods to recover the gas. This distinction highlighted the loophole in last year’s HB 69 which grouped CBM and shallow gas into the same "streamlined" leasing process. The committee requested detailed information from DNR about the actual public notice process. No future hearing has been scheduled. Hmmm… DNR isn’t comfortable with the leasing process. Should we be surprised that Homer Mat-Su landowners aren’t happy either?"I’m puzzled… people can get a lease for $500 bucks and that lease isn’t predicated on the value of the resource, but if we buy it back then the state has to predicate how much they pay because of the value of the resource? -Senator Kim Elton (D-Juneau) in response to Mark Myers’ (Division of Oil and Gas) assertion that it may cost the state $200 million to buyback the 8 Homer area shallow gas leases which originally sold for $4,000 (Senate State Affair 4/3 on SB 250). Not a bad return on a handful of speculative leases. |
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