Alaska Oil & Gas Ltd (fka AKOL)

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The Associated Press

Published: February 27th, 2005
Last Modified: February 27th, 2005 at 02:36 PM


FAIRBANKS (AP) - A subsidiary of Usibelli Coal Mine has applied for an exploration license to search for natural gas or coal bed methane near the company's Healy coal holdings.


Usibelli Energy wants to find out how much gas the land on the northern edge of the Alaska Range could hold, said Steve Denton, president of business development for Usibelli.

"It's the right kind of geology and we figured somebody ought to take a look," Denton said. "We're right here and we seemed like the logical ones."

Workers at the mine have spotted bubbles rising out of the ground that may indicate natural gas, Denton said.

Usibelli wants to explore 208,630 acres over 10 years, with the promise to spend at least $500,000.

It's not the first foray into gas for the company. Usibelli is working with Doyon Ltd., Arctic Slope Regional Corp. and Denver-based Andex Resources to explore for natural gas in the Nenana Basin 50 miles to the north. Healy is about 100 miles south of Fairbanks on the Parks Highway.

Several areas in the Interior have good potential for natural gas, said Jim Cowan, a petroleum geologist with the state's Division of Oil and Gas. The Nenana Basin holds the most promise. The Healy Basin may only have enough gas to heat and light Usibelli's coal mining operation or perhaps the community of about 1,000 people, he said.

The Healy Basin abuts the south flank of the larger Middle Tanana Basin, an area that extends past Delta Junction. Usibelli wants to look within a land parcel that extends nearly to Clear to the north, about 12 miles west of Healy at its farthest point, about 24 miles to the east, and about two miles from the border of the Denali National Park and Preserve to the south.

It's likely that the gas found there would be coalbed methane, Cowan said. Coalbed methane is gas trapped in seams of coal by water. It is extracted by removing water pressure by pumping the water to the surface or relocating it underground.

Denton said it's too early to say anything specific about Usibelli's plans.

"We don't know what the resource is," he said. "It'll be next year before we can do any firm planning."

The Department of Natural Resources intends to issue a best-interest finding, an in-depth document that will spell out if the project is in the best interest of the state. That report would be final later this year.

Sue Deyoe, community organizer for the Denali Citizens Council, said some Healy residents are worried about the potential exploration and production.

"It's a big chunk of land," she said. "We're concerned with impacts to wildlife and people's property."

The council and other nonprofit organizations are holding workshops in Healy, Homer, Wasilla and Fairbanks starting next week, she said. The council wants to help the public understand the licensing process.

She said she believes the state will ultimately issue the license.

"We're doing it to get information out," she said. "So when they write (public comments) they can cover things that are important."

Usibelli, a three-generation family business in Healy, has been responsive to community concerns, she said.

"Personally, truthfully, I much rather have Usibelli doing it than an outside company," she said.

Denton agreed that there is much more to learn about methane gas. Usibelli would likely hire a contractor to do the exploration, he said.

"The issue with coalbed methane, I think, is that it probably has been poorly understood by both sides," he said.

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