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State considers opening land near Talkeetna and Willow for oil and gas exploration

  • Author: Alex DeMarban
  • Updated: May 30, 2017
  • Published May 29, 2017

The state has received an application for an exclusive oil- and gas-exploration license in a giant area in the Susitna Basin mostly west of the Parks Highway near Talkeetna and Willow.

State officials won't name the applicant, respecting the individual's or company's privacy in the early stages of an application. But the request for the Susitna Valley exploration license is unique. The area that might be opened lies far from Cook Inlet and the North Slope, where oil and gas companies have operated for decades.

The 1.5 million acres of state-owned land that Alaska officials are considering making available to exploration falls under a state program designed to encourage prospecting in little-explored regions.

The area extends west beyond Skwentna and east nearly to Willow. Talkeetna lies just outside the northern boundary. The area surrounds portions of the Yentna River and the Susitna River that feed salmon into Cook Inlet.

Cook Inlet Energy was the only company to have held an exploration license there, but it never conducted exploration drilling. It relinquished its license in 2015 amid financial difficulties that led to bankruptcy. The small oil and gas producer still operates elsewhere in Alaska, with new financial backers.

Its chief executive, Carl Giesler, said on Friday that his company is not the applicant.

"No idea who it is," he said.

The Alaska Division of Oil and Gas announced the application on Wednesday, launching a month-long public comment period.

Cathy Teich, a retired speech pathologist living near Talkeetna, said she opposes making the land available to petroleum exploration out of fear it will destroy salmon streams.

She predicted that the idea won't receive a favorable reception in Talkeetna, where people will be "rabidly" against it.

"Everyone's livelihood in this area is from fish and tourism, and this would devastate the economy, not to mention the ecosystem of this area," she said.

The state keeps the applicant anonymous for now because competitors can sign on, potentially leading to a bidding contest for the license, said Jonathan Schick, a natural resource specialist in the division. Bidders are also kept anonymous until bids are opened in Alaska's traditional lease sales, such as on the North Slope.

The exclusive license is a preliminary step in exploration. If it is granted, the company's name will be publicly available, Schick said.

The license holder has the right to explore state land in the area for up to 10 years. But before a company can receive a license, the state must decide whether it's in Alaska's best interest to open the basin again to potential exploration, Schick said. That could take a year.

Public comments received by June 23 will be used in that finding.

Before the company can conduct exploration drilling or do related work, it will need to submit a plan of exploration to the state for approval. That will require its own public comment period, said Schick.

In a licensed exploration effort in a different part of the state, regional Native corporation Ahtna drilled a gas well in October near its headquarters in Glennallen. The company has an eye on selling natural gas in the Copper River Basin and surrounding areas.

Ahtna has not released results from that well, or information on future plans, a spokeswoman with the company said last week.

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