Saying ‘no’ doesn’t work with oil-gas industry
Remember when First Lady Nancy Reagan came up with “just say no,” a chant meant to steer children away from the nightmare of a drug-addicted life? Its simplicity and hoped-for-power made it spread like wildfire. Thousands of “Just Say No” clubs sprang up. The Girl Scouts of the United States of America and the Coalition of Parents for a Drug-Free Youth helped broadcast the message. Britain and Australia gave it an international reach.
Sadly, there’s one subject where “no” appears to go unheard: oil and gas.
My two daughters and I are fortunate to hold the surface and subsurface rights to a 3.22-acre piece of land near Ninilchik that was homesteaded by my paternal grandfather in the 1920s. It was my home base for many years. It’s been the site of numerous family gatherings and the location of choice for creating new family memories. Counting my grandchildren, five generations of Jackinskys have held this land dear.
In 2013, we received a lease offer from Hilcorp, the Texas oil and gas company which is now the largest producer in Cook Inlet. It wasn’t unexpected. In a 12-mile stretch north of our cabin, Hilcorp has six operating sites. They were interested in extending the southern reach of the nearest, a four-well pad about a mile away.
Had we signed that offer, it would have granted Hilcorp access to our land for a period of three years “or as long thereafter as oil or gas and associated substances is produced in paying quantities from the leased premises hereunder.” It also included a $10 signing fee and royalties, the amount of which would be determined by a complicated formula spelled out in the lease.
In June 2016, Hilcorp leased Heavenly Sights Charter’s 24-acre parcel that borders the bluff above Cook Inlet on the west and on the east a portion of the homestead on which my nephew and his family live. It now brings Hilcorp less than a quarter mile from the property my daughters and I own.
In May 2017, we received a packet from Hilcorp stating the company’s intent to purchase the Heavenly Sights’ acreage. In the cover letter, Hilcorp states, “None of our planned activities will occur on or beneath your property.” The letter continues that if the planned well proves successful, our mineral interests will increase in value and if the planned well drains a large area, my daughters and I may be entitled to a portion of the production proceeds. The lease says something different, however. It clearly states that Hilcorp agrees not to conduct surface operations, but that our signatures give right to “drill and operate directional wells through and under said land.”
If we don’t sign the lease and Hilcorp is successful, the letter says, any proceeds due my daughters and I would be escrowed by the state of Alaska.
What? A “no” from us won’t stop Hilcorp from reaching into the subsurface of our land and taking what it wants, even though we hold the rights? A “no” only means any payment due us would instead be escrowed by the state?
To better understand the situation, I’ve made multiple calls to the Alaska Division of Oil and Gas and was directed to the Alaska Oil and Gas Conservation Commission, who, I was told, administers the escrow account. I called AOGCC and, as directed by the person who took my call, followed up with an email explaining the situation and the information my daughters and I need. My daughters and I were hopeful of a response, especially in light of AOGCC’s stated mission to “protect the rights of all owners.” Two weeks passed with no response, so I sent the email a second time, copying my legislators, hoping that might spur a reply, but have yet to hear from anyone.
I also contacted an attorney to have the lease reviewed and to help us understand the meaning of subsurface rights and what a state of Alaska escrow is. The attorney hit the same brick walls and closed doors I did.
While we do our research, Hilcorp continues to advance at an ever increasing rate. On the Heavenly Sights property, the plan is to drill two wells this summer to gain additional geologic information and then drill the first gas well this winter. Less than two miles north of us Hilcorp also is developing a new pad on Ninilchik Native Association-owned land.
Earlier this year, following a talk at Rotary Club of Homer-Kachemak Bay about my book “Too Close to Home? Living with ‘drill, baby’ on Alaska’s Kenai Peninsula,” someone commented it sounded like a case of “not in my back yard.”
Without a doubt I am concerned about my back yard. So were the Paulsruds, who live next door to the North Fork pad where Homer’s natural gas is produced and saw their property value drop as the project developed. So was Ken Lewandowski when Enstar constructed a nearby natural gas pressure reduction facility that made so much noise he couldn’t carry on a conversation inside his home. So was the Correia family when they battled unsuccessfully to maintain their secluded setting near Clam Gulch when Hilcorp moved in across the highway. So was Herff Keith when BlueCrest announced plans to frack wells little more than 1,000 feet from his water well.
“Backyard” takes on larger proportions when it encompasses Cook Inlet, upon which many of us depend for our livelihood, food and recreation. In February, it was reported natural gas was leaking from a Hilcorp pipeline at the rate of more than 200,000 cubic feet a day. Finally in April Hilcorp reported the leak repaired. Reports of possible leaks from two other Hilcorp platforms resulted in the platforms being shut down.
Last Wednesday Hilcorp was the only bidder in both the federal and state oil and gas lease sales for Cook Inlet. The company spent more than $3 million for exploration rights to 14 federal offshore leases in a 76,615-acre area of Cook Inlet and just shy of $1 million for 26,822 Cook Inlet acres in the state sale.
My point is not to argue the “not in my backyard” perspective, but to expand the definition of “backyard.” How much does oil and gas have to expand before we realize we all share one backyard? And how loud does our “no” have to be before it’s heard?
McKibben Jackinsky is a freelance writer who live in Homer. She also is the author of “Too Close to Home? Living with ‘drill, baby’ on Alaska’s Kenai Peninsula.”
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