By SUSAN GALLAGHER
Associated Press Writer Thursday, August 26, 2004
HELENA, Mont. - The British Columbia government's sale of coal-bed methane leases in the southeastern corner of the province, a sale Montana's governor opposed for environmental reasons, has drawn no bids.
"Of all the scenarios we anticipated, this wasn't one of them," said David Thomas, a City Council member in Fernie, British Columbia, and a leading critic of drilling for coal-bed methane in that area.
"This demonstrates the power of working together across the border and the value of this landscape to both sides," Thomas said.
Michael Gatens, chairman of the Canadian Society for Unconventional Gas, said potential bidders apparently decided risks and costs were too great. Tests over the past 20 years in southeastern British Columbia and southwestern Alberta yielded some disappointing results, Gatens said from his office in Calgary, Alberta.
Thomas said opponents of drilling were influential in deterring bids, but Gatens said that "for most of the players, that's something you're always going to be dealing with, and that's OK."
The British Columbia Ministry of Energy and Mines said many things influence prospective bidders, and over the span of a year, more than 10 percent of leases offered by the ministry go unsold.
Gov. Judy Martz had said British Columbia was moving too rapidly to join the emerging coal-bed methane industry, active in Montana, and could end up harming water in the Flathead River system, which enters Montana from the province. The North Fork of the Flathead forms the western boundary of Glacier National Park, the state's crown jewel.
This summer she asked, apparently to no avail, that Canada's federal government rein-in British Columbia on the coal-bed methane issue by requiring a full environmental study before the sale of leases. Others calling for a study included the 22-member Flathead Basin Commission, created by the Montana Legislature to protect the watershed. The Fernie City Council called repeatedly for a thorough study before selling leases.
British Columbia officials began accepting bids in July for rights to explore for coal-bed methane beneath some 4,900 acres of land divided into two parcels. They accepted bids until the middle of this week but announced Thursday there were none.
Earlier this year, a proposed coal mine in southeastern British Columbia also raised concern in Montana over environmental issues. Provincial officials said they would not let mining proceed, but they said coal-bed methane leasing was an entirely different matter and would be encouraged.
Thomas said that with no leases sold and the mine blocked, attention now turns to Shell Canada Limited's plan to explore for coal-bed methane this fall in southeastern British Columbia. Shell and Elk Valley Coal Co. are collaborating on plans to explore beneath coal company land between Fernie and Sparwood, British Columbia.
"The fight's not over," Thomas said.