This map shows the site of a proposed Hilcorp well pad off the Old Sterling Highway. (Illustration provided)

This map shows the site of a proposed Hilcorp well pad off the Old Sterling Highway. (Illustration provided)

Borough votes to lease Anchor Point parcels to Hilcorp

At last week’s Kenai Peninsula Borough Assembly meeting, the assembly voted to lease parcels in the Anchor Point area to Hilcorp for oil and gas subsurface rights.

At the Oct. 23 assembly meeting, assembly member Willy Dunne took the ordinance off the consent agenda for further discussion in Anchor Point.

The ordinance will lease oil and gas rights at 12.5 percent royalty, which is the minimum royalty under borough code. One of the lease areas is near Chapman Elementary School on a site that’s used as a solid waste and recycling transfer site. The well site will sit on land off of the Old Sterling Highway.

At last Tuesday’s meeting, Dunne said he’s received a lot of feedback regarding the ordinance.

“There still are problems with this,” Dunne said. “I’m not ready to support it in its current form. We heard lots of people talking about the inability to sleep at night because of the lights and the noise.”

Assembly member Kelly Cooper said she would support the ordinance to ensure the borough has a seat at the table.

“I spent a great deal of time talking to people on both sides of the issue, as well as those participating,” Cooper said. “When we talk about the community meeting in Anchor Point. This is not an easy decision for us, especially those who know we need to be working towards alternative energy, and greener energy. I also know we can’t just flip the switch. We have to work towards that. Whether we vote this up or down, I think the majority of the constituents now understand that if we vote this down it occurs anyway and the revenue goes to the state.”

Oil and gas are what makes the Kenai Peninsula go around, assembly member Dale Bagley said.

“It’s what makes Alaska do well,” Bagley said. “I’m happy there’s a well down there (in Anchor Point). I support drilling anywhere on the Kenai Peninsula. I’m happy the borough can get some royalties. I’m surprised by the controversy on this.”

Dunne ended the assembly comments, saying if the assembly voted the lease down it would not harm the borough. He said the borough could get a higher royalty percentage.

“It’s absolutely not true that if we vote this down we lose it forever,” Dunne said. “We just need to come up with a better lease deal. Voting this down will not mean we don’t get revenue from that subsurface property. I think we can do better than 12.5 percent. Voting this down would not harm the borough at all. We need to get the best deal we can for the borough residents.”

The assembly passed the ordinance 8-1, with Dunne being the only member opposed.

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