A suburban Pittsburgh regional park authority in Allegheny County, PA, voted Thursday to sign a five-year, non surface lease with a Pittsburgh land brokerage firm that could lead to Marcellus drilling under the one park the authority runs. The agreement still needs to be approved by four of the five communities that the authority represents.
The Avonworth Community Organization for Recreation and Development (ACORD) executive board -- which represents the Ben Avon, Ben Avon Heights and Emsworth boroughs along with Kilbuck and Ohio townships -- voted 3-2 to give Energy U.S. drilling rights in the 119-acre ACORD Community Park, which lies in Kilbuck and Ohio townships.
Board Chairman Ed Gould told NGI's Shale Daily on Friday that Energy U.S. had offered $2,500 an acre, plus royalties.
"Our agreement with the five communities requires us to go to them to get their approval," Gould said. "All our signing did was allow us to continue the conversation. We don't have the right to give those lease rights away without the consent of four of the five communities."
Ohio Township approved the lease on April 4. Ben Avon Heights is scheduled to meet Tuesday, while Emsworth meets Thursday, Ben Avon will meet April 19 and Kilbuck meets April 26.
"It may end up being that what we're being offered is a good deal, but at this time I don't think we know," Michael Bett, a member of the Ben Avon Council, told NGI's Shale Daily on Friday. "We haven't had time to investigate it. We need more time to come to a proper decision."
Bett added that whether the Ben Avon Council brings the Energy U.S. proposal up for discussion depends on what happens at the Ben Avon Heights and Emsworth meetings.
Energy U.S. did not return calls seeking comment Friday or Monday.
Gould said the authority had been actively shopping the park's mineral rights as a way to raise revenue, naming Range Resources and Chesapeake Energy as two other companies that were interested in the park. He said Energy U.S. officials told him they had 600,000 leasehold acres in western Pennsylvania, and confirmed that the company had presented him the lease on March 30 with a one-day deadline to sign, with the understanding that it would be void if rejected by the board or two of the five ACORD communities.
"A representative from each of the elected councils has been contacted through this very quick process" Gould said. "We have indications that they are glad that we are following the process as prescribed. The authority is always looking for different ways to raise revenues for the park, as long as they are sound business decisions."
Bett said he remained skeptical about the proposal. "I feel very much like when you're in a car dealership and you get up to walk out the door and the dealer says 'this deal won't be good tomorrow,'" he said. "We all know the deal is still there; the land isn't going anywhere. It's too early on to say whether or not Energy U.S. is the right company for us."
Asked if any revenue from drilling under the park would be divided evenly among the five municipalities the authority represents, Gould said, "We haven't had that part of the discussion. But that's a good discussion to have. It's better than the alternative of not having enough revenues."
The county government -- the Allegheny County Council -- is considering new restrictions on drilling, including stretching the minimum distance between wells and homes to 2,000 feet from the current state-mandated 200-foot minimum. While not currently a Marcellus heavy hitter, it is wedged among some of the state's most productive counties. Four permits to drill and operate wells in Allegheny County were issued in January, according to the state Department of Environmental Protection (see Shale Daily, March 9).