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Showdown Looms Between Morgantown, Driller

The City of Morgantown, WV, and Northeast Natural Energy (NNE) appear to be on a collision course, with the city preparing to pass an ordinance Tuesday night that would ban hydraulic fracturing (hydrofracking), and the company in turn vowing to sue the city if it tries to interfere with its two wells.

Morgantown Mayor William Byrne told NGI's Shale Daily that he predicts the ordinance -- which would ban hydrofracking within the city limits and a one-mile buffer surrounding the city -- would pass. He admits the ordinance specifically targets two NNE wells in the Morgantown Industrial Park, which lies outside the city limits but is within the buffer zone (see Shale Daily, June 10).

"The industry made a real mistake here, placing those wells in that location," Byrne said Monday. "Without any notice or opportunity to be heard, they put those wells right in our faces. Now they are hearing the incredible outcry from the citizens of Morgantown."

NNE spokesman Brett Loflin told NGI's Shale Daily that the Charleston, WV-based company was closely monitoring developments in Morgantown. He said NNE sent a letter to city officials seeking clarification over the ordinance.

"We're troubled by the action of the city council," Loflin said Friday. "We feel like it is an illegal ordinance and that it would preempt existing state law. We have permits from the [West Virginia Department of Environmental Protection] DEP to drill and frack those wells.

"We're kind of in a 'wait and see' mode. We'll be at the city council meeting Tuesday night and we obviously plan to speak. Depending on the outcome of the vote we'll have to regroup Wednesday morning and decide what our strategy is."

Loflin made it clear that NNE would sue Morgantown if the city tried to stop the company from performing hydrofracking at its wells.

"We're not in the business of suing people," Loflin said. "That's not where we want to be. We don't want to end up in court and we certainly don't want to have to sue the city. But if the ordinance passes, we will pursue all options to guarantee that our legal rights are protected."

Morgantown officials met their counterparts from neighboring Monongalia County and the City of Westover to discuss the proposed ordinance during a work session last Wednesday. County officials had wanted the ordinance amended to exclude properties that would not affect the city's water supply, but Byrne said the measure would not be changed (see Shale Daily, June 15).

"We had a very open and frank discussion with the commissioners about the problem and what we were doing about it," Byrne said of the work session. "There was some discussion about how we would work this over time. If there are things that come up with respect to its application, the various municipalities and the county will have to work them out, and we will do so. But if there are issues that can't be worked out, they will have to be decided by the courts."

Monongalia County Commissioner Bill Bartolo told NGI's Shale Daily that a large number of people, most of them opposed to hydrofracking, turned up for the work session. The meeting was open to the public.

"The county has a concern about the legal issues over a municipality coming out of their boundaries and exercising authority," Bartolo said Friday. "We told them that they can't just draw an arbitrary one-mile radius around the Morgantown city limits and say they have authority over it. But that issue would remain to be decided if in fact they shut down, or attempt to shut down, the drilling that's going on now."

Morgantown officials contend the West Virginia Code -- specifically Section 8:12:19, also known as "Extraterritorial Exercise of Powers and Authority" -- gives them the power to enact legislation covering a one-mile buffer zone around the city.

"There are neighborhoods in Morgantown, located on the border of the city, that don't want to see this type of industrial operation right next to their house," Byrne said. "Under existing regulation, this is permitted. We're trying to create a buffer around a metropolitan area that prides itself on a quality of life that is not disturbed by industrial activity."

Bartolo predicted a court fight between Morgantown and NNE if the ordinance passed and the city tried to stop NNE from hydrofracking.

"My feeling is, and Morgantown officials are well aware of this, that the driller probably will take legal action if they attempt to shut them down," Bartolo said. "I've been told that they allegedly have already spent $7 million preparing to do this drilling. If that's the case, then I'm sure they're not going to just roll over."

Loflin confirmed that NNE has already spent more than $7 million on the two wells. The company plans to eventually site six wells on the pad.

"We want the city council to understand that even if they pass this ordinance and it is later overturned, it is still going to cost us a lot of money," Loflin said. "Whether they are trying to make a statement to get the state to draft additional regulations that would pertain to the whole industry or not, or what their motivation is, we're not all that sure."

Loflin said NNE had completed the vertical drilling section for one of the two wells and would begin the horizontal drilling portion within days, at least guaranteeing that one well would be beyond the reach of the proposed ordinance. Loflin said the start of vertical drilling for the second well was still two to three weeks away.

"I'm not exactly sure what the issue is, other than there are some folks worried about the public water intake," Loflin said, adding that the wells were 2,000 feet from the Monongahela River, and an additional 1,500 feet from the municipal water intake. "We're drilling our wells in an industrial park. I couldn't imagine picking a better spot than an industrial park to conduct industrial activity."

Both Bartolo and Byrne voiced frustration over the issue and reiterated their calls for Democratic Gov. Earl Ray Tomblin to call a special session of the West Virginia legislature to discuss Marcellus Shale regulatory reform (see Shale Daily, June 17).

"This is a very important industry for our region and our state, with great potential and opportunity," Byrne said. "But at this time it's in a very precarious place. There's lots of concern about it. It has in many ways a very bad public image. This [dispute] has just exacerbated a problem that needs to be addressed in a more systemic, comprehensive way. We need the industry, environmentalists and legislators to all sit down and say, 'Let's move forward and get this thing done.'"

Said Bartolo: "We need to come to some type of agreement on this."

The Morgantown City Council is also expected to give final approval Tuesday to a resolution asking the DEP to issue a stop-work order for the two NNE wells. DEP Secretary Randy Huffman has said that request was unlikely to be granted (see Shale Daily, June 6).

The DEP amended NNE's two well permits on May 19, after the company negotiated with Morgantown's utility board to include closed-loop drilling systems for both the air-drilled and fluid-drilled portions of the wells (see Shale Daily, May 25).

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