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University of Tennessee Shelving Gas/Oil Impact Study
The University of Tennessee’s Institute of Agriculture (UTIA), which had spent three months in search of an industry partner to investigate the impacts of natural gas and oil exploration, as well as development from shale formations, has put the project on hold after receiving no bids for the proposed research project.
“While we are disappointed in the outcome, we are going to look at the feasibility of continuing this innovative research,” said Kevin Hoyt, director of UTIA’s Forest Resources AgResearch and Education Center.
A request for proposals (RFP) that was issued by UTIA in June to lease oil and gas interests in 8,600 acres in Tennessee’s Morgan and Scott counties was “intended to identify a potential industry source to conduct the drilling component” of the research project at the university’s Forest Resources AgResearch and Education Center (see Shale Daily, June 13). The acreage is “documented to have reserves of natural gas and oil, and UTIA scientists say it is an ideal location for university-based research into societal concerns regarding natural gas and oil development,” according to the university.
The proposed investigation would seek to answer research questions regarding the relationships between the development of gas and oil resources through hydraulic fracturing (fracking) and groundwater quality, wildlife habitat, soil disturbance, geological shale and individual species of flora and fauna.
The contract was to be awarded for five years, with three five-year renewals possible, according to the RFP. Revenue to the university would include a $300,000 lease bonus, $35/acre in rent and at least a 15% royalty on any gas produced in the Cumberland Forest research area. The university would also receive free natural gas and $500,000 a year in research project funding. The Southern Environmental Law Center and Sierra Club opposed the research proposal, which they said was an attempted shortcut to fracking at the research center.
UTIA said it received a single, “no-bid” response to the RFP, from CNX Gas Co. and its subsidiary Consol Energy, “citing that the project would not be economically viable for the company under the terms outlined in the Request for Proposals.”
The university has sought ways to generate revenue from the Cumberland Forest research area for more than a decade.
The U.S. Forest Service has been wrestling since 2011 with a draft plan that would, among other things, make almost one million acres of the George Washington National Forest (GWNF) in the Appalachian Mountains of Virginia, West Virginia and Kentucky available for gas leasing but prohibit horizontal drilling on all federal leases (see Shale Daily, Oct. 25, 2011).
Besides the prohibition on horizontal drilling, the GWNF plan includes other restrictions on development of underground wells. It would also allow consideration of wind energy development, but prohibit it on 450,000 acres of areas identified as sensitive. Unlike National Parks and Wilderness areas, some commercial development is allowed in national forests. A final environmental impact study and plan are scheduled to be issued before the end of the year.
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