The city council in Youngstown, OH, voted 5-2 Wednesday in favor of an ordinance that could open city-owned land to oil and natural gas drilling.
Ordinance No. 12-280 authorizes the city’s Board of Control to seek competitive proposals and enter into a contract to lease city-owned land for oil and natural gas extraction. The board, which has the power to execute contracts and agreements on behalf of the city, includes the mayor, the city’s law director and the its finance director.
The city will reportedly use revenue from oil and gas leasing toward the demolition of blighted housing and neighborhood revitalization projects.
Councilman Paul Drennen (D-5th district) told NGI’s Shale Daily that he cast one of the two dissenting votes because he wanted the city council to be the ultimate arbiter over any oil and gas contracts.
“We were willing to let the board go out for bids, but then we wanted them to come back to us before any contract was finalized,” Drennen said Thursday. “We wanted to make sure we had the final say. We wanted to be sure the drilling wasn’t going to be too close to a residential area or any natural resources that might be harmed.”
Asked if the board does that for any other enterprise, Drennen said, “It depends. Sometimes. For example, if they’re going to pave a street and it’s going to cost $200,000, we’ll allow them to go out for bids and then enter into a contract. But with this type of issue, we just felt that was the right thing to do. And that’s why I voted ‘no.'”
During Wednesday’s meeting, a verbal agreement was made among city officials that the board would delay seeking bids for oil and gas drilling until the U.S. Environmental Protection Agency (EPA) completes a study on the potential risks of hydraulic fracturing (fracking) on water quality and public health (see Daily GPI, March 19, 2010).
“It was just a verbal statement; it’s not written into the ordinance,” Drennen said. “They could actually go out for bids and enter into contracts tomorrow if they wanted to. But we felt that it wouldn’t be too harmful to wait until that study came out. I believe the study is going to be out shortly. I didn’t feel we needed to rush this through. If the EPA study came back positive, then it could have possibly changed the vote.”
EPA has said it expects to deliver an interim report to Congress in December and an additional report completed by 2014 (see Shale Daily, Nov. 4, 2011).
Last year the Youngstown area began getting hit by a dozen small earthquakes, which the Ohio Department of Natural Resources (ODNR) said may have been caused by the Northstar I Class II injection well (see Shale Daily, March 12). The well, which is owned by Youngstown-based D&L Energy Inc. and operated by Northstar Disposal Services LLC, remains offline and depressurized. A final ODNR report is expected by the end of the year.
Drennen said he thought the fracking fluids would be a bigger issue once drilling started, but he agreed that there was a possibility for renewed seismic activity.
“It depends where they drill,” Drennen said. “If the presumption was that D&L drilled too deep, or they went into the wrong area, what if another company does that? Then there’s the possibility of seismic activity. It just depends if the company is following the guidelines they need to follow.
“I know these companies do test the land. They look for where the Utica Shale is, and they want to make sure that it’s in a correct area. But what if you have a company that isn’t following the correct guidelines, or that the ODNR is not regulating like they should be? We could have an issue with that.”
ODNR had asked D&L to halt operations at Northstar 1, which began operations in December 2010, at the end of 2011 (see Shale Daily, Jan. 5). The ODNR report said the closest known fault system is the Smith Township Fault, which runs in a northwest-southeast direction in Mahoning County. Maps of the fault indicate that it has had recurrent movement throughout geologic time.
According to the Ohio Seismic Network, 12 earthquakes with a magnitude greater than 2.0 have been recorded in the Youngstown area since March 17, 2011, when two quakes — of 2.1 and 2.6 magnitude — were recorded. Additional earthquakes were recorded on Aug. 22 (2.2 magnitude), Aug. 25 (2.4), Sept. 2 (2.2), Sept. 26 (2.6), Sept. 30 (2.7), Oct. 20 (2.3), Nov. 25 (2.2), Dec. 24 (2.7), Dec. 31 (4.0) and Jan. 13, 2012 (2.1).
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