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Paying their way?

| Sunday, Dec. 23, 2012, 12:02 a.m.
Valley News Dispatch
A Falcon Drilling rig takes up the entire road as it moves heavy equipment to a work site on Hartge Road in Lower Burrell on Wednesday, Dec. 19, 2012. Falcon Drilling is contracted by an oil firm to do work in the area. Jason Bridge | Valley News Dispatch

Municipal officials say they have found ways to work around what they say are inadequate road bonding amounts.

But the rising cost of road material and increased natural-gas drilling activity have created renewed interest in pushing the state to increase the bonds, meant to ensure that private companies repair the roads they use during activity in the area.

“I've been asking the state to increase the amounts for the past 15 years,” said Lori Ziencik, chairwoman of Frazer supervisors. “I don't know what the holdup is. I see no reason why they're not doing it.”

Road bond amounts — set in 1978 — are $6,000 per mile for unpaved roads and $12,500 per mile for paved roads.

“That doesn't even cover a quarter of a mile,” said Buffalo Township Supervisor John Haven.

It costs about $120,000 to pave a mile of road, officials said.

The Pennsylvania State Association of Township Supervisors has been working to get legislation sponsored to increase road bond amounts, said Assistant Executive Director Elam Herr.

House and Senate bills introduced in 2009 did not make it out of the transportation committee.

“We have a resolution that's been on the books for years and we have been talking both with legislators and PennDOT about increasing the rates,” Herr said. “Hopefully, something will be put in place after this session.”

Most commonly, roads are bonded by a company doing work that requires heavy trucks to use municipal, county or state roadways.

Once the company repairs any damage that occurs from its activity, the bond is released.

If a company doesn't fix the road, the bond amount goes to the municipality to cover repairs.

While work such as timbering or mining can lead to heavy truck traffic on rural roads, the increase in both conventional and horizontal drilling in the natural-gas rich Marcellus shale play has led to additional truck traffic, officials said.

The Marcellus Shale Coalition, an industry group, said its members recognize the impact operations can have on communities.

“Our member companies have invested more than ($500 million) to repair and rebuild roads,” coalition president Kathryn Klaber said in an emailed statement. “Additionally, more than half of the recently disbursed $204 million in natural gas impact fee revenues were directed to local governments.”

Officials say the Act 13 Marcellus shale impact fee money, which is distributed to municipalities based on the number of wells in their community, doesn't cover the full cost of paving a road in the 21st century.

For example, Buffalo Township received about $59,000 and Gilpin Township received about $21,600.

“Sometimes roads aren't in that good of shape to begin with,” said Gilpin Township Supervisor Michael Steimer. “We probably have at least $1 million worth of paving that needs to be done.”

Gilpin's annual budget is about $800,000.

“Most townships have a tight budget and if all of a sudden someone tears up a mile of road, we don't have the money,” Steimer said. “Some companies work more with you than others.”

In some cases, township officials said they enforce road bonds as the damage occurs.

South Buffalo Township Supervisor Terry Van Dyke said his township has had success with that method.

“What you have to do is keep on your toes and not let it get to the point where it's impassable for the public,” he said. “If it gets to the point where they've exceeded $12,500, you get with the company and get it fixed. Then we can start another $12,500 bond.”

Officials in Buffalo and Frazer townships, where Marcellus shale drilling activity is also under way, negotiated excess road maintenance agreements. They bond roads for an amount beyond the state requirement and ensure the drilling company restores the roadway back to its original condition.

“We never tried to negotiate one prior to Marcellus wells,” said Ziencik, of Frazer, where Range Resources is drilling wells off Bakerstown Road. “Their operation is such a large capacity, and we knew with this many trucks and the equipment, that this was a no-brainer.”

In Lower Burrell, Penneco Oil, of Delmont, had a drilling company drill oil wells along McAlister Drive and Hartge Road. But beforehand, Penneco widened, paved and improved drainage on about a quarter mile of McAlister, off Route 780.

City and Penneco officials negotiated an agreement to bond McAlister for $25,000.

“It's based on the worst-case scenario of having to redo the road in that area,” said Lower Burrell road foreman Scott Johnson.

Penneco Senior Vice President Marc Jacobs said the company doesn't normally upgrade a road before drilling.

They did so for two reasons: Lower Burrell had intended to improve the road, and the company was drilling two oil wells off the same well pad and the expense of fixing the road seemed justified, he said.

Penneco's general policy is to return roads to the same condition they were originally.

“We're a family business that's been in the area drilling wells since the early '80s,” Jacobs said. “So it's not like we're in and drilling a few wells and leaving. Our reputation is very important to us.”

Jodi Weigand is a staff writer for Trib Total Media. She can be reached at 724-226-4702 or jweigand@tribweb.com.

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