Allegheny County wants Consol to sweeten bid to drill on airport property
By Timothy Puko
Published: Thursday, Jan. 17, 2013, 1:46 p.m.
Allegheny County is asking Consol Energy to sweeten the bid that won the right to drill for natural gas on airport property, two county leaders said on Thursday.
County Executive Rich Fitzgerald said Cecil-based Consol could pay $10 million to $15 million more than its initial bid — $20.8 million — in upfront money before the sides finalize a deal in coming months. The county has leverage because it has a second bid from EQT, and it could throw out current offers and rebid, said Fitzgerald and Dennis Davin, director of county economic development and the Airport Authority's board treasurer.
Consol agreed the offer could change.
“Since the airport authority selected our bid last month, we have made significant progress in our negotiations,” said Lynn Seay, Consol spokeswoman. “Our conforming bid contemplated an ability to increase the bonus payment as part of those negotiations should we get clarity and comfort in certain aspects of the bid package.”
Some were skeptical on Thursday. County Council Vice President Nicholas Futules said the county probably won't be able to get Consol to boost its offer. EQT met few of the county's requirements with its bid, he said, meaning the county probably has only one qualified bid.
“I would probably consider their (EQT) bid pathetic. They gave us six sheets of paper when we gave them a whole booklet,” Futules, D-Oakmont, said by phone after Fitzgerald spoke to reporters Thursday.
When asked how much leverage the county had, Futules said, “Probably none. I mean, they struck a deal, they have a contract, and that's what we're going to get.”
Other Allegheny County Airport Authority leaders, who put out the bid request and are collaborating with county officials on negotiations, could not be reached for comment.
At stake is about 9,000 acres for drilling on land at Pittsburgh International Airport in Findlay. The Consol deal could net about $200 million to $250 million in a signing bonus and royalties.
Because of federal airport rules, that money probably will have to go to lower gate fees and to build roads and infrastructure to help industrial and office redevelopment on county-owned airport land, Fitzgerald and Davin said.
The Allegheny County Airport in West Mifflin ultimately could see drilling, too, but it's not part of the first phase, officials said.
The airport authority required bidders to offer 18 percent in royalties. EQT's bid offered $44 million in upfront cash, double what Consol offered, but had no deposit check as Consol's bid did.
Airport and county officials chose Consol because its bid was more detailed and contained provisions that made its payout competitive with EQT's over the long-term, Fitzgerald said. He declined to say whether EQT failed to meet the county's bid requirements.
“I don't want to get into that,” he said. “I feel we're fortunate that two good companies, local companies ... are bidding, trying to negotiate with us to develop that land.”
Fitzgerald's comments occurred on Thursday after he submitted legislation to County Council asking members to approve drilling on the land.
Futules said he expects council to pass it with little opposition.
Councilman Matt Drozd, a Ross Republican who represents the airport area, said he supports the effort and Fitzgerald's attempt to get more money from Consol.
Council will host a public hearing near the airport and could authorize drilling by February or March, said Davin and Fitzgerald. The airport authority could give its approval of the Consol deal in the meantime — pending county approval, Davin said.
Drilling is unlikely to start before the summer of 2014, with production opening in 2016, Fitzgerald said.
Davin said he expects six to eight well pads, each with several wells, all outside the fence line around the terminal and runways.
Timothy Puko is a staff writer forTrib Total Media. He can be reached at 412-320-7991 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Analysis: Kesler remains on Penguins’ radar as Shero looks bring back ‘Big 3’ formula
- Starkey: Steelers know when to say goodbye
- Pirates’ big risk with pitch-heavy draft focus might soon pay off
- With so many needs, Steelers can ill afford to miss in draft
- Wikileaks founder teases about more secrets to be released
- Penguins GM Shero’s deadline deals: Addition by subtraction
- Ex-Colts executive Polian: Approach free agency with caution
- Lima claims a galaxy of star-quality restaurants
- Penguins minor league report: Defenseman Dumoulin optimistic for home stretch
- Steelers defense doesn’t make the grade in 2013 review
- Greensburg bishop’s time at helm draws to a close