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County executive: Allegheny risks losing millions with delayed decision on park drilling

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By Timothy Puko

Published: Wednesday, June 19, 2013, 12:01 a.m.

Allegheny County leaders must decide soon whether to allow natural gas drilling at Deer Lakes Park or risk losing a chance to make millions, County Executive Rich Fitzgerald said on Tuesday.

The oil and gas company Huntley & Huntley Inc. signed leases surrounding the park in Frazer and West Deer and plans to build a well pad to drill just outside of the park early next year. If county leaders make a decision within seven months, the company could add wells reaching under the park from that spot, Michael Hillebrand, the company's executive vice president, said last week.

If not, they could drill through the area in a year or two and be gone, Fitzgerald said in a meeting with Tribune-Review editors and reporters.

“We're kind of forced to make a decision,” Fitzgerald said. “If we don't, we may lose that and it may never come back.”

That is possible, Hillebrand said. The company wants to start gathering comments from parks advocates and residents to find out whether they would support the plan, he said.

“We can't rope-a-dope and dance around forever, but we'll surely give every business courtesy possible to examine all timelines available,” Hillebrand said. “I'm a big Pittsburgh and Allegheny County fan. We wouldn't strong-arm the county into anything.”

The county could make anywhere from $40 million to $96 million in gas royalties and other fees from drilling there, based on current gas prices, the Trib estimates.

“We've been talking to some of the groups out there in Deer Lakes Park to see if there are any improvements they may want or like, or if they would be supportive if the county would decide to participate,” Fitzgerald told council on Tuesday evening.

“Preliminarily, there's some support,” he said. “Because the drilling is going to occur anyway no matter what the county does.”

Fitzgerald said he would ask the county law department to issue a request for a proposal “to see what kind of opportunities that we can take a look at and to see if this is something worthwhile.”

Drilling is revving up again in many places across Pennsylvania and companies are geographically consolidated, meaning a lot of Marcellus shale landowners will find themselves in situations where their hands are forced, said Kent Moors, scholar in residence at Duquesne University's Institute for Energy and the Environment. Landowners have fewer choices and competition for their land, reducing their leverage.

“They're going to be under an intense amount of pressure” because of the time­table, Moors said. “If (Huntley) already controls the leases, then there's really nothing you can do about it.”

The best thing the county can do is start engaging Huntley & Huntley's partner, Range Resources Corp., which oversees drilling for Huntley, Moors said. The county should ask for guarantees that Range will limit its use of open-air pits for storing wastewater and use its best pipe system to contain drilling water, Moors said.

“We will continue working with Allegheny County and Huntley to include the county in an adjacent unit that we are moving forward with as well as leases we have that surround the park, allowing them to participate with no surface impacts,” Range's Cecil-based spokesman Matt Pitzarella said in an emailed statement.

Officials from both companies will meet on Wednesday, as they do each month, Hillebrand said. He wants to start working on a formal offer for the county, saying the Deer Lakes plan is getting more traction than they expected.

Fitzgerald said he will attempt to set up a meeting for council members with officials in Washington County, which “has been doing this” (drilling) in and around county parks.

Timothy Puko is a staff writer for Trib Total Media. He can be reached at 412-320-7991 or tpuko@tribweb.com.

 

 
 


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