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Fixing the Deer Lakes gas lease

| Monday, May 5, 2014, 9:00 p.m.

Allegheny County Council is considering an ordinance that would approve the leasing of oil and gas rights in Deer Lakes Park to Range Resources. As a member of County Council, I have a duty to evaluate the proposal from the perspective of a steward of the natural and financial resources of the county.

This duty includes analyzing the potential effects on our environment, our assets and the welfare of the citizens of our county. In order to help me to analyze the lease proposal, I hired the law firm of Strassburger, McKenna, Gutnick & Gefsky, with my expense account money, to review the proposed lease. Their opinions and recommendations have been made public.

I firmly believe that development of the oil and gas resources in Western Pennsylvania, and in Allegheny County, is an important component of a strong economic future for our region. I support development of the county's oil and gas resources as a matter of basic fiscal responsibility.

The publicized terms of the proposed transaction with Range Resources would, generally, result in a reasonable balance between the development of assets and the protection of assets. Unfortunately, the actual language of the proposed lease does not reflect the expectations of the public, nor does it adequately protect the public assets. For the reasons that are summarized below, I have prepared an amendment to the proposed ordinance.

County Chief Executive Rich Fitzgerald has trumpeted the proposed lease as the “optimal” nonsurface lease for the oil and gas rights. The detailed analysis of the proposed lease prepared by Strassburger, McKenna, Gutnick & Gefsky reveals that this is certainly not the case. With that being said, I understand that the negotiation process does not allow for the opportunity to actually obtain an “optimal” lease. However, at a minimum the lease should reflect the public's expectations and protect the public's assets.

My amendment to the ordinance, if approved, will ensure that:

• there must be no use of the roads in the park

• the lease term must only be extended if there is actual production, in marketable quantities, from relevant wells

• without exception, the lessee must operate in conformance with all applicable laws and industry best practices in connection with activities for the relevant unit as well as adjacent properties

• there must be no adverse affect upon groundwater and the lessee must not use water from the park (or from water sources that supply the park)

• there should be no storage of waste liquids on the relevant unit or the adjacent properties

• the bonus payments should be paid on all 1,100 acres that are encumbered by the lease and the requirements for including the leased land in a production unit must be enforceable

• and the county must retain the right to terminate the lease if the lessee defaults.

I urge my colleagues to join with me to approve this amendment, which will provide for the proposed lease to be approved by including basic protections that the citizens of Allegheny County deserve and should expect.

Heather Heidelbaugh, a Republican at-large member of Allegheny County Council, lives in Mt. Lebanon.

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