WV-DNR opens bids for oil and gas drilling rights under Ohio River
From an Article by Sarah Tincher, State Journal, September 26, 2014
The WV Department of Commerce opened four bids September 26th for drilling rights on state-owned land under 22 miles of the Ohio River in Pleasants, Marshall and Wetzel counties.
The Division of Natural Resources, which is under the Department of Commerce, opened the bidding period on August 13th, and required a minimum bid of at least 20 percent worth of production royalties and a per-acre lease payment.
The Department received a bid for drilling rights from river mile markers 106 to 116 in Marshall County for a 20 percent royalty payment and $211.11 per acre cash bonus from Houston-based Noble Energy; a bid for rights from mile 124 to 125 in Wetzel County for a 20 percent royalty payment and $8,125 per acre cash bonus from Houston-based Statoil USA Onshore Properties; a bid for rights from mile markers 108 to 116 in Marshall County, 121 to 125 in Wetzel County, and 145-147 in Pleasants and Tyler counties for a royalty payment of about 18 percent and a $7,100 per acre cash bonus from Marietta, Ohio-based Triad Hunter LLC; and a bid for rights under mile markers 121 to 123 in Marshall and Wetzel counties for a 20 percent royalty payment and $3,500 per acre cash bonus from Gastar Exploration, which is also based in Houston.
Although DNR required a minimum 20 percent royalty payment, Josh Jarrell, the Department’s deputy secretary and general counsel, said he wouldn’t yet “disqualify” Triad Hunter for choosing a royalty payment of less than 20 percent. “We’re going to evaluate everything,” Jarrell said, adding that the team choosing the winner will be “examining to determine the highest competitive, responsible bid.”
The team plans to come to a decision within the next week or two, according to Keith Burdette, the secretary of the Department of Commerce.
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Will fracking under Ohio River be West Virginia’s money maker?
From an Article by Jonathan Mattise, Charleston Gazette (Associated Press), September 26, 2014
Facing another tough budget scenario, West Virginia is ready to let companies drill for oil and natural gas deep beneath 14 miles of the Ohio River. The state commerce officials opened bids to drill under the Northern West Virginia section of the river, which serves as a natural border with Ohio. Officials said other river tracts could be next and that a wildlife management area is under consideration.
West Virginia used $100 million from its Rainy Day Fund to balance this year’s budget, and Gov. Earl Ray Tomblin’s administration expects to need another $100 million to help shore up next year’s budget, said Tomblin spokesman Chris Stadelman.
Environmentalists and citizens groups are alarmed at the drilling proposal, since it would allow drilling a mile beneath a river that provides drinking water to millions of people. State environmental regulators would have to approve permits for the operations. Burdette said additional land is being considered, but state parks aren’t on the table. The actual drilling would not be done on state land. Currently, the mineral money has to go back to the Division of Natural Resources.
Jerry Mead, who has researched fracking under streams with Drexel University, called the practice a “mixed bag.” “If the mining is done at a low-enough density, and safety measures are put in place, at least for surface water I wouldn’t expect a significant impact on aquatic communities and water quality,” Mead said.
The state of Ohio has a system to detect possible contaminants in the river and its tributaries before they hit public water supplies. Its environmental agency still urges caution, though. “Even with these safeguards in place, it is important that any industry who is conducting activities near critical surface-water resources carefully follow all applicable rules and regulations and make sure best management practices are implemented, to ensure those assets are protected,” said Chris Abbruzzese, Ohio Environmental Protection Agency spokesman.
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