Marietta City Council members heard from folks on both sides of the oil and gas horizontal hydraulic fracturing (fracking) debate during a special public meeting of council's lands, buildings and parks committee at Washington State College Tuesday night.
At issue is an offer from a broker for Tulsa, Okla.-based Protege Energy III to lease up to 95 acres of city property that would be included among 6,100 surrounding acres for a drilling operation that would be located on property near the city.
About 40 people attended the session.
SAM SHAWVER The Marietta Times
Marietta Councilman Harley Noland, left, answers questions from Patrick Stewart, right, about the potential lease of up to 95 acres of city property to oil and gas interests during a public meeting at Washington State Community College Tuesday night.
"We're here to learn your opinions about the city's potential lease of this property," said Councilman Harley Noland, D-at large, who chairs the lands, buildings and parks committee.
He explained that in January James Vuksic, CEO of MNW Energy LLC in Marietta told the committee that 35 acres of city property could be included with a block of surrounding lands for lease to Protege. Vuksic said at the time that MNW is working with about 200 area landowners to put together a 6,000- to 7,000-acre block of properties in Washington County where Protege could set up horizontal drilling operations to extract natural gas from nearly a mile below the earth's surface.
The original 35 acres included parcels of city-owned land located behind the Walmart complex and along Goose Run Road in Marietta Township.
At a glance
Potential city property for oil and gas lease (approximate acreage):
Gun Lock Park (behind the Walmart complex on Pike Street)-23.77 acres.
Goose Run property, off Goose Run Road-14.13 acres.
City garage property off Alderman Street-9.93 acres.
Buckeye Park-20.59 acres.
Kroger wetlands off Acme Street-26.94 acres.
Total 95.36 acres.
Property would be leased to Protege Energy III of Tulsa, Okla. for $4,750 an acre, plus a 17.5 percent royalty based on any product retrieved from the drilling operation.
Source: City of Marietta
But Noland noted that since January the committee members have also discussed the possibility of leasing 60 more acres, including city garage property off Alderman Street, Buckeye Park property, and the Kroger Wetlands off Acme Street.
Councilman Michael Mullen, I-at large, said the city could realize some substantial income by leasing the property.
"Potentially we could get $168,000, more or less, for the original 35 acres, with a 17 percent royalty if the drilling operation (produces)," he said.
Steve Downer of Meadow Drive said he had some concerns about allowing drilling operations in the Ohio River flood plain behind the Walmart complex. But he felt somewhat better after sharing his concern with Bob Chase, chairman of Marietta College's Petroleum Engineering Department.
"These oil and gas companies try to avoid any hazardous areas by locating on hilltops or other areas away from streams and rivers," Chase said. "Over the years there have been many little shallow oil wells drilled along the river, and a lot of those are still producing. But when those wells were drilled they didn't use protection anywhere close to what's being used in these wells today."
He said modern hydraulic fracturing operations drill 7,000 to 8,000 feet under the earth's surface, then drill another 7,000 feet horizontally into Utica shale beds in order to release oil and natural gas products.
"They're not likely to drill anywhere near a river because they know that would be a hazardous area for their operations," Chase said. "But that's a good concern."
Former council president Walt Brothers noted the city needs the revenue that leasing to the oil and gas industry could provide.
"This council and previous councils have worked very hard to keep this town viable," he said. "But we're running out of ways to obtain the revenue we need to do that. This is a way to substitute for monies the city is no longer receiving from Washington, D.C. and Columbus. We need to give some very serious thought to filling the holes in our revenue stream."
City engineer Joe Tucker encouraged council members to make use of local resources like Chase and other oil and gas experts.
"I think we have tremendous resources at Marietta College and other areas to help make this decision," he said. "Council should listen to what they can tell us about this industry."
Tucker said oil companies like Triad Hunter, Artex, and PDC have chosen to locate here.
"I'm not saying I have the knowledge, but we do have these resources and should listen to them," he added.
Third Street resident Bill Hutchinson, who is also business manager of the Parkersburg-Marietta Building and Construction Trades Council, noted the oil and gas industry is already making improvements to Ohio's economy.
"It's doing great things up north of here," he said. "Not only the drilling, but it's providing many jobs, too. This drilling can be done environmentally safe, although it may cost a little more to do so, but it can be done, and it would be great for this area."
But Councilwoman Kathy Downer, D-at large, wasn't so sure fracking operations would be good for this area.
"I have concerns about any type of environmental accident that could occur," she said. "How do we know that a drilling company won't set up shop, then declare bankruptcy if there is some kind of accident? And who's responsibility would it be to clean that up?"
Betsy Cook, a member of the Southeast Ohio Fracking Interest Group (SEOFIG), expressed concern for the city's drinking water.
"Without water humans can not exist," she said. "The cement casings on these wells can crack, and Washington County is becoming the location of a lot of injection wells, which is a big concern in my mind."
Fracking companies use injection wells to store the chemical-laced briny water that's used in the hydraulic fracturing process.
"We don't know where the fluid from those injection wells may be going once they're underground," Cook said. "I've read that in some states that brine is coming up in old abandoned coal mines and other areas."
She added that EnviroTank, a local company that cleans fracking trucks and equipment, is applying for a permit to handle radioactive material that sometimes is brought to the surface in the drilling process.
"And they're going to put that radiation in our landfills," Cook added.
Representatives of EnviroTank said recently that the company would be diluting any radioactive material to a safe level before transporting it to a landfill.
City resident and local businesswoman Jane Tumas-Serna said if the city does not lease the property to Protege it would not stop the company from drilling under Marietta because the city's home rule does not apply to fracking operations.
The Ohio Department of Natural Resources regulates all oil and gas drilling operations in the state, including operations that may involve municipal property.
"So what control do we have?" Tumas-Serna asked. "The only control we can have is if we have a lease and spell out our terms in that document."
City law director Paul Bertram III said Protege has a 60-day window, with a possible extension, in which the city can make a decision about leasing the property.
"But if the city decides to lease, the property would have to be put out for bid, according to state code," he said. "I don't know that this would happen, but there could be another gas and oil company that would lease from us. And city council has the right of refusal if council doesn't want to lease to a particular entity."
Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, said discussions about leasing municipal property to oil and gas interests are also being held elsewhere in the state.
"There are probably four or five other communities where that conversation has been going on," he said. "And having a community dialogue is very helpful to the process, particularly when you have the resources Marietta has like Marietta College. We salute Marietta's leadership for being willing to hear from both sides before making this important decision."