Simply put, Allegheny County has no plans to lease more public parks for oil and gas development.
At least, not yet.
County officials said they want to see how drilling fares in Deer Lakes Park before the county entertains bids for more oil and gas plans.
In reality, it might be the drillers opting out of future partnerships if they find, as some have said, the remaining eight parks in Allegheny County inhospitable to large-scale oil and gas drilling.
Monroeville-based Huntley & Huntley, the company that’s jointly developing Deer Lakes with Range Resources Corp, has been looking at county parks for decades. Huntley has been drilling shallow gas wells in the area for over a century and is likely the largest lease holder in Allegheny County. If there’s one company that’s poised to drill in more parks, it would be Huntley.
But Mike Hillebrand, the company’s COO, doesn’t think it’s likely.
“We know five of the nine parks very, very well because we drilled all around them,” Mr. Hillebrand said. “We have a lot of legacy acreage that surrounds those parks.”
From all that experience, he said it’s obvious that oil and gas development isn’t likely to touch South Park, North Park, or Hartwood Acres. They are too populated, too small, and make running pipelines to and from the area a near impossibility.
Settlers Cabin is bigger and more rural, but the park sits on top of a giant, century-old oil field, meaning its oil and gas ownership has been sliced and diced into “a title nightmare,” he said. It would be expensive and time consuming to figure out who owns the rights to the gas below Settlers Cabin and then to track down the owners for leasing.
For a potential drilling site to be viable, it needs four basic ingredients, said Ben Wallace, COO of Delmont-based Penneco Oil Co., which has wells in Plum and Pine townships, not far from Boyce Park.
There needs to be fuel in the ground, suitable topography, road access to the site, and pipelines to take the oil or gas to markets, he said.
“Many, many county and local parks will get scratched off the list because they fail for different reasons,” Mr. Wallace said.
As he tells landowners, “Just because you own a farm, doesn’t mean Walmart wants to build there. Just because you have an open piece of acreage, doesn’t mean we want to put a well there.”
According to Mr. Wallace, shale gas companies need about 640 acres to make the most efficient use of land for horizontal drilling.
Then there’s the public image consideration.
“How much political capital and how much good will are we going to spend,” he said. “All these public hearings, it drives the cost up.”
As does the engineering required to drill in a park, rather than in an industrial site, for example.
Wait and see
It was a year ago that Allegheny County Executive Rich Fitzgerald formally announced to members of Allegheny County Council that the county would seek bids to drill beneath Deer Lakes Park, a 1,180-acre park that lies in the northern communities of Frazer and West Deer. His announcement came a few months after council approved a plan to lease county-owned land near Pittsburgh International Airport to Consol Energy Inc.
Range and Huntley had leased land in the area around Deer Lakes already, and Mr. Fitzgerald told council he wanted to explore the county's options.
By March, the county and Range had arrived at a proposed deal. Range could pursue extraction of natural gas from beneath the park through horizontal wells extending from well pads set up outside the park. In exchange, Range would pay the county a $4.7 million bonus payment, $3 million toward a parks improvement fund, and 18 percent in royalties.
In early May, after numerous public meetings drawing residents both for and against the drilling, members of council voted 9 to 5 to lease the county's oil and gas rights beneath the park to Range.
Although Range has many leases in Allegheny County, and plans to continue drilling Marcellus wells, the company has no plans for operations involving additional county-owned properties, spokesman Matt Pitzarella said in an email.
"Deer Lakes was unique in that we already had plans to drill the proposed location," he said.
Consol, too, said it was focusing on its airport plan, which is in the construction phase, with drilling expected to begin in August.
Recently, Downtown-based EQT Corp. met with landowners in Elizabeth Township, where Round Hill Park is located, about leasing. An anti-fracking activist, Russ Fedorka, attended one of those meetings, and said he looked at display maps that made it seem as though EQT wanted to drill beneath part of Round Hill Park.
EQT said it discussed that option with the county about a year ago. But, according to spokeswoman Linda Robertson, the discussions never went anywhere, and EQT has no plans to drill under Round Hill. The maps presented at the meeting in Elizabeth showed tax parcels, not drilling prospects, she said.
After Mr. Fitzgerald gave his quarterly address to council on June 17, Councilwoman Sue Means, R-Bethel Park, asked the county executive whether the county was exploring gas drilling options involving Round Hill Park. He said no.
"I just want to see how this goes," Mr. Fitzgerald said in an interview. "We've done two in the last two years. One at the airport, which is more of an industrial site. Then we did a park."
Now, he said, he wants to wait.
“I think we want to just give it some time, and see how this thing operates before jumping into something else."
Deer Lakes unique
Andrea Geraghty, who chaired Allegheny County’s energy and environment vision team that recommended opening up limited county land for gas development, said Deer Lakes stood out from the rest because access roads wouldn’t need to go through residential property.
“I think we should drill in any one of them where we could find a way to do it,” she said. “I think we ought to do it and get the money.”
But for most, if not all other county parks, it simply isn’t an option, she recalled.
There is already drilling activity near Boyce Park and Settlers Cabin, said Nicholas Futules, D-Oakmont and chair of Allegheny County Council's parks committee, where much of the discussion about Deer Lakes took place.
"I know that there's activities in these areas, and they may come to us five years down the road when they get close, and ask again," he said. "That's a possibility."
That scenario would still require another vote of council, he said.
But, he said, regarding drilling in any other county parks: "As of now, there's no conversation whatsoever."
A public park is never likely to be the centerpiece of a company’s development plan, according to Mr. Hillebrand, as it would be a risky speculation.
“If I lease all around the park and don’t get the park, I can kiss all that money goodbye,” he explained.
Only when the park surfaces as an island among other leases, as was the case with Deer Lakes, would it make sense to pursue the option.
“In my opinion some ‘[parks] will never get done, some may be considered down the road,” Mr. Hillebrand said. “It’s my pulse that I don’t think the public’s ready yet until they see the results of what’s done with the airport and Deer Lakes Park.”
If drilling is pursued in another park, it will likely spur another contentious cycle in county government. Members of Protect Our Parks, the group that protested the Deer Lakes plan in large numbers, have said their work is not yet done.