Saturday, July 12, 2014

Towns could miss out on Pittsburgh Airport gas drilling bounty

FAA rules mean that $500 in royalties could go to the airport

August 31. 2013 10:55PM
KEVIN BEGOS Associated Press

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PITTSBURGH — A deal to allow natural gas drilling at the Pittsburgh Airport could generate $500 million in royalties over the next few decades, but for now none of that money will go directly to Allegheny County or nearby townships.

That’s because Federal Aviation Administration rules mandate that any revenue generated by airport-owned “mineral, natural, or agricultural products or water” go back to the airport.

Allegheny County officials have accepted the rule but haven’t given up hope.

“We will certainly abide by that,” County Executive Rich Fitzgerald said in an email. “If opportunity exists to utilize those funds to reduce the burdens on the county’s taxpayers, we fully expect to pursue that.”

In February, the Allegheny County Airport Authority approved the deal with Consol Energy, which paid a signing bonus of $50 million. Officials hope royalties will add $450 million over the next 20 years.

Some area residents are wondering how or if local government will benefit.

“Will we get any of the money?” asked Barbara Leary, 73, who has lived in nearby Coraopolis for 43 years.

If parts of the wells extend beyond the airport and under private property, Consol will need to sign leases with those people, too. And, indirectly, the townships may benefit in other ways.

Consol will need water to fracture the shale rock in the 47 wells it plans to drill — about 300 million gallons total. The company plans to buy that from the nearby townships of Moon and Findlay.

If all the water came from Findlay, it would bring in about $2.4 million in new revenue over the next four years at the current retail rate of $7.94 per 1,000 gallons, the Pittsburgh Tribune-Review reported.

“So it’s a very big thing for our authority,” Jason Orsini, general manager of the Findlay Township Municipal Authority, told the paper.

Pennsylvania also has an impact fee that provides local government with some revenue from drilling operations.

Patrick Creighton, a spokesman with the Marcellus Shale Coalition, an industry group, said the townships will get credit for wells drilled within their boundaries. The payments are based on the number of wells, how much gas they produce and market prices.

Findlay Township manager Gary Klingman said the township could get up to $500,000 a year from those impact fees, at least during the first four or five years of drilling.

Klingman also said Findlay residents appreciate that the FAA is doing an additional environmental impact review of the project beyond state efforts.

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