Neighborhood Gets a Well but No Lease Payments
NORTH JACKSON, Ohio -- Aside from occasional truck traffic, the rural neighborhood along South Bailey Road in Jackson Township enjoys a relatively quiet existence.
But today horses graze and children play in the shadow of a new, noisy neighbor – an oil derrick that towers 150 feet on land that abuts the backyards of four homeowners, some of whom are concerned about the proximity of the well to their houses and the potential effects on the environment.
“I have more questions than answers,” says one resident who declines to give her name because she doesn’t want to become embroiled in a fight over oil and gas drilling in her neighborhood.
She says the biggest complaint her neighbors have is the noise made by Consol Energy’s large rig as it continues to drill on the 60 acres owned by local farmer Melvin Cadle. “We’re also concerned about our well water,” she says.
When the woman discovered that a drilling rig would be moving in immediately behind her house, she purchased a hot and cold-water dispenser that holds five gallons of fresh water at a time. “If our water is contaminated, we’re all done for – rich or poor.”
Consol Energy is drilling at least two wells at the site, about a half-mile south of the Mahoning Avenue and Bailey Road intersection. Residents in this part of the township are wary of industrial development, and earlier protested its expansion in to land zoned specifically for agriculture.
Three years ago, Anderson-DuBose requested a zoning variance that would have allowed the company to construct a warehouse on land Melvin Cadle owns on the corner of Bailey and Blott roads, just across the street from the well.
Neighbors balked at what they perceived was an encroaching industrial footprint in North Jackson and voiced opposition to the project during a series of public meetings. The warehouse, which serves McDonald’s restaurants across the Midwest, was then constructed in Lordstown.
This time neighbors had no say over the arrival of Consol and the new well.
“There’s no stopping them,” the woman says. “I have six kids, and this isn’t what I expected to see when I moved here.” And, like many of her neighbors, she doesn’t own the mineral rights to her property, shutting her out of any compensation.
Others who live along Bailey Road agree the most aggravating aspect of the new rig is the noise, and there is some concern over the potential for an accident.
Tony Pizzuto, who has lived at 3175 S. Bailey Road 14 years, says that the loud noise coming from the drill site doesn’t bother him that much, but it does irk other members of his family.
“I can sleep, but my wife can’t,” he says. “There’s not much we can do about it. It’s a nuisance.”
Pizzuto has four children, and worries about how how close the well is to his property and the prospects of an accident. Representatives of Consol Energy have been very professional, he emphasizes, and tested his water about three months ago.
Once the drilling is completed, the water will be tested again to check for any contamination, Pizzuto says. “It looks like a pretty good company that’s doing this,” he attests.
Bill Clark says he’s found the experience “interesting,” as he’s watched from his backyard at 3197 S. Bailey Road the construction of the well pad, the arrival of the rig and the drilling.
“It seemed like it all went up pretty fast. The main tower was up in a day,” he observes. “I’ve lived here for more than 20 years, and I’d always thought this would be nothing but good old farmland.”
Clark says no one has approached him about mineral rights, and he isn’t sure whether he owns his. “We’re still wondering about that,” he adds, and is looking into whether an older, existing lease on his property is valid.
In an email Consol spokeswoman Lynn Seay said that her company takes its drilling operations very seriously, and exercise safeguards to minimize the impact of its well sites. Many of these safeguards exceed state and federal regulations she notes.
Among the concerns neighbors and other members of the public have is that the well is too close to the Meander Reservoir – the water source for the city of Youngstown – and the Clingement Ditch, a tributary.
“Consol Energy is aware that part of the site is located in the floodplain, but none of it is located in the floodway,” Seay says. “We are also aware that there are some wetlands around the edge of the site, and we were careful to build the site so that we did not adversely impact them,” she states.
The company also worked with the Ohio Department of Natural Resources and the Ohio Environmental Protection Agency to obtain all the required permits, including a floodplain permit, to operate in the North Jackson site.
While some of the neighbors complain about the noise, most are appreciative of the long-term economic benefits the oil and gas industry can deliver to the Mahoning Valley, says Melvin Cadle, who owns the land where the well sits.
Cadle says since his land was already leased, and two Clinton sandstone wells were there, he did not receive any upfront bonus money. Still, Cadle says he was able to negotiate a higher royalty rate of about 17%.
“There wasn’t anything I could do,” Cadle says. “The land was already leased.”
Protesters from groups opposed to the use of hydraulic fracturing in the exploration process, have convened at the Consol site, demonstrating that the chemicals used to “frack” these wells could contaminate the water supply.
Cadle counters that oil and gas companies have operated in North Jackson for decades, most of them drilling shallow, directional wells into the Clinton formation. “There are already wells drilled underneath Meander,” he adds.
Rigs such as Consol’s are after a much bigger prize. By using horizontal drilling, larger operations are able to drill vertically 8,000 or so feet into the Utica shale, and then drill a lateral leg between 5,000 and 6,000 feet through the strata instead of vertically through it.
The Utica shale is projected to house trillions of cubic feet of natural dry and wet gas as well as oil.
Cadle has lived at his Blott Road residence since 1969, and farms mostly soybeans and corn. “I’ve lost about 25 acres of farmland[from the well],” he says.
While the Bailey Road acreage is under lease with Consol, the land around Cadle’s house was leased to Chesapeake Exploration LLC, a division of Chesapeake Energy. Cadle says he purchased the mineral rights to his land in 2001, years before there was any understanding of the Utica shale.
“Most people are behind this,” Cadle notes. “I really haven’t had any complaints other than the noise.”
Wayne Volland, who has lived at 3247 S. Bailey Road for 18 years, says the giant well in his backyard may cause some inconveniences, but those inconveniences are temporary.
He leased his land – a five-acre plot along Bailey Road and another 23 acres behind the well site – to Consol for 17% royalties on the production of that well.
“There was no upfront money offered,” Volland says. “I was one of the last to sign.” He reports that Consol has tested all of the water tables along this section of Bailey Road.
As to the concerns about the noise and possible effects on the water supply and environment, Volland shrugs.
“I talked to some attorneys before they even started drilling and they said there was nothing I could do about it,” he recalls.
“So, I signed.”
Editor's Note: This story was first published in the November edition of The Business Journal. CLICK HERE to subscribe.
Copyright 2012 The Business Journal, Youngstown, Ohio.