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Ohio Utica Shale

District approves two deals for Ohio lake water for drillers

By Bob Downing Published: April 19, 2013

The Muskingum Watershed Conservancy District today approved two deals with Utica shale drillers for water from Seneca Lake and Clendening Reservoir, despite continuing objections from a grass-roots group.

The first deal calls for the district to provide up to 184 million gallons of water from Seneca Lake in Guernsey and Noble counties to Colorado-based Antero Resources.

The district will sell up to 2 million gallons a day for up to three months to the drilling company that has about 20 Utica shale permits near Seneca Lake.

The contract covers 92 days and could result in the sale of up to 184 million gallons of reservoir water.

It will pay $6 per 1,000 gallons from May through July. .

That price is 50 percent more than Antero is currently paying for raw water, the district said.

The water will be used, along with other sources, to create a private water system for Antero and its operations.

That system is expected to cost $50 million to $60 million, according to information provided by the district.

That system will include the creation of about 10 different water storage facilities connected by fresh water-only pipelines.

The agreement also calls for cutting off Antero’s water withdrawls if the lake level drops too low.

The district also approved a separate deal with Oklahoma-based Gulfport Energy Corp. for up to 25 million gallons of water from Clendening Reservoir in Harrison County.

The company will pay $8 per 1,000 gallons of water.

The agreement calls for water withdrawls to be halted if the lake level drops below a certain threshold.

The company needs the water to hydraulically fracture or frack two of its Utica shale wells in Harrison County.

The deal runs through June 12.

The two water deals were strongly opposed by the Southeast Ohio Alliance to Save Our Water.

The group says it is convinced that the district’s five-member governing board is abusing its power by approving the water sales.

It also wants the district’s Conservancy Court to investigate the water sales and the district’s procedures, according to a letter submitted by Toledo attorney Terry Lodge.

What is happening "comprises a special subsidy to a single industry and destroys public water resources permanently," he wrote in a 42-page report. "Secret decisions based on secret evidence are anathema to Ohio’s courts and should not be tolerated by the Conservancy Court."

Last February, the district has approved a $40.3 million natural gas lease with Antero for 6,500 acres at Seneca Lake.

The district will be paid a leasing bonus of $6,200 per acre plus a royalty of 20 percent on natural gas, oil and natural gas liquids from Antero wells under district-owned land.

The district had earlier approved two other natural gas leases.

The district signed a 2011 lease with Gulfport Energy at Clendening Lake and in 2012 with Chesapeake Energy Corp. for land at Leesville Lake in Carroll County.

Gulfport paid the district a $15.6 million lease bonus on 2,800 acres and royalties on natural gas produced.

Chesapeake paid the district $21.5 million in lease bonuses on 3,700 acres plus royalties.

The district covers 14 reservoirs and dams in 18 counties. It stretches from Akron to the Ohio River.

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.