This article originally provided by The Charleston Gazette

November 17, 2007

Drilling planned at Chief Logan State Park

Gas firm's proposal sets up fight with Manchin and state laws

By Ken Ward Jr. Staff writer

Cabot Oil & Gas Corp. wants to put nearly three-dozen new natural gas wells inside Chief Logan State Park.

Manchin administration officials say the plan would violate state law, and that they have no interest in legislation to accommodate the company’s proposal.

Houston-based Cabot announced Friday that it plans to apply for the first of its permits next week. Company officials vowed to fight the state in court to either obtain drilling permits or receive financial compensation for the natural gas under the park.

One estimate put the potential costs of such compensation into the tens of millions of dollars.

“We hope to be able to work through the process, and get approval,” said Thomas S. Liberatore, Cabot’s vice president and regional manager. “But we’ll exercise all of the legal options available to us.”

Cabot officials want to get at 300 million to 500 million cubic feet of natural gas under the 3,600-acre park. The company holds lease agreements for the gas, which is owned by the heirs of Anthony Lawson, one of the first English settlers of what is now Logan County.

However, the proposal has broad implications, including the possibility of opening up other West Virginia state parks to oil and gas drilling.

David McMahon, a Charleston lawyer and environmentalist who follows natural gas issues, said changing the drilling prohibition is a bad idea.

“The state is about to run into what thousands of people around the state suffer when they think that their land is special and the oil and gas companies don’t treat it as if it is special,” McMahon said. “State parks are special to the people of West Virginia, but the oil and gas companies want to come in and drill anyway.”

Cabot wants to start with 10 wells in the southern and southeastern part of Chief Logan. The company expects to submit permit applications next week to the state Department of Environmental Protection’s Division of Oil and Gas.

Lobbyist Tom Susman and publicist Randy Coleman set up interviews for Cabot officials with several media outlets on Friday to announce the company’s plans.

A second phase of 25 additional wells is planned for sometime next year on the northern section of the park, company officials said. All of the wells would be spaced about 2,000 feet apart, company officials said.

Cabot said it would build its own roads, rather than run trucks through park roads. Also, Cabot would build a road that would better connect older parts of the park with a new conference center. The newly built gas-well roads could later be used for hiking and biking, Cabot officials said.

“The latest technology will be used in the construction and operation of the well sites; all small-diameter pipelines, although not required under the lease, will be installed underground,” the company said in materials promoting its proposal.

“The wells are to be positioned in the outlying areas of the park so that they will not be located near current or planned recreation facilities,” the company said. “This includes the outdoor swimming pool and the new convention center and lodge.”

Oil and gas drilling and logging are allowed in state forests, but not in state parks. Such projects in forests have generated considerable controversy over the years, including citizen complaints about logging in Kumbrabow State Forest in Randolph County and gas drilling in Kanawha State Forest near Charleston.

Larry George, a lawyer for the Lawson heirs, said that controversy over the Kanawha State Forest drilling helped kill legislation that might have helped pave the way for Cabot’s Chief Logan project.

A section of state law that spells out rules for leasing or selling minerals on state property specifically prohibits the West Virginia Division of Natural Resources from permitting “extraction of minerals ... on or under any state park.”

During this year’s legislative session, George said, he worked with the DNR to draw up a bill to change that language. During the Caperton administration, the DNR had supported somewhat similar legislation.

This time, George said, the DNR backed out of supporting the bill.

The legislation, SB683, would have allowed the DNR to permit oil and gas drilling from state park lands if the oil and gas were privately owned.

Now, Cabot officials and George said the legislation isn’t really needed. They say the prohibition on drilling in parks already applies only to state-owned minerals and not to private reserves.

Hoy Murphy, a spokesman for DNR Director Frank Jezioro, said his agency disagrees.

“DNR does not have the authority to allow any such drilling,” Murphy said. “The law would have to be changed. Nobody is talking seriously about that.”

Murphy added, “If it were changed, it would have to be written in such a way that the park would have to receive a good benefit from the park.”

Carte Goodwin, chief lawyer for Gov. Joe Manchin, said the governor “is not in favor of drilling in state parks.”

However, Goodwin said, if the state were to lose that legal battle, Manchin would want to very tightly restrict any such drilling.

George, the Lawson heirs’ lawyer, said a lawsuit alleging that the drilling ban is a “taking” of private property might leave the state with little choice but to allow the drilling.

“The numbers would be frightening to DNR,” said George, a longtime agency employee before he went into private practice. “They would have to shut the whole agency down.”

George said the natural gas under the park is worth tens of millions of dollars — perhaps more than $100 million.

“The state would have to acquiesce,” George said. “We do really want to drill gas. We don’t want to drill the state treasury.”

To contact staff writer Ken Ward Jr., use e-mail or call 348-1702.