Are royalties worth risk, MVSD board wonders

MVSD could receive 3.2 million in royalties from gas wells, developers said.
BY AMANDA GARRETT
VINDICATOR TRUMBULL STAFF
MINERAL RIDGE -- Mahoning Valley Sanitary District board members said Friday they would only consider a proposal to place 25 natural gas wells on MVSD property if there were a minimal risk of accidents.
Representatives from Ohio Valley Energy in Austintown said drilling the wells could earn the district 4.6 million in royalties, free gas and reduced gas prices during the first six years of operation.
However, some board members expressed reservations about the project, fearing that an accident could leak gas or oil into the Meander Reservoir.
"This is the water supply for 330,000 people," said board member Matthew Blair, who represents Niles.
"I'm not willing to approve wells if there's only a 1 percent risk. If there's an accident, there's no place for people to get water. That's not a risk I'm willing to take."
Bridge construction
Other projects already under way on the reservoir are much riskier than building wells, Ohio Valley Vice President Ben Funderburg said.
"Building the bridge over the reservoir, with all the trucks and cars going over it is much more risky than natural gas wells," he said.
Ohio Valley President Charlie Masters added that there are several wells harvesting natural gas on MVSD property by using a method known as directional drilling.
"Right now, they're taking all your gas and you're not getting anything in return," he told the board members at their meeting in Mineral Ridge on Friday.
Directional drilling allows gas well owners to place wells on one property while drilling underground to retrieve natural gas on another property.
If the MVSD partners with Ohio Valley, they would receive 12.5 percent of all royalties, which would add up to 3.2 million in the first six years of operation, according to the company's figures.
Other savings include 537,500 in free gas and 840,000 in savings from reduced gas prices.
Masters said he plans to make presentations on the wells in front of Niles City Council and Youngstown City Council, and if there is sufficient interest, Ohio Valley is willing to pay for a study to examine the risk of putting in the wells.
agarrett@vindy.com