Mars Area school board to decide on drilling lease with Rex Energy

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Members of the Mars Area school board say they have a tough decision to make next week.

Do they approve a lease that will allow Rex Energy to drill under district schools, taking advantage of the inevitable drilling nearby and pocketing more than $1 million in initial royalties?

Or do they heed the warnings of approximately 75 residents who attended Tuesday’s presentation with Rex Energy and vote it down?

The lease is on the agenda for the board’s upcoming voting meeting on Tuesday.

“This board did not solicit this. This came to us. We are not the catalyst. We are here as a consequence, basically, from the decisions that other people have made,” board President J. Dayle Ferguson said. “There are risks and rewards for all of us, directly and indirectly, simply because of living and learning here. This is not an easy decision, and it will not be taken lightly.”

Representatives of Rex Energy and its subcontractors told board members that the company will apply for a permit to drill as many as six wells on property owned by Kim Geyer, former president of the school board. The property, along Denny Road in Adams, is less than a mile from the Mars Area campus.

The company will dig through the shale horizontally from the well site — in a north/northwest and south/southeast line — and extract the natural gas. Portions of the Mars Area schools are under the 4,000-foot radius from the well site, which requires Rex to test the water supply before drilling.

“These wells will be drilled. They will be coming off of this site in those two directions,” said Duane Maust, land manager in the Appalachian Region for Rex Energy.

The five-year lease would pay the district a bonus of $690,000 and an advance royalty payment of $331,396. 

Rex Energy is also in the final stage of negotiations with the Mars Home for Youth, which is near the public schools, but will not finish the negotiations with the youth home if the district does not sign a lease, Mr. Maust said.

Mr. Maust showed board members a color-coded map of gas leases in Butler County with Rex and its competitors. Rex holds leases with the Seneca Valley, Butler Area and South Butler school districts, and has 78 acres in Middlesex under oil and gas leases, he said.

Middlesex is one of four municipalities in the Mars Area district.

Rex has drilled more than 70 wells and has two processing plants in Butler County, he said.

A previous request to drill under Mars Area schools was denied. The current request came to the district in December, and the district sought two independent legal opinions, Mrs. Ferguson said.

The board was represented at Tuesday’s meeting by Will White, an attorney with solicitor Tom King’s firm who specializes in oil and gas leases.

Rex is self-insured and will indemnify the district, standing in for it legally if problems occur, he added.

Resident Bob Nassif wasn’t impressed by that, telling board members that neither the insurance nor the indemnification will be worth anything if Rex goes out of business.

“Rex could simply go bankrupt and leave the district exposed,” he said.

Mr. Maust said the company will be applying for the permit for the wells on the Geyer property within three to five weeks.

That is the time to step in, resident Charles Clark said.

Mr. Clark said his family moved to Mars Area from Ben Avon to get away from the industry on nearby Neville Island. 

“Accidents could happen. It could happen near us,” he said. “Let’s go fight the permit.”

Other residents distributed literature from Protect Our Children, a Philadelphia-based coalition that opposes shale drilling and infrastructure within 1 mile of schools.

"I'm very concerned about how many wells are going to be in Butler [County], and I am very concerned about the children and their respiratory systems," said Diane Arnold of Middlesex. "Water travels very slowly. We may not see impacts from this for six years."

Gail Carpenter of Mars, a mother and real estate agent, said there is no way of knowing when pipes 1 mile underground begin eroding. “It could be your children or your great-grandchildren,” she said.

She said she is already having trouble selling property in the county because of the oil and gas leases. The $1 million in royalties “is a drop in the bucket. It means nothing when it comes to your children’s health. It is going to affect your future enrollment. We wanted this beautiful, serene area.”

Sandy Trozzo, freelance writer:

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