Drilling on Campus: Marcellus Shale boom puts colleges at crossroads
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Mike Morgan is a superintendent for Mashuda Corp., the company building the well pad next to Bethany College's campus in Bethany, W.Va. -
An abandoned storefront in Bethany, W.Va. Other than Bethany College, there are very few working establishments in Bethany. Administrators hope to reinvest royalties earned from their natural gas lease with Chesapeake into both the institution and the surrounding community. -
Student housing at Vulcan Village, a 10-building student apartment complex, is part of a lease agreement between The Student Association Inc. at California University of Pennsylvania and Antero Resources Appalachian Corp which allows subsurface drilling on the South Campus.
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Now a junior, Jenna Kemmerle knows her way around California University of Pennsylvania's campus, the shortcuts to its red-brick classroom buildings, the walkways approaching Old Main.
But this she didn't know: Land where she and hundreds of CalU students live and play is part of the Marcellus Shale drilling boom.
Ten months ago, The Student Association Inc., an organization affiliated with the university, approved a lease for subsurface drilling on land it owns that includes tennis courts, baseball and soccer fields and an apartment complex where 768 students, including Ms. Kemmerle, live.
The deal may be the first Marcellus Shale lease affecting a state-owned university in Pennsylvania, and it shows how drilling is starting to alter the financial landscape at colleges struggling to maintain their missions in a bad economy.
PG VIDEOIt also illustrates how a drilling lease can remain under the radar. Even the school's president, Angelo Armenti Jr., said he did not know a deal had been struck. The lease, approved in a closed meeting, was never announced on campus.
Ms. Kemmerle, 22, of Dover, Del., is neither fan nor foe of hydraulic fracturing -- or fracking -- the process used to extract natural gas from rock. But she was surprised to learn from a reporter that a group better known for managing student activity fees had approved fracking deep below what CalU describes as part of its South campus.
"I do live up here," said the education major as she stood outside her Vulcan Village housing complex. "I'm surprised they didn't send out an email or anything to let us know."
State-owned universities in Pennsylvania cannot yet keep income from the sale of natural gas beneath their campuses, although proposed legislation would change that for those schools, which include CalU and 13 other universities belonging to the State System of Higher Education.
While each has been hit hard by state funding cuts, the current rule that income reverts to the state has lessened incentive for such deals and thus postponed what some expect will be a touchy campus debate about the money versus environmental risks.
But there is nothing right now that prevents an organization affiliated with one of those universities from quietly negotiating a deal for land it controls and keeping the money, even if students who live on the property are unaware of the plan.
CalU's Student Association Inc., a student nonprofit, granted Antero Resources Appalachian Corp. subsurface drilling rights on just over 67 acres.
At its Jan. 25 meeting, the association's 13-member governing board -- more than half students and the rest associated with the university -- approved the lease, including language requiring that the terms be kept confidential.
A university spokeswoman, when contacted recently by the Pittsburgh Post-Gazette, initially said the association would not say whether it had a lease or had been approached to sign one. But the group changed course, eventually providing the lease.
The association says it is legally separate from CalU and not required to disclose the information, even though its offices are on campus and its executive director is a CalU employee.
Pennsylvania Common Cause, a government watchdog group, says taxpayer-funded state universities and their affiliated groups have at least an ethical obligation to disclose such decisions to their students. Barry Kauffman, the group's executive director, said the State System ought to look at the issue given potential for future leases involving other member universities.
First Published November 6, 2011 12:00 am
