ST. CLAIRSVILLE - Drilling in the liquids-rich Utica Shale formation underlying eastern Ohio holds the potential to deliver major profits for natural gas and oil companies, as well as the landowners who signed leases.
However, drilling in southern Belmont County and northern Monroe County may be on hold for a while because of an ongoing dispute between coal miners and gas drillers who are seeking to extract riches from the same land.
"The coal interest is claiming that drilling in that area will impact their coal mining," said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. "They consider an impacted mine to be coal reserves where they may decide to mine 20 years from now - not just a currently active mine."
Photo by Casey Junkins
As many eastern Ohio mineral owners continue signing natural gas leases, an ongoing dispute involving coal mining rights for the same pieces of property is delaying drilling.
The Ohio Department of Natural Resources issues permits for both coal mining and gas and oil drilling in the state. The department has been trying to resolve the disagreement between the energy interests, which is delaying the plans of companies like Chesapeake Energy, XTO Energy, Hess Corp. and Oxford Oil Co. to drill on the acreage, for which some of the companies have paid as much as $5,200 per acre to landowners to lease.
Stewart said the ODNR is "sitting on this" with regard to the negotiations between the gas and coal interests. ODNR spokesman Andy Ware could not be reached for comment regarding the negotiations, while another representative did not return a phone call.
Mike Carey, president of the Ohio Coal Association and a Belmont County native, said representatives from his industry, the oil and gas industry, the ODNR, some landowners and some staff from Gov. John Kasich's office met to discuss the matter within the last month. He said some of the problem seems to be that certain gas drillers want to place their wells without regard for any other industry.
"In states where you don't have to worry about coal interests, you can just drill wherever you want," Carey said, noting many of the gas and oil companies are used to working in states that have little if any coal mining. "The ODNR is looking at all the variables because you can't just have one set of rules. There are going to be places where you simply cannot put a well. But if you move that well 1,000 feet one way or another , you can do it."
In response to Stewart's comment about the coal objections affecting future mines, rather than active mines, Carey said, "When a person invests in coal reserves with intent to mine, they have a right to do that."
"In many cases, you map out your projected coal operations 15 years in advance," he added. "Many times, more often than not, the coal companies and gas companies can work this out."
Robert Edward Murray, vice president of business development and external affairs for Murray Energy, said in December, "Our coal ownership is superior to any oil and gas leases," adding that the company seeks to protect the "jobs we provide from indiscriminate drilling for oil and gas."
When asked to comment for this article, Murray said, "Our company believes that the oil and gas development in Ohio is a very good thing for Ohio and Ohioans. And we further believe that all rightful owners of resources should be allowed to enjoy their resources."
"I know that Murray Energy and the ODNR have worked to identify areas for possible horizontal drilling," Carey added regarding the parent company of American Energy Corp.'s Century Mine and Ohio Valley Coal Co.'s Powhatan No. 6 mine.
Stewart said the ODNR has authority to administer a decision in the matter, but the Ohio Legislature would need to vote to change the law to allow the drilling - despite coal company objections.
"The only way to effectively resolve this is to define just what is an 'affected' mine," he said. "Right now, it is open to interpretation."
Carey, however, said not all mines are the same, so crafting one specific definition for an "affected" mine would be a difficult task.