ST. CLAIRSVILLE - Earlier this year, Rice Energy paid about $100 million for Utica Shale natural gas leases to Belmont County property owners over a period of just a few days.
Now, Belmont County commissioners are expecting a payment of more than $3 million from Rice, thanks to the $7,500 per acre lease they signed in September for 406 acres of land. Although the amount is significant, the county could realize a steady stream of income for many years because the lease calls for Rice to pay 20 percent of production royalties to the board of commissioners.
"The money has not come in as of yet and we don't expect to see it for a few more months," said Commission President Ginny Favede. "We would like to invest more of our dollars into road improvements and debt reduction."
Photo by Casey Junkins
As a horse grazes, Rice Energy drills its Blue Thunder well along Ohio 149.
Commissioner Matt Coffland also said the county must perform water and sewer line upgrades, adding that he would like use some of the money to offer raises to county employees.
Newly appointed commissioner Mark Thomas, who will take office next week to replace retired commissioner Charles Probst, said the county needs to look at the longterm impact.
"We need to further some economic development projects," he said. "We could set up a rainy day fund with the royalties so that we have some money when we need it in the future."
Giving their wells the names "Bigfoot" and "Blue Thunder," Rice is now drilling southeast of Barkcamp State Park along Ohio 149. Rice has yet to report any production for Belmont County. Much of the high value for the gas underlying parts of Belmont County is that it contains wet ethane, propane, butane, pentane and oil in addition to the dry methane gas.
"Like most counties that are fortunate enough to host the oil and gas industry we are incurring increasing costs," Favede said. "Our sheriff's department alone has seen a tremendous increase in costs due to a rise in activity as a result of the increase in population."
Favede said the county is in the midst of completing several infrastructure projects, including some that must be completed because of federal mandates.
"At this point we have $1.8 million worth of water and sewer upgrades that need to be completed within the next year. The majority of the signing bonus will be put toward infrastructure upgrades throughout the county," she said. "The tremendous growth our county is experiencing is dependent upon these critical infrastructure upgrades."
Earlier this year, County Engineer Fred Bennett said approximately 80 of the 279 county and township road bridges throughout Belmont County are so structurally deficient or obsolete that they have posted limits. He said 35 of the 80 bridges with weight limits cannot safely accommodate a school bus loaded with children, which he said weighs approximately 16 tons.
"It sure would be nice to give our county engineer some money to work with," Coffland said. "We've got roads and bridges that are badly in need of repair."
Thomas also said roads and bridges should be a priority, especially with so many of the natural gas industry trucks now traveling on county roads.
As for the forthcoming 20 percent royalty payments, Favede said she would like to use the money to pay down debts and increase the general fund balance. Both Coffland and Thomas said they would also like to pay down debts.
"We are now looking at another lease for about 421 acres," Coffland said of multiple parcels scattered throughout the county. "Things are happening very quickly in this county, especially with this industry."