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Hue and cry in Palestine

February 26, 2014
By KATIE SCHWENDEMAN - Staff Writer (kschwendeman@mojonews.com) , Morning Journal News

EAST PALESTINE - "Put it on the ballot!" That was the chant from the majority of residents who turned out for this week's Village Council meeting.

The residents were referring to the group oil and gas leasing proposal being considered by council, a matter that has generated some controversy over the last several weeks.

The three residents on the agenda to speak to council were all in agreement the village is moving too fast with the suggestion, and they need more information before making a decision.

"You really jumped the shark, so to speak. You went from zero to 60 without giving consideration to bringing in the ideas from people," Malibu Drive resident Rebecca Nelis said.

She suggested council rescind legislation approved at the last meeting to allow Village Manager Pete Monteleone to move forward with seeking out interested landowners and oil and gas companies, and replace that with a non-biased committee that would hold forums for residents before any decisions are made.

That committee would consist of people with "no skin in the game."

"I don't think that, with a proposal so controversial, this is an outrageous request," she said.

She then said that, according to Councilman Don Elzer's estimates, she would receive about $800 for her small piece of property, but that is less than the $1,200 she'd probably have to pay an attorney to help draft a lease.

"What do I gain?" she said.

Mayor Margo Zuch agreed the village could slow down with the process, but Elzer - who made the group leasing suggestion in the first place - didn't think that was necessary.

"Let's ask the people what they think," he said, referring to the informational brochure distributed to council at the last meeting.

The brochure was to be given to residents, but council members Alan Cohen and Ellen Beagle argued it only presented one side, and Cohen claimed it was not factual.

Elzer didn't appear to believe slowing down was necessary and did not see a problem with the village seeking out interest, but Cohen and Beagle argued the brochure was designed for people already interested in leasing and shuts others out.

"Who holds an election and says we only want to hear from the people who are going to vote yes?" Cohen said. "The truth of the matter is the brochure is designed to get back information from people who want to do this. You are shutting out all of the people who do not want to do this."

He also said many people are not aware of the second step of the legislation approved at the last meeting - it allows Monteleone to actually talk to oil and gas companies for a potential lease.

"There is a step here nobody is paying attention to," he said.

Grandview Avenue resident Becky Foster also said the process is moving too quickly.

"I think that the people need to be informed before they need to know how they feel about even filling out the brochures. Bring it to the people, even if it has to be put on the ballot, bring it to the people," she said, which several people in the audience agreed to, and shouted out at times during the meeting.

She then said her daughter ran into a mortgage problem a few months ago when trying to buy a home in Seville.

"If we get into the gas lease, people need to know that a gas lease can be intact for a long time it just doesn't disappear when they finish drilling and move on. It can stay for many, many years. I know it can cause problems with people who want to sell their houses," she said.

Before her daughter was approved for the home a hold was put on the title until the bank determined a former gas lease on the property had expired and no drilling had actually occurred there.

"The banks are getting more and more on board with not wanting to deal with this," she said.

Elzer then told Cohen he spoke with lending institutions regarding his claim the leasing would hinder the buying and selling of local homes, and that he had proof that would not happen.

Elzer provided the Journal with a copy of e-mails he received from Quicken Loans, and letters from Montgomery Real Estate and Hardcastle Realty, in which they stated leasing has not resulted in anyone being denied a loan due to mineral rights leasing, or their home being foreclosed on after the leasing of mineral rights.

Quicken Loans provided a copy of their limited guidelines regarding new loans, and according to those, mineral rights are "not allowed to impair the look of the property, affect marketability, or enter the surface for the purpose of removing oil, gas or minerals. Minerals are allowed as long as we have a surface waiver."

The waiver is obtained from the mineral rights owner and it waives their right to use all or part of the land surface, it stated.

Sarah Sorge of Bill Montgomery Real Estate said in her letter to Elzer they have not come across any issues with mortgage companies financing properties with mineral rights leased, as did Sandra Hardcastle, of Hardcastle Realty.

Foster also expressed environmental concerns to council, specifically with regards to drilling.

"None of us know what the long term effects are going to be with this. The water, the air, the ground. Duke University just finished a study showing there was an increase in methane levels of water supplies in communities with drilling sites. Some of us know what we could be doing to our kids in the future here we went without water for a few days, think about what we would do if we lost our water," she said.

Elzer said there is no evidence that fracking (hydraulic fracturing) is causing methane in the water. The comment prompted several "boos" from the audience.

"There are 13 wells within six miles from here that are under way the question is, do we want to be part of the economic benefit of it? We are going to see all the things that go with fracking happen right here" whether we do this or not, he said.

Councilman Fran Figley agreed.

"Do you know there are three wells within three miles of this town that are being fracked? They are taking water out of Beaver Lake to frack these wells," he said.

Figley has argued before oil and gas companies will take the minerals from East Palestine through horizontal drilling no matter what the village decides to do.

"If the gas is going to go it's going to go, the only benefit to this is they will receive a signing bonus and royalty," he said of the residents.

He then indicated that if fracking was so dangerous the Environmental Protection Agency would have put a stop to it.

"We have an EPA that is down our backs and throats, they have investigated all of our neighbors," he said, to which Cohen interrupted, "So what you are saying is we should let them put a gun to our heads."

Figley responded, "Every day they are putting a gun to our head."

Other concerns expressed by residents were unitization, which can happen when 65 percent of the total acreage needed for a horizontal drilling unit is leased. In that case, oil and gas companies can request the surrounding non-leased acreage join the unit to make up the minimum 640 acres needed. The request must be approved by the Ohio Department of Natural Resources.

Dot Herbert, who also spoke before council, said the village and school district likely have enough acreage to make up that 65 percent on its own.

Cohen said the school board has already shown an interest in leasing property.

 
 

 

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