School districts in area see little from gas boom

By Sarah Hite shite@timesleader.comStaff Writer

As natural gas companies begin construction of gathering lines from Susquehanna County, school districts in Wyoming and Luzerne counties have already faced decisions about leasing land. But failure to find marketable quantities of gas in Luzerne County has left districts here with no additional income from the booming industry.

To the north, Tunkhannock Area, Lackawanna Trail and Wyalusing Area school districts have signed leases with natural gas companies. Elk Lake, which has Cabot Oil & Gas-drilled wells on its property, is another Wyoming County school district to benefit from the drilling boom.

The Tunkhannock Area School District signed a lease with Citrus Energy Corp. last spring for two properties, including land surrounding the Mehoopany Elementary School and land in Washington Township.

Superintendent Michael Healey said the district received $5,750 an acre for a combined total of about 100 acres, with 20 percent royalties in the three-year lease.

In 2009, the district considered cooperating with the Wyoming County Landowners Group to work out a joint gas lease, but Healey said the district had to include several clauses in its lease that the Wyoming County group didn’t have. He said the district has a non-surface disturbance clause and maintains the right to reclaim the land for any reason.

The school receives royalty checks from wells producing on adjacent properties, but while the extra revenue helps, Healey said it’s not enough to cover state budget cuts.

“The governor’s budget sideswiped our budget,” he said. “We lost $2.1 million. Depending on gas prices, we could receive $30,000 a month, but $360,000 a year is not going to change a $43 million budget.”

Lackawanna Trail

Lackawanna Trail School District offered 74 acres to Chesapeake Energy Corp. for $5,750 an acre with 20 percent royalties in a five-year lease signed in 2009. The terms are similar to those negotiated by the Wyoming County Landowners Group, and the school also includes a non-surface clause for its property in Clinton Township, where the high school is located.

Wyalusing School District, located in the northwest part of the county, also agreed to a natural gas lease with Chesapeake.

School districts in northern Luzerne County, where natural gas companies are looking to construct pipelines but not well pads, have not agreed to any leasing terms yet.

But that doesn’t mean officials haven’t considered the possibility.

Mark Kornoski, Lake-Lehman School Board president, said the board informally discussed whether the district could lease its 103 acres around the time Encana Oil & Gas USA Inc. began drilling exploratory wells in Fairmount and Lake townships.

Those conversations ended when Encana could not find a commercial amount of gas below the surface in Luzerne County, but Kornoski said “anything is possible.”

“With the cuts made for education, every school district has to look at some way to get some revenue,” he said. “It has its pros and its cons. The money sounds good, but until they know all the problems it could cause, like what happened in Dimock and Bradford County, is it really worth putting students in danger like that?”

Dallas School District Business Manager Grant Palfey said he talked to Healey when Tunkhannock Area was first negotiating its lease terms, but that’s where his research ended.

“Maybe we’re not even in a good spot for that,” Palfey said.

“I don’t know if it’s something we would actively seek, but you never want to rule anything out.”

Metering stations

The district, which owns about 100 acres near Route 309, is currently the subject of concern for residents and parents as two natural gas companies are working to build metering stations within 1,800 feet of the four schools.

Unlike districts benefiting from drilling, neither the school district nor the township stands to gain any significant income from the metering stations or pipelines.