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Oil and gas boom could mean changes for schools

April 13, 2012
By Evan Bevins - The Marietta Times ( , The Marietta Times

Area school districts are considering whether to lease the mineral rights on land they own, but those financial benefits are just the first of many possible impacts Utica shale development could have on schools.

A recent report by the Penn State University Cooperative Extension outlines the results of surveys and interviews with school officials from around Pennsylvania about the effects Marcellus shale activity has had on their districts in recent years. It addresses everything from enrollment and property tax revenue - neither of which increased as much as some expected or hoped - to transportation and dropout rates.

Warren Local Schools Superintendent Tom Gibbs heard firsthand from some of his counterparts in the Keystone State at a March conference hosted by the Pennsylvania School Study Council and the Pennsylvania Association for Rural and Small Schools. While they addressed a number of problems that arose, he said the focus was on how to deal with them and the message was not negative.

"They were saying that overall it had a positive impact on the community," Gibbs said.

But the process was not without its growing pains.

"The biggest single impact that they just really went over and over and over is road conditions," Gibbs said, referring to the damage done especially to dirt, gravel and chip-and-seal roads by trucks hauling equipment and supplies to and from drilling sites. "The companies eventually remedy them ... but it takes time for that to occur."

Fact Box

Survey of Pennsylvania school officials on the effects of Marcellus shale development:

School personnel have reported relatively low impacts on enrollments, even in areas to which a significant number of people have moved.

Less than 6 percent of schools in areas with higher drilling activities reported significant increases in students for whom English was not their first language.

About 17 percent of respondents in areas with high drilling activity believed the high school dropout rate might increase as students leave school for oil and gas industry jobs.

Increased interest in career and technical education was reported by educational leaders in the state's northern tier.

Congestion and road damage has increased travel time for some residents and in some cases directly interfered with school bus routes or otherwise hindered travel to and from school for staff and students.

Respondents reported property taxes have not significantly increased, although some districts earned money from leasing land to gas companies.

More than 38 percent of respondents in high-drilling areas reported major or substantial environmental or water quality issues, compared to about 7 percent in low-drilling areas.

Source: "Marcellus Shale Gas Development: What Does It Mean for Pennsylvania Schools?"

Q&A: Superintendent says no drilling will occur on school-owned property

The Wolf Creek Local school district was one of the first in the area to investigate leasing its mineral rights.

The district owns about 182 acres at the Waterford High and Elementary School sites, including land across Ohio 339 and Beebe Road from the elementary school where school buses are parked and the FFA chapter plants corn and other crops. The school board unanimously approved an agreement with the Waterford Landowners Association last year.

Superintendent Bob Caldwell said the district has stipulated it is not interested in having a well on any of its property.

Q: What are the potential advantages of leasing the district's mineral rights?

A: Well, there would be the opportunity to save our taxpayers some revenue or money from taxes by getting perhaps a little bit of an income from them.

Q: Were there any downsides that you thought about?

A: I have to have confidence in people that understand that business much more than what I do - petroleum engineers, the Department of Natural Resources and the Environmental Protection Agency (with whom he consulted).

Q: Why did the district opt to join a landowners group?

A: Comfort in numbers and being able to get perhaps a little bit higher price per acre. And the landowners group that we ultimately joined waived their 1 percent commission fee ... because it's for a school and to help the students.

Q: Beyond leasing, what potential advantages do you see from the possible shale boom for the school district?

A: Employment opportunities for residents in the community and for graduates. Anything that keeps economic development and keeps our young people in this area, I'm all for.

Q: And what about any potential disadvantages?

A: The disadvantage is, from what I understand, the "boom" that comes. It's just almost like, I'll say the gold rush of the olden days.

When they built the power plant that was formerly known as PSEG, we had a lot of construction workers in and around the area and congestion for traffic, and that's always a worry when schools are in session and the buses are on these county and township roads. ... The sheriff's office helped us and patrolled the area, and the plants did a good job, so hopefully we can communicate with them so that they know when our beginning and ending times are.

Evan Bevins conducted the interview.

Those repairs, and increased traffic in general, can slow down travel to and from school for students and staff, the Penn State report says.

Another effect on transportation can be difficulty in finding bus drivers, Gibbs said.

"With the CDL (commercial driver's license), they can make significantly more money driving for an oil and gas company than they can working for a school district," he said.

One initial source of excitement about the predicted shale boom was a financial boost to local schools as a result of rising property values. But that isn't a given since actual sales of property, not the leasing of mineral rights, raises the value.

"Under Pennsylvania's tax structure and Ohio's current tax structure, the financial benefit for a school district ... is slim and none," Gibbs said.

The Penn State report says only 4 percent of respondents from areas with high drilling activity reported increases in enrollment, although more reported significant numbers of people moving in to the area. Those that do arrive would add challenges to the schools, said Belpre City Schools Superintendent Tony Dunn.

"You also have the possibility of transient families coming in," he said. "You get students for a short period of time, then they go away, and that's never a good thing."

The Penn State report also notes concerns about diminishing local housing opportunities. Dunn said some companies provide generous housing allowances for their employees when they come into an area, which may allow them to pay more, causing rental rates to rise.

"They can throw some rent money around, and they can possibly displace some of your local residents," he said.

But there can also be advantages for schools, in addition to general economic improvement for an area.

Although some school leaders worried the prospect of jobs in the oil and gas industry might encourage more students to leave high school early, the Penn State report notes increased interest in career and technical training. The Washington County Career Center's high school program is already looking at changes to better prepare students for potential oil and gas work, said Dennis Blatt, secondary director.

"We look for maybe more students to come into the heavy equipment/natural resources program," he said.

There will also be more focus in welding classes on pipeline work.

"Pipeline welding's kind of a specialization welding (for which) we think there'll be an increased demand," Blatt said.

And there is the prospect of financial windfalls from leasing land for mineral rights. The career center has not been approached about that, but Superintendent Roger Bartunek said they have conferred with legal counsel to make sure the mineral rights are clear on the approximately 180 acres the school owns.

Wolf Creek Local Schools has signed up with the Waterford Landowners Association to look into leasing its land, about 182 acres. Wolf Creek board of education President Hugh Arnold said he had no reservations about it, considering the district's lease would include provisions that no drilling take place on school property since the shale deposit could be accessed by horizontal drilling.

"We wouldn't even know they were there," he said.

Warren plans similar protections for any lease it would sign for the mineral rights on nearly 100 acres it owns. The district has entered an agreement with another landowners group, Southern Ohio Energy Consultants Inc.

The Fort Frye Local Board of Education is also exploring its options for leasing mineral rights. Marietta City, Frontier Local and Belpre City school officials have discussed the issue informally, but no action has been taken.

Dunn said Belpre only has about 40 acres of land, but if it signed a lease agreement for $5,000 an acre, that would bring in $200,000, regardless of whether any royalties were ever paid.

"It would at least be a good one-time revenue source," he said.



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