Akron City Mayor Dan Horrigan last week announced the withdrawal of the oil and gas well proposal with DP Energy Auburn, LLC, at the LaDue Reservoir in Geauga County.
Mayor Horrigan said his decision came after hearing arguments from both inside and outside the City of Akron, including Geauga County residents and organizations, opposed to leasing mineral rights of 475 acres of city-owned property at the southeast side of the LaDue Reservoir, located in Auburn and Troy townships.
“I have decided to withdraw the LaDue well and gas proposal from the Akron City Council agenda at this time,” Mayor Horrigan said. “They will not need to consider it, there will not be a vote on it, we’re not moving forward, definitively, with the project.”
Akron and Geauga residents responded to the proposed lease citing concerns of city drinking water and the effects horizontal drilling, known as fracking, could have on the county’s groundwater. About 97 percent of Geauga residents source their drinking water from groundwater wells.
Mayor Horrigan said the public’s concerns regarding irresponsible fracking seen across the country are not lost on him, but with this decision, the city lost an opportunity for increased revenue. He noted the city has pursued alternative sources of revenue “to minimize the burden of current and future utility costs for all Akron residents.
“The recent LaDue Reservoir proposal to lease underground oil and gas rights for well sites located outside Akron property lines is an example of one of these many initiatives,” Mayor Horrigan said in a written statement following a virtual town hall.
“This project was expected to generate an immediate quarter million dollars in revenue followed by significant royalty revenue over the life of the project,” he continued. “Hundreds of oil and gas wells are already located in our area. The proposal was not the first of its kind and has already been done responsibly in our area for decades.”
According to the agreement, Akron would have received a one-time payment of $237,500, at $500 per acre, and 15 percent royalties on any gas or oil extracted from the well. Drilling would not have taken place on city-owned property, but the leased mineral rights would have allowed the energy company to extract resources from beneath the property.
Akron Public Service Director Chris Ludle had informed Akron Council during their Jan. 11 meeting that the agreement had been about a year in the making.
Dave Partington of Protect Geauga Parks claimed that this withdrawal may be temporary, putting special attention on the mayor’s “at this time” statement.
“[Mayor] Horrigan may try to re-introduce the proposal,” Mr. Partington stated in a Feb. 6 written commentary on the proposal. He pointed out that the mayor’s comments that the city would have “tight control” over the project are “likely not correct.
“By law, localities have little control over gas well drilling,” he said. “That control is exercised by the Ohio Department of Natural Resources.”
The ODNR Division of Oil and Gas Resources Management obtained exclusive authority on oil and gas well production in the state in the 2015 Ohio Supreme Court case, State of Ohio ex rel. Jack Morrison, Jr. v. Beck Energy Corp.
“So, this project may resurface at a later time,” Mr. Partington speculated.
During the Geauga Commissioners’ Feb. 2 meeting, Auditor Charles Walder also wasn’t so sure the deal would stay dead.
“As of this morning, the project is dead,” he said, referencing a conversation he had with city officials. “Now, whether it’s going to stay dead or not, I don’t know. We will continually monitor that.”
Mr. Walder said his staff was looking into whether fracking would be an infraction against the tax exemption status that Akron currently holds on the LaDue Reservoir property in Geauga County.
With the project “killed,” he said there is currently no impact on their tax exemption. He said forestry work, such as logging, is allowed and does not negate their tax exemption.