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Natural gas wells proposed on Capital High grounds

CHARLESTON, W.Va. - Kanawha County Schools officials say natural gas wells might be drilled on Capital High School property.

School officials said Friday no plans are finalized and there would be no risks to students associated with drilling on the large property. Instead, they believe it could provide much needed savings and revenue to the school system for years to come.

"Any relief to the taxpayers is always welcome," said board President Pete Thaw.

In February Spencer-based Reserve Oil & Gas presented a drilling proposal to the school board.

The company is proposing three wells on the Capital High property, said Doug Douglass, its land manager. Spread 1,500 feet apart, two of the wells would be on the land across the street from the high school, he said.

The third would be on the same side of the road as the school, but Douglass said it's planned for the far southwest corner of the property. He said that would be about a quarter mile from the school building itself.

"We don't want them anywhere near where kids go," said county facilities director Chuck Wilson. "We want them far away, and any of the actual drilling to happen when (students are) not in session."

The county owns 176 acres that's considered part of the Capital High property, Wilson said. Most of the property consists of mountainside adjacent to Coonskin Park property, far from the areas used by students, he said.

Douglas said the crews would not be drilling into Marcellus shale, and his company uses nitrogen fracturing to release the natural gas.

"These are vertical wells, no hydraulic fracking," he said.

The wells themselves take up very little space, Douglass said. The pad for each well would be 100 feet by 200 feet, and a parked pick-up truck could block the wellhead from view, he said.

No project can proceed until the county officially solicits bids for drilling. Douglass said his company understands it might not get the contract, but he's confident they are the right people for the job.

"We have an interest in that tract because we've drilled 80-plus wells in Kanawha County in the past five years," he said.

County purchasing director Tim Easterday is still putting together the official request for proposals, he said. Although Wilson said this is not the first time someone has proposed drilling on school property, Easterday said this is the first time the process has made it to the bidding stage.

He said he has looked at documents for other natural gas projects, and he's confident he'll have the proposals ready within the next 10 days.

Apart from safety considerations, school officials said savings and revenue are the top priorities for the project.

In Douglass' proposal, the county would receive a 12.5 percent royalty payment on any of the gas sold from the wells, Wilson said. Douglass said that is the company's standard royalty rate.

The company also offers a free gas component and discounted prices for any additional gas needs, he said.

Douglass said the company typically provides 150,000 cubic feet of natural gas per well each year at no charge. That's enough to satisfy a residence but probably not Capital High. However, with the three wells on the property, he and county school officials thought it could cover the lion's share of gas costs at the high school.

"This will be a major benefit to the school system and the public," Douglass said.

Last year the school system spent roughly $1.5 million on natural gas, Easterday said, adding that not all of the county's schools use natural gas.

Citing a study from Johnson Controls, Wilson said the county's high schools use an average $40,000 worth of natural gas each year. Middle schools average about $36,000; elementary schools, about $16,000; and the county vocational schools, about $42,000.    

The combination of royalty payments and discounted prices could subtract a large chunk from those costs.  

"I think on the royalties, if I'm reading this right, around $10,000 per year," Wilson said, referring to Douglass' report.

School officials and Douglass said royalties would depend heavily on the amount of gas in the area. Douglass said he's confident the gas is there, and his company believes the wells could produce for 40 to 50 years.  

That could be just the additional revenue the school system needs.

This year Kanawha County voters approved a measure presented by the board that caps the amount of money provided by the excess levy. The cap on the property tax doesn't take effect until next year, but Treasurer Harry Reustle and Superintendent Ron Duerring have repeatedly said the cap will make for tight budgets.

"Anytime you can do any energy savings, that puts money back into the budget," Duerring told the Daily Mail in May, referring to upgrades to air conditioning units. "Every penny helps."

Capital High Principal Clinton Giles said Friday he hadn't heard about any drilling plans.

However, he thinks it's a progressive move and supports it as long as the savings or revenue find their way back to his school.

"If these wells produce gas at a significant enough rate to offset expenses, we would love to have that money made available to us," Giles said.

Every Friday at Capital High is "lights out Friday," Giles said: only emergency lighting is used in the halls throughout the school. Teachers are asked to turn out the lights in the classrooms and turn off computers to keep energy costs down, he said.

He's not sure how much those measures save, but he knows the school could use a little extra money.  

"I suppose the bottom line is whatever money is saved would be put to excellent use at Capital High school, and I would strongly recommend that before it's put to use anywhere else," he said.

Wilson said he wasn't sure where the money would end up, but board member Jim Crawford thought it should go toward general maintenance costs.

The board must approve any final drilling contract before the project can proceed. Easterday thought the bids could be finalized in about a month.

Contact writer Dave Boucher at 304-348-4843 or david.boucher@dailymail.com. Follow him at www.twitter.com/Dave_Boucher1. ;;


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