CLC and the Marcellus Shale

Natural gas drilling is becoming a topic of widespread interest, as seen in the Promised Land feature movie that came out recently.  We feel that many readers and supporters of CLC may be interested in this topic and want to know about Crystal Lake’s involvement – or lack thereof – with natural gas development.

As many of our readers probably know, the Camp property is located within the broad swath of northern and western Pennsylvania (and southern New York, eastern Ohio, and most of West Virginia) underlain by a rock formation rich in natural gas, the Marcellus Shale.  A few years ago CLC was approached by a number of gas exploration companies, each asking CLC to sign a lease allowing them to drill for gas on the Camp’s roughly 925 acres.  Neighboring property owners did sign leases.

Why would CLC consider a lease in the first place?  To pay off its mortgage, to improve site facilities and equipment, to make it possible for more campers to attend camp, perhaps even to extend camp activities to reach young Christian Scientists overseas, and generally to put the Camp on a steadier financial footing year round.

To date CLC has not signed a gas lease and is not currently discussing a possible gas lease with anyone.

You may ask – why not, since there is a potential for ongoing royalty income in addition to the “signing bonus” payment offered by the gas companies?  The answer is quite simple in principle – above all, we must protect the property for continued use as a children’s camp — but rather complicated in practice.

Simply stated, the standard terms and conditions of the gas leases offered by the gas companies would not be suitable.  Wells could be drilled and service roads could be installed pretty much wherever the company wanted, and environmental protections offered by the companies and by the current federal and state regulations are inadequate, in the opinion of our Board of Trustees.

The Board worked for many months with three separate law firms to develop acceptable terms for a lease, but then found no gas company interested in discussing those terms, in part because abundant production of natural gas is now being developed in the United States, and the gas companies are not currently entering new leases in the Marcellus Shale area of northeastern Pennsylvania.

To understand why CLC spent tens of thousands of dollars on legal fees to understand and develop proposed lease terms acceptable to the Camp, let’s digress a bit into the technology used to extract gas from a shale deposit. Unlike gas deposits in some parts of the country, where a driller only has to drill down into a large underground pocket of gas to let the gas come to the surface, in the Marcellus Shale and other shale deposits the gas is trapped in small pockets throughout the dense rock formation.  Since 1998 a technique has been successfully used, originally in the Barnett Shale in Texas, called “hydraulic fracturing” (or more commonly “fracking”) to release the gas in commercially viable quantities.

A vertical well is drilled into the gas-bearing shale layer, which would be about 5,000 feet down to the Marcellus Shale below the Camp’s property.  The well is then turned 90 degrees and extended as far as another 5,000 feet horizontally through the shale bed.  (Don’t ask how to turn a drill bit nearly a mile underground.  We don’t understand that part either, but it’s now done all the time).

A large quantity of fracking fluid, mostly water but with sand and small amounts of various chemicals, is then forced down the well and into the shale formation under great pressure, which fractures the rock enough to free the trapped natural gas and let it flow up the pipe to the surface.

As you may know, considerable controversy has arisen over the fracking process, with claims that it can cause serious environmental problems and should be more closely regulated.  And here’s where negotiating a gas lease becomes more complicated, at least the way the CLC Board of Trustees approached it, with careful protection of the Camp property as its primary goal.

Rather than simply sign a gas drilling company’s standard lease, written to make things as easy as possible for the driller, the Board worked extensively with three separate independent law firms with expertise dealing with the gas industry to develop specific conditions for any lease CLC would sign.  The Board’s conditions seek to prevent any work on the property during the summer camp season, to  keep all drilling activity completely out of sight from the active part of the camp property, and to  impose numerous strict environmental controls and environmental testing requirements.  The Board also included provisions in its proposed lease terms to require the gas company to remove all of its equipment and restore the well site when it left, and to bury all pipelines on the property so they wouldn’t interfere with the wilderness feeling of the property or obstruct the many trails, used for mountain biking, horseback riding, hiking, and skiing in the winter.

To date there has been no serious discussion with a gas company about these terms and conditions developed by the Camp’s lawyers since the current low prices in the natural gas market have kept the companies from entering or even negotiating new leases – and possibly because they would rather deal with other landowners who are far less protective of their property.  So for now CLC doesn’t have a gas lease, and doesn’t expect one in the foreseeable future.

Wherever your personal thoughts land on this issue, please know that the Board of CLC and its year-round staff members continue to address prayerfully this topic with the utmost care and consideration for the Camp’s mission.  And for now, and for the foreseeable future, CLC will continue to rely on (and will always be grateful for!) the generosity of all of its supporters who help us keep the Camp moving forward without any help from a gas lease.