Clearville residents want others to learn about gas storage

CLEARVILLE - In this rural Bedford County town comprised of retired couples, hardworking farmers and tight-knit families, complex issues such as eminent domain and property rights are in the forefront as a group of landowners takes a stand against one of the largest energy companies in the world and what they say are unfair practices.

Residents say they realize they may lose their battle, less than four months from the expected completion of a 12 billion-cubic-foot natural gas storage field under the ground many of them have bought for vacation or retirement homes.

What keeps them going in court, through attorneys and letters, phone calls and endless research, is making sure the same situation doesn't happen somewhere else.

''It's always almost a done deal before landowners can get in there and do anything,'' said Sandra McDaniel, one of the landowners.

She said several property owners did not have gas storage rights in their gas drilling leases and didn't really know any better when they signed them with Pennsylvania General Energy Corp.

''Landowners gave rights away unknowingly,'' she said.

More than 100 landowners signed leases with Pennsylvania General in 2003. Most contracts included a clause to allow the company to store natural gas underground. However, McDaniel said, 10 landowners whose leases did not include the clause are predominantly the ones fighting against the proposed underground storage field project.

Property owners were given monthly payments from 2004-06 for gas production, with the amounts varying according to the land acreage and how much gas was underneath. They have not received payments since then, McDaniel said.

In 2007, Pennsylvania General sold the leases to newly formed Spectra Energy, based in Houston, Texas, which is creating the Steckman Ridge gas storage project near an already-existing portion of the Texas Eastern pipeline, also owned by that company.

About 10 miles of pipeline is in the network connecting to the Steckman Ridge storage field, all of it running through Clearville.

After failing to reach an agreement with the 10 landowners, Spectra took the issue to court to use eminent domain, the taking of private land by a public or governmental entity for the public good.

During early negotiations, Spectra's top storage offer was a one-time payment of $400 an acre for the 10 property owners in question.

The courts have not yet decided upon a compensation amount or if the compensation will be a one-time payment or over a period of time.

Eminent domain

While landowners describe Spectra as difficult to work with, a company official said it has done everything it can to avoid an eminent domain battle.

''We do not use eminent domain as a negotiating tactic,'' said Susan Waller, vice president of stakeholder outreach. ''That is not used by anyone in our industry. We make every effort to communicate, seek their input.

"Eminent domain is a last resort," she said. "That occurs when a property owner feels they actually don't agree with the compensation. What happens is they have the opportunity to go through the court system and let the judge make a decision.''

One of the main reasons landowners are fighting against the underground storage field is the possible existence of Marcellus Shale in the area - a natural formation that could contain reserves of gas waiting to be drilled and produced. They argue that if the storage project continues, already-existing resources will be taken by Spectra through clandestine drilling.

Spectra representatives declined to comment on that charge, saying it is in the hands of the court.

In Marcellus Shale areas, landowners on average receive $6,000 to $70,000 a month for 20 years or more, McDaniel said.

When told of the negative opinions Clearville landowners have of Spectra, Waller paused and let out a sigh.

''We've talked to everybody and we've tried,'' she said. ''At this point, we'd give anything if we could settle with them. They can still settle with us. We can still resolve this.''

Landowner Mike Benard said eminent domain is not being used as a last resort in this case and that the basis for rulings so far has been less about the public good and more about the financial good of publicly held corporations.

''Since when is it the public's responsibility to ensure a company's commercial success?'' Benard asked. ''In addition, the need for another underground storage area in Pennsylvania is said to be critical by Spectra Energy and FERC [Federal Energy Regulatory Commission] - yet Pennsylvania has more underground gas storage sites than any other state in the continental U.S.,'' he said, citing the Energy Information Administration.

In a similar case, Kelo v. City of New London, the U.S. Supreme Court held that a home or business can be taken if the government believes someone else can make more money with that land.

''The floodgates to eminent domain abuse have busted open,'' said Benard, although he noted a silver lining in the court's decision. ''The court said, 'Nothing in our opinion precludes any state from placing further restrictions on its exercise of the takings power.'''

Waller, with 30 years of experience in the industry, said she was at first amazed to discover how little storage there is in the U.S. and that companies need to take advantage of the Commonwealth's ''natural reservoirs that are nearly depleted but can be re-injected with gas.''

''What storage does is it gives the market and local distribution companies the opportunity to get it close to their home to where they can pull it as they need,'' she said, explaining that one molecule of gas takes three to five days to move from the Gulf of Mexico to New England. ''Storage improves the reliability of natural gas in that area, and it brings competition.''

Transparency

Many of the Clearville landowners say they are upset by the process they claim does not treat property owners as valued stakeholders in the process.

''Without our property, there is no 12 billion cubic feet underground natural gas storage facility,'' Benard said. ''At the end of the day, Spectra Energy will make money from our property and we will continue to pay taxes on this land, much of which will have restrictions on its use.''

FERC meets regularly with energy companies, but landowners typically are not a part of the discussions.

Landowner Paul Stup believes Clearville residents were deliberately left in the dark.

''In my dealings with FERC, I have always had the feeling that the less I knew, the better off they were,'' Stup said.

Waller said changes in projects, such as Spectra's initial promise to meter each well and its recent decision to have only one meter in the area, are normal.

Residents are concerned that having just one meter will mean less accurate information about the extraction of resources on their individual properties.

''In any construction project, you are always going have minor modifications to your original plan along the way,'' Waller said. ''We felt that it was something that we were doing that eliminated unnecessary construction. Metering each well does not add any value to information for the landowners.''

Pollution, water quality

Recently, residents have become alarmed by the possibility of project-related pollution. Geraldine Beegle noticed in mid-November that her water was foamy and bubbly. Earlier this month, owner William Smith became concerned about brown water and an oily substance in his water.

''We are aware of the concerns regarding the water quality and we responded immediately,'' Waller said, adding that bottled water and dispensers were delivered immediately to those residents and that additional testing is being done.

She added that it is hard to determine if the change in water quality is related to the Steckman Ridge project.

In a Dec. 2 bi-weekly report to the FERC, Spectra acknowledged that one water well showed a ''slightly elevated concentration of arsenic,'' which the landowners were made aware of. ''The occurrence of arsenic in groundwater in Pennsylvania is not uncommon,'' said the report.

Water testing results have not been made public yet.

Geoscientists were at McDaniel's residence Wednesday afternoon, taking samples of water from her kitchen sink and at a spring-fed natural pond on her property that will be sandwiched in a valley between two wells. Her water then will be tested post-drilling to make a comparison of the effects of the water quality.

Asking for help

Landowners have contacted most of their local government officials, asking for aid in their situation.

State Sen. John H. Eichelberger Jr., R-Blair, said while contract-related issues that are in court are more or less out of his hands, he said many of the things taking place in Clearville may come up in Harrisburg.

''It's important for me to understand the problems they have,'' he said. ''I think we will be looking at things in Harrisburg over the next year because it's becoming more of an issue. We'll probably start to address some of these things and at least look at them to see if things are reasonable in the law or we need to firm anything up and make changes.''

Messages with the office of U.S. Rep. Bill Shuster, R-9th District, and the FERC were not returned.

Kendra Barkoff, spokeswoman for U.S. Sen. Bob Casey, D-Pa., would not share the senator's stand on the issue.

''Our office was made aware of the situation by constituents in Bedford County,'' she said by e-mail. ''Due to privacy concerns, I am unable to comment any further than that.''

Frustrated with a seeming lack of support on a local level, McDaniel has even penned a request to President-elect Barack Obama.

''Our cause we bring before you does not ask for money but asks for restoration of justice,'' she wrote.

Through the Web site www .spectraenergywatch.com and continued research and contacts, the Clearville landowners are fighting, not as much for themselves anymore, but for the other towns and other storage projects yet to come, to strangers they may never meet.

''It is too late for us,'' McDaniel said. ''But my hope is to restore a little justice for others.''

Mirror Staff Writer Wendy McCardle is at 946-7520.