Will the village of Silver Lake allow drilling for a natural gas well on property south of Village Hall?
That is a question village leaders are pondering after hearing from David Beck, Vice President of Beck Energy Corporation, at a village council meeting in late December.
“I think it’s worth pursuing and I think we should take this up, probably sooner [rather] than later,” said Council President At Large Jerry Jones after hearing Beck’s presentation. “If it produces what he thinks it might, it’s certainly income that we can use.”
Beck encouraged village officials to consider this opportunity.
“I just think you have a good opportunity,” Beck told Village Council and the administration Dec. 19. “I think you have a sweet spot where [there] could be a lot [of natural gas] there.”
If the village decides it is interested in having a well drilled, Beck said he would ask the village to enter into a three-year lease with his company and would plan to drill the well in the summer. He estimated the drilling itself would take six days and the whole process “would be about a month.”
Beck said his company operates about 300 wells in 10 Ohio counties. He noted his company has “many” gas wells in Portage County that are 20 to 25 years old, and are still producing.
“This part of Summit County has a long history of oil and natural gas production. I search for places where I have a strong feeling of success [for drilling a well].”
Beck told the council he would like to drill a vertical natural gas well on a parcel owned by the village which is south of Village Hall in an area where village officials keep equipment. The parcel in question is close to 30 acres, said Beck. He said he would drill less than 4,000 feet below the surface. While noting the initial drilling process requires using a lot of equipment, Beck said the end product is a tank battery and a wellhead.
Beck later told the Cuyahoga Falls News-Press that the precise location of the wellhead and other necessary equipment would be “approved and agreed upon between Beck Energy and the village. It appears that they have enough acreage and the adequate spacing to be the sole landowner involved.”
The Ohio Department of Natural Resources requires that drilling down less than 4,000 feet be done on at least 20 acres and that the well be at least 200 feet from an occupied building, said Beck. He noted the ODNR also stipulates that any landowner whose property is within 300 feet of the well must approve of the drilling of the well. Beck said he is confident that the well can be drilled on the parcel in question and meet the ODNR rules to where the village itself would be the only property owner that would need to agree to the drilling.
If the drilling is successful, Beck said he would offer an “allotment” of free natural gas that can be used by Village Hall. Additionally, as owner of the property, the village would receive a monthly royalty equating to 12.5 percent of the gross profits generated by the sale of any natural gas or crude oil produced by the well, according to Beck. He added that, under the terms of the lease, the village would have to pay a state severance tax.
Beck noted he would be willing to pay the village a $15,000 royalty prior to drilling the well. If the well fails to generate natural gas, the village would still have $15,000. If the well is successful, Beck said he hopes it would generate $2,000 to $3,000 per month for the village. He later told the Falls News-Press that the estimates “are hard to predict before the well is completed.” He added that the income projection is based on the current price of natural gas and crude oil, as well as the success of the well.
Beck said he would have to see the village’s gas bill to see whether the well he would like to drill could also provide service to the village’s other buildings.
The property’s location away from the lake and the neighborhoods attracted Beck to the site.
“I don’t want to go under your lake,” said Beck. “I don’t want to go under your beautiful neighborhood. I don’t want anybody to see it.”
Another attractive feature of the site? Beck noted he would not have to remove any trees before performing the drilling.
He said whenever he wants to build a well, there are two primary issues people are concerned about: will the water supply be protected and what is the risk that the well will blow up?
Beck explained there are 52 different requirements he must meet in order to acquire a permit to drill a well and added a “good share” of those deal with the casing and the surface of the well. The Cuyahoga Falls water table is about 120 feet deep, while the natural gas is believed to be about 4,000 feet below the surface, said Beck.
“From the beginning of that drilling process, we’ll spend close to $100,000 just to get through that water field to protect it,” said Beck, who noted the state has requirements for drilling and state officials will monitor the drilling process. The city of Cuyahoga Falls would also be kept in the loop. “ As part of that process we run an 11-inch casing through the water table, cement around it, run another casing 400 feet deep and cement around that. Before we even drill, before we even get close to the oil and gas, we have two strings of pipe surrounded by two cement casings.”
Plugging the wells are his company’s responsibility, according to Beck.
“Beck Energy has a bond,” said Beck. “I have to be responsible to plug all or any of my wells at any time the state holds me financially responsible.”
Beck offered to show council members other projects his company did at Twin Falls United Methodist Church in Munroe Falls.
He emphasized that if the village was not interested in drilling a well, then he would move on to other opportunities.