County signs natural gas lease

BY STACI WILSON

The Susquehanna County Commissioners signed a non-surface oil and gas lease agreement on the parcel of land where the county jail and recycling center are situated.

The county agreed at the Oct. 23 meeting to a five-year lease with Cabot Oil & Gas Corporation, of Houston, Texas, for 12.24 acres in Bridgewater Twp. for $42,840 ($3,500/acre) with 18.75 percent royalties.

Cabot was the only company to submit a bid on the county parcel.

According to the lease, any royalties will be free and clear of all post-production costs.

Although natural gas development in the county has been prolific over the past few years in Susquehanna County, this is the first county-owned parcel to be leased for development.

In September 2012, the commissioners rejected a bid from Chesapeake Energy on a 10-acre parcel in Rush Twp., the site of the former County Farm.
Commissioner Michael Giangrieco said Cabot’s offer was better and the county solicitor had reviewed the lease agreement.

The commissioners did not know of any drill site near the property at this time but Giangrieco said he wouldn’t be surprised if there was development in that area within the next year.

Audience member Craig Stevens of Silver Lake Twp. asked who would be checking to see if the royalty payments were accurate.

Giangrieco said, “Let me make this easy for you, we’re going to keep check on it.”

Discussion on the gas lease prompted an update on the status of the recycling center.

In February, the commissioners announced that with the equipment failures, building repairs, mounting financial losses and cuts in state recycling grants the county was beginning to look at the feasibility of privatizing the center.

At Wednesday’s meeting, Commissioner Alan Hall said it is not yet clear if privatization is in the county’s best interest.

“The trend is that grants are going away and it’s costing the taxpayers more and more every year,” Hall said.

Equipment in the facility was installed 14-15 years ago when the center first opened. “Most of it is at its life end and needs to be replaced,” Hall said.

In 2012, the recycling program cost the county more than $80,000, Hall said, adding he expects that figure to increase this year.

He said the Solid Waste Advisory Committee is looking to see if a private company could maintain and even expand the existing service.

“We want to entice people to recycle,” Hall said. “We want to make it better and improve it.”

But the commissioners said in order to sell the recycling center to a private firm there would have to be language in the agreement mandating certain services continue.

At the annual Susquehanna County Township Supervisors meeting, also held Wednesday, Michele Nestor – a consultant working with the county’s Solid Waste Advisory Committee on an update to the Solid Waste Management Plan said she anticipates significant changes being made to the recycling program.

Nestor said, “The program has done a tremendous job in a rural area but expenses have increased and material sales have remained flat.”

She echoed comments made by Hall at the commissioners’ meeting saying, “If privatization is the best answer, it would have to improve and expand services in the county.”