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Oil and gas leases in bay region spark debate
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Pollution fear

Oil and gas leases in bay region spark debate

Pollution a fear, but residents could get rich, firm says

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A company that’s leasing oil and gas rights in Virginia’s rural coastal plain has tapped a gusher of concern.

Some people worry that drilling could pollute waters in the Chesapeake Bay region and turn pastoral Northern Neck and Middle Peninsula counties into noisy industrial zones.

But the president of the Texas company acquiring the leases, Shore Exploration & Production Corp., said drilling could turn landowners into millionaires and help the environment by providing relatively clean-burning natural gas.

“We are the true environmentalists,” said Stan Sherrill, who is also the company’s CEO. “Unfortunately, other people who claim to be environmentalists are giving a completely false vision of what’s happening.”

It’s hard to know just what is happening — or going to happen — because company officials keep offering different versions of their plans, said Ruby Brabo, a member of the King George County Board of Supervisors.

“I think they change their answers based on what people want,” Brabo said.

There are thousands of gas wells and two oil wells in Southwest Virginia but none in eastern Virginia, state officials said.

Much of the bay-region controversy centers on a drilling method called hydraulic fracturing, or fracking.

Fracking typically involves injecting water, sand and chemicals underground at high pressure to break up rocks that harbor gas or oil. Critics say the process can pollute streams or underground water. Supporters say the worries are vastly overblown.

Brabo said Shore officials first spoke of using the watery form of fracking, called hydrofracking. Later they said they would employ a type of fracking that uses little water by substituting substances such as nitrogen or carbon dioxide.

“We don’t know what kind of fracking is going to occur,” Brabo said.

In a telephone interview, Sherrill said: “We have no plans whatsoever” to use the watery fracking.

Moments later, Sherrill said Shore Exploration is looking for a partner — maybe an oil company — to provide capital and perhaps do the drilling.

“I can’t control what partners could possibly do,” Sherrill said. “Sometimes partners call the shots.”

Sherrill said drilling would not cause pollution.

Brian Coy, a spokesman for Gov. Terry McAuliffe, said, “The governor is aware of the uniqueness of this situation” and has asked Secretary of Commerce and Trade Maurice Jones and Secretary of Natural Resources Molly Ward to look into it.

McAuliffe currently has no position for or against the possible fracking, Coy said. “He wants more information about whether this can be done safely.”

Since 2010, Shore Exploration has acquired about 84,000 acres in gas and oil leases in the counties of Caroline, King George, King and Queen, Essex and Westmoreland. That’s an area equal to 840 Maymonts.

The counties, north and northeast of Richmond, lie atop the Taylorsville Basin, an ancient geological formation believed to contain gas- and oil-rich shale.

Shore Exploration, incorporated in Virginia in 1982, also investigated the area in the 1980s. The company collaborated with Exxon and Texaco, and exploratory wells were drilled.

“The program did not prove to be commercially viable, but left Shore extensive information about the shale formations,” the company says in a flier.

Drillers have used fracking for decades. But technological innovations in recent years — including horizontal drilling and fracking that enable a well to tap hard-to-reach gas and oil — triggered a U.S. energy boom over the past 10 years and made eastern Virginia attractive again.

Fracking in Pennsylvania, West Virginia and other states has increased production of gas, and many power plants are switching from coal to the cleaner-burning gas.

The Taylorsville Basin occupies a modest area under eastern Virginia and Maryland. Scientists estimate there is 1 trillion cubic feet of natural gas in the basin, said Chuck Bailey, a College of William and Mary geologist.

By comparison, Bailey said, the more-famous Marcellus Shale region is estimated to hold 400 trillion cubic feet of gas, but it also covers a larger area — parts of New York, Pennsylvania, West Virginia and Ohio.

Bailey said it’s his opinion that fracking, done correctly with modern methods, is safe. But as more and more wells are drilled, Bailey said, the likelihood increases that someone doesn’t follow procedures, accidents and spills happen, and groundwater or streams get contaminated.

“As this new gas revolution in the East happens, there will be lots and lots of environmental problems that are created,” Bailey said.

Depending on gas prices, drilling companies might not be in business long in Virginia, Bailey said. “The costs that are borne environmentally may have a longer residence time than the benefits from the extraction itself.”

Noise, traffic and other effects of drilling would change much of rural Virginia, said Albert C. Pollard Jr., a Lancaster County businessman who works part time for two environmental groups following the issue.

“There needs to be a community discussion” about drilling, said Pollard, a former state delegate.

Widespread drilling could draw lots of workers into the region, raising the possibility of more crime and drugs, said Rick Parrish, a senior attorney with the Southern Environmental Law Center, an environmental group.

“There is concern about the potential for that kind of outside labor force moving in and disrupting the community,” Parrish said.

Mike Ward, executive director of the Virginia Petroleum Council, a division of the American Petroleum Institute, said fracking is safe because, among other reasons, it happens thousands of feet below underground aquifers, which provide drinking water.

Fracking lasts only three to five days per well, Ward said. Then there’s a period of heavy activity, which includes making roads to the well site, that lasts a few months, he said.

“It’s like a construction site,” Ward said. “As it’s being done, there is going to be truck traffic. There’s going to be noise. There’s going to be some dust in the air. There’s going to be mud around the area. But that’s short-lived.”

After that, Ward said, you’ve got “a fairly quiet environment” as the well, if successful, operates for 30 to 40 years.

About 8,000 wells produce natural gas in this state, and two produce oil, all in Southwest Virginia, said Tarah Kesterson, a spokeswoman for the state Department of Mines, Minerals and Energy.

Fracking, sometimes with water but most often with nitrogen, has frequently been used, and “we haven’t had any reports of problems,” Kesterson said.

Brabo, the King George supervisor, said neither the state nor her locality is prepared for fracking.

For example, before a company can drill a well in the bay region, it must perform an environmental impact study, called an assessment. Brabo said the state or some disinterested party should conduct that study.

The county, among other things, should determine if it wants to restrict drilling in places — maybe near churches and schools — because of truck traffic and other effects, she said.

Brabo said she personally opposes the drilling but won’t stand in the way if her constituents want it. “If it’s going to come, I want to make sure my county is prepared to mitigate the impacts.”

Shore Exploration has its headquarters in Dallas and an office in Bowling Green in Caroline County. The company plans to move its headquarters to Virginia.

Sherrill, the president and CEO, said the company has two full-time employees — him and a “landman” who acquires the Virginia leases. There are about four part-time workers.

Sherrill said Shore has drilled exploratory wells from Virginia to Georgia but has never drilled a well to extract oil or gas.

Sherrill, 62, was born in Texas and grew up in Staunton. He holds a degree in English from Andrews University in Michigan.

The privately held Shore Exploration produces no annual report and has no website. A report and website would provide information to competitors, Sherrill said.

To drill, Shore must apply for a permit from the state mines department and perform the environmental study. The state Department of Environmental Quality also would have some oversight.

Sherrill declined to say when his company would apply for a permit.

He said the company’s momentum was slowed by an effort in the 2014 General Assembly to increase state oversight of drilling in eastern Virginia. The bill, by Sen. Richard H. Stuart, R-Stafford, passed the Senate but stalled in the House.

Drilling could mean big money for Virginians, Sherrill said. Owners leasing to Shore would get 12.5 percent of the value of the gas or oil that comes out of a well, he said.

“If we make a decent find, there will be landowners who get millions of dollars a year, and there will be small landowners who get hundreds of thousands of dollars a year. People who own 5 acres are going to be making significant money.”

Before that happens, expect significant debate.

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On Sunday, Times-Dispatch reporter Rex Springston offered an excellent overview of a subject that has been flying below the radar: fracking in Virginia’s northeastern coastal region.

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