Friday, September 14, 2012

Carrollton Approves Lease With Rex Energy Despite Locke's Objections

From the Free Press Standard:
Carrollton Council members discussed pros and cons of an ordinance to sign a lease with Rex Energy Monday evening right up to roll call vote on the final reading. 
Mayor Frank Leghart presented an emergency ordinance at the July 23 meeting, which was turned down by council, forcing the ordinance to go through three readings.  Second reading was held at the Aug. 27  meeting. 
Councilman Dan Locke told members he needed to comment once more on village water.  “As far as lease goes, if something happens to our water supply or there is an environmental impact,” Locke said.  “They only have $5-million liability.  How can they replace our water system for that?” 
Councilman Andy Gonda noted all attorneys who have visited with council regarding gas and oil leasing have stated they feel the village’s water supply is safer with a lease than without.  Gonda made the motion to accept the ordinance and Wilma Lambert seconded. 
Village Solicitor Clark Battista said, “This is not a perfect lease but it is acceptable and has a good strong water clause.” 
According to Battista, by entering into the lease with Rex Energy, the burden of proof transfers to Rex Energy.  If the water supply would be compromised in any way, it becomes Rex’s responsibility to prove they did not cause the problem.   In the clause, Battista said it states, “(Rex) would take any and all steps to restore the water supply.” 
Rex is paying the village $3,500 per acre and 20 percent of gross royalties to lease 268 acres of village owned property.  There is no surface drilling in the area, which includes the water well fields.  The ordinance passed.  Locke voted no.
Read the rest of the article here.

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