Payette County Admits Allowing Oil Company to Break the Law on Road Use

(EnviroNews Idaho) — Payette, Idaho — What’s easier than making oil and gas companies follow the law? How about changing the rules? That’s what officials in Payette County, Idaho are attempting after it became apparent current regulations are not being complied with.

The oil and gas industry could drastically alter both the landscape and economy of southwest Idaho as more than 100,000 acres are being explored, leased and potentially drilled for natural gas. Roughly 20 gas wells have been punched in the county and many more are slated for development.

In order to see a viable gas market take root Alta Mesa Idaho, LLC (AMI), owning a majority of gas leases in Payette County, has buried several miles of pipeline to gather and move gas from its wells and the company is working to purchase 40 acres of rail-side property for a hydrocarbon processing and transport plant.

AMI hasn’t been the only entity preparing for the industry’s future: In August 2013, the Payette County Planning and Zoning Board adopted a new chapter of ordinances written specifically for the emerging trade aptly titled “Oil and Gas Drilling.”

The Planning and Zoning requirements outline how and when the county will regulate oil and gas exploration, drilling and extraction activities.

These county-level ordinances are supposed to protect residents from noise, economic harm and environmental degradation.

County citizens are already seeing certain county roads damaged by industry use and although AMI has paid for some repairs, key language in the Oil and Gas Drilling ordinance could be altered, creating a possible loophole for drillers which may let them off the hook.

AMI paid $612.38 for road repair last year, according to emails from Highway District #1. The records state AMI will be billed for additional road repairs to be completed this spring.

Specifically, language in the county’s rules are suppose to keep local taxpayers from having to foot the bill for road degradation caused by well development.

As the ordinance stands now, drillers are supposed to agree to pay for or repair roads as a condition of being granted permits to drill from the county.

The ordinance clearly states:

“Access directly to County local streets shall require a Payette County road development, replacement or repair agreement prior to initiating any work at a well site.”

Although some wells were in place prior to Planning and Zoning signing off on this law in 2013, at least five new wells have been drilled since then, of which none have the requisite county road development, replacement or repair agreement on file.

Alma Hasse: “…and then my third complaint, to follow up on what Joe said is that there’s still no road maintenance agreement with Alta Mesa, which I find very troubling especially since its part of our oil and gas ordinance as I understand it.”

Local activist Alma Hasse raised this issue with county commissioners over a month ago. Sufficed to say, her thoughts on the matter were not warmly received.

Instead of addressing Hasse’s concerns, including lack of official government email addresses for Planning and Zoning board members, she was chastised by the commission for attempting to impede gas development.

Hasse: …so the way to remedy that…
Commissioner Larry Church: Right now, just because you folks cannot accept…
Hasse: Who is you folks? You know, I find it offensive that you keep addressing me as “you folks” Mr. Commissioner Church.
Church: Ok. You and Joe cannot accept the will of the majority. You have been doing everything possible to slow down the oil thing. You’ve buried our clerk’s office and our Planning and Zoning office, with records requests, when they have other things they could be doing.
Commissioner Marc Shigeta: Or should be doing.
Church: And in my mind, you’ve slandered people of our Planning and Zoning committee, which you don’t have the right to do, I don’t believe. It’s I think a carryover from our national administration personally. If somebody doesn’t agree with them they’re racist — If somebody doesn’t agree with you they’re corrupt and bribed. So uh… I think you’re…
Hasse: Have you heard me refer to someone as “corrupt and bribed?” Have you heard me slander someone Commissioner? You are making accusations. I would like an actual… I would like you to point me to an actual instance that you’re referring to. I think you…
Church: (laughs) I guess this is similar to what you do every time you come in here.
Hasse: Slander people?
Church: Yeah. [You] make accusations that are not based on fact. The uh… To answer your question… you want answers? Complaint number one: I don’t believe they (Planning and Zoning) have any conflict. Our one and only decicsion was location, location, location. It was not weather or not we could stop this. So, it doesn’t matter where it (the railway transportation facility) was located. Unless you were a seller of property. I’m not a lawyer, and this is going to be turned over to legal for their interpretation, but that’s mine. And you were asking us.
Problem number two is on Holladay Engineering: I have full confidence in Holladay Engineering. I don’t think they have every left our county in a liability position.
Problem three: No road maintenance agreement with Alta Mesa: I have a problem singling out a single industry and charging them for road maintenance. Is the sugar beet trucks — the sugar industry going to be next? Where do you stop?
Hasse: [Do] you have a problem with following ordinance? — the ordinance? [Do] you have a problem with following county ordinance Commissioner Church?
Church: That wasn’t the question. This is the question.
Hasse: You just said you have a problem with it, and it’s county ordinance.
Church: I do have a problem with that.
Hasse: Wow.
Church: Ok, we can change…
Hasse: I don’t even know how to respond to that honestly. (laughs)
Church: We can change the ordinance.
Shigeta: Ok. It’s over.
Church: Ok.

During a subsequent county commissioner’s meeting, Planning and Zoning Department employee Mark Harvey brought up a Freedom of Information Act request filed by myself asking for copies of the required road use agreements, and to the surprise of some people he admitted the county was allowing drilling and operational activities to go on without them.

Harvey: First thing is that we received a records request from a Blair Koch and we believe she is with EnviroNews. She asked… she is asking for, county road development, which you should have a copy of that I highlighted, county road development, replacement, repair agreements, as required per section. And Patti responded to this Blair. Essentially, the long and short of it is, we do not have a road and repair agreement in our office. We believe that any road repair agreements between any concerned companies would be done with road and bridge and not through Planning and Zoning. To add to that fact, we have a minor discrepancy that I need to bring forward to you Commissioners that you might want to review. Our Gas and Oil Drilling ordinance, and Title 20 Chapter 8, or excuse me, Title 8 Chapter 20, where it says ‘there shall be a requirement for a road agreement.’

I know that this has been brought before to the Commissioners that… I believe the statement was, not necessarily singling out any one industry to be required but, it is in our language in the code and in the ordinance that this ‘shall’ be required. The big difference that we see is the shall and may. Shall is a commandment, may is an option. You might want to… I suggest to commissioners that you may want to alter the language that ‘may be required’ a road maintenance agreement, rather than ‘shall be required.’ That would satisfy some of the issues and questions that are being raised about a road agreement.

Shigeta: [Any] comments?

Commissioner Rudy Endrikat: I have no comments.

Shigeta: That… I would just say it is a work in progress.

Harvey: Very good.

Instead of telling commissioners how the county should or would comply with its own rules, Harvey suggested changing the ordinance so oil and gas companies wouldn’t necessarily need a road use agreement — and if industry did have an agreement it would be between the local highway district and not the county.

Sounding like an attorney, Harvey indicated the issue could be swept away by changing how the county “shall” require the road agreement to “may” require. If the county adopts that language gas developers would not be required to have a road repair plan with the county before getting the green light to drill, and road repair costs could fall on local taxpayers.

Although it would take some time to draft new language for the oil and gas ordinance and a public hearing would be required before changes could be officiated, Commissioner Marc Shigeta reassured Harvey the issue is a “work in progress.”

A few hundred dollars here and there may not sound like a lot but for a county with about 23,000 people local tax dollars are quickly stretched thin — especially where the costs of road repairs tied to gas development are considered.

According to a Rand Corp. study released in February 2014 titled “Estimating the Consumptive Costs of Shale Natural Gas Extraction on Pennsylvania Roadways,” each shale gas well drilled has caused between $5,400 and $10,000 in damage to state roads.

Pennsylvania has billions in road repair backlog and industry has a heavy and historic footprint, but the Rand study is a good example of what gas development can cost in maintaining travel-ways.

Costs are mounting for road repair in other states where gas and oil development is taking place. In the Bakken states of North Dakota and Montana, leaders are grappling with how to pay for the millions of dollars needed to bring infrastructure up to snuff.

Of course, the southwest Idaho gas field is unproven and the future yield unknown so it is hard to estimate how many wells will be drilled and how much road damage will be done.

In October 2014, Holladay Engineering Company, the county’s engineering firm, reviewed plans for development by AMI and recommended the company pay for or repair any county road they are responsible for damaging.

During a December 2014 Planning and Zoning Board meeting the issue was discussed several times.

AMI Attorney and Vice President John Peiserich minimized the industry’s potential truck traffic but said it could grow over time. He said Alta Mesa has entered into road agreements in other parts of the country and that the company would be willing to do the same in Payette County, “but it has to be on terms that allow Alta Mesa to be treated the same as everybody else in the County.”

Planning and Zoning Member #1: I guess my question is: Is your business willing to enter into some type of an agreement with either Payette County, or the Highway District, for any type of damage that your business may incur to the road infrastructure of the county?
Peiserich: We have entered into road agreements other places. So, yes, I think we are willing to do that but, it has to be on terms where we’re treated the same way that everybody else is in the county. I mean, look, all we’re asking for is to be treated the way everybody else is. And, to the extent that’s what happens, then I think we’re ok with that.
Member #1: I agree. Your business is a lot different. So, as long as you’re willing to go on the record to say that you ar willing to enter into an agreement with the county or the Highway District for any road damage that is incurred, I think that would ease a lot of the taxpayers minds.
Peiserich: Well, ya’ know, I mean, if we cause damage, then we kind of view it as our problem.

Highway District #1 is drafting a road maintenance agreement for AMI that would require them to post a bond for replacement damages. A suggested $50,000 bond could be increased, as that amount wouldn’t begin to pay for bridge damage.

At this point it is unknown if the District will require AMI, or any future gas developers, to have a road agreement for future development.

It is heartening that this discussion is taking place because Idaho’s gas and oil industry is in its infancy and to this point, road damage has been minimal.

The industry has been telling Idaho and local communities set to be impacted that they plan on being good neighbors and “doing it right.” People in Payette County hope paying for local road damage is part of the promise.

Reporting for EnviroNews Idaho, this is Blair Koch .

TAGS
Alma Hasse, Alta Mesa, Alta Mesa Holdings, Alta Mesa Idaho, AM Idaho, AMI, Bakken Shale, Blair Koch, Bomb Train Station, Clarke Howell, Clarke Howell, Commissioner Larry Church, Commissioner Marc Shigeta, Commissioner Rudy Endrikat, Documentary Showcase, Emerson Urry, Estimating the Consumptive Costs of Shale Natural Gas Extraction on Pennsylvania Roadways, Featured Idaho, Highway District #1, Holladay Engineering, Holladay Engineering Company, Joe Morton, John Peiserich, Larry Church, Liquified Natural Gas, LNG, Marc Shigeta, Mark Harvey, Natural Gas, Oil and Gas, Patti Nitz, Payette County Commission, Payette County P & Z, Payette County P&Z, Payette County Planning and Zoning Commission, Rand Corp., Rudy Endrikat