Airplane passengers may begin to notice new features popping up across the landscape beneath them as they take off or land at Pittsburgh International Airport.
Drilling rigs and well pads — fixtures of a 20-year, $500 million deal to drill for natural gas on airport land — soon will dot the 9,200 acres around the facility in Findlay and Moon townships, possibly by the end of next year.
But for those who have flown to destinations such as Dallas/Fort Worth International in Texas, the equipment may not be a novel sight. The drilling procedure formally known
as hydraulic fracturing already has been going on for years at dozens of airports in other nutrient-rich areas across the country.
The first drill bit sank its teeth into the soil at Dallas/Fort Worth in May 2007, about eight months after the airport leased its 18,000 acres to Chesapeake Energy Corp.
The airport received an initial $186 million bonus and negotiated a 25 percent royalty payment on all natural gas extracted from the land.
The deal was the largest natural gas lease in the Barnett shale formation and one of the highest per-acre agreements in the area at the time.
David Magana, senior manager of public affairs at DFW, said the deal has been great for the airport from an economic standpoint. Immediately after signing, the airport put $45 million of the bonus to work for customer service improvements such as new seating areas, flight information monitors and renovated restrooms, and the rest of the money was set aside in a fund for capital improvements.
But the airport soon faced some financial challenges related to the drilling as well.
Chesapeake initially planned to drill an estimated 300 wells at the airport, but only about a third of the wells had been tapped when natural gas prices plummeted in 2009. To date, the airport has received nearly $300 million from the bonus and royalty payments, but the annual income has declined.
“From a production standpoint, they’ve sort-of turned the spigots down,” Magana said.
Last year, the airport and Chesapeake settled a lawsuit over the royalty formula, after the two parties argued about payments following the halt in drilling, according to reports from Fort Worth newspaper, the Star-Telegram.
The drop in revenue could have impacted the airport more significantly had the money been budgeted for daily operating expenses, but Magana said officials elected to put it toward special projects.
The Federal Aviation Administration requires all revenues generated by drilling on airport property to be reinvested within the airport system as a condition for receiving Federal Airport Improvement Program funding.
Allegheny County Chief Executive Rich Fitzgerald said drilling is “perfect” for the land around Pittsburgh International and will be an economic generator not only for the facility, but the entire region.
“The access to the airport is one of the reasons … It’s really in a great location and with the Shell cracker plant being built 10 miles down the road, it’s really creating synergies for that land to be really valuable,” Fitzgerald said in a telephone interview with The Times.
Under the lease at Pittsburgh International, which was approved by the Allegheny County Airport Authority earlier this month, Consol Energy Inc. subsidiary CNX Gas Co. will pay a $50 million bonus and then 18 percent royalties over the life of the deal.
Royalty payments are expected to total $450 million, but that figure isn’t guaranteed. Nevertheless, Fitzgerald said the county’s experts believe the endeavor will be valuable, though fluctuations in the natural gas market should be expected.
“I don’t think there’s any question that natural gas is going to continue to be in demand — in particular, the wet gas that is in production in this area,” he said.
Penn State University’s Marcellus Center describes wet gas as natural gas that also contains “natural gas liquids” such as propane, ethane and butane, which have their own value when extracted.
The Marcellus shale under the airport is about 80 feet thick and is approximately 6,000 feet below the surface, according to Consol geologists.
Fitzgerald said the airport, which was constructed in 1992, will use the revenues to attract more flights to the facility and create the infrastructure to bring new companies to the surrounding industrial space.
“The airport itself facility wise is really state-of-the-art,” Fitzgerald said. As the 20-year-old airport ages and maintenance issues start to build up, however, the natural gas — not taxpayers — will help foot the bill, he said.
Consol also will invest $500 million in infrastructure under the new agreement.’s lease has many controls that insure leasing activities have no impact on flight operations.
A 2010 presentation by Julie Wilson, Chesapeake’s vice president of urban development, said the energy company at the time had generated more than $300 million in non-aviation/natural gas revenues for airports in three north Texas counties.
Chesapeake holds natural gas leases at several airports in Texas, including Meacham and Spinks airports, both in Fort Worth, and Arlington Municipal Airport.
FRACKING AND FLYING
Fitzgerald and many others believe drilling will have a positive impact at Pittsburgh International, but numerous opponents spoke out against the deal at a Feb. 8 airport authority hearing.
Some of the individuals questioned the safety of fracking while airplanes fly in and out, but Dennis Davin, airport authority treasurer has said the FAA rules are very detailed when it comes to drilling, according to an Associated Press report.
“First and foremost, we’re running an airport. The airport can’t have any disruption of service from the drilling,” the AP quoted Davin as saying.
At Dallas/Fort Worth, officials worked with Chesapeake to determine where the drilling rigs and well pads could go, so the proposal would meet FAA standards and not encroach on areas used for flights.
Of the 29.2 square miles the airport sits on — an area larger than Manhattan — only 6,000 acres was available for commercial development, including the natural gas surface operations.
“You have to keep your distance from safe areas of runways and the contours that they have already set up,” Magana said.
Craig Neal, vice president of gas operations for Consol, said the company’s lease with PIT has many controls in order to insure the activities have no impact on flight operations. Neal said the airport authority also plans to utilize an auditor to check Consol’s compliance with local, state and federal laws and regulations along with lease terms.
The FAA is not required to review gas drilling contracts, but the agency said it did review the PIT proposal, including the request for bid and lease agreements.
In an emailed statement to The Times, the FAA said gas-drilling activities would require an airport to change its Airport Layout Plan, which would then trigger an FAA environmental assessment.
The FAA said the assessment “examines alternatives to and potential impacts of the proposed project including air quality, endangered species, noise, water quality and others,” though there is no deadline to complete the assessment. If potential significant environmental impacts are identified, an Environmental Impact Statement is required, the FAA said.
The airport authority originally proposed seven sites for well pads around the airport property, but Neal said Consol ruled out one of the sites during its preliminary assessment. The company plans to drill 45 to 50 wells on the six pads, the closest of which will be several thousand feet from the runways and at least 1,000 feet from residential areas, according to plans revealed last week at an open house event in Findlay Township.
Though Magana said no rigs were placed in direct flight paths at DFW, Chesapeake used special low-height rigs (101 feet) — as opposed to standard rigs (173 feet) — in some areas that allowed for closer operations, according to Wilson’s presentation.
Neal said Consol won’t be using special derricks, but the company’s rigs comply with FAA height restrictions and are shorter than the average rigs at 143 feet.
Magana said now that drilling has stopped, the activities at DFW are virtually invisible to day-to-day airport operations.
“Once the rig leaves, there’s nothing there,” he said.
By Jenny Wagnerjwagner@timesonline.com