Duke Lake to be Restored in $36M Settlement

Washington PA Observer Reporter
24 April 2013

WIND RIDGE – Duke Lake at Ryerson Station State Park, dry for almost eight years, will be restored under an agreement announced Wednesday between the state Department of Conservation and Natural Resources and Consol Energy Inc.

“It’s been a long time; we recognize it’s been a long time since 2005 when the lake was drawn down,” DCNR Secretary Richard J. Allan said at a news conference Wednesday at the park office. “I’m very happy to report we have a resolution and we will be rebuilding the dam and restoring the lake as soon as possible.”

Allan said the department hopes to have the lake restored by summer 2017.

Expanding cracks in the 45-year-old concrete dam at Ryerson forced DCNR in July 2005 to drain the lake and remove part of the dam. DCNR filed a claim against Consol, maintaining the damage was caused by subsidence from Consol’s Bailey Mine, which was longwall mining near the park.

The state Department of Environmental Protection investigated and determined the damage was caused by mining. It ordered Consol to restore the dam.

Consol, which denies its mining activities were to blame, appealed DEP’s decision to the state Environmental Hearing Board, where the case was scheduled for trial next month.

Much of the agreement announced Wednesday had been included in recommendations made by Thomas A. Rutter, a mediator in the case, who suggested Consol pay to restore the lake in return for being able to drill for natural gas beneath the park, but only from properties outside the park.

Under the agreement announced Wednesday, Consol will pay $36 million to replace the dam and will give DCNR eight parcels of land it owns adjacent to the park containing 506 acres.

The $36 million will be adequate to complete all the work that needs to be done, Allan said. The addition to park property of the eight parcels will increase the size of the 1,164-acre park by 40 percent, he said.

The company will be able to drill for natural gas beneath the park using horizontal drilling but only from well pads outside park boundaries.

“There will be no activity, no impact to park property,” Allan said.

Consol will pay DCNR an 18 percent royalty for gas production from the wells under the park after $13.7 million has been realized on the wells by Consol. The royalty money will go into the state’s Oil and Gas Lease Fund, which is used for conservation, recreation and flood control.

The company also will be permitted to mine the coal it owns in the eastern area of the park once it receives the required mining permits, but it will be prohibited from mining under the dam or lake. Consol will be required to monitor stream flows and ground movement with DEP oversight, according to the agreement.

The company will, in addition, be prohibited from using water from the park for drilling activities and will build a new maintenance building for the park.

The agreement will end litigation before the state environmental hearing board. Under the agreement, Consol admits no liability in regard to damage to the dam.

Allan said restoration of the lake has remained a “top priority” for Gov. Tom Corbett’s administration and internal work to prepare for the dam’s replacement has never stopped. DCNR is seeking permits for the new dam from DEP.

“Anything we can do to make this move as fast as possible, we will do,” he said. “This is going to get done through everybody’s efforts. We ask that you be patient with us going through the next several years as we set everything back in place.”

Tommy Johnson, vice president of government affairs and public relations for Consol, said serious discussion on resolving the matter began about two years ago.

“We set aside who was wrong and who was right and agreed to chart a new course,” Johnson said. “It has been a journey; we’ve had some twists and turns, but here we are celebrating what is a tremendous win for all of us.”

State Sen. Tim Solobay, D-Canonsburg, said the settlement was a good outcome and he thanked DCNR, the governor and the Duke Lake Task Force, which was active in pushing for the dam’s replacement.

“We could have stretched this thing out forever in court battles,” Solobay said. “(But we might) never have had the opportunity to restore a natural gem that we have here in Greene County.” He referred to the agreement as “triumph of collaboration over confrontation.”

Greene County Commissioner Chuck Morris spoke on behalf of his fellow commissioners and Dave Coder on behalf of state Rep. Pam Snyder, D-Jefferson, who was in session in the House.

Center for Coalfield Justice, which was an intervenor in the case before the hearing board, said though it was pleased to hear the lake will be restored, it was disappointed Consol was not taking full responsibility for the damage.

“Not only is Consol shirking its full financial obligation for the loss of Duke Lake, but it is poised to turn a profit in the process by seemingly breaking the longstanding moratorium on shale gas leasing in state parks,” it said in a release.

In a question-and-answer session, Allan was asked about whether the executive order establishing a moratorium on drilling in state parks would prohibit drilling beneath Ryerson. Allan said ‘no’ in that the moratorium only prohibits drilling activities on park surface land.

Asked whether the new dam could be damaged by additional mining in the park, Johnson said the dam will be designed with energy development in mind.

“The threat or risk of future Ryerson issues are slim to none,” he said.

Consol senior counsel Stan Geary later said the area the company still has to mine in the eastern section of the park is about one-quarter of the park’s existing size.

Asked how many wells would be drilled surrounding the parks, Geary said the company’s gas division is developing a drilling plan that should be completed by the end of the year. He also noted that any of the eight parcels that will not be used for drilling will be deeded to DCNR at that time.