Mediator Releases Interim Report on Ryerson Negotiations

Washington PA Observer Reporter
8 February 2013
by Bob Niedbala, Staff Writer

A mediator attempting to settle litigation between the state and Consol Energy regarding damage to the dam at Ryerson Station State Park released a report Friday that includes recommendations he said he believes can serve as a basis for resolving the dispute.

The mediator, Thomas A. Rutter, released the interim mediation report with the approval of all parties to the case. Expanding cracks in the concrete dam at Ryerson forced the state Department of Conservation and Natural Resources in 2005 to drain the lake and remove part of the dam.

DCNR filed a claim against Consol suggesting the damage was caused by Consol’s Bailey Mine, which was mining near the park. The state Department of Environmental Protection later determined the damage was caused by mining and ordered Consol to restore the dam.

Denying its mining activities was to blame, Consol appealed DEP’s decision to the state Environmental Hearing Board, where the case is scheduled for trial in May.

Rutter’s recommendations build on a proposal he presented at a public meeting on restoration of the dam last month.

He proposes a settlement under which Consol would pay to rebuild the dam in return for it being allowed to drill for natural gas beneath the park, but only from properties adjacent to the park.

Consol would be given the opportunity to lease gas resources beneath the park. Once its drilling activities are completed on the eight parcels of land it now owns adjacent to the park, the company would deed those parcels to the state, which will increase the size of the park by about one third, Rutter said.

Consol would also agree never to conduct gas drilling on the park lands and would establish a monitoring program to address concerns related to future mining in the area of the park.

Rutter notes an executive order has established a moratorium on drilling in state parks, but he urged parties to consider the proposal for reasons stated in the report.

“This matter has dragged on too long. If the parties miss this opportunity, I fear that this case will proceed and the community will continue to suffer while this lengthy and costly litigation proceeds,” Rutter wrote.

The report was released at the request of DCNR secretary Richard J. Allen.

“The report in my view provides a reasonable framework to reach a resolution of the litigation and to restore the dam,” Allen wrote in a letter to Rutter, which also was released.

Allen said he believes from newspaper articles and other information he’s received that the community would support such a resolution, but to insure the public is fully informed he suggested the report be released.

Consol spokeswoman Lynn Seay said in an email that the company has supported the process outlined by the mediator.

“We’re hopeful that this mediation sets a new course that takes it out of the attorney’s hands and into a construct where all parties can align around the common goal of restoring Ryerson dam and the recreational aspects to the park as soon as possible,” she said.

A spokesman for the Center for Coalfield Justice, which intervened in the case, could not be reached Friday for comment.

In his report, Rutter said he believes from discussion with the parties that any settlement involving Consol paying a substantial sum to resolve the claim would have to address, in exchange, Consol’s development issues.

The company owns coal rights beneath part of the park that could be mined in the future, he said. In addition, its subsidiary, CNX Gas, has acquired the assets of MOB Corp. that include four gas wells in the park.

CNX gas has not drilled any wells in the park but is interested in doing so in conjunction with its shale gas development on the parcels it owns adjacent to the park, he said,

DCNR has estimated the cost to rebuild the dam at $21.7 million not including design and pre-construction services. Consol has estimated repairs and renovations at between $10.6 and $17.6 million

Rutter said that oral and written testimony he received from about 200 individuals and groups, include more than 40 who testified at the hearing Jan. 26, indicate people want the dam restored as soon as possible and would accept a “reasonable resolution” to ensure that result.

He said he heard little opposition to the settlement proposal he presented at the hearing, which involved having Consol compensate the state for the dam while allowing it to drill for gas beneath the park.

Each of the parties is ready to prove its case before the hearing board, he said. Both sides “have marshaled impressive, well credentialed experts who support their positions.”

Parties estimate it could take three to five years to resolve the case through administrative and appellate court proceedings.

But even if the state wins, the public will lose by the time that has passed until the lake is restored, Rutter wrote. If the state should lose, he added, it might find it hasn’t the money to replace the dam itself.

Negotiation teams have made progress but the matter has come to a “critical point” at which those involved in the mediation must obtain authority to negotiate a settlement under terms specified in the report.

“I may be optimistic, but if you can agree to these terms I believe the rest of the case can be settled in short order.” Rutter said.

Further public comment in writing is still be accepted regarding the report. Comments can be sent to:
• Stewart L. Cohen, DCNR special counsel, Two Commerce Square, 2001 Market Street, Suite 2900, Philadelphia, Pa. 19103; facsimile: 215-567-6019;
• Stan Geary, senior counsel, Consol Energy, 1000 Consol Energy Drive, Canonsburg, Pa. 15317; facsimile: 724-485-4837;
• Michael Heilman, assistant regional counsel, DEP, 400 Waterfront Drive, Pittsburgh, Pa. 15222; facsimile; 412-442-4267
• Odam Salim, Center for Coalfield Justice, University of Pittsburgh School of Law, P.O. Box 7226, Pittsburgh Pa. 15213-0221; facsimile 412-648-1992