NORWICH – With the specter of state education cuts looming once more, one local district is taking a proactive approach when it comes to exploring how they can best use their resources to generate an additional stream of revenue. One that flows not out of the pockets of local tax payers, but from the very strata of rock beneath property held by the district – natural gas.
Last week, the Norwich City School District board of education heard from their legal counsel and a local expert on the potential implications for the district of natural gas exploration. According to Superintendent Gerard O’Sullivan, the presentation and discussion which ensued was a very preliminary first step into gathering information about the natural gas issue and not an indication that the district plans to pursue exploration or leasing at the present time.
“I wanted to make sure the board has a baseline measure of the issues that might be presented to the district in the future,” said O’Sullivan. “We’ll continue to gather information and evaluate what the appropriate next steps might be, if any.”
According to John Lynch of Hogan, Sarzynski, Lynch, Surowka & DeWind, LLP, several school districts in the western part of New York are already involved with natural gas exploration, both for their own energy use and for profit.
“It’s a hot topic right now,” he told board members, explaining that the Marcellus Shale formation, atop which Chenango County sits, holds great economic potential for the area and the school district.
“Not only do we have accessible, exploitable natural gas, but we have the Millenium Pipeline to take it to market,” he said.
Lynch provided an overview of the legal and tax implications of gas leasing and drilling as they pertain to public schools in New York State. Schools are not prohibited from selling natural gas, he explained, and are fully within their rights to lease mineral rights. If they attempted to explore or develop their own gas fields, however, they would be subject to General Municipal Law 368.
“As long as we don’t go into the energy business, we avoid the problems 368 presents for us,” he reported.
It is not the 110 acres owned by the school district within the City of Norwich limits, but rather a 55.876 acre parcel on West Hill which is of primary concern for gas exploration. This parcel, located off Manley Road, was deeded to the district in the 1950s as a “forever wild educational outdoor laboratory,” explained Deputy Superintendent Margaret Boice.
According to Preston businessman Steve Palmatier, who sits on the county’s natural gas advisory committee, much of the land surrounding the district’s West Hill property has already been leased. Because of this, Norwich could be compulsorily integrated if any wells are drilled on any of the adjacent land.
“The school district is probably safe to study it for now, but be ready,” said Palmatier, who estimated that it would likely be at least a year before any natural gas wells are drilled in that particular area.