Broome County rejects $7.8M gas lease offer
$7.8 million lease offer for the natural gas rights to thousands of acres of Broome County and was overwhelmingly rejected Thursday night by the Broome County Legislature.
In a decision that was expected to be much closer, Broome lawmakers voted 10-3 to defeat a resolution that would have allowed the county to lease 3,200 acres of gas rights to Inflection Energy.
This was the second time in four months that an offer from Inflection has been rebuked by the county.
Some members voted it down on the basis of waiting for the State Department of Environmental Conservation to come out with the regulations for drilling, One member is quoted as saying , “I’m going to wait for the scientists to tell me this is OK, not the lawyers.”
A 10-3 vote , 3 democrats voting in favor, 2 membeers absent, while four others were forced to recuse themselves because of ties to landowners coalitions.
The offer would have paid the county $7.8 million up front, and 20 percent royalties on any gas produced, minus a share of post-production costs. It included an option to extend the offer for the same terms after five years.
Drilling in the state’s portion of the Marcellus Shale is effectively on hold as the DEC reviews its permitting regulations. Althoug 2 permits were recently issued in Otsego County.
Inflection’s offer was backed by County Executive Barbara J. Fiala, who is a drilling supporter and has pointed to the economic relief the deal could have provided, noting that the 2012 budget will be devastating and the proposed lease would have brought some much needed financial support as the county tries to recover from tough econoic times.
The thumbs down ended two months of debate on the lease offer, which was held over from the legislature’s October session. Wednesday, Inflection extended the offer until Dec. 17 to give lawmakers the opportunity to push back the vote another month, but a motion to table the resolution failed by a single vote.
Marchie Diffendorf, a Republican from Kirkwood, ignored a request from the legislature chairman and county attorney to refrain from discussing the offer on the floor. Diffendorf, the head of the Kirkwood Gas Coalition, urged his colleagues to wait until local landowner’s coalitions begin signing deals before the county considers one of its own.
“You can add this to my list of ethics charges,” he said.
It was not clear whether Inflection would make a third offer. It s rumored that several of the “no” votes were not in opposition to leasing county owned lands for drilling, but rather to hold out for a bigger piece of the pie.
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