Pro-frack­ing Md. del­e­gate ac­cused of per­sonal stake in drilling

Gar­rett County law­maker with gas-rich land could profit if per­mit is granted

The Washington Post Sunday - - METRO - BY JOSH HICKS

A Mary­land law­maker who is a lead­ing pro­po­nent of hy­draulic frac­tur­ing could profit from the con­tro­ver­sial gas-ex­trac­tion process if the state de­cides to per­mit it, be­cause he owns land and min­eral rights in Gar­rett County.

Del. Wen­dell R. Beitzel (RGar­rett) has said lit­tle pub­licly about the pos­si­bil­ity that he could make money off gas roy­al­ties if the leg­is­la­ture al­lows a mora­to­rium on frack­ing to ex­pire in October. In in­ter­views, how­ever, he ac­knowl­edged his fi­nan­cial stake in the mat­ter, even as he re­peated that his ef­forts to sup­port frack­ing in Western Mary­land stem from a de­sire to pro­tect the rights of prop­erty own­ers in the re­gion.

Frack­ing op­po­nents say Beitzel has a con­flict of in­ter­est that should dis­qual­ify him from de­lib­er­a­tions over whether to al­low frack­ing and un­der what con­di­tions. “It is an­other ex­am­ple of the po­lit­i­cal elite us­ing the power of gov­ern­ment to en­rich them­selves at the ex­pense of the tax­payer,” anti-frack­ing ac­tivist and Gar­rett County res­i­dent Kenny Brait­man said.

The Demo­cratic-ma­jor­ity Gen­eral As­sem­bly has not been eager to em­brace frack­ing; a bill to ban it per­ma­nently passed the House of Del­e­gates on Fri­day, though its chances are less cer­tain in the Se­nate. A sep­a­rate bill would ex­tend the ex­ist­ing mora­to­rium for two years.

Beitzel staunchly op­poses the ban, but he has been amenable to the mora­to­rium as a way to keep the pos­si­bil­ity of frack­ing alive in Mary­land. In the House of Del­e­gates on Fri­day, he said that pro­hibit­ing the gas-ex­trac­tion method would “ab­so­lutely take away prop­erty rights from the peo­ple who own them.”

After con­sult­ing with the leg­is­la­ture’s ethics ad­viser, Beitzel has filed an ethics dis­claimer form say­ing he owns land in the area where frack­ing would po­ten­tially oc­cur. He said he saw no need to say on the forms that he owned gas rights for some of the land.

Beitzel, who has pro­posed leg­is­la­tion to com­pen­sate landown-

ers if frack­ing is banned per­ma­nently, says his po­si­tion on the in­dus­try is in line with that of most of his con­stituents, not­ing that he twice won re­elec­tion as a sup­porter of the prac­tice.

“I think I rep­re­sented the ma­jor­ity of the peo­ple that voted for me,” he said. “It’s some­thing I rep­re­sented to the pub­lic, and it’s some­thing I in­tend to hold to.”

Beitzel, 74, ac­quired a 99-acre par­cel, along with its gas rights, for about $140,000 in the 1980s. In 2007, his first year in the leg­is­la­ture, he paid $400,000 to buy a dif­fer­ent 86-acre site.

Both parcels sit above the gas-rich Mar­cel­lus Shale, which the frack­ing in­dus­try wants to ac­cess in Mary­land, to the dis­may of en­vi­ron­men­tal­ists and health ad­vo­cates who say the prac­tice is dan­ger­ous. A gas com­pany owns most of the un­der­ground min­eral rights for the prop­erty Beitzel bought in 2007, but he owns the rights for the 99-acre par­cel.

Beitzel placed the 86-acre site in the state’s Ru­ral Legacy preser­va­tion pro­gram and placed the 99-acre par­cel in the Mary­land Agri­cul­tural Land Preser­va­tion Foun­da­tion, each time re­ceiv­ing a pay­ment equal to the prop­erty’s de­vel­op­ment value in ex­change promis­ing not to use it for in­dus­trial pur­poses. He of­ten cites those agree­ments when asked whether he could profit from frack­ing if the drilling method is al­lowed in the state.

“I can only lease that land for agri­cul­tural pur­poses and other uses that are not re­stricted by the con­ser­va­tion ease­ment,” he ex­plained last month.

But Beitzel could make money off gas roy­al­ties for the 99-acre par­cel by al­low­ing hor­i­zon­tal drilling from a neigh­bor­ing prop­erty, a prac­tice that has be­come more com­mon as the in­dus­try has ma­tured.

Beitzel in­tro­duced a bill in 2009 to al­low drilling on land in state con­ser­va­tion pro­grams, but it was re­jected. The pre­vi­ous year, he lob­bied the board of the agri­cul­tural foun­da­tion to al­low sur­face drilling on lands in its pro­gram, ac­cord­ing to the foun­da­tion’s ex­ec­u­tive di­rec­tor and meet­ing records. The foun­da­tion ul­ti­mately de­cided to per­mit hor­i­zon­tal drilling be­low such prop­er­ties on a case-by-case ba­sis, pro­vided the drilling did not dis­turb the sur­face.

The foun­da­tion paid Beitzel $77,000 in 1996 to pre­serve the 99-acre par­cel for agri­cul­tural pur­poses. In 2009, Beitzel ac­cepted a $427,000 of­fer from Ru­ral Legacy to pre­serve his 86-acre site.

Beitzel’s con­tract with Ru­ral Legacy has drawn scru­tiny from Brait­man and other anti-frack­ing ac­tivists be­cause of a clause say­ing Beitzel must use his “best ef­forts to en­cour­age” the owner of the prop­erty’s gas rights “to min­i­mize the im­pact to the sur­face of the prop­erty and, to the ex­tent pos­si­ble, con­duct any min­eral ex­trac­tion by ac­cess­ing the sub-sur­face of the prop­erty lat­er­ally from ad­ja­cent prop­erty rather than from the sur­face of the prop­erty.”

Crit­ics of the law­maker, in­clud­ing Gar­rett County res­i­dent Michael Bell, say it is a loop­hole that could be ex­ploited. But a state Depart­ment of Nat­u­ral Re­sources spokesman says the clause was used for prop­er­ties ac­cepted into the pro­gram when the landowner did not also own the gas rights.

Beitzel also owns 73 acres near Deep Creek Lake, along with the gas rights for that prop­erty. The state pro­posed frack­ing reg­u­la­tions last year that would pro­hibit sur­face drilling in the Deep Creek water­shed, but those guide­lines would not bar hor­i­zon­tal drilling be­low the pro­tected area, mean­ing Beitzel could still ben­e­fit if the state al­lows hy­draulic frac­tur­ing.

The law­maker said he is un­for likely to profit from gas be­neath that par­cel be­cause com­pa­nies would have to drill hor­i­zon­tally from about three miles away, out­side the water­shed. But drilling tech­nol­ogy is con­stantly evolv­ing, and some com­pa­nies have al­ready drilled hor­i­zon­tally for up­ward of three miles.

In 2011, Bell wrote to Beitzel, say­ing the law­maker should not par­tic­i­pate in gas-ex­trac­tion de­lib­er­a­tions be­cause the land he owned cre­ated a con­flict of in­ter­est. Beitzel sent a let­ter to the leg­is­la­ture’s ethics coun­sel at the time, Wil­liam G. Somerville, ask­ing for ad­vice on whether he should re­cuse him­self.

Somerville replied in writ­ing that Beitzel’s in­ter­est in leas­ing land for gas exploration “cre­ates the pre­sump­tion of a con­flict of in­ter­est with re­gard to any leg­isla­tive ac­tion” re­lated to frack­ing, which he said meant the law­maker could file a dis­claimer of con­flict form. The let­ter said Beitzel did not need to re­cuse him­self, be­cause so many of his con­stituents had sim­i­lar gas and land in­ter­ests.

The next day, Beitzel up­dated a dis­clo­sure form he had filed with the leg­is­la­ture’s joint ethics com­mit­tee in 2007, writ­ing that the ap­pear­ance or pre­sump­tion of a con­flict of in­ter­est might ex­ist with re­gard to leg­isla­tive mat­ters on gas ex­trac­tion. In ex­plain­ing his reasoning, he stated: “I am a landowner in Gar­rett County.”

Deadra W. Daly, the leg­is­la­ture’s cur­rent ethics coun­sel, does not com­ment on ad­vice she gives to in­di­vid­ual law­mak­ers. But Beitzel said he checks with Daly each year to make sure he is fol­low­ing the rules.

“It was clear as day that the rea­son I took that ac­tion [fil­ing the form] was to di­vulge the fact that I own land above Mar­cel­lus Shale, and I could de­rive some ben­e­fit from it,” he said. “I did every­thing I thought I was sup­posed to do.”

In in­ter­views last month, Beitzel dis­missed the idea that he could make money from frack­ing, not­ing that the land he owns is pro­tected from in­dus­trial ac­tiv­ity. “Con­trary to what has been al­leged by some, my po­si­tion on this is­sue is not mo­ti­vated by greed to en­rich my­self,” he said.

But asked last week whether he could po­ten­tially make money from hor­i­zon­tal drilling on his 99-acre par­cel, he ac­knowl­edged that he could.

“In Amer­ica, peo­ple who own land of­ten own the min­eral rights for their land,” Beitzel said. “And I don’t think it should be taken away with­out com­pen­sa­tion.”

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