University of Tennessee officials said Friday that they have no immediate plans to reopen bidding for natural gas drilling on university land, but they refused to rule out the possibility in the future should the "public need" arise.
Kevin Hoyt, director of the Forest Resources AgResearch and Education Center, and Bill Brown, dean of UT AgResearch, defended the scientific merits of a project that would have allowed "fracking" in a university forest on the Cumberland Plateau.
But Hoyt and Brown added they did not plan to bend from the university's terms, which included upfront cash payments, royalties and a lead role in research efforts. They said plans to discuss the project at the UT Board of Trustees meeting in October had been scrubbed.
"There's no timetable at all," Brown said. "We develop our research based on public need."
Their statements — made in aconference call with reporters one week after a bidding deadline passed with no offers to drill on the university's terms — suggest that UT officials will not try to jump-start the fracking project by backing off their demands.
The school began to explore the possibility of opening a portion of the Cumberland Forest, an 8,600-acre research area in Morgan and Scott counties, to drilling in 2001. Initially pitched as a chance to generate revenue for the university, the project has been redefined as an opportunity to research whether fracking could take place on the Chattanooga shale formation without major environmental side effects.
Hydraulic fracturing, often known as fracking, is a controversial technique for extracting natural gas that involves injecting water, chemicals or other materials thousands of feet below ground to break apart shale rock and release the gas. Critics claim the process can contaminate water supplies and cause other pollution, and university officials have said the project represents an opportunity to sort those claims into fact or fiction.
But many neighbors and environmentalists have fought the effort, arguing a relatively pristine section of Tennessee should not be subjected to potentially harmful drilling. They also said members of the public had been cut out planning for the project.
Environmental concerns played no role in the decision to walk away from the project, Brown and Hoyt said. But opponents were please with the result, nonetheless.
"That's excellent news," said Scott Banbury, conservation chairman for the Tennessee chapter of the Sierra Club, which had helped organize a petition drive against the proposal. "We feel like the people have been heard."
Four drilling companies expressed an interest in taking part in the project, Brown and Hoyt said, but only one, CONSOL Energy, followed through with a response to the school's request for proposals. Executives from the Pennsylvania-based firm, which controls several wells on the outskirts of Cumberland Forest, wrote only to say it would not accept the university's terms.
Those terms included a $300,000 bonuses for the initial five-year deal, $35 per acre in rent, at least 15 percent of the royalties, payments of $500,000 a year for research funding and free natural gas. The company also would have to agree to drill at least one new well a year and give UT researchers access to its operations.
Natural gas prices have fallen substantially since a peak in 2008, and CONSOL Energy said they could not meet those terms. Brown and Hoyt conceded that under current market conditions, it was unlikely that another would, but said perhaps a driller would agree to partner with the university at some point in the future.
"We'd hope there'd be companies out there that would be interested in conducting the research, also," Brown said.
Duane W. Gang contributed to this report.