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Pa. agency could make millions from water contract

PITTSBURGH — The Pennsylvania Fish and Boat Commission could make millions of dollars selling water from a public lake to gas drilling companies — or it could wind up with far less if water levels are persistently low.

The commission in April signed a contract with Williams Production Appalachia, LLC to allow pipeline withdrawals from Donegal Lake, a popular fishing spot in Westmoreland County,

A review of the contract by The Associated Press indicates the commission could make a maximum of $2.5 million annually under the five-year contract, which could be renewed at a more generous rate.

Drilling companies tapping into the Marcellus Shale need the water for hydraulic fracturing, or fracking, a process which injects chemical-laced water to break up the shale and allow natural gas to escape.

The contract calls for Williams to pay the commission $5 for each 1,000 gallons of water withdrawn, with an option to renew for another five years at $6. It also calls for flat payments of $10,000 for each of the first two years, rising to $12,300 for the 10th year.

The $5 per 1000 gallon rate might not sound like much — except that the contract allows for withdrawals of 1.4 million gallons per day during normal water conditions. That translates into $7,000 per day, or about $2.5 million per year. If the contract was renewed at the $6 rate, the payments could rise to $8,400 per day, or $3 million per year.

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