FRANKFORT — Drilling for oil and gas on state-owned lands — including state parks — could become common under a proposal making its way through the legislature.
Senate Bill 138 would allow the state's Finance and Administration Cabinet to lease oil and gas rights for state property, including the state's public universities and parks. The bill also directs the state's Department for Natural Resources to set up regulations to oversee the program.
However, there are some protections in the bill. It would require that an oil and gas operation "maintains the scenic, aesthetic, and environmental quality of the land and its natural resources."
The measure was passed by the House Natural Resources and Environment Committee Thursday and now goes to the full House for its consideration. The bill has already cleared the Senate.
Under a separate provision, Senate Joint Resolution 67, the Kentucky Geological Survey would conduct an assessment of state-owned land to determine where gas and oil deposits are located and whether it's feasible to extract those minerals. The House Tourism and Energy Committee approved the resolution Thursday.
The survey — which would cost approximately $80,000 — would determine whether some lands were unsuitable for drilling, said state officials.
Sen. Tom Jensen, R-London and sponsor of both measures, said no university or public group asked him to sponsor the legislation. When asked why he proposed the legislation, Jensen replied: "Revenue."
Under the proposal, the state agency that leases its mineral rights would get the profits, Jensen said. Those funds would offset any general-fund money those agencies would otherwise receive, the bill says. Jensen said many public universities, which are strapped for cash, support the bill.
Jimmy Stanton, a spokesman for the University of Kentucky, said the university has no problems with the bill.
"We're certainly supportive of the bill and have no concerns with it," Stanton said.
But some House members expressed concern that there would be little oversight of funds from gas and mineral rights and that the bill doesn't go far enough to protect pristine habitats. "I would like to see more reporting," said Rep. Robin Webb, D-Grayson. Without more oversight of those funds, "that's an inherent setup for abuse."
Tom FitzGerald of the Kentucky Resources Council told the committee that the council is not opposed to the bill, but he said the council thinks a thorough study proposed by the joint resolution should be completed and guidelines should be established before any drilling begins. Approving SB 138 before that survey is completed would be premature, FitzGerald said.
Jensen said he sponsored both measures this session so the state could be ready for action when the survey is completed. Jensen said nearly half of all states allow drilling on state lands. Moreover, natural gas extraction can be unobtrusive, he said.
State officials said they think the geological survey should take about a year to complete.
The Kentucky Conservation Committee also thinks the issue should be studied before a green light is given to drilling, said Bruce Williams, the group's lobbyist. The study should address which lands are suited to drilling and which are not. He cited nature preserves as the kinds of places that should be protected.
He also said that a portion of any revenues from oil and gas production on state lands should go toward purchasing more land for conservation.
Williams said he expects several floor amendments to be filed on the bill.