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 (R-Garrett) 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 landowners 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 for 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 unlikely 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.”