Adrian denies company's plan to expand oil facility

City won’t sell land for project

4/3/2013

ADRIAN — A tie vote by city commissioners has left dead in the water a proposal for an energy company to buy acreage from the city to expand an oil-production facility.

The commissioners voted 3-3 Monday on a resolution to sell 8 acres of city-owned land on Witt Farm to Savoy Energy LP. The tie vote killed the issue unless they bring it back to the table.

Savoy wanted the land to expand a central production facility that’s been in operation since February.

In 2010 and 2011, Adrian commissioners signed two, three-year contracts with Savoy for oil leases that involved Witt Farm, as well as two other properties, Heritage Park and Marvin Farm.

The most recent proposal would have allowed Savoy to pay the city $80,000 for the acreage.

The proposal also included an easement for an access road onto State Highway 52 and for a pipeline connecting the central facility.

A letter from William Sperry, Savoy Exploration Inc.’s president, to city Administrator Dane Nelson said the benefit of expanding a central facility would “alleviate the need for multiple production facilities centralizing the operations in one distinct and fairly small spot in the community.”

As part of the offer, Savoy would remove the pipelines once production was finished and remediate the central site. The city would be able to conduct tests to detect contamination before buying back the land plot for $1.

“Right now, the offer is off the table, and they will proceed just as they have the right to do without. They've always had the right to do the same work,” Mr. Nelson said.

Mayor Greg Dumars and commissioners Jerry Galatin and Charles Jacobson voted to approve the sale, while commissioners Tom Faulhaber, Julie Berryman Adams, and Cary Carrico voted against it.

Ms. Adams said she voted against it because of lack of information.

“I felt there were too many questions left unanswered,” she said. “We should not be rushing into decisions that will have long-lasting effects on the city.”

Mr. Galatin and Mr. Jacobson did not return requests for comment Tuesday.

Mr. Nelson said Savoy has had the right to put a continued production facility on the property, but approval of the sale would have shifted liability from the city to the company.

The vote, a tie made possible by the absence of commissioner Milo Warren, surprised Sister Elise Garcia, director of communications and technology at the Adrian Dominican Sisters, who have opposed the project.

“I was pleasantly surprised that it did end up being denied. I was happy to see that there were commissioners willing to table it, although there was not a majority, so that also failed to pass,” she said.

Sister Elise said her research indicated that Witt Farm is on land that is “highly permeable” to toxins and pollutants.

She expressed concerns about the surrounding wetland space.

“Wetlands are a great resource and the very few that exist in Adrian should be preserved,” she said.

But more than anything, she just wants to know that commissioners have heard her misgivings about the project.

Mr. Nelson said he acknowledges those issues.

“I appreciate that they are concerned, as we are concerned with any factory in town or any gas station in town. We always have concern,” he said.

Mr. Nelson said many emergency scenarios have been addressed and that the police and fire departments have looked at the property.

“It's not a big operation. It's not a refinery, it's just a separation of oil, gas, and water. That's what it does,” he said.

Contact Kelly McLendon at: kmclendon@theblade.com or 419-724-6522, or on Twitter @KMcBlade.