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Consol, Pa. reach settlement on dam, gas drilling

Kevin Begos, Associated Press

PITTSBURGH (AP) -- Consol Energy has agreed to pay the state $36 million to settle allegations that a dam in a state park was damaged by underground coal mining, state officials announced Wednesday.

The Department of Conservation and Natural Resources said in a release that the settlement with Consol Energy Inc. will lead to the replacement of the dam at Ryerson Station State Park, about 60 miles southwest of Pittsburgh. The state drained 62-acre Duke Lake in 2005 to keep the dam from failing.

Department of Conservation Secretary Richard Allan said Consol, which is based in Pittsburgh, also agreed to donate 506 acres of adjacent land to the park.

State agencies have been involved in lawsuits with Consol for eight years over allegations that the dam was damaged by longwall coal mining, which the company denied.

Consol, which bills itself as the leading diversified energy producer in the Appalachian basin, said in a statement that it is pleased the settlement will lead to the restoration of the dam.

Under the agreement, Consol is prohibited from doing any mining beneath the lake or the dam and is prohibited from using any water from the park for drilling activities. Consol also gave up any existing rights to drill on park lands.

In return, Consol will be allowed to drill for natural gas from underneath the park but only from well pads outside the boundaries. The state will receive an 18 percent royalty on gas produced from wells under the park; $4 million of the $36 million payment was an advance bonus for the drilling lease, but the state will keep that even if no wells are drilled.

The state said construction of a new dam could begin in the spring of 2015, with an estimated completion date of 2017.

The lake was popular with visitors before it was drained. The 1,164-acre Ryerson Station State Park opened in 1967.