City officials want to extract oil from 4,000 feet under Century II.
But the project is on hold for at least a month, stymied by an internal mixup and questions about how drilling would affect downtown revitalization.
City Hall’s application to begin a horizontal drilling project toward that deposit – from land between McLean and Sycamore near the west bank of the Arkansas River – has been deferred while city staff members update council members on it.
City officials also are working to answer concerns raised by officials at the Wichita Downtown Development Corp., who say they’re worried about the impact of the project’s smell and noise on downtown projects, especially on land to the north and east across McLean, which has been earmarked for a multimillion-dollar apartment complex.
The two developers vying for the apartment complex deal with the city said Monday they’re still interested in proceeding.
Wichita oilman David Leben’s Trek AEC is negotiating a mineral rights lease with the city to drill on the downtown land. If Leben strikes oil, the city plans to use its share of the money for “one-time capital improvements,” loosely translated as anything from street projects to a pipeline from a new water source.
“It’s quite the exciting project,” Leben said.
The Arkansas River basin is one of three locations where geologists believe there is oil under city land; the others are at Mid-Continent Airport in southwest Wichita and near Jabara Airport in northeast Wichita.
Leben had little else to say about the project Monday, saying city officials have instructed him not to comment. He questioned how The Eagle had used public records and city staff members to identify him as the drilling applicant.
The project also requires a conditional use permit from the Metropolitan Area Planning Commission, because drilling isn’t permitted in Wichita. That request had been headed for a zoning hearing early this month when council member Janet Miller sought a deferral, saying she was unaware of the application and not ready to bring the issue before her district advisory board. The issue will go before the zoning panel and Miller’s advisory board in August.
“It’s kind of unique, since we are the applicant, and there was more I needed to know,” she said.
John Schlegel, who directs the city’s zoning office, acknowledged Monday that council members weren’t adequately informed about the drilling request, which was initiated about 15 months ago when the city issued a request for drilling proposals.
“We should have been briefing the council members that all this was coming to a head,” he said. “We neglected to do that, and that’s on us as a staff.”
“The process moved quickly, and we did not have an opportunity to fully inform the council about all the different steps necessary to move forward,” City Manager Robert Layton said.
Layton and Schlegel have been updating council members on those plans over the past few days, including the latest on how Leben’s company would house pumping equipment and storage tanks out of the sight of what could be downtown’s biggest residential project in decades.
There is no agreement yet between the city and Trek AEC on how that equipment would be housed to keep it compatible with plans to build housing, retail and office space nearby.
“(Leben) is talking about a fairly small operation after the drilling rig is there, which would be two weeks to two months,” Layton said. “After that, if they discover oil, it can be a small operation that’s hidden in a small building, thanks to technology. Storage of the oil would be in a building there or off-site. It’s a good discussion, and it’s why we’re holding this up.”
The WDDC has sent a letter to the council raising several questions about the compatibility of any drilling with Project Downtown, the city’s downtown revitalization master plan.
The letter, by WDDC president Jeff Fluhr on behalf of the board, asks about odor, leak and explosion mitigation. It also indicates that oil drilling is incompatible in the master plan with residential development and with now-idled plans for a new central library at Second and McLean. City officials initially learned about oil downtown in February 2012, when several drillers expressed interest in drilling on the library site.
“Referencing Project Downtown, the current proposed exploration site greatly diminishes the infill (future) development potential of this area,” the letter reads. “From a design perspective – constructing a wall along McLean inhibits the type of development that fosters connectivity and walkability that should be fundamental goals as the west bank site and library are designed and developed.”
However, Dave Wells, a spokesman for the George Laham group, and Stephen Clark, representing the Clark Investments group, said Monday they weren’t aware of any issues with the proposed drilling that would cause them to withdraw their proposals for west bank residential development.
Council member Jeff Longwell, a proponent of exploring possible oil reserves on city land, said any drilling can be made compatible with development.
“The new technology in the oil business is amazing,” he said. “They’ve got pumping equipment the size of a residential electrical box. It can be hidden.”
Although the city’s share of any oil pumped out by Leben’s group is unclear, pending lease terms, Longwell and Layton said any oil revenue should go to the city’s growing list of future projects, like water and sewer infrastructure and streets.
“This certainly could be an opportunity for us to build some needed infrastructure,” Longwell said. “I’d never think of using any revenue off of this in an operational-type budget. It would be best served for one-time capital expenses.”