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Airport Participation in Oil and Gas Development AIRPORT COOPERATIVE RESEARCH PROGRAMACRP SYNTHESIS 87 A Synthesis of Airport Practice Sponsored by the Federal Aviation Administration
ACRP OVERSIGHT COMMITTEE* CHAIR KITTY FREIDHEIM Freidheim Consulting VICE CHAIR KELLY JOHNSON Northwest Arkansas Regional Airport Authority MEMBERS GLORIA G. BENDER TransSolutions ROCHELLE CAMERON City of Philadelphia-Division of Aviation, Philadelphia International Airport DEBORAH FLINT Los Angeles World Airports RHONDA HAMM-NIEBRUEGGE Lambert-St. Louis International Airport WINSOME A. LENFERT Federal Aviation Administration MARGARET McKEOUGH Metropolitan Washington Airports Authority SCOTT McMAHON Morristown Municipal Airport FRANK MILLER Hollywood Burbank Airport BOB MONTGOMERY Southwest Airlines ERIC POTTS Freese and Nichols, Inc. MEGAN S. RYERSON University of Pennsylvania EX OFFICIO MEMBERS SABRINA JOHNSON U.S. Environmental Protection Agency MARK KIMBERLING National Association of State Aviation Officials LAURA McKEE Airlines for America CHRISTOPHER OSWALD Airports Council InternationalâNorth America NEIL J. PEDERSEN Transportation Research Board MELISSA SABATINE American Association of Airport Executives T.J. SCHULZ Airport Consultants Council SECRETARY CHRISTOPHER J. HEDGES Transportation Research Board TRANSPORTATION RESEARCH BOARD 2018 EXECUTIVE COMMITTEE* OFFICERS Chair: KATHERINE F. TURNBULL, Executive Associate Director and Research Scientist, Texas A&M Transportation Institute, College Station Vice Chair: VICTORIA A. ARROYO, Executive Director, Georgetown Climate Center; Assistant Dean, Centers and Institutes; and Professor and Director, Environmental Law Program, Georgetown University Law Center, Washington, D.C. Executive Director: NEIL J. PEDERSEN, Transportation Research Board MEMBERS SCOTT E. BENNETT, Director, Arkansas State Highway and Transportation Department, Little Rock GINGER EVANS, Commissioner, City of Chicago Department of Aviation, IL NATHANIEL P. FORD, SR., Executive DirectorâCEO, Jacksonville Transportation Authority, Jacksonville, FL A. STEWART FOTHERINGHAM, Professor, School of Geographical Sciences and Urban Planning, Arizona State University, Tempe JOHN S. HALIKOWSKI, Director, Arizona Department of Transportation, Phoenix SUSAN HANSON, Distinguished University Professor Emerita, Graduate School of Geography, Clark University, Worcester, MA STEVE HEMINGER, Executive Director, Metropolitan Transportation Commission, Oakland, CA CHRIS T. HENDRICKSON, Hamerschlag Professor of Engineering, Carnegie Mellon University, Pittsburgh, PA JEFFREY D. HOLT, Managing Director, Power, Energy, and Infrastructure Group, BMO Capital Markets, NY S. JACK HU, Vice President for Research and J. Reid and Polly Anderson Professor of Manufacturing, University of Michigan, Ann Arbor ROGER B. HUFF, President, HGLC, LLC, Farmington Hills, MI GERALDINE KNATZ, Professor, Sol Price School of Public Policy, Viterbi School of Engineering, University of Southern California, Los Angeles MELINDA McGRATH, Executive Director, Mississippi Department of Transportation, Jackson PATRICK K. McKENNA, Director, Missouri Department of Transportation, Jefferson City JAMES P. REDEKER, Commissioner, Connecticut Department of Transportation, Newington LESLIE RICHARDS, Secretary, Pennsylvania Department of Transportation, Harrisburg MARK L. ROSENBERG, Executive Director, The Task Force for Global Health, Inc., Decatur, GA GARY C. THOMAS, President and Executive Director, Dallas Area Rapid Transit, Dallas, TX PAT THOMAS, Senior Vice President of State Government Affairs, United Parcel Service, Washington, D.C. (Retired) JAMES M. TIEN, Distinguished Professor and Dean Emeritus, College of Engineering, University of Miami, Coral Gables, FL DEAN H. WISE, Vice President of Network Strategy, BNSF Railway, Fort Worth, TX CHARLES A. ZELLE, Commissioner, Minnesota Department of Transportation, Saint Paul EX OFFICIO MEMBERS MICHAEL BERUBE, Deputy Assistant Secretary for Transportation, U.S. Department of Energy MARY R. BROOKS, Professor Emerita, Dalhousie University, Halifax, Nova Scotia, Canada, and Chair, TRB Marine Board MARK H. BUZBY (Rear Admiral, U.S. Navy), Maritime Administrator, Maritime Administration, U.S. Department of Transportation STEVEN CLIFF, Deputy Executive Officer, California Air Resources Board, Sacramento MALCOLM DOUGHERTY, Director, California Department of Transportation, Sacramento HOWARD R. ELLIOTT, Administrator, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation DANIEL K. ELWELL, Acting Administrator, Federal Aviation Administration, U.S. Department of Transportation AUDREY FARLEY, Executive Director, Office of the Assistant Secretary for Research and Technology, U.S. Department of Transportation CATHY GAUTREAUX, Deputy Administrator, Federal Motor Carrier Safety Association, U.S. Department of Transportation LeROY GISHI, Chief, Division of Transportation, Bureau of Indian Affairs, U.S. Department of the Interior, Washington, D.C. JOHN T. GRAY II, Senior Vice President, Policy and Economics, Association of American Railroads, Washington, D.C. BRANDYE HENDRICKSON, Deputy Administrator, Federal Highway Administration, U.S. Department of Transportation DONALD JACKSON (Major General, U.S. Army), Deputy Commanding General for Civil and Emergency Operations, U.S. Army Corps of Engineers, Washington, D.C. HEIDI KING, Deputy Administrator and Acting Administrator, National Highway Traffic Safety Administration, U.S. Department of Transportation BEVAN B. KIRLEY, Research Associate, University of North Carolina Highway Safety Research Center, Chapel Hill, and Chair, TRB Young Members Council JUAN D. REYES III, Acting Deputy Administrator, Federal Railroad Administration, U.S. Department of Transportation CRAIG A. RUTLAND, U.S. Air Force Pavement Engineer, U.S. Air Force Civil Engineer Center, Tyndall Air Force Base, FL KARL SIMON, Director, Transportation and Climate Division, U.S. Environmental Protection Agency DANIEL SPERLING, Professor of Civil Engineering and Environmental Science and Policy; Director, Institute of Transportation Studies, University of California, Davis RICHARD A. WHITE, Acting President and CEO, American Public Transportation Association, Washington, D.C. K. JANE WILLIAMS, Executive Director, Federal Transit Administration, U.S. Department of Transportation FREDERICK G. (BUD) WRIGHT, Executive Director, American Association of State Highway and Transportation Officials, Washington, D.C. PAUL F. ZUKUNFT (Admiral, U.S. Coast Guard), Commandant, U.S. Coast Guard, U.S. Department of Homeland Security * Membership as of February 2018.* Membership as of November 2017.
2018 A IRPORT COOPERAT IVE RESEARCH PROGRAM ACRP SYNTHESIS 87 SubScriber categorieS Aviation, Energy Airport Participation in Oil and Gas Development A Synthesis of Airport Practice conSultantS Lois S. Kramer KRAMER aerotek inc. Boulder, Colorado Jeffrey W. Letwin Saul Ewing, LLP Pittsburgh, Pennsylvania Timothy R. Karaskiewicz TRK Law Milwaukee, Wisconsin
AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans- portation of people and goods and in regional, national, and interna- tional commerce. They are where the nationâs aviation system connects with other modes of transportation and where federal responsibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most air- ports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Coopera- tive Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Air- port Research Needs: Cooperative Solutions in 2003, based on a study sponsored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agencies and not being adequately addressed by existing federal research programs. ACRP is modeled after the suc- cessful National Cooperative Highway Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activities in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100âCentury of Aviation Reauthorization Act. The primary partici- pants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operat- ing agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Association of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sci- ences formally initiating the program. ACRP benefits from the cooperation and participation of air- port professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organizations. Each of these participants has different inter- ests and responsibilities, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by identifying the high- est priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooper- ative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP SYNTHESIS 87 Project A11-03, Topic S01-12 ISSN 1935-9187 ISBN 978-0-309-39021-7 Library of Congress Control Number 2018936244 Â© 2018 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to repro- duce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular prod- uct, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permis- sion from CRP. NOTICE The report was reviewed by the technical panel and accepted for publi- cation according to procedures established and overseen by the Trans- portation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transpor- tation Research Board; the National Academies of Sciences, Engi- neering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufac- turers. Trade or manufacturersâ names appear herein solely because they are considered essential to the object of the report. Published reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America
The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. C. D. Mote, Jr., is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to increase the benefits that transportation contributes to society by providing leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Boardâs varied committees, task forces, and panels annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.
TOPIC PANEL S01-12 Irina Tenenbaum, Revenue Management, Denver International Airport Steven Kjergaard, Airport Director, Sloulin Field International Airport Rachel Mosier, P.E., Assistant Professor, Oklahoma State University Tom Schauer, Director of Aviation Planning, KLJ Engineering Rick Etter, Airport Land Use/Real Property Expert, Federal Aviation Administration Christine Gerencher, TRB Liaison COOPERATIVE RESEARCH PROGRAMS STAFF Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Michael R. Salamone, Manager, Airport Cooperative Research Program Gail R. Staba, Senior Program Officer Demisha Williams, Senior Program Assistant Eileen P. Delaney, Director of Publications ACRP COMMITTEE FOR PROJECT 11-03 CHAIR Joshua D. Abramson, Easterwood Airport, College Station, Texas MEMBERS Debbie K. Alke, Montana Department of Transportation, Helena, Montana Gloria G. Bender, TransSolutions, Fort Worth, Texas David A. Byers, Quadrex Aviation, LLC, Melbourne, Florida David N. Edwards, Jr., GreenvilleâSpartanburg Airport District, Greer, South Carolina Brenda L. Enos, Massachusetts Port Authority, East Boston, MA Patrick W. Magnotta, FAA Liaison Adam Williams, Aircraft Owners and Pilots Association Matthew J. Griffin, Airports Consultants Council Liying Gu, Airports Council InternationalâNorth America Linda Howard, Independent Aviation Consultant, Bastrop, Texas Cover figure: Credit: Matt Jeacock, IStock by Getty Images CASE STUDY ACKNOWLEDGMENTS Arlington Municipal Airport (TX) Roger Venables, Assistant Director of Community Development/Real Estate, City of Arlington Dallas/Fort Worth International Airport (TX) Paul Tomme, Esq., Airport Legal Counsel, and Jim Jackson, Airport Oil and Gas Development Denton Enterprise Airport (TX) Quentin Hix, Director of Aviation, City of Denton Denver International Airport (CO) â¢ Francisco Alonzo, Director of Commercial Property and Rental Cars â¢ Irina Tenenbaum, Acting Commercial Property Manager, Contract Administrator â¢ Julie M. Branting, Manager, PetroPro Engineering, Inc. â¢ Debra Overn, Senior Assistant City Attorney â¢ Tom Reed, Supervisor, Landside Planning â¢ Brandon Howes, AICP, Senior Landside Planner â¢ Mark Kunugi, Acting Director of Environmental Programs, Environmental Public Health Manager â¢ Jerry Williams, Public Health Analyst II Elmira-Corning Regional Airport (NY) Steven Hoover, Manager, Chemung County Budget Office, and Ann Crook, former Director of Aviation Greeley-Weld County Airport (CO) Gary Cyr, Director of Aviation Pittsburgh International Airport (PA) Jeffrey Letwin, Esq., Saul Ewing LLP, Counsel for the Authority Sloulin Field International Airport (ND) Steven Kjergaard, Airport Director, and John Kautzman, City Auditor, City of Williston Case Study Research for Arlington, Denton, and Pittsburgh: Justine M. Kasznica, Baer Crossey McDemus
Airport administrators, engineers, and researchers often face problems for which infor- mation already exists, either in documented form or as undocumented experience and prac- tice. This information may be fragmented, scattered, and unevaluated. As a consequence, full knowledge of what has been learned about a problem may not be brought to bear on its solution. Costly research findings may go unused, valuable experience may be overlooked, and due consideration may not be given to recommended practices for solving or alleviating the problem. There is information on nearly every subject of concern to the airport industry. Much of it derives from research or from the work of practitioners faced with problems in their day-to- day work. To provide a systematic means for assembling and evaluating such useful infor- mation and to make it available to the entire airport community, the Airport Cooperative Research Program authorized the Transportation Research Board to undertake a continuing project. This project, ACRP Project 11-03, âSynthesis of Information Related to Airport Practices,â searches out and synthesizes useful knowledge from all available sources and prepares concise, documented reports on specific topics. Reports from this endeavor consti- tute an ACRP report series, Synthesis of Airport Practice. This synthesis series reports on current knowledge and practice, in a compact format, without the detailed directions usually found in handbooks or design manuals. Each report in the series provides a compendium of the best knowledge available on those measures found to be the most successful in resolving specific problems. Oil and gas development recently experienced a full economic expansion and contrac- tion cycle during which certain airports located in Arkansas, Colorado, Louisiana, New York, North Dakota, Oklahoma, Pennsylvania, Texas, West Virginia, and Wyoming had the opportunity to participate in the most recent energy boom. This synthesis of airport practice reports on some of the lessons learned as energy prices went from their highest levels (in the mid-2000s) to some of their lowest (in 2015 and 2016). As the price of oil and gas has a long history of volatility, a view of the full price cycle has particular utility. This synthesis of airport practices presents a compilation of federal, state, and local regu- latory frameworks; available airport oil and gas leases; municipal permits and ordinances; and case examples from targeted interviews with eight airports. Conclusions from the analy- sis provide rich data on practical considerations and responses involving oil and gas extrac- tion through directional drilling from outside airport property and development of oil and gas wells on airport property. Lois Kramer, KRAMER aerotek, Boulder, Colorado; Jeffrey W. Letwin, Saul Ewing, LLP; and Timothy R. Karaskiewicz, TRK Law, collected and synthesized the information and wrote the report. The members of the topic panel are acknowledged on the preceding page. This synthesis is an immediately useful document that records the practices that were acceptable within the limitations of the knowledge available at the time of its prepa- ration. As progress in research and practice continues, new knowledge will be added to that now at hand. FOREWORD PREFACE By Gail R. Staba, Staff Officer, Transportation Research Board
CONTENTS 1 SUMMARY Case Studies, 2 Government Oversight of Oil and Gas, 2 Lessons Learned from Airport Experiences, 3 5 CHAPTER ONE INTRODUCTION Purpose of the Synthesis, 5 Historical Context for Oil and Gas Development at Airports, 5 Oil and Gas Basics, 7 Research Scope and Report Organization, 10 Other TRB Resources, 11 Endnotes, 11 13 CHAPTER TWO OVERSIGHT OF OIL AND GAS DEVELOPMENT AT AIRPORTS Regulatory Big Picture, 13 Airport Sponsor Regulatory Responsibilities, 15 FAA Review Process, 18 Federal Environmental Requirements: NEPA and the Clean Water Act, 19 Checklist for Working with the FAA, 19 Federal Enforcement Actions, 20 Wrap-Up, 21 Endnotes, 21 22 CHAPTER THREE COMPONENTS OF AN OIL AND GAS LEASE Background on Oil and Gas Leases, 22 Initial Steps in the Leasing Process, 22 Key Elements of a Lease, 23 Lease Elements for Off-Airport Drilling Situations, 27 Wrap-Up, 28 Endnotes, 28 30 CHAPTER FOUR ACCOUNTING TREATMENT OF BONUS AND ROYALTIES Bonus Payment, 30 Royalties, 30 Endnotes, 31 32 CHAPTER FIVE AIRPORT EXPERIENCES WITH OIL AND GAS DEVELOPMENT Overview of the Case Studies, 32 Interview Questions, 34 Arlington Municipal Airport (GKY), 36 Dallas/Fort Worth International (DFW), 40 Denton Enterprise Airport (DTO), 43 Denver International Airport (DEN), 47 Elmira-Corning Regional Airport (ELM), 51 Greeley-Weld County Airport (GXY), 53 Pittsburgh International Airport (PIT), 55 Sloulin Field International Airport (ISN), 59 Endnotes, 61
66 CHAPTER SIX CONCLUSIONS 67 APPENDIX A OWNERSHIP OF MINERAL ESTATES â REVIEW OF STATE LAWS Introduction, 67 Severability, 67 Interpretation: Terms, Methods, and Canons, 67 Additional References, 70 73 APPENDIX B SAMPLE INSURANCE REQUIREMENTS A. Definitions, 73 B. General Requirements, 73 C. Coverage Limits, 74 D. Additional Requirements, 75 E. Certification of Insurance, 76 F. Alternative Risk Funding, 76 77 APPENDIX C BIBLIOGRAPHY FAA Guidance and Requirements Applicable to Oil and Gas Extraction, 77 U.S. Government Studies, Commentary, and Articles, 78 ACRP Publications, 78 Other, 78 79 GLOSSARY 81 ACRONYMS