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Finders, Keepers For Indiana Universities That Strike Oil

Some states like Ohio and Pennsylvania use a heavier hand when regulating natural resource extraction on state-owned land.

Fence Med

Photo: Jashin Lin

Indiana State University began drilling for oil on its property in Terre Haute earlier this month.

Officials from Indiana State University and Pioneer Oil are refusing to estimate how much oil could lie under ISU’s property in Terre Haute.

But the prospects have been good enough for the university to lease its property for exploration.

Initial drilling began this month. While no one is ready to predict a financial windfall, other recently revisited wells in Terre Haute have produced up to thousands of barrels of oil a day thanks to new advancements in drilling and extraction.

Indiana State’s lease with Illinois-based Pioneer Oil guarantees the University %15 of the gross profits from wells drilled on its property.

ISU Vice President Dianne McKee says the University’s lease was subject to state oversight.

“In our case, because we were a public entity, we did seek the approval of the state budget committee before signing the lease,” McKee says. “So in effect we did go through a state approval process.”

However, some states with more experience in oil and gas exploration take regulation a step further.

Both Ohio and Pennsylvania have laws governing contracts for oil exploration on state owned land such as prisons, universities and forests.

Pennsylvania State Senator Donald White authored the Indigenous Mineral Resources Development Act. White’s legislation, enacted in 2012 made it possible for drilling to take place on state owned land.

While White says his legislation was crafted to get as many people as possible on board for the controversial extraction of natural resources from public property, it had the side effect of redistributing potential profits across the state.

White says the schools with resources keep half the profits while the rest is shared.

“35% shall be allocated to the state system of higher education to be distributed among universities with no mineral resources,” White explains, quoting his law. “The remaining 15% would be allocated among all the 14 state universities to be used for tuition reduction scholarships.”

The University of Southern Indiana currently has an operational oil well on its property. USI is using the money generated to acquire additional real estate for the university.

Vice President for Finance and Administration Mark Rozewski says it’s been a good alternative source of income.

“In reality the state should applaud any institution that finds non-state sources of revenue to hold its costs down without resorting to the taxpayers or the students,” he says.

Rozewski says state universities in Indiana  are relatively independent institutions with their own boards of trustees which are capable of making these kinds of decisions on their own.

ISU/Pioneer Oil Lease

Jimmy Jenkins

Jimmy Jenkins is a multimedia journalist for WFIU and WTIU news. A native of Terre Haute, he is a masters student at the Indiana University School of Journalism and is proud to be a part of the public broadcasting stations he listened to and watched since he was a child. Follow him on Twitter @newsjunkyjimmy.

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