News From Terre Haute, Indiana

August 2, 2012

ISU gets OK to drill for oil

Zoning board approves special use permit for campus

Arthur Foulkes
The Tribune-Star

TERRE HAUTE — Indiana State University is giving the oil business a try.

The university received permission Wednesday from the Terre Haute Board of Zoning Appeals for oil exploration and possible drilling on the eastern edge of its campus.

Four members of the five-person BZA, at a meeting at the Vigo County annex, granted a special use permit for mineral extraction for ISU-owned property at 10th and Chestnut streets. A fifth member of the board was absent from the meeting.

The property, formerly an industrial site, is currently zoned for manufacturing purposes. Pioneer Oil, an Illinois-based company, holds a lease on the property with ISU and would conduct any exploration or drilling, officials said.

Because the property is within the city and is already zoned “M-2” for heavy manufacturing, it was not necessary for the request to come before the Vigo County Area Plan Commission or the Terre Haute City Council, according to the Vigo County Area Planning Department.

As a next step, Pioneer Oil, which has other oil drilling projects in Vigo County, will need to receive a state permit to begin exploration, said Diann McKee, vice president of business affairs, finance and university treasurer at ISU.

Pioneer is covering all of the expenses of the exploration, she added.

If Pioneer determines there is oil enough oil in the ground to make drilling worthwhile, any pumps would be submerged below ground and any gases would be burned in an incinerator to prevent odors from escaping, officials said.

“We’re very concerned about that,” McKee said of any possible odors. “We don’t anticipate that being a problem at all.”

The property will also be professionally landscaped, officials said.

Downtown Terre Haute has been the site of significant oil discovery in the past. Wells have been drilled at various locations in the city, including a gusher around Tenth and Eagle Streets discovered in 1889. That site, which is only one block south of the site approved for exploration Wednesday, helped give rise to the “Terre Haute Oil Craze of 1889,” according to county historian Mike McCormick. Initial projections believed the well capable of producing up to 1,400 barrels a day. Later those estimates were downgraded to about 200 barrels a day.

If oil is pumped at the site, ISU would benefit financially and educationally, McKee said. Pioneer has agreed to allow ISU students access to the site for hands-on educational experience, she said.

ISU selected Pioneer for the project due to the company’s good record of exploring for oil in unconventional settings, McKee said. The company currently has a well at the University of Southern Indiana and another in the New Harmony State Park, she said.

Any oil drilling would take place horizontally, reaching under ISU property from the 10th and Chestnut location, according to officials in the Area Planning Department.

ISU has long considered attempting to extract oil from under its property in the past, McKee said. The technology has now made it possible to do so in a way suited to the campus and the surrounding area, she said.

Reporter Arthur Foulkes can be reached at (812) 231-4232 or