Pioneer Oil Co., which signed an oil and gas lease with Indiana State University in 2012, has been looking for additional oil deposits, according to a university official.

Diann McKee, ISU senior vice president of finance/administration, confirmed that the company drilled a test well on a grassy area located east of Holmstedt Hall and south of Root Hall, near Seventh Street. 

“A few summers ago, Pioneer asked to drill a test well at Wolf Field near Third Street, and we allowed it,” she said. “This summer they asked to do the same thing” in the area east of Holmstedt Hall. 

The company is looking at rock formations to determine if there may be additional oil reservoirs. Pioneer completed its work at the site and was removing equipment this week, she said. 

“I have no idea of what, if anything, they found, but if it is something that is worth pursuing, that area would not be an [oil well] drill site,” she said.

“They were permitted up to four wells at the drill site” on property at 10th and Chestnut streets. So far, “They’ve drilled two oil wells at that site.”

No oil production wells will be allowed on the main campus, she said.

The agreement with Pioneer has brought revenue to the university.

In January 2015, McKee reported the university had received $350,000 in royalties up to that point. 

This past fiscal year, ISU received about $100,000 in royalties, she said, noting that the price of crude oil has dropped. “It is market dependent. If oil prices are down, revenue is down,” she said.

ISU trustees asked that any royalties be designated for facility deferred maintenance projects. “It is not used for any operations,” she said.

Faculty member Paul Burkett said he was surprised and concerned to see the exploratory well on the campus property recently. “We were told nothing about it,” he said. As of Thursday, he said,  “It looks like it might be winding down.”

The property is just west of the Zorah Shrine Temple.

He emailed ISU’s president, Dan Bradley, about his concerns and learned the ground is being restored to its prior condition.

“A few people have talked about odor” and shaking from the exploratory effort, Burkett said. He said when he walked by about a week ago, “I could smell chemicals.”

“I don’t see how new students are seeing that this helps the university, especially with climate change,” he said. “We are supposed to be a sustainability university,” and that seems inconsistent with the oil drilling, he added.

ISU trustees approved an oil and gas lease with Lawrenceville, Ill.-based Pioneer Oil Co. in February 2012. The company later commissioned seismic testing on the ISU campus and adjacent areas and determined that sufficient reserves were present to warrant drilling. 

The university’s agreement with Pioneer called for equipment to be located at a former industrial site on university-owned property at 10th and Chestnut streets, and horizontal drilling has been being used to reach oil beneath the campus.

All pumping gear and related equipment are below ground, and a fence has been constructed at the site where the company has its equipment. Hydraulic fracturing is not being used.

McKee said ISU included stringent measures in the agreement with Pioneer to protect the campus, students and employees. ISU has “very carefully monitored” for odors or fumes from the drill site. “We have had no complaints and we have not noticed any ourselves,” she said.

Pioneer sells the oil to CountryMark, which transports the oil it to its refinery; the royalties have been through CountryMark.

A representatives of Pioneer was not immediately available for comment Friday.

Sue Loughlin can be reached at 812-231-4235 or at sue.loughlin@tribstar.com Follow Sue on Twitter @TribStarSue.

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