Helis plans to begin drilling at St. Tammany site by end of the month _lowres

Advocate staff photo by SCOTT THRELKELD - Michael Barham of Helis Oil and Gas Co., LLC, visiting a proposed fracking site Wednesday, July 30, 2014, off Louisiana 1088 across from Lakeshore High School, looks at a map showing Tuscaloosa Marine Shale sedimentary rock formation where his company plans to drill.

A plan by a New Orleans energy company to put a fracking well in St. Tammany Parish hit a major roadblock Tuesday when the U.S. Army Corps of Engineers asked Helis Oil & Gas to submit a revised wetlands permit application because of questions about whether the proposed drilling site can be a productive well.

Because the site is classified as wetlands, the Corps of Engineers must give its permission for any development there.

Helis had asked the Corps to approve its plans for a 10-acre drilling site just north of Interstate 12 and east of La. 1088. The company hoped to drill an oil well there that would employ a horizontal shaft and hydraulic fracturing to extract oil from rock formations more than two miles deep.

But the Corps, acting on recommendations from the Louisiana Geological Survey, asked Helis to submit a new application for a smaller drilling site with an exploratory well drilled vertically and not employing hydraulic fracturing, or fracking, a method in which water, sand and chemicals are injected into the ground at high pressure to create cracks in rock through which oil can be extracted.

A Helis spokeswoman said Tuesday afternoon that the company was reviewing the Corps’ decision.

In essence, the decision only requires that Helis do what it already has said it would do initially. The company, in an effort to mollify some critics of the proposed well, agreed in May that it first would drill a 13,000-foot-deep vertical exploratory well, which would not use fracking and from which samples would be collected.

Those samples would then be tested to determine whether the rock formation holds enough oil to make production feasible. If the well proves to be a dry hole, the company promised to plug it and leave the site alone. Only if the site shows viability as a commercial oil well would the company drill the further 6,000-foot-long horizontal shaft and begin the fracking process, company officials said at the time.

Helis hoped to gain a wetlands permit for both stages of its operation at the same time, but Tuesday’s decision means it first will have to submit a new application for a permit for the vertical well and then, once the samples have been tested, apply for the second stage if it appears the project will be viable.

Getting a new permit is usually about a 90- to 120-day process from the time the public comment period opens, Corps spokesman Ricky Boyette said. For more complicated permits — such as the Helis application — the process can take significantly longer.

The Corps’ action came after John Johnston of the Louisiana Geological Survey raised questions about the viability of the plan.

“Instead of having them do a large operation, involving fracking, which we weren’t sure would be necessary, I recommended to the Corps that they drill a test well on a normal-sized pad,” Johnston said.

Johnston recommended a 400-foot-by-350-foot drilling pad, or a little more than three acres, far smaller than Helis’ proposed 10-acre pad. He put the well’s chances of success at about 50-50.

“If it’s productive, they can come back and prove that there is oil down there,” he said.

Besides obtaining a wetlands permit from the Corps of Engineers, Helis still has to gain a drilling permit from state Commissioner of Conservation James Welsh. Before he can issue the latter, Welsh must issue a “unit order,” a certification that Helis’ proposed tract of land is an appropriate drilling unit.

Helis has applied for a unit order and a hearing was held in June, but no decision has been made yet, a spokesman for Welsh said.

Helis officials have admitted that the site — 40 miles to the south and east of any other significant drilling site in the deep-underground Tuscaloosa Marine Shale — is exploratory. But because that shale formation is estimated to hold about 7 billion barrels of oil and Helis was able to get about 60,000 acres of land under lease or option, company officials decided the well was worth the $16 million to $20 million gamble.

Helis’ plans ignited a storm of controversy almost from the moment they came to light in April. Groups formed on social media, organizing to pack public meetings, sometimes raucously. Environmental activists made St. Tammany — normally a pro-business Republican bastion and home to several energy companies — a regular stop on their travels around the state.

The outcry drove the parish to hire an outside law firm — Blue Williams — which then filed suit against the commissioner of conservation in an attempt to prevent him from issuing the company a drilling permit.

Opponents of Helis’ plans hailed Tuesday’s news.

“It was a great victory for us,” said Rick Franzo, president of the Concerned Citizens of St. Tammany, a watchdog group that opposes the project. Franzo said the delay would give the parish more time to pass an anti-fracking ordinance, something his group advocates, though there are questions about whether a parish can ban such activity.

Councilman Marty Gould, who spearheaded the hiring of Blue Williams, lauded the Corps’ action but said the parish should not relent in its legal fight with Welsh.

“Helis is very likely to reapply,” he said in a news release. “This decision doesn’t eliminate the issue, and it doesn’t mean we can lower our guard.”

Against the very public and vociferous opposition, Helis has mounted a quiet public relations strategy, meeting with individuals and interested parties in small groups.

Though some officials, such as Parish Councilman Jake Groby, have criticized company officials for refusing to attend any of the numerous public meetings that have been held, others, such as Mandeville Councilman Rick Danielson, have said they need to learn more before making up their minds about the project.

The company recently got a boost of support from the Tammany West Chamber of Commerce, which issued the results of a survey that showed the group’s members broadly support the plan.

Follow Faimon A. Roberts III on Twitter, @faimon.