The natural gas company that leased Republican Sen. Monty Pearce’s property for oil and gas drilling said the lease he signed was the same as others in Payette County.
“Sen. Pearce received exactly the same financial terms and lease conditions as did the dozens of his neighbors who also signed leases,” wrote John Foster, a spokesman for Snake River Oil and Gas, in an email responding to the Idaho Statesman.
Snake River Oil and Gas closed a lease agreement with Pearce for 288 acres of his ranch near New Plymouth Nov. 4. The lease became public after Pearce disclosed he had oil and gas leases since the 1980s just before he voted earlier this month for House Bill 464, which changed regulations for oil and gas drilling in Idaho.
The issue of the lease conditions is central to an ethics investigation brought by the Idaho Senate into allegations Pearce failed to disclose a potential conflict of interest as the oil and gas legislation moved through the Legislature this year. Deputy Attorney General Brian Kane told the Ethics Committee Monday that it must first determine if Pearce had a private pecuniary benefit in the legislation that passed. Then the panel has to decide if Pearce is exempted from a conflict because he is part of a large class of people who would benefit from the legislation.
The Ethics Committee will meet again Wednesday, examining leases to determine if Pearce’s is the same as others.
But Senate Democratic leaders who brought the allegations said limiting conflicts of interest to pecuniary interests is incorrect.
“The term 'conflicts of interest' includes both personal and pecuniary interests,” wrote Sens. Edgar Malepeai, Les Bock and Michelle Stennett — the Senate minority leader, assistant minority leader and caucus chairwoman, respectively.
Still, the Democrats listed three places Pearce would get pecuniary gain. The first was by eliminating the Payette County conditional use process for natural gas facilities in House Bill 464, which Pearce supported in committee. The second was by approving rules for hydraulic fracturing, that will be make his leases more valuable by raising natural gas production. They also suggested that a clause that limited production costs was not included in all of the leases.
Foster told the Statesman Pearce may not make any more money.
“In the industry, a lease does not guarantee exploration or drilling,” Foster said. “A lease is only an option to explore. Often, leases expire without any drilling happening at all.”
Republican Sen. Jim Hammond said during the ethics committee meeting Tuesday that the investigation should be closed.
“ I’m troubled that we're still here in this case (when the gain) he could achieve from this bill is purely speculation and is the same as hundreds of lessees or possible lessees in that class,” Hammond said.
Democratic Sen. Dan Schmidt said Senate rules require disclosure not only on the floor but also in committee, a point that was supported by Deputy Attorney General Brian Kane. Schmidt said it was Perce himself who said he had a conflict when he disclosed it on the Senate floor.
“I would like to take the senator at his word; he said he had a conflict,” Schmidt said. “I want to hear him.”
Here is Foster's entire statement:
"You asked me (to) tell you what I can, on the record, about Monty Pearce's lease. I checked with Snake River. Senator Pearce received exactly the same financial terms and lease conditions as did the dozens of his neighbors who also signed leases.
Also, it is important to note that in general in the industry, a lease does not guarantee exploration or drilling, and is not a guarantee of larger financial gain from drilling. A lease is only an option to explore. Often, leases expire without any drilling happening at all."