In August 2004 the town of South Bristol inherited one-third of the estate of the late Ann Wilder Stratton – a donation worth about $9 million.
The South Bristol Board of Selectmen carefully manages the money and estimates the current worth of the town’s portfolio at over $10 million. The selectmen use approximately 70 percent of the earnings – over $1 million so far – to offset property taxes and re-invest the remainder.
The income helps South Bristol maintain the lowest property tax rate in Lincoln County and one of the lowest in the state.
Stratton, a social worker and philanthropist, in addition to her millions, left the town a share of the mineral rights to 4300 acres in Dickenson County, Va., including the earnings from 16 natural gas wells.
For several years, the gas wells were a steady source of income for the town. At their peak, the wells brought in over $50,000 each year. Now, the town’s monthly checks are under $1000 and usually significantly lower.
In years past, the wells fully funded a scholarship for South Bristol students with room to spare. The declining revenue, however, funds only a fraction of the award.
The Ann Wilder Stratton Award is available to any year-round resident of South Bristol who is a full-time post-secondary student, regardless of academic performance or need. To qualify, students must simply fill out a one-page application and provide proof of enrollment.
Ken Lincoln, the chairman of the South Bristol Board of Selectmen, got the inspiration for the Ann Wilder Stratton Award from Lincoln Academy’s class day.
Many of the scholarships awarded at the ceremony, Lincoln noticed, were only available to students in a certain town. Among these scholarships, South Bristol was poorly represented, with only “a couple of small” awards available.
With the Stratton money in hand, it was “a good time for us to step up to the plate,” Lincoln said.
The town pays an even $1250 to every student, regardless of how many attend college in any year.
From 2008-2011, the town cut 72 checks to 40 students for a total just short of $100,000.
The selectmen intend to continue funding the award using earnings from the town’s portfolio. Fortunately, the town is in a position to absorb the expense, selectmen said.
The dramatic decrease in revenue, however, left town officials with questions, and initial efforts to get answers from EQT Corporation, the Pittsburgh-based company that manages the wells, proved fruitless, leading Lincoln to suggest an investigatory road trip.
A sharp drop in natural gas prices, from an average of $8.08 per dekatherm (DTH) in 2008 to $3.17 the following year, is the leading reason for the decline, according to earnings statements and an EQT spokeswoman. The revenues, however, dropped at a sharper rate than the price.
Karla Olsen, manager of public relations for EQT Corporation, said this is due to a “natural volume decline” typical of natural gas wells. “Over time, they tend to produce less and less,” Olsen said.
Olsen, in an e-mail to The Lincoln County News, cited the website www.naturalgas.org. The website is published by the Natural Gas Supply Association, which “represents suppliers that produce and market natural gas.”
According to the website, when a natural gas well “is first drilled, the formation is under pressure and produces natural gas at a very high rate. However, as more and more natural gas is extracted from the formation, the production rate of the well decreases. This is known as the decline rate.”
According to statistics provided by Olsen, from 2006-2010, the production of the South Bristol wells dropped steadily each year, from over 4600 dekatherms to about 3300, a total decrease of about 28 percent.
Together, the decline rate and the plummeting price of natural gas account for the drop in revenue.
While, according to naturalgas.org, “certain techniques… can increase the production rate,” any potential rebound of South Bristol’s earnings depends largely on the market, Olsen said.
As Selectman Chester Rice pointed out, South Bristol retains the rights to any new natural gas wells drilled on the parcel, as well as any other valuable minerals found there.
In the meantime, the 15 South Bristol students on their way to college this year can thank voters and a patron who, for years after donating Hodgdon Island to the Damariscotta River Association, continued to send an annual donation in lieu of property taxes.
“She obviously loved the town of South Bristol,” Rice said in 2004.
