PA Forests 'Significantly Threatened' by Gas Drilling

Vote on Rep. Vitali’s 5-year Moratorium Expected this Week
By Iris Marie Bloom
Philadelphia Weekly Press
24.MAR.10

The Pennsylvania legislature may vote this week to allow Governor Rendell to force the Department of Conservation and Natural Resources (DCNR) to lease yet another huge chunk of Pennsylvania state forests. At a Temple University teach-in attended by over 200 people last Thursday, DCNR Secretary John Quigley stated that Pennsylvania’s forests are "significantly threatened by this uncontrolled gold rush to extract natural gas from the Marcellus Shale."

The forest land already leased is one third of all Pennsylvania’s state forest land. All the state forest land left is sensitive and deserves special protection, according to the Pennsylvania Forest Coalition, PennFuture, Trout Unlimited, and other members of a wide-ranging coalition springing up to defend Pennsylvania’s forests and rivers.

Pennsylvania Representative Greg Vitali (D-Delaware) has introduced a resolution, HB 2235, which would require a five-year moratorium on any further leasing of forest lands. Supporters have become more vocal and active this week, expecting the vote any day. In a March 22nd editorial, "Stop, Look, Assess Drilling’s Full Effects," the Pocono Record advocated for HB 2235: "Pennsylvania should not risk the integrity of the beautiful forests that gave the state its name… Pennsylvania has already leased…a whopping 700,000 acres. Let’s see how that goes before opening the remainder of this valuable public land to energy companies." Over 145 people attended a Poconos forum on Marcellus Shale drilling last month, sponsored by the League of Women Voters out of growing concern about forest fragmentation, water quality and other impacts.

Vitali’s bill would also authorize DCNR, rather than the governor, to decide whether to authorize further drilling after the five-year moratorium.

Legislators not particularly known for environmental advocacy may favor the moratorium for economic reasons: tourism is Pennsylvania’s second most lucrative industry, and that’s not all about people standing in line to see the Liberty Bell. According to the Appalachian Mountain Club, Pennsylvania has more maintained hiking trails than any other state.

The Pocono Record commented, "Responsible legislators also must weigh [shale gas drilling’s] substantial risks, which include chemical spills, water pollution, the incursion of new roads in pristine remote land and heavier traffic in rural areas. Our legislators have a sworn duty to protect Pennsylvania’s natural resources." The Record concluded, "Don’t let our historic forests become a cash cow for drillers."
LINK to complete article.

DEMAND ACCOUNTABILITY!

Pa. justices side with gas industry over landowners in question of lucrative royalty contracts

By: MARC LEVY
Associated Press
03/24/10

HARRISBURG, PA. — Pennsylvania's high court sided Wednesday with the natural gas industry in a dispute with landowners who had sought to invalidate the leases they signed before the Marcellus Shale rush intensified and drove up land values.

In a 6-0 decision, the Supreme Court upheld a Susquehanna County judge's ruling that validated lease agreements that subtract drilling costs from the calculation of landowners' natural gas royalties.

"Certainly we're very pleased," said Pittsburgh lawyer Kevin C. Abbott, who had filed friend-of-the-court briefs in the case on behalf of Chesapeake Energy Co. and other gas companies. "It does certainly look like a victory for the oil and gas industry."

The decision is expected to settle dozens of other cases pending in Pennsylvania's state and federal courts.

In this case, landowner Herbert Kilmer and others had sued ElexCo Land Services Inc. and Southwestern Energy Production Co., contending that such leases were invalid because state law guarantees landowners a minimum one-eighth royalty from the production of oil and gas on their land.

Justice Max Baer, who wrote the court's decision, noted that the term "royalty" and the method of calculating a one-eighth share is not defined by the state's Guaranteed Minimum Royalty Act. However, he cited various texts on the industry that say a royalty is paid from the net amount remaining after deduction of certain production and well development costs.

Kilmer's lawyer, Laurence M. Kelly, said Wednesday evening that he was unaware of the decision and did not want to comment until he had read it.

Industry representatives have suggested the lawsuits were sour grapes on the landowners' part because they had signed leases at values well below what their neighbors were negotiating months or years later from companies pursuing the Marcellus Shale.

Some geologists predict that the formation below a large swath of Appalachia could become the country's biggest gas field.

The case was being closely watched by the company executives, who worried that a decision against their companies could invalidate tens of thousands of leases and throw the industry into chaos.

In addition, the royalty issue was being raised in more than 70 lawsuits filed in Pennsylvania's federal and state courts by plaintiffs seeking a judgment that the leases they signed were never valid.

Judicial decisions in two of the cases raised the prospect of a myriad of different legal opinions.

In Susquehanna County, the judge in the Kilmer vs. ElexCo case had handed the companies an initial victory, saying the law does not specifically prohibit the subtraction of costs.

Separately, a federal judge in Scranton hearing a case against Cabot Oil & Gas Corp. denied a motion to dismiss the case, saying the law's silence did not necessarily mean the costs can be legally deducted.

Kilmer appealed to state Superior Court, but industry lawyers asked the Supreme Court to step in and effectively settle the matter for everyone.

It did, and heard arguments in September.

LINK

Opinion: http://www.courts.state.pa.us/OpPosting/Supreme/out/J-78-2009mo.pdf

DEMAND ACCOUNTABILITY!

We have leased enough state forests for Marcellus Shale gas drilling

Patriot-News Op-Ed
By State Rep. Greg Vitali
February 12, 2010
pennlive.com

Gov. Rendell plans to lease — perhaps as early as this spring — more Pennsylvania state forest land for Marcellus Shale gas drilling. This would be in addition to the almost 700,000 acres of state forest land already available for Marcellus drilling. No one knows what the impact of the anticipated drilling will be. That’s why I have introduced legislation to impose a moratorium on further leasing until we know more. The governor plans to raise an additional $180 million from state forest leasing for the 2010-11 budget. He needs no legislative approval to do this.

One-and-a-half-million acres of Pennsylvania state forest land sits atop the Marcellus Shale formation. With the leasing of 32,000 acres in January, 692,000 acres of state forest land is now available for drilling. Yet the governor wants to lease more.

...

Fracking a single well typically requires more than a million gallons of water. Several acres of land need to be cleared for the drilling pad. Access roads, a water sediment basin and other infrastructure need to be installed, and a high volume of truck traffic is required to transport drilling equipment and water to and from the drilling site. This activity impacts state forests and puts local water quality at risk.

Presently, there are only three Marcellus wells producing gas on Pennsylvania state forest land. About another hundred wells are being drilled. It is conservatively estimated that about 5,000 to 6,000 Marcellus wells will be drilled in the next 15 years. No one knows what the impact of this drilling will be on state forests or how it will affect the quality of drinking water in the Marcellus region.

We need to stop leasing state forest land until we can better assess the impact of this anticipated drilling. That’s why I have introduced H.B. 2235, The State Forest Natural Gas Lease Moratorium Act. This bill would impose a five-year moratorium on further state forest leasing. The bill also would require the state Department of Conservation and Natural Resources to study the impact of drilling and provide an annual report to the governor and General Assembly.

Instead of leasing more state forest land to balance this year’s budget, Pennsylvania should impose a severance tax on gas drillers. Almost every other state that extracts natural gas imposes such a tax.

The citizens of Pennsylvania need to send a strong message to Gov. Rendell and the General Assembly that our state forests and the quality of our drinking water are too important to compromise.

Greg Vitali is a Democratic state representative from Delaware County and serves on the House Environmental Resources and Energy Committee. He can be reached via www.pahouse.com/Vitali.

LINK

DEMAND ACCOUNTABILITY!

Breaking: Rendell rumored to be considering unilateral leasing of even more state forest for drilling

Philadelphia City Paper
Monday, February 8th, 2010 at 4:23 pm

posted by Isaiah Thompson

Governor Rendell is rumored to be considering directing the Department of Conservation and Natural Resources (DCNR) to lease more land for Marcellus Shale gas drilling, even before the 2010-2011 budget, which he proposes tomorrow, passes.

"The fear is that governor will lease out more land in the spring," said State Representative Greg Vitali (D-Delaware). "The governor does not need legislative approval to lease out more land for drilling. He could do it tomorrow."

Vitali has sponsored a bill that would impose a moratorium on further leasing of state forest for drilling.

Some background:

For the past few weeks, rumor had it that the four main caucuses of the General Assembly had made a closed-door agreement to require DCNR to authorize the lease of even more forest land for Marcellus Shale gas drilling to the tune of $180 million.

As I reported in this week's column, Man Overboard ("Uh-oh" 2/3/2010), the legislature included a similar – and totally unprecedented – clause in last year's budget, requiring DCNR to lease $60 million worth of state forest, effectively usurping DCNR Secretary John Quigley's job of determining himself what and whether to lease:

For years, Gov. Ed Rendell and legislators have rubbed their hands in anticipation of this windfall. And during the 2009 budget wars, they did something completely unprecedented: Lawmakers ordered the Department of Conservation and Natural Resources (DCNR), which oversees state forests, to lease land to gas drillers to the tune of $60 million — which the state would keep.

That decision ignored the advice of former DCNR Secretary (and current Philly Parks and Rec czar) Michael DiBerardinis, who in a March 2009 memo warned that too much leasing would "scar the economic, scenic, ecological and recreational values of the forest," and that "a rush to drill threatens the certification of our state forests as sustainably managed."

They did it anyway.

Governor Spokesman Michael Smith confirmed in a phone call with CP last week that Rendell would indeed seek $180 million from "gas drilling revenues of some sort" - but whether that amount would include a possible proposed tax on drilling or include the leasing of state forest – he declined to specify.

That, he said, would be up to the legislature.

But maybe not. If the rumor's true (the governor's office has not yet responded to a call for comment), the Governor may decide to lease state forest for drilling all by himself – effectively letting legislators who might face opposition on such a vote off the hook.

Currently, one-third of all state forest land has already been leased for drilling. And while thousands of wells are expected on the land already leased, only three are operational.

LINK

DEMAND ACCOUNTABILITY!

Don't Frack with Cornell

By Tristan Fowler
Campus Progress
January 21, 2010

Thanks to the work of environmental activism, Cornell University has put a moratorium on potentially hazardous natural gas drilling.

The northern Appalachia region might be on the brink of a natural gas boom, but at Cornell University, students and faculty are advocating against the lucrative but potentially hazardous drilling. Cornell sits on the northern portion of a multi-state deposit of trillions of cubic feet of natural gas known as the Marcellus Shale.

With pressure coming from students, faculty, and the community, the administrative leadership of Cornell announced on Dec. 23, that the university would declare a moratorium on any considerations to drill for natural gas. “The university will not agree to a process that we believe might constitute a threat to the environmental integrity of our property or that might adversely affect the quality of life of people living in the areas that would be impacted by such a process,” said a statement from the university’s Vice President of Communications Tommy Bruce.

While faculty and student believe that Cornell wouldn’t consider leasing its land, they also believe that had they not voiced their concerns, Cornell wouldn’t have made a declarative statement against the drilling. Fil Eden, a Cornell senior and the former president of Kyoto Now!, a student group that fights climate change, led a campaign to prevent drilling.

“A movement like this is happening on a community level,” Eden says. Cornell’s actions lend its support for the entire movement, he says.

Cornell’s moratorium may guide thousands of other landowners, municipalities, and perhaps universities which are considering leasing their land. The Marcellus Shale is a deep underground rock formation buried under much of West Virginia, and portions of Pennsylvania, Ohio, and New York. Within the shale are trillions of cubic feet of natural gas; professors from Penn State University and SUNY Fredonia estimate that somewhere between 168 trillion and 516 trillion cubic feet of recoverable natural gas is buried there. To put that into prospective, in 2008, the United States consumed 23.2 trillion cubic feet of natural gas; this means that the Marcellus Shale could provide enough natural gas to supply the nation for 15 years at current rates of consumption.

But the drilling process is complex and controversial. To extract the gas, energy companies drill vertically into the ground then horizontally underground. This horizontal section of the well is perforated by a small explosion. Millions of gallons of water, sand and chemicals are pumped into the well, and the pressure from the water causes cracks and fissures in the shale. These cracks allow the natural gas to be pumped out from the well. This process is called hyrdofracking, or fracking for short, and it is the focus of so much of the controversy.

The chemicals used to frack the wells are a trade secret, and combined with the millions of gallons of water needed, the Cornell community is concerned about the environmental effects.

“These fluids have been found in people’s well water,” says Linda Nicholson, a Cornell University professor of molecular biology and genetics. In December, the Pennsylvanian EPA fined Cabot Oil & Gas Corp. $120,000 because the drilling caused methane gas to leak into 13 area water wells. Homeowners could light the faucet water on fire, and there were reports of wells exploding.

“It not only threatens the water, which I think is our most precious natural resource, but it also threatens the natural beauty of the region,” Nicholson says.

...

“To me, this is a threat to our national security,” Nicholson says. “If someone were to take a vile of something really toxic and dump it into a river, would we call them a terrorist? That’s why our water is an essential part of our national security.”

At the beginning of the semester, Eden and Kyoto Now! decided to begin another campaign to address this issue. ...

“Cornell has a lot of weight in New York State as a land-grant college,” Eden says. “If Cornell thought this isn’t good enough for us yet, then maybe it’ll give pause to others in the state.”

With support from local activist groups such as the Shaleshock Action Alliance, Kyoto Now! held a rally on campus on Dec. 1, a day before their meeting with the vice president of student and academic services and vice president of facilities.

“The timing was critical,” Eden says. “We wanted to show force without being too aggressive.”

At the meeting, Eden and a handful of other representatives explained how this could affect the drinking water of the community, and it may cost more to clean up than any financial benefit from leasing the land.

...

Cornell will set up an advisory committee to investigate the current regulations and advise the university on actions in the future.

“We don’t expect that Cornell will lease its land for gas drilling in the foreseeable future,” says Simeon Moss, deputy spokesperson for the university.

For the complete article, CLICK HERE.

DEMAND ACCOUNTABILITY!

The Last Resort of Scoundrels

Reader Submitted by Donald Allen
pressconnects.com
January 7, 2010, 7:10 am

"Patriotism is the last resort of scoundrels”. That quote, attributed to Benjamin Franklin, is as true today as it was in the time of our founding fathers. When someone is trying to sell the general citizenry on an idea that benefits the seller at the expense of that citizenry, they will often resort to phrasing their sales pitch in terms of the ‘good of the nation'. Whenever you hear something of that nature; put your hand on your wallet and run the other way.

Residents of the southern tier of New York State are now in the crosshairs of such a sales pitch. An ongoing series of television ads are currently running which are trying to tie the idea of domestic production of natural gas to the concept of a patriotic cause. They show ugly “foreign” oil tankers as the cause of our woes, and use the phrase ‘blue sky' to refer to themselves in their pitch. They imply, as a corollary of their pitch, that anyone against drilling for gas under our homes, schools and businesses would be all but a traitor.

In fact, their entire ad campaign is mixture of un-truths and un-stated truths designed to make their greed seem like patriotism. First; most of our “foreign” oil comes from Canada and Mexico, not Jihadist states of the Middle East as implied. Second; while the result of gas drilling might appear to keep the skies ‘blue' (CO2 & Methane are invisible gaseous toxins), the greatest danger caused by gas drilling is out of sight below the ground. It is the poisoning of our water supply!

How do they have the nerve to try and sell the idea that; poisoning their neighbor's water and destroying their neighbor's property value, so that they can get rich, is somehow patriotic? No, it is just plain and simple greed.

The huge amount of money the Gassers are spending to convince us of the “patriotism” of their greed tells us how much profit they expect to make. The lack of any true disclosure of the dangers of fracking tells us how morally bankrupt they are. When huge profit (not patriotism) is the motive, you can bet dollars to doughnuts that cheap and dirty will be the modus operandi. When lack of regard for one's neighbor is apparent from the get-go, you can also bet that the Gassers will try and avoid any responsibility for the disastrous consequences of the fracking. They will take their money and run from the polluted environment, the broken infrastructure and the destroyed property value they have caused. No amount of advertising can convince anyone who has thought about the facts of things that the Gassers are the good guys here and those opposed to their greedy schemes are the in the wrong.

The Gassers are the gas corporations and a small number of gas drilling lease holders; less than 10% of the area's population. The rest of us; the victims of their greed, who will not profit a penny in this deal, make up over 90%. In any definition of “democracy” an overwhelming majority has the right to protect themselves from predation by a small minority and their out of the area corporate partners.

The residents of New York City obviously know that eight million citizens have much more of a right to protect their vital resources than do a few lease holders and their Texas and Oklahoma gasmen partners. New York City won't let the Gassers get anywhere near their upstate water supply, and for good reason. Fracking poisons the water with dozens of known toxic chemicals, and can release other toxins from the ground, including radioactive ones.

If the poisoned water from fracking is an obvious danger to the well being and health of the people of New York City, is it not as obvious and dangerous to the well being and health of men, women and children of the of the Southern Tier? You bet your life (perhaps literally) it is!

Real patriotism is the defense and preservation of the liberties and rights we are entitled to as members of a democracy. In a democracy; a vast a majority should not be put in danger and deprived of their rights by a small (but well funded) minority for that minority's sole economic benefit. In a democracy a vast majority of property owning, taxpaying citizens have the ultimate right and liberty to control our own choices of environmental protection, not the political hacks at DEC, locally, or in Albany. The at risk citizenry of the Southern Tier outnumber the Gassers 10 to 1. In a democracy such as ours is designed to be, we the people have the true power, the right and the responsibility to control and protect our essential water resources. Our political leaders had better learn and remember this right now, or they will be replaced by people who do know it, very soon. Protecting the rights and serving the best interest of the vast majority of citizens is how true patriotism is expressed in a real democracy!

DEMAND ACCOUNTABILITY!

Gas Leases in PA Filed Illegally... heh...

Patrick Card
December 8, 2009


WELLSBORO -- A WENY-TV News investigation shows that there could be a large number of natural gas leases in Pennsylvania that were filed illegally.

The legality of the leases is linked to the process taken by natural gas companies when the leases are signed.

When a landowner signs the lease, the landowner by law must appear before a notary, who is technically an appointed state official.

In a number of cases, landowners said they never appeared before a notary but the notary's seal still appeared on their documents.

Some of them said they never realized they had to because they weren't told that by gas company representatives when they signed the lease.

Others didn't even live in the State of Pennsylvania on the date that the notary's seal appeared on their lease.

One notary we spoke to, who requested anonymity because she could lose her license, said it's been common practice to cut corners to get gas leases done faster for the past 20 years.

"[I've done] at least 50, if not as many as 100," she said.

When asked if she knew it was illegal, she said, "Yes. It's absolutely common practice. No question about it."

Many of the leases she signed illegally were with East Resources, a drilling company based in Mansfield. The notary we spoke to said the representative from East brought her the leases despite knowing it was illegal for her to notarize the leases without the landowner present.

East's lawyer said the company was unaware of any allegations like this one but said the company would investigate.

He went on to say it is East's policy to follow all relevant laws and regulations dealing with gas leases.

The Pennsylvania Department of State regulates notaries in Pennsylvania. A spokesman for the department confirmed that notaries found to be certifying leases without seeing the landowner would be investigated and possibly stripped of their licenses.

DEMAND ACCOUNTABILITY!

Online Auctions Hawk America's Gas Shale Underground... "Here You Go!"

$1.00 – 1656 Acres Mineral Rights West Virginia Marcellus Land

*SOME PROPERTIES INCLUDE SURFACE!! MAKE OFFER 1 OR ALL*

Current Auction Price: $1.00
Current Bids: 0
Zip Code: 26554

HERE YOU GO A BUNCH OF MINERAL RIGHTS OVER WEST VIRGINIA IN THE MARCELLUS SHALE AREA!!!! MAKE OFFER NOW PROPERTIES ARE FOR SALE OR LEASE!!!!!!!!

COUNTIES INCLUDED ARE MARION, MONONGALIA, ROANE, AND NICHOLAS!!!!

HERE IS A BREAKDOWN:

64 ACRES MARION COUNTY SURFACE AND MINERALS WITH TIMBER AND SURVEY MANNINGTON DISTRICT 100% OWNER THERE ARE GAS WELLS AROUND THIS PROPERTY. NICE LAYING PROPERTY BORDING CITY LIMITS IN MANNINGTON, WV 26582 CURRENT SURVEY AVAILABLE

95 ACRES MARION COUNTY MINERALS ONLY BIG PAW PAW DISTRICT 100% OWNER

48 ACRES MARION COUNTY MINERALS ONLY GRANT DISTRICT 100% OWNER

226 ACRES NICHOLAS COUNTY SURFACE AND MINERALS WITH TIMBER (THIS PROPERTY IS DIFFERENT THAN MY OTHER CURRENT AUCTION!!!) 100% OWNER HAMILTION DISTRICT SURVEY INCLUDED.. THERE ARE GAS WELLS AROUND THIS PROPERTY ALSO.. BEAUTIFUL OLD FARM WITH FARM HOUSE ONLY 1.5 MILES FROM SUPER WALMART AND CLOSE TO HOSPITAL CALL FOR PICTS!!!!

10 ACRES BRAXTON COUNTY MINERALS ONLY OTTER DISTRICT 100% OWNER

25 ACRES MONONGALIA COUNTY MINERALS ONLY CLINTON DISTRICT

128 ACRES OIL AND GAS LICK FORK ROANE COUNTY SPENCER DISTRICT 1/2 OWNER

60 ACRES OIL AND GAS SPRING CREEK ROANE COUNTY SPENCER DISTRICT 100% OWNER

247 ACRES OIL AND GAS JOHNSON ROANE COUNTY SMITHFIELD DISTRICT 1/48 OWNER

61 ACRES OIL AND GAS FLAT FORK ROANE COUNTY HARPER DISTRICT 1/2 OWNER

88 ACRES OIL AND GAS SPRING CREEK ROANE COUNTY SPENCER DISTRICT 1/6 OWNER

110 ACRES OIL AND GAS LAUREL ROANE COUNTY SPENCER DISTRICT 1/2 OWNER

62 ACRES OIL AND GAS MISSOURI FORK ROANE COUNTY SPENCER DISTRICT 1/2 OWNER

54 ACRES OIL AND GAS LEFT HAND ROANE COUNTY GEARY DISTRICT 1/36 OWNER

221 ACRES OIL AND GAS SANDY ROANE COUNTY SANDY DISTRICT 1/10 OWNER

85 ACRES OIL AND GAS DOG CREEK ROANE COUNTY GEARY DISTRICT 1/3 OWNER

75 ACRES OIL AND GAS LEFT HAND ROANE COUNTY GEARY DISTRICT 1/4 OWNER

DEMAND ACCOUNTABILITY!

Investors/Gamblers, CLICK HERE!

Landowners and Oil and Gas Leases in Pennsylvania

COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF ENVIRONMENTAL PROTECTION
OIL AND GAS MANAGEMENT PROGRAM

Fact Sheet

Answers to questions frequently asked by landowners about oil and gas leases and drilling.

Who owns the oil or gas on my property?

In Pennsylvania, the mineral estate may be separate from the surface (real) estate. Ownership of minerals on the same tract may be separated from each other - oil, gas, coal, hard rock minerals, etc. All surface and mineral owners have property rights under the law. The Commonwealth recognizes the mineral owner's right to recover the mineral, and the landowner's right to protection from unreasonable encroachment or damage. The Commonwealth does not maintain ownership records of mineral properties; county governments have these records. Surface deeds are almost always recorded in the county's Recorder of Deeds office. An older mineral deed may or may not be recorded in any government office. In modern times real estate transfers are usually taxed, and thus should be recorded in the deeds office of the county where the property is located.

If you own property, your deed may state ownership is "fee simple"; that means you own the surface and mineral deposits. Otherwise, someone else may own mineral properties on the tract. A thorough title search may discover different ownership rights to the mineral property. If you can't be sure from current documents, searching your property's historical deeds back to the 1860s might reveal that oil and gas has been separated from the surface estate. A phrase in an old deed such as "oil and gas excepted and reserved" means that the surface was sold separately from the oil and gas property at that time. If you find such a statement in an old deed, the oil and gas would now probably not be yours to lease or develop.

Is there any oil or gas on my property?

It is not the Commonwealth's responsibility to know or determine whether oil or gas exists in any particular tract. You may contact the Bureau of Topographic and Geologic Survey for general information about oil and gas fields throughout the state (see DCNR's Map #10, Oil and Gas Fields of Pennsylvania). If you have identified wells near your property, past production information may also be available through that Bureau (telephone No. 412-442-4235). For an evaluation of the hydrocarbon potential of your property, you should contact a private oil and gas geologist. The Bureau of Topographic and Geologic Survey can provide a list of qualified consultants.

What is a lease?

A mineral lease is a contractual agreement between the owner of a mineral tract (the lessor) who grants the right to develop deposits of the mineral to a producer (the lessee). Oil and gas can be sold or leased separately to different parties. Different deposits of the same minerals can also be leased or sold separately. Usually, a lessee will insist on the right to sell or reassign a mineral lease to another party. Because a mineral lease gives the lessee a property interest in the mineral, leases should be recorded at the Recorder of Deeds office of the county where the leased tract is located. A lease is usually secured by annual rental payments or a royalty on production paid to the lessor.

How does coal property relate to oil and gas property?

The interests of coal owners, mine operators, and oil and gas drillers and producers frequently conflict insofar as one party is required to give up the right to extract some of its resources to preserve the interests of the other party. In an area underlain by a coal seam that can reasonably be expected to be mined by underground methods, gas well operators may not place wells closer than 1,000 feet apart. Where mining advances toward and around a gas well, the mine operator must leave an undisturbed block of coal around the gas well adequate to protect both the integrity of the well and public health and safety.

I am considering leasing oil and gas property to a producer. What should I do?

* Promptly consult an attorney who knows oil and gas law. If you don't know one, contact the local bar association for assistance.
* Negotiate lease payments. Typically, a lease payment holds the lease on the oil and gas property until drilling and production occur, and thereafter, the lease is held by production until production stops. Depending on the mineral resource, annual rentals can range from a few dollars to hundreds of dollars per acre.
* Negotiate the royalty amount. The minimum royalty on production paid to oil and gas lessors in Pennsylvania is set by law at 1/8 of the value of the produced oil or gas, usually excepting any gas used on the lease or for "house gas" by the lessor. Although the lessor may seek greater royalty amounts, the lessee is not required by law to pay more.
* Be mindful of lease terms for expiration should production cease, or if the lessor fails to produce oil or gas within a specified period. Questions about ownership of wells and equipment may remain if a lease expires and wells are not plugged.
* Write into the lease agreement protections necessary for crops, livestock, buildings and personal property.

I own the surface, someone else owns the gas or oil, and a driller is looking over my land. What should I do?

* Promptly consult an attorney who knows oil and gas law. If you don't know one, contact the local bar association for assistance.
* As stated above, the Commonwealth recognizes the rights of a mineral owner to develop the resource. If you do not own the oil and gas under your land, you cannot prevent the mineral owner's reasonable access for development and production.
* Try to work with the driller on the location of the facilities - well site, access road, gathering pipeline, etc.
* Negotiate a reasonable price for damage to crops, cropland, timber, etc., before clearing work begins at the well site.
* Request that the well operator hire a certified lab to analyze any source of water used as a water supply for people, animals or crops before drilling begins. This is to document the pre-drill conditions in case the water supply would be adversely affected by drilling the oil or gas well. If the oil and gas operator declines to perform this pre-drilling survey of your water supply, consider hiring a laboratory approved by DEP to collect and analyze samples at your expense. Commercial laboratories certified by DEP to sample and analyze drinking water are listed on the department's web site at: http://www.dep.state.pa.us/dep/deputate/mts/bol/default.htm. Required documentation for a pre-drilling survey of a water supply is described in DEP regulations; see 25 Pa. Code 78.52. If DEP determines that a water supply was polluted or diminished by an oil or gas well, the law requires the well operator to restore or replace the water supply. (See the Oil and Gas Act, Section 208, 58 P.S. 601.208; and 25 Pa. Code 78.51).
* Pay attention to the notice you receive of the well permit application. You may file an objection with DEP to the proposed location, based on location restrictions described in Section 205 of the Oil and Gas Act. If you file an objection, be prepared to present the facts and reasons for objection to DEP. Retaining an attorney for a permit objection is not required, though an attorney may be helpful. (See the Oil and Gas Act, Section 202, 58 P.S. 601.202).
* For a more detailed explanation of your rights as a landowner or water supply owner, read Landowner Notification of Well Drilling or Alterations. This form is available on DEP's Oil and Gas web page, or you may call any DEP Oil and Gas Management office to request a copy. An applicant for a permit to drill a well must notify the surface owners, and water supply owners and parties with coal interests within 1,000 feet of the proposed location. (See the Oil and Gas Act, Section 201 (b), 58 P.S. 601.201(b)).

I own the oil and gas on a small tract surrounded by others and I don't want to lease it, but the neighboring owners are developing or leasing theirs. Can I lose my oil or gas or be forced to lease it?

Your oil or gas could be produced or captured from a well outside your property tract boundaries. In fact, your only protection is if your oil or gas property is subject to the Oil and Gas Conservation Law, 58 P.S. 401.1 et seq. If so, the gas on your property could be included in a unitization or pooling order issued by the Commonwealth at the behest of a producer on a neighboring tract. That well operator would then have to pay you a production royalty based on your prorated share of the production from the well, depending on how much of your tract was deemed to be contributing to the well's pool. This law applies to oil or gas wells that penetrate the Onondaga horizon and are more than 3,800 feet deep. DEP does not oversee or regulate pooling agreements in any way, except to see that the agreement is in place, if required, before issuing a permit to drill the well.

Other than spacing for wells in coal areas, Pennsylvania places no restrictions on well location in proximity to tract boundaries for development of oil or gas which is not subject to the Conservation Law; the law of capture applies instead. This means that the operator of such a non-conservation well cannot be compelled by law to pay rents or royalties to owners of neighboring oil or gas tracts, regardless of where the well is located. Of course, the law of capture applies on your side of the property line if you drill a well. So to protect their investments in wells to be drilled, most operators are willing to enter into voluntary pooling or unitization agreements for wells to be placed close to neighboring tracts.

What is DEP's role in regulating the oil and gas industry?

DEP enforces Pennsylvania's oil and gas laws relating to resource management, well construction activities and waste management practices.

An operator must secure a bond before applying for a well permit. DEP approves bonds and well permits, inspects wells and environmental controls, and permits and inspects waste disposal facilities and waste management activities. Operators must submit reports on well completion, waste management, annual production, and well plugging. DEP has the authority to take action to enforce compliance with applicable laws and to seek civil penalties for violations of these laws.

The Commonwealth of Pennsylvania is not involved in regulating lease agreements between mineral property owners and producers, except that minimum royalty payment is prescribed by law. Lease agreements are contractual matters between private parties. DEP does not audit payments, read or calibrate meters or tanks, or otherwise get involved in lease matters.

Well operators are required to report production annually, and state agencies must keep this information confidential for five years, except for enforcement proceedings, as provided in Section 212 of the Oil and Gas Act, 58 P.S. 601.212.

What is the role of the Commonwealth in resolving conflicts involving mineral owners or lessees and surface property owners?

DEP is the agency charged with hearing objections to well permit applications, based on location restrictions or conflicts with other resource interests (for example, coal owners). County courts hear suits for property damage or disputed lease matters, including royalty payments. Remember, a lease is a contract generally subject to contracts law, and not regulated by a government agency. Persons who believe they have been harmed by a decision by DEP - for example, to approve a well permit application, or issue a spacing or pooling order -- may appeal that decision to the Environmental Hearing Board. Instructions for filing an appeal can be found on the web site: www.ehb.verilaw.com.

Leasing oil and gas properties from the Commonwealth of Pennsylvania.

Through various state agencies the Commonwealth owns property that is available under lease for oil and gas development -- for example, state forests, parks, and state game lands. There are even a few gas wells on the campuses and lands of state universities. If you are interested in leasing oil and gas rights on land owned by the Commonwealth, contact DCNR's Bureau of Forestry, minerals section at 717-787-4835. For information on mineral properties controlled by other state agencies, contact that agency directly. For contact information for all state agencies, visit the PA PowerPort at www.state.pa.us

Who can I contact for more information?

For more information, you may contact any of the DEP Oil and Gas offices shown on the following map. For information about production history, geology and for research quality data on well locations or producing formations, please contact Pennsylvania's Topographic and Geologic Survey at:

Department of Conservation and Natural Resources Bureau of Topographic and Geologic Survey Subsurface Geology Section 400 Waterfront Drive Pittsburgh, PA 15222-4745 Phone: 412-442-4235 www.dcnr.state.pa.us/topogeo/loc.htm

Contact any of the DEP offices shown on the map below for more information about oil and gas well drilling and production in Pennsylvania. If you have a complaint or question about a particular well, please contact the regional office (Northwest or Southwest) according to the counties shown in this map. Production information reported by well operators is held confidential for five years, as required by the Oil and Gas Act.

More information about underground gas storage fields is available from the DEP offices listed below:

Pa. Department of Environmental Protection
Bureau of Oil and Gas Management
P.O. Box 8765
Harrisburg, Pa. 17105-8765
Phone: 717-772-2199
FAX: 717-772-2291

Pa. Department of Environmental Protection
Oil and Gas Regional Manager
Southwest Regional Office
400 Waterfront Drive
Pittsburgh, Pa. 15222-4745
Phone: 412-442-4024
FAX: 412-442-4328

Pa. Department of Environmental Protection
Oil and Gas Regional Manager
Northwest Regional Office
230 Chestnut Street
Meadville, Pa. 16335-3481
Phone: 814-332-6860
FAX: 814-332-6121

Commonwealth of Pennsylvania
Edward G. Rendell, Governor

Department of Environmental Protection
Kathleen A. McGinty, Secretary

An Equal Opportunity Employer

DEMAND ACCOUNTABILITY!

At Odds Over Land, Money and Gas

By MIREYA NAVARRO

New York Times
November 27, 2009

NOT INTERESTED Lisa Wujnovich and her husband, Mark Dunau, refuse to sign a lease to allow natural gas drilling on their 50 farmland acres in Hancock, N.Y.

CHENANGO, N.Y. — Chris and Robert Lacey own 80 acres of idyllic upstate New York countryside, a place where they can fish for bass in their own pond, hike through white pines and chase deer away.

But the Laceys hope that, if all goes well, a natural gas wellhead will soon occupy this bucolic landscape.

Like many landowners in Broome County, which includes the town of Chenango, the Laceys could potentially earn millions of dollars from the natural gas under their feet. They live above the Marcellus Shale, a subterranean layer of rock stretching from New York to Tennessee that is believed to be one of the biggest natural gas fields in the world.

As New York environmental officials draft regulations to allow drilling in the shale as early as next year, thousands of residents like the Laceys in upstate counties have banded together in coalitions to sign leases with gas companies for drilling on their land — for $5,000 to $6,000 an acre for a term of five years, and royalties of up to 20 percent on whatever gas is found.

“When I heard about drilling, what came to mind was ‘Thank you,’ ” said Mrs. Lacey, 58, who has lived on her property here for 27 years with her husband, Robert, 68, a commercial insurance agent. “Finally our community can recover, and our children don’t have to leave the state to find jobs.”

In New York City, natural gas exploration is largely seen as a threat to the drinking water the city gets from watersheds to the north in the Catskills. But in the rural communities above the shale, the reaction has been far more mixed — and far more contentious.

Some residents welcome the drilling as a modern-day gold rush and salvation from the economic doldrums that they say have chased jobs and young people away from their area. Others express concerns about the environment and quality-of-life issues like noise and heavy-truck traffic.

In some cases, the issue has pitted neighbor against neighbor or spouse against spouse.

Exploring the shale involves a drilling method called hydraulic fracturing that requires pumping huge volumes of water laced with benzene and other chemicals into the rock to break it and extract gas. The process raises issues about the use and disposal of wastewater, and the danger of leaks, spills and other contamination. It has been linked to contamination of water wells in Pennsylvania and Wyoming and to the death of livestock in Louisiana.

Mark Dunau, an organic vegetable farmer with 50 acres in the town of Hancock in Delaware County, says he is passing up any potential rewards from drilling because of worries about the pollution of water and air and the cumulative impact of thousands of wells. “That water is my resource,” he said.

Mr. Dunau, 57, and his wife, Lisa Wujnovich, 55, said that they were holdouts not only among their neighbors but also among their friends, and that the character of their community was already changing. Mr. Dunau said he knew people who said they would take the money and move away, families who were fighting over whether to sign gas leases, and neighbors who regretted signing too early for too little money.

“It’s a nightmare,” he said.

One of Mr. Dunau’s neighbors, Grace K. Kinzer, signed a lease with Chesapeake Energy two years ago when a representative of the company knocked on her door with an offer of $25 an acre and royalties of 12.5 percent, she said. Ms. Kinzer, 83, said she needed money to pay her taxes so she signed, getting about $2,750 for 110 acres that would now fetch more than half a million dollars.

...

Sometimes rifts over drilling are found under the same roof.

...

Mr. Ernst, 72, favors drilling as a matter of survival. “We’re prostrate, and dependent on oil from enemy countries,” he said.

His wife, 74, said she was too worried about possible accidents and chemical spills.

“My main concern is the aquifer,” she said. “We have our own well. I don’t want to have to buy bottled drinking water.”

She refuses to sign a lease, and, after 46 years of marriage, Mr. Ernst said, he knows better than to think he can persuade her. “That’s like asking how do I plan to fly to Pluto,” he said.

But the holdouts cannot stop the transformation of their surroundings, both good and bad, once drilling is allowed. The area of the shale in New York that is expected to be the most productive spans about 3.4 million acres in 10 counties, but lies mostly in Broome, Delaware, Sullivan, Chenango and Tioga, said officials from the Independent Oil and Gas Association of New York.

Further fostering bad feelings within communities, under a concept known as “compulsory integration” gas companies can drill under land without the owner’s consent if they have leases in most of the surrounding area. Those owners without leases would get royalties of 12.5 percent on gas from their property, the minimum allowed under state law, but many worry more about exposing their water to pollution.

“They could be drilling directly under your well and threatening your groundwater,” said Wes Gillingham, the program director for the environmental group Catskill Mountainkeeper. He owns 100 acres in Sullivan County and said he was trying to keep it off-limits to drilling.

The regulations proposed by New York’s Department of Environmental Conservation are under fire as inadequate from environmentalists around the state. Another concern shared by both the pro- and anti-drilling sides is whether the environmental agency, which has suffered financial and staff cuts, will have the resources to monitor the drilling.

But the financial benefits beckon strongly in the communities that stand to benefit from a gas boom at a time when they are suffering economically. Broome County, which has lost jobs and population over the last decade, would stand to gain $3.72 billion a year in wages and tax and retail revenue from up to 4,000 gas wells, a study commissioned by local officials estimated. (However, a report by Columbia University researchers this year noted that any prediction of economic results was “entirely speculative” because of unknowns like the potential cost of cleaning up contamination.)

...

“We cannot afford to chase this industry away,” Patrick J. Brennan, deputy county executive, told state environmental officials this month at a hearing on the proposed rules governing drilling that drew about 800 people to a school auditorium in the county.

Both to poor residents with small parcels of land and wealthy landowners with vast estates, drilling represents an economic opportunity tantamount to winning the lottery. Jim Ward, who heads a landowners’ coalition with 138 members whose properties range in size from 650 acres to half an acre, said the sentiment in his group is: “I should have a right to prosper from my land.”

...
To read the complete article, CLICK HERE.

DEMAND ACCOUNTABILITY!

Residents Take Action to Correct Conduct by Natural Gas Company in Dimock, PA

Families will announce an important development in their fight to restore homes, land and community after environmental onslaught

DIMOCK, PA – Fifteen families living on Carter Road in Dimock Township, Pennsylvania, located in Susquehanna County in the northeast region of the State, plan to announce on Friday, November 20, 2009, the filing of a civil lawsuit in Federal Court in an effort to require a major gas and oil drilling company to repair the damage that has occurred to themselves, their homes and properties as a consequence of drilling for natural gas.

Beginning with Cabot's solicitations in 2006, these families entered into gas lease agreements with Cabot Oil & Gas Corporation, headquartered in Houston, Texas. These lease agreements allowed Cabot to extract natural gas from beneath their properties in exchange for monetary compensation. These families, like so many others who signed leases, had high hopes for a better future with the revenue this activity was supposed to provide.

The Carter Road families maintain they were given assurances that their property and land resources would remain substantially preserved for themselves and their children and that their health and quality of life would not be adversely affected by drilling operations. In addition, if it was determined that Cabot’s operations were adversely affecting their water supply, then Cabot would immediately disclose that information to the families and take all steps necessary to return their water supply to pre-drilling conditions.

Instead, these residents have had their hopes dashed, their health threatened, their safety and way of life destroyed, and the pristine land around them compromised.

The complaint will assert that the families suffer environmental contamination and pollution caused by the conduct and activities of Cabot. It will be alleged that Cabot caused the release of combustible gas into the underground water supply and discharged hazardous chemicals and industrial wastes onto properties and into local streams. The families are requesting a clean up under the Hazardous State Clean Up Act, and medical monitoring, as well as compensatory damages for their loss of property value, emotional distress, and personal injury.

LINK

DEMAND ACCOUNTABILITY!

State identifies 32,000 acres of forest for gas drilling

BY ROBERT SWIFT (HARRISBURG BUREAU CHIEF)
Published: November 10, 2009
thedailyreview.com

HARRISBURG - Nearly 32,000 acres of state forest land in north-central Pennsylvania will be opened up next month to potential natural gas drilling under a plan to generate revenue for state government, the Department of Conservation and Natural Resources announced Monday.

Setting minimum bids at $2,000 an acre, DCNR officials anticipate that if all 32,000 acres are leased to private drilling firms it will generate $60 million in gas lease revenue to help support the state budget enacted last month.

The budget requires DCNR to lease enough forest land this fiscal year so it can transfer $60 million to the General Fund. It provides $50 million in future royalties from gas production to help operate and maintain state parks and forests. The lease terms set minimum royalties at 18 percent.

...

DCNR will open six tracts in Elk, Moshannon, Sproul, Susquehanna and Tioga state forests in Cameron, Clearfield, Clinton, Potter and Tioga counties.

"The tracts represent a little more than 1.5 percent of our total state forest land," said Acting DCNR Secretary John Quigley.

The bids will be opened Jan. 12 and awarded a day later.

DCNR officials have spent the past year conducting an environmental review of the land chosen for drilling. The process starts when drillers identify land they are interested in. DCNR officials say their review focuses on how drilling will affect the health of the forests and ecosystems that support wildlife and other permitted uses of forest land such as public recreation and timber cutting. The department sets conditions on how drillers operate. The head of the statewide environmental group PennFuture expressed concern about how the new drilling will affect hikers and hunters.

PennFuture CEO Jan Jarrett said she is aware of anecdotal stories of hikers in the Tioga State Forest finding trails unexpectedly blocked because of drilling operations. She said the state needs to do a more comprehensive study weighing the impact of drilling on forest activities.

About 660,000 acres of the 2.1 million acres of state forest land is leased for gas production. A lot of that acreage is in the traditional shallow gas fields of Northwest Pennsylvania.

Complete story: CLICK HERE.

DEMAND ACCOUNTABILITY!

One Landowner's Leasing Logic

My strategy with the energy extraction that is already underway in the whole area is to co-opt the Energy Exploitation corp into actively conserving our little plot of water and land by signing a strongly conservation-led non-disturbance lease. They get the gas down there legally (they don't have to steal it, I mean), and agree to not touch the land or water up here. If they do, we can (I believe) fairly easily and cheaply shut em down with an injunction - something not possible without a lease. A lease transfers the weak legal enforceability of conserving land into the strong legal enforceability of honoring an agreement. Just make sure the agreement is right for us!

If they sign this agreement, they have an 80% interest in protecting the covenants of the agreement (they get 80% we get 20%). They don't have to give a shit about the land and water. But in order to get the gas they have to give a shit about upholding the lease, which demands that they preserve land and water.

Mind you, this is a compromise and is only made possible because all our neighbors have already happily sacrificed their rights over control of their own land so the gas guys can put their rig over there and not on our land. Up until then, I was strongly in favor of no leasing, no dialog, no nothing because that kept them away quite effectively. After the entire valley leased, our holding out prevented nothing, preserved nothing, allowed us to control nothing, not even on our own land. That's when it became preferable to me that we create a binding agreement with the Gas co about how our land is affected.

DEMAND ACCOUNTABILITY!

PA Landowners Get Big Payments as Marcellus Shale Bidding Escalates

Gary Abdullah, Penn State University
November 17th, 2009

UNIVERSITY PARK - As legislators, environmentalists and others strive to balance the many interests involved in developing the natural gas deposits contained in the Marcellus shale formation, a fierce bidding war has doubled the prices being offered for leases in Pennsylvania. The resulting competition could be a boon for landowners, according to experts in Penn State's College of Agricultural Sciences.

The nation's economic troubles may have slowed development of natural gas wells for the last year, but energy companies seem to be returning to the state and buying up drilling leases with a vengeance. Joann Kowalski, Penn State Extension economic development educator in Susquehanna County, said the proven performance of existing wells may have companies competing to lock up prime properties in the state's Northern Tier.

"Word hit the street in September that Fortuna Energy was going to be paying the Friendsville Group $5,500 an acre for a five-year lease, with 20 percent royalties for producing wells," Kowalski said. "That was probably about twice the rate that had been offered up to that point. Fortuna had not been buying leases in Susquehanna County before this -- they were doing most of their work in Bradford County."

A second company, Chesapeake Energy, is reported to have offered a higher lease rate to area landowners who had not yet signed with Fortuna, according to Thomas Murphy, energy development extension educator in Lycoming County. While actual offers are unconfirmed by the companies, he says the implications are clear: energy companies are making directly competitive bids to the same landowners, hoping to wrap up lease rights in several counties along the Northern Tier.

"Companies have become very competitive to acquire leaseholds that are still available by offering these higher rates," he said. "A lot has to do with the acreage that they can tie up. The Friendsville Group was offering 37,000 acres in Bradford and surrounding counties and lower New York.
...
"Once a company knows what gas is there, there's a sense of urgency to acquire as large a foothold as possible," he said. "Other players are moving into the broader Appalachian region and acquiring or expanding some very large footholds, and with that amount of money flowing in, companies interested in getting a foothold are feeling a greater sense of urgency to capture the remaining pieces. Some other landowner groups are still negotiating with companies, and other groups probably will be forming, but that's hard now because so much of the ground in north-central and northeastern Pennsylvania has been leased."

Kowalski explained... "Large groups that negotiate as one can raise the bar for price; then others can benefit from that, as well. It's also advantageous for the company because there's less effort required to make the deal happen. The group has already gone through the steps of formation, so it makes it easier and less costly for a company to acquire a lot of foothold in one fell swoop instead of going to all the individuals independently. And a landowner group often can provide more contiguous acreage, which is valuable for an energy company."
...
"This is probably the tail end of the initial leasing wave, which has lasted for more than two years," she said. "The amount of land available now is probably pretty small, but this could be repeated as the leases terminate over time. It'll be interesting to see what happens when these leases are up in five years, since the companies will have better well-production records. I believe the companies have found that the wells are producing more than they'd expected, so this could go on for decades."
...
For the complete story, CLICK HERE.

DEMAND ACCOUNTABILITY!

Farm family’s nightmare: ‘Gas drillers cut corners from day one’

This powerful first person landowner/leaseholder's account
by Candace Mingis offers up lots to think about.
It is reprinted with permission from the author.
Thank you Candace!

In 1971, when my husband’s family bought its farm in Van Etten, there was an abandoned Oriskany formation well on the property. There were, indeed, abandoned wells all over the neighboring hills — some of which were providing neighbors with free gas.

A small pipe and tank seemed innocuous enough. So when a neighbor came by in 1999 with his friend, an oil and gasman who owned a small company in Pennsylvania, we signed a ten-year lease.

It was a community-held belief in Van Etten, based on past experience, that gas wells were “no big deal.” Nearly all our neighbors signed. There were no informational forums back then, nor attorneys who knew what was coming.

Five years later, after the lower rights to our lease were assigned to a multinational corporation, we realized something bigger was happening and finally sought an attorney’s help. The first attorney we saw was knowledgeable but was interested in helping us only if we exercised a sale clause we had put in the lease, and sell our land to a friend of his who invested in oil and gas. His fee would be 33% of the additional royalties gained from the transaction.We were not comfortable with this.

The second attorney willingly assisted us with the high-pressure, eleventh-hour negotiations with the gas company, which now wanted to drill a well on our farm. But it soon became clear he knew nothing about the industrial gas drilling coming. Finding a reliable attorney was nearly an impossible task. We didn’t even know what questions to ask.

We scrambled to come up with last-minute protections, mostly from bits and pieces of information we were now learning from neighbors.

The gas company was willing to negotiate, as they had not yet gotten us to sign an amending agreement they needed. We forged an agreement to make sure our beautiful, gravelly loam field would be restored.

The well was drilled in the Trenton/ Black River formation. It was a conventional well that went nearly two miles down and one mile horizontally under the village. It was a huge industrial operation — a far cry from the old Oriskany wells on our hill.

From day one, the gas company began to cut corners. What was to be “just a couple of acres” was actually seven acres (we measured it.) We asked that the access road run along the edge of the field, and they cut it diagonally through the field. The landman who had been negotiating with us had actually helped us flag where the road was to be, and he argued for us to get them to re-do the road. It just went on and on. The holding ponds were supposed to have two layers of plastic. They had only one. The brine was supposed to be hauled out more often than it was. We felt we had to constantly be checking, taking pictures, and calling the gas company.

Of course, the operation was an industrial site we never could have imagined: 24-hour-a-day drilling, ramming noise, lit up all night. It went longer than they said it would, taking three months to prepare the site and drill. When the well was flared (for three days and nights) and the whole valley was lit up like a stadium, it began to feel like something terrible had been unleashed.

When it was time to restore the larger/outer area of the well site, the gas company cut corners once again, even though the procedure was spelled out clearly in the written agreement. They used a bulldozer to remove the plastic and large rocks, hauling much of our precious topsoil with it. My husband furiously tried to get them to stop, and subsequently to bring us more topsoil to fill in the depressions. Rude employees argued with him. They also never loosened the subsoil before filling in.

We had a retired Ag & Markets consultant come in and shoot some grades and write a recommendation. This appeared to really annoy the gas company.

They sent us a “without prejudice” letter stating they had done all they had to do until final restoration (10 years or so hence). The “friendly” landman who had worked on our behalf was told to stop talking to us.

We then knew that if we ever wanted to have that field restored as per the signed agreement, we would have to get an attorney. Attorneys tell us now that only rarely can you get industry to pay for your legal fees.

Having a multinational corporation in your life is extremely stressful. It’s a “contractual relationship,” but it is vastly unequal. Corporations are protected under the law, and are ultimately not liable, responsible or responsive. Their sole job is to make money for their shareholders, and they will do what they want. Oil and gas companies are essentially in the game of “gotcha!” Once you sign, it’s up to you to watch them, call them, sue them. It’s your problem now. They are obliging only until they get what they want from you. Phone calls, e-mails, letters, lawyers all become routine.

Signing a lease with a multinational corporation is like inviting a very rude, unscrupulous, uncaring (dare I say criminal?) person to live in your home. It is extremely stressful. However, this well, we were assured, would have a lifetime of only about 10 years, and then they would be “out of there—all cleaned up, like [we] didn’t know [they] had been there.” We thought we could live with that. (Of course, at this point we had no choice.) At this time our daughter and her husband decided to go ahead and make plans to move their farm/ winery business to the family farm.

And we were “lucky” ones. The well was successful. In fact, it was the most prolific well in New York, and in 2006 produced 4 billion cubic feet of gas — enough to heat 57,000 homes for a year. Organizations and 133 families receive royalties from this well, including the town, school and church. Who couldn’t use more money? Folks could finally repaint their houses and replace roofs. They could start retirement savings and donate to charities. We were able to finish our house and install solar panels, buy a tractor and pay off some college loans.

There is no denying that the people could use the money. But the question began to emerge: at what cost?

In the spring of 2008, we began hearing talk of the next big gas “play” — the Marcellus shale — and, at first, thought nothing of it. But the more we learned, the more alarmed we became, and then it hit us: we were “held by production” with a producing well, and that meant that lease expiration was irrelevant. And while we are held by production, more wells may be drilled on our property in different formations, which in turn could hold us by production longer.

In essence, we had “sold” our land forever. The night I realized this, I had a dream that our house had been robbed, and it was from the inside.

Now, our daughter seriously doubted they could move to the farm. How could they move here when there could be a lifetime of drilling, drastic change in our rural landscape, and potential contamination and pollution? We had “sold” the land out from under our children and their children. No amount of money is worth that.

Unconventional shale gas drilling is a nasty business. And I venture to guess there are hundreds, maybe thousands of leased-landowners out there who, as they learn what this new gas drilling really entails, wish they had never signed a lease.

A contract between an individual and a multinational corporation is never on an even playing field. The power imbalance is staggering. Attorney Jane Welsh, of Hamilton, believes gas leases should actually be commercial lease transactions, which include the legal concepts and protections found in any commercial lease, and “the only reason they are not is that the parties to a gas lease are woefully mismatched in terms of negotiating power, experience, sophistication and financial clout.” New York, she concludes, is sorely remiss in not regulating these leases.

But this is not merely a leasing issue (though the Attorney General’s Office, Cooperative Extension and many landowner coalitions seem to believe it is).

For one, it’s a community issue. As Herb Engman, Ithaca town supervisor, said recently (and I’m paraphrasing): Towns go through all the time, trouble and expense to generate comprehensive plans and protect community resources, and then gas companies can destroy all planning.

The scale of proposed shale gas drilling in the area will affect our entire landscape and rural way of life.

Leases cannot protect us from plummeting real estate values or the inability to obtain mortgages or sell our property; leases cannot protect us from a decline in tourism or other negative economic effects; leases cannot protect us from the increased difficulty in obtaining insurance or the increased cost of doing so. And unless gas companies are willing to post billions of dollars in bonds, leases cannot ultimately protect us from personal liability.

But above all, this is a public health issue. Emerging studies on air pollution and reports of water contamination make it very clear that the negative affects of unconventional gas drilling cannot be contained by property boundaries.

Whether you are leased, leased in a coalition or compulsorily integrated; whether you are un-leased living down the road, downwind or downstream of gas wells or deep injection disposal wells; or whether you simply use roads traveled by frack-water trucks — we are all at increased risk.

Our communities need full disclosure of the risks we will be exposed to before we can decide if we, as a community, want to take those risks. We do not want to be unwilling participants in a grand experiment, because that’s what this is.

And the truth is, no one even knows what all the risks are.

There have been no comprehensive, long-term, systematic studies of hydrofracking. Nor have there been comprehensive, long-term, systematic studies on deep injection disposal of toxic wastewater. But the high-pressure injection of contaminants into the ground appears to be liinked to unpredictable migration of fluids, aquifer contamination and possibly earthquakes.

Have we mapped our entire area for natural faults? How do we know that the fracking fluid left behind won’t eventually migrate upward and contaminate our water? Maybe not this year, but what about in five years or 50 years? While the gas companies and the DEC assure us that these activities are perfectly safe, they will not guarantee it, because there is no science backing those claims. And in fact, more and more evidence is mounting to the contrary —at the expense of people’s health and safety.

I am haunted by the specter of some day turning on my tap for a glass of our clear, cold, sweet water and wondering if chemicals left underneath us have migrated into it.

Do I test my drinking water once a year? Once a month? Every week? How can I live (how can we live) with the unending uncertainty that this glassful might be poisoned?

Do I drink it?

Do I offer it to my granddaughter?

DEMAND ACCOUNTABILITY!

Warren County Commissioner gathering evidence for oil/gas drilling hearing

By BRIAN FERRY bferry@timesobserver.com
TIMES OBSERVER, August 18, 2009

One side says the economic impacts are devastating.

The other side doesn't see it that way.

The judge in a case filed by representatives of the oil and gas industry against the U.S. Forest Service and environmental groups wants to hear the specifics of those economic impacts.

Warren County Commissioner John Bortz will be one of the witnesses testifying at an evidentiary hearing scheduled for Monday and Tuesday in federal court in Erie.

To prepare for that event, Bortz, with the help of Warren County Chamber of Business and Industry (WCCBI) Director of Workforce Development Heidi Powley, is gathering evidence.

...

Bortz did not disclose the results of the survey that had come in as of Monday, but gave a preliminary outline of the findings.

"There is a degree of confirmation" of negative effects on the economy, he said. "They are pointing to a direct impact from the moratorium on new development."

"This is having a direct effect on us locally," Bortz said.

Powley explained that she has been polling local businesses via email.

"I basically asked them how the ruling... has impacted their business," she said.

Those polled include all chamber members and various other business contacts in Warren, Forest, McKean and Elk counties, Powley said.

She did not disclose the results of the polling but said she has been getting responses.

In July, U.S. District Court Judge Sean McLaughlin scheduled the evidentiary hearing after a hearing to rule on a defense motion to dismiss the lawsuit and a plaintiff motion for a preliminary injunction against a prior settlement.

In that prior settlement, the Forest Service and plaintiffs Allegheny Defense Project (ADP), Forest Service Employees for Environmental Ethics (FSEEE), and the Sierra Club agreed that the appropriate level of National Environmental Policy Act analysis be done before new drilling development is allowed on the Allegheny National Forest.

The Forest Service agreed to allow several hundred new wells, for which applications were already in place, but to otherwise put a hold on new drilling until a forest-wide Environmental Impact Statement can be prepared. That process is expected to take at least a year.

In the current lawsuit, Minard Run Oil, Pennsylvania Oil and Gas Association (POGAM), Allegheny Forest Alliance (AFA) and Warren County are the plaintiffs and the Forest Service, the agency's local and national leaders, ADP, FSEEE, and Sierra Club are named as defendants.

CLICK HERE for article source.

DEMAND ACCOUNTABILITY!

Is the Juice Worth the Squeeze?

The Latest Report from Calvin Tillman, Mayor of DISH, TX

When taking over as mayor of DISH, the first question that was asked by the local media outlets was to respond to the fact that our property values as a whole had decreased considerably from the past year. This is where small towns and cities get the bulk of their funding, through taxes on these property values. Therefore, if the taxable value goes down, naturally the revenue for the town does as well. Now I must say that I am opposed to unnecessary taxation, and therefore have done everything I can to make the taxes here the lowest in the area, and succeeded. However, the town has doubled in size over the last couple of years, yet the taxable value continued to drop. This baffled me how essentially the total value of the town drops every year, while were experiencing massive growth.

Not only did it baffle me, but it concerned me. As most small towns do, we use the county tax assessor’s office to perform the tax collection service for us, so they were my first call. When they explained the mineral values were the cause of this drop, and that was sixty percent of our tax base, I was again stunned. As you know we are located in the middle of the Barnett Shale, and have had a great deal of exploration in this area. So what would cause the values to continue to drop? This was also during the timeframe when natural gas prices were climbing to all time record highs.

As I investigated the source of the decline in my town it all started to become apparent. The property values not tied to minerals have continued to drop. I believe this is mostly due to the massive natural gas compressors, pipelines and metering stations. They have all but made the surface property here worthless; however, that does not account for the minerals which is over half of our taxable values. I then found that on average, each well drilled loses fifty percent of its production after the first year. That is a huge drop in production in only one year. So that tells me that the only way to maintain the same mineral value is to drill fifty percent more wells every year. So if you have ten wells this year, you would need to drill five more next year just to maintain the same production.

Many of the local cities have went on a sort of spending spree with the new found wealth from the natural gas minerals, and are now finding themselves in a financial crunch. The facts that I taught myself through this simple question from an intui tive reporter has made a world of difference on how I approached this problem here in DISH. We are frugal at best here, making the most of every dollar we get. We have cut the town debt in half, built a massive park, a library, repaved roads and performed substantial upgrades to town facilities and done this while lowering taxes and not dipping into the emergency fund we have in only two years.

To the real point, is what do minerals play into all of this? As previously mentioned we have over half of our tax dollars that come from the minerals, more specifically the revenue we received in 2007 was made up of 56% mineral values, in 2008 that number jumped to 64%. We have not gotten the completed numbers for 2009, but they will likely be similar. The dollar figures for this are 14,500,000 in 2007 and 22,277,000 in 2008 in property values from mineral.
On the surface the benefit from this industry seems huge. We are a small town and they double our value. But I also compare this to the drug “heroin”, due to seeing the other towns which have gotten addicted to the drug and when the drug goes away, (when they price of natural gas goes down 75% as it has), they find themselves in a financial crisis. Also, most people do not take into account how much it costs to have this activity going on. I can only explain what goes on in DISH, TX, but will attempt to explain the drug's side effects.
First and foremost this exploration destroys roads, which are very expensive to maintain and replace. None of the existing roads were designed to withstand the constant pounding from an 80,000 pound waste-water truck. Nor were they designed to handle the larger equipment that is used to drill and refracture the wells. To build roads to handle this traffic can cost millions of dollars.
If the municipality owns the roads, they can force the companies to sign a road use agreement, which forces them to pitch in and help the roads. Most of the cities in the area have agreements like this in place. If they do not, then they are foolish, and are likely costing their taxpayers a great deal of money by not forcing the companies to pay. However, the drilling companies are going to take whatever measures they can to keep from paying damages to the roads. The City of Argyle found out the hard way when they were sued by XTO over road work.
Here in DISH many of the roads are not owned by the town. This is both good and bad; it is good because we don’t have to pay for the major upkeep of these roads. However, if we don’t own the road we don’t have much control either. For example, we have implemented a weight restriction on all of the roads that we do own, but we can not enforce this on roads that we do not own. Unfortunately, the county does not have the capability to force these companies to have road agreements and pay for what they destroy. Therefore, the replacement and repairs come from the general taxation, or bond elections, not directly from the gas companies. So as you might guess it is a juggling match for the counties to keep the roads drivable for the average vehicle.
One example of that is Eakin Cemetery Road, which goes through part of DISH, but is owned by the county. A pipeline was being installed in this area, and the equipment used in this process is massive. Please note that the pipelines must be included in the cost of this exploration, even though they contribute little to the towns or property owners, and take a lot in return. I will discuss how bad they hurt the towns later.
When this line went in the companies used Eakin Cemetery Road to access the route. They completely destroyed this road and virtually made in impassible for the average vehicle. You could literally see the grooves where the truck tires that hauled massive equipment went. The pavement was cracked and torn from this equipment and the pipeline companies did nothing to prevent or repair this. And though the county does work hard to keep the roads in reasonable shape, when something like this happens in takes a while to plan the repair; therefore, the citizens here were forced to drive on the impassible road for quite a while until repairs were made.
There is another impact that can be recognized quickly, and that is the affect that the exploration has directly on surface values. I am sure that there are some who believe the propaganda and are fine with having a well or pipeline in their front yard. However, regardless of what you may have heard, they are the exception not rule, especially if you have a small population of mineral owners in your community. The average person will not purchase the property right next to a well site or compressor, providing they are made aware of it. Unfortunately, most of the mineral owners in this area have kept the minerals and moved on to someplace else. However, when they have tried to sell their property with wells and pipelines on them, it has not been successful.
Although you may see a boost in your tax rolls for the short term, you will pay in the long run with the drop in property values. For a small growing community like DISH it especially provides an obstacle for quality growth. There have been four large tracts of property for sale in DISH for several years with no real interest in purchasing the property. If you do manage to get some interest in the property, it will likely be something like a pipeyard or something else that continues to devalue the surrounding property. So getting quality growth in an area that has a large amount of exploration proves to be a large hurdle if not impossible.
The above paragraph dealt with the exploration of the mineral, now we must consider the pipelines, and appurtenances to these pipelines, such as compressors or metering stations. These facilities have dealt us a very harsh blow without giving much in return. This is highlighted by a previous illustration of the pipeyard. The gentleman who unfortunately lives next door to this compressor site sold off a piece of property to a developer who built 18 homes that average around $200,000 each. However, after the compressors were there, he has not been able to give his property away. He was only able to lease some of it to a company that stores pipe. That is the best he can do now, and that in itself is very low quality growth and makes the area even less desirable.
Another illustration that has been used by me before is the gentleman who has had 63 acres for sale now for several years. He purchased the property as an investment, and now has three pipelines and an above ground valve. He can not give this property away. As he reaches retirement age his retirement has been stolen from him. This is no different than Enron or any other scandal, only it has been made legal thievery. There are two other pieces of property that have been for sale for several years, one of which is a large parcel of about 70 acres and the other is about 10 acres.
The above examples are heart wrenching when you look at how much it has cost the property owners, and only one of the above mentioned owners has any substantial mineral interest. Therefore, they others are merely victims of circumstance. However, as this gets to the point of whether this all is really worth it, I believe that if all of these property were sold and developed it would add somewhere around $20,000,000 in property values, which is more than the average in mineral values over the last few years. I also believe this is a very conservative estimation, it could be more.
So would you rather have homes than minerals? Homes in theory will increase in value over the long term while minerals will drop. Although, this has not been case the last couple of years, in the long term this has held true. Also, natural gas is a commodity, and its prices are much more volatile than housing. For example in the last couple of years the lowest price of natural gas is about 25% of the highest; therefore, you have seen a 75% drop in prices in a little over a year.
In DISH we have focused on overcoming the boom and trying to get quality development. We have worked with a number of developers to annex their property into the city. All three of the major annexations we have had since I became mayor, have been solely to protect them from the development of the minerals and total destruction of the surface values that accompany it. This is not saying that we do not allow drilling; we just force the companies to do it responsibly. We have a pad site that is right in the middle of one of these subdivisions and it really does not look that bad. It is lined with an eight foot concrete fence and most of the stuff inside including the tanks is not visible beyond the fence. However, the companies will only do this when they are forced too, they will not volunteer it.
So how about all those mineral owners who have gotten filthy rich? Here in DISH there have been some folks who have made a great deal of money on the minerals. However, most of them had lived here their whole life, and had property handed down over the generations, otherwise they only have a small portion of the mineral rights. Therefore, there are only a few that are still alive that have a major portion of the mineral rights, and as previously stated most of them have moved away to someplace that they do not have to deal with the mess that is left behind.
This area was the beginning of the Barnett Shale, if I am not mistaken the first gas producing well in the Barnett Shale, was within 20 miles of DISH. Therefore, the minerals were purchased several years ago, and the leases were quite low in comparison to the massive leases signed last summer. The lease here is somewhere around 16% royalties with anywhere from $1,000 to $1,500 per acre, not the 25% and $25,000 per acre that have been publicized.
So what does the 16% royalty get you? From what I understand, for someone who owns four acres and has a quarter of the mineral rights, they average less than a $100 a month. Therefore, if you have one acre with 100% of the minerals you would get something similar. Therefore, unless you have a massive amount of land with 100% of the minerals, you are not going to get much money. If you are part of the lease, you must also consider the truck traffic, odor, noise, and you just might be fortunate enough to have a high pressure gas pipeline run through your front yard. All of these things accompany the hundred bucks a month. I do not have any mineral rights, if anyone has another illustration please add it to this posting.
So to the point of, is the juice worth the squeeze? From my perspective as a small town mayor and a property owner, I say no! Not in the manner in which it is being done in Texas. I think that with minor regulation it could both provide the natural resources that we need as well as not totally destroying the surface values and destroying the growth of these areas. For example, there is no process in Texas for the laying or routing of pipelines. The pipeline companies can literally put them anywhere they want without concern for surface owners and other natural resources. Municipalities do have some limited control over the placement of the wells, but not the pipelines.
The items that were discussed were only the things that are easily recognized. I am still learning the affects on air and water quality and to explore the possible health of affects of this exploration. Although I have recently learned that the companies with the compressor site have learned a loophole that allows them to virtually go without regulation in regards to the air emissions they produce. I will share more on this subject as I figure out the specifics. I have the documents; I just have not digested everything yet.
This also does not include the tens of thousands of dollars in legal fees it takes to offer the citizens some minor protection from these companies. Nor does it take into account the hundreds of hours of my time spent researching and campaigning for more regulation for no pay. So you must ask yourself; is the juice is worth the squeeze? I can support any statement that was made in this posting; therefore, if you have more specific questions, please let me know and I will clarify it for you. To those of you who have visited DISH, I doubt you have any questions in regards to the impact the Barnett Shale has had on us.


Calvin Tillman
Mayor, DISH, TX
(940) 453-3640

"Those who say it can not be done, should get out of the way of those that are doing it"

DEMAND ACCOUNTABILITY!