Gas Leasing Still 'Hot' Topic

Nor' east Thinkin'

Informal discussions at N.Y. Farm Show raise lots of questions.

Published on: March 3, 2010

While a snowstorm slowed things down in central New York, it didn’t deter a lot of people from coming to the natural gas mini-seminar at the New York Farm Show.


While the main speakers were snow-bound in Ithaca, plenty of landowners showed up and shared their experiences of what’s going on in New York and Pennsylvania. And much is going on.


Land men are still trying to steal gas, oil and mineral rights. Gas drillers are causing water quality and improper chemical waste handling problems in Pennsylvania. And there’s much misinformation out there.


For instance, some believe there’s a moratorium on gas drilling in New York. That’s not the case. But there is a moratorium on hydrofracking until the Empire State gets its regulatory act together. And there’s good reason for that moratorium – more than 15 million on them, actually.


The environmental risks are not negligible. And the groundwater sources of water for New York City and Philadelphia, let alone, millions of rural residents must be protected.


Pennsylvania already has a large staff of regulatory people and regulations based on decades of oil and gas drilling experience and enforcement – and more are being added.


New York State, on the other hand, went into the Marcellus Shale gas rush with virtually no staff, gas and oil regulations and little experience. Pumping thousands of gallons of toxic chemicals into the ground with only a 30% recovery rate is just cause for concern.

Even bigger payouts ahead

None the less, it’s awesome that thousands of rural land owners of Appalachian country land will be able to benefit from gas lease agreements that are only now reaching a point of being worthy of the resources beneath.


However, I must add that per-acre leasing rates are still far below the $15,000-per-acre cash up front and 25% to 30% royalty rates now enjoyed by land owners in Texas and Oklahoma.


As several people told me last week: Never sell gas rights on all your land at one time. Hold some of it. Your patience will be rewarded. And you can bet that ag land values will be rising appreciably as long as gas, oil and mineral rights haven’t been sold out from beneath them. 


Your comments are welcome and wanted. Just click on “Add a Comment”.