Natural Gas Leasing Issues

Every Northeast landowner and farmer must be on top of them.

Published on: Jan 25, 2010

When it comes to natural gas leasing meetings, you'd swear there was a championship basketball game going on at the high school gyms. Cars and pickups overflowed from the parking lots. And school gymnasiums were the only places big enough to accommodate the crowds.

That's as it should be. The future livelihoods of landowners and farmers and their surrounding communities are at stake with the Marcellus Shale natural gas development. The economic and environmental issues are already beginning to transform the lands above the 7,000-foot-deep Marcellus Shale gas formation.

That's why American Agriculturist asked Cornell Cooperative Extension to host a gas leasing workshop on the morning of Friday, Feb. 26, at the New York Farm Show. The workshop begins at 9 a.m. in the Arts and Home Center's Bistro Room at the state fairgrounds in Syracuse.

First topic of that morning will be "What every farmer needs to know", presented by Brett Chedzoy, Schuyler County Extension resource educator. "While landowners are more savvy about gas leasing concerns, so many aren't as up to speed on all the related issues," says Chedzoy. "There's a lot of both good and bad that comes with gas exploration.

RADICALLY ALTERED: Natural gas drilling and yet-to-come pipelines will dramatically change the ecoscape of Pennsylvania and southern tier New York.

"We've seen a lot of landowner coalition and Extension education programs, But until a land man comes knocking on the door, many still aren't aware. It's still easy to be taken advantage of," he cautions.

Ain't in Texas no more

Taming Marcellus Shale drillers may be one of the toughest fights, contends Jan Jarrett, PennFuture president. Drillers are coming to Pennsylvania and New York from around the world to tap one of the region's most valuable natural resources.

"We're trying to learn from the experience and mistakes elsewhere," says Chedzoy, who's also a landowner. "This isn't Texas, and it's a different ballgame.

Storage and pipeline issues go way beyond getting a good price. They can conflict with farming operations, and come back to haul farmers and landowners."

"We must make sure a portion of this new money will be invested in the land, water, wildlife and communities that'll bear the brunt of this drilling. Otherwise, we'll find our citizens holding the bag on damage done by drillers – an awful reenactment of our experience with the coal industry."

Problems have already popped up – contaminated wells, destroyed roads and forests, and streams left with dead or dying fish and vegetation," contends Jarrett. In three southwestern Pennsylvania counties for instance, Atlas Resources was recently fined by the Department of Environmental Protection for 13 violations.

Violations involved failures to control erosion and establish vegetative cover plus discharging wastes, diesel fuel and production fluids into the ground. And there have been numerous other pollution events.

Land use and legal issues

Gas leases can cause trouble with farm mortgages, warns Chedzoy. Lenders, for example, don't want to mortgage property without free and clear title. Some leases give gas companies unrestricted access to surface and subsurface rights. Others can tie up property forever.

"In Broome County, leases were sold splitting surface and subsurface ownership. This has been 'under the radar' of local assessors." he adds.

Environmental groups have legitimate concerns. Whole communities have a vested interest. That's why local communities need time to make natural gas play out well in their communities, suggests Chedzoy. "When the Fortuna Energy trucks roll in, you can't start negotiating terms."

By March or April, Chedzoy predicts, gas drilling companies may be able to apply for drilling permits in New York State.

More on this topic in February's American Agriculturist issue. Explore Answers to Crucial Gas Leasing Questions under the "Exclusive" tab on this Web site.