Susquehanna County Blog

It is becoming more and more evident that there are two groups of people who own land and who haven’t signed a mineral rights- those who want to sign and get a check as soon as possible and those who don’t. 

Those who remain on the fence about it are dwindling in number literally by the hour.   Over the past few months, the landmen running around have subjected the unsigned owners to sign using every tactic they could think of to get them - and for the worst terms possible to them. 

At the end of the day, those who do not sign a lease may be in a much better position than those who do.  Why?

Let’s be realistic folks, most people won’t have a production well on their property.  Those who do will probably do very well financially (at least by our local standards).  Those who are in a “production unit” (still undefined as I understand it), will make some money, depending on the size of the production unit.  According to various landmen, the production unit may consist of between 40 and 640 acres.  The shape will be determined by the gas company and does not have to include contiguous parcels.  Of course, few if any locally have seen any of this is writing, so it is entirely up to the discretion of the gas company to either include or not include you in a production unit.  If you are not included in a production unit, beware.

Those who have signed and will not have a production well on their property or be included in a production unit may have, according to the terms of their lease, given their permission to use their property for “storage”.  It is entirely possible, and maybe probable, that the properties not used for production may be hosting injection wells.  Or, maybe the “non domestic water” will be used to supply the enormous requirements for fracing fluid.  Many who have signed have given their permission, knowingly or not, to allow this to occur. 

If not injection wells, how about those retention ponds.  I bet they smell wonderful during the hot days of summer.  It may make your local veal farm smell good.  It certainly won’t help the property owner who is down wind to have “peaceful enjoyment” of their property.  You will almost certainly see one or the other.  Why not recycling? 

No one will be trucking this toxic mess to the Meadville area (the closest area currently permited to accept this waste) to be recycled.  Certainly not at $5 or so per gallon or more of diesel fuel.  If water weighs about 8 pounds to the gallon and you have to transport one million gallons, you may be able to get  about 8,000 gallons at most on a tank truck.  Sort of like those tankers who deliver gasoline to your favorite filling station.  Here is the math: 1,000,000 gallons divided by 8,000 gallons equals 125,000 tankers. This is just for fracing of one well, one time.  As I said, no one will be trucking this fluid for recycling.  By the time a plant could be built in this area, it would probably be too late.  Also, who would pay for it?  The drillers you say?  They should, but they probably would demand government funds.  Being optimistic, maybe a few people should look in to building such a facility privately.  Then the municipalities would have a better chance to pass legislation to force recycling.  Of course waiting for the necessary permits from DEP, EPA and God only knows who else, the issue could become moot.  Is it already too late? 

Maybe the waste could be transported by rail.  No wait, the current county commissioners haven’t supported the Railroad Authority any more than the last bunch.  Now it is reported that the land which was to be used as the basis for a transload facility will no longer be available as the Authority cannot get the support of State and Local officials.  Too bad, they had defeat snatched from the jaws of victory.  So, probably no rail solution here. 

As stated in a previous post, the landowner who has leased and finds they have problems after the fact, especially those who signed early on, will have precious little recourse.  Some will get an acknowledgement of their complaint within 60 or so days, others (current leases being circulated) require the lessor (landowner) to submit to arbitration.  No wonder they want to have as many signed up as possible.  Especially if they are properties which will never be drilled on.  This will reduce the company’s potential for a payout in the event of a problem.  NEVER GIVE UP YOUR RIGHT TO A JURY TRIAL.  If you sign a lease, you have certainly compromised yourself in that regard.  Ask a competent attorney.  Please note the word competent.  There is a difference between an attorney who can help you transfer your home and one who can properly represent you in negotiations such as these gas leases.

Here is something else to chew on.  Did the municipalities who signed a lease negotiate the use of natural gas for their respective commuties?  If not, why not.  Ask your elected official why their attorney (who is supposed to be advising them) didn’t negotiate that item and many others.  Part of the problem is that it is the opinion of this writer that there isn’t an attorney in the area who is competent to properly represent their client in these negotiations.  If they were, they wouldn’t have allowed their clients to sign these leases which are ridiculously slanted in favor of the lessee (gas company).

To those of you who haven’t signed a lease and share the concerns of this writer, good for you.  Whether it is out of not needing the money, concern for the environment, concern for reduced property values or some other valid reason, good for you. 

Maybe it is time for those who have no intentions of signing to organize to protect their properties.  Not just some little group in our fair county, as that will have little if any impact.  From reading publications from other areas, there are others in the Marcellus shale who don’t buy into the whole thing for whatever reason.  Maybe there should be a broad based effort to organize and force our elected officials to do something to protect those who don’t want to “play”. 

Maybe it’s time for Congressman Henry Waxman (D) California to reopen his House Oversight Committee Hearings on the subject. 

Your thoughts?

Has anyone else noticed that our fine County Commissioners have been conspicuous by their absence?  Oh sure, they show up for their meetings, but they appear to have pretty much disappeared into the woodwork.   Also, their meetings seem to be getting shorter and shorter…. 

Since the gas lease fever hit, you really don’t hear much from our State Senators or State Representatives either. 

This writer feels each of these elected officials needs to weigh in as to their position on the (a) way properties are being leased, (b) how they will address the damage to the infrastructure, (c) how they intend to address the environmental issues, (d) how they intend to address the obvious violations to the Clean and Green program and (e) are they participating in the gas lease “play”. 

These 5 issues are just the tip of the iceberg.  There will be many other questions.  The electorate deserve answers. 

If the readers would like to add to, or correct this by giving examples of how they are currently serving their constituency, please post it here.  Better yet, if we can get our elected officials to respond individually in this forum that could be construed as information directly from the horse’s mouth. 

After reviewing the entries, replies and links regarding gas wells on this blog and others, it’s time to push all the commonwealth’s elected representatives to update and enforce the laws regarding gas and oil exploration, leasing and drilling.

It is becoming more obvious on a daily basis that our county commissioners (all three) are completly ineffective at even informing the residents of Our Fair County that there could be a serious problem if the landowners of even 1 acre sign a lease without considering the wording (read potential downside).

That being said, we really need to make our elected officials - State and Federal aware of the potential issues regarding leases, wells, and other related issues.  In case you didn’t read the articles from the River Reporter, please go to Gas Muse 4/15/2008. 

Also, here is another site from Damascus, PA, which may be of interest

http://naturalgaslease.pbwiki.com/Damascus%20Citizens

 The point here is that if our county officials are not able or interested in doing what needs to be done to protect the landowners, especially the ones with smaller lots surrounded by larger lots, and the water issue, then it’s time to move up the ladder.  We need to contact our state representatives and senators as well as our federal congressmen and senators, the news media and anyone else who could make a difference.  If the websites posted on this blog in the past few days don’t give you great concern, I don’t know why.  It has been said before on this and other sites, so please bear with me if you have heard this before. 

At the end of the day, the greatest natural resource we have in Northeastern, PA is our clean, abundant water.  Don’t let someone who has NO interest in this area and who doesn’t live here cause problems with our water. 

Your thoughts?

It occurred to this writer after reading a comment from a contributor to this blog that the actual numbers of both the investment and the obvious internal projections of profit from this “Play” are nothing short of enormous.   Using Susquehanna County as the example, follow this: We have about 823 square miles of land here.  There are 640 acres in a square mile.  This means there are roughly 526,720 acres of land here.  If, at the end of the day, assuming a good class action doesn’t negate these leases (due to illegality of contracts, blockbusting techniques, etc.); at the current rate, these gas companies will probably have about $1,000 per acre invested. 

Of course, there areas which can’t or won’t be leased, such as under boroughs and villages, but that is a relatively small area.  Even some of those communities are considering leasing their excess land.  So, for the sake of discussion, let’s assume that the total investment to lease gas (and oil) (and in more than a few cases - mineral) rights here in Susquehanna County is in the neighborhood of $562,720,000.  That is NOTHING to these companies which expect to make many multiples of their investment.  If you haven’t read it here or seen it elsewhere, you should know that very recently, leases were signed in the Arlington, Texas area for $22,000 per acre, plus 25%. 

Reading elsewhere, it will cost in the neighborhood of $1 to 3 million to drill a well.  Before you start feeling bad, remember, they won’t have that investment until they actually drill and connect the well to the to be installed piping through a lot of backyards.  Once that is is place, just remember, they keep as much as 87.5% of the value of the gas flowing from that well.  So, the ultimate value of the wells to be drilled in Our Fair County to these companies could easily be in the tens of billions of dollars. 

If you have a problem with the last statement, consider this: it has been conservatively estimated that the Marcellus Shale contains one quarter of the known reserves in the contintental US.  These companies would not be as interested in this area as they are if they didn’t stand to make a whole lot of money.

The more information that comes to the surface, the more this writer is convinced that the leases signed should and must be challenged.  Not for the amount of “bonus money” or percentage of royalty unless it doesn’t meet the Commonwealth’s minimum requirements, rather for the way the “landmen” used improper and probably illegal tactics (read BLOCKBUSTING TACTICTS) to get (uneducated as to their rights).  Again, based on the previously posted links, the “landmen” who negotiated and executed these contracts are almost certainly operating well outside the law. In other states, this may not be the case, but reading the statute, it is abundantly clear that they are here.  The easy answer is to REFUSE to negotiate with them. 

Believe me, these companies want the access to this huge pool of gas (and the oil) which lies below.  It’s time to fix the problem before it becomes unfixable.  Oh yes, it has been stated by several who apparently know, the “Great Saviour”, our minority commissioner is asking a ridiculous fee to represent these injured landowners in a class action.  Don’t make a SECOND mistake.  Tell him to do his job as a commissioner.  After all, we are paying him (and two other commissioners) to represent ALL of us.

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 NOTE: THIS IS ONE OF THE EARLIER ARTICLES REGARDING GAS LEASING, WELLS, ETC. ON THIS SITE.  ALL ENTRIES ARE SEARCHABLE UNDER THE “GAS WELLS” CATEGORY.  Please take the time to review these articles which are all documented, rather than just opinion.

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It seems that the longer these “landmen” run around the county attempting to get you to sign off on your mineral rights, the more questions are raised. 

One of the more recent questions has been raised about the validity of these landmen.  Are they operating within the scope of the law?  This question has been raised by several in the real estate community who believe that the “landmen” who are signing leases on behalf of their respective companies are required to be licensed a real estate brokers.  It is known that as of this writing, a complaint has been filed with the state real estate commission (the agency who oversees licensure in Pennsylvania).  It will be interesting to see what their investigation will turn up. 

Another group of landowners (presumably ones who leased their mineral rights for $25 - 100 per acre) believe they have found that these leases weren’t written in accordance with state law.  It is the understanding of this writer that a class action has or will be filed shortly.

This is arguably the biggest transfer of mineral rights affecting the county in it’s history.  

Where is our county government weighing in?  Oh yeah, “they are looking into it”.  Is there a connection with the proposed class action suit and a certain county commissioner who is also an attorney?  Enquiring minds would like to know…

Better yet, did various townships and school districts sign on to these leases without proper advice, giving away a valuable asset for pennies on the dollar?

Does anyone have information they want to share here?