A natural gas drilling company can legally drill under your land — even without your permission.
Under New York State law, if enough of your neighbors sign a lease with a company, that company has the right to drill under your property as well. It is called “compulsory integration,” and some landowners near active gas wells in Central New York call it a form of illegal eminent domain: the taking of property by the government.
One of these critics is Lebanon Town Supervisor Jim Goldstein.
“As far as I’m concerned, if there is gas under my property, I’ll decide if and when I want it drilled. No one else.”
(Jim Goldstein, Lebanon town supervisor)
But there is no way of saying no to the gas companies. If you are integrated into a drilling area through compulsory integration, the state requires that you be given a hearing. In court, experts say, you will learn you have these options:
You can become an integrated participating owner, similar to a partner to the gas company. You would pay for your share of production costs up front, and share in the profit of a productive well.
You can become an integrated non-participating owner who pays only after the well has been drilled and deemed productive. This owner takes less of a risk in his or her investment, and receives less profit.
The final choice is to become an integrated royalty owner. You would receive at least 12.5 percent of the revenue the company makes per acre from your property that was integrated. And, according to the State Department of Environmental Protection, this is the default option if you do not make a choice within 21 days of your scheduled hearing. You cannot choose to say, “No, thanks.”
Jane Welsh is an attorney, and a member of Citizens for Safe Energy — a group of concerned landowners in Madison County. She says that landowners should have the option to keep gas companies from drilling under their property.
“The gas company should be required to legally control—not not by statute or leasing or whatever — all of the land within the spacing unit. It just seems only fair.”
(Jane Welsh of Hamilton, local attorney and member of Citizens for Safe Energy)
Norse Energy is a natural gas company that owns many leases in Madison County. Dennis Holbrook is the company’s vice president. He says compulsory integration actually helps landowners develop their resources and gain economic benefit.
“If you didn’t have compulsory integration, you could have someone that only represented one percent of the potential unit, and they could deprive the other 99 percent of the opportunity to have a well drilled.”
(Dennis Holbrook, vice president of Norse Energy)
Holbrook acknowledges that the company seldom sees 99 percent of desired drilling areas leased out. But Holbrook says that usually about twenty percent of property in an area is drilled through compulsory integration.
That’s still too much, say unhappy landowners who object to their natural gas being taken without their express permission.
“Why should somebody who doesn’t want any part of it be forced to be apart of it and have to live with the noise, the mess, the smell?”
(Jane Welsh of Hamilton, local attorney and member of Citizens for Safe Energy)
Reporting for Democracywise, I’m Leigh Isaacson.
(Leigh Isaacson is a broadcast digital journalism major and geography minor.)
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