Forced Pooling: When Landowners Can’t Say No to Drilling

by Marie C. Baca, Special to ProPublica May 19, 2011

As the shale gas boom sweeps across the United States, drillers are turning to a controversial legal tool called forced pooling to gain access to minerals beneath private property–in many cases, without the landowners’ permission. Forced pooling is common in many established oil and gas states, but its use has grown more contentious as concerns rise about drilling safety and homeowners in areas with little drilling history struggle to understand the obscurities of mineral laws.

Joseph Todd, who lives in rural Big Flats, N.Y., wasn’t especially concerned when he learned in 2009 that his half-acre property had become part of a drilling unit. But when methane gas showed up in his drinking water well after the drilling began, he became outraged, describing forced pooling as “eminent domain for gas drillers.” “We never wanted to be a part of the drilling,” he said. “To have something like this happen is beyond frustrating.” Todd and some of his neighbors are now suing the company that is drilling near their neighborhood, even though no link has been proven between drilling and the contamination of their water.

People who see forced pooling as an infringement of property rights also tend to oppose the practice, including Pennsylvania’s Republican governor, Tom Corbett, who has otherwise been a staunch supporter of the drilling industry.“I do not believe in private eminent domain, and forced pooling would be exactly that,” Corbett told a group of nearly 400 drilling industry representatives and supporters last month. He also said he won’t sign pending legislation that would allow forced pooling for drilling in Pennsylvania’s gas-rich Marcellus Shale.

Forced pooling compels holdout landowners to join gas-leasing agreements with their neighbors. The specific provisions of the laws vary from state to state, but drillers are generally allowed to extract minerals from a large area or “pool”–in most states a minimum of 640 acres–if leases have been negotiated for a certain percentage of that land. The company can then harvest gas from the entire area. In most cases, drillers aren’t allowed to build surface wells on unleased land, so they use horizontal wells or other means to collect the minerals beneath those parcels.

Thirty-nine states have some form of forced pooling law. West Virginia and Pennsylvania each have measures that don’t apply to drilling in the Marcellus Shale, and proponents are trying to expand the laws in those states. (Check out our chart of forced pooling laws across the United States.)

In New York, the owners of 60 percent of the acreage in the proposed drilling unit must agree to lease their land before the state oil and gas board will consider a driller’s petition for compulsory integration, as it is known there. In Virginia, only 25 percent of the land must be leased. In all states with such laws, drillers must notify all the landowners within the prospective drilling area of their right to participate in a hearing before the oil and gas board, or whatever regulatory agency the state has set up for that purpose.

If the board approves the driller’s petition, holdout landowners typically have three choices: contribute to the cost of the well and share profits from the sale of the gas; don’t pay for the well and share the gas profits after a “risk aversion” penalty is subtracted, or receive a state-mandated minimum royalty payment. Landowners who choose none of these options are automatically enrolled in the last plan. Opting out is not a possibility.

Gas companies argue that forced pooling allows them to build fewer wells and harvest gas efficiently, creating tidy drilling parcels as opposed to a patchwork pattern of leased and unleased land.

Forced pooling is also supported by landowners who fear that drilling companies will place wells near their property and siphon off their gas without payment. Another group of supporters includes people who own the surface rights to their property while someone else owns the mineral rights–a situation known as a “split estate.” Although these landowners usually aren’t entitled to any payment, some forced pooling laws compel drillers to compensate them, too.

The complexities of forced pooling can be seen in Big Flats, a town of about 7,000 in Chemung County, in the southern tier of New York. Gas drilling has provided a huge boost to the county’s economy, said budget director Steven Hoover, bringing in $30,000 to $40,000 a year in royalties and more than a million dollars in bonus payments from land the county has leased to drilling companies. That money, along with savings in other areas, has allowed Chemung County to cut property taxes over the last few years, Hoover said.But Joseph Todd thinks struggling communities like his are too willing to accept the erosion of residents’ property rights in exchange for an influx of cash.

In 2009, he and his wife Bonnie received a letter from the state informing them that Anschutz Exploration Corporation would be allowed to extract gas from beneath their land.

At first, the Todds didn’t think much about it. No construction crews visited the modest ranch house where they had lived for more than 20 years. No heavy equipment materialized in their backyard. A horizontal well was built less than a mile away, but from the road its operations were almost invisible.

Then in September 2010 the couple discovered mud and methane in their private water well. Methane, the largest component of natural gas, isn’t toxic, but it can be explosive if it accumulates.

“We’ve lived in this house for 22 years without any problems, and suddenly the water turns dirty and fizzy and can be lit with a match,” said Todd, a firefighter.

After hearing about similar water problems near drilling operations in Pennsylvania, the Todds began to wonder if their dirty water–and the water problems that had simultaneously cropped up at nine neighboring homes–could be traced to the nearby drilling.

Denver-based Anschutz and the New York Department of Environmental Conservation both say the water problems aren’t related to drilling. But in February, the Todds and their neighbors filed a lawsuit in Chemung County State Supreme Court, accusing Anschutz and its subcontractors of negligence in the drilling, construction and operation of the wells, causing the families to be exposed to combustible gases and toxic chemicals, and reducing property values. They are seeking millions in damages.

Anschutz spokesman Jim Monaghan said the company abides by state law and has committed no wrongdoing.

Joseph Todd says he’s angry, not just about his contaminated well water but about the compulsory integration law that made it easier for drilling companies to move into his neighborhood. He said he has spent thousands of dollars on bottled water and laundromat fees–and that the royalty payments he’s supposed to receive, even as an unwilling participant in the nation’s natural gas boom, haven’t begun arriving yet.

ProPublica’s Nicholas Kusnetz contributed to this report.

Correction (May 19): This story has been corrected. It should have made clear that state regulations in New York and Virginia require drillers to lease a certain percentage of the acreage in a drilling unit before forced pooling or compulsory integration can occur, rather than a percentage of the landowners. May 20: This story originally said 38 states have some form of forced pooling law. Actually, 39 states do.

To read this article in full online, click here:

http://www.propublica.org/article/forced-pooling-when-landowners-cant-say-no-to-drilling

To read what Governor Corbett told the 400 drillers, click here:
To view ProPublica’s chart of forced pooling laws across the USA, click here:
To read the Marcellus Shale Coalition’s take on forced pooling, which they term “fair pooling”, click on these links:

EPA Wants to Look at Full Lifecycle of Fracking in New Study – Gas industry not happy

by Nicholas Kusnetz

ProPublica, Feb. 9, 2011, 2:32 p.m

The EPA has proposed examining every aspect of hydraulic fracturing, from water withdrawals to waste disposal, according to a draft plan the agency released Tuesday. If the study goes forward as planned, it would be the most comprehensive investigation of whether the drilling technique risks polluting drinking water near oil and gas wells across the nation.

The agency wants to look at the potential impacts on drinking water of each stage involved in hydraulic fracturing, where drillers mix water with chemicals and sand and inject the fluid into wells to release oil or natural gas. In addition to examining the actual injection, the study would look at withdrawals, the mixing of the chemicals, and wastewater management and disposal. The agency, under a mandate from Congress, will only look at the impact of these practices on drinking water.

The agency’s scientific advisory board will review the draft plan on March 7-8 and will allow for public comments then. The EPA will consider any recommendations from the board and then begin the study promptly, it said in a news release. A preliminary report should be ready by the end of next year, the release said, with a full report expected in 2014.

A statement from the oil and gas industry group Energy in Depth gave a lukewarm assessment of the draft. “Our guys are and will continue to be supportive of a study approach that’s based on the science, true to its original intent and scope,” the statement read. “But at first blush, this document doesn’t appear to definitively say whether it’s an approach EPA will ultimately take.”

The study, announced in March, comes amid rising public concern about the safety of fracking, as ProPublica has been reporting for years. While it remains unclear whether the actual fracturing process has contaminated drinking water, there have been more than 1,000 reports around the country of contamination related to drilling, as we reported in 2008. In September 2010, the EPAwarned residents of a Wyoming town not to drink their well water and to use fans while showering to avoid the risk of explosion. Investigators found methane and other chemicals associated with drilling in the water, but they had not determined the cause of the contamination.

Drillers have been fracking wells for decades, but with the rise of horizontal drilling into unconventional formations like shale, they are injecting far more water and chemicals underground than ever before. The EPA proposal notes that 603 rigs were drilling horizontal wells in June 2010, more than twice as many as were operating a year earlier. Horizontal wells can require millions of gallons of water per well, a much greater volume than in conventional wells.

One point of contention is the breadth of the study. Chris Tucker, a spokesman for Energy in Depth, said he understands the need to address any stage of the fracking that might affect drinking water, but he’s skeptical that water withdrawals meet the criteria. “The only way you can argue that issues related to water demand are relevant to that question is if you believe the fracturing process requires such a high volume of water that its very execution threatens the general availability of the potable sources,” he wrote in an e-mail.

The EPA proposal estimates that fracking uses 70 to 140 billion gallons of water annually, or about the same amount used by one or two cities of 2.5 million people. In the Barnett Shale, in Texas, the agency estimates fracking for gas drilling consumes nearly 2 percent of all the water used in the area.

The EPA proposes using two or three “prospective” case studies to follow the course of drilling and fracking wells from beginning to end. It would also look at three to five places where drilling has reportedly contaminated water, including two potential sites in Pennsylvania’s Marcellus Shale, and one site each in Texas, Colorado and North Dakota….

To read this article in full online, view the photos, videos, sidebar topics and access the links within it, click here:

http://www.propublica.org/article/epa-wants-to-look-at-full-lifecycle-of-fracking-in-new-study

Do ‘Environmental Extremists’ Pose Criminal Threat to Gas Drilling?

by Abrahm Lustgarten Sept 8th, 2010

As debate over natural gas drilling in the Marcellus shale reaches a fever pitch, state and federal authorities are warning Pennsylvania law enforcement that “environmental extremists” pose an increasing threat to security and to the energy sector. A confidential intelligence bulletin sent from the Pennsylvania Department of Homeland Security to law enforcement professionals in late August says drilling opponents have been targeting the energy industry with increasing frequency and that the severity of crimes has increased.

A pro-drilling group, the Marcellus Shale Coalition, characterized the vandalism in Pennsylvania as “directed at preventing our industry from safely delivering these resources to Pennsylvanians.” The group’s president, Kathryn Klaber, said she supported civil debate over drilling, “but to the extent they go in the other direction, and potentially devolve in a manner that undermines our ability to keep our folks safe, then we will have a problem,” she said.

 
It warns of “the use of tactics to try to intimidate companies into making policy decisions deemed appropriate by extremists,” and states that the FBI — the source of some of the language in the Pennsylvania bulletin — has “medium confidence” in the assessment. A spokesman for the FBI did not immediately respond to a request for comment. The advisory, a copy of which was obtained by ProPublica, doesn’t cite the specific incidents causing concern. It is also unclear from accounts from state law enforcement officials whether the incidents in Pennsylvania posed a substantial threat, or what effect the advisory might have on public gathering and the debate over drilling in the state. Pennsylvania State Police said there have been only a few isolated crimes involving drilling facilities.

“We haven’t had any incidents of any significance to date where we have identified a problem, or any environmental extremists,” said Joseph Elias, a captain with the Pennsylvania State Police Domestic Security Division, which was not involved in issuing the bulletin.

An aide to Gov. Ed Rendell — speaking on behalf of the state’s Homeland Security Office — said the advisory was based on five recent vandalism incidents at drilling facilities, including two in which a shotgun was reportedly fired at a gas facility. “All this security bulletin does is raise awareness of local officials. It doesn’t accuse anyone of local activity,” said the spokesman, Gary Tuma. “Where the professionals detect a pattern that may pose a threat to public safety, they have a responsibility to alert local law enforcement authorities and potential victims.”

Anti-drilling activists in the state say that public hearings and other events have been peaceful and that they see no evidence of violent opposition. Given the lack of evidence about “extremist” crimes, they say, the bulletin casts drilling opponents as criminals and threatens to stifle open debate.

“It may very well be designed to chill peoples’ very legitimate participation in public decision making,” said Deborah Goldberg, an attorney with Earthjustice, a national group pressing for stronger environmental protections. “If people who have concerns fear that they are going to be treated as a security threat they may very well be afraid to go and express their views.”

The advisory lists a series of public hearings on drilling permit issues across the state as potential flash points. It also mentions a Sept. 3 screening of the anti-drilling film “Gasland” in Philadelphia that went off without incident. Language describes “environmental activists and militants” on one side of the debate and “property owners, mining and drilling companies” on the other.

Finally, the bulletin groups the public hearings and film screening with protest rallies for anarchist clubs focused on “evading law enforcement,” and with a Muslim advocacy group’s rally for the release of suspects in an alleged terror plot at Fort Dix, N.J.

The advisory was sent to state law enforcement and local government groups, as well as businesses with a specific concern addressed in the bulletin. It was not intended to be distributed to the public.

To read the full ProPublica article cited above, with all its active hyperlinks,  click here:
To read the report cited in this article that wan’t supposed to be made public  (PENNSYLVANIA INTELLIGENCE BULLETIN NO. 131 PENNSYLVANIA INTELLIGENCE BULLETIN NO. 131

In issuing such an advisory, the government has to walk a fine line between the need to respect the fundamental rights of freedom of speech and the need to keep the public safe, said Nathan Sales, an assistant law professor at George Mason University and a former policy development staffer at the U.S. Department of Homeland Security. “The question is how to accomplish the one with minimal consequences to the other,” he said.

Broad Scope of EPA’s Fracturing Study

by Abrahm Lustgarten, ProPublica – April 7, 2010 7:09 am EDT

A federal study of hydraulic fracturing [1] set to begin this spring is expected to provide the most expansive look yet at how the natural gas drilling process can affect drinking water supplies, according to interviews with EPA officials and a set of documents outlining [2] the scope of the project. The research will take a substantial step beyond previous studies and focus on how a broad range of ancillary activity – not just the act of injecting fluids under pressure – may affect drinking water quality.

The oil and gas industry strongly opposes this new approach. The agency’s intended research “goes well beyond relationships between hydraulic fracturing and drinking water,” said Lee Fuller, vice president of government affairs for the Independent Petroleum Association of America in comments [3] (PDF) he submitted to the Environmental Protection Agency.

Read the rest here:

http://www.propublica.org/feature/broad-scope-of-epas-fracturing-study-raises-ire-of-gas-industry

What We Dont Know

http://www.propublica.org/feature/natural-gas-drilling-what-we-dont-know-1231

End of the year story from propublica.

Under-used Drilling Methods are Possible-Greener Fracking?

http://www.propublica.org/feature/underused-drilling-practices-could-avoid-pollution-1214

A good read from Propublica. The discussion of safer and “greener” drilling chemicals is on the rise and so is research that shows these other methods do work. And of course some parts of the industry will fight this tooth and nail while others have embraced it and some are already putting it into action. There is an intersting quote at the end of this long article.

“No matter what we do we are capitalists here in the U.S.,” said Richard Haut, the Houston Advanced Research Center project director. “We do have to look for a balance between environmental issues and development.”

of course capitalism is playing it’s role…and we are playing ours as stewards of our resources, water and homes.

Radioactive waste water? uh oh!

http://apps.grouptivity.com/socialmail/main.do?uId=208252&tId=351621&pk=82379009649&acn=zj!d9&pId=HeOHCWXaPRs=&acn=zj!d9

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