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:

Gas industry no longer must comply with stricter air quality guidelines!

Deadline for policy reversal looms
TAKE ACTION TODAY

The facts: In December, 2010, a policy document was put in place by DEP, advising air quality professionals responsible for permitting of gas industry compressors and other sites to consider the aggregation (total toxic accumulation) of air emission sources, as opposed to just permitting each site based on the emissions of that single-point source of pollutants.

On February 26, 2011 – this policy was rescinded by the Corbett administration. The new policy advises air quality permitting staff to look ONLY at individual pollution-emitting sites rather than the cumulative impacts the gas industry will have on PA’s air quality.

The problem: Due to the topography of our region, we already have poor air quality. With the increasing presence of the gas industry, a change for the worse is certainly headed our way. A variety of emissions are emitted at compressor sites: NOx, CO2, VOC, Formaldehyde, PM10, Ethane, Methane, Propane, I-butane, n-butane, Non Methane Hydrocarbons, Heavy Non Methane and Non Ethane Hydrocarbons, etc.

Compressors will grow in number and size as the gas fields grow. They will emit a mix that can create ground level ozone that will regularly be held in place by the air inversion factor we see in our valleys and hollows, including the Susquehanna River Valley, where many of you live.

What might this mean to your family, especially children, the elderly and those with respiratory challenges?

The solution: DEP must be made to rescind the recent order and reinstate tighter controls. Your participation in this public comment process is critical. Please take action today. Below is a template with the address and necessary subject line information. Please write to the Environmental Engineer Manager, Mr. Trivedi at: vtrivedi@state.pa.us 

The final deadline day is May 26, 2011. He prefers emails but you can send real mail to him at:

Virendra Trivedi, Environmental Engineer Manager
New Source Review Section
Division of Permits
Bureau of Air Quality
12th Floor
Rachel Carson State Office Building
PO Box 8468
Harrisburg PA 17105-8468

SPORTSMEN MARCELLUS SHALE SUMMIT

Saturday, June 4th
University of Pittsburgh – Johnstown Campus

In the heart of the Marcellus Shale region, sportsmen and women, and conservation groups are working together to identify and propose solutions to mitigate the impacts from gas drilling and hydraulic fracturing on hunting, fishing and trapping experiences.

Learn more about the Sportsmen Alliance for Marcellus Conservation efforts and listen to experts in the field, along with sportsmen and women with first-hand experience, discuss the following topics:

  •    Potential impacts of Marcellus Shale gas development on wildlife, coldwater    fisheries, and habitat and forest ecosystems;
  •    Impacts of Marcellus Shale gas development on the outdoors experience;
  •    Lessons from oil & gas development in the West;
  •    What you can do as an individual outdoorsmen; and
  •    How sportsmen and women interests can be protected through policies and best
    management practices that protect fish, wildlife and the outdoors experience.

How to Register:
Registration opens at 8:00 a.m. and opening remarks will be offered at 8:45 a.m. The conference will conclude by 4:30 p.m. Attendance at the Summit is free. However, space is limited and registration is required. Registration closes on May 31st. Save your space now, by registering herehttp://www.tu.org/conservation/eastern-conservation/marcellus-shale-project/summit 

Attendance is free, space is limited, registration is required, and registration closes on May 31, 2011

 Directions to the Summithttp://www.sportsmenalliance.org/directions.htm

Food and Lodginghttp://www.sportsmenalliance.org/FnL.htm

To read about this event online, click here:

http://www.sportsmenalliance.org/conference.htm

To read about Sportsmen Alliance for Marcellus Shale Conservation is, click here:
One thing the organization says about its focus is this:
“Even with the best environmental standards in place,
the immense number of wells projected to be drilled in the Marcellus Shale is likely
to have a cumulative impact on the region’s wildlife and coldwater fisheries, that will
in turn affect hunters and anglers and the recreational economies built upon these
sporting traditions. For these reasons, sportsmen and women from across the
Marcellus Shale region are coming together to identify and propose solutions to
mitigate the impacts from gas drilling and hydraulic fracturing on hunting, fishing
and trapping experiences.” (see: http://www.sportsmenalliance.org/index.html)


Water Well Owner Network Training in Wellsboro, PA

I’d like to pass this info along from the RDA —-

This just in from the Master Well Owners Network. This is a group within Penn State which trains people who have private wells. My husband and several of our friends have received this training, which we all found quite valuable. You learn about the legal and regulatory oversight  aspects of private well ownership in Pennsylvania and how they differ from public well systems. You also learn about how to manage your private well for optimum performance and to insure water you drink from it is free of the commonly known contaminants found in rural well systems. You come away from the training with new knowledge, valuable contacts and a notebook full of useful information for future reference.

As the message below indicates, the focus is not on gas drilling. However, there will be information about gas drilling impact on private wells at this session. 

The Master Well Owner training will be May 14th 9 AM – 4 PM. It will be held at the Tokishi Training Center in Wellsboro, PA. It’s free and lunch is provided. For details contact Stephanie Clemens at the phone number or email address below. Directions to the Tokishi Training Center can be found by clicking here:

Susquehanna River Sentinel

I just wanted to pass along this link to another blogger’s site who is offering some great information. His recent post addresses water withdrawls and there is a note about Pine Creek (the one that runs through Tioga County, PA) and the water that is being taken from that source.

http://srs444.blogspot.com/2011/04/hydrofracturing-minus-water-moratorium.html