Tuesday, October 7, 2008
Clean Energy Alternatives
Sunday, October 5, 2008
Norwich Evening Sun Article
By Melissa deCordova
Sun Staff Writer
NORWICH - It's taking more time than expected for landowner groups to reach leasing agreements with natural gas companies due, in part, to new environmental reviews required for horizontal well permits and water withdrawal limits set by the Susquehanna River Basin Commission.
In July, the New York State Department of Environmental Conservation made environmental quality reviews a part of the application process for new well permits. The SRBC, just a few weeks ago, anounced a policy change that requires prior approval for natural gas companies to withdraw water for drilling purposes.
The Oxford Land Group, which represents 350 private landowners who own 24,000 acres, had expected to receive lease bids back in August and enter into an agreement this fall. Group consultant Jackie Root said tighter scrutiny of the industry had slowed leasing activity across the state.
"Deals are taking more time," she said.
Group President Bryant LaTrouette said companies that were interested in bidding need more time. "Their main concern is New York State restrictions that have been put upon them. They are restricting offers," he said.
A Vestal landowner group representing 6,000 acres recently met with similar delay, LaTourette said.
Natural gas industry specialist and attorney Christopher Denton said the leasing process has not slowed down as much as it has "changed gears." Development in the Trenton Black River formation in Steuben and Chemung counties hasn't slowed, for example.
"The permits may be less, but you don't see the companies stopping," he said.
Denton also referred to last week's record deal in Pennsylvania where five companies, including giant Exxon Mobil Corp., bid between $1,151 and $5,837 per acre on 74,000 acres of state land.
Natural gas companies have also changed their focus from leasing land for drilling to leasing land for pipeline easements, he said.
"Like any process, certain parts slow up and then other things speed up. As the play's economical, political and regulatory environment changes, you will see suttle changes from month to month."
Central New York Landowners Coalition President Richard Lasky said he expected natural gas companies to begin buying and leasing land in full swing at the beginning of next year.
"It's a tactic. They (gas companies) will come back. There's 150 trillion dollars worth of gas down there. They have an enormous amount of land. They're not going to walk away," he said.
In related news, the Coalition has retained the law firm of Levine Gouldin and Thompson, LLP, of Binghamton in conjunction with Peter Hosey of Jackson Walker, LLP, of Texas to negotiate their lease. Coalition members and landowners are invited to meet the new legal team for a question and answer session from 1 to 4 p.m. on Sept. 27 at the Unadilla Valley Central School.
Until recently, Denton had provided gratis legal consultation and was a guest lecturer for the Norwich-based Coalition. Because the Coalition, formed in May, has grown from 1,200 to 50,000 acres, Lasky and members of the steering committee said they needed "to transition to a law firm that was equipped to handle the growing organizational needs of all our members in a timely fashion." Denton said he would continue to be a guest speaker at educational forums for the group.
"We have great respect and appreciation for Attorney Denton and his quality staff and are grateful for all the time he devoted to addressing meetings in our area and informing landowners about the perils of the gas leasing process," a statement from the Coalition's newsletter reads.
Denton, whose firm litigates compulsory integration leases for clients, said more landowners are educated about lease offers and have formed groups to stipulate more advantageous terms. His lectures, which attract groups across the state numbering up to 1,000 at a time, have begun to focus on seismic testing permits and easement leases because companies have begun approaching more property owners to do both.
"If they are granted without real consideration and a hard look, they can damage a person's ability to lease their land for drilling. It is less financially beneficial to another company who might want to lease land for drilling because they would then have to buy their competitor's easements. And that can be very expensive. It reduces the competetive edge and marketability of the landowners land," he said.
Melissa deCordova
Staff Writer
The Evening Sun
(607) 334-3276
www.evesun.com