Drillng Information

• Town Hall Meeting - Agenda and a list of Questions and Answers from the meeting.
  
  

Websites / Articles on Natural Gas Drilling

• US Geologic Survey
• PennFuture
• League of Women Voters (Tarrant County, Texas, where drilling has already occurred)
• The Fort Worth League of Neighborhoods (another area where drilling has occurred) – lots of great basic info
• Yahoo article that questions whether gas drilling is responsible for sudden earthquakes in a Texas town
• PG article describing that drilling caused an environmental issue, killing fish and other animals when a pipeline was leaking
• PA Township News article explains why and how the law in PA does not protect us
• PA DEP Fact Sheet: Oil and Gas Well Drilling and Production in Pennsylvania - Click HERE for a great commentary on the Fact Sheet.
• Gas Rights/Forced Lease FAQ - Answers to questions frequently asked by landowners about oil, gas leases and drilling.
• Churchill Borough Drilling ordinance
• Penn Future - Action Alerts - Citizens for Pennsylvania's Future: Working to Protect Pennsylvania's Environment and Economy
• Scientific American - EPA: Chemicals Found in Wyoming Drinking Water Might Be From Natural Gas Drilling
• Penn Future Facts - Snake oil sales reps

Discussions/Research

• One of our BCA Board Members has a client that does mineral drilling.  Following is the research he extracted from his contact.

Chesapeake = BIG company.  He knew them right off; I don’t know whether that’s good or bad for us dealing with them.

He said that he speculates that what they want to dig is a Marcellus well – which is a deep well, where they can drill straight down, or horizontally out.

He also said that the company would probably try to create a unit, or unitize the impacted properties.  Then each landowner who participates in that unit would receive a percentage of the proceeds from the well based on their participation in the unit.

He warned us to be careful to limit any surface rights, because the leases they want people to sign may include them, and would allow them to run pipelines on people’s property, etc.

Also, the drilling/blasting shouldn't have an impact on undermined areas - the gas well will be MUCH deeper, and any blasting occurs at the level of the gas shale, which will be 6000 or 7000 feet down, as opposed to maybe a few hundred + for existing mines.

And the potential for toxins being released is minute - wells and water ponds should be lined, so nothing should escape, and all waste materials have to be collected and hauled away.   He did say that we should ask about pond linings for the water they’re using for drilling, though, to make sure that everything is lined and nothing can leech out.

 

• Research done by a Blackridge resident:

  On the environmental impact
  The wells, which head 7,000+ feet into the ground, are all going to have to be cased wells. This protects the local water tables from any sort of leeching contamination. In general, there are few contaminates that come from the fractional mining anyway. However, the waste water can contain a radioactive isotope called (I think) Thorium.

  The Marcellus shale is horizontally stratified, so even after the fracturing, the shale should settle down into the same layers and should not cause subsidence.

  Now, all that being said, my concerns are that the blasting and digging may cause old coal mines to collapse, which would definitely cause subsidence, and it could also cause foundation damage.

  On the contracts offered
  The contracts being offered by Chesapeake are the lowest that they are allowed to offer by law. While there is not legal regulation of the lease per mineral acre, I read that the current going average is $750 for speculation, $2500+ for a producing shale play. In Ft. Worth Texas, gas rights were going for as high as $25K / mineral acre.

  In PA the minimum royalty rate is 12.5%, which is what was offered. They also are offering contracts with a 5 year guarantee, and then an option for them to pick up another 5 at the originally agreed upon rates if they think they can make money on the leases.

  If you look around at other places where shale has gone hot, what I have found is that the communities that make the most money bargain as a collective. It's better for the people who come on board, and it's even better for the gas companies because they work against one contract instead of scattered contracts with differing terms.

  The way that this works is community finds a mineral and oil rights attorney to negotiate for them. This person then takes a percentage of the lease monies, and may get residuals from the royalty payments.

  They generally negotiate into any contract

  - a fixed 5 year term (no additional 5 year option)
  - a royalty rate that sits around 20%-25%
  - a "favored nations" clause which resets the contract terms higher if a better contract is given in the area
  - no surface rights (which Chesapeake offers, but you can't drill w/in 200' of a building anyway)
  - any other terms deemed necessary by the community, such as free natural gas or gas at a reduced rate

  What could happen if a large bargaining group does not come together is the gas company will "force pool" residents. This means that the government looks at all the contracts in the area and basically forces you into a pool of land with your neighbors. It's like eminent domain, but under ground. Under this structure you lose your bargaining rights, and depending on which wheels the gas company greases, you lose, big time.

  The simple fact is that gas isn't going to get cheaper. Chesapeake is trying to get the area tied up, and may not even drill in the initial 5 years. However, sometime between now and 10 years from now they will be doing the drilling because even if the residents of Blackridge get a fair and equitable deal it will still make sense for them to drill. The entity, which has the most to gain from this I’m hoping, is the BCA. We could probably put "new roof and furnaces for the BCA, and free pool chemicals for the length of the contract" into the contract and they would pay for it. However, that's for the lawyers to work out.