State Resource Law Allows Companies To Claim Natural Gas
Published: Wednesday, September 12, 2012
Updated: Wednesday, September 12, 2012 15:09
A controversial piece of New York state law, compulsory integration, has deepened the controversy over natural gas drilling in Madison County and across the state. Under compulsory integration, a landowner who has not leased their land can still have gas extracted from under their property if they are included in the gas well’s spacing unit and at least 60 percent of the gas field is located under neighboring land that has been leased to the gas company.
While the gas company pays a royalty to any properties within the well’s spacing unit, the company is allowed to extract resources even if the property owner does not voluntarily agree. Compulsory integration, which was signed into law in 2005 as Title 7 of the Oil, Gas and Solution Mining Law, is especially significant in Madison County, an area with abundant natural gas resources.
Compulsory integration is a controversial topic in regards to basic property and resource rights as well as liability. With the law in place, landowners are put at risk for possible environmental degradation or water contamination, even if they do not sign a lease. While there is currently no full-scale horizontal hydrofracking within New York, compulsory integration also applies to traditional vertical drilling.
“This process will pit neighbor against neighbor in a very troubling manner, unless the current law is changed so that those who wish to pursue gas extraction on their property cannot negatively impact their neighbor’s health, air, water, soil, quality of life, safety or health,” Supervisor of Lebanon Township Jim Goldstein said.
Professor of Anthropology and Peace & Conflict Studies Nancy Ries found herself personally involved in the issue when her neighbor signed a lease and her former property was compulsorily integrated without her consent.
“I bought the space because it had a buffer zone. I could control my view, the noise levels, and my own privacy – until suddenly there was a gas well being drilled on the land right next to my property.”
Ries said that the majority of New York residents she has talked to are more concerned about the threats of water contamination and environmental damages than their mineral rights. Because the majority of Madison County residents source their water from individual wells and have no other way of acquiring water, a property can lose significant value and habitability if the water table is contaminated. According to Reis, this is especially important for this region, where many residents don’t have mobility for certain cultural or financial reasons.
“We have to ask – with these high levels of production and profits, are the companies being forced to apply the most advanced safety regulations available to prevent water contamination and other damages? The answer is clearly no. These companies don’t want to be regulated and they don’t want to be controlled,” Ries said.
While property owners are given options to cooperate through different levels of involvement – and corresponding levels of liability and compensation – the legal contracts are complex and confusing. Ries said that many residents don’t have easy access to the resources needed to research compulsory integration and, as a result, fail to understand their rights and options.
“The whole structure takes advantage of peoples’ lack of knowledge about the law and their inability to obtain good information,” Ries said.
In a survey of residents within Madison County that was released by the Colgate Upstate Institute, 60 percent of residents felt that they were not very or not at all informed about compulsory integration. When looking at respondents who said they were ‘neutral’ about gas development – the residents who are not involved in natural gas debates statewide – the percentage that felt similarly uninformed rose to 90 percent.
Member of the Concerned Residents of Madison County Cheryl Cary said that while many landowners are against the law, their petitions have yet to make a large impact on the local government. Many believe this is in part because of the political power of the gas companies.
“When I got involved in this issue I realized that these are very hasty, very powerful companies that are working at a large, non-regional scale,” Reis said. “They are going after gas resources very aggressively with the approval of the state, who needs the tax revenue stream.”