State Resource Law Allows Companies To Claim Natural Gas

A controversial piece of New York state law, compulsory inte-gration, has deepened the contro-versy over natural gas drilling in Madison County and across the state. Under compulsory integra-tion, a landowner who has not leased their land can still have gas extracted from under their prop-erty 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 compa-ny 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 con-troversial 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 hydrofrack-ing 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 prop-erty cannot negatively impact their neighbor’s health, air, water, soil, quality of life, safety or health,” Su-pervisor of Lebanon Township Jim Goldstein said.

Professor of Anthropology and Peace & Conflict Studies Nancy Ries found herself person-ally 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 talk-ed to are more concerned about the threats of water contamina-tion and environmental damag-es than their mineral rights. Be-cause the majority of Madison County residents source their water from individual wells and have no other way of acquiring water, a property can lose sig-nificant value and habitability if the water table is contaminated. According to Reis, this is espe-cially 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 prof-its, 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 giv-en options to cooperate through different levels of involvement – and corresponding levels of li-ability 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 ad-vantage of peoples’ lack of knowl-edge about the law and their inabil-ity 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 in-formed about compulsory integra-tion. 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 Res-idents of Madison County Cheryl Cary said that while many land-owners are against the law, their petitions have yet to make a large impact on the local government. Many believe this is in part be-cause 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.”

Goldstein also believes that the law is in place largely because New York is desperate for tax revenue during the economic downturn.

“The entire process is a classic example of the state abusing its authority by aligning itself with one industry, the natural gas and oil industry, for favored status. No other industry or business in New York enjoys this kind of economic and political advantage with landowners,” Goldstein said.

At this moment, natural gas drilling in New York has become a less urgent issue as gas companies are pursuing fewer leases. This is a result of a glut of natural gas in the market, which has caused prices to temporarily fall.