Current Cautions and Advice from Oxford Visionaries and Chip Northrup:
Courtesy of Chip Northrup: The Norse Auction:
Norse Energy, the Rent-a-Plaintiff vs Town of Dryden is in liquidation. Boo hoo. These frackers are the kind of frackers that give frackers a bad name. Here’s a litany of the stunts they pulled in one New York town – that almost got royally fracked by Norse:
That letter about what the fracking industry did to the Town of Lebanon is worth taking a moment to read it now.
Act fast or your lease may be foreclosed on by a Chinaman and you will have to deal with a lawyer in Shanghai to get rid of it.
Contact Joe Heath at Fleased.org to get rid of your bum Norse lease!
OV NOTE: invitation is only for Norse lease holders with expired leases who wisely did not cash a Norse check after the date of expiration. Otherwise they are out of luck
this post has gone viral – in Norway – where some disgruntled investors have figured out that Norse has been lying to them:
NEW EVIDENCE THAT FRACKING HARMS THE DAIRY INDUSTRY
“ An oral agreement isn’t worth the paper it’s written on.”
— Samuel Goldwyn
TO: Oxford Landowners who have signed or are considering signing gas leases:
- Know the zoning, road use and related laws and regulations!
- Learn the differences between Agreements and Laws.
- Never assume that agreements or local zoning regulations are legal and enforceable.
- Examine your lease!
- Consult a landowners’ association (see list of resources below).
- Investigate experiences that other landowners have had with gas leases
- Form a local landowners group, committee or association
- Communicate with landowners within and outside your local area.
Laws and Regulations
Gas drilling leases may be misleading. A New York Times review of 111,000 documents showed that most homeowners aren’t aware what rights the industry takes.
■A majority of leases do not require companies to compensate landowners for water contamination or damages to the land.
■Even if state regulations force industry to replace contaminated drinking water, not all costs are covered nor are needs of crops or livestock included.
■Many consumer protection laws do not apply.
■Some leases deduct costs such as hauling to or from the site.
■Energy companies can use the property to build roads, store chemicals, cut down trees, run equipment 24 hours a day, and build containment ponds (in some instances covering them with dirt rather than hauling away the waste).
■Few landowners are fully aware that their property becomes, in essence, an industrial site.
■Some homeowners’ insurance policies will not cover problems related to fracking.
■They also may not be aware of a potential loss in property value.
Questions from Craig Stevens, Pennsylvania landowner and gas lease holder:
IMPORTANT QUESTIONS FOR LANDOWNERS TO ASK THE GAS INDUSTRY
Where is the meter? How do I know how much money you owe me each month?
Why can’t we wait awhile until the price goes up again for My Natural Gas?
Why do you only pay the landowner 12.5-20% royalty on their own minerals?
Will you guarantee me that my gas will stay here in the USA and put it in writing?
Why are so many foreign countries buying our leases? ( China, Russia, Norway, Japan )
What do I do if my neighbors water goes bad and they want to sue the both of us?
Are you going to liquefy the gas and share the profits with landowners when sold?
Are you planning to use Imminent Domain to take my property to install pipelines?
Can you guarantee in writing my water will not go bad and will you fix it if it does?
Will it include having to sign a non-disclosure agreement? Will you fix it if I don’t sign?
If you sell my lease to another company, will they be responsible to honor the contract?
Have you ever paid a landowner to sign a Non Disclosure Agreement to stay quiet?
Are you going to use Force Majeure and/or Options Clauses to extend my lease?
Will you be drilling vertical wells that are Non-Producing just to hold my lease?
Will you order your contractors to share the roads safely with our community?
Will you assure us that all contracted drivers and vehicles are legal and safe?
Will you promise in writing not to punish workers who report problems that occur?
Will you believe your landowner partners when we call with problems and Fix them?
Will you demand the seismic companies get All landowners permission before starting?
Will you inform all my neighbors in the path of drilling to allow them to pre drill test?
Will you as a good neighbor provide potable water to anyone damaged post drilling?
Will you stop all drilling activity in my area if multiple people’s water is disturbed?
Craig L. Stevens, Marcellus Patriots For Land Rights, 6th Generation Landowner
Silver Lake Township, Pa., 570-967-2280, email@example.com
ASK YOUR LAWYER
ASK THE LANDMAN
The answers to many of these questions should be written into your lease. Sam Goldwyn was right: Verbal assurances aren’t worth the paper they’re (not) written on!\
They offer no legal protection for you! Have the Landman number and initial every page. Make photocopies of the lease. If the lease returned to you has any missing pages, cancel it immediately via certified mail, and notify the NYS Attorney General’s Office.
LEGAL —WHAT ARE THE LEGAL RAMIFICATIONS OF SIGNING A LEASE?
• If I lease my “minerals”, what does that include? Would I be leasing more than just natural gas?
- Can I lease only my natural gas? Only in certain formations, say excluding Marcellus?
• Once I sign a lease, when do the terms of my lease expire? Isn’t a 5-year lease that can be automatically extended by the gas company, really a ten-year lease?
• If the gas company chooses not to produce the gas in this well for market reasons, or any other, will that automatically extend the term of the lease?
• Does the lease specify which layer or formation, or does it give access to all underground layers?
• Can the gas company drill wells into each and all of the geologic formations beneath my property?
• Don’t the terms of the lease mean that the lease can be held in perpetuity, so long as any company leasing any one of the layers is searching for or producing gas, or storing it on my property?
• Can the gas company drill a second well on my property before the original one plays out, and thereby extend the lease indefinitely?
• If the company is out of compliance with the terms of the lease, how will I enforce it? Has the company put money in escrow? Will they pay for my legal expenses or will I pay for theirs?
• If a spill occurs, and the company is sued but evades liability, will I become liable? Do I have an adequate insurance policy in place?
• Signing a lease now may mean the lease will be active for generations. How do my children feel about my leasing the land?
• Do I have a plan for how I will monitor the company and how I will enforce the lease?
- If I don’t have the time and expertise, will I have to hire a consultant?
- If the gas company goes bankrupt, will its insurance clean up open pits, partially drilled wells, land in development or partial reclamation?
- Has my local governments been bonded against that eventuality?
• If the production of this well ceases for a period of time, will the well be capped and the pad site restored? What period of non-production will trigger capping and restoration?
• As the mineral owner, am I protected from legal action in case of an accident?
• Is there a “hold harmless” clause in my contract? If so, how do I enforce it? If not, how should it be worded?
• Would I be responsible for the loss of my neighbors’ water wells? Do my neighbors have the right to sue me, the landowner, for the loss of their water?
• Will my leasing affect my neighbors who choose not to lease? Can you give me a copy of the DEC Program Policy DMN-1: Public Hearing Processes for Oil and Gas Well Spacing and Compulsory Integration?
• Doesn’t ECL § 23-1303 (Authority to acquire property) mean that if gas is stored on my property, that the company can use Eminent Domain to put a pipeline through my land?
TAXES —WHAT ARE MY TAX OBLIGATIONS IF I LEASE MY MINERALS?
• Is it true that any signing bonus and royalty checks would subject to regular federal income and state income taxes, and not the lower capital gains tax?
• If I become a non-participating operator, will I also have to pay both the employer’s and employee’s share of the Self-Employment Tax (15.3%) on any bonuses and royalties?
• Would I be taxed annually on the potential value of my minerals, through property and school taxes?
• Would I be obligated to pay this tax even if the gas company decides to curtail production from a well on my property?
• If my Town taxes gas infrastructure/equipment on my property the same as any other “improvement”, will the gas company reimburse me for those higher assessments?
FINANCIAL —WHAT ABOUT MY HOME VALUE, INSURANCE COSTS AND OTHER COSTS?
• In two Pennsyvania counties (Franklin and Clinton), mechanics liens totaling more than $10 million have recently been filed against property owners who hosted industrial wind turbines when the operator, Noble Environmental Power, defaulted on payments. How will my gas lease protect me from such an outcome?
• I may be responsible for fees associated with my mortgage in the event I sign a lease. Is the gas company willing to negotiate subrogation fees with my mortgage company?
• Would I be responsible for paying additionally for a title search?
• Would the gas well’s production costs (legal, transportation, advertising, insurance and other business-related costs) be taken from the top before I receive my royalty payment? How about payments to shareholders, and corporate bonuses?
• Are there studies that report the impact on the market value of my home if I am party to a gas lease? Or if there is a wellpad near my house on a neighbor’s leased property?
• I expect a rise in homeowner’s insurance if my home is near a gas pad site. Is the gas company willing to defray that increased cost?
SITE — HOW WILL THE PAD SITE AFFECT MY HOME AND MY NEIGHBORHOOD?
• Where will the pad site be?
• How big will the pad site be?
• Is there potential for additional pad sites on my property?
• Will the company agree to limit the # of pads on my property to the spacings allowed by law at the time the lease is signed?
• Have I seen drilling operations similar to the largest ones allowed by my lease, or only those shown by the gas company?
• Will the gas company grant more than the 100′ set-back from homes required by current law?
• Besides the “Christmas tree,” what other equipment will be permanently installed on the pad site?
• Will there be a compression station associated with this pad site? Will there be a compressor station within one mile of my home?
• Is there an existing pipeline associated with this pad site? Will the Right-of-Way be over 66’
wide? Can I put limits on the pipeline company’s access to my surface property?
• Is the anticipated life term for pad sites in the Marcellus shale really 30-50 years?
• When will the pad site be restored to its original condition?
• Fresh (potable) water be trucked in and wastewater trucked out from this pad site. How many
trucks will access the pad site during the drilling and the fracking each day, and for how many days?
ENVIRONMENT — HOW DOES GAS DRILLING AFFECT MY ENVIRONMENT?
• Does the lease offered include water-supply pre-testing done by an agreed-upon third party,
and paid for by the driller? Will they be required to pay for a retest by the same company if I think my water is polluted?
• Where can I find a reliable report that illustrates how much water is used during drilling and fracking?
• Where can I find a third-party report that estimates the number of times, and how often, the gas wells on my property will require fracturing?
• Does drilling production stop during drought conditions?
• Is the gas company willing to exempt water withdrawals on my property from the lease?
• Do energy companies pay for water usage?
• How is water usage metered when it is taken directly from rivers, ponds, and wetlands?
• Are drill sites exempt from the storm water run-off ordinance in my town?
• How are watercourses protected from storm water runoff on sites with reserve pits?
• Will the company agree to more than the 50-foot setback from watercourses required by current regulations?
• Is wastewater regulated as a toxic by-product?
• Can I get a lease to require that drilling muds and “produced” fluids coming up from the boreholes be removed from my property?
• Will the lease guarantee that deep well injection of wastewater will not be carried out on my property?
• Where can I find a government report that shows the effects of gas drilling on quality of air?
• Does my town have air quality standards for ozone that gasdrillers are required to meet?
• Who monitors drill sites for air pollution violations?
• What is flaring and how does it affect air quality in my neighborhood?
• Has there been a study to gauge how the impact of increased truck traffic will affect my air quality?
• Is there a county infrastructure impact study for the gas drilling planned by the company?
• How will the county and town measure the impacts on infrastructure?
• Who bears the financial burden of road repair? Wastewater treatment plant expansions and maintenance? Increased use of emergency services?
SOIL / FARMLAND
• How is soil surrounding the drill pad site protected from contaminants used during drilling? From herbicides used to keep pads weedfree?
• Who monitors reserve pits at a drill pad site? How?
• How is the soil protected from reserve pit run-off, leaks or spills?
• How are reserve pits cleaned up?
• Are companies required to submit a soil remediation plan for a drill site in the event of soil contamination?
• How is contaminated soil disposed of?
• Will there be a reserve pit associated with this pad site?
• How many gas wells are planned for this pad?
SAFETY — HOW IS MY NEIGHBORHOOD PROTECTED?
• Have you talked to your neighbors? How do they feel about gas development in your community? On your property? On theirs?
• How has the [village, town, city, county] prepared for a drilling accident?
• Is there an evacuation plan available for the neighborhood in case of accident?
• Have my fire and police departments trained specifically for disasters related to gas drilling and transporting gas via pipelines and compressor stations, possibly in an urban environment?
• What is a typical blast radius for a gas well explosion?
• What training, protocols and resources are in place to protect medical first responders, as well
as secondary responders such as ER staffs, from the drilling/fracking chemicals that the gas
company will not reveal?
• Does my town have a fully-functioning, quickly-responsive ambulance service?
• Who is responsible for damage to my property in case of an accident involving gas wells?
• How do neighbors contact the company with complaints of excessive noise, obtrusive lights and dangerous truck activity?
• What are my legal rights to preserve a reasonable quality of life during the life of the well?
SOLIDARITY — CONTACT YOUR LOCAL CITIZENS GROUP FOR MORE INFORMATION — OR FORM ONE WITH FELLOW LANDOWNERS!
RESOURCES FOR LANDOWNERS
http://www.un-naturalgas.org/ CDOG —Chenango / Delaware / Otsego Counties
http://www.binghamtonsustainability.org/ Broome County
http://www.catskillcitizens.org/ Sullivan County
http://www.chenangogreens.org/ Chenango County
http://www.damascuscitizens.org/ Delaware Basin NY / PA
http://www.catskillmountainkeeper.org/ Catskill Mountains
http://www.shaleshock.org/ Shaleshock— Tompkins / Tioga Counties
http://www.schoharievalleywatch.org/ Schoharie County
http://steubengreens.org/index.html Steuben County
Pennsylvania Lease Holders warn NY:
Fracking costs are too high
By Jessica String
February 04, 2013
Several farmers and landowners from Pennsylvania traveled across the border to talk about the cattle deaths, water contamination, family illnesses and loss of property value due to pollutants of hydrofracking fluid in their state.
Those individuals from Pennsylvania communities where property was leased to gas companies for hydrofracking brought with them pictures depicting dead cattle and a milk carton of brown contaminated water from their well, all of which they say are a direct result of hydrofracking near their homes.
Linda Hadley, whose landlord leased the property she was living on to two gas drilling companies that used hydrofracking as an extraction method, said the industry has poisoned the air, water and soil on her farm. But Hadley said it was the treatment by the companies and their representatives that brought so much frustration.
“We have been lied to, stolen from and verbally abused,” said Hadley.
“Being told that ‘we should not have built our house here,’… we have been told by a land man that ‘we are a pain in his ass,’ all the while they are affecting the health and welfare of my family, my children, my animals and our community.”
Ray Kimble used to work for the gas industry as a wastewater and water delivery truck driver and said he was ordered to illegally dispose of fracking wastewater. He was asked to use the same freshwater truck he used to deliver water to people’s homes to transport wastewater from fracking fluids. [Ed note: See also Breaking News short video of former PA gas worker turned whistleblower, who confirms this problem).
So Much for Government Enforcement!
“I’ve worked for every gas company there was… the practice is the same; it doesn’t matter what name is on the company,” Kimble said. “I kept a truck at my place for three days trying to get EPA to come test and prove there was [waste water] … They refused to come check the truck, they didn’t care.”
Reports of infighting and foul play also mar communities being fracked. Some say they have had their tires slashed after talking to the regional manager of a gas company; others said they received harassing phones calls and reported stalking. Community members are turning against each other for speaking out about their concerns, some said.
“As far as the money these people are getting from the gas; when the water is gone, when the food is gone, you can’t eat that money,” said Manning.
IF YOU THINK GAS WELLS WILL “SAVE YOUR FARM,” WATCH THIS VIDEO:_________________________
FOLLOWING IS AN INTERVIEW WITH CAROL FRENCH, A FARMER IN PENNSYLVANIA, TOGETHER WITH COMMENTS ON HER MOST RECENT EXPERIENCES.
If I hear one more New York farmer or any Farmer tell me that they want Natural Gas drilling in their state or they signed a gas lease to “SAVE their FAMILY FARM” I will probably lose it! Today I thought it’s going to be a good day. We didn’t lose power (snowstorm). We made our way to the barn to only find that another cow aborts her calf. She was eight months into he…r pregnancy. Before I was done milking my cows, cow number three starts to abort her calf. She too is eight months into her pregnancy. In nine days we have had three cows lose their calves. For people not familiar with farming I will explain the dilemma. A cow should be “dry” for 2 months before giving birth. A cow that aborts during this time of her pregnancy doesn’t “come into” her milk real well. This Farmer counts on the replacement calves to continue farming the same number of cows. I have heard from other farmers with “changed” water having similar problems. If this is true, the money from the lease, royalties, and signing other agreements will NOT offset the cost of 1. Losing your health. 2. Losing your family business, 3. Losing the value of your property. With this stripped from you, what will you have? A farmer claiming that this natural gas extraction is going to save the farm is sadly mistaken. Should that farmer count on this money and lose everything that I had mentioned ……………. He defiantly will lose his farm to the gas industry without a dime in his pocket! …………. Just a farmer sounding off, before I lose it!! Hoping tomorrow will be a better day!
Following is a letter posted in the Norwich Evening Sun, written by Ellen Anderson, a medical secretary who lives in Oxford Village and attended a presentation by FLEASED, an organization that helps lease holders escape their gas lease contracts:
Have You Been Leased or Fleased?
On March 14th I attended the Fleased Forum in Norwich. Everyone who has a gas lease should have been there to become better informed, whether or not you want to get out of your lease. What an eye opening experience for the many dozens of Chenango County landowners who attended! The two speakers were Ellen Harrison, a retired Cornell Geology professor, and Joseph Heath, an attorney from Syracuse. Heath is one of the best informed legal experts on gas leases in the state.
We were reminded of the old saying “be careful what you wish for”. That should be a warning for landowners who signed gas leases, especially those who were blinded by the signing bonus, “free” money that ranged from $20 to more than $8,000 per acre, and the promise of lottery-winner royalties for years to come. Too often landowners have minimal understanding of the legal intricacies of the contractual agreement, which is full of fine print and invariably favors the gas corporation. The seasoned corporate attorneys write leases with so many technical provisions that landowners often cannot even cancel them after they expire.
To their dismay, property owners discover that they have to file a cancellation notice with the county clerk and must notify not only the leasing gas company but all “assignments” – that is, all the other companies that have bought up all or parts of their lease. The gas industry is not required to notify a lease holder when it makes such assignments. The burden of research falls upon the landowners to find out ALL of the lease owners, and they often learn that there are multiple and sometimes elusive “assigned” owners.
Meanwhile, the design of the leases makes it easy for the gas company to renew the lease. It has only to send another payment as originally agreed in the contract. To force all landowners on a spacing unit to renew their leases, the company needs only to claim that they have started a work project. “Starting a work project” can consist of an act as simple as parking a bulldozer on a cleared area anywhere on the 640 acre spacing unit. One spacing unit can consist of many properties. That means all of those people who have been compulsorily integrated are forced into renewed leases as well. Oh, and when the well has gone dry, the industry can store tons of pressurized gas in it without the various landowners’ consent or knowledge. That has been written into leases as well.
What about those royalties that were going to transform property owners from struggling tax payers into millionaires? Many land owners may learn that their best chance for seeing that financial windfall is never. There are no profits until ALL of the costs of drilling the well and processing the product have been met. Who decides that? The gas company. So it can easily make a case for showing no profit.
Especially right now. In the present market there is already no profit in the sale of gas. In fact, it costs more to produce than the companies make from selling it. Since they have to keep drilling to fulfill the conditions of the leases and maintain them, there is a huge glut of gas on the market so profits are impossible. Since holding the leases is essential for the dim prospect of future profits, gas companies have to keep drilling in a negative market to retain leases, to convince more people to sign leases and to persuade reluctant Wall Street investors to keep pumping up the bubble.
As a result, gas companies have learned to profit not by selling gas, but by becoming financial speculators. They bundle leases (like subprime home mortgages!) and sell them on the market for far more than they pay property owners – without the knowledge of the lease holders. A company can sell parts of your lease to many buyers so that the varied, mysterious strings attached to a lease make it extremely difficult for landowners to extricate themselves.
Who buys these bundled leases? Foreign countries that pay much more for gas overseas than we do. Gas companies that paid 15 billion dollars for a bundle of leases last year may have sold them for 17 billion dollars in the commodities market. But the corporate gas and oil attorneys designed contracts to ensure that not a penny of that two billion dollar profit flows back to the actual landowners.
Bernie Madoff is spending his life in prison for managing a Ponzi scheme which he could have maintained for decades more if it hadn’t collapsed when Madoff reached the tipping point and couldn’t pay the bills. According to some market analysts, the gas companies have already reached that tipping point. The Ponzi scheme is failing because the awful truth is dawning upon investors in bundled leases. It costs too much to drill without profit and they cannot continue to throw good money after bad to maintain continuous sales of gas leases indefinitely. So investors are bailing out.
This why Norse Energy is in Chapter 7 bankruptcy and liquidating its assets, and why Chesapeake Energy is 19 billion dollars in debt and has sold half of the company to a Chinese corporation. These two companies own leases on 70% of the land in the Town of Oxford. My neighbors have no idea which and how many speculators will own their leases tomorrow.
When the schemes inevitably implode, communities are left behind with contaminated aquifers, increased cancer rates, devastated landscapes, dashed hopes and dreams, and a huge expulsion of methane gas in the atmosphere, further pushing global warming to its irreversible tipping point.
And when gas companies destroy the value of people’s properties and make people sick, they don’t have to worry because proving that they are responsible for your problems is next to impossible. It is financially cost prohibitive for an ordinary property owner to take a giant corporation to court. So gas companies don’t have to take responsibility for anything.
Now you can understand why banks are becoming more reluctant to grant mortgages on properties that have leases attached to them. If a lender has to foreclose on a property, it is stuck with an ongoing entanglement with many gas industry players, property that may be polluted, and old wells with unknown liabilities. That also makes it difficult for a person who has a lease to EVER sell their property to anyone. Obviously, for similar reasons, insurance companies are reluctant to renew policies on or near leased properties.
NEVER sell your mineral rights beneath your property to a gas company. It becomes a permanent deed—as distinct from a lease- and you may never be able to sell your surface property because of it.
What a learning experience it was to attend the Fleased Forum!
For you who have signed leases, and for those of you who dream of doing so, seek a specialist attorney’s advice. If you wish to terminate your lease, go to Fleased.org because these good folks are a great source of information and advice. You will also benefit from “Cautionary Advice for Landowners” at http://www.oxfordvisionaries.org/frackonomics-2/
WHAT HAPPENS IF YOU ARE HARMED BY FRACKING?
Posted by Chip Northrup: Texas Sharon backs down frack flak Tom Shepstone, Bankrupt Discredited Former Land Planner, now full time Shale Shill . . . and she’s just a chick.
by TXSHARON on MARCH 25, 2013
Shepstone wrote another one of his twisted screeds. I don’t normally try to comment on the fracking Joe Camel site but, since Shepstone vowed a couple of months ago to post all comments, I gave it a shot on Saturday. The comment must have disappeared into the ethers so I’ll just post it here.
By now, we all know how it works, Tom.
- The landowners have proof of contamination and sue for damages.
- The frackers make a settlement offer but it comes with a gag order and many other stipulations that strip away your rights.
- Before you get the check that will FINALLY get your family to safety, they make you sign a piece of paper saying you weren’t harmed.
No one I have ever known wants to sign away their rights. But the choice is exposing your family or getting them to safety.
And there is plenty of evidence showing drilling and fracking causes harm. Is there anyone out there who believes you can breathe and drink toluene, styrene, benzene and many other chemicals and not get sick? Raise your hand if you do, please. I have a couple of residences you can pick up dirt cheap.
BUT, let’s talk about what happened to Exhibit B and what might be hidden there? Let’s have a look at that first. Can’t you wait a few more days for Exhibit B? It looks like we might have it soon.
“In a motion filed Friday in Washington County Common Pleas Court, the newspapers asked President Judge Debbie O’Dell Seneca to order Stephanie and Chris Hallowich to file the missing document with the Washington County prothonotary.
That document was not part of more than 900 pages of court records the judge ordered unsealed Wednesday, even though the agreement supposedly was “attached” to other filings in the case and is identified as “Exhibit B” in the released documents.
“While it is unbeknownst to Intervenors why an exhibit averred to be attached to a court pleading filed with this Court is missing,” the newspapers’ said in the 12-page motion, “it is clear that the Agreement, Exhibit B, is a judicial record subject to public access.”
Unseal all the gag orders on people who have been harmed. Let Laura Amos, Tim & Christine Ruggiero, Runner Susan and her neighbors, and all the many others who are gagged speak out. Let’s look at their documentation that’s hidden away.
Hey Tom! Would you like to take a trip with me to visit some fracking sites? I can guarantee a headache and sore throat, maybe even a nosebleed and rash. How about it? This is the real deal not one of those industry model rig tours.
It just occurred to me that this is a coerced confession and it’s the same as torturing someone to get a signed confession. Our legal system has a set of rules to detect false confessions. I think the Fracking Mafia should be required to follow those same rules.