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Land lessors face difficult choices

Published July 23. 2010 05:00PM

To some, the Marcellus shale deposits are a financial blessing capable of pulling the state out of debt. To others, they are a potential environmental disaster.

Speaking about the situation at the Kidder Township Environmental Advisory Committee meeting this week, committee member Bob Dobosh said, "basically the state is faced with a choice between water or gas."

For landowners approached by drilling companies, many of whom live in struggling rural areas, the impact of drilling is offset by a much-needed financial benefit.

"How do you tell a sixth-generation farmer, who's never made a dollar's profit, not to do it?" asked Dobosh.

The economic recession has only made the decision all the more pressing and immediate. In some cases, landowners have been offered up to $50,000 a month per acre of leased land.

The decision to lease land is complicated by the fact that in some cases landowners may not have a choice. A new state law decrees that in a situation where all of a group of neighbors have decided to lease a contiguous plot of land, any hold outs can have their land forcibly taken from them.

This creates pressure for landowners. If they do not accept the first sales pitch, they may eventually be forced to accept a lesser one later. This fact is reinforced by the way in which shale drilling is conducted. It is possible to lay the pipes horizontally and extract shale from areas far away from the surface mouth of the pipe. Thus, if a landowner does not accept an offer, the drilling companies can simply go to someone else and get the shale anyway.

Landowners gamble when they sign leases with drilling companies. The township of Noxen, in Wyoming County, has collectively signed away roughly 8,500 acres of land to the Carrizo Oil and Gas Co. of Pittsburgh. Each landowner will receive only $500 up front, with more cash and percentages of profits to follow if the initial drillings prove out.

If the drillings do not work out, the Noxen residents face the possibility of having lost portions of their land for no purpose, and potentially up to a million gallons of polluted water.

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