The cheap leases of the past. They used to offer $50/acre and 12-1/2% royalties to lease. Nobody drilled because there wasn't that much gas available.
The expensive leases now. Now they're offering $$5,750/acre and 20% royalties to lease. Why? Because 2 new drilling techniques allow them to get the gas much more efficiently - Horizontal drilling (where they drill down to where the gas is, and turn the drill horizontally along the seam of gas so the well hits much much more of the gas-bearing rock than a vertical well) and Fracking (where they pump nasty chemicals into the well to dissolve and break up the rock below so it releases much more gas).
The Profits: The wells they've drilled since 2005 in Bradford County using these new techniques far exceeded their expectations. This prompted the gas rush land-lease grab here starting sometime in late 2007. Since then, 1,000 drill permits have been issued in Bradford County (That's one well permit for every square mile of the county). Same thing has happened in the surrounding counties.
Conclusion:The money they're offering landowners and the amount of drilling going on right now says it's here to stay, they're investing hugely. We can't ignore it this time.
Loss of control:
They're leasing - not buying. A lease is a legal agreement about them using the land for the length of the lease. The terms of the lease are negotiable. But, we lose some degree of control over the land. How much control is determined by the terms of the lease. This agreement, this loss of some degree of control, can and probably will be for all intents forever.
Pollution:
Permanent sharing of control over the land:
Each of the leases that have been signed by our neighbors dictates now much control the gas company has over the use of the land. Some leases relinquish a lot of conrol, some not so much. But every lease relinquishes some control, and we should consider that control lost for ever.
Nobody knows:
We're being expermented on. Nobody knows the environmental or social impact of this kind of disturbance, this kind of flow of money into an impoverished area, or this kind of invitation of population influx into an area that hasn't really changed much in several generations.
We negotiate the level of loss of control over the land-use until we can live with it:
We can negotiate the lease and every one of the terms in it. Initial contact with the gas company indicates that they are willing to sign a non-disturbance lease that prevents any contact of any kind on the surface of our land, but still pay us bonus money and royalties (albeit they've offered less than the going rate because they can't drill).
Because we've waited, there are now leases available for us to consult that have been negotiated by powerful landowner associations that include many protections for landowners. Using these as a basis for negotiation we can modify them to our specific need with a reasonable hope that the loss of control over our land-use will be minimal and we are protected to our satisfaction.
Financial stability in perpetuity:
It's not just a lot of money. We are finally being offered an amount of money that satisfies the provision of the infrastructure of the Merryall Manse in perpetuity. We have never before been able to invent or create or be offered a financial entity that is self-sustaining. This does the job.
Anywhere from $3,500/acre (their first offer) to $5,750/acre (the going rate for a lease that allows drilling) bonus money does the job. We don't need more. Less is still a lot of money, but it doesn't do the job.
Setting the precedent for use of the land into an enforceable agreement:
Leasing binds the land-use into an enforceable agreement. If the lease dictates what we need - If the lease is explicit in the terms of use of the land - comprehensive and with no ambiguities, not only are we bound by its terms, but so is the gas company and any future assaults on the use of the land will take this example as precedent.
After signing a lease the gas company and we both have an interest in enforcing the terms of the lease, even the State will resist changing the lease agreements that are put into force. Everyone has an interest in holding to the terms of the agreement. Just make sure that the terms of the agreement are sound and satisfactory.
A non-surface-disturbance lease:
This is a lease that dicates that they cannot enter our property for any reason, however they can drill under our property at a 7,000 foot depth to extract gas from a drilled well on a neighbor's property. I have explored this with Chesapeake Energy and Fortuna Energy (the two companies that predominate the leasing in the Merryall valley) and they both expressed interest; Chesapeake going so far as to indicate they'd sign a non-surface-disturbance lease for $3,500/acre and 20% royalties.
It's too late to affect our neighbors:
They've already signed, and they signed leases of whatever style and level of protection they themselves negotiated for. The use of their land is already agreed upon. Only Dean Starner behind us has not leased and I am talking with him about it.
It's not too late for our watershed and our land:
Our water is a spring. It is fed by a local and shallow aquifer that is almost entirely on our property. It's possible but unlikely that gas exploration activity on our neighbor's land will pollute or disturb our water system. I have already notified the gas companies that we will not lease if it means drilling on our property and they are still interested in leasing our land with a bonus payment of $3,500/acre 20% royalties and they will not enter our land for any other purpose than to perform a siesmic survey.
I think we can get more. $5,000/acre with 20% royalties is what I would ask for. Leasing will come to and end, though the bonus money offered may rise dramatically or fall dramatically. Nobody can know which until it happens.
My personal opinion: Larry Wood, Merryall Manse steward
I think we should secure the land-use now with a well-negotiated non-surface-disturbance lease, get the bonus money while it's being offered. Note: Susan Reynolds, president of the Board agrees: see points of view for other Board members' and members of the community, particularly Margaret Wood.
Read. email, ask, talk, until you have personally decided how you feel about it.
Post your opinions by email to the Board before the meeting on Nov 15 so there is some discussion. At some point (sooner than later) open the discussion to the entire community - who will, we hope also post your opinions/queststions to the Board and to Larry.
At the Nov 15 meeting be prepared to decide in concept to
If no-lease, then I'll call them and say no. If yes-lease, please: