Landowners' coalition raises gas lease questions

By Matthew J. Perry
The majority of the seats were filled in the Delaware Academy auditorium on Thursday night in Delhi by landowners, concerned citizens and even a handful of land men working for gas companies.
Everyone was hungry for information, and two experts working with the Central New York Landowners Coalition (CNYLA,) which organized the meeting, supplied three hours worth on natural gas speculation, drilling and leasing. It was a scratch into the surface of an issue that could reconfigure—or scar—the face of Catskill mountain communities in the coming years.
Principally, this meeting was for the benefit of landowners, whether they have joined the CNYLA or not. Chris Denton, an Elmira-based attorney who is working with the coalition on a contingency basis, was forthright about the disparity of knowledge between gas companies and landowners. “The land men know what they’re doing; you don’t,” he said at the meeting. “Don’t sign these leases.” Don’t sign, that is, without doing research, soliciting expert advice and locking hands with fellow landowners. “When you sign a lease it’s the one shot you have to get the deal right,” said Denton.
Don Zaengle, a petroleum geologist who worked for Shell Oil for 20 years, prefaced a lecture on the science of shale formations and gas drilling with an explanation of how he came to be representing the other side. “I love the land,” he said of New York State, where he was raised and received a degree in geology from SUNY Oneonta. Referring to the plays for Marcellus and Utica shale, he was also blunt in assessing the relations between the region and energy companies. “Right now it is not a fair playing field.”
During the lectures and throughout the question and answer period that followed, the implication was clear: deals will be made, since the odds of rich returns warrant extensive investment in both Marcellus and Utica shales. Energy companies can spread their risk worldwide, and they will drill where the probabilities of success are highest. “Just because they’re exploring doesn’t mean this is going to work,” Zaengle said of gas drilling. “This is a very speculative business.”
“It’s difficult to slow this down. I think it’s impossible,” Denton said. “Let’s do what we can to protect ourselves.” That conclusion certainly troubled some members of the audience. Questions about moratoriums on drilling, municipal laws and oversight, as well as harsh words for the Department of Environmental Conservation, which is tasked with monitoring the safety and environmental impact of drilling, peppered the speakers once the floor was open for questions. In response, Zaengle and Denton were polite but consistent: those are political issues, and the purpose of this meeting and organization is business.
In light of recent developments, the CNYLA approach is pragmatic. Last Wednesday, Governor David Paterson signed a bill that alters DEC regulations with the intent of expediting exploration for gas. In addition, the agency is tasked with drafting a new Environmental Impact Statement (EIS) that will be more stringent concerning the serious problems created by horizontal drilling, most importantly the need for fresh water to drill and the presence of chemical-laced waste water after extraction.
The EIS requirement was a concession to environmental concern or a sop, depending on one’s point of view. Either way, it is meant to slow down rather than halt the proliferation of horizontal drilling. Most would agree that the few months which will be needed to collect information and draft the statement provide a narrow but crucial window of opportunity for local concerns to prepare themselves by writing smart leases, or to organize in defense of the land.
At Thursday night’s meeting, there was reason to believe these goals might not be mutually exclusive. Denton opined that while towns would likely be unable to ban drilling, they could use zoning and usage regulations to protect municipal concerns, provided town attorneys did their homework. Zaengle informed DEC critics that on August 6, at Oneonta High School, the DEC will host a meeting to hear community concerns about drilling.
Denton’s message to landowners also did not preclude the possibility that they would opt out of leasing altogether. “You can’t lease unless you’ve really thought about the purpose of your land,” he said. “You also have to do the math.”
When asked if it was possible that some landowners would be overlooked by the gas companies, Denton did not imagine many would experience an anticlimax. “There are four guys to every girl at this prom,” he said. “They will come to you.”