How NY Can Force You to Allow Gas Drilling
Under Your Property
by Mike Bernhard
Landowners who have rejected a landman’s attempt to lease may think they have the final say in protecting their lands and families—but they do not. DEC can force landowners to surrender their subsoil rights. Here is how:
When it applies for a permit from the DEC to drill a well, the gas company proposes a “Drilling Unit” from which gas will be extracted [by horizontal drilling]. The unit boundaries may cut across property lines and include parts of, or all of, unleased properties.
If the driller affirms (rather than provides evidence) that 60% of the land surface in the proposed unit is leased or owned outright, the DEC will schedule a Compulsory Integration hearing (in Albany on Tuesdays) which will give the driller the remaining landowners’ subsoil gas rights to that gas formation. This process serves to extort acceptance of the gas company’s lease offer.
Of the three “options” offered to the integrated property-owner (30 days before a hearing), most landowners choose to receive royalties at a rate equal to the lowest rate paid to lessors in that unit.
The other, riskier “options”: going into partnership with the driller by sharing upfront the drilling and maintenance costs of the well; or owning all production attributable to his/her integrated acreage after the driller has triple-covered his or her costs. These also involve the assumption of liability on the part of the landowning “partners.”
If my property is integrated, what happens?
The integrated property can be “mined” of its gas. The new horizontal drilling techniques have increased the likelihood of multiple hydraulic fracturing events far from the wellhead.
Integrated owners have no power to specify environmental protections, protect their property values, prevent the storage of commercial gases or the injection of used fracking fluids under their homes, nor prevent storage-associated access or pipeline easements taken by eminent domain.
So, if your neighbors have leased or sold to the gas corporation, there’s a good chance your property will suffer the impacts of gas drilling, which is almost completely exempt from federal environmental law, and minimally regulated by New York State. However, if you and your neighbors deny them the 60%, then they can’t drill.
Most importantly, by not signing a lease, you give them no rights to do anything on the surface of your property.