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Economy and Business


Area landowners are signing over drilling rights in droves
But questions remain about the value and risks in what is being called the "shale gas play" in eastern Ohio

by WKSU's TIM RUDELL


Reporter
Tim Rudell
 
Storage tanks and well heads in a newly graded area of a newly constructed drilling site. This particular site is in Stark County's Paris Township, not far from where Sally Lytle and her neighbors met.
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In The Region:

It’s a super-weapon of economic recovery…it is an assault on the land; it will save the farm…it’ll wreck your well.  “Fracking”--as most people now call the hydraulic fracturing/horizontal drilling  boom moving into to Ohio--is believed to be many things.

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This is true: rural Ohio is beautiful on a summer evening.   The rich green grows deeper, richer, as shadows lengthen in the dale below Sally Lytle’s front porch.  She’s hosting the neighbors, who have gathered to talk…

It’s July 2010 and they’re here to talk about “fracking.”   Remember. This is a year ago. And the term “fracking” is still relatively new to the lexicon.   

Landsmen -- agents for gas drillers -- have been knocking on doors here in southern Stark County, and all over eastern Ohio, trying to get people to lease mineral rights to drilling companies to burrow as much as two miles down…into shale where vast deposits of natural gas are locked in the tiny pores of the rock.  Once down there the drills go laterally inside shale “eams to access as much of each formation as possible.  Then comes “fracking”—short for “hydraulic fracturing”—to free the gas molecules from captivity in the microscopic crannies.  Neil Wells of Kent State University’s Geology Department…  

 “…the next step is to see if you can fracture the rock a little bit…and the way they do that is that you inject water under very very great pressures, that  expands the drill hole a little bit, fractures the rock, and if you’ve got fractures the gas will seep into the well…and you can extract the gas…

 

Marilyn and Chris King live down the road from Sally Lytle.  Like the rest of the neighbors on the porch they’ve heard much about fracking.  Including that it is new, and an untested and therefore risky technology.  But Wells says, strictly speaking, it is not so much new as a new assembly of  assembly of known equipment and approaches...

 “…it’s evolutionary…its not sort of…dramatic inventions of the something or other machine;iIts just people steadily adding techniques and experience.  The last ten years this has all kind of come together to make this profitable…”

 

What is new is the level of activity related to shale gas exploitation.  In Stark County, through the last decade, there were 100 to 200 gas leases recorded each year.  In 2010, with what is now being called “the shale gas play”, 1,100 leases were filed.  And this year, the number of filings passed 1,100 by the end of March.  Also, Ohio is opening its state parks to drilling.  And,  $650-million steel tube mill in Youngstown is being built largely for the fracking industry.

But despite its big mark on Ohio’s landscape, misunderstanding and mythologies continue. That’s why people have been attending town-hall style information sessions, and gather on porches like Sally Lytle’s.  They’re trying to sort through claims, and through where their rights and opportunities lie as land owners being asked to sign leases for drilling on their property.

Alan Wenger is a lawyer in Youngstown who has specialized in mineral rights and leasing for twenty five years. 

 “…I hear many accounts of landmen threatening folks with this, saying ‘we can take itland anyway’ or worse, we can go under your property and get your minerals anyway.  That is false.  In my opinion it is tantamount to fraud.  That is not in the law, and they cannot do that.  There are setback requirements, there are procedural requirements; they cannot just go and arbitrarily take property…”

 

There is still the issue of forced pooling:  a concern that even if a landowner doesn’t want to sign a lease, if enough neighbors sign the whole area can be designated a “unit” and, like it not, that owner has to accept drilling on his or her land…they’d get the same royalties as everyone else, but no signing bonus and no say in what the driller can do.  Alan Wenger says such a thing does exist in the law; but…

 “…it does not happen very often, and the elements they have to prove is that there is no other configuration the unit without including the property.  They have to show that they made a reasonable offer for the property.  There are administrative procedures, and appeals.  And there is a limitation that a company can apply for this more than five times in a year.  So they don’t do this willy-nilly…

 

Those residents showing up on the porches and at town halls also are concerned about protections for health and safety.  Especially about protecting the wells where they get their drinking water. 

And who is safeguarding those wells – and where the watchdog’s financial interests lie?  Ohio’s primary regulator, the Oil & Gas division of the Department of Natural Resources, is being switched from  funding through general tax revenue, to a system in which fees for licenses and regulatory activities pay for staff and operations. 

Dave Simons of the Ohio Sierra Club’s Hydraulic Fracking Committee, believes the funding change l puts the agency in the position of being a player in economic development, instead of an independent monitor of the industry.  And that could affect something critical to the regulation process, changes in the sort of research and scientific study done to underpin regulation.  

 “…historically in economic development, the science is funded primarily by the industries that benefit…that’s where the money comes from….and that was just expounded on by our State Geologist here in this meeting…

 

Geologist Tomastik says, “not so.”  He stands by the division of Gas & Oil’s inspection and regulation policies for safeguarding the public interest in gas and oil drilling.  And he says the agency has a practical focus…

“…when were’ drilling a new well we want to make sure that surface casing is properly set.  That protects the fresh water and that’s our number one priority.  And then we look at the blowout preventer, to make sure that we don’t’ have a fire or whatever when their drilling the well.  Now, with these shale players that have come in, we’re doing what we call pres-site review.  Go out into the field with our field people to meet with the oil and gas companies before they’ve even started anything…to see what’s going to be their location, where this is going to be, where that’s going to be…”

 

So, the people on the porch in Stark County and those at meetings throughout the state have spent the last year getting some of their answers. But from many of those answers have come new questions.  In subsequent  parts of this series we’ll explore some of the economic claims made in the name of “fracking”—including taking a look at what some big investors behind the “gas” play may really drilling for.


Related Links & Resources
http://www.ncsl.org/default.aspx?tabid=23224


Related WKSU Stories

Pa. fracking-water heads for Ohio
Monday, June 20, 2011

Ohio tries to figure out what to do with millions of gallons of chemical-laced water used in fracking
Tuesday, May 17, 2011

Natural resource head speaks in support of state-park drilling
Monday, May 2, 2011

Environmentalists want to hold oil fracking in Ohio for one year
Wednesday, April 27, 2011

Fracking spill contained
Friday, April 22, 2011

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