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September 17, 2008

 

Forum educates landowners on gas lease rights

Nearly 400 people attend Binghamton meeting organized by the Attorney General’s Office

Forum

Joe McIntyre/staff photographer    
Truxton resident Richard Ryan asks a panel of experts on gas leases and landowners' rights if there are plans to have a similar forum in Cortland County. 

By Anthony Borrelli
Staff Reporter
aborrelli@cortlandstandard.net

Landowner patience was urged at a public forum held Tuesday evening concerning natural gas exploration statewide in recent months.
Representatives from Attorney General Andrew M. Cuomo’s office held an educational meeting sponsored by Assemblywoman Donna A. Lupardo (D-Endwell) in Broome Community College’s Baldwin Gymnasium on Upper Front Street.
The forum, in which nearly 400 attended, was in response to a multitude of calls from around the state to the Attorney General’s Office concerning land leases and natural gas speculation. Spokesmen were unable to provide how many complaints had been received from Cortland County residents.
Landowners are signing leases without knowing their rights in the negotiation, according to Assistant Attorney General Michael Danaher. He said many landowners are not getting the best deal for their money.
Danaher said landmen, or representatives from natural gas companies, have been approaching landowners across the state to sign leases for drilling and surveying quantities of gas in the Marcellus Shale deposit.
The deposit is vast, he said, covering about 54,000 square miles and running through parts of Ohio, across Pennsylvania, and into parts of New York’s Southern Tier, including Cortland and Tompkins counties.
He added this means more revenues for landowners who own property in the deposit areas. The majority of complaints arise from some landmen employing fraudulent tactics to obtain leases, and property owners are signing without fully understanding the implications, he said.
“This isn’t an indictment of landmen,” Danaher said. “A small percentage may be giving them a bad name.”
Lindsay Wickham, field representative for the New York Farm Bureau, urged landowners to say no if they are feeling pressured into signing a lease, particularly if they are unaware of what percentage of royalties they are entitled to receive.
Danaher highlighted several tactics employed by landmen, such as the misconception that gas can be taken from an individual’s property without royalties, if a lease is not signed.
“This can’t be done, according to state law,” he said.
A statement from Cuomo’s office states, as long as a landowner is located within a unit (an area with potential deposits), they are entitled to any royalties generated within that unit in the proportion allocated to their property.
Danaher pointed out that landowners should discuss the issue with neighbors to determine whether a lease should be signed.
Gas operators must control at least 60 percent of the property within a potential unit to be drilled, he said.
“If there is one iota of information you take with you, it is to consult an attorney before you sign a lease to ensure you get the best deal,” Danaher said.
He stressed this fact since once a lease is signed; there is little that can be done to get out of it.
“It’s your property, where you live every day,” he said. “We understand that.”
Danaher said New York state policy of compulsory integration means landowners could receive royalties from gas drilling if their property lies in the vicinity of shale deposits, whether they desire to or not.
The issue, however, was that landowners have rights in leasing their property, and may negotiate them how they wish. Danaher added that any term in a lease, other than those required by law, could be negotiated, despite any landman’s claim to the contrary.

 

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