Still Thinking Gas Companies Care About Your Property Rights? Think Again.

Compulsory Integration. Have you heard of it yet? You should…

In 2007, a landman came calling at Mike and Velda Ward’s 110-acre golf course in Delphi Falls.

Their wide open acreage right at the northern edge of the Marcellus Shale natural gas formation made the Wards’ land a prime target for drilling.

But Ward turned the lease down, and told the sales guy “we don’t want anything to do with it.”

The landman turned to leave and said over his shoulder, “I’ll get it anyway.”

That was Ward’s first brush with “compulsory integration.”

Now even the gas companies are saying that the number of landowners forced into compulsory integration could “rise exponentially.” Up to 50 locations a MONTH could be forced to integrate…

Boling says the de facto moratorium that’s been in place on drilling bigger horizontal wells in the Marcellus Shale has kept compulsory integration activity to a minimum. But when the state finishes its regulations for the high-volume hydrofracking process, Boling says he expects the use of compulsory integration could rise “exponentially.”

Boling says that in 2009 there were roughly 50 requests in New York to drill using compulsory integration. But if fracking were to be a more widespread practice:

“I wouldn’t be surprised to see that number or something close to that number … being asked for per month instead of per year,” he says.

Proponents of compulsory integration say the law offers better terms for landowners than if gas companies were to just draw gas out from a neighboring property, without any compensation to the mineral rights holder. But some say the law unfairly forces landowners to sign a lease – or even prevents them from signing a lease, so that the gas can be bought at a lower rate than what the landowner might have been able to negotiate.

(By law, the no one should be able to extract minerals or gas from under your land if you own the rights. They should not be legally able to drill horizontally and steal your minerals.)

This entry was posted in Fracking, Fracking and Real Estate, Property Rights and tagged , , , , . Bookmark the permalink.

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