Canonsburg, Pa. – The New York Times reporter whose agenda-driven tactics aimed at the American natural gas industry have been rebuked by even the paper’s public editor, is at again. True to form, the latest piece highlights a narrow universe of individuals who signed straightforward contractual agreements to lease their minerals for production and, in some cases, their surface rights for other natural gas production activities. While the mineral- and lease-holders cited in the story are, yes, disgruntled and displeased – despite the terms of their respective leases agreements – the fact remains that they represent only a fraction of landowners working with the industry. Even so, in his 2,490-word piece today, the rebuked reporter paints a picture that landmen – gas industry representatives that help secure leases – employ shadowy practices.
While many of the claims in the story are woefully short on proper context, the Times does dedicate 3 percent – or 94 words – to the overwhelming economic impact that responsible American natural gas development continues to have on the region:
To be sure, many landowners have earned small fortunes from drilling leases. Last year, natural gas companies paid more than $1.6 billion in lease and bonus payments to Pennsylvania landowners, according to a report commissioned by the Marcellus Shale Coalition, an industry trade group. Chesapeake Energy, one of the largest natural gas companies, has paid more than $183.8 million in royalties in Texas this year, according to its Web site. Much of the money has gone to residents in rural areas where jobs are scarce and farmers and ranchers have struggled to stay afloat.
However, here are some critical facts that, unsurprisingly, were omitted from today’s story.
FACT: On our website, we note that “A number of market-based factors influence the terms included in each agreement.” These market-based factors include the price of natural gas, the type of natural gas present in the region (i.e. wet gas, dry gas, oil, etc.), proximity to market and availability of infrastructure to ultimately move that gas, as well as a host of others.
FACT: There is not a one-size-fits-all lease. As such, “Leases also include provisions to allow for the construction of underground gathering lines to transport natural gas from wells to larger transmission pipelines and processing plants,” as laid out on our website.
FACT: Mineral and landowners and industry are inherently partners – not adversaries, as today’s story speculates. It is the mutual interest of all parties to ensure that lease agreements and contracts are clear, consistent, and reflect market-based conditions. Our industry, which is committed to transparency, urges potential lessees to seek professional legal advice and guidance prior to signing any contract.
- Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group, said most landowners are happy with the leases they signed. Any contracts that weren’t negotiated in good faith can be challenged, she added. … “The most educated landowner is going to be this industry’s best business partner, and that means legal review,” Klaber said. (Associated Press, 7/23/11)
- Klaber: “I think it’s important for a lot of different issues, including this one, that when someone is signing a lease that they have an attorney review not just all the other contents but make sure to understand how that production value is going to be determined and be fully informed as to how that’s being done over time. I think that’s in the best interests of the oil and gas company as well as the property owner. (Wheeling News Register, 5/1/11)
- This advice is seconded by the pro-industry Marcellus Shale Coalition. Spokesman Travis Windle said his group encourages landowners to speak with a lawyer who specializes in oil and gas leasing before signing with companies. According to Windle, it is in the natural gas companies’ best interest to be transparent with landowners in order to uphold a good reputation. (Daily American, 3/19/11)
FACT: Highlighting a few disgruntled lessees without acknowledging the overwhelming support our industry has from mineral and landowners would have undercut the pre-meditated storyline of today’s article.
- PA Farmer: “About one year ago, a company began drilling a well tucked away in a field about a quarter mile from his home. Just last month, the company finished reclaiming the land around it. The well produced about 800,000 cubic feet between July to October. Tim Beardslee said the whole process went pretty smoothly. “There really wasn’t much impact,” he said. “We live far away enough from the rig that you can’t tell. They worked with us real well. There are always issues, but usually they will understand.” (WYTV News, 11/18/11)
- OH Farmer: “When Chesapeake approached Geatches about a possible well, he agreed, but with a couple of conditions. The well couldn’t be in the middle of his cornfield, and water that he gets from a well needed to be tested before the start of operations. Chesapeake complied with both requests. In fact, the company has complied with all of Geatches’ requests. “They’ve done what they said they were going to do,” he said. “I’m OK with it so far.” (Youngstown Vindicator, 11/27/11)
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