September 20, 2011

You can do what you want with your property if and only if...

it's compatible with what the oil and gas companies want to do with it.

That seems to be the message of the career of Thomas West, the "Super Lawyer" who announced that his firm would be bringing a lawsuit against the Town of Dryden last week. (I didn't originally mean to single out West, but he's proud of his work and appears at many of the most important places where gas drillers demanded that everyone else bow down before their power.)

Do you ever wonder how compulsory integration, which basically lets drillers force their way under up to 256 acres of a 640-acre drilling unit, could have happened?

He was one of the principal authors of the spacing and compulsory integration legislation that overhauled New York's oil and gas program in 2005.

Or, in a version with more detail:

Compulsory integration now plays a crucial role for gas drillers assembling sites in New York. No well can be drilled without a state permit. And no permit can be awarded until the drilling company creates an approved "spacing unit" -- typically 640 acres -- at the proposed well site. The spacing unit is made up of property leased to the drilling company, plus property owned by holdouts who won't lease.

Compulsory integration may only be applied if the driller obtains leases on property totaling at least 60 percent of the proposed spacing unit. After that threshold is reached, the company can force the holdouts to join against their will.

To some, that arrangement seems an outrageous violation of basic private property rights.

"It is a way to get around negotiating price with landowners, a way to acquire gas rights at below-market rates, and a way to force people into leases or lease terms they don't want," said Fractracker, a website managed by a group founded at the University of Pittsburgh's Graduate School of Public Health.

When the gas industry in Pennsylvania sought a milder version of New York's compulsory integration statute for drilling in that state's Marcellus Shale — the leasing threshold was 75 percent instead of 60 percent — it met vehement opposition and died.

In New York, opponents never had a chance to mobilize because there were no public hearings before the bill sailed through, Denton said. Albany attorney Thomas West claims on his website bio that he "played a key role" in winning passage of the 2005 bill. Denton agreed, saying, "Tom West shepherded it through the Legislature."

Yep - New York's delightful combination of a sleepy legislature and sleazy lobbyists frequently adds up to a not very funny joke. For all the complaining industry does about the cost of doing business in New York, we sometimes sell ourselves cheap.

As that article notes, West's firm also delivers the notices that your mineral rights are being taken from you at a low bargain price with pretty awful options. It's not clear if that same firm is leading Anshutz's charge to countersue people in Big Flats who dared take legal action when their water turned black and smelly.

And now, of course, this line of thinking has come to Dryden. Dangle riches in front of large landowners, downplay the risks, and hope they'll come along voluntarily. If they don't, worm your way toward enough acreage to take the rights anyway. And if they step up to say "Stop! This is a lousy idea!" - well, sue them.

Posted by simon at September 20, 2011 5:02 PM in , ,
Note on photos