SHERBURNE – There’s a good opportunity for rural landowners in Chenango County to cash in on natural gas deposits below their fields and forests, said a group of landowner advocates and experts, but only if they educate themselves on their rights and take calculated measures to protect their interests.
Ashur Terwilliger, a self-educated, self-proclaimed natural gas landowner’s rights advocate from Chemung County, along with attorney and natural gas legal expert Chris Denton and state agricultural resource specialist Matt Brauer offered their advice to around 100 local landowners Tuesday night at a natural gas leasing public information meeting at Sherburne-Earlville High School. The meeting was sponsored by the Chenango and Madison County Farm Bureaus.
“If it’s handled properly,” said Terwilliger, referring to gas leasing, “this could be the biggest boon to landowners and farmers in New York state in 100 years.”
The state became a hot spot in natural gas drilling and production in the late 1990s when large, deep deposits were found under what’s called the “Trenton-Black River” formations in Chemung and Steuben counties. Those same deposits extend east into Chenango County, where gas exploration is on the cusp of a similar boom, Terwilliger says, meaning a good number of landowners will be, or already have been, approached by gas companies to sign over their property rights.
Before signing a lease or entering an agreement with gas exploration companies, Terwilliger and Denton say landowners need to know what protections they want, and should want, in their leases. That means negotiating – not in conversation, but on paper – terms that will protect landowners from potentially hazardous risks and get them the most economically sound return for their land.
“Think, think, think,” Terwilliger said. “Come up with all different kinds of scenarios.”
The most common misconception they say: Believing that there is such thing as a “standard” lease.
“There is a ‘typical’ lease,” Denton said. “There is no such thing as a standard lease.”
The “typical” royalty – percentage landowners get paid on gross natural gas production from the well they’re tied two – is 12.5 percent, or one-eight. Denton and Terwilliger say that number has historically been the minimum starting point, but it’s not the ceiling. Royalties in other parts of the U.S. and the world can be between 25 and 50 percent, two to four times higher than what many locals are being offered, they claim.
“It’s your land and your money,” Terwilliger said. “You deserve the best price.”
The scenarios, laws and clauses associated with gas leasing and other financial relationships landowners can enter into are complicated and confusing to most, Denton explained, contending that a potential lease should always be reviewed by an attorney first.
“They (gas companies) know what they’re doing, you don’t, it’s a fact of life,” said Denton, an Elmira Attorney versed in gas leasing and property law. “And let’s give them credit – They’re not here to solve energy problems, they’re a business that’s trying to make money just like the rest of us. But that doesn’t mean you have to give them everything.”
Denton says its important that landowners know the different levels of involvement they can have in a gas operation – from flat out leasing land to actually putting up financial risk as a partner in a well operation.
Regardless, if gas is under their property and it is extracted, landowners legally will be drawn in – if they don’t want to sign a lease, they’ll either get the typical 12.5 percent royalty with no risk or they can choose to get involved with differing levels of risk. All in all, Denton says, “you don’t have a choice now whether or not this is going to affect you.”
Brauer advised farmers that could become potential lease signers to consider and examine how access roads, drilling sites and permanent gas wells will impact their farm land. He said roads, heavy equipment use and drilling can and have impacted soil structures and crop production if not prohibited from being used or built in a certain way.