Norse backs off on giving homeowners free gas from their own wells; supplies propane instead
NORWICH – A side-benefit once touted by natural gas companies as an enticement to leasing your mineral rights to them is now being considered unsafe.
Norse Energy Inc. alerted more than a dozen leasees two weeks ago that it would no longer permit property owners to run private gas lines from the producing on wells on their property to power their homes, farms and businesses free of charge. The company offered, instead, to assume the cost of converting the homeowners to propane as well as the cost of the propane going forward.
“We’ve gotten away from the direct connects due to safety issues associated with being physically tied into a producing well,” said Regulatory Compliance Department Spokesman Dennis Holbrook.
Norse Energy has 150,000 acres under lease in Chenango and Madison counties. It is unknown how many actual leases that acreage represents, and the number of property owners who have already connected to their wells or had planned to in the future. The “more than a dozen” leases Holbrook referred to are in both Chenango and Madison counties.
The company released its statement because, according to Holbrook, some of those contacted felt they “were losing something of value.”
“They are getting the equivalent value. We are not the big, bad, gas company they may think we are. Obviously, we are doing this because it’s the right thing to do, not because we have any financial gain out of it,” he said.
Chenango County’s economic development consultant to the natural gas industry confirmed that Norse Energy is concerned about safety.
“That’s what they claim, that having a gas line directly connected to the well, if something were to go wrong, that Norse ultimately has deeper pockets to go after,” said Steven Palmatier, of Walking Ridge Consulting LLC in Preston.
Palmatier reserved further comment until receipt of a report on the matter. He said Norse Energy will provide more details to the Chenango County Natural Gas Advisory Committee.
Preston resident Evelyn Blood said she received both a visit and a letter from Norse Energy in late January advising her of the change.
“I don’t know much about it, or why... . They said for safety reasons,” she said.
Blood said she paid to have a gas line buried from the well to her home and to convert her fireplace with the proper insert. “It was expensive,” she said.
While Blood is receiving royalty income from the producing well on her property, she wonders why people were told they would have free gas, but now have lost it.
The Chenango County Planning Department has fielded calls from other well owners equally unhappy with the development.
Meanwhile, in adjacent Madison County, Lebanon Supervisor Jim Goldstein is encouraging affected landowners to attend a meeting at 7 this evening at the town’s municipal offices on 1210 Bradley Brook Rd. An attorney will be on hand to discuss Norse Energy’s recent actions.
“The purpose of the meeting is to gather information and to begin to craft a uniform and united response to Norse,” a press release from the supervisor said.
For more information or directions, landowners can contact Goldstein at 837-4152 or the Lebanon Town Clerk’s office at 837-4220.
Landowners with leases with Norse Energy also received notification a month ago that the Norwegian company was claiming the right to extend expiring leases under a force majeure provision of leasing contracts, citing the current moratorium on high volume hydraulic fracturing in the state as justification.
Local and regional attorneys have advised landowners not to agree to the claim.
Norse Energy Inc. operates nearly 65 producing natural gas wells in the Town of Lebanon and 23 in Chenango County. The company is also active in natural gas development in the Southern Tier.
Goldstein said Jane Welsh of Hamilton, an attorney with expertise in natural gas issues, has helped out a number of his constituents on a wide range of gas leasing and compulsory integration issues in the past, and has offered to facilitate the meeting.
“I have spoken to several landowners in Lebanon. While I recognize that every landowner may not be in an identical position – some may stand to lose a great deal as a result of Norse’s efforts to unilaterally alter its contractual obligations, while others may not,” said Welsh.
Goldstein spoke yesterday to the New York Attorney General’s office about Norse Energy’s recent notification. He was informed that a breech of contract or contract dispute would be between the landowner and Norse, but if there were “a more over arcing pattern of behavior,” the state “would take a look at that,” he said.
The Lebanon supervisor said he had been contacted by six constituents who had received the notification from the natural gas company.
Norse Energy Inc. alerted more than a dozen leasees two weeks ago that it would no longer permit property owners to run private gas lines from the producing on wells on their property to power their homes, farms and businesses free of charge. The company offered, instead, to assume the cost of converting the homeowners to propane as well as the cost of the propane going forward.
“We’ve gotten away from the direct connects due to safety issues associated with being physically tied into a producing well,” said Regulatory Compliance Department Spokesman Dennis Holbrook.
Norse Energy has 150,000 acres under lease in Chenango and Madison counties. It is unknown how many actual leases that acreage represents, and the number of property owners who have already connected to their wells or had planned to in the future. The “more than a dozen” leases Holbrook referred to are in both Chenango and Madison counties.
The company released its statement because, according to Holbrook, some of those contacted felt they “were losing something of value.”
“They are getting the equivalent value. We are not the big, bad, gas company they may think we are. Obviously, we are doing this because it’s the right thing to do, not because we have any financial gain out of it,” he said.
Chenango County’s economic development consultant to the natural gas industry confirmed that Norse Energy is concerned about safety.
“That’s what they claim, that having a gas line directly connected to the well, if something were to go wrong, that Norse ultimately has deeper pockets to go after,” said Steven Palmatier, of Walking Ridge Consulting LLC in Preston.
Palmatier reserved further comment until receipt of a report on the matter. He said Norse Energy will provide more details to the Chenango County Natural Gas Advisory Committee.
Preston resident Evelyn Blood said she received both a visit and a letter from Norse Energy in late January advising her of the change.
“I don’t know much about it, or why... . They said for safety reasons,” she said.
Blood said she paid to have a gas line buried from the well to her home and to convert her fireplace with the proper insert. “It was expensive,” she said.
While Blood is receiving royalty income from the producing well on her property, she wonders why people were told they would have free gas, but now have lost it.
The Chenango County Planning Department has fielded calls from other well owners equally unhappy with the development.
Meanwhile, in adjacent Madison County, Lebanon Supervisor Jim Goldstein is encouraging affected landowners to attend a meeting at 7 this evening at the town’s municipal offices on 1210 Bradley Brook Rd. An attorney will be on hand to discuss Norse Energy’s recent actions.
“The purpose of the meeting is to gather information and to begin to craft a uniform and united response to Norse,” a press release from the supervisor said.
For more information or directions, landowners can contact Goldstein at 837-4152 or the Lebanon Town Clerk’s office at 837-4220.
Landowners with leases with Norse Energy also received notification a month ago that the Norwegian company was claiming the right to extend expiring leases under a force majeure provision of leasing contracts, citing the current moratorium on high volume hydraulic fracturing in the state as justification.
Local and regional attorneys have advised landowners not to agree to the claim.
Norse Energy Inc. operates nearly 65 producing natural gas wells in the Town of Lebanon and 23 in Chenango County. The company is also active in natural gas development in the Southern Tier.
Goldstein said Jane Welsh of Hamilton, an attorney with expertise in natural gas issues, has helped out a number of his constituents on a wide range of gas leasing and compulsory integration issues in the past, and has offered to facilitate the meeting.
“I have spoken to several landowners in Lebanon. While I recognize that every landowner may not be in an identical position – some may stand to lose a great deal as a result of Norse’s efforts to unilaterally alter its contractual obligations, while others may not,” said Welsh.
Goldstein spoke yesterday to the New York Attorney General’s office about Norse Energy’s recent notification. He was informed that a breech of contract or contract dispute would be between the landowner and Norse, but if there were “a more over arcing pattern of behavior,” the state “would take a look at that,” he said.
The Lebanon supervisor said he had been contacted by six constituents who had received the notification from the natural gas company.
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