I haven’t seen ‘Promised Land’ yet, but John Hanger has a review up making a lot of good points.
Hanger objects to the simplistic characterization of the gas companies and landowners who lease their land as bad guys, and I mostly agree. The real villains are the state lawmakers who have allowed gas companies and landmen and landowners to conduct business in a way that shunts some of the costs of environmental and property damage onto third parties – neighbors, taxpayers, water drinkers, air breathers, etc.
We’ve been over the problems with the insufficient impact fee and bonding requirements here many times, but leasing is another area where state policy needs fixing. Recall this from Emma Jacobs:
Landmen began approaching Ruth Tonachel during the leasing rush that swept through northern Pennsylvania in 2007.
“When they first showed up in 2007,” she says, “there were people knocking on the door a couple times a week, calling constantly, stuff in the mail, phone messages, from all different companies. I mean it was hard to even sort out.”
Tonachel’s property has been in the family since 1790, so she was understandably cautious about the idea of a drilling lease.
Right now you have dudes going around misrepresenting the laws, lying to landowners about their options, telling people they’ll find a way to drill the gas anyway from an adjacent property. Landowner associations and websites have been popping up to get people better information, and that’s great, but this situation really calls out for some kind of central clearing at the County level. There should be a functioning market with a broker in the middle putting together a tranche of contiguous properties on the seller side, and the gas company paying for the leases on the buyer side.
Landmen want to buy leases at below the true market value, and rip off landowners. Having the County in the middle to broker the trade would ensure that this doesn’t happen, since they would have lots of information about the market value of leases in the area. This would also be an ideal point in the process to collect taxes.
