5:36pm

Tue September 6, 2011
Marcellus Shale

Number of landowners forced to frack could rise "exponentially"

Compulsory integration is (not completely unfairly) sometimes called the "eminent domain" of gas drilling, including by the decidedly pro-gas drilling governor of Pennsylvania, Tom Corbett.

We did a longer report on the ups and downs of the New York State law, which forces landowners to let their land be drilled in some cases, even if they don't want to sign a lease to allow a gas well.

But whatever your perspective, what seems clear is that compulsory integration is going to happen a lot more if (or when) horizontal hydrofracking goes forward in New York State.

That assertion comes from Mark Boling, vice president of Southwestern Energy, who also sits on the governor's natural gas drilling task force.
 

An "exponential" rise

Boling says the de facto moratorium that's been in place on drilling bigger horizontal wells in the Marcellus Shale has kept compulsory integration activity to a minimum. But when the state finishes its regulations for the high-volume hydrofracking process, Boling says he expects the use of compulsory integration could rise "exponentially."

Boling says that in 2009 there were roughly 50 requests in New York to drill using compulsory integration. But if fracking were to be a more widespread practice:

"I wouldn't be surprised to see that number or something close to that number ... being asked for per month instead of per year," he says.

Proponents of compulsory integration say the law offers better terms for landowners than if gas companies were to just draw gas out from a neighboring property, without any compensation to the mineral rights holder. But some say the law unfairly forces landowners to sign a lease - or even prevents them from signing a lease, so that the gas can be bought at a lower rate than what the landowner might have been able to negotiate. 

An overtaxed agency

Boling says he also has concerns about the ability of the Department of Environmental Conservation (DEC) to keep pace with a potential expansion of drilling.  As the agency that manages all aspects of drilling, Boling says the task force he sits on is discussing whether or not the DEC has enough staff to handle drillers' requests.

Notably, the gas company executive's concern about the agency's staffing levels echo those of environmental groups.

Earlier this year, former DEC head, Pete Grannis, who was fired over a leaked memo detailing cuts to the department, said the agency is stretched thin. He concluded that once environmental regulations are finished, the pick up in drilling with be hard to cope with.

"The question for ... the Cuomo administration [is that] they're going to have to make a decision on resources available to the department," said Grannis.

It could be months before there's more clarity on how compulsory integration requests and DEC staffing issues will unfold - the task force has been meeting behind closed doors, and the DEC still has months of work ahead to finish its draft environmental regulations. The next draft is due out on Wednesday.