How is a producer to deal with a demanding and formidable lessor’s insistence on stringent surface protection? How about demands from environmental groups and government entities? One way might be to educate himself and his fellow stakeholders.
One group at the forefront of education efforts is Texas A&M University-Kingsville’s Caesar Kleberg Wildlife Research Institute . The Institute promotes voluntary conservation practices in oil and gas development. Specifically, it provides information to producers about native grass reseeding efforts. Texas Parks and Wildlife also provides wildlife-friendly education materials.
Why is this important? Historically, “South Texas” meant brush country, big deer, quail, and late-night border town revelry. I was in south Texas last week, marveling at the development arising from Eagle Ford Shale oil production. Today, “South Texas” is as much about oil derricks, over-travelled roads, “no vacancy” signs, and savvy lessors with significant mineral interests presenting sophisticated and demanding lease provisions (we’re talking about surface use; let’s not even mention royalty and pooling clauses).
Larger rural tracts resulting in greater bargaining power for the mineral owner drive more stringent requirements for surface reclamation. Landowners devote significant effort and attention to their surface. In addition to addressing locations and damages for roads, pads, pits and pipelines, leases often also require reseeding and planting of grasses after production is obtained. Drilling closer to populated areas drives the same interest by governments and environmental groups. (To our knowledge this isn’t prevalent in the Eagle Ford but is an issue elsewhere.)
There is another reason: South Texas is a significant wildlife habitat, and landowners and environmental groups hoping to support the environment, while also enjoying the economic rewards of mineral development, request reseeding with native grasses. To the landowner it’s easy – native grasses encourage vibrant wildlife and support wildlife habitat. It’s not quite “Keep Austin Weird”; it’s more like “Keep South Texas Native”. Satisfying these requirements can be burdensome and costly, and requires knowledge and effort, but it can be good for producers, landowners, hunters, environmentalists and nature lovers in general.
The Big Picture
Landowner and community happiness can often be found in creative surface-use protections. Not coincidentally, producers’ frustrations often lie in the same spot. Reseeding with native grasses and similar efforts can turn the producer’s frustration into happiness – at least until the royalty and continuous operations clauses kick in.
For another article on this subject, see the July/August 2013 AAPL Landman magazine.