[author: Michele Bowman]
Hydraulic fracturing, or “fracking,” – a method of oil and gas extraction – was already controversial because of charges that the process is harmful to the environment. Now it’s being used to rip off landowners who refuse to sell the mineral rights to their property.
After Kaushik De and his wife Ranjana Bhandari reportedly refused to deal with Chesapeake Energy Corp., which wanted to use fracking to drill for the natural gas under their home in Arlington, Texas, the company secured permission from the Texas Railroad Commission to do it anyway.
The couple had been offered thousands of dollars plus royalties for the use of their mineral rights, but refused because they oppose fracking in residential areas. In the end they were left with nothing, while Chesapeake will get what it wanted all along.
Oil & Gas Companies ‘Drink Your Milkshake’
In There Will Be Blood, the 2007 film based on the 1927 Upton Sinclair novel, ruthless oil landman Daniel Plainview taunts Eli Sunday, an unfortunate victim of his greed, by revealing he’s already sucked the oil out from under the property Sunday believed he was still negotiating over: “I drink your milkshake!” Plainview tells his victim.
Professor Jacqueline L. Weaver
There are reports of drilling companies drinking landowners’ milkshakes in Texas as well as in Ohio. “I have heard of this happening in other states,” says A.A. White Professor of Law Jacqueline Lang Weaver at the University of Houston.
In this Texas case, Chesapeake applied for and was granted an exception to a 1919 state law that prohibits drilling too close to properties that are not already leased by the oil and gas drilling company. Intended to protect small landowners’ mineral rights, the law has been swallowed by its exception, which prevents holdouts from blocking development of domestic oil and gas fields.
Getting such exceptions is not difficult in Texas: Drilling companies secure them if owners of the land don’t protest their intent to apply for the exception. The three largest Texas oil and gas drilling companies have applied for over 3,500 exceptions since 2005, according to Reuters’ special report on the issue, and have only been denied a handful of times.
Landowners should get a notice from the Railroad Commission if a drilling company is trying to drill a well too close to the lines of its existing leases, explains Weaver. The notice would allow them a hearing, at which they can request enforcement of a “no-perf” (no fracking) zone on their land.
Fracking Continues, Despite Irreversibility
Other countries including France, and states such as New York, Vermont, and Maryland do not grant fracking licenses; the Environmental Protection Agency is reviewing how the method, which injects chemicals into underground rock to create reservoirs for extracting oil and gas, affects groundwater.
The EPA says it will issue a progress report later in 2012 and a final draft for public comment in 2014. But even if it finds that fracking contaminates drinking water, the exceptions have already been granted, the harm done. “The horse is out of the barn,” confirms Weaver.
Such a conclusion might, however, enable landowners to get compensation for damages because of their loss of water, she adds. In the drilling and fracking process, cement casing around the well is supposed to prevent contamination of groundwater. Fines could be levied against the drilling companies “if the fracking was done with improper casing that allowed the water to become polluted,” Weaver says.
The Obama administration proposed a rule in May that would require oil and gas companies to disclose the chemicals they use during fracking – after they’ve completed the process. The industry reportedly resisted the administration’s initial proposal to require disclosure 30 days before starting a well.
But the rule would only apply to federal public and Native American land. Homeowners like Kaushik De and Ranjana Bhandari would be out of luck – again.
If you own land that has mineral rights and you’ve been approached by a drilling company, contact a land use lawyer on Lawyers.com to find out about your options.