Report: Frackers cheating Pa. landowners and gov't out of billions
Source: Philadelphia Inquirer
Don Feusner ran dairy cattle on his 370-acre slice of northern Pennsylvania until he could no longer turn a profit by farming. Then, at age 60, he sold all but a few Angus and aimed for a comfortable retirement on money from drilling his land for natural gas instead. It seemed promising. Two wells drilled on his lease hit as sweet a spot as the Marcellus shale could offer tens of millions of cubic feet of natural gas gushed forth. Last December, he received a check for $8,506 for a months share of the gas.
Then one day in April, Feusner ripped open his royalty envelope to find that while his wells were still producing the same amount of gas, the gusher of cash had slowed. His eyes cascaded down the page to his monthly balance at the bottom: $1,690. Chesapeake Energy, the company that drilled his wells, was withholding almost 90 percent of Feusners share of the income to cover unspecified gathering expenses and it wasnt explaining why. They said youre going to be a millionaire in a couple of years, but none of that has happened, Feusner said. I guess were expected to just take whatever they want to give us.
Like every landowner who signs a lease agreement to allow a drilling company to take resources off his land, Feusner is owed a cut of what is produced, called a royalty. In 1982, in a landmark effort to keep people from being fleeced by the oil industry, the federal government passed a law establishing that royalty payments to landowners would be no less than 12.5 percent of the oil and gas sales from their leases.
From Pennsylvania to North Dakota, a powerful argument for allowing extensive new drilling has been that royalty payments would enrich local landowners, lifting the economies of heartland and rural America. The boom was also supposed to fill the governments coffers, since roughly 30 percent of the nations drilling takes place on federal land. Over the last decade, an untold number of leases were signed, and hundreds of thousands of wells have been sunk into new energy deposits across the country.
Read more: http://www.philly.com/philly/business/Frackers_.html
H2O Man
(73,626 posts)Thank you for this!
SharonAnn
(13,779 posts)hobbit709
(41,694 posts)all unspecified with vague sounding reasons.
starroute
(12,977 posts)Which is notorious for never paying royalties even on blockbuster hits.
Octafish
(55,745 posts)As the gathering fees kick in, people everywhere will realize they've been had.
And soon the water will taste funny for everybody.
Champion Jack
(5,378 posts)It will be poisoned and it will kill you.
Octafish
(55,745 posts)Plus, it can catch fire.
Dustlawyer
(10,497 posts)bad they have been lying to us it will be too late!
Champion Jack
(5,378 posts)Supersedeas
(20,630 posts)Orrex
(63,226 posts)Say it ain't so!
so glad I already finished my coffee just before reading this
sorefeet
(1,241 posts)Everyone who owns a house thinks the oil man is going to put a well in their back yard and they will be rich. This state full of Republicans that have no problem selling out to the oil man. The coal trains are increasing by 50 more trains a day, the interstate hums round the clock from traffic going and coming from the Bakkaan field oil patch. I have put together a plan to escape this part of the country, hopefully 2 years and I'm outta here. But where do you go that hasn't been raped or is going to be. I'm looking for a safe haven for my sisters grandkids, who don't even realize what their problems are going to be some day. And they don't even know me, heck they might not be born yet.. First priority is fresh water.
PA Democrat
(13,225 posts)They can do as they please with the help of one of the most corrupt governors in history.
Martak Sarno
(77 posts)Semantics, I guess. They're chemical WEAPONS in other countries, items necessary for business to turn a profit in America.
And yet somehow, our government, politicians and president are more concerned with chemical weapons being used somewhere else. Not to mention the aid from U.S. tax dollars that will go to those people.
All the while basically chemical weapons are being used on Americans in the form of fracking compounds, rocket fuels, oil by-products, radioactive waste and anything else business can dump into our streams and shoot into the air. But we need to stop other countries from using chemical weapons on their people because evidently, all those nasty chemicals aren't important enough to warrant Congress worrying about the effects on Americans.
While the difference may be immediate in those overseas cases, the results here will be pretty much the same - poor health for Americans, higher health care costs, early deaths and suffering. Yet somehow, Congress and the President seem to think it's ok to ignore Americans who have been and are being screwed by Oil, Banks and Wall Street.
Yep. Good thing we're concerned about those other people first! And American politicians and business people have no trouble sleeping.
When we complain about this, we get the W.C. Fields answer from the politicians and corporations..."Go away son. You bother me!"
And we do.
marions ghost
(19,841 posts)---
CrispyQ
(36,533 posts)I have that bumper sticker somewhere.
What it always come back to is that there is no profit to be made by taking care of your own citizens. With war, you can get at least some of the citizens to enthusiastically back your siphoning of the treasury.
An excellent post, Sarno. Welcome to DU.
Bryn
(3,621 posts)which is banned in several other countries, but USA still allows GMO that's poisoning us.
Squinch
(51,025 posts)fasttense
(17,301 posts)These oil and gas corporations, especially Chesapeake Oil, are basing their business plans on conning and cheating. They are determined to cheat everyone they deal with. Now, even a good contract lawyer will miss something now and again. But with the oil corporations constantly coming up with new and improved scams, no contract will cover all the possible cheats.
So if you think you have an iron clad contract, think again. When cheating is the business model, contracts are useless. The only safe bet is to NOT make a deal with the devil.
Tippy
(4,610 posts)Historic NY
(37,453 posts)its isn't "champagne wishes and caviar dreams." Ny City has taken measure to exculde fracking around their aquifers.
http://www.citizenscampaign.org/campaigns/hydro-fracking.asp
adirondacker
(2,921 posts)an informed public to put this to rest before it starts. It didn't help that Cuomo and several stooges in the DEC gave it a green light in the beginning. There are still quite a few good people in the state to counter this ill conceived plan for corporate exploitation. Cheers!
mountain grammy
(26,656 posts)no restrictions, no regulations. A hell scape brought to you by Dick Cheney and the fabulous oil companies.
DirkGently
(12,151 posts)land, and it turned out to be some kind of bad deal?
Inconceivable!
Thav
(946 posts)I don't think it means what you think it means.
rickford66
(5,528 posts)Two wells will be drilled in Broome County NY as soon as fracking is approved. One is about a mile from us and the other is 1000 feet away. Half our neighbors have dollar signs in their eyes and the other half understand the terrible consequences. We share a large underground pool with our neighbors. We have plenty of fresh water. It's hard but treatable. It turned to sulphur water after a water well was drilled across the road and we treat for that. A gas well will probably ruin it for good making our property worthless. I attended the demonstration at SUNY Binghamton when Obama appeared there last week. I doubt it had much effect on him but our governor stayed away. Since land men have lied to me and many others around here, it's no surprise the gas companies cheat the leaseholders. To make matters worse we live on a fault line. I was told that when one company wanted to do seismic tests on our land many years ago.
Ikonoklast
(23,973 posts)establish a baseline for future reference.
The problem with so many people claiming that their water was ruined is that they have no way to prove it.
With water in many places that has abundant natural gas already full of dissolved gas and minerals, it is hard to prove what caused any contamination if there is no previous testing to compare samples to.
rickford66
(5,528 posts)We were aware of this. We had our water tested a dozen or so years ago. Turned out clean. We will do it again soon. It's good to let everyone know about this catch.
Ikonoklast
(23,973 posts)It is hard to prove resource degradation after the fact.
bigworld
(1,807 posts)In West Virginia, for example, underground mineral rights often belong to prior owners of the land. So if you have a farm in WV, the royalties can very easily go to the heirs of someone who owned the land 100 years ago.
Champion Jack
(5,378 posts)In WV the mineral seem to have far more fits than the surface owners.
Of course, the extraction companies run this state and own all the politicians whether D or R
Ikonoklast
(23,973 posts)about mineral rights leases on his part. He fell for the "Pie In The Sky" talk from a lease aggregator.
"Gathering" is a trick used by Chesapeake (and other drillers, leaseholders) that allows them to set up shell corporations to sell to themselves the gas or oil produced from that well, or set up well-head maintenance companies and offset those inflated costs against royalty payments.
And it is entirely legal.
It isn't up to the exploration or development companies to ensure that you know what you're doing, it is up to them to maximize their profits.
He isn't getting swindled, he signed a valid contract that allows them to do what they do.
CANDO
(2,068 posts)That still doesn't mean this fellow wasn't swindled. When a landman stands there and lies to the landowner through deliberate omission of certain information, I'd call that a swindle. Also consider that many thousands of landowners had legal representation, and turns out that there's a lack of knowledge on the part of those supposed professionals. There's a steep learning curve involved for everyone but the swindlers. Until laws are enacted to hold them accountable, people are going to get screwed.
durablend
(7,465 posts)Say it ain't so! Seems like all Mr. Feusner saw was dollar signs (and lots of them).
valerief
(53,235 posts)Paladin
(28,276 posts)toby jo
(1,269 posts)4 billion using an auditing agency. The private landowner has to shell out his own money to audit the companies, according to the article.
When the citizens can get that auditing done as a matter of course, the theft will stop. What bastards, just can't stop themselves.
Theyletmeeatcake2
(348 posts)I've always wondered who actually checks how much of the stuff comes out of the ground in order to pay royalties. I'm sure it's a trust based system .....
marions ghost
(19,841 posts)Officials OK rule to force fracking on NC landowners
Published: August 28, 2013
RALEIGH North Carolina landowners would be forced to sell the natural gas under their homes and farms whether they want to or not under a fracking recommendation approved Wednesday thats expected to be enacted by the state legislature this fall.
The proposal by a state study group endorses a rarely used 1945 law thats never been tried here on the kind of scale that would be required for shale gas exploration, or fracking. Thousands of property owners could potentially be affected in the states gas-rich midsection in Lee, Moore and Chatham counties.
The recommendation, dealing with one of the most emotional fracking issues, bypasses the N.C. Mining and Energy Commission, which holds regular public hearings on protecting the public and safeguarding the environment, and goes to the legislature.
We are talking about a for-profit industry taking away personal freedoms with the blessing of the government, Therese Vick, a community activist with the Blue Ridge Environmental Defense League, told the Compulsory Pooling Study Group. Personal freedoms are seldom on the radar when the gas companies come to town.
Read more here: http://www.newsobserver.com/2013/08/28/3145187/officials-ok-rule-to-force-fracking.html#storylink=cpy