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QUESTIONS TO ASK A DRILLING COMPANY BEFORE YOU SIGN A GAS LEASE

 
1.  Ask your drilling company to put in writing that all of their employees and all of their sub-contractors employees have passed background checks and have no criminal record.  Remind them that you are concerned for your children's safety and protection of your home. 

Oil and Gas Lease

2. When the drilling company sends someone out to do your pre-drill water sampling ask for at least two weeks notice so you can have another water company of your choice (that you will pay) to be present to do a "split sample".  You will want to do the same for your post-drill sample.  Ask them what "EPA Method" they will be using so you can make arrangements with your testing facility. 

In 2015, the required distance for pre-drill well water testing was 2,500 feet, which is an increase from the early days of Marcellus Shale drilling when it was only 1,000 feet.

Marcellus Shale Leaseholds
as of June 2011

Chesapeake Energy: 1.67 million acres

Range Resources: 1.2 million acres

ExxonMobil: 897,000 acres

National Fuel Gas: 745,000 acres

Consol Energy: 752,000 acres

Chevron: 714,000 acres

Royal Dutch Shell: 700,000 acres

EQT: 520,000 acres

Anadarko Petroleum: 355,000 acres

3. Ask for specifics on where their entry road will be, expected hours of use and the volume of traffic.

4. Would they consider moving the road to the very edge of your property?  Express your concerns over the safety of your children playing in your yard, the constant noise and the fact that your property value will decrease. This road will be used frequently for many years following drilling, so try to situate it accordingly.

Marcellus drilling rig

5. Ask how they will control dust on the access roads on your property. Do they intend to wet the roads? In the State of PA drillers are allowed to spray brine (used frac fluids) on their construction roads to control dust. They have to receive permission from the DEP once a year to spray. No testing or monitoring is probably done. This will eventually make it into groundwater.

6. Where do they plan to obtain the millions of gallons of water they will need to do the drilling and fracing?  At one Pennsylvania site the driller put on their permit application that they needed approximately 100,000 gallons for each well drilled and approximately 6 million for each well fracked. Most pads have multiple wells. Some well pads permitted in 2015 have as many as 24 wells.

7. Where do they intend to store the millions of gallons of flowback or produced water? Are they planning an impoundment dam?  Freshwater only, or also wastewater? Since many of the drillers are now recycling water they use wastewater impoundments. How long will the open air impoundment be in use on your property? Will you be notified if they switch it from holding clean water to wastewater?

frac and flowback pits

8. Do you have any water sources on the land, like springs, creeks or ponds?  Ask the driller to sample any of these, pre- and post-drill.  Ask for a split sample on these too.

9. During the frac and flare, will they consider putting your family in a hotel? Mention you have concerns over the VOC's that will be emitted from the flaring. These emissions are very toxic.

10. How long do they anticipate the following will take (ask for this in writing)

      -install the road
      -install the pad
      -install the impoundment
      -collect the water required
      -drilling
      -frac
      -flare
      -well completion
      -site restoration

11. What does the driller do with the frac pit liner after the frac?  In PA, they are allowed to bury the liner 18 inches below the surface. The liner may still have drilling materials in it. They can leave in the remnants of any solids brought to the surface during the frac which could include radioactive materials. Photo below: Drilling pad flow pit getting buried.

burying drilling waste on a well pad

12. Any plans for a compressor station or processing facility on your land or neighboring land? These are sources of noise, vibration and considerable air pollution 24-7.

13. Are you leasing rights to only Marcellus Shale or all the other sources of natural gas and petroleum beneath your land too?  You can specify which geologic formations your lease covers, instead of it being to the 'center of the earth.' Someday, they may drill deeper to the Utica Shale, Trenton-Black River, Point Pleasant or another formation, once the Marcellus Shale gas production declines.

14. Lease term. You may sign a gas lease for 5 years, but your lease can he "held by production" and extended, even if they only move an excavator onto your land the last day of the lease.

15. Privacy lost. Once you have gas wells on your property, there may be daily truck traffic to the well sites by well keepers and unknown personnel. Specify in your lease where roads and wells will be located.

16. There is much more in "wet gas" from Marcellus Shale than just methane. Be sure your lease includes payment for other products like propane, butane, ethane and drip gas.

17. Expenses. Will the drilling company be deducting expenses from your royalty payments for things like drying, transportation and storage? Some royalty payments are being reduced by nearly half for expenses like these.

Impoundment dam and gas drilling sites


Additional Information:

A Landowners Guide to Hydraulic Fracturing
Addressing Environmental and Health Issues in Oil and Gas Leases

June 2011 HARVARD LAW SCHOOL - Online PDF

VIDEO: $500 million dollar lien on Ohioville resident's property

 

 


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