Shale gas fuels first-day discussions at Ohio FSR

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LONDON, Ohio — The potential for profit and regional economic gain in the Marcellus and Utica Shale industries has brought a lot of excitement to this year’s Ohio Farm Science Review, which began today and runs through Sept. 22.

At least three of the first major sessions at the review addressed the progress of drilling, mineral rights, and landowner options.

“The oil and gas business in Ohio is exploding,” said Mike Lloyd, OSU assistant professor in community development.

Lease offers continue to be made on a daily basis, and the volume of industrial equipment and workers moving into eastern Ohio and western Pa. is picking up, officials said.

“This is a once in a lifetime opportunity for philanthropy in a region of the state that’s never seen much philanthropy,” Lloyd said.

Much to consider

But the “explosion” of activity needs to be controlled, officials warned, to protect financial assets as well as environmental resources — as basic as land and water.

The drilling and fracking take a lot of water, usually 2.5-8 million gallons per well. The water used for fracking is contaminated in the process, but currently is being reused and recycled, said Allen Klaiber, OSU ag economics professor.

“There is an incredible amount of technology that’s working on (water quality)” and recycling, he said.

Another concern is the traffic created by the industry. When drilling begins, “the truck traffic is tremendous,” Klaiber said, often on the windy, narrow roads of eastern Ohio.

For local businesses like restaurants and hotels, increased traffic is good. Klaiber said some communities have discussed ways to re-route the traffic to improve traffic flow, but must be cautious of long-term effects, and whether new or improved routes might cause the traffic to bypass local businesses altogether.

Protecting water

The biggest concern on the minds of those at the review, and likely across the two-state region, is drinking water.

“If everything goes right there should be no problems,” Klaiber said.

Where problems have surfaced, it’s often with faulty casings (well linings), in which case the contaminated water or methane gasses can come in contact with the drinking water. The depth of 200-500 feet is where most local drinking water comes from, he said, and is the biggest area of concern.

Major drilling companies have begun to test water in this depth prior to drilling, officials said, so they can note and document any changes to local water supplies. Water tests can usually be done for $100 or less, and establish certainty over any changes to the quality during or after drilling.

Klaiber said the fee for testing is worth paying, because it establishes liability, should there be any issues.

“If there are problems down the road, you know where they came from,” he said.

Other issues

Several landowners who attended an afternoon session on natural gas called Question the Authorities said they were concerned about noise, water use and financial gains and losses.

Wishing to remain unnamed, one landowner said his advice to others is “to be patient.”

Officials said some of the earliest leases paid to landowners ranged from $20-$50 an acre. Now, it’s common to be offered $2,500-$5,000.

Peggy Hall, OSU’s director of ag law, said her advice to landowners is “not to sign anything when you get that first knock at the door. You have a resource, therefore you have time on your side.

Land groups

Some landowners have increased their bargaining power by joining land groups, essentially combining their acreage into a cooperative. That can bring many positives and a few negatives, Lloyd explained, depending on the people leading the group and what they know.

Hall and other officials continue to advise landowners to consult with knowledgeable attorneys who are experts in natural gas leases.

“It’s a very special area of law and it’s a very complex area of law,” she said.

Some existing leases may need to be reevaluated and in some cases legally challenged — especially those made prior to the exploration and drilling of shale gas. Hall said in some cases, if minerals under lease haven’t been touched for a period of 20 years or more, they may qualify for the “dormant mineral” policy, and be statutorily terminable.

OSU Extension can provide information and suggestions, officials said, but is not in the position to tell producers which groups to join, nor for what amounts to sign leases.

Many hands were raised during each of the sessions, with questions being asked and answered throughout the day.

“This is an industry that is moving very quickly,” said Douglas Southgate, an OSU ag economics professor.

As it moves, so do local economies. New jobs are being created — often in related industries like water quality improvement, hotels and restaurants. And the supply of natural gas is outpacing demand, he said, and price is dropping.

About the Author

Chris Kick lives in Wooster, Ohio. An American FFA Degree recipient, he holds a bachelor’s in creative writing from Ashland University. He spends his free time on his grandparents’ farms in Wayne and Holmes counties. More Stories by Chris Kick

2 Comments

  1. David says:

    Mike Llyod appears to have most of his certifications in economic development. If he knew anything about real “community development”, perhaps he wouldn’t be supporting a dangerous NEW practice (horizontal hydro fracking is NOT the same thing as vertical hydro fracking) that destroys communities nationwide. I was truly hoping that academia would transcend mere institutionalization on this issue, but clearly Ohio’s politicians and universities are the reason behind the state’s environmental/economic condition. Obviously being a national joke for having rivers that catch on fire, and air that smells of dead industry, it’s enough. Now we can add dangerous, improperly regulated gas extraction/exploitation to our credentials. This will not create jobs/revenue for the majority. This is going to benefit a select few that opened the state to the worst exploitation it will have ever experienced. I hope someone is keeping track of the state’s drilling advocates to hold them accountable when this all ignites into disaster. BTW:China and India are getting the lion’s share of this natural gas, so don’t deceive yourself into thinking it’s some patriotic mission.

  2. Bekki Shining Bearheart says:

    Thanks for your comment David. This practice is quite risky, and at the moment there are few protections for the land owner if something goes wrong. I recommend reading Myths VS Reality in the Resources section on NEOGAP’s web site
    http://www.neogap.org/neogap/

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