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Environmental laws give landowners moment to pause on natural gas drilling leases

Landowners in rural, upstate New York have been given moment to pause over natural gas drilling leases thanks to environmental law. Over the last few years, many landowners entered into natural gas drilling leases with energy companies, but a number of the landowners signed the leases before learning about the possible negative environmental impact of hydrofracking. Thanks to environmental regulations landowners are reexamining their original positions.

Horizontal hydraulic fracturing also called hydrofracking is a method of natural gas extraction that uses high pressure to force chemicals and high volumes of water into rock formations to extract natural gas. Natural gas companies say the method is not a threat to drinking water supplies and that the process is governed by state environmental laws. Environmentalists argue the process threatens aquifers and groundwater sources and contributes to air pollution from the use of heavy equipment.

The state has been in the process of finalizing environmental rules specific to the hydrofracking process. The state environmental review process has delayed the issuance of natural gas drilling permits for millions of acres of land in New York. Because of the delay, landowners were given time to learn more about their decisions and many regret ceding their land rights partly because of environmental concern and because of low lease rates. The regulatory process has run out the clock on many drilling leases and some gas companies have unilaterally extended the leases without the assent of landowners.

Because of the gas companies’ aggressive moves and because of the lack of knowledge about hydrofracking when the leases were created, hundreds of leaseholders have filed lawsuits against the gas companies. Some landowners want market rates for their leases and others believe they were misled by the gas companies, fear the liability of contaminating their neighbor’s water and worry their property may ultimately become worthless.

According to one attorney the majority of the cases he takes on involve clients who are against hydraulic fracturing.

Source: The New York Times, “Signing drilling leases, and now having regrets,” Mireya Navarro, Sept. 22, 2011

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