What should I do if a gas company approaches me?

Marcellus Shale Development Information:

Leasing forestland for natural gas exploration can be profitable, but before signing a lease on your forestland, there are many things to consider to protect your interests. Building roads, installing pipelines, and clearing drilling pads will affect many forest values. Understanding these issues and your options are important in making the right decision for you and your forestland.  Educate yourself, talk to your neighbors and prior to signing a lease, have an attorney experienced with gas leases review its content and seek advice from a qualified natural resource professional!

It is in your best interest to have a forest management plan for your property before leasing your land. As a rule of thumb, use your consulting forester and work with the gas company to minimize disturbance to your forestland

Considerations for Leases on Forest Land 

  • Permanent and temporary right-of-ways should be clearly marked before executing lease agreement so that the exact extent of impact is known.
  • Loss of existing timber should be appraised exclusively by your Forester, and not left open to contention by the lease holder.
  • Cleared timber should be harvested by conventional logging methods (not pushed out by heavy equipment) and left neatly sorted and piled in accessible designated areas if to be later sold or utilized by the owner. Otherwise, the timber should be chipped or hauled away. Burying the debris will cause unnecessary soil disturbance.
  • You can exclude surface rights (no activity) on your property while still leasing your subsurface (gas) rights, but this may decrease the value of the lease. This may not be an option for coalition leases.
  • If currently enrolled in the Clean and Green Tax Program, conversion penalties should be paid by lease holder.
  • How will temporarily impacted areas be restored? (topsoil conservation, revegetation with desirable plants, restored surface and sub-surface drainages, erosion control structures, restoration of wildlife habitat, etc.)
  • What penalties and provisions are there for non-compliance, such as failure to revegetate temporary worksites, damage to unmarked trees, delays in completion, erosion damage, spills, etc? You should require a performance bond and your Forester should be the final authority on compliance.
  • Location of all drilling sites, roads, pipelines and temporary structures should be approved by you or your Forester to minimize surface, visual and noise impacts.
  • What measures will be taken by the lease holder to prevent trespass problems on right-of-ways and access roads?
  • Will you be allowed to use new access roads created on your property?
  • You should require the lease holder to construct at least one permanent crossing in a designated location if you expect to cross the pipeline with heavy equipment, such as a future timber sale or pond excavation.
  • Are there unique wildlife habitats or sensitive areas on your property? If so, you should exclude surface rights on these areas.
  • How will you be compensated if development activity conflicts with a primary ownership goal, such as hunting?
  • What measures will be taken to reduce the establishment of invasive plant species near disturbed areas, such as planting tree screens along cleared edges?
  • If noise will be a concern, exclude the right to maintain a permanent compressor station on your property.
  • If water for drilling will come from your property, you should be compensated for it, and limits should be set that protect the source. Drilling fluids should be stored in tanks, not lagoons, and disposed of off site.
  • Do not allow access on your property for any activities without first receiving a copy of an executed lease. Even seemingly harmless activities like seismic work can become a nuisance and liability if not controlled through a sound lease.

Modified from the Cornell University Publication: Brett Chedzoy, CCE Schuyler County (bjc226@cornell.edu) with assistance from Kevin Mathers, CCE Broome County; Jim Ochterski, CCE Ontario County, and Peter Smallidge, NYS Extension Forester. http://downloads.cas.psu.edu/naturalgas/pdf/LeasingPointersforForestOwners.pdf

Penn State’s Marcellus Shale website

The following publications from that website will be useful:

Forest Landowners and Natural Gas Development

Forest Landowners and Natural Gas Development: Timber Resources

 

From the Northern Tier Hardwood Association:

Natural Gas Exploration: What will happen to your timber?
The PA DCNR Bureau of Forestry website has extensive information about the DCNR leases and the implications of drilling on State Forest Lands.