A clash coming over US neighbourhood oil and gas drilling?

July 31, 2012

Free Market Foundation

As the U.S. searches for more sources of energy and as suburbs across the nation grow, a tug-of-war between homeowners and oil and gas drilling companies may be emerging.

In most states that have large mining or oil-and-gas production, surface and mineral rights were severed decades ago. So for every deed to a property’s surface there may be numerous mineral-rights owners. In exchange for royalties on production, these owners can lease their rights to oil and gas companies.

That’s leading to battles between homeowners and oil and gas companies over where wells will be placed.

Drilling contractor Baker Hughes Inc. reports that 994 rigs are now drilling for natural gas in the U.S. up 57 percent from this time last year and the highest number since it started counting in 1987.

In gas-rich La Plata County, Colorado, home-building permits are being issued at twice the rate of a decade ago, at the same time that a state commission has authorised drilling at twice the density previously permitted resulting in clashes between residents and energy companies.

Oklahoma’s Conservation Commission has put out a brochure telling landowners how to deal with geologists conducting seismic studies with explosives on their land.

Farmers and homeowners in western New York and parts of West Virginia are complaining of noise and traffic related to drilling.

In the battle over surface versus mineral rights, homeowners are often at a legal disadvantage. But companies usually try to consult and work with them in deciding where to site a drilling rig.

Source: Chip Cummins, Nation Wants Energy, and Drillers Find It in People’s Back Yards, Wall Street Journal, May 17, 2001.

For text
http://interactive.wsj.com/articles/SB990045139773748265.htm

For more on Energy http://www.ncpa.org/pd/budget/budget-7.html