by Alex Halperin // March 24, 2010
NEW YORK- Bruce Murray lives on an undulating 150-acre property forested with hardwoods and pines near Ithaca, New York. At 57, Murray, who runs a house-painting business, is bald with a blond-gray beard. He has a hunter's relationship with the land and tries to "do what's right, conservation-wise." Over the years, he says, he has ignored offers to install cell-phone towers on his property and to sell the lumber.
In 2006, somebody called to offer him $35 per acre for the rights to drill for natural gas on his spread. Murray said no, but the solicitations continued. A few months later, someone from Mason Dixon Energy arrived at his door. The man's business card read "landman." Murray describes him as "a nice guy, straightforward," college-age, like Murray's children. "I did a lot of research, and he didn't seem to be giving me any false facts," Murray says.
The landman told Murray that his neighbors "were pretty much signed up." For drilling purposes in New York, land is divided into units, and if 60 percent of a unit is leased, a gas company doesn't need an owner's permission to drill under the remaining land. Murray talked to a lawyer and eventually decided, "Well, if I'm going to get forcibly integrated then I should have some kind of protection." (Compulsorily integrated landowners receive royalties but not typically signing bonuses.)
The landman also gave Murray a brochure from a different company, Denver-based Ansbro Petroleum. It explained that Ansbro is exploring for natural gas "buried one to two miles beneath the earth's surface. The Finger Lakes region has natural gas reserves trapped in a pervasive rock layer called the Black River Formation." Neither the pamphlet nor the landman mentioned hydrofracture drilling or the Marcellus Shale, buzzwords that might have raised landowners' eyebrows. The Marcellus is a gas-saturated expanse of shale rock that lies under much of Pennsylvania, New York, and West Virginia. Tapping it requires using a process called hydrofracture, injecting a pressurized cocktail of water, sand, and chemicals into the rock. Hydro-fracking ("fracking" for short) shale is far more invasive and environmentally risky than extracting conventional gas deposits.
NEW YORK: The Hillman Foundation announced today that Alex Halperin has won the March Sidney award for “Drill, Maybe Drill?”, his feature in The American Prospect which examines whether the plans for extensive natural-gas drilling in upstate New York are a “ticket out of economic depression – or a serious environmental risk.”
Sidney Award judge Charles Kaiser said, “Halperin’s piece does a great job of illuminating a burgeoning national issue – the quick expansion of a barely regulated industry whose environmental dangers are only beginning to be looked at, particularly in New York state.”
As Halperin writes, “despite objections from environmentalists about water use and chemicals, shale drilling is poised to be a big part of the world’s energy future.” Although a de facto moratorium on drilling is currently in effect in New York, gas companies are rushing to secure the minerals rights of landowners across upstate New York, some of whom are eager to cash in on signing bonuses and royalties.