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Source: The Syracuse Post-Standard

Lawsuits, rally in Albany question company's ability to extend land leases for fracking


Posted: May 2, 2011
Originally Published: May 2, 2011

Nearly 250 landowners in the Southern Tier are suing to stop a large gas company from indefinitely extending leases that landowners want to end.

While no Central New York landowners are involved in the suits, hundreds of local people received the same lease-extension notices from Chesapeake as those being challenged in the Southern Tier suits.

A lawsuit filed in federal court Friday is the second in as many months to challenge Chesapeake Appalachia’s right to indefinitely extend thousands of leases at what landowners consider bargain-basement prices.


About 40 local residents plan to board a bus early this morning to attend a large rally in Albany to stop the controversial drilling technique known as fracking.

A Syracuse attorney and a landowner who extracted himself from a lease are holding public information sessions to help people get out of expired leases.

The state says it plans to complete a study on the environmental effects of fracking by summer.

The two lawsuits against Chesapeake Energy say the company cannot unilaterally extend leases that have rightfully expired. This winter, Chesapeake and at least one other gas company sent letters to thousands of landowners across Central New York and the Southern Tier who signed five-year leases that allowed gas drilling on their land. Chesapeake says it has the right to extend the leases for months, or years, because of the state’s delay in approving fracking.

A spokeswoman for the state attorney general’s office said last week the office is still reviewing the letters. In 2009, then-Attorney General Andrew Cuomo fined another energy company $192,500 for sending similar letters. Cuomo is now governor.

The two lawsuits claim that Chesapeake paid $5 an acre to landowners for the original leases, but those are worth at least $17,400 per acre now. The lawsuit bases that number on the amount of money a European gas company recently paid Chesapeake to become a partner in the Marcellus shale drilling.

Many Central New York leases went for $3 an acre long before the potential of Marcellus shale was widely known. Landowners across the state want to end the leases because they have decided against allowing drilling, or they want to renegotiate for better terms.

The land rush during the last decade was fueled by the exploration of the Marcellus shale, a sprawling underground rock formation that could contain trillions of cubic feet of natural gas. To extract the gas, drillers employ the technique of high-volume hydraulic fracturing, or fracking. Drillers sink wells deep into the earth, extend them horizontally for a mile or more, then shoot millions of gallons of water and chemicals into the well at high pressure. That shatters the shale and lets tiny pockets of gas escape.

Activists say fracking can pollute waterways and wells. Today, a busload of about 40 local residents will join representatives from about 35 organizations in Albany to ask for a ban on fracking.

“I think it’s critical that folks continue to make their voices heard about the inherent risks of hydrofracking in the Marcellus shale,” said Dereth Glance, of Syracuse, executive program director of Citizens Campaign for the Environment.

The rally comes just two weeks after a hydrofracking well blew out in Bradford, Pa., sending thousands of gallons of tainted water into a nearby creek. A spokesman for the Independent Oil and Gas Association of New York said drilling companies work hard to prevent accidents, but that some are inevitable.

“No one wants to see any negative impacts on the environment, but the reality is those things are going to happen,” spokesman Jim Smith said.

Later this month, Syracuse lawyer Joe Heath and landowner Mike Bosetti will hold another workshop to help landowners end their leases. The workshop will be at 7 p.m. May 17 at the Cortland County Office Building auditorium.

“I’m giving them a heads up on the obstacles they’ll face,” said Bosetti, who had to research the history of his lease and send letters to several companies that held or once held an interest in the lease on his Cortland County property. “They’re happy to know that there is a path for them and that there are people like themselves who are dealing with this.”

No fracking is taking place now in New York in the Marcellus shale, and won’t for months. An order signed by former Gov. David Paterson bans the practice until at least July 1. A spokesman for the state Department of Environmental Conservation said a study on the drilling won’t be done until summer. Then, the public will have at least 30 days to respond, and the state would review those comments, before any drilling permits are issued.