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The Brown Revolution

There is an energy revolution underway right now, but contrary to the ardent hopes and expectations of the greens, this one is a brown revolution.

In Noble County, Ohio, an area where the average annual income is less than $33,000, families are signing exploration leases with energy companies at $4,000 per acre, plus 19 percent royalties on oil and gas production. Such a massive cash infusion is already changing lives in this economically depressed region, and this is only the beginning.

Up to now, greens have been decidedly unhappy with this American shale gas revolution and the environmental threats it presents. They’re not wrong to be concerned: Ground water can be polluted; wastewater can be improperly disposed of; dangerous amounts of methane can be released into the atmosphere. There is evidence to support all of these fears.

But things are turning around. Americans can be very shrewd, and the people of Noble County, Ohio are better informed and better prepared than the Pennsylvanian hillfolk who opened their doors to strip-mining, mountain-shredding coal corporations decades ago, only to find their air polluted and livestock poisoned, with nary a government regulator in sight:

The leases signed by the Noble County landowners were largely written and negotiated by Jennifer Garrison, a lawyer from Marietta and former three-term Democratic state representative. Until very recently most oil and gas leases in Ohio were a few pages long most often hammered out by energy companies working one-on-one with mineral owners, many of them unskilled in the back and forth of negotiation.

Ms. Garrison’s clients negotiate as an association of landowners controlling thousands of acres in a leasing block. In nearby Sardis, she helped a group of 200 households that own almost 10,000 acres negotiate a lease with Eclipse that pays $4,250 an acre for the first three years of the agreement, plus 20 percent royalties. If Eclipse — which declined to comment — or its successors do not start a well in that time, the Sardis landowners gain $1,000 more per leased acre or the lease expires and the mineral rights revert to the landowner.

Ms. Garrison’s leases also contain provisions for testing before and after drilling occurs to make sure that none of the chemicals used in the production process have contaminated drinking water. The leases bar energy companies from drawing water for hydrofracking from any water source on the leaseholder’s land — provisions that go beyond existing Ohio regulations.

This is a legal approach we’re likely to see more and more in states with gas and oil buried in shale formations. Communities near fracking operations are the most at-risk, but they’re learning how to negotiate with energy companies to secure environmental protections and generous compensation to boot. All Americans will benefit from the new jobs created, the cleaner sources of energy, and fewer dollars pouring into the coffers of foreign petro-states.

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  • J R Yankovic

    IMO, some brilliant writing on a very promising – though admittedly liable to mismanagement and exploitation – economic trend.

  • Luke Lea

    Very good.

  • Frank Slack

    “Ground water can be polluted; wastewater can be improperly disposed of; dangerous amounts of methane can be released into the atmosphere. There is evidence to support all of these fears.”

    There’s powerful evidence that this is a made up fear: according to the American Petroleum Institute, since 1856, there have been nearly 300,000 oil and gas wells drilled in Ohio, of which about 90,000 have been fractured or subjected to water injection recovery. The vast majority of that activity took place at drilling depths thousands of feet closer to the surface and water tables than current activity, and during a time when no thought whatever was given to “environmental concerns.” If the dire outcomes pointed to by your “evidence” was other than trivial for the state as a whole, this entire state would be a flaming, unlivable pit.

    I say, state the evidence, and let’s consider it, but let’s consider all of the evidence.

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