* Farmers in New York state fear invasion of drilling rigs
* State considers whether to allow shale gas drilling
By Edith Honan
HANCOCK, New York, Feb 18 The race to exploit
America's promising reserves of shale gas has triggered a clash
between landowners in New York state, pitting those eager to
earn royalties from drilling against farmers who fear gas
companies will be able to drill without their consent.
"There are people that say: my land, my gas," said Marc
Dunau, an organic farmer in Hancock, located 150 miles (240 km)
northwest of New York City, who refused to sign a lease to
drill on his 50-acre (20-hectare) farm. "You know it is our
land and it is your gas, but it's my water. And you can't get
that gas unless my water and my air is protected."
Dunau was approached by multiple gas companies over the
years, most recently in 2008 by XTO Energy XTO.N, currently
the subject of a $30 billion all-share takeover bid by Exxon
The booming shale gas business accounts for 15 to 20
percent of U.S. natural gas production and is seen increasing
fourfold over the next 15 years, providing a relatively clean
energy source for a country sensitive to its dependence on
Natural gas from shale is trapped deep underground inside
solid rock. It has been unlocked in recent years through
Environmentalists and people living near drilling
operations worry that the drilling process might contaminate
ground water. Some landowners welcome the possible financial
benefits of drilling in economic hard times. [ID:nN17118922]
The shale gas industry considers environmental opponents of
drilling misguided, saying drilling is heavily regulated and
that there has never been a documented case of ground water
contamination because of hydraulic fracturing.
New York state has placed a virtual moratorium on the
production of shale gas -- a policy that is under review.
The issue has the attention of Washington. The White House
has promoted research and development funds that could help
develop cleaner forms of producing natural gas energy. The U.S.
Senate is looking at compromise climate control legislation
that could encourage more domestic natural gas production.
Much of western New York sits on top of the Marcellus
Shale, a vast geological formation that geologists say might
contain enough natural gas to satisfy U.S. demand for more than
Shale gas is collected a mile (1.6 km) or more underground
by hydraulic fracturing, in which a millions of gallons of
water, sand and diluted chemicals are blasted into the shale,
breaking the rock and freeing the gas.
In many cases, shale gas is cheaper to produce than
conventional natural gas, particularly in the Marcellus, which
is the most economical of U.S. shale formations because of its
quality and proximity to the U.S. Northeast market.
Democratic New York Governor David Paterson has directed
the state to complete an environmental review of hydraulic
fracturing before it begins issuing drilling permits.
The U.S. House of Representatives Energy and Commerce
Committee is investigating potential health and environmental
impacts from hydraulic fracturing. [ID:nN18198199]
"I feel like my rights are being taken away because if I
don't lease my land, and my neighbor does, they can go under me
and contaminate my water," said Cindy Gieger, who runs a dairy
farm on 200 acres (80 hectares) of property in nearby
Jeffersonville and says she does not trust gas companies to
Under a rule known as compulsory integration, gas companies
in New York state can secure leases on 60 percent of a patch of
land, totaling no more than 640 acres (259 hectares), to seek a
permit to drill on the entire patch. The landowner who sits
over unleased land is paid 12.5 percent of the royalties -- far
less than if the landowner had signed a lease.
"Property rights are a very relative thing," said Albert
Appleton, a former commissioner of New York City Department of
Environmental Protection. "The rights of property ends where
the exercise of your rights impacts somebody else's right to
property. When people talk about their property rights they
don't talk about the right of the person who doesn't want to
drill gas, not to have their property destroyed, their wells
Drilling has been at a standstill since the effective
moratorium went into effect in July 2008. Industry sources
privately express their exasperation with New York, saying they
have all but given up on the state.
"I'm an environmentalist and it doesn't make sense to me to
use any other fuel at this time," said Barbara Thomas, a
landowner in the nearby town of Conklin who is a member of the
Joint Landowners Coalition, a group created to support
landowners in their negotiations with gas companies.
"The only way I can protect my land is by having a lease
that is written to protect the land," she said.
(Reporting by Edith Honan; Editing by Will Dunham)