As if
that wasn't enough of a profound indication that these Marcellus
wells bring serious adverse impacts to people and communities! What
other situations are relevant and of serious concern to landowners
that the current drilling frenzy has impacted? (Well, aside from the
obvious concerns about well water contamination, toxins, air quality,
health issues, noise and dust pollution, traffic and road safety
issues, quality of life issues living near these huge well sites,
loss of property values, etc.)
How
about finding out that your property may not be one that the bank is
willing to issue a mortgage on? This is yet another growing concern
that is being recognized and reported in the media.
According
to an article published in the May 20th edition of Energy Bulletin,
"Wells
Fargo & Company, both the largest home mortgage lender in the
United States and a major lender to the country's second largest
producer of natural gas, Chesapeaker Energy Corp., refuses to make
home loans for properties encumbered with natural gas drilling
leases."
See internet link:
http://www.energybulletin.net/stories/2012-05-20/how-fracking-mess-about-make-mortgage-mess-worse
So, this means that if your
land is being drilled upon, or there are leases to the minerals under
you, your property is considered a mortgage risk. And, what if you
may sometime desire to refinance your existing mortgage, or even try
to sell your property? Will prospective buyers even be able to get a
mortgage on your property should they want to purchase your home?
(Assuming you're lucky enough to find a buyer who doesn't mind having
a big ol' 7-8 acre Marcellus well pad sitting on or near them.)
Food for thought, folks. What is this oil and industry really doing
to all of us?
It is disturbing to read
these articles which are starting to pop up on the internet.
Articles that are raising the questions about banks and mortgage
financing companies that have indicated their reluctance to issue
mortgages on gas-leased properties.
Elisabeth Radow is a NY
attorney who studies gas leases. Last year, she published an article
in the November/December 2011 issue of the NY State Bar Association
Journal. It closely examined such issues.
See link:
http://www.nysba.org/AM/Template.cfm?Section=home&template=/CM/ContentDisplay.cfm&ContentID=44613
If you have access to the
internet and can pull up the above link, this is a "must read"
report that EVERYONE who has a Marcellus well on or near their
property should be aware of!!
In the eleven page report of
her findings which is titled: "Homeowners and Gas Drilling
Leases: Boom or Bust?" can be found the following
statements.....
"Residential
fracking carries heavy industrial risks, and the ripple effects could
be tremendous. Homeowners can be confronted with uninsurable
property damage for activities they cannot control. And now a
growing number of banks won't give new mortgage loans on homes with
gas leases because they don't meet secondary mortgage market
guidelines." .....
"The introduction
of fracking in homeowners' backyards presents a divergence from
typical current land use practice, which separates residential living
from heavy industrial activity, and the gas leases allocate rights
and risks between homeowner and gas company-lessee in
uncharacteristic ways."
A similar article about
mortgages on gas-leased properties, provides additional perspective
of what this means for the homeowner who is hosting a Marcellus well
pad or for those living near one and having their minerals under them
leased also.....
See internet link for the
following article where the excerpt below was taken:
"A Pennsylvania
couple was recently denied a new mortgage on their home and a hobby
farm because according to the lender --gas wells and other structures
in nearby lots...can significantly degrade a property's value. The
owners came to the conclusion that if they cannot refinance their own
home, no potential buyer would likely be able to get a mortgage to
purchase it should the couple ever want to sell.
Others who've had their
water supply contaminated but could not prove it was due to nearby
natural gas drilling are facing a wipeout since their homes are now
worth far less than the mortgages on them. Some of those people will
simply end up walking away in order to protect the health of their
families.
But why not turn to one's
insurance company to pay for damage to one's property? It turns out
that homeowners insurance almost always excluded damaged from
industrial operations on one's residential property, Radow writes.
And, that's what natural gas drilling is, an industrial operation.
Even for those who escape the problems of water contamination and
human and animal health effects, there remains the ever present
possibility of damaging explosions and fires from drilling production
operations. Homeowners insurance won't pay for that either.
Surely, the drilling companies
are responsible for explosions and fires linked to their operations.
Unlike water contamination which is usually an underground phenomenon
and often difficult to prove, it should be obvious that the companies
are responsible for damage from explosions and fires caused by their
actions. Don't count on it, Radow seems to say. In such
circumstances, homeowners may have to sue for damages and even if
they win, may not get paid for all the damages since the natural gas
drillers admit in their regulatory filings that they may not carry
enough insurance to pay for such damages due to mishaps. "
Take for example the current activities
going on in New Milton area on the property tracts leased by John
Erwin to Antero Resources. Right now, land along the ridge tops of
Brushy Fork Road is being cleared for several well pads. Excavation
equipment (at least a dozen or more vehicles on site including bull
dozers, articulated dump trucks, backhoes and giant excavators) are
clearing dozens of acres of trees and making a new road to connect
onto Brushy Fork Rd.
Trees are being piled up and lit to
burn off from all the downed trees in the the cleared forest turned
well sites. Much like mountain top removal excavation, just as in
the coal industry.... only this is for the 7-8 acre Marcellus well
pads. A giant fan is being used to blow on the fire to stimulate
it. Concerned neighbors have photographed the burn sites unattended,
and burning brush piles set up within yards of existing old gas wells
already up there. No water tank trucks were on site during the
burning and no nearby water source is available should the fire get
out of control in these drought conditions.
What happens if they lose "containment"
of all these brush fires they are creating to burn the trees they
bull dozed? And what if a potential brush fire on the ridge top
becomes a forest fire and reaches an old gas well nearby and it all
goes "kaboom?"
We already know that the homeowner
insurance industry will not cover damages for drilling related
activities. And now we are finding out that mortgage companies are
unlikely to offer mortages for properties drilled on or with leases
underneath.
How much more evidence is needed to
convince an unsuspecting public that this "unconventional
drilling" that is imposed upon us due to the Marcellus shale
natural gas play has serious implications. Even far beyond the
environmental and health issues that people have already been warning
about for years.
And while many people do not have a
choice about leases on their properties, (since the drillers in many
cases use the same leases our grand pappies gave them) what about
those who do have a choice and are chosing to lease their properties
to the drillers now? As example, would be the farmer in New Milton
who unleashed this on his entire community.
Currently lawyers, who are chomping at
the bit to jump on these type situations, are reporting that here is
talk that suggests that a person who creates such risks, by their
deliberate decision to lease their property could be held equally
responsible as the drillers would be, for any damages or harm to
neighboring properties. (see link:
http://www.huffingtonpost.com/andrew-reinbach/stop-gas-drilling-sue-you_b_787881.html)
It's on the way folks! Neighbor pitted against neighbor courtesy
of the drilling industry who takes their billions in profits from our
gas and leave us to battle it out.
This is only the beginning of some
interesting events on the way for Doddridge citizens and those in
other counties when the Marcellus drilling REALLY gets underway.
They haven't even started yet on what they have in store for us.
Stay tuned.
