A lesson for the Fayetteville shale | Arkansas Blog

Friday, December 2, 2011

A lesson for the Fayetteville shale

Posted By on Fri, Dec 2, 2011 at 7:06 AM

To hear the Arkansas legislative shale caucus tell it, gas drillers in the Fayetteville shale would never dream of mistreating the Arkansas environment and nearly always treat landowners fairly. All the same, this New York Times report on reviews of six states (not including Arkansas) suggests that people watch their gas lease agreements closely. In a review of thousands of documents, it found:

* Fewer than half the leases require companies to compensate landowners for water contamination after drilling begins. And only about half the documents have language that lawyers suggest should be included to require payment for damages to livestock or crops.

* Most leases grant gas companies broad rights to decide where they can cut down trees, store chemicals, build roads and drill. Companies are also permitted to operate generators and spotlights through the night near homes during drilling.

* In the leases, drilling companies rarely describe to landowners the potential environmental and other risks that federal laws require them to disclose in filings to investors.

* Most leases are for three or five years, but at least two-thirds of those reviewed by The Times allow extensions without additional approval from landowners. If landowners have second thoughts about drilling on their land or want to negotiate for more money, they may be out of luck.

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