Utica Shale Landman’s Book Hoax
The financial network CNBC recently published a story about how an oil and gas “landman’s guidebook” on “how to close the deal”, had been found in the driveway of a Greene county Ohio home where Utica shale oil and gas leasing is occurring. Some are calling the story “Landman Gate”. Since the notebook was found, not a single oil and gas lease has been filed in Greene county. (It should be noted that Greene County is not in the area where oil companies are most interested in leasing land at the present time, since they are primarily focusing on the Utica shale oil play in Eastern Ohio instead.) See map of Utica Shale
The supposed playbook reportedly instructs the oil and gas company agent or landman, to not mention the dangers of hydraulic fracturing, radiation, loss of property value, and to play up fears of China buying oil and gas rights.
Is The Ohio Landman’s Book A Hoax?
Environmentalists have insisted that the supposed oil and gas leasing playbook belonged to a landman who was actively leasing in the area for West Bay Exploration. Ohio attorney general Mike DeWine could find no such evidence. Some now speculate that the book was planted by someone in the environmentalist camp to dirty the image of oil and gas landmen. I personally believe that is the case in this story. Why? I once worked in the oil and gas industry, for over 30 years. I personally knew many landmen, worked with them, and even leased my own property to them. Most are highly trained professionals who belong to the respected American Association Of Professional Landmen, and have taken hundreds of hours of training courses, which include ethics in oil and gas leasing. Pat Gibson, vice president of West Bay Exploration was quoted as saying “I would have to assume that it’s 100 percent fabricated,” “I can’t see any reasonable oil company producing a document that would contain anything like that.” I personally agree.
For a professional landman to carry around (while he visits property owners), a book that states things like “don’t talk about the dangers of hydraulic fracturing”, “radioactivity” or “play up fears about China” is ludicrous. Could you imagine an airline ticket agent having a printed card just out of sight at the ticket booth which included things like “don’t mention the chance the plane will crash”. It’s like an exterminator losing a large laminated card in a home he’s sprayed that say’s “don’t tell the homeowner they will get cancer” or “don’t mention our products kill babies”. Professionals working for a company would never need cue cards about how not to talk about the most extreme or unrealistic scenarios to customers. It’s crap, and simply wouldn’t happen in this or any other universe. Also, the supposed manual instructs the landman to emphasize searching for oil, rather than gas, as if somehow the process is different and gas exploration more dangerous. It’s the same process, exactly, and the fact is that companies are looking for oil under Ohio, with natural gas being almost worthless at around $4 per thousand cubic feet.
As a professional landman, those things aren’t even on his or her mind, but are on the minds of some rabid environmentalists. If however this story is somehow true, whoever owned the book is a complete moron and should be sent to jail for stupidity alone.
Same Week That “Gasland” Playing In Town
It’s a funny coincidence that the anti-drilling movie “Gasland”, was playing in town the same week the notebook was found. The Colorado state Oil and Gas Conservation Commission found “Gasland” so full of errors, hype and outright propaganda that it put out a statement about it: Gasland Errors The environmentalists may mean well, but misinformed and unscientific documentary makers and activists have whipped up such a frenzy of opposition to fracturing that you would think oil companies were setting off uncontrolled nuclear explosions rather than pumping high pressure liquids underground. Let’s get real folks, it’s a heck of a lot safer way of getting energy than coal!
What About Frac Water Radiation?
What about the radiation “issue”? All underground seams of rock and coal contain some amounts of radioactive elements such as uranium. About 20% of frac water or “flowback”, returns to the surface and depending on the geology of the area, it may contain traces of some of these elements. This water is either cleaned up by companies such as Clean Streams, or injected into deep disposal wells, which are drilled into rock formations located far below water aquifers. Untreated frac water is not pumped into streams or into municipal water supplies, as some would have you think. If any operator were to do such a thing, they would be in big trouble with the Ohio Dept of Natural Resources, the EPA, etc.
Safety Of Frac Jobs
There have been past incidents where oil and gas extraction processes, such as injecting water into shallow coal seams, or improperly cased older wells, have resulted in shallow water well contamination. Such cases are rare, and not caused by frac jobs, which “Gasland’s” narrator basically tells viewers are ruining water supplies all over the place. Could a drilling rig operating near your water well cause it to suddenly produce water with more silt or odor in it? There’s always that chance, depending on how close the well was, if your well was deep or shallow, properly cased, and if any naturally occurring methane gas was already there. Biogenic gas refers to that found in water bearing zones naturally, a product of the decay of organic matter. Thermogenic gas, which what oil and gas companies drill for, is different. It might be possible that a 200 ton drilling rig, vibrating the soil as it drills a well, might cause more natural methane gas to migrate into a water well very near it, if gas was already present but trapped in pockets. Having a clause in your oil lease that requires testing before and after drilling, and providing for water treatment equipment for your well should that ever happen is probably a good idea. That scenario, however remote it might be, has nothing to do with hydraulic fracturing.
The fact of the matter is that in similar shale formations, which are thousands of feet underground, the process of using high pressure water, sand and a few chemicals, (hydraulic fracturing), has been used without incident in thousands upon thousands of wells. A mile or more of impervious rock layers, thick steel, and multiple layers of concrete lay between fresh water zones near the surface and where the frac job is applied.
What about the chemicals that environmentalists are so worried about? The fact is that oil and gas reservoirs already contain trace amounts of many kinds of chemicals, that’s where we get them from in the first place, petroleum. Nevertheless, several companies, such as Chesapeake Energy, have already switched to frac fluids which contain non-toxic alternatives. A frac job is a one-time process, done after the well is drilled, and is carefully controlled and monitored. This technology has directly resulted in the U.S. having more than a 100 year supply of natural gas, AND, for the first time since 1970′s, actually beginning to reverse oil imports by making available billions of barrels of new oil, such as is found in the Utica shale of Ohio.
Don’t Be Freaked Out By Environmental Extremists, But Also Don’t Just Sign A Lease Blindly
I’m not saying to take everything an oil and gas company, or a landman for that matter, tells you as gospel. They are out to make the best deal for them, not for you. Every landowner needs to use a qualified oil and gas attorney to negotiate a good bonus rate (amount paid per acre to lease your land), a good percentage of royalties (money you get from oil and gas), and how your land will be treated during and after the time a well is drilled. You can negotiate all sorts of things into the deal, such as what kind of roads they build on your land, kinds of gates, how much you are compensated for land removed from agricultural use, fences that hide gas and oil wells from sight, and much more. Joining a group such as the Associated Landowners of The Ohio Valley is also a good idea. Such landowner groups can help you negotiate a better deal. In the Eagle Ford shale in Texas, a similar shale which holds oil, the going rate for royalty percentages is 20-25%. So far Ohio landowners have only been getting from 12-15% of royalties. That’s not because oil and gas landmen are cheating people, it’s because landowners are not negotiating for higher rates. Once enough delineation wells have been drilled, and production figures start to come come in, landowners will have a better chance of bargaining for a greater share of royalties in areas where chances of a well’s success are almost guaranteed.
Ohio’s Utica Shale Oil Discovery Enhances Our National Security
If environmentalists would focus on the effects of coal mining and use, including the removal of whole mountain tops, acid rain and mercury pollution, as much as they were obsessed with hydraulic fracturing, our country would be better off. By using oil found under Ohio rather than buying it from some dictatorship which seeks our downfall, we gain security. Foreign oil imports cost American lives, that’s a fact. I don’t need a “playbook” to know it either.