Steve Neeley estimates that he has spent more than $500,000 over the past 12 years to build a country estate in southern Portage County.
When a Chesapeake Energy land man approached him months ago with an offer to lease the Utica shale mineral rights beneath his meticulously landscaped 9.5-acre property in eastern Ohio, Neeley declined. That’s when, Neeley says, the land man told him, “We’ll just take it.”
Neeley and 23 of his neighbors are the first group of Ohio landowners forced to take part in Utica-shale drilling under a seldom-used state law. The law lets companies add properties to large “ drilling units” even if leases with landowners haven’t been obtained, to maximize access to deeply buried oil and gas.Even the state isn’t immune from the law. The Chesapeake Energy drilling unit of 959 acres in Portage and Stark counties includes a 4-acre corner of Quail Hollow State Park northeast of Canton. That makes it the first state park in line for “fracking.”
Ohio Department of Natural Resources officials say the “unitization” law guarantees fair compensation, and that the properties of unwilling landowners won’t be damaged.
“We don’t allow the company to occupy any of the surface of the land,” said Rick Simmers, the chief of ODNR’s Oil and Gas Division.The law also ensures that no drilling activities, access roads or pipelines will damage the properties, Simmers said.
In a written statement, Chesapeake Energy said the company tries “numerous times” to obtain voluntary agreements from landowners. “Proper use of unitization allows for oil and gas reserves to be developed in the most efficient and fair manner for all owners and minimizes the use of the surface,” wrote Keith Fuller, Chesapeake’s corporate-development director.
But Neeley described the practice as a type of theft. “It’s like (Chesapeake already has) everything sewed up before they even talk to you,” he said. “You were just going to lose, no matter what.”Oil and gas companies are offering landowners a bonus of as much as $5,000 an acre in some areas to sign Utica-shale mineral-rights leases. Many are eager to sign.
Though industry officials insist it’s safe, some landowners, including Neeley, fear that fracking threatens their land and water. The process involves injecting millions of gallons of water, sand and chemicals underground to fracture the shale.
Ohio’s law lets a drilling company add unwilling landowners’ properties to drilling units as long as the company has leased at least 65 percent of the unit’s acreage.