May 24, 2013
PIEDMONT, Ohio - When Dick and Kaye Clay were approached by a shale energy representative about possibly leasing a portion of their Harrison County land, Kaye Clay knew where to turn for guidance.
She had previously worked for the Guernsey County office of Ohio State University Extension and was familiar with a fact sheet that Extension educator Clif Little had written in 2008, "Leasing Farmland for Oil and Gas Production."
The publication is available online at http://ohioline.osu.edu/als-fact/.
OSU Extension is the outreach arm of Ohio State University's College of Food, Agricultural, and Environmental Sciences (CFAES).
"Knowledge is gold," Kaye Clay said. "I thought I knew a few things about oil and gas development, but I didn't know a fraction. That's where Extension comes in. That's where I turn."
The Clays used the fact sheet's checklists to prepare for negotiations with Gulfport Energy, and also talked with Little "and picked his brain," she said.
"Extension educators are so willing to share their knowledge, and if they don't know, there's someone they can contact and get back with an answer," she said. "I can't say enough about Extension."
Dave McCleary in neighboring Tuscarawas County had a similar experience.
A representative knocked on his door with a lease agreement to run a pipeline on McCleary's land - something that more and more Ohioans are likely to experience as additional shale energy wells begin producing and the gas and liquids need to be delivered to energy facilities.
The representative "came back the next day wondering if we had signed the agreement so he could give us our check," McCleary said. "It was tempting - he was standing there with that check in his hand, but if we had signed it then, I would have ended up with a small check and a big headache."
Fortunately for McCleary, he had been able to talk to Extension educator Chris Zoller at a meeting the previous night. Zoller gave him a list of questions about issues he should check into before signing the contract.
"The company came to me with a one-and-a-half-page lease agreement that was very much in their favor," McCleary said. "It went from that to seven pages covering everything from how deep the pipe will be buried, details about timber, brush and stump removal, and what they would re-seed the land with.
"He (Zoller) gave me lots of good information to protect me. Some of those things I would have caught, but not everything."
Zoller also advised McCleary to take the agreement to a lawyer with experience in oil and gas leasing issues before signing it.
"The attorney looked at me and said, 'I'm glad you came,'" McCleary said. "In the end, he got me eight times the lease price the company originally offered."
Kaye Clay said she was glad she did her homework when it came time to negotiate with company representatives.
"It gave me confidence," she said. "Otherwise, I might have felt intimidated. With the knowledge gained from Extension, I have the confidence to ask the correct questions and make informed decisions so we're not taken advantage of."
Since 2010, OSU Extension has devoted a growing portion of its resources to work on shale energy issues.
The statewide OSU Extension Shale Energy Workgroup meets monthly to discuss emerging needs and get updates from the Ohio Farm Bureau, which also offers programs across the state, and from the Ohio Department of Natural Resources.
In addition, the group created a website, http://shalegas.osu.edu, as part of the university's Subsurface Energy Resource Center (SERC), where Ohioans can get information about shale development, leasing, taxation issues, pipelines, water resources, community impacts and other issues related to shale development.
Shale energy is one of the college's top priorities for additional investment, said Bruce McPheron, dean of CFAES and Ohio State's vice president for agricultural administration.
Already, more than 16,000 landowners have attended meetings and learned what to expect when approached about leasing mineral rights. The college is also a key player in SERC, which offers the means for Ohio State experts from many disciplines to work together on shale development issues.
"We've consulted extensively with colleagues at Penn State and have signed a memorandum of understanding with West Virginia University to partner on this issue, combining the expertise from land-grant universities to better prepare for the shale boom," McPheron said. "But there is far more need than we have human capital to conduct the necessary research and outreach to support decades of shale gas management."
Now, a handful of Extension educators based in eastern Ohio counties have become resident experts to help landowners protect their rights.
Zoller said the experience has kept him busy but has been rewarding.
"It's what we're supposed to be doing: educating people and helping them make good decisions," he said. "We tell people, 'Get as much information as you can, evaluate that information, and then make the best decision possible.'"
Little, who has offered programs in eastern Ohio "from the Ohio River to Lake Erie and everywhere in between," said he recommends that landowners west of the current development area, or any who have not yet been approached about possibly leasing their land for drilling or pipeline installation, to start thinking about it now.
Although it's unclear how far west in Ohio shale development will occur, companies are already doing some legwork exploring the possibilities.
In fact, Little and fellow Extension educator Chris Penrose were invited to southern Illinois last year and spoke to about 600 people there about Ohio's experience with shale energy development, and they're heading back later this month.
For landowners who haven't yet dealt with these decisions, Little advises them to not delay before doing their homework.
"Don't wait to clear up any old lease issues," he said. "Don't wait to find out if you own your mineral rights.
"When the leasing issue picks up, and it can do so very quickly in a county, the recorders office can become very busy very quickly. I've seen situations where people can wait for days to get in there."
Little also recognizes that shale energy is a controversial issue, with many people questioning, "whether this development should be going on or not."
"Those of us in Extension respect the decision people make on that, either way," he said. "But the people who have come to us have needed help with the leasing issue, and that's what we've been focusing on."
And that kind of education can make a practical difference for Ohioans.
For example, McCleary had a clause written into his lease that the company would erect temporary fencing and then replace the permanent fence when the pipeline installation was completed, so he could continue to use that land as pasture for his cattle. The Clays made sure eight spring developments that are used for both their livestock (cattle and sheep) and their home were protected.
"This drilling pad will probably be here for 25 years, and this land will be here when we're gone," Kaye Clay said. "We want to make sure everything is done right for our family, for the next generation."