Our shale gas nightmare (Wheeling: mineral rights, leasing, mortgage)

[Zimar]

Ok... so here are the basics of this situation:

I live in D.C., where I go to law school and my hubby works (because there are basically no good jobs in WV). But I love WV and if I can ever go back, I will.

Here's the problem: my mom and aunt live in a beautiful home in a rural-ish part of the Northern Panhandle. One individual owns all the land surrounding the neighborhood. He has sold his mineral rights for millions of dollars (because he owns hundreds of acres), and a company is planning to put in a gas well VERY close to my aunt's property. Our neighborhood is mostly professional people, like nurses, lawyers, etc. There are a bunch of families with young children, and everybody is freaking out. The more I research this issue, the more I freak out too. My mum and aunt have put pretty much everything they have into that house, they intended to live there until they die. I am worried about the pollution this will cause, I am sort of worried about all the neighbors' kids, and I am worried about the property values of the home (I sort of want my mom and aunt to leave and move down here with me now).

There's a wrinkle to this: my mom and aunt's house is sitting on a big ol' gas line. They're not allowed to even plant trees on a huge part of the property because the gas company has a right-of-way. I am worried if some accident happens it could do something to the line and cause an explosion. We've all heard about the earthquakes that may be caused by all this fracking stuff.

My sense is that there are not very good protections for homeowners in WV in this scenario.

Everyone in the neighborhood has been offered a lease by the gas company, but no one really cares about the money. They just want the well as far away as possible. My sense, as a lawyer-to-be, is that no one should sign the leases, particularly if they are worried about the property values of the home. I would think (and this is just my instinct) that signing a lease with the gas company is going to preclude a lot of rights if something goes wrong and you want to sue. My sense is that no matter what, this is going to do terrible, horrible things to the value of this property. And if, God forbid, there is any sort of accident nearby, I don't even think a lender would be willing to put a mortgage on it, which would make the value plummet even more.

I have asked my aunt to get a lawyer, but she hates lawyers! I'm supposed to be the lawyer! But this is so over my head it is not even funny. Two of our neighbors are lawyers and I think this is way over THEIR heads! So here are my questions:

1. Does anyone know about the general terms of these leases? Are you aware of any rights to sue that may be taken away if you sign them?

2. Does anyone know a good environmental lawyer in the Wheeling area?

Thanks for reading my sob-story!

[billscamaros]

I would think that the first thing to do is to get a copy of lease that they are offering your family and read it. I can't imagine that it's truly "over your head" nor over the head of all the lawyers that you know. Verify that actual location of well that they are planning to put in. It's entirely possible that your family will pull in royalties from the gas company that could increase their property values and provide them with additional income for the rest of their lives. It seems a little early to panic.

[CTMountaineer]

I'm not a scientist, but I do not believe gas lines explode. Closed in areas with concentrations of gas in combination with oxygen explode when ignited by a spark. Those conditions can not exist within a gas line. Now, if you were to dig down and sever that line with something you might have an issue at the point where it would be severed, especially if there were some sort of spark, but under normal conditions I would not think your family need worry about the gas line.

[Zimar]

We have a general sense of where the well is going to be, based on the road the company is building and what they have told the neighbors, the well site would only be 600 feet from the property across the street from us. This upsets our across-the-street neighbor very much.

My aunt was offered a lease before, which I carefully read. I did not like it and I told her to either take it to a lawyer or not sign it. The lease gave what I considered to be way too much power to the gas company- they could store materials on your land, put a road, etc. My aunt only has 3 acres, so I'm pretty sure that they would not do this, but I would never give over that kind of power on my property. I don't remember the exact terms, but it was a pretty mediocre sum- about 3k a year. Each lot in the neighborhood is only about 1-3 acres, so no matter what, they're not going to get big money from a gas well. This is a neighborhood full of fairly expensive homes, so the property values are far more important than the royalties the gas company is offering.

My suspicion is that the reason the gas company is offering leases on this neighborhood (which is about 50 acres max) while it already has rights to all of the surrounding land (which is hundreds of acres) is that they are going to use the leases to preclude any lawsuits. How could you sue a company for ruining your property values when you've been sharing in their profits? But that's just my cynical suspicion.

My aunt recently visited me and brought a new contract that she was being offered, but this one was longer, and I did not have the time to sit down with it and carefully peruse it while she was here. I am planning to look at it again the next time I am visiting her.

This isn't really my wheelhouse, and I know enough about the law that I know that this is a serious matter, and that someone with expertise in environmental law in this region should be looking at the contract (hence why I asked for recommendations). Surprise surprise, not all lawyers are the same.

The idea that having a gas well next to your home would increase property values strikes me as completely bizarre, and an idea that could only pass muster in West Virginia (i.e. terribly naive). Maybe I've become a city slicker, but I would NEVER buy an upscale home sitting next to an industrial site. It might not even be a matter of taste, if there are any accidents on the site causing any damage or creating toxicity in the soil, lenders might refuse to put a mortgage on a property, which by itself would completely destroy the property values of the neighborhood.

These points are actually moot. At this point, no one in the neighborhood cares about leasing out their land, what they care about is putting distance between themselves and the well, and maybe delay the drilling. These are hard-working, professional people, and they are more worried about the value of their neighborhood and the health of their children than some paltry sum the gas company is offering.

I know that this region is in the midst of a gas boom, and that a lot of people are excited about it. I don't think industry is evil, I think industry is industry. These companies are trying to make a profit, and it would be dumb to expect them to protect or care about the people living in these communities. I just want to take care of my own.

[billscamaros]

I would agree .... I can't imagine how having a gas well close to your house would increase property values. On the flip side, your folks have a marked gas line running thru their property that presumeably hasn't hurt their property value either. I guess that it would depend on the size and construction of the gas well, as well as how often it is accessed.

Hopefully the neighborhood can organize and force the proposed well to a more distant location. The ongoing gas boom does seem to have alot of folks excited .... which makes it more scary in my mind.

I concur with you absolutely .... any sum of money would be insignificant when compared to the health of your friends and family. Sorry that I don't have anyone to recommend to you.

I hope that this works out in the best way for your family.

[David Kennedy]

This is 'over your head.

Keep the peace and your sanity....sell the interest to the gas company, free and clear and walk away.

[boycewv]

Yea unfortunately big energy owns wv and they know they can get away with it because of the laws are in their favor and protect their interests, at least thats how I see it. So I can understand your frustration and skepticism. Not sure what kind of advice to give, just dig in and maybe even get blueprints from the gas company if they would be forthcoming.

[CTMountaineer]

It does no good to not sign a lease unless you think you can sign a better lease. As soon as the gas company gets a majority of mineral rights owners to sign, they can drill whether or not you have signed. You simply lose out on the leasing fees and royalties, which can be substantial for even relatively small tracts of land. Remember, it is not the land which has value to the company, it is what is under it. The land can be essentially useless... very steep, etc. but still have great value due to the mineral rights.

600 feet from a home would be more than a nuisance for certain, but they will drill it whether your relatives like it or not so they should simply try to profit from it as best they can.

[David Kennedy]

The new state law says that no new wells will be drilled less than 600 ft from an occupied dweling....

unless, the owners sign a wavier permitting the well to be at a closer distance.

[CTMountaineer]

And, that is reasonable. Now, if you happen to have a house located 601 feet from the wellhead AND don't own the mineral rights on your property, you are SOL as my dad used to say. But, if your house is 550 feet from the proposed wellhead you have a bargaining chip even if you don't own mineral rights because you could negotiate a waiver of the 600 feet restriction with the gas company.