Feature - Penn State Extension Helps Landowners Work With Natural Gas Drillers

For landowner Jamie Ulrich, it started with a letter in the mail. Then there were a few phone calls, and one day last winter Ulrich found a note hanging from the doorknob of his Clearfield County farmhouse.

 

The letters and calls were from gas and energy companies that wanted to lease Ulrich’s land to explore for underground natural gas. “I thought there was some mistake,” says Ulrich, who works for the Pennsylvania Department of Agriculture’s State Conservation Commission. “I didn’t think we were in typical gas country.”

 

In January 2008 Ulrich and his wife, Annie, were offered $50 an acre to lease their sixty-one-acre farm, and they considered signing. They talked to neighbors who were getting offers. After attending an extension workshop, the Ulrichs decided to hold out for a better offer. “I went to an extension workshop and heard Tom Murphy speak, and I was impressed,” he says. “Folks like Tom have been a tremendous help. They’ve seen the trends, they’ve been to Texas and seen what’s happened there with the Barnett shale, they have the facts.

 

“Back in May, our offer was $800 an acre, and I thought, okay, now it’s time to sign. I called Tom, and he said, ‘Jamie, I think that’s a little light. Right now time is your friend.’ He gave us courage to hang in there.” The Ulrichs bided their time, and on October 1 they signed a five-year lease for $1500 per acre with 15 percent royalties on any gas that is extracted from their property.

 

“It was definitely worth it to educate ourselves and get clear, objective information from extension,” Ulrich says. “It’s been a stressful time, but following extension’s advice to be patient paid off for us.”

 

 

Richard Burd operates a cash grain farm in Fayette County. He estimates that since April 2008, he has spent an hour each day researching the process of natural gas leasing. “I’ve kept up on what’s going on in the gas industry,” he says. “I’ve looked at different companies and tried to find good sources of information about how to go about leasing my land so we wouldn’t end up as one of the many horror stories we’ve heard about the things that can go bad when you lease your land for gas exploration.”

 

In the process of searching for reliable information, Burd turned to Cooperative Extension. After attending two extension workshops and consulting further with extension educators over the phone, he realized the importance of drawing up a lease with addenda that protected him, his farm, and the environment. “I was hauling wheat in Mill Hall this past summer, and I stopped in and talked with Les Greevy, an attorney who participated in the extension meetings,” he says. “Our group of neighbors hired Les as our attorney, and he gave us a lot of real-world, practical education in a hurry. Working with a competent attorney who knows the language you need is really important.”

 

Burd and his group have not yet signed a natural gas lease; they are awaiting word from two gas companies who had presented tentative offers. Following extension’s advice to consult financial professionals, Burd met his accountant when he began researching gas leases, and he plans to hire a financial planner after signing a lease.

 

“What extension has done for me and my neighbors in this process has been huge,” Burd says. “I can’t overstate how important it is to get good, unbiased information. These are life-altering decisions we’re making. Someday my kids are going to inherit my successes as well as my mistakes, and I don’t want this gas leasing decision to be a mistake. Extension can do a lot for rural communities like ours, to help bring fairness and transparency to this whole process. I’ve really been grateful for what Penn State has done. They have hit a home run with their natural gas team.”

 

 

In a vocational agriculture course at Bradford High School, students are using a CD-based Cooperative Extension short course to learn about gas well drilling and private water supplies. “McKean County is located over one of the largest pools of oil and natural gas in Pennsylvania,” says teacher Sam Heyler. “Oil has been in the blood of Bradford people since the mid 1800s.” In 1975 the high school started a petroleum production class to support the oil boom, and when that boom fizzled in the late 1980s the class was closed. “Now,” says Heyler, “employers are coming back and saying they need new people for the workforce. People are coming from all over the country to work in the oil and gas industry.”

 

Because of the new Marcellus shale gas rush, Bradford High School has brought back its petroleum production class, and Heyler is using the CD course to deliver research-based information to his students. “The Marcellus shale is going to create new jobs. And this computer course has a tremendous amount of information that is not only valuable to landowners, it gives these students a background on the water quality and environmental issues that go along with natural gas drilling.

 

“Future workers need to be trained for the gas industry, and this extension program gives the students education they’ll need when they go out on the job. As an educator, I don’t have time to develop curriculum. So when extension produces something I can take right to the classroom, it’s great. If it comes from extension, I know it’s done right. I can tap into what extension professionals are doing, with the added advantage that this program was developed specifically with the natural gas boom in mind and is tailored to our area.”

 

 

Recently, a Williamsport community organization called Technology Futures held a workshop in cooperation with extension, natural gas companies, and realtors, focusing on doing business in a gas economy. “We expected 70 or 80 people to show up, but we ended up with 150 and had to turn people away,” says Vince Matteo, president/CEO of the Williamsport Lycoming Chamber of Commerce and co-chair of the Lycoming County Community Gas Task Force. “That kind of attendance has been typical with educational meetings focused on natural gas.”

 

The Lycoming County Community Gas Task Force works closely with Cooperative Extension, sharing information on how to best get the word out about the types of employees needed in the natural gas industry. ”We all know each other and we all talk to each other, and that cooperative approach is to everyone’s advantage,” says Matteo. “For instance, our task force has not done a lot of public education because extension is doing it, and doing a fine job. We don’t want to reinvent the wheel.”

 

Lycoming County has seen an increase in activity because of the natural gas boom. Several service companies that support the gas industry, such as hydrofracturing companies and sand companies, are leasing work space. Hotels, restaurants, and apartments also have seen increases in business.

 

“So far, the effect on the local economy has been positive,” Matteo says. “We know that in the future, some of our local businesses might be threatened if employees go to work for the gas industry, and we know our roads will get beat up. But some of the work extension has done, along with our gas task force, is helping us keep ahead of the curve. We are cooperating to identify ways to be ready for the changes to come.”