Marcellus Shale drilling is an advancing technology that is being talked about more frequently. With the recent advancements, horizontal drilling – or “hydraulic fracturing” – is becoming a common term in households where drilling is taking place. Many landowners want to do everything in their power to protect their land and prevent long term damage on their property. So, the question becomes: If you are an owner of land where drilling is commencing, how can you prevent surface damage on your property?
Surface damages can be agreed to and paid as part of an agreement negotiated with the driller before the well is drilled. This agreement is usually present in the original lease/contract and involves a “waiver” or “statement of no objection” to the permit that includes the surface owner consenting to the locations of the well site and access road. Be sure that anything you sign includes a dollar amount for damages before and after the well is drilled. Wording of the agreement is important and it is suggested that any signed agreement be reviewed by an experienced attorney in this area.
The driller can also give the owner a notice that reclamation has begin and the landowner is free to begin a statutory arbitration process. This process was designed to work without the landowner having a lawyer, but it is still recommended to meet with a lawyer to understand how to explain and prove the damages to your property.
Damages under the statutory arbitration process are limited. The landowner only receives compensation for the land at its current value – not the market value. Landowners do not get compensated for the reduction in land value surrounding the land being drilled. Landowners do get compensated for lost crops.
After the well is drilled on the property, the landowner can bring this to his or her attorney’s attention if he or she feels the driller has done more than is “fairly necessary” to the well without properly “accommodating” or giving “due regard” to the landowner’s use. Attorneys can assist by using theories for claims on damages made on property.
Attorneys are beginning to take the new Marcellus Shale surface damage suits on a contingency basis because they are seeing so much more damage occurring.
In order to find a good answer to what the landowner should settle for, it is important to understand what original terms and agreements were in the initial lease. Many landowners sign into a lease and are quickly talked into an agreement before drilling even begins. Because they do not understand what they are signing up for or what is going to take place on their land, their main focus was money when they initially signed.
On average, when represented by an attorney, landowners receive anywhere from $5,000 to $15,000 for a conventional well site in these proceedings. Depending on the amount of damage, the compensation fees vary. The more damage on your land, the higher the compensation amount becomes.
Horizontal Marcellus drillers are more likely to approach landowners early because they want the landowners to sign a lease that waives claimed damaged. Landowners are strongly cautioned to hold off on signing any contracts until they have discussed the contract with their attorney.