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Planning for Gas Leases. Planning For Gas Leases. Daniel S. Dineen, Director of Planning Cortland County Planning Department 37 Church St. Cortland, NY 13045 (607) 753-5043 FAX (607) 753-5150. Exploratory drilling.

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planning for gas leases2
Planning For Gas Leases
  • Daniel S. Dineen, Director of Planning
  • Cortland County Planning Department
  • 37 Church St.
  • Cortland, NY 13045
  • (607) 753-5043
  • FAX (607) 753-5150
exploratory drilling
Exploratory drilling
  • Has been occurring for several decades in other parts of the country
  • has recently become an issue in the northeast
  • has not been incorporated into zoning laws in NYS but other areas of the country have developed land use regulations
gas leases
Gas leases
  • Contractual agreement
    • binding document establishing time, price, and any other conditions of the lease
    • gives the energy company access to the site, the right to prepare the site as needed, and to drill on the site
    • landowner receives compensation on a per acre leased basis
gas lease
Gas lease
  • Term of lease
    • shorter lease equals smaller payments
    • if exploratory program is not over, the lease can be renewed or the gas rights revert to the property owner
      • EXCEPTION - if gas is found during the lease period, the operator retains their rights to the gas for as long as the well is productive
gas lease6
Gas lease
  • Advantages
    • lease fee
    • if successful
      • owner receives compensation as a % of gas produced
      • may be allowed to tap into the gas reserve for life of well
gas lease7
Gas lease
  • Disadvantages
    • disruption of land : building of roads, removal of trees, topsoil, vegetation, etc.
    • erosion due to clearing of land
    • possibility of leaking of drilling fluids into the ground
    • noise
    • equipment storage
gas lease8
Gas lease
  • Lessee is required to reclaim the site to the extent possible (topography, vegetation, etc.)
  • Purchase of Development Rights program
    • if property has a conservation easement, can not enter into a gas lease
    • gas lease can only exist if entered into prior to placing property into conservation easement
gas lease9
Gas Lease
  • Factors to consider before signing lease
    • check references
    • check with neighbors
    • negotiate lease payment
    • negotiate term of lease
    • damage settlement
    • negotiate location of well, storage tanks, access roads, pipelines,etc. (Pipelines should be buried below plow depth)
gas lease10
Gas Lease
  • Negotiate a ‘free gas’ clause
  • limit total combined acreage of gas lease
  • limit the storage of hazardous materials on site
  • disposition of well once it is no longer in use
gas leases11
Gas leases
  • Other considerations
    • drilling rig will run 24hrs. a day 7 days a week
    • can affect wells in rare instances
gas leases12
Gas leases
  • Land use regulations pertaining to exploratory drilling
    • regulations exist throughout the country but very little in NYS
      • Clermont,NY requires zoning permit from zoning enforcement officer for drilling activities in the floodplain
gas leases13
Gas leases
  • Other examples of land use regulations pertaining to exploratory drilling
    • Napa,CA
      • requires temporary exploratory probe permit
        • similar to special use permit with site plan review
        • requires holes to be sealed within 365 days from commencement of operations
        • requires indemnity bond to insure site is returned to original state, to the extent possible
        • requires liability insurance
        • work must commence within 60 days of issuance of permit
gas leases14
Gas leases
  • Other land use regulations pertaining to exploratory drilling
    • Garden City,KS
      • exploratory drilling prohibited within 25ft. of a building
      • prohibited within 25ft. Of a property line unless the adjoining property is also under a lease agreement
      • drilling locations and equipment shall be enclosed in temporary fencing of at least 4ft. in height
gas leases15
Gas leases
  • Garden City,KS (continued)
    • gas wells and equipment require chain link fencing a minimum of 6ft. in height
    • drilling, completion, equipping, repairing, and maintenance of wells can only occur Monday through Friday between the hours of 8am and 5pm
exploratory drilling16
Exploratory drilling
  • Does not appear to require a building permit for exploratory drilling
  • appears that the Town can require site plan review
gas leases17
Gas leases
  • References
    • “Mother Earth News” issue #85
    • Ohio Department of Natural Resources “Mineral Resource Management”
    • Town of Clermont,NY zoning
gas leases18
Gas leases
  • References (continued)
    • Napa,CA zoning
    • Garden City,KS zoning
gas leases19
Gas leases
  • ???Questions???