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Three Ways that S820 allows Private Companies to Infringe on Your Private Property Rights

If the current fracking bill passes, this sign won’t do you any good if you live in North Carolina. Photo by heathzib

June 2012 — Today, the NC House of Representatives Committee on Environment approved the latest version of a law legalizing fracking in North Carolina.

It puts a moratorium on issuing permits for drilling that won’t be lifted until legislators vote to lift it. Like the earlier House version, it contains many of the landowner rights protections that RAFI and the North Carolina Attorney General’s office recommended. And like earlier versions, it has gaping holes in those protections, holes that are too big to ignore.

Gas companies could drill your minerals without your permission.

The first of the bill’s fatal flaws is its failure to ban forced pooling. Forced pooling allows gas companies to drill on private land without the landowners’ permission, as long as a certain percentage of their neighbors sign gas leases. If you live in an area where fracking will occur, this practice strips you of the most basic private property rights. It can force you to let a private company onto your land. It can allow that company to extract and sell your resources, build roads, drilling platforms, and pipelines, and use your water, all without your permission. Even if you want to lease your gas rights, forced pooling can force you into a contract without the leverage you need to negotiate a fair price or fair terms.

North Carolina prides itself on protecting private property rights, but if the bill that the House Committee on Environment just passed becomes law, the state will strip landowners the right to control what happens on their property, and it will allow private companies to take personal property without permission.

Gas companies could use your land without your permission.

The second fatal flaw is the bill’s failure to require surface rights agreements. These are agreements between landowners and gas companies about where and how the gas company can use the land. They would commonly include things like where roads and drilling stations can be built and how landowners will be compensated for any damages.

The current bill makes these kind of agreements optional. If you own your land but not your mineral rights – like many landowners in Chatham, Lee, and Moore Counties – this is a big problem. It means that if the person who owns the mineral rights signs a gas lease, the gas company doesn’t have to negotiate with you. It can come onto your land and build whatever it wants wherever it wants to. Once again, this is a huge violation of your private property rights.

Even if you own your mineral rights, surface rights agreements give you a chance to work out important lease terms. For instance, in other states where surface rights agreements are not required, gas companies have built staging areas for entire regions on one person’s property without that landowner’s permission.

Gas companies could take your land without your permission.

In The News & Observer last week, attorney Michelle B. Nowlin notices something important that has not been part of the discussion about fracking so far: eminent domain. Most of us are familiar with eminent domain as the power that allows the government to take private property for important public infrastructure like roads, schools, sidewalks, and fire stations. When governments use this power, there’s a public comment period that allows affected communities to weigh in.

But in North Carolina, private companies can also claim eminent domain. Right now, gas companies use this power to put in pipelines to bring natural gas to customers. If fracking is legalized, companies will be able to pipe the gas from the drilling sites to compression stations, building pipelines on private property using eminent domain. These pipes are much larger than the pipes that take gas to customers. Depending on how the law gets interpreted, they may also have the right to seize private land to build compressor stations, pipes for water and wastewater, and other infrastructure.

It’s time to slow down.

Earlier this year, we joined the Attorney General in asking the General Assembly to take the time to fully understand the impact that fracking might have on our state before deciding whether or not to make it legal. The moratorium in the current bill is to allow a Mining and Energy Commission to move forward with developing regulations instead of studying all of the issues as DENR’s and the Attorney General’s reports recommend.

The problems with the bill that moves out of house committee today demonstrate why time to study is necessary. There are many good parts of this bill. It is a compromise between the earlier House bill and the Senate bill that passed two weeks ago, and it includes many of the recommendations that RAFI, the Department of Energy and Natural Resources, and the Attorney General made. It includes a solid plan for making sure landowners are educated about their rights and the potential impacts of fracking on their land. But it leaves out some critical parts of the protections landowners will need.

Education does no good if landowners lose the right to act on what they know. The bill as it is written gives gas companies the right, under certain conditions, to drill and seize private land without the landowner’s permission. It leaves huge gaps in protections for North Carolina landowners – gaps that are too big to ignore.

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