Be wary of fracking pitch
Now that North Carolina has opened the door to hydraulic fracturing for oil and natural gas, it probably should come as no surprise that landowners are beginning to be approached about selling the rights to any of those valuable commodities that might lie under their land.
What is a bit of a surprise is that early activity has started in around Durham. This area has hardly been discussed as a likely repository of oil or natural gas – generally the area around Sanford has been seen as the most likely profitable area for fracking technology.
In fact, John J. W. Rogers, a Durham resident and distinguished professor emeritus of geography at UNC-Chapel Hill, writing last month in The News and Observer, argued that our geologic history just doesn’t hold much promise (or threat, depending on your view) of widespread fracking.
“So there may be some frackable gas in the Sanford sub basin – optimistic estimates suggest a 40-year supply – but there is none in the rest of the state,” Rogers wrote. “Certainly none in the hard rocks of the Piedmont and Appalachians. And none in the sediments that underlie the coastal plain, which are too young to generate oil and gas.”
That view, though, hasn’t stopped an outfit called Crimson Holdings Corporation from making overtures for mineral rights to landowners in Durham and Chapel Hill.
The Ellerbe Creek Watershed Association has received interest letters from the group, The Herald-Sun’s Alex Dixon reported last week. Unsurprisingly, the conservation-oriented association has voted not to sell mineral rights in its nature preserves.
The Town of Chapel Hill also has received the letter. Town Manager Roger Stancil said he plans to take no action on the request.
To some who know of the offers, considerations of the propriety of fracking aside, the price is too low. “I wouldn’t advise anybody to sign this lease,” Ryke Longest, director of the Environmental Law and Policy Clinic at Duke University, told Dixon.
There are other reasons for anyone approached by the company to be wary. Frank Sides, the regional agent listed on the documents sent to Chapel Hill or the Ellerbee Creek Watershed Association, is not registered as required with the N.C. Department of Environment and Natural Resources. He didn’t return our calls seeking an explanation.
The prices may be low-balled because an early buyer may hope to get in before potential sellers realize the value, and the rights can be resold later for a nice profit. But given the dim outlook for any payoff in this area that seems a problematic strategy.
We wish the state had been more cautious before green lighting fracking, but now that it has, we would urge anyone solicited for mineral rights to be wary.
“The first thing I would do is tell someone to contact an attorney,” said Dave Rogers, field director of Environment North Carolina. “People should know their rights and they should learn about what rights they have as landowners.”
That’s sound advice.