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>>> Decades ago, energy companies bought "mineral rights" to the land below those farms — so the companies can move in, create drilling pads where they please,
by ssharp 14y ago
>>> Decades ago, energy companies bought "mineral rights" to the land below those farms — so the companies can move in, create drilling pads where they please, move in trucks and workers, without the farmers' consent...
Huh? Without the farmers consent? When you sell your mineral rights, you're giving consent. What usually happens is that the gas companies lease your mineral rights and in that lease agreement are provisions that give the gas company the right to drill on your property, which includes equipment, trucks, etc. If the mineral rights were actually sold and not leased, I'd suspect the contract included writing in easements on the title for access and equipment.
Since the story is painting sort of a doom and gloom scenario, my guess is that whoever owned the property "decades ago" either bought the property without the mineral rights, sold them off, or did a very long-term lease on them. When this happened, the rights probably weren't very valuable because fracking technology didn't exist. Now that the land is worth a fortune, it's a missed opportunity of the farmer. Whatever the case, the owner either initiated the action or the terms should have come up when the property was sold.
I live in a part of Ohio that is currently in the early stages of a fracking "boom". Whether or not it comes to full fruition is unknown but the industry is certainly developing. I hear lots of stories about people who missed out on fracking leases because they had leased their mineral rights previously. The old scenario used to be next to no upfront lease money, a modest royalty, and free gas if they put a well on your property. When the fracking technology became available and the shale area was suspected to be ripe with gas, the whole game changed. Leases were being written that gave in the range of $800-$5000 per acre up-front, along with longer-term royalties. These were significantly more valuable than previous leases. I've heard stories of people missing out on upwards of $1,000,000 in upfront lease money because they already had leased their property to someone else. Of course, if gas hits on that land, the up-front money pales in comparison to the long-term royalites.
If I were a farmer, I wouldn't buy land knowing that I didn't own the mineral rights to it. You're making a bet that nobody will ever come in and claim those rights, which is unrealistic. If I'm a farmer and I sell of my rights through sale or lease, I'm making a bet that the sale of the rights or the lease and subsequent royalties are worth more than the production of my farm.
- nmcfarl 14y agoI've been told that in northern New Mexico most of the mineral rights where sold off long ago, in the 20's and 50's, and sold off pretty comprehensively. Meaning there are parts of the state you just couldn't live in if you refused to live on land that no longer had its mineral rights. Also meaning those people there now where not directly compensated for them, thus have not thought of the issue. (Presumably, this is priced into the market and land values are lower, but with real estate pricing being so dynamic people probably don't consider this either) --- It should be noted that my sources are people I vaguely knew about 10 years ago, who where whinging about oil men. So not reliable. But if true, it makes a more compelling story for people complaining about oil men. Also it must be said - oil men are probably going to elicit complaints where ever they move in as their personalities, and manners, are not, as a rule, refined...
- jensonkko 14y agoSomething else grandpa did to fuck us over! Fucking asshole.
- jensonkko 14y agoI mean that as a legitimate comment! The guy who owns the farm now who is getting fucked over by the oil companies having mineral rights, was actually fucked over by his grandfather when he owned the land, selling off the rights.
- eru 14y agoThe grandfather was under no obligation to leave even the land sans mineral right to his heirs.
- at-fates-hands 14y agoInteresting. My grandfather and five of his college friends bought into some oil rights in Western ND back in the 1950's. When he passed away, he willed the rights to his six kids (My Dad was one of them). Nobody thought they were worth anything, but continued to hold on to them for whatever reason. Imagine the families surprise when several oil companies started calling to get permission to start taking field samples on the plots they owned. They've continued to make good money on the plots and are now just waiting to see if the "big payout" ever comes, where an oil company would want to buy the family out of its ownership.