Get Politically Active: What’s Wrong With Compensating Landowners for their Shale Gas?

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“Get Politically Active”  is an occasional entry that contains a document on a current political issue.  It will be one page long and easy to copy. Feel free to email this to contacts who might be interested in this topic.  Someone may even want to pass this out at a Town Hall Meeting!

Background: In response to Governor Cuomo’s decision to ban hydrofracking in New York, Rep Reed sponsored a bill that would permit property owners  to obtain compensation (sue) when local, State, or Federal government impairs the value of ownership.

Go to: H.R.510 (Text and other information about the proposed law)

Follow this LINK for a one page pdf copy of “What’s Wrong with Compensating Landowners for the Shale Gas?”

The following a comment made by Glenn Wahl, a friend of New NY 23rd on Rep. Tom Reed’s Facebook page. It is printed here with permission of the author.

There are many things wrong with the idea of compensating landowners for their shale gas. First, there has been no devaluation of land values. Landowners who have gas under their land don’t have this value added to their assessment, and now that NY has banned fracking, there won’t be a reassessment devaluing the land. It’s worth just as much now as it was before the ban.  Second, the gas is still there- nothing has been taken. So what happens if the government pays these landowners, then down the road NY approves fracking or some other extraction technique, and that gas is removed? Does NYS then get the money from that? Does the landowner? Double-dipping like that is illegal.

What happens when the present landowner who just got paid compensation then sells the land to the new owner? Does the land get sold for less because it had been “taken”, even though it is exactly the same as it was? And do only landowners who had already sold leases get compensation? What about other landowners who were waiting for gas prices to rise? What about landowners who never wanted fracking? Their land still was “devalued” the same amount, according to the warped logic of compensation. It’s not 77,000 landowners (the number of members the Joint Landowners Coalition claims to have), it’s hundreds of times that number. Every landowner would need compensation, even the smallest landowner.

And another complication is that the people who own the land and signed the lease don’t own the gas anyway- the drilling company does once the lease is signed. But when they bought the lease, they knew they were taking a risk- that NY wasn’t open for fracking and might never be. The landowner knew that too.

Do we compensate anyone who makes an investment at a risk, and then loses it?

I have lots of white ash on my land, and I can’t sell it due to the Emerald Ash Borer quarantine. Should I now demand that New York State compensate me for that timber since they enacted the quarantine?

Do we compensate anyone who wants to do something with their property that the law disallows? If I want to collect used tires for $1 each, pile them on my property and burn them to make room for more tires, the law won’t let me. Should I demand compensation for that lost revenue?

I can think of dozens of things that the state has prohibited for the general welfare that have ended up either preventing people from making money, or that have cost people money out of pocket. See how flawed the idea of compensation for the New York State ban on fracking is? It’s impossible to legislate equitably for, and it would be extremely difficult to administer that compensation. People knew they were on shaky ground when they signed leases. They knew NY might never open for fracking.

Funny how the very people who complain about government hand outs now have their hands out.

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About pystew

Retired Teacher, political science geek, village trustee. I lean a little left, but like a good political discussion. My blog, the New NY 23rd (http://newny23rd) is about discussing the issues facing the people of our new congressional district. Let's hear all sides of the issues, not just what the candidates want us to hear.
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9 Responses to Get Politically Active: What’s Wrong With Compensating Landowners for their Shale Gas?

  1. Anne says:

    All good points. I’ve had a similar thought myself…I, too, watched “Breaking Bad” and you know, I’ve got plenty of room on my land for a lot of trailers &/or campers that could function as labs. And yet the government tells me it’s illegal to produce meth? Haven’t they just cheated me out of my $80M, and whom do I sue over that?

  2. josephurban says:

    When you consider the history of our tax code, this is consistent. The GOP has long supported the idea that agribusiness should be paid for NOT growing certain crops. They have supported the ludicrous idea that oil companies be paid for the oil that is no longer in the ground (oil depletion allowance). They always have their hands out for property owners and multinational corporations but for some reason don’t consider that “welfare” or “government interference” in the free market. But try to get a break for working Americans ! The sky is falling !!

  3. Barbara Griffin says:

    Well written piece, and thank you and Glenn for sharing. Tom Reed is simply proving to the fossil fuel industry that he still works for them, rather than us.

    • pystew says:

      With an analysis like this one, plus all the other facets of government it will affect (local zoning regulations for example) there is no wonder this bill lacks a co-sponsor. I feel that Reed’s political purpose is to unite those land owners for future support. Martha Robertson, in a recent radio interview, pointed out that Reed never attack her stand on hydro-fracking. Why? Because he knows how NY-23 feels about the fracking. He is dangling an impossible to get carrots in front of hungry horses.

  4. Robert says:

    Seems a pretty comprehensive reply to me. Good to go.

  5. Robert says:

    It seems to me, given the natural aquifers of New York state, and the chemicals injected into the shale for fracking, even as the most minimal consideration, it is simply too risky to engage in this activity. And the idea of compensating landowners for a non-existent value, or lack thereof, is simply specious upon its’ face.

  6. solodm says:

    Thanks Glenn, your extensive knowledge about the whole fracking business notwithstanding, the points you state in this article are just common sense. I guess when greed leads, common sense evaporates.

  7. Marcia says:

    I mentioned to Reed at a town hall meeting that he is proposing compensating people for gambling and losing, for what they hoped to get from the gas companies. When people signed contracts they knew it might not happen. He talked about people losing college funds, etc. I asked how do you lose what you never had? No answer to that.

    • solodm says:

      I like your question. Reed’s and those landowner’s attitude is: we had it and the government took it away. Reed will surely lose this battle, but he’ll still be seen as having “championed the little guy” to the people who gambled on his promises to frack NYS.

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