By Vicki Johnson – Staff Writer (email@example.com) , The Advertiser-Tribune
Energy companies are revisiting gas and oil deposits left under ground in past years, when oil pumps were a common sight on northwest Ohio farms.
"There's been a tremendous amount of oil and gas exploration activity in northwest Ohio," said Dale Arnold, director of energy services for Ohio Farm Bureau Federation.
He said research has been under way for 20-30 years and maps have been created using the township road system as a grid.
"I saw those maps," he said. "It's amazing how much I could see. It might not be the Marcellus. It might not be the Utica, but only 40-60 percent has been pumped and they're coming back to get the rest of it.
"The first offshore oil rig was not in the Gulf of Mexico. It was in Grand Lake St. Marys," he said.
Arnold said landowners in eastern Ohio are being approached for gas and oil leases and the companies are heading west.
"Don't consider this the final point on this issue, consider it the beginning," he said.
Arnold spoke Thursday to public policy action team members from Seneca and three other county Farm Bureau organizations at the Master's Building on the Wyandot County Fairgrounds, Upper Sandusky. The meeting was open to the public and about 150 people listened.
"By 2025, 25 percent of this nation's energy resources are going to come from renewables," he said. "Farming and agriculture are going to be very much involved in all of that. You are now part of that planning process."
Arnold explained the Marcellus and Utica shale deposits in eastern Ohio, Pennsylvania and New York.
"There's enough methane in that shale formation alone for the entire U.S. for he next 40 years," he said. "It's that big."
Although the deposits under northwest Ohio are not that large, he said they're worth the time of companies.
He reviewed an extensive list of questions to ask if a company representative is requesting a lease for the gas and oil rights on a farm.
He suggested hiring an attorney.
"For every $1 spent, you'll save $15 in future legal expenses," he said.
And find out which type of technology the company plans to use. He said vertical drilling is 20th-century technology.
"But this type of technology is not going to go away," he said.
The newest technology uses horizontal drilling to centralize eight-12 drilling projects off of one pad.
"This could be coming to your area," he said.
Some of the key words to listen for are "shale," "deep well," "directional drilling," and "additional seismic testing."
"If you hear those words, odds are they're talking about 21st-century technology coming to your farm."
He cautioned landowners against signing a general five-page lease agreement.
"Request a more detailed lease agreement," he said. "Ask for one. In fact, demand it. You'll either get it or you'll never see that developer again."
He said a lease is between an individual landowner and an energy service provider. It's multi-generational, so the grandparents, parents and grandchildren all should be involved in the decision.
"Anything and everything is negotiable, and you need to make adjustments based on the individual needs of your farm," he said.
Arnold suggested using the rules of Ohio Department of Natural Resources Division of Oil and Gas as a starting point.
"They'll take care of 80 percent of the items to cover," he said. "The other 20 percent is individual."
Before considering a lease, he suggested getting to know the person who is requesting the lease and the company he or she represents.
"Ask for five references because it is a potential business partner," he said. "Find out everything is working as negotiated and if there are any problems."
Dollar amounts per acre for leases vary by region, depending on the quality and quantity of oil and gas available. But in areas closer to northwest Ohio, the average is $4,500-$2,700 per acre.
Families involved in negotiations also must consider financial planning to allow for a large initial check and family counseling services to help families make a decision.
Arnold also suggested checking at the county recorder's office.
"Your piece of property could already have an oil and gas lease on it," he said.
Some leases date from the 1920s to 1950s and still are active.
"Take a look at the title track all the way back as far as you can go," he said. "If you find a lease and you don't find a cancellation, it's still good."
However, the Ohio Dormant Minerals Act generally allows those leases to be renegotiated.
He recommended not cashing a check sent in the mail by a company.
"Cashing the check renews the lease under the original provisions," he said.
It's the landowner's responsibility to teach the company about field tile, grass waterways and other conservation measures on the farm, he said, as well as document the state of crops, trees and water quality before and after construction and drilling.
Arnold explained hydrofraction technology, or "fracking."
He suggested landowners get wells and septic tanks tested before signing a lease in case of future problems.
"It's time to establish baselines right now," he said. "That way you have a clear record and you have established a baseline for investigation."