Wrongful takings, the sequel
The combination of these two factors could obviously have the effect of forcing numerous property owners who have no wish to lease into non-compliance with the terms of their mortgages. Properties in technical default on their current mortgages, and/or properties on which it is difficult or impossible to get a new mortgage, could become virtually unsaleable.
So, it looks like the action of the state, in collusion with drilling companies, could result in a significant number of properties becoming unmarketable and therefore worthless.
Sound familiar? It should. It’s called a “wrongful taking.” It certainly satisfies two major criteria: the property would be left with at most “a bare residue” of its worth, and the problem would not be self-created.
A third criterion—whether those who suffer are being unfairly singled out to pay for the supposed good of the whole—is perhaps not so black and white. It’s true that the Marcellus Shale covers a fairly large swath of New York State, so if a lot of properties are integrated it could be argued that too many people are affected in order to count as “singled out.” But let’s face it: if so many people were affected that they couldn’t be perceived as unfairly singled out, that would mean that a vast portion of New York real estate had become worthless—a pretty steep price to pay for any perceived public benefits of chasing after an obsolescent energy source like natural gas.
The bankers—and the investors to whom they wish to be able to sell mortgage-backed securities—have not created this situation because they are sentimentalists or tree huggers. They are businessmen, and many of them have apparently made the decision that land upon which natural gas leases have been signed is in such danger of becoming worthless that they don’t want to take a risk on it.
Think about it.