No time to waste: Highland takes gas to task

Supervisor urges caution on lease negotiations

By SANDY LONG

TOWN OF HIGHLAND, NY — While other Sullivan County towns watch closely, the Town of Highland has embarked on a path of action intended to protect the health, safety and resources of the town and its residents while maximizing potential benefits related to gas-drilling initiatives in the region.

Immediately following the passage of a six-month moratorium, aimed at slowing down the gas rush facing the town, supervisor Tina Palecek formed a task force comprised of various individuals with unique perspectives on the potential impacts of natural gas and oil speculation.

Palecek said that a primary goal of the task force will be providing information to enable landowners considering leases to make more informed decisions. “The gas companies often employ scare tactics to rush people into signing,” said Palecek. “That never leads to a good lease.”

Palecek has been actively researching gas-drilling information and attending multiple meetings on the subject. She recently participated in one based in Binghamton but conducted via the Internet. What she has learned is that there’s much more to learn and the need for this knowledge is pressing.

At one recent presentation, information was supplied showing additional layers of gas and oil even deeper than the commonly mentioned Marcellus Shale. As a result, many leases contain automatic renewal clauses that lock landowners into renewal terms that can continue for years beyond the initial exploration.

Another thing people might not realize is that they can sign a lease with one company only to end up in a contract with a different company, according to Palecek. “The gas companies are flipping contracts, buying low and selling high,” she said. “One thing to consider negotiating is that there is to be no reassignment without client consent,” said Palecek.

Beyond leases is the need for more information related to taxes, assessments, environmental impacts and more. For example, Palecek noted that successful wells will affect assessments and taxes will be incurred, based on units of production of gas. “The DEC [New York State Department of Environmental Conservation] will receive information on a well’s productivity, which they will supply to ORPS [NYS Office of Real Property Services], which will tell the town what numbers to plug in,” she said.

Palecek has asked the task force to gather and distribute such information. While campaigning for her post, Palecek talked about drawing upon the talents of people living within the Town of Highland. She hopes to tap the public relations and communications skills of task force members Carol Roig and Glen Goldstein, who she’s counting on to find effective ways to deliver clear information to Highland residents.

Highway superintendent Norman Sutherland will bring his expertise to bear on issues related to roads and has already begun performing traffic counts on area roadways. Fire and emergency personnel will identify potential threats to prepare for, such as handling of undisclosed fluids used in the well-fracturing process. Others will focus on impacts to school busing, social issues, housing and more.

Palecek would like to see the task force prepare a mailing containing the most immediately useful information, particularly related to negotiating leases that protect the landowner and the town. “We’re learning about things like the ‘most-favored-nation clause,’ and the ‘no cost clause’ related to royalties,” she said. “Both of these may be important to have in a lease. By providing such information, we can empower people with knowledge that will help them secure better leases.”

The task force met on July 23 and will convene again on August 13. Meanwhile, Highland will partner with the towns of Tusten and Delaware to apply for an Upper Delaware Council Technical Assistance Grant to fund a road impact study.

Palecek added that other townships are welcome to access the information being gathered on behalf of the Highland residents. With a better understanding of the complexities involved in drilling, a landowner might even conclude that the best lease is no lease.

“This is going to be our legacy,” she said. “I’d like to see people get the most they can out of this, while causing the least harm in the process.”