Hopefully ppl will read this report and be moved to action to put a stop to fracking companies defrauding the public of their property values & rights. CharO resource-media.org/drilling-vs-the-american-dream-fracking-impacts-on-property-rights-and-home-values/#.U87asfldWSo Drilling vs. the American Dream: Fracking impacts on property rights and home values, March 14, 2014 There are currently more than 1.1 million active oil and gas wells in the United States, and more than 15 million Americans now live within a mile of the hundreds of thousands that have been drilled since 2000, according to an analysis by the Wall Street Journal. Made possible by the advent of fracking, drilling is taking place in shale formations from California to New York and from Wyoming to Texas. And there’s no indication that this “unprecedented industrialization” shows any signs of slowing. Almost 47,000 new oil and natural gas wells were drilled in 2012, and industry analysts project that pace will only continue. Drilling rigs now regularly inch up and even into communities that never anticipated having to address problems like round-the-clock noise, storage tanks, drums of toxic chemicals, noxious fumes, near-constant truck traffic and pipelines near homes, schools, playgrounds and parks. For many, the impacts of this kind of large-scale industrial activity are incompatible with quality of life. Congressman Jared Polis saw this firsthand last fall when a drilling rig went up on property neighboring his small farm in Weld County, Colorado. Polis, who said he had no notice of the fracking operations, filed a complaint with state regulators and then a lawsuit over concerns “about the impact that fracking has on the health of communities as well as the economic impact as it relates to property value.” Also look no further than Exxon CEO and board chairman Rex Tillerson, who is suing to stop construction of a water tower that would supply nearby drilling operations because of the nuisance of, among other things, heavy truck traffic, noise and traffic hazards from the fracking operations the tower would support. That’s right, the head of the single largest drilling company in the world, acknowledges the “constant and unbearable nuisance” that would come from having “lights on at all hours of the night …traffic at unreasonable hours … noise from mechanical and electrical equipment.” Tellingly, Tillerson’s lawsuit – filed in 2012 with other plaintiffs, including former House Majority Leader Dick Armey – claims the project would do “irreparable harm” to his property values. Property Values In April 2014, a Texas jury awarded just under $3 million to a family whose health and lives were turned upside down by the emissions coming from dozens of wells that had been drilled near their home. The verdict, which compensated the family for pain and suffering from illnesses linked with exposure to oil production and fracking chemicals, also included $275,000 for the loss in market value of their property caused by all the drilling. In a 2013 survey of 550 people conducted by business researchers at the University of Denver, a strong majority said they would decline to buy a home near drilling site. The study, published in the Journal of Real Estate Literature, also showed that people bidding on homes near fracking locations reduced their offers by up to 25 percent. Realtors in Colorado are taking note as clients become increasingly hesitant about buying homes near drilling sites, with fewer and fewer bids rolling in. “Some don’t want to even look at anything remotely close to any existing or proposed well sites,” Boulder County real estate agent Nanner Fisher told the Colorado Independent. She also told Boulder iJournal that “if there is a well that’s visible when you show a property, [the prospective buyer] will ask to look for something else. A lot of it is the visual effect of the well site,” she said. “And, they think if you can see it, it’s gotta be close enough that it’s not healthy.” An economic analysis by the Headwaters Institute undermines the idea that oil and gas developments fatten the bank accounts of communities and leave them better off than before drilling started. While there may be short-term windfalls, the study of six western states found that over the long-term “oil and gas specialization is observed to have negative effects on change in per capita income, crime rate and education rate.” In Pavilion, Wyo., where the EPA has linked groundwater contamination with fracking, Louis Meeks saw the value of his 40-acre alfalfa farm all but disappear completely. In 2006, his land and home were appraised at $239,000. Two years later, as ProPublica reported, “a local realtor sent Meeks a coldly worded letter saying his place was essentially worthless and she could not list his property. ‘Since the problem was well documented … and since no generally-accepted reason for the blowout has been agreed upon,’ she wrote, ‘buyers may feel reluctant to purchase a property with this stigma.’ ” As documented by Reuters, homeowners in subdivisions in Colorado, Florida, North Carolina, Louisiana and other states have all purchased homes without disclosure about severed mineral rights only to see drilling rigs spring up next door too late for them to do anything about it. “This is a huge case of buyer beware,” University of Colorado-Denver Law Professor Lloyd Burton told reporters. “People who move into suburban areas are really clueless about this, and the states don’t exactly go out of their way to let people know.” Senate and House committees in the Colorado Legislature have passed a measure that, much like disclosures for lead paint, would require sellers to notify prospective homebuyers about separated mineral rights and whether a property may be subject to oil, gas or mineral development. Senate Bill 14-009 is awaiting approval by both chambers to be forwarded to the governor. In at least 39 states, there are laws that compel “holdout landowners” to join gas-leasing agreements with their neighbors, allowing oil and gas companies to drill horizontally to tap into oil and gas reserves that cross property lines – whether the owner of a property wants to allow the drilling or not. Called “mandatory pooling” or “compulsory integration,” these laws basically create eminent domain by private enterprise. Pooling gives the owner an interest in the well, including royalty payments, but as in Colorado, where forced pooling orders were issued by the state’s Oil and Gas Conservation Commission 48 times in 2010, the law also makes the unwilling owner “liable for the further costs of the operation, as if he had participated in the initial drilling operation.” The intent of forced pooling is to create more orderliness in drilling underground oil and gas reserves, which rarely adhere to the patchwork of surface ownership. Forcing holdout landowners into leasing agreements is supposed to lead to fewer wells drilled and more efficiency in the ones that are. But it’s also frequently used as a threat by landmen looking to cash in on leases. Recognizing the numerous ways that drilling and fracking could damage value, the mortgage industry is starting to refuse to take on the financial liabilities and is tightening policies that prohibit lending on properties with wells on them or that are subject to leasing. Insurance Coverage Homeowners who think damage to property incurred by drilling accidents is covered by insurance need to think again. Such damages are typically not covered. Last July, Nationwide Insurance spelled out specifically that it would not provide coverage for damage related to fracking. According to an internal memo outlining the company’s policy, “After months of research and discussion, we have determined that the exposures presented by hydraulic fracturing are too great to ignore. Risks involved with hydraulic fracturing are now prohibited for General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage.” Often, a driller or well operator’s insurance won’t cover damages, according to the NYSBA summary. Homeowners may have to sue for damages and, even if they win, may not get paid for all damages since drillers admit in their regulatory filings that they may not carry enough insurance.
Posted on: Tue, 22 Jul 2014 22:05:42 +0000