I had a debate with a local legislature on a similar issue. The question was
the actual amount of after tax financial gain to a landowner. I don't think
it's as much as most people think. Many rural landowners who own 5 to 30
acres are not going to be millionaires. Pointing out the rewards, versus the
risks (including the liability and mortgage issues) there are a number of
folks I've talked to that are now thinking twice. --Martha
I ran eight scenarios (the numbers are in after tax dollars):
In some towns more than half the landowners have leased at 12%. And $11 gas
is a pipedream considering that gas is at less than $4 currently. Yet this
is the number one legislator is providing in her examples so I used it.
5 acres, at $4 gas, at 20% royalty gives a landowner $67,977 over ten years
($6,798/yr)
5 acres, at $4 gas, at 12% royalty gives a landowner $33,989 over ten years
($3,399/yr)
5 acres, at $11 gas, at 20% royalty gives a landowner $175,673 over ten
years ($17,567/yr)
5 acres, at $11 gas, at 12% royalty gives a landowner $87,837 over ten years
($8784/yr)
30 acres, at $4 gas, at 20% royalty gives a landowner $329,238 over ten
years ($32,924/yr)
30 acres, at $4 gas, at 12% royalty gives a landowner $164,619 over ten
years ($16,462/yr)
30 acres, at $11 gas, at 20% royalty gives a landowner $846,843 over ten
years ($84,684/yr)
30 acres, at $11 gas, at 12% royalty gives a landowner $423,422 over ten
years ($42,342/yr)
----- Original Message -----
From: <[email protected]>
To: <[email protected]>
Sent: Sunday, November 15, 2009 4:49 PM
Subject: [SustainableTompkins] How brief are the profits from a gas lease?
In history, governments have generally favored powerful urban interests
over rural communities. In its decisions so far on gas drilling in the
Marcellus shale, the behavior of our NY state government already fits
this pattern. Worse, the fact that many rural land owners want to profit
from gas drilling only strengthens the hand of Albany and the drillers.
So I see little chance in blocking the hydrofracking of Marcellus shale
unless rural populations can build a unified front.
To this end, we might do well to start asking farmers and other land
owners who are planning to make money from fracked gas if they know the
answer to this question: How brief are the profits from a gas lease? Most
have been lead to think the gas will bring them years of income, and to
correct this deception we could point them to the graph that a
professional geologist posted in an article on hydrofracked gas
prospecting.
http://www.theoildrum.com/node/5961#more
It shows that compared to conventional vertical gas mining that ocommonly
yields gas for years, gas production from the hyfrofracked wells often
lasts only a year.
Karl North
Northland Sheep Dairy, Freetown, New York USA
www.geocities.com/northsheep/
"Pueblo que canta no morira" - Cuban saying
"They only call it class warfare when we fight back" - Anon.
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_______________________________________________
For more information about sustainability in the Tompkins County area, please
visit: http://www.sustainabletompkins.org/
RSS, archives, subscription & listserv information for:
[email protected]
http://lists.mutualaid.org/mailman/listinfo/sustainabletompkins
Questions about the list? ask [email protected]
free hosting by http://www.mutualaid.org
