Replies to This Discussion

Permalink Reply by tacoma7583 on June 23, 2012 at 12:43am

Maybe a suggestion, but has anyone thought about writing up something in like a word document we can insert are individual names and send by mail or email to the respective people?

Permalink Reply by Inchworm antenna on June 24, 2012 at 11:24pm

Any time a company is granted the enormous powers of emminent domain, to take and hold an individuals personl property, like in this case to operate a undersground gas storage field there must be a certain "checks and balance".  We need to make certain there is always a fair market value to what is being taken. In these cases Columbia Gas has the privilage to develop oil and gas but along with the storage field field leases the royalties for such privilage is just $200 per year for gas.  As far as we know that royalty is the same for all the thousands of acres in the Brinker Storage Field.  This goes to show limited property opwner input into these leases and the "you get what we give you mentality" mantality. 

Permalink Reply by Dan on June 26, 2012 at 8:06am

Columbia Gas has asked to raise NG rates on their Western PA customers due to increased costs!  They even own a lot of the midstream there.  How much could their cost to supply NG have gone up with current prices?

Permalink Reply by Inchworm antenna on June 26, 2012 at 11:07pm

I don't know.  I do know their storage rental acreage to landowners has been the same for decades. 

Permalink Reply by Linda A on June 27, 2012 at 8:25am

Believe me, you do NOT WANT the govt. involved in these deals.  Educate your neighbors and support your neighbors.  If they made a deal/contract/lease w/o education, they must live with that deal.  The govt is NOT your friend and once you ASK and/allow them in the door, you might as well give up ALL your rights to control your property.

Asking govt to fix problems only complicates and makes them worse - haven't we all lived long enough to see and understand that?  When you do this, you are giving up control of your land and natural resources.

We all make bad decisions about many things, but we must accept personal responsibility for those decisions.

Someone decides to speed and cause an accident, do I then ask the govt. to maximize the speed of ALL cars?

With this type of mentality, our country will continue to be ruled by the government, and apparently, as long as everyone gets their 'fair share' then everyone should be happy with their dictator.

This is NOT an issue of right versus wrong!  I'd rather have freedom than security because without freedom, there is no security. 

Permalink Reply by 0i7okn54zwbdo on June 27, 2012 at 1:54pm

Linda,

While I generally agree with you about the role of government I think this is an extenuating circumstance.  Government is there to protect its citizens against any number of threats.  Columbia Gas signed contracts with people, some of them 60 years ago.  There are people in this storage field who are third generation inheritors of this mess.  Those people who own the land, till the soil, grow our food and  contribute to society deserve the chance to make the minimum royalty of 12.5%, not a paltry $200/yr.  

Permalink Reply by Linda A on June 27, 2012 at 2:49pm

thank you Marcus for the kind response.  I hold one of those 'old' leases, inherited from my Grandparents, however, the surface had already been sold as they were in the coal business and also leasing off the other mineral rights.   It is now owned by group of hunters.

So, it's not uncommon for one person to own the land and others to have leases for mineral rights.  While in the coal business, he bought a lot of land just for the mineral rights, and then resold the surface.  One example in in Indiana County where he had almost 2k acres.  Sold the mineral rights one way and then sold the surface to the State Game Commission. 

Today, it must be a new way for people to think before they sell any amount of land.  They would be out of touch not to consider the mineral rights in the selling price.

However, I still cringe at the thought of bring in govt officials because one thing always leads to another. 

Children and grandchildren will be affected today same as when my Grandparents were in business. At the time, it appeared he got a fair price for the coal, and in their later years, benefited from that money AND it certainly was worth a lot more then (buying-power)  - before the Fed Reserve printing presses went wild.  IF he hadn't sold the coal rights, all of us in the family would, today, be multimillionaires!  Today, the 'dollar' is worth only four cents compared to when we had gold backing our money. 

The wars are fought, not for oil, but to keep the U.S. Dollar the reserve currency, and have had good success until other major players have joined forces...

Permalink Reply by Inchworm antenna on June 27, 2012 at 11:45pm

Linda, I appreciate your Libertarian views.  I woud like to beleive that if Companies like Columbia Gas (and their predecessors) did not have the powers of eminent domain, then many people would not have signed these gas storage leases in the first place.  Government granted them the powers to sign people to these leases so government needs to fix the situation.  Had libertarianism, or a free market bene able to have prevailed we would not see Thousands of contiguous acres with leases that all have royalties and rates EXACTLY THE SAME.

After seeing how State Representative Mark Okey's Minimum Royalty ammendment to SB 315 went down in flames along a party line vote, it challenged me to wonder what it is about this issue that makes it unpopular amongst our elected Republican officials.

After giving it some thought I do not think the other Republican Representatives have considered much on the matter beyond what is on the surface. Here we have a deep devotion to honoring lease contracts, and not wanting to create additional laws, and rightfully so. It seems that at the rate things are going we will someday even have a law to verify a dozen eggs in a carton means 12.  I get that.

However, I do not think our Leadership in the House and Senate have considered any meaningful thought on the matter, and why support for a minimum royalty law is very much in touch with Republican philosophical principles. We have allowed Companies like Columbia Gas (and their predecessor Manufacturers Light and Heating) to posess the powers of emminent domain- to take or hold posession of ones personal property. In doing such we have not created a proper "checks and balance" to this enormous power. Just the mere ability to weild such power has always enabled them to pay less than market price when they need to acquire additional storage ground. This is not the American way. They have frequently enforced a "you get what we give you" mentality to leasing. I cannot imagine how many people in the old days thought.... "well, we better sign the lease because if we don't they'll just take it anyway". For example the entire thousands of acres of the Brinker Storage Field property owners just receive $4 per acre for storage of gas per year under their property. I'm not sure who determined this to be the indefinate market value. And when it comes to new drilling production, I'm not sure who really ever determined just $200 as a flat rate for all gas taken from a parcel as being appropriate.

Because Columbia Gas, and like companies have such extroidinary power, they have not had to live within the contstraints of market value. The market value to them is whatever they offer. As opposed to the "usual leasing", in 1988 Columbia Gas sued the McCullough Family in Wayne County, Ohio. They wanted to actually condemn their oil and Gas while embracing them into the Wayne/Weaver Storage Field. As a result of an oil and gas appraisal of their 264 acre farm, the McCoullough's value was $873,802, and discounted to royalty value to $313,000. Columbia however felt the condemned energy value to be only $50.00 per acre, or ($13,200) and fought hard through appeals to only be able to pay this much. The McCaullough's were eventually forced to accept $213,798 per court judgement. This is how Columbia Gas does business. And as we know now, Wayne county is also in the oil rich portion of the Utica shale.

So, here, in the Brinker Storage Field, we are at an impass between doing what a contract (lease) says or ensuring that people are failry compensated for their personal property, based on the values and principles we all believe in. I personally beleive that when a company posesses eminent domain powers they need to hold themselves to a higher standard. We as a State must ensure that our citizens are treated fairly, and in market fashion when it comes to how we allow entities we have privilaged with exraordinary powers. Not everybody has the resources to sue. When it comes to oil and gas, only a market based royalty, based on the market value of such comodities, can ensure people are not being taken advantage of.

 

The Republican leadership needs to  adhere to their core principles in regard to personal property, fair market value, and checks and balances, when it comes to entities who weild the eminent domain powers of the State.

 

Perhaps the Republican Leadership in Ohio needs to hear a message that resonates with their own core prociples when it comes to minimum royalty persuant to this problem.  And this is why we need everyone's help.  Thanks.

 

Permalink Reply by Mark Allen on June 28, 2012 at 9:28pm

AMEN BROTHER..great post, well thought out and well presented.

Permalink Reply by Linda A on June 28, 2012 at 10:26pm

yes it is, a good post and great perspective to a serious problem.

Permalink Reply by Dan on June 29, 2012 at 9:41am

Columbia wants to increase rates for NG in Western PA.  They say the cost of Ng has increased for them?  WTF!  How can this be the case?  Maybe Columbia Gas Production and Storage increased their costs so in turn Columbia Gas Transmision adding their 25% midstream costs made their cost of supply go up.  Life is good when you control production, storage, transport, wholesale, retail and the State.