Natural Gas Development

Landowner ‘David’ and fracking ‘Goliath’

The message was simple and clear. Do not trust gas corporations to have your best interests at heart and do not trust government agencies to protect you.

Craig Stevens was born in California and lived there for most of his life. But his father’s side of the family tree is rooted in Pennsylvania allowing Stevens to claim he is now a sixth generation landowner there.

Stevens has lived in the Montrose, Pa. since 2010 having bought his ancestral home that has been in his family since 1832, and holds a one-ninth share of around 115 acres. He spoke for more than two hours last Thursday at the Dansville Fish and Game Club about the impact gas drilling, specifically the method of high-volume horizontal hydrofracturing, or “fracking,” has had in his area.

“I’m going to give observations of living in an area where this is going on,” he said, and while holding up a map added.

“And if you didn’t come up and see this, it’s easy to see from where you’re at — guess which part I’m from — the part with all the yellow and black dots are at. It is the number one county in the state of Pennsylvania for production of natural gas.”

To back up his arguments, Stevens stood before a table filled with maps, reports, legal documents. He repeated many times that he is not against fracking, in fact, he signed a lease for drilling as well as a right-of-way lease for a pipeline on his property.

Stevens is a self-proclaimed “right wing conservative” who was a leading National Rifle Association recruiter and now runs his own marketing company. After his personal ordeal as a landowner, he is warning others (having given more than 60 presentations) of the practices gas companies use to sign up landowners to drilling leases, the practices used to implement the drilling, and how local, state and federal government agencies fail to protect residents when these practices.

His first foray into gas leases came after he found that his 95-year-old grandmother had signed a lease in 2007 with the Chesapeake Energy Corp. But because she was incapacitated, they had Stevens’ aunt, who had power of attorney, sign it.

“Number one, you don’t sign grandmas in nursing homes or you don’t get any kudos or it does not score brownie points in my book, I don’t care what the reason is,” he explained. “The other problem was, she was only a life tenant, she didn’t own a blade of grass on 115 acres or the house that I am living in. She had gifted it to her children…my dad, his younger brother and younger sister in 1994.”

Even though the lease was considered a good deal at $135.10 an acre, many others had signed for $50 per acre, he said that it was illegal based on the Pennsylvania law so stating that “life tenant therefore has no authority to lease land.”

When he confronted Chesapeake’s representative on this point, he was told that, after Chesapeake had found this out, his aunt and uncle had been asked to and had signed a “ratifier” document to tie them to the grandmother’s signature. But, Stevens found out that they had not sent him, his brother, the executor of their father’s estate, or his sister, as tenants in common, any document for them to sign.

Stevens explained that further calls to Chesapeake met with smug responses that “we have all we need” that led him to even fight harder, especially when he found out that Chesapeake had sold a one-third interest of his lease to Statoil – the energy company owned by the nation of Norway.

Stevens called Statoil and asked its rep if his company would be responsible for their third of the $10 million lawsuit Stevens was ready to file against Chesapeake for stealing his land. He gave him 48 hours to get back to him before he filed this lawsuit.

This got Chesapeake’s attention and Marty Byrd, the vice president of land acquisition, called Stevens directly within 24 hours to ask why “I was causing so much trouble.” Stevens said he asked Byrd if people in Oklahoma (where Chesapeake is based) got upset when companies tried to steal their land – he said “probably” – and after telling Byrd to fix this Byrd said “no …take us to court.” Stevens told the gallery that with the army of lawyers Chesapeake has, “this is what they want you to do.”

“I am going to take you to the court of opinion,” Stevens said he relayed to Byrd and after connecting with the Associated Press his “20 paragraph” story was printed “on the front page of almost every newspaper in the United States – that’s how you deal with these guys. You know what they can’t stand? Bad press.” He said he has newspapers from Australia, Norway and England where the story ran front page as well.

“So it’s a huge story about signing old ladies in nursing homes. Why am I showing you this? I want to give you the ability to defend yourselves against these guys … the only way you’re going to know is if somebody that’s experienced found out where the chinks in the armor are. They’re arrogant.”

Stevens’ tactics worked and he and his siblings finally signed a lease with Chesapeake, not for the $4,000 per acre they were offering, but for $8,000 per acre and for a 20 percent share of the gas extracted instead of the 12.5 percent minimum. And they rejected the $5-a-foot for the pipeline right-of-way (and lifetime use) and received $115 per foot and a 40 year limitation. This meant his aunt and uncle received $95,000 versus $5,000 they were ready to sign for.

His questions as to where the pipeline was going came to be Albany; with a trunk that was going to Boston which has a natural gas liquefaction plant. Once natural gas is liquefied it can be shipped overseas to the highest bidders, he said. If it is all about becoming energy self-sufficient here in our country, why is the pipeline going there Stevens asked.

The main reason, he said, was the fact that landowners are paid at the wellhead, they are paid only the 12.5 percent of royalties on about $2.70 to $3 per thousand, but if the companies ship through the pipeline they can now sell it for upwards of $16 per thousand without sharing these extra profits.

In the fight against the gas companies, Stevens brought up the use of eminent domain that is used to force landowners to sign pipeline deals. His argument against the use eminent domain comes from the U.S. Constitution and the Pennsylvania constitution, which say that it use must come with “a public benefit” similar to telephone poles, electric lines and highways that the public can use — not for a for-profit endeavor by a company.

Stevens’ message also included the impact on his neighborhood, including one sad event.

He passed around a photo showing the accident that claimed the life of one his neighbors explaining that a gas company “mud” truck had run a stop sign. It was later found, according to Stevens, that three of the four brakes weren’t functioning, and that the out-of-state worker driving the truck, who left the state, did not have a commercial driving license (CDL) required to operate the truck. Stevens said he has around 400 trucks going by his property 24 hours a day.

While putting in the pipeline through his neighbor’s property, by means of drilling beneath a stream, several blow outs occurred creating first a 10 foot hole and ever larger holes in the streambed that caused mud to head downstream in the trout stream. While the company was eventually fined for the accidents by the Pennsylvania Department of Environmental Protection and the EPA, Stevens said that no damage clean up for his property was included in the fines.

His bigger concern was for the water wells that have been contaminated by the drilling around his area. He said that 33 wells so contaminated required the owners to rely on trucked in water supplies even after the EPA report came out saying that the water was fine. He got a nervous laugh out of the mostly deadly quiet gallery after he said that the officials who were caught on camera after this statement refused to take a drink of the homeowners’ water when it was offered.

He has asked his state’s EPA officials to give him a list of the number of people who now have to rely on the use of “water buffaloes,” or fresh water tanks, and has been given the answer that this is not an issue they collate information on.

His main purpose in holding these discussions he said, was his hope that he can share information about the true impact of gas drilling companies and to give useful tactics to help people protect their land, to “take care of their family treasures.”