Commissioners delay acting on exploration company requests
While oil and gas companies exploring for minerals may appear like a boom to many people in Carbon County, to some residents the activities seem to be more of a bust. That was the feeling expressed by many citizens who spoke at a conditional use permit and zoning hearing conducted by the county commission last week.
At the commission meeting, the J.M. Huber Company wanted approval permits and zoning changes for 20 sites on which the operation plans on drilling wells for gas exploration.
"You know that commercial for the credit card where the bobsled girls are headed down the chute and they see a rabbit and stop the bobsled?" exclaimed Dale Mathis, a property owner who Huber wants to lease land from to put in wells. "Well ,I feel like that rabbit. They say on the commercial next time they won't stop and that is just the way I feel about what Huber is offering us in payment for the use of our property."
During past years, various issues have been raised about gas exploration and development companies' policies toward land owners, particularly regarding runoff control, dust problems and locked property.
But last week was apparently the first time in recent years that residents came to a commission meeting to complain about how much they are being paid for the use of property and the alleged heavy handed tactics some exploration companies take.
The issue also raised its head at a recent county planning and zoning meeting. The permits and zoning for the well sites were approved by that body.
Dealing with the issue is a complicated matter. The county has no control over what firms pay people for the use of property and commissions cannot prevent companies from doing business as long as the firms meet the requirements of special use and zoning.
However, the commission postponed acting on the requests until Huber representative Brian Wood could check with upper management to see what could be done to accommodate the land owners' concerns.
At the center of the issue is the feeling among land owners that the situation is a "take it or leave it" offer.
Utah law gives the state's oil and gas commission the authority to force owners of surface rights to allow gas and oil companies on private property to do exploration and drilling if the parties cannot come to a mutual agreement.
"Huber hasn't offered us enough to compensate for the use of the land for what could be a very long time," said Mathis. "They offer us a one time $800 payment up front and then can run the well for years. We think they should pay us continuing payments."
Mathis suggested that the companies should pay about $1 a day for each well site and $1 a day for the roads the operations build on the property.
"As I explained during the planning board meeting, we can't get involved in the dispute you have with Huber over compensation," pointed out Commissioner Mike Milovich. "Just the same, however, we want to hear your concerns."
The discussion turned to the negotiations which had gone on between landowners and the company and what could be done to solve the problem.
"I have conveyed to our company's vice president that there is a problem with the negotiations on some of these sites," Wood told the commission. "But he told me that Huber would be sticking to its budget and only paying one time fees."
The problem for some of the landowners isn't just the onetime payment. It is the fact that they are losing income from cattle property and other gas companies in the area reportedly pay land owners more.
"We lease our property to a gentleman who runs cattle on it and that rent is dependent on how much range he can reasonably use," said Mildred Cave. "With these well sites on the property, we will get the onetime payment of $800 and then will lose $1,000 a year in revenue. Other companies we have worked with pay us a yearly fee to make up for this loss. One company not only gave us the $800, but also pays us $350 per year rental."
Other issues brought up at the commission meeting included the difference in rates between private landowners and what companies sometimes pay other entities.
"I have heard that some of the government agencies that have impacts on their lands, like the Division of Wildlife Resources, get more money than private landowners," commented Commissioner Tom Matthews. "I am wondering what the going rate is? If you look at it, it doesn't seem quite right. If a person parked a trailer on someone's property it would seem they would have to pay some kind of rent for it being there. What is the difference?"
Cave also brought up the point that on some of her property the area had been classified as prime sage grouse habitat and that DWR is getting mitigation on that area while she is not.
The Huber representative, however, differed with the characterization of what should be going on in the Carbon County area.
"I have worked all over the Rocky Mountain states on gas and oil development and 90 percent of the time the surface rights are compensated with a one time fee," Wood told the commission. "The state looks at the situation and if we have made a good faith effort to negotiate they will allow us to use our superior right to go in and drill. That happened in once instance where we had worked with the landowners but were not getting anywhere."
It was also brought up that some of the land owners who have not signed agreements with Huber have not done so because there is a quiet clause in the contracts. In other words, once the contract is signed the private property owner cannot speak about the compensation or the details of the agreement.
"That is why we are here now and haven't signed," said Morrill Mathis. "We couldn't have said a thing in this meeting otherwise."
The discussion turned to other issues involved in the wells such as dust control. Wood said the company he represents tries hard to deal with the problems and meet the provisions of the conditional use permits.
"We are working hard to handle any problems," said the Huber representative. "We are contracting with a new company to bring in magnesium chloride to handle the dust problems. We haven't ignored property owners desires, but I have been told we will stick to our budget on these sites."
Commissioner Bill Krompel told Wood he was disappointed with Huber's attitude.
"If other companies are paying more, I think it is only reasonable that Huber match what they are doing," he told Wood.
Matthews pointed out it didn't seem right that someone could dictate price to a private landowner and, if the person didn't accept it, the company could go ahead and do what it wanted anyway.
"If I had a cow that I wanted to sell for $1,000 and I couldn't get anyone to offer me more than $500, why should I have to sell it?" asked Matthews.
Milovich basically agreed with the assessments.
"I think this is a real problem," said Milovich. "I don't think with what is being made on these wells that $350 per year is going to break the company."
The commission delayed the vote on the permits and zoning requests, asking Wood to go to his superiors and reassess where the company is at, then return to the county when he has more answers.
Matthews also asked that Wood bring some information on what mitigation costs the company had incurred on the wildlife areas as well.