horizontal shale drilling: the process of drilling and … we have learned source: horizontal shale...
TRANSCRIPT
What We Have Learned
Horizontal Shale Drilling: the
Process of Drilling and the Impacts
by: Chris Penrose
Associate Professor, OSU Extension & Extension Educator Ag/NR
Basic Lease Considerations
by: Clif Little
Associate Professor, OSU Extension & Extension Educator Ag/NR
What We Have Learned
Source: Horizontal Shale Drilling: The Process of Drilling and the
Impacts, Chris Penrose, Ohio State University Extension
Site Range: 4 – 8 Acres
Pad Depth: 2 ft of Rock
½ to 1 Acre Site When
Fracking Complete
1,500+ Trailer Loads of
Water Per Frack
Companies are Looking to
Recycle Water to Reduce
Water Usage Associated
with the Process
What We Have Learned
Source: Horizontal Shale Drilling: The Process of Drilling and the
Impacts, Chris Penrose, Ohio State University Extension
Carroll County - Utica Shale
Horizontal Drilling
Carroll County - Utica Shale Horizontal Drilling
What We Have Learned
Source: Horizontal Shale Drilling: The Process of Drilling and the
Impacts, Chris Penrose, Ohio State University Extension
Carroll County - Utica Shale
Horizontal Drilling
Guernsey County Well Site
What We Have Learned
Source: Horizontal Shale Drilling: The Process of Drilling and the
Impacts, Chris Penrose, Ohio State University Extension
Carroll County - Utica Shale
Horizontal Drilling
Harrison County
– First Productive
Utica Shale Well
Harrison County – Utica Shale Well
What We Have Learned • Hydraulic Fracturing has the Potential to be Life Changing
• For the Better…
• Potential for Large Bonus Payments
• Potential for Large Royalty Payments
• Potential For a More Secure Financial Future
Source: Horizontal Shale Drilling: The Process of Drilling and the
Impacts, Chris Penrose, Ohio State University Extension
What We Have Learned • Hydraulic Fracturing has the Potential to be Life Changing
• For the Worse…
• Royalty Payments May Diminish Rapidly
• Potential Damage or Changes to Property
• Increased Traffic / Congestion
• Strain on Family / Neighbor Relations
• Addition of Gas Lines / Roads / Right of Ways
• Potential Water Issues / Surface Spills
Source: Horizontal Shale Drilling: The Process of Drilling and
the Impacts, Chris Penrose, Ohio State University Extension
What We Have Learned • Hydraulic Fracturing has the Potential to be Life Changing
Land owners will need to weigh the
benefits and the costs and answer
this question:
At what cost are you willing to have
potential damages / changes to your
property for a lease with bonus and
royalty potential and a more secure
financial future?
Source: Horizontal Shale Drilling: The Process of Drilling and
the Impacts, Chris Penrose, Ohio State University Extension
What We Have Learned • Sample Lease Considerations
• What is the subject of the lease (oil, gas, other minerals)?
• What is the primary term of the lease?
• May the lease be assigned?
• What constitutes “commencement” of drilling?
Source: Basic Lease Considerations, Clif Little , Ohio State University Extension
What We Have Learned • Sample Lease Considerations
• Does the lease include underground storage rights?
• Does the lease allow for roads, pipelines, storage tanks, right of ways?
• Is the Lessee responsible for surface damages (extent)?
• Are there provisions for the use of resources? (land, water, timber, etc)
• What types of buildings, fixtures, etc are allowed on the property?
(distance from home, existing buildings, etc)
Note: Leasing companies may have
multiple leases and/or multiple
addendums which contain different
terms.
Source: Basic Lease Considerations, Clif Little , Ohio State University Extension
Community Economic Development • Potential Community Impacts
• Increased Water Usage
• Increased Traffic and Congestion
• Wear and Tear on Existing Roads / Infrastructure
• Road Maintenance Concerns Due to Increased Traffic
• Strain on Existing Housing Stock (lack of housing for rental / purchase)
• Possible Displacement of Current Renters / Commercial Tenants
• Strain on Community Infrastructure
• Strain on Local Financial Institutions Due to Loan Payoffs
• Need for Additional Training for Emergency Responders
• Need for Cell Coverage at Remote Well Site Locations
• Possible Displacement of Workers from Existing Jobs
Community Economic Development • Potential Community Impacts
• New Pipeline Development
• New Roads and Infrastructure Improvements
• Increased Sales Taxes and Other Revenues
• Increased Revenues / Opportunities for Existing Businesses
• Tractor Dealers, Auto Dealers, Restaurants, Lodging Owners, Caterers,
Cleaning Services, Trucking Companies, Grocery, Waste Disposal, etc
• Increased Occupancy Rates for Housing / Commercial Rentals
• Need for New Housing Units, RV Parks & Commercial Developments
• New Business Opportunities
• Job Opportunities
• Welders, Truck Drivers, Mechanics, etc
Community Economic Development • Potential Community Impacts
• Short- and Long-Term Population Changes / Labor Migration
• Temporary Workers - Transient Crews Skilled in Specific Stages
• Development of Temporary Housing Facilities
• Hotels, Motels, Trailer Parks, Campgrounds, RV Parks, Rental Units, etc
• How Will Community Absorb Unoccupied Units When Temporary
Workers Leave?
• Increased Demands on Water, Sewer, Roads, Telecommunications, etc
• Increased Demands for Emergency Services
• Police, Fire, Medical, Hazardous Materials Teams, etc
• Increased Enrollment at Local Schools
• Increased Real Disposable Income
• Potential Impact on Tourist’s Perception of the Region
What We Have Learned
• The information provided by the University of
Illinois Extension and/or Ohio State University
Extension is not meant to serve as legal advice
and should only be used as an educational
resource.
• Potential leaseholders should consult with an
attorney before signing a lease agreement.
Contact Information
(618)842-3702
(618)252-8391