Natural Gas Forum for Landowners

On Thursday, November 17, 2011, the news began to leak out that the DRBC would not be holding it's meeting to vote on their proposed regulations for natural gas drilling within the Delaware River Basin. From information we received, it appears that the DRBC meeting was postponed because a consensus between the commissioners was unreachable by the 21st, the scheduled date for the DRBC meeting.

Although landowners cancelled group participation in the no-vote, non event, the anti drilling crowd held an "Occupy Trenton" rally and focused on extending their influence and political clout.

Amidst chants of "Ban fracking now", "No fracking way", " Don't drill anywhere", and "Occupy the earth", The basic message was that the opening battle was won by those who oppose drilling for energy resources. The crowd on hand cheered as some of the speakers spoke about bringing the fight to ban natural gas drilling throughout the US and ultimately, the world.

The Losers

The family farmers. Many of them are currently under force majeure. When the DRBC arbitrarily declared a moratorium on natural gas drilling in the Delaware River Basin, the companies, who had planned to begin drilling, were shut out. In most of the leases, a force majeure clause is included that stops the clock if regulations are enacted that prevent companies from drilling. In a nutshell, as long as the DRBC fails to produce the regulations that will govern natural gas drilling, the lease automatically extends itself at no cost to the company. So far, roughly 2 years have passed since the DRBC announced the drilling moratorium.

The Winners

The real beneficiaries of the DRBC drilling moratorium are the drilling companies themselves. Over two years have come and gone with promised regulations still undone. Over two years have been added to the primary term of every lease with a force majeure clause, which represents almost all of the leases in the area the DRBC claims as under it's jurisdiction. The DRBC drilling moratorium has provided the incentive for the companies to just sit on their leasholds at no cost or obligation to them.

It is ironic that all of these delaying tactics at the regulatory level do nothing more than delay the inevitable, and in the process create hardships for the family farmer and small communities themselves. The companies are not going to simply go away. They have $billions invested in these leases. Even if the family farmers end up selling or sub-dividing their lands into micro-estatelets, those leases follow the deed at no cost to the companies until drilling regulations are approved... And those regulations will be approved. Whether it is due to an energy resource shortfall, industry lobbying, or a landowner revolt. The politicians will always side with those who can best assure their entrance or tenure in the halls of power.