Energy companies pressuring landowners to frack their land, study finds

Energy companies use persistent, personalized pressure to get landowners to give permission for hydraulic fracturing (fracking), and even when landowners refuse, companies use legalized coercion to proceed with fracking anyway, according to a new study by researchers at Binghamton University, the State University of New York and UNLV.

The article, “Assessing How Energy Companies Negotiate with 31 Landowners When Obtaining Land for Hydraulic Fracturing,” was published in Natural energy.

“Fracking is a controversial topic, but much of the controversy is about the broader implications for climate and the economy,” said Benjamin Farrer, lead author and a former doctoral student at Binghamton University. “We hope this paper encourages policymakers to pay more attention to the individual experiences of those closest to the problem.”

Because many fossil fuel reservoirs in the United States are on private land, energy companies often have to negotiate with private landowners, offering compensation in exchange for access to the minerals beneath their land.

Because a well is only economically viable if a large area can be drained from a single well, drilling companies must bundle several mining concessions into a single work contract before drilling. But landowners often refrain from entering into such agreements for a variety of reasons: they may be wary of potential health risks, expect more money, or simply be unreachable.

This is where compulsory unitization comes in. This is a law in many oil and gas producing states that says if a certain percentage of the land above an oil or gas reservoir is owned by people who have already given permission to drill, the owners of the remaining land can be compelled to join in the drilling. For example, if there are 1,000 acres of land above a gas field and the owners of 650 acres have given permission, the owners of the remaining 350 acres can be compelled to join in the drilling.

“In conventional vertical drilling, the use of coercion was generally a net benefit to mineral owners: It prevented holdouts seeking better contract terms from derailing a project, and it allowed small properties or properties along the edge of a drilling area to force a contract on themselves if the drilling company tried to exclude them,” said Robert Holahan, an associate professor of political science at Binghamton University.

“However, in the case of hydraulic fracturing, where drilling is done horizontally under multiple properties, mandatory unitization may force mineral owners who do not wish to lease their property to do so.”

A research team including Holahan, Farrer, and former Binghamton students Kellyanne Allen and Tara Riggs looked at data from Ohio, a state that experienced a fracking boom in the 2010s. The team obtained the Ohio Department of Natural Resources’ comprehensive online database, which covered all mandatory unitization applications submitted in Ohio from January 2014 to April 2021, the height of the fracking boom.

The team reviewed a random sample of 37 requests, each of which included a log of every time a landowner was contacted about a rental, including the date, method and outcome of the conversation.

In one example, a landowner refuses to sign a lease, but the company persists in trying to get her signature. The landowner calls, sends letters, and when these are returned with the handwritten words “REJECTED,” the landowner goes to the landowner’s home. When the landowner refuses to open the door, the landowner talks to his neighbors and family.

In another example, a land agent contacts a landowner who is undergoing radiation treatment in a hospital. The landowner seems willing to sign, but wants to go home from the hospital before discussing it. However, the land agent continues to contact him while he is in the hospital for weeks.

“Overall, we find widespread use of personalized tactics such as phone calls and visits, as well as evidence that these tactics are used persistently, with land agents making multiple attempts over several months to contact landowners. We also find that many negotiations end in coercion rather than consent,” the researchers wrote.

The data also suggest that compulsory unitization is used in negotiations with many different types of landowners, not just economic holdouts and inaccessible landowners.

“Legal instruments, such as mandatory unitization or pooling, are often designed to solve one type of problem (ensuring that all mineral owners get a fair share of the revenue from an oil or gas well), but can potentially be used for other purposes (requiring mineral owners to lease their rights),” Holahan said. “Effective resource policy requires continuous updating of the law as technologies evolve.”

The researchers are currently conducting a follow-up survey of the people whose conversations were used in the study to verify their accuracy. In addition, Holahan and his team conducted a survey of 3,000 people in the Twin Tiers of New York and Pennsylvania to gauge opinions about drilling and wind turbines to better understand how, or if, “green energy” is perceived differently from “conventional energy” at the landowner level.