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Preserved farms not protected from drilling

| Sunday, Nov. 27, 2011

Terry Matty never signed a lease with a company to drill Marcellus shale gas wells on his South Huntingdon Township farm.

Nonetheless, two vertical gas wells have been drilled on the 166 acres he owns with his brother and sister-in-law. Gas rights on the land where they board horses and grow crops were leased by a former owner decades ago.

Two horizontal wells are planned for the property, which the family protected several years ago for agricultural use through the state's Farmland Preservation Program.

There has been no drilling on a bordering farm Matty owns, which is not protected.

"Would I have preferred them to be on the other farm• Yes. But it just happens to be where they set it," said Matty, 61.

Officials concerned with preserving Pennsylvania farmland worry about the amount of land needed for Marcellus shale drilling and the industry's long-term impact.

Under state law, farmers who have been paid through the preservation program to keep their land operating as a farm retain the gas and mineral rights.

"We need land to grow the food and energy to cook it. It's a Catch-22 kind of thing. The two have to work together somehow." said Betty Reefer, executive director of the Westmoreland County Agricultural Land Preservation Board.

'Preserve the farmer'

Pennsylvania's Farmland Preservation Program, which began in 1989 and protects more than 450,000 acres from development, allows for oil and gas development. There are no plans to change that because of Marcellus shale drilling, said Mike Rader, executive director of the state Senate Agriculture and Rural Affairs Committee.

Rader said the impact on preserved farmland is limited, but the impact on farmers can be tremendous, providing much-needed finances so they can continue to farm.

"Marcellus shale provides opportunities for the farmer and for agriculture," Rader said. "What's the sense in preserving farmland if we can't preserve the farmer?"

The amount of royalties vary. Tom Murphy, co-director of the Penn State Marcellus Center for Outreach and Research, said a well extracting from an 80-acre parcel, over its 30- to 50-year estimated lifetime, could generate $1.5 million to $2.25 million for its owner.

Caroline Sinchar, administrator for Washington County's farm preservation board, said deep-well drilling has helped sustain farming for many in that community.

But board members are concerned about the size and scope of compressor stations, which extract gas from a property.

"That land will never be reclaimed as the station is permanent," Sinchar said.

Sinchar said the concern is that compressor stations will be used to extract gas from surrounding lands, not just the protected farm, but county boards don't have the funds to question that.

Reefer said Marcellus drilling can leave a bigger footprint than the shallow gas wells that existed when farmland preservation legislation was initially passed.

"Our best bet is to monitor it and to help ensure that the steps are being followed in the best way possible to protect the soil and the water quality on the land and see the restoration of it done in a way that puts the land back to being able to be farmed, to the best of their ability," Reefer said.

Crop production impact

Matty said that though he had no legal rights concerning drilling on his land, Atlas, the company that subleased his gas rights, has worked with him. While its crews were drilling the two vertical wells, the company took up nearly 12 acres of crop land. Now, the two wells together use less than an acre.

But the horizontal wells, which will extract gas from his and neighboring properties, will take about 25 acres during drilling, which is expected to last more than a year and impact pasture and crop lands. He's unsure how much land will be used permanently.

Matty and his family are getting royalties, though not enough for him to quit his day job at Westinghouse in Cranberry.

"We've done more fencing and stuff like that for the horses, and we put some more buildings up for hay. ... We probably wouldn't have done some of that if we didn't have the additional money coming in," he said.

There is a trade-off, Matty said. His experience has shown that the first year of trying to grow crops in soil that was moved during the drilling process is not good. Even the second year did not yield high-quality crops, he said.

"Anytime you move dirt and put it back, you're going to have some issues to getting it worked out," he said.

Reefer is concerned that the Marcellus shale might make some areas of the state off-limits to federal funds for farmland preservation.

A Westmoreland farm recently was denied preservation funding through the Department of Agriculture's Farm and Ranchlands Protection Program because the farm, which has no Marcellus gas wells, is in a Marcellus region, Reefer said.

However, Hathaway Jones, a management analyst with the USDA's Natural Resources Conservation Service for Pennsylvania, said properties are considered on a case-by-case basis, and the land was denied because of confusion over surface rights.

"The decision not to accept one Westmoreland County parcel is not a blanket decision for Westmoreland County or for the Marcellus shale region as a whole in Pennsylvania," Jones said.

Landowner concerns

In Armstrong, Indiana and other counties, farmland preservation officials said they expect an impact from the Marcellus industry.

Jim Resh, administrator for Indiana County's program, said his concern is how soil will be affected at drilling sites.

"Can you put them back and get the same type of conditions you had prior to that?" Resh said. "It could very well benefit farmers as far as their royalties, but still a viable farm should be viable on what it produces as far as agricultural products."

Some landowners have similar concerns.

"I'd say there are some landowners that are now less willing to convey away their gas rights than there were before," said Shaun Fenlon, vice president for land conservation for the Western Pennsylvania Conservancy. "It's just hard for me to generalize. We're working throughout Western Pennsylvania, and there are parts ... where gas extraction is not as much of an issue as others."

In land acquisitions, the conservancy tries to acquire both the surface and the gas and mineral rights, Fenlon said.

"If a landowner just absolutely insists on maintaining the gas rights, then one of the first questions we have to ask is whether or not it's still worth our efforts to protect the property. And if it is, then we try to negotiate to have as little surface disturbance as possible," he said.

In many cases, the conservancy can reach an agreement that limits surface disturbance. Because gas can be extracted from one property through horizontal drilling on another, that's sometimes an option, Fenlon said.

"It's kind of a case-by-case basis, and our general goal is to get as much protection as possible," Fenlon said. "There are going to be situations where we just can't comfortably protect a property when we think the gas rights are too much of a problem."

On property where the conservancy controls mineral rights, Fenlon said, the group has decided against Marcellus drilling.

"We just want to make sure the science is telling us that it's safe, and we're not 100 percent confident in that right now," he said.

Officials from the Westmoreland Land Trust and the Allegheny Land Trust said Marcellus shale drilling hasn't really affected their work, but they are monitoring it.

"We are observing what other organizations are doing in terms of adopting policy papers and position papers, so we are following the industry. But we've not experienced anything significant in terms of the pace of work that we're doing either way," said Roy Kraynyk, executive director of the Allegheny Land Trust. "When we are talking to landowners now, mineral rights do come up more than they ever did."

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