Fruitland rural residents Sue Bixby and Robert Bixby have to decide in the next two months how they will react to the plan to drill for natural gas in their neighborhood.
Texas-based petroleum company Alta Mesa wants to drill for natural gas in the residential area east of Fruitland, where children feel safe playing in the streets and the rural countryside is only a walk away. She’s not alone. Several dozen residents hold the mineral rights to their property and have to give Alta Mesa or the state their answer on whether they want to lease the right to drill or perhaps even share the risk and reward of the drillers.
But the Bixbys are more concerned about what the drilling will do to their quiet little community. They worry about the threat of water contamination and most of all, they feel like they are in the dark.
“I don’t think we have a voice,” Bixby said. “We’d like answers and we don’t get answers.”
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They got some answers Monday night when Idaho Department of Lands Director Tom Schultz explained natural gas exploration and the state’s regulations. More than 140 people came to Payette’s McCain Middle School to the meeting organized by state legislators.
Alta Mesa filed an application earlier this summer to integrate two 640-acre parcels in the area. New rules for integration, also called mandatory pooling, were approved by the Idaho Legislature earlier this year to protect mineral-right holders and ensure gas is not wasted.
If 55 percent of mineral interest owners in a 640-acre area designated by the state as a “unit” or “pool” agree to lease their rights, a driller can ask the state to force the other 45 percent to be included in the unit.
Owners are then presented a list of options for compensation, among them leasing, investing in the drilling for a larger share of the profits, or being included in the investment with their share coming from future earnings. If no compensation option is chosen, the Idaho Oil and Gas Commission — if it approved the integration — comes up with an alternative compensation, likely royalty payments and bonuses approximating what the 55 percent who signed leases got.
What the forced percentage of mineral-right owners don’t get to say is “no drilling,” and for some residents that’s a disappointment.
The Oil and Gas Commission will hold a hearing on Alta Mesa’s application for integration Sept. 16. After its decision, residents will have at least 15 days to make their own choices and the commission can give them more time if they choose.
At the back of the room Monday, protesters held up signs with questions they had for Schultz. He took written questions, too.
What effect will this have on my mortgage?
Schultz said anytime you sign a lease or go through the integration process you should inform your mortgage lender, but the state knows of no cases where homeowners’ loans went into default because they didn’t keep a lender in the loop.
What about waste?
Schultz said so far, drillers have hauled their waste to a landfill. But they may apply to reinject wastewater into the wells. That’s regulated by the Idaho Department of Water Resources.
What about earthquakes?
Schultz said the science has shown that some earthquakes in Oklahoma have been triggered by reinjection and horizontal fracturing in shale deposits. So, location on faults are a consideration that will be viewed in separate permitting processes.
What about split estates?
That’s where the mineral rights and the surface rights are split. The mineral rights take precedence, which means the surface owner can’t stop drilling. But the driller can’t move forward without an agreement with the surface owner under state regulations.
What about fracking?
Schultz said the new practice of horizontal fracturing, where the driller turns the drill perpendicular into a shale formation and under heavy pressure pumps fluid and sand to open space for the gas to escape, isn’t planned for the area. Companies have done well treatment, also called “mini fracking,” where chemicals and low pressure are applied to the well to clear away debris. But gas in the area is in deposits of sand, not shale. Opponents are skeptical.
The Bixbys own their mineral rights but have felt bullied by the man who sought their lease. They want to make sure it’s done right.
“It’s not about the money,” Sue Bixby said.