Guest Opinions

Oil, gas interests no threat to Idaho property owners

Thomas Kennedy’s guest opinion, “When it comes to mineral rights, prospective homeowners beware,” published Jan.15, is so wholly inaccurate that it demands a response. His comments are the worst kind of fear-mongering, displaying his lack of understanding of our industry.

1. Property values have not dropped “because of oil/gas leases granted by the state in residential subdivisions.” In fact, property values in Payette County have increased since the industry started exploring there.

2. We are not aware of any residential mortgage being called due because of an oil and gas lease causing “technical default.” Fannie Mae loan origination guidelines specifically contemplate lending against properties with oil and gas leases. Mortgage lending has gone on in the presence of oil and gas leases here and elsewhere for over 100 years. Kennedy’s claim that residential lending is in danger is just wrong.

3. Mr. Kennedy’s attack on “fracking” is a red herring. While we strongly believe in not only the safety of hydraulic fracturing but its fantastic contribution to the U.S. economy, “fracking” has not been used in Idaho. Moreover, what is known about the geology in Southwest Idaho so far does not suggest it will be of any use here. The horizontal drilling used to develop shale resources in North Dakota and other states are not used here. Here, the industry drills vertical wells into sand structures.

4. Idaho’s Legislature has not “jeopardized” property values, mortgage lending or title insurance. In fact, oil and gas leasing and drilling have gone on in Idaho since the early 1900s, and there has been no discernible effect on any of those things since then.

5. Kennedy misstates the Idaho Oil and Gas Conservation Commission’s role. The Idaho Legislature actually set policy in 1963 by enacting the state’s Oil and Gas Conservation Act and declaring that it is in the public interest to “foster, encourage and promote the development, production and utilization of natural resources of oil and gas in the state of Idaho . . . to the end that the land owners, royalty owners, producers and the general public may realize and enjoy the greatest possible good from these vital natural resources.”

6. The state has not “allowed oil drilling/fracking in residential areas.” Again, no fracking of oil and gas wells has ever occurred in Idaho. State rules require equipment on well pads to be set back several hundred feet from residential structures, water wells and surface waters. As a practical matter, this makes it impossible to drill on a property smaller than several acres in size. Drilling simply cannot occur in the average residential subdivision (although its residents might receive royalty checks if a successful well is drilled nearby).

Contrary to Kennedy’s unsupported claim that people will not move to Idaho because of oil and gas development, we regularly receive inquiries from Idahoans working in the industry in other states, looking for work here so that they can return home to their families. Since 2010, about half of Idaho’s counties have lost population, almost certainly because of the lack of economic opportunity. Payette County has grown.

Kennedy’s goal is clear — he would like to eliminate oil and gas development, and in the process take away the property rights of thousands of Idaho mineral interest owners, and important taxes, jobs and other economic benefits. The websites he cites are those of hard-core activists, hardly unbiased sources. We encourage readers to visit the Idaho Department of Lands website for more useful and unbiased information about our industry.

Scott Madison is president of the Idaho Petroleum Council. This opinion is supported by Suzanne Budge, executive director, Idaho Petroleum Council.