Updated 02/05/2010 06:02 AM
Town of Maine coalition signs $18 million drilling lease
As the debate over drilling in the Southern Tier rages on, one coalition has signed on the dotted line, leasing their land rights to a drilling company for around $156,000 per household. Our Neil St. Clair explains why this Town of Maine group decided to jump on board and why some neighbors aren't so thrilled.
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MAINE, N.Y. -- To some, these patches of snowy farmland hold only minimal surface value. But there's a theory that lurking beneath may be subterranean gold and that's why one drilling startup has invested $18 million to purchase the rights to around 3,000 acres of Southern Tier natural gas.
"Inflection Energy has reviewed the geology of the Marcellus Shale across several states and we're one of the few companies that thinks southern New York will be a very good place for this," said Mark Sexton, Denver-based Inflection's CEO, during a telephone interview.
For now, a moratorium on horizontal drilling stands in the way of the 115 coalition members sharing this would-be boon. The group, known as the South Maine Millennium Coalition, is represented by attorney Robert Wedlake. He explains why nearly 95 percent signed on to this particular deal.
"It's no secret in our area that unemployment has been relatively high. There are many people that can financially use some assistance. The other items that are attractive is that there are a lot of provisions in the lease that protect the landowner and the land," said Wedlake, a partner in the law firm Hinman Howard Kattell.
But there's dissension in this windswept farmland that's pitting neighbor against neighbor. Not everyone thinks the gas leases are fair or even desirable.
"I don't think it's a good deal no matter how you do it," said Edward Kicsak, a land owner and beef farmer in the Town of Maine.
Kicsak's family has farmed on these 50 or so acres for more than 60 years. He's no fan of the deal, most of all for what it could do to the environment.
"You're going to answer for it sooner or later. I feel I owe God and Mother Earth more than to receive the dollars from it. The land has been good to me and I want to treat it the same way," Kicsak said.
It's unclear when or if the moratorium will be lifted and drilling can begin.
The leases are for three years with a five-year extension option.
Inflection would pay all the taxes on wells dug, though if gas is discovered, it could raise property values and overall assessments.