Wednesday, June 6, 2012

Mineral Leases Create New Prosperity

The New York Times details how hydrofracking dollars are starting to pour into the small, rural communities of Ohio and Pennsylvania:

Here in Noble County, . . . Eclipse Resources, a Pennsylvania company, mailed $16 million in oil- and gas-leasing checks last month to 70 households whose property has been found to sit atop oil and gas reserves. Working with a lawyer in nearby Marietta, the residents were able to band together to negotiate an unusually lucrative deal with the company that paid $4,000 an acre and 19 percent royalties on oil and gas production, and included safeguards to protect water and land. (The standard has been $20 to $30 an acre, one-sixth royalty rates, and no protections for water and land.)

Steve Clowney

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At first I thought it read "mineral leases create new property".

There being increasing attention (particularly in Australasia) to the extent to which leases/licences/consents/permits are property; what this means; and whether the title given to the instrument matters.

In Australia, for example, if something is property, it is subject to compensation for takings under the Australian constitution. New Zealand has no formal written constitution, so things can be property without this affecting or inhibiting regulation.

But I'm getting very off-topic.

Posted by: Thomas Gibbons NZ | Jun 6, 2012 1:46:52 PM

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