The industry is apparently taking the same tack with NYS “marks” as they did here [in Texas].

The need for pipelines and the total inability of municipalities to use police powers to control ROW selection for these ticking time bombs is an omission of material fact in mineral leases (producers 88) that makes this contract fraudulent in the inducement.

Drillers know that if they described their complete plans for production to potential lessors and municipal governments there would be nobody who would sign a lease.  Their con game involves appealing to greed to get the wells in the ground while saying as little as possible about any facts that would raise concerns. Then once they have spent millions of dollars on the well drilling (with the cooperation of the marks and the government) they will be in a position to threaten a lawsuit if there are any objections later to the infrastructure needs they unveil as it becomes necessary to do so. At that point they play blame-the-victim and ridicule any naysayers as being stupid for not realizing that pipelines, gas processing plants, and compression stations were going to be required. They will say “Buyer beware!”, and “You failed in your obligation to do due diligence before signing.”

But the fact is that the contracts are fraudulent by omission of material fact. I know of no case law where this issue has been tried, but I’m not a lawyer, either.

Jerry Lobdill
Fort Worth, TX

Calvin Tillman, mayor of DISH, Texas, writes:

Known as a “strategic lawsuit against public participation,” a SLAPP suit is meant to intimidate, exhaust and silence critics. Widely considered an affront to the First Amendment, 26 states and one U.S. territory have adopted some kind of statutory protection against SLAPP suits. Courts in two other states also adopted such protections, Texas is not among them.

I had never heard of the above mentioned term, until recently. I further found it was illustrated in a recent article in the local newspaper, the Denton Record Chronicle, when discussing Oil and Gas Industry threats. As mayor of the town that is the crossroads of the Barnett Shale, I have been threatened with litigation on numerous occasions, mostly for trying to hold the companies accountable to their promises given to myself and the other citizens here. You see as previously mentioned, they will do or say virtually anything to get their “nose in the tent”. After that getting them to fulfill those promises, especially if you do not have it in writing, can be very difficult. However, even when it is in writing, they will likely not give in easily. For example, we recently had a pipeline company come through here, Enterprise Texas Pipeline.

Enterprise did not meet many of the contractually obligated conditions, such as covering, or fencing around the 12 foot trench that they left open. When you complain to them, the first thing they tell you is that they will compensate you for any damages to livestock, property, etc. Now lets say you have a $ 25,000.00 horse, which some here do, and it falls into the trench and dies. You are legal bound to get payment for that horse, but unless specifically outline prices in the contract you will get offered $ 1,000.00 for your horse. If you want more than that, you have to sue them and spend $ 15,000.00 in legal fees. This illustration can be applied to anything, such as returning property to its state, planting grass, damages to surrounding property, etc. So you may or may not get what has been promise to you, even if it is in writing. Therefore, after you go through this process once you will be reluctant to do it again, because at the end of the day, they know how much it will cost you to fight them and they know at the end of the day you will not gain a dime by fighting them.

If you hear a company say, “we just want to be good neighbors“, be especially cautious, because the knife is about to go into your back. Also, if you notice the companies be especially nice and going above what they legally have to, there will be more to the story. They likely have plans to add additional facilities next to you, or they are trying to get laws passed that benifit them, and they want you to keep quiet. If you are screaming that they are a horrible industry, the lawmakers are less willing to give in to a sales pitch. They say things on one hand, and then typically act in a different manner. So here in DISH, I have tried to force the seven companies who have virtually destroyed our, civil rights, constitutional rights, property values, quality of life, and likely our health, to just do what they say they will do when they are forcing their “nose in the tent”.

On many occasions, as I have pointed out, they will say just about anything to get in without a fight. A fight takes time and time is money, if you hold them up for six months, they may loose millions in revenue from whatever facility the are proposing; therefore they make promises they never intend to keep, and if they do it will only be after a fight. Once a pipeline, compressor, or metering facility is connected and pumping gas, there will be a customer on the end of that line, and shutting down would mean not being able to provide that customer with gas. Therefore, it is highly unlikely that any judge would require them to shut down until they can install noise abatement, control odor, etc. Please note, that I am not suggesting that we shut consumer’s utilities off in the middle of winter, I am simply stating that these companies know the system, and are willing to abuse and exploit it to their full advantage.

Which brings me to the latest threat of litigation from one of these companies which is Crosstex Energy. Crosstex has done some good things here in DISH, and have been fairly friendly in doing. They would like to make one believe that this is because they are “good neighbors”; however, there is much more to the story. Crosstex attempted to sneak a compressor station into our community, without our knowledge. As stated above once they start pumping gas, you are at their mercy. A compressor can be constructed in a manner that makes as much noise as the air conditioning unit on your home or it can omit 80 + decibel of noise. Obviously, the quiet ones cost much more money than the noisy ones. Also, the quiet ones are enclosed, and are more esthetically pleasing than the open ones, which are hideous to look at.

So Crosstex tried to install the cheap one at our expense. However, although I am small town mayor, I do have a little common sense, so something did not seem quite right. So I took a look, and to my surprise, behind a grove of trees, was the pad for a compressor station. Therefore, I red tagged all of their construction vehicles and shut down the operation. I also called the local media to see if they were interested in this. Fortunately, the media was interested, so there were some photos of the red tagged vehicles on the front page of the local paper. This is when they sent the propaganda machine to quiet things down a bit.

You see at any given time these companies have multiple lawsuits against them, so bad press may fuel some young ambitious attorney’s court case against them. It also brings groups who have the same problems together. During the propaganda, there were multiple promises made, which have not been kept. For example, Crosstex stated during a public meeting that they were not going to put in a huge facility, only a “small building to house 600 HP compressor”, not the big eyesores we were accustomed too. However, they will only go so far as to say that they will never add on, but they sure won’t tell you the real plans. So, as things continue on, and the compressor starts pumping gas they come around with another small addition to the site.

When you push back a little they send the propaganda machine back. For me, there are many of these companies that have only designated people that are allowed to meet and visit with me, all others are forbidden from speaking to me. This is usually the best the company has to offer, and won’t slip up and tell the real story. Please note that their goal is not to be good neighbors, but to complete the company’s agenda. So now Crosstex has plans to install another facility that consists of two forty foot towers, which we here in DISH would compare to being snake-bit. Unfortunately, the State of Texas has given these companies extreme authority; therefore, at the end of the day, we will likely have another facility that brings two 40 foot towers. If that is not bad enough, we just ask that they be responsible, and give the town its full rights to require a permit, with reasonable stipulations, and they threaten litigation.

When the propaganda does not work, the next step is …”the bluff”. They wish to see how serious you are about putting up a fight, so they float the litigation option. When they find that this will not work, “the bluff” gets bigger. They will push the corporate attorneys aside for the high priced downtown Dallas law firm that everyone has heard of. These attorneys start by questioning whether certain ordinances even apply to their client, when there is clearly case law that says it does. Then they will state that the town has some how missed a step in the ordinance approval process, and therefore it is not valid, so it cannot be imposed on their client. You might call this rhetoric, because it has no basis, I am not aware of case-law to support these positions. However, it does run up your legal fees, due to your attorney needing to respond.

I must urge everyone to get a qualified attorney to handle any of these matters. You want them to respect the high-priced attorneys, but not fear them. If your attorney gets intimidated by the gas company’s attorney, you may want to be shopping for a new attorney. After you go through “the bluff”, they typically come to the table and attempt to mend the fences they just severed, by threatening to sue you. They know their rights better than anyone else does and therefore when “the bluff” does not work, they will do what the law says they have to do. If they sue, then the process stops, and that will hold up their project, and they will have to do what the law states in the end anyway, so they will do what the law says they have too when it comes down too it.

I suspect that they will weigh the cost of complying with your request, weigh the options of being successful in suing you, and do what is the most economical. For the above said threat, it only came after the message “Another Lie?“ came out, and therefore, I would speculate that they are really trying to shut me up. The town’s position is based on case law, and has a very good foundation; therefore, they are attempting to “SLAPP” me with a suit.

This message is getting long, but I have an illustration I would like to give you briefly. When the Town of DISH adopted its drilling ordinance, the local Devon Energy Landman, stated that they would comply when the courts said they had too. Some shots went across the bow for a while until the above stated person was banned from speaking with me. I was then passed to the next in line, and started taking with them. Of course, then the high-priced attorney got involved and followed the script above. However, at the end of the day, Devon Energy drilled numerous wells in full compliance with our ordinance, and frankly we have a very good relationship with them now, in comparison with the other companies. We have invited them to city functions, and they have sponsored events, it can be done if they want it to. That is not too say that our relationship will not sour in the future, but for now, I think both sides are content. The one thing that these companies have a hard time grasping is that people typically just want to be shown respect. When you show people respect, you typically get it in return, when you don’t, you also get the opposite.

In closing, I know at the end of the day we will likely have two more forty foot towers, but that does not mean that we have to like it, or be nice to those who continue to destroy our rights, or look for every avenue to protect the little we have left. Fortunately, of all the things that the State of Texas has given to them, forcing us to be nice and courteous to these people is not one of them. As far as “the bluff”, time will tell whether it is really a bluff or not. I may be served any day. However, in watching the various poker tours on TV, I have found that when someone gets low on chips, desperation sets in and they go “all in” with the first decent hand they get. That is where we are at here, that point of desperation, that we have nothing to lose, where no matter, win, lose or draw we have to do something. I urge everyone to educate themselves on their rights; this will be the biggest tool you have.

Calvin Tillman, Mayor, DISH, TX
(940) 453-3640
“Those who say it can not be done, should get out of the way of those that are doing it”

http://www.newson6.com/Global/story.asp?S=9349075&nav=menu682_2

Natural Gas Pipeline Explosion

• SKYNEWS 9 HD Surveys Damage From Gas Line Explosion

• Gas line explodes in Grady County

The explosion and fire near Alex closed down State Highway 19.

Associated Press

ALEX, Okla. (AP) — Two people were hospitalized after natural gas pipeline operated by Enogex exploded early Friday morning in Grady County.

Three homes were destroyed by fire after the explosion near Alex and State Highway 19 was shut down.

A man and woman in a mobile home were injured. The man was taken to a Chickasha hospital. His name and extent of his injuries weren’t immediately known.

The woman is identified as Mildred Hull and is reported in good condition in an Oklahoma City hospital with second- and third-degree burns to about 17 percent of her body.

The cause of the explosion isn’t known. Enogex and Oklahoma Corporation Commission inspectors have been sent to the scene.

The pipeline was built in 1975 and transports natural gas from wells northwest of Thomas in Custer County to a production plant south of Alex.

————

Interview with fire chief:

http://www.kswo.com/Global/story.asp?S=9353162&nav=menu495_2

Grady County Fire Chief interviewed, says he could see it from his house 20 miles away, “A big massive, huge fire ball. The sound, it was unreal.”… “This is nothing like I’ve ever seen before. I’ve been in the fire service for 21 years now.” He says the initial explosion was only part of the problem. “Everything ignited from the heat, even the high line poles on the south side of the road ignited from the heat off that,” he said.  ”The other house across the road ignited from the heat.”

Here are a few reasons we need to reduce it: this winter’s rash of natural gas explosions in New England suburbs, and the lives lost:

1. One dead in house explosion
http://www.theunionleader.com/article.aspx?headline=One+dead+in+house+explosion&articleId=b0836fb5-ce5c-4986-aa7b-168dc60b083e

2. Gas leak forces evacuations in Keene
http://www.theunionleader.com/article.aspx?headline=Gas+leak+forces+evacuations+in+Keene&articleId=31ffaf73-a619-4cee-83e5-8afedc73b28f

3. Woman killed in gas explosion in Somerset

http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20090220/NEWS/902200349

Before explosion, gas crew waved off help; told firefighters they could leave the scene
http://www.boston.com/news/local/massachusetts/articles/2009/02/21/before_explosion_gas_crew_waved_off_help/

4. More natural gas leaks discovered around Gloucester
http://www.wickedlocal.com/manchester/news/x959451230/More-natural-gas-leaks-discovered-around-Gloucester

Owner miraculously survives explosion – ‘Miracle day’
http://www.bostonherald.com/news/regional/view.bg?articleid=1147762

5. 1 Dead In Scituate House Explosion  4 Nearby Homes Condemned After Explosion
http://wbztv.com/local/scituate.house.explosion.2.889634.html

The infrastructure is aging: For years Matt Simmons, the only Peak Oil activist among the oil & gas industry elite, has been warning about, besides peak oil, the aging energy delivery system:

“If the world wants to keep using energy from oil and gas, it will have to rebuild the infrastructure and the cost of doing this could rival the combined cost of the World War II war machine, the post-war Marshall Plan that rebuilt Europe, and the post-war buildout of the U.S. interstate highway system.”

Simmons said the costs could be enormous–in the $50- to $100 trillion range. Triage needs to happen immediately to prioritize which links in the system are the weakest and need to be repaired or replaced first. Pipelines are old, some dating to World War II. The average age of the drilling rig fleets onshore and offshore is 24 years. Refineries are even older.

See:
http://blogs.oilandgasinvestor.com/leslie/2008/05/05/matt-simmons-rust-happens/