Did we read that right??

Did Railroad Commissioners just stand up for THE PEOPLE and their property?

Against the industry?  Against their money??

Read the Fort Worth Star-Telegram.  YOU won't believe it.

The Railroad Commission has shown some spine.

Last week, on Chesapeake Energy's request to "force pool" some residential properties for drilling in the Glen Garden neighborhood of southeast Fort Worth, commissioners Barry Smitherman and David Porter politely but decidedly beat up on the big local company and its attorneys for belligerent behavior.

One of the arguments that Chesapeake's offer was not fair and reasonable was that it asked property owners who had not signed mineral leases to take a "working interest" in the well, under which they would share in the profits but would pay twice their share of the well's costs. It gave them 14 days in which to decide, and they were told they would be given a written copy of the agreement after they said they wanted to go that route.

Under questioning from Jones, hearing examiner James Doherty said, "To me, it just seems unfair on its face to expect somebody to commit to enter into an agreement that they've never been given the opportunity to see."

Since that didn't work, he said, he joined Porter in making the vote 2-1 to deny the company's pooling application.

The commission moved to a case in which Chesapeake asked for a "Rule 37 exception" that would give it more flexibility in drilling on 182 acres in Crowley.

"In the nine months I've been here," Porter said, "this may be the poorest fact case I've seen on a Rule 37 request."

It wasn't Chesapeake's day. The commission unanimously denied that request.

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Being Railroaded?

Read the letter concerning the Railroad Commission from former DISH, TX Mayor Tillman.

Worth your tax dollars?

I recently spoke at an event with a representative from the Railroad Commission of Texas (RRC), which regulates and promotes the Oil and Gas Industry in Texas. After dealing with the organization for several years, I have little respect for them as a tax payer funded organization, as do most of the people that have been forced to deal with them. When I was mayor of DISH, I tried for years to get the RRC involved in our situation, and they did nothing. They would not respond to our complaints, and if they did return calls, they certainly would not show up on site. When you call after hours or on weekends, the person who responds will likely not be from your area, because they only have one person on call for the entire state. I bring this up, because the RRC representative stated that they respond to every complaint, and that is simply inaccurate. I am not saying the RRC representative was lying, but he was inaccurate. It is possible that the suits in Austin are quoting some general written procedure that no one follows, or perhaps they really could be lying about the situation.

It is further disappointing that the Texas State Legislator failed to take action to help improve this situation during the 2011 legislative session. Texas has a wonderful idea, and that is the Sunset Advisory Commission, which was created to eliminate waste and inefficiency in government agencies. The Sunset Advisory Commission agreed with me and most of the people who know anything about the RRC. You can read the entire report at: http://www.sunset.state.tx.us/82ndreports/rct/rct_dec.pdf. The RRC is led by three elected commissioners, which are kindly referred to by some as the Moe, Larry, and Curly. The only type of oil and gas experience required for the commissioners is to pay close attention to what the industry lobbyist tell them, and properly accept the envelope of cash slid across the table to them. The Texas Legislature failed to do their job and get rid of this sacred cow.

I suspect the organization has been given a reprieve to the next legislative session to clean up their act. However, it is clear that they are not going to clean up their act, but rather send their PR folks out to tell lies and mislead the public. One thing that shocked is that the RRC employees are paid very well to do very little, and in the case of the employee who was on the speaking panel, he is paid almost $100,000.00 per year. Now remember that the Texas education budget was cut by four billion dollars but the RRC was fully funded.

I am ashamed that our conservative legislature who is sent to Austin to get rid of wasteful spending, are still wasting tax dollars on this organization, but can not invest in our children's future. If the RRC simply went away, the average Texan would not know the difference, and certainly would not miss the organization. For the most part the average Texan does not even realize that the "Railroad Commission" has anything to do with the oil and gas industry, not completely convinced that the "Railroad Commission" is aware that they have anything to do with the oil and gas industry.

Another disturbing fact about this organization is that they have voted on thousands of occasions to take private property that belongs to a taxpayers in Texas and transfer this to a corporation without compensation. In Texas there are spacing rules that prevents an operator from drilling up against an unleased property line; however, the operator can request an exception to that rule and therefore put the drill bore against the property line. When the hydraulic fracturing takes place, the minerals from the unleased property are collected without compensating the mineral owner. This has been accomplished thousands of times in the Barnett Shale. The commissioners will attempt to state that this rule is need to prevent one person from stopping others from benefiting from their minerals. However, that is not how it is being used, but rather the operators no longer negotiate in good faith. They will simply make a low offer and if it is not accepted in a timely manner, they will simply move toward the exception. This was outlined in a recent local article which can be found at: http://www.fwweekly.com/index.php?option=com_content&view=article&id=4950:free-gas-for-drillers&catid=76:metropolis&Itemid=377

Once this trick had been sniffed out, the people in the Barnett Shale began protesting the exceptions, and therefore holding up the drilling process. Therefore, they have proposed to alter the current rule to notify the property owner only after the exception had been approved, which would prevent those annoying people complaining about their minerals being stolen. We have several instances in Texas where the surface owner have been pushed around by these companies, now they are doing it to the mineral owners also. This action completely destroys the theory of a free market system, and also destroys private property rights. The free market system in Texas, is directly related to the amount of money that is donated to a particular campaign, and you can own and peacefully enjoy your property as long as someone with more money does not want it. Not sure that is exactly how the founding fathers of this great nation planned it.

In today's economic climate it is imperative that we cut ineffective organizations. Every tax dollar counts, and we the taxpayers should influence what that money is spent on. So many of these organizations that are paid to protect our health safety and welfare, simply go through the motions and collect a pay check. That is exactly what the state officials want...the masses to think they are being protected, and that is simply not the case. In many of these organizations, the low level boots on the ground want to do the right thing, but are prevented from doing that by a political appointee. However, that is not the case with the RRC; their way of doing business has been going on for so long, that it is ingrained in their culture. Therefore, some ineffective organizations could change with new leadership, but with the RRC, we need to abolish the entire organization.

Those of you in other states, may not have this exact problem, but I would bet that your "regulatory agency", has the same problems that exist here. The organization is there only to give the perception that the state is trying to protect health, safety and private property rights, but are really in existence only to protect the industry. It is time that these organizations fulfill what the taxpayers are paying them to do, or get funded by a source other than taxpayers.

In Texas, the RRC is the entry level political office, for the above stated qualification requirements, however, many of these officials go on to further political careers. One current commissioner has announced a run for US Senate, while a recent former commissioner is running for a US Representative seat. I am betting that they will be rewarded for the thousands of occassions that they allowed the legal theivery of private property by corporations. We simply can not let this cycle continue. It makes no sense for us to spend millions or billions on organizations that simply make no effort to perform their intended functions.

"Those who say it can not be done, should get out of the way of those that are doing it"

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You can't make this stuff up

We're not sure which of the Fort Worth Weekly Static stories we like better.  The Revolving Door Star-Telegram courthouse reporter, now working for the courthouse....or having your drillers spayed and neutered.  Read them both.  YOU don't want to miss them.

The application’s minimum requirements seemed custom-written for McDonald. The job required a bachelor’s degree in journalism, four years of reporting experience relating to criminal trials and the criminal justice system in a major metropolitan area, and an additional six years’ reporting experience with a daily newspaper or broadcast media.

In our last issue, Weekly scribe Peter Gorman wrote about another truck-sized loophole that the drillers have been using to avoid paying property owners for their minerals — Rule 37 allows a driller to take minerals from under property that is unleased as long as the Texas Railroad Commission lies down like a throw rug again and approves it. If a property owner has the temerity to show up to contest the action, just cancel the hearing! And reset it later after providing notice only in the tiniest-circulation newspaper the company can find.

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Calling Grand Prairie....

And Lewisville, and Flower Mound, and....are YOU next?

In January, we told you the gas drillers were coming.

Today, you get a heads up from a South Grand Prairie Watchdog.

Beware.

People in Grand Prairie need to look into RULE 37 that lets the gas company take your mineral rights without any compensation. BEWARE if you receive a letter from the Railroad Commission. If you do not file protest within the short period of time the RRC will give the gas company the ok to suck the minerals out from under your property. South Grand Prairie is currently under siege by the gas company and these letters are showing up. You MUST fight for your rights.

In addition to filing the protest, you'll have to drive to Austin to contest it.

And they are coming for you too, Lewisville.  Consider yourself warned.

Check out the Rule 37 cases in Flower Mound.  And learn a thing or two about WHO is connected, here.

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PAYING Attention

Not all are sheep asleep.  At least a few are standing up for YOU.  Too bad a forced pool is the only kind of pool Fort Worth has.

Read the letters in the Fort Worth Star-Telegram.

Gas leases

"Protecting property owners' mineral rights," my foot. (See: Wednesday commentary)

The Railroad Commission's Rule 37 is confiscatory and antithetical to the principles under which this nation was founded. The separate Mineral Interest Pooling Act, if twisted in the way Glenn Johnson and Chesapeake Energy are trying to distort it, will be even worse.

What about the mineral rights of the victims of these predators? A Rule 37 exception just takes their minerals with no compensation whatever.

And in the present economy, is failure to sign a lease going to prevent production of someone's minerals? No!

Why? Because the sales price of gas is too low to recover drilling costs now, and nobody wants to sell their gas in a glutted market anyway. All the investor publications say so.

Chesapeake is filing cases with the Railroad Commission not to facilitate production but to consolidate all the land in a unit cheaply and hold it for speculation.

They are not completing wells and gathering pipelines now. They are posturing on the drilling pads and drilling a few hundred feet and calling that a good-faith effort to produce in order to hold their existing leases.

When the market once again supports profitable drilling and production, perhaps those unleased mineral owners will see a reason to lease.

-- Jerry J. Lobdill, Fort Worth

Anyone who believes Chesapeake Energy is just a benevolent organization that wants everyone to participate in the production of this wonderful Barnett Shale is what I call a fool.

Chesapeake is neither a benevolent nor a philanthropic organization bent on giving money away without any strings attached.

The fact is that the precedent for "force pooling" unleased mineral interests is already outlined in what is commonly referred to as the "Finley Resources" decision from the Railroad Commission (Oil and Gas Docket No. 09-0252373).

Within that decision the Railroad Commission has ruled that if Chesapeake wants to force pool unleased mineral owners it may do so in this way: (1) the owners of unleased tracts within the unit are pooled as owners of a one-fifth royalty and four-fifths working interest, proportionately reduced; (2) the mineral owner's share of expenses, subject to a zero risk penalty, are payable only from the four-fifths of production rather than from their entire mineral interest.

This latest attempt by Chesapeake is to simply reverse the Finley decision with one that is -- again -- in its interest only.

Fools do seem to abound these days.

-- Louis McBee, Fort Worth

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Hey, Media!

Enough with the fluff already - WHERE YOU at?

If you live in Texas, read the letter from the Fort Worth Star-Telegram.  YOU can't afford not to. 

Brutal tactics

Mike Norman's Thursday column speaks mildly of the gangster-like tactics of the oil and gas operators in Fort Worth and other communities in the Barnett Shale. (See: "Don't understand oil and gas? What's wrong?")

The industry many times ceased negotiations after the July 2008 crash of the gas boon. Industry representatives, now with partial but not fully developable lease tracts, are back in neighborhoods offering not only paltry bonuses, but leases with reduced royalty shares, unfair charge-backs against royalties, pre-waiver of all activities they deem necessary to operate, and pre-agreement to support variances to city and other governmental rules or laws, including setbacks and pipeline easements. Want that on your property?

The landmen have been bold and say if you do not sign this one-sided, inequitably paid lease then they will file a Rule 37 against your property and will take your gas minerals anyway. Envision a gun held to a property owner's head.

These are brutal tactics supported by the Texas Railroad Commission. The fact that a Chesapeake spokesperson used the word "generosity" is nothing but a perverse statement. Chesapeake and the others need to be exposed by the media for what they really are.

-- Gary Hogan, Fort Worth

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Crooked is...as crooked does

Just when you think the laws concerning YOUR property can't get any more stupid, they do. WHY? Arrogance and greed.

Read about the latest gas drilling move in the Fort Worth Star-Telegram. We're just glad this one wasn't written by Smith.

Arguing before the three-member Texas Railroad Commission on behalf of Chesapeake Energy on Monday, Johnson said, "The commission has had problems because people in the Tarrant County area don't understand oil and gas and unfairly criticize the commission."

So, whatever is wrong is our fault? Maybe some of us just look at natural gas drilling differently.

Chesapeake wants to "force pool" properties for drilling in the Glen Garden neighborhood of southeast Fort Worth, south of Cobb Park and west of the Glen Garden Golf and Country Club. It would require property owners to take part in urban natural gas drilling, whether they like it or not.

Regardless of what happens in this case, he told the commission, the well will be drilled. And, "our well will drain all the gas."

To do that, the company wants to pursue a second route to forced pooling, the Mineral Interest Pooling Act, or MIPA. Chesapeake would force unleased property owners to take, and pay for, ownership shares (what's called a working interest) in the well.

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WHO in their right mind

Would support (push) SB 875? 

Read about it on TXSharon.  WHO elected this gashole?

If you keep electing people like Bonnen, then you should at least pay attention to the ways these people misuse their office and stop pretending that you are the party of personal property rights.

The Denton Record Chronicle quotes attorney Kirk Claunch on his opinion of the amendment:

“I can’t think of any piece of legislation that’s more un-American than one that deprives a private property owner of the right to defend themselves against abuses from a big oil company or anybody else,” Claunch said. “This is law that essentially says we are going to let the oil and gas industry do whatever it needs and to run over anybody that gets in its way without any consequence.”

Rights, what rights?  This is the new Texas...unfortunately headed the Fort Worth Way...

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