FRUITLAND — On Sept. 16, the Idaho Oil and Gas Conservation Commission held two hearings at Fruitland City Hall to hear testimony on an Apr. 26 application by Snake River Oil and Gas.
The company is seeking permission to integrate (also known as forced pooling) “all uncommitted mineral interest owners” in two spacing units Payette County, including property surrounding the Fallon 1-10 natural gas well. Fallon 1-10 is located near the bank of the Payette River.
Conducting the meeting was Mick Thomas, administrator for Oil and Gas at the Idaho Department of Lands.
Richard Brown, owner of Snake River Oil and Gas, was also at the morning hearing, where he explained his proposal to use form 610 from the American Association of Petroleum Landmen for this integration. He described its use as leveling the playing field for property owners. He told officials he has worked with an estimated 1,000 oil and gas wells in his career.
“For my entire 40-plus year career, it’s been in use,” said Brown.
He said the form is used by a majority of landmen in the oil industry.
Form 610 describes how the cost and revenue sharing percentages of the parties are to be calculated, how the operators and non-operators will handle title issues, and also covers the potential future acquisition and/or disposition of interests within the contract area, according to oilandgaslawdigest.com. This form was most recently revised in 1989.
During the hearing, James Piotrowski, attorney for the Citizens Allied for Integrity and Accountability, raised concerns over potential due process violations.
“The application in this case is not supported by adequate evidence that the necessary majority of land” has been leased, said Piotrowski over video connection. “Less than the necessary minimum number of lands have been leased. In addition, it appears that there appears to be a significant issue that our evidence uncovered recently; There were uncommitted mineral owners who have not received notice of this proceeding.”
In an emailed statement to the newspaper, Piotrowski stated that the application is a further attempt to limit property owners’ influence on local oil and gas operations.
“In two recent cases, one involving the Fallon 1-11 well, and the other the Fallon 1-10 well, [Snake River Oil and Gas] moved to exclude [Citizens Allied] from participating as a party in those cases. In both cases Oil and Gas Program Administrator at ID Dept. of Lands (Mick Thomas) granted the motions and excluded [Citizens Allied] from being a party,” wrote Piotrowski. “This has meant that while [Citizens Allied] can still make public comments to the, it can no longer cross-examine witnesses such as [Snake River Oil and Gas] owner Rich Brown, or its geologists or landmen. Only mineral rights owners and the Department of Lands are allowed to do that. In both of those cases the Dept. of Lands asked those witnesses few, if any questions.”
Piotrowski further stated that Thomas shows a narrow view of what lease terms are “just and reasonable” under the law and that he doesn’t consider how oil and gas operations could harm homeowners’ property values.
“It’s a one-sided system that works to benefit and enrich gas companies, while providing no precautions against SW Idaho having the type of groundwater, pollution and declining property value problems we’ve seen in other states,” wrote Piotrowski. “[Citizens Allied] continues to challenge the industry and demand stricter protections for Idaho property owners. This has included efforts to draw attention to the harms of gas development in other regions; protection of the property rights of Idaho landowners; and continued steps to require the Dept. of Lands and the Oil and Gas Conservation Commission to be an effective watchdog of the industry rather than merely facilitating faster and more reckless development.”
On Sept. 15, in response to a motion filed by officials at Snake River Oil and Gas, the commission issued an order stating that Citizens Allied is not a party to this matter and denied their petition to intervene.
Numerous concerns expressed
Public comments received during the hearings included concerns over royalty calculations, as raised by Sharon Simmons of Payette. Simmons is an uncommitted mineral owner.
“I don’t know … where they get their figures to begin with, for their $100 an acre and 1/8 [12.5%] royalty. I did some checking and I have a friend that lives in Pennsylvania and in Pennsylvania they gave $1,000 an acre and 15% royalty. And the friend that I know, she owns 147 acres and she was was written a check for the agreement for $147,000.”
Julie Fugate, a board member with Citizens Allied, questioned the scope of testimony the Oil and Gas commission accepted from Snake River Oil and Gas. She raised concerns about the integrity of the project.
“The explanation, in regards to the map, was to add acres as a protection for others just outside the 300 acre spacing unit. If this was the case, why isn’t this protective wall provided around the entire 300 acres?” said Fugate. “It is extremely concerning that [Idaho Department of Lands] relies solely on the word of Snake River Oil and Gas, that they in fact have leases. [It] does not examine those leases, [it] does not do anything to confirm that Snake River Oil and Gas is correct. And [it] does not even do so after Snake River Oil and Gas has submitted incorrect maps and sandman notes in this very case.”
Fugate further stated that the legal description on their paperwork is also incorrect.
Shelley Brock, president of Citizens Allied, also weighed in, noting that Brown never promised not to explore hydraulic fracturing in the area as he confirmed in his testimony earlier in the day.
“I distinctly remember five years ago … him stating unequivocally to people who asked him questions about that, that they definitely were going to frack here,” said Brock. “I’m glad that he was honest this morning, when he was questioned.”
Brock was referring to Brown’s comments at the morning hearing when asked if he could comment that fracking would not happen here, and he answered “No.”
A representative for the Wild Idaho Rising Tide organization questioned drilling so close to the Payette River for what may be a small amount of gas.
“Why is the well already drilled, and just now there’s decisions being made about would would be integrated?” she asked. “All oil and gas wells leak, it’s just a matter of time.”
The representative also took aim at Thomas, claiming that he has a vested interest in oil and gas in Idaho.
“We … find it rather strange that the one Idaho citizen who most financially gains from oil and gas regulation and … development and production… yourself, Mick Thomas, is actually presiding over these hearings and making decisions that impact all the rest of us who won’t gain, and in fact will be financially, physically and environmentally harmed.”
However, Thomas was quick to refute that claim.
“I do collect a salary as a state employee, that is true,” said Thomas. “That is my only source of income, even remotely related to oil and gas. I do not and have not held any stocks or investments in any old and gas operations since probably about 12 months before I took this job.”
No action on the application was taken during the hearings, as a window for further public testimony remained open until Sept. 17. However, Brock stated in an email to the newspaper Friday she’s not letting up on her stance. The last item posted on the application on IDL’s website was a public testimony hearing on Sept. 16.
“This, and all future integration contracts should include terms that are just and reasonable for Idaho citizens, rather than favoring out of state oil and gas companies that come here to exploit our natural resources for a profit,” Brock said. “We are at the mercy of these operators and state regulators who are failing to do the job the taxpayers hire them to do. CAIA will continue to advocate for the protection of property rights, property values, clean water and the health and safety of Idaho families living here now, and for future generations.”