Farm Land For Rent In Pa

Advice offered on shale drilling

At Heather Houlahan's farm, chickens run freely through brush, turkey flocks roam from field to field and five shepherd dogs keep them all in line. It's the farm of her dreams, but when she and her husband bought it in 2008, they didn't understand how the gas boom was reshaping rural life.

Her water comes from natural springs, and she worries about the complaints of well water contamination that have often followed Marcellus shale gas drilling. She doesn't own the farm's mineral rights and, like scores of other landowners around the state, she's trying to figure out how to protect her 26 acres of land and water.

"It doesn't really help me if I can sue (a driller) after our well is contaminated," said Houlahan, 45, of Lancaster in Butler County. "It's not about money. It's about living our way of life."

Landowners have a lot to consider to protect themselves, said Ross Pifer, director of the Agricultural Law Resource and Reference Center at Penn State's Dickinson School of Law. Drilling agreements will affect generations, and landowners need to thoroughly understand the law, their leases and land deals to prepare for permanent consequences, he said.

Pifer spoke to Houlahan and about 20 other people Wednesday night at a meeting in Richland on the maze of state law and regulation governing drilling. The Pennsylvania Association for Sustainable Agriculture has been holding meetings in four counties to teach people how to monitor industry impacts and to help mineral owners decide whether drilling is right for them.

"You have to know what your rights are and be prepared to act in your best interest," Pifer said. "If I'm a surface owner, I want to raise every issue on how this might impact my land."

Surface owners - those who don't own their land's mineral rights - do have a right to notification and can ask drillers to sign a surface-use agreement if a well is going on their land. Drillers don't have to sign the agreement but often will to ensure they won't get sued for unreasonably disturbing the land, Pifer said.

Most of Pifer's recommendations were for potential leaseholders. The key is to make demands from the drilling companies, he said.

• Ask for a right of first refusal at the end of the lease. If a lease expires, that gives people the power to seek a better deal from another company.

• Limit the types of formations and mineral rights in the lease. This prevents drillers from getting free or cheap control of other minerals like coal or to hydrocarbons from other formations under the land.

PRIMER ON CONTRACTS UNDER RENEWABLE ENERGY ...

Just before leaving office in 2010, Governor Corzine signed into law P.L. 2009 c. 213, also known as the “Renewable Energy Farming Law”.  This law would allow farmers to use part of their farm for solar, biomass, or wind electricity generation without forfeiting their farmland assessment.  The law applies to both commercial farms and to farms that have been preserved, but each group must meet a different set of requirements in order to keep their assessment and the protections under the Right to Farm Act.

The Renewable Energy Farming Law has helped promote entrepreneurs seeking leases for solar farms.  These entrepreneurs are locking up properties with options and proposed leases and it would appear that many farmers are signing these documents without adequately reviewing them.  Developers seek to lock-in the property while they do the necessary planning and obtain the necessary approvals and permits but before signing any of such documents there are some basic contract provisions that you should consider.

First an “option” is a legally binding contract that a property owner gives to another person or company which ties up the land or object of the option.  This option gives the option holder the right to tie-up the property for a period of time during which the developer conducts the engineering for the project.  The developer also uses this time to obtain the appropriate permits from local land use boards, approvals from Pennsylvania Jersey Maryland Interconnect (PJM) or local utility to connect to the grid and a power purchase agreement to sell the power.

Under basic contract law for there to be a binding contract there has to be consideration the developer can tie up the property.  This period of time should be used by the developer to conduct their due diligence which should include identifying how big of a system can be put on the property and whether or not they can get the interconnections with a local utility and/or PJM.  During this time they should also determine whether there are any environmental issues including wetlands or c1 streams that would limit or impact the system.  Other environmental issues could include whether the property is contaminated by past activities.