The quest for energy to supply a world dependent on fossil fuel has found its way to Alabama’s mainland.
Drilling off the state’s coastline years ago resulted in prosperous oil and gas wells that have been producing for years, but more recently companies specializing in hydraulic fracturing have located here.
Michael Irvin, director of the Kansas Farm Bureau Legal Foundation for Agriculture, spoke at the Alabama Farmers Federation’s Commodity Producers Conference in August. He is supportive of hydraulic fracturing (sometimes referred to as fracking), but cautioned landowners that while the wells carry hefty profit potential, they also carry risks and responsibilities.
Fracking has been practiced in the U.S. since 1946, but Irvin urges landowners to study the drilling process, ask questions and hire an attorney familiar with mineral rights and hydraulic fracturing before signing a contract.
“These companies have multiple attorneys on staff, and contracts they may ask you to sign are not to your benefit,” he said. “They are written to benefit the company. A contract is a partnership, and both you and the company want to make money.”
Landowners may be compensated in a lump sum, annual payments or a percentage of the production royalties. If payment is based on production, ensure the company is contractually obligated to share production records
Irvin cautioned that the most important part of the contract is an indemnification clause to protect the landowner from liability.
“There is risk,” Irvin said. “Companies will tell you there is no risk, but if that’s the case, make them put in the indemnification clause.”
Irvin said the indemnification clause should cover damages to crops and farmland, loss of life for drill workers and water table damage.
Fracking captures natural gas or oil from the ground by creating cracks in coal beds, tight sand or shale formations. The process requires vertical wells, drilled hundreds or thousands of feet deep through dirt, water tables and rock. The horizontal fractures are filled with fluids pumped under high-pressure through the wells, releasing the trapped gas or oil.
The fracking fluid is 90 percent water, 9.5 percent sand and pellets and .5 percent chemical additives. Some of the chemicals used are known carcinogens. Over its lifetime, one well requires between 50,000 and 5 million gallons of water, which means 75,000 to 320,000 pounds of chemicals are used.
Three main basins where fracturing hold greatest potential in Alabama are the Texas-Louisiana-Mississippi Salt Basin in far southwest Alabama; the Black Warrior Basin in west Alabama; and the Valley and Ridge Province Basin in the northeast corner of the state.
Irvin said drilling might not be appealing to some landowners, even if the potential for profit is there.
“If you don’t want it, you can say no,” he said.
For an in-depth look at hydraulic fracturing, visit http://bit.ly/aNhEui.