11/08/2023
BEWARE:
While it is good to see interest in natural gas development, Southern Tier CO2 Solutions may not be the way to go. Please read the following information from Jim Willis from Marcellus Drilling news:
Company Seeks to Lease New York Mineral & Pore Rights for Flat $10
CARBON CAPTURE | INDUSTRYWIDE ISSUES | LEASE & ROYALTY PAYMENTS | NEW YORK | STATEWIDE NY
October 25, 2023
A company called Southern Tier CO2 to Clean Energy Solutions, based in Binghamton, NY (where MDN is located), is sending fliers to landowners in Broome, Tioga, and Chemung counties (along the border with Pennsylvania, where there is no doubt large amounts of Marcellus and Utica gas beneath the ground) inviting landowners to sign up for what appears to be an exciting opportunity to sell gas rights. The flier (below) and company website say the company plans to use carbon dioxide (CO2) to (a) store it underground, but also (b) use it to extract natural gas from underground and then (c) either sell the gas via pipeline or burn it to produce electricity. The technology envisioned is an alternative to fracking. Will it work? And, will it be profitable for landowners?
We give high marks to this company for its creativity in navigating around New York’s anti-fossil fuel insanity. New York has banned fracking, permanently. It has also blocked new
natural gas pipelines into and through the state. Lately, the state has banned connecting new residential and businesses to natural gas, period. There’s even a push to ban existing users of natgas from continuing to use it, and a push to close down gas-fired power plants.
By using CO2 to extract natural gas avoids many of the roadblocks NY has erected againstnatural gas extraction. If the company’s plan works, it promises to pay landowners a 20% royalty. Huge! The technology does not use water and does not use sand — only CO2.
The company is looking to lease large parcels of land, pooling together land into 50,000 to100,000 acre units. If a landowner’s property is included, they will receive a bonus of $100
per acre (a “signing bonus”) in addition to 20% royalties. What’s not to like, right?
Here’s what we DON’T like: You sign a very long, extensive lease now, and your land is locked up for 10 years. And you get $10. That’s not per acre. That’s $10 period, no matter how much land is in your lease agreement.
We will give you the standard advice we’ve given landowners since Day One of writing the MDN site: You CANNOT sign ANYTHING (especially a lease!) without first having it reviewed
by an attorney. PERIOD. Sign over the rights to your land for 10 years for 10 bucks? Not a good deal, in our humble opinion. Even with the promise of a big payout down the road.
Here’s the one flaw we can spot in this company’s scenario: You think a legislature under the iron-fisted control of Democrats (who collectively HATE fossil energy) and a Democrat governor (who also HATES fossil energy) will allow new gas-fired power plants to get built in NY to use the gas extracted? No way! The regime in Albany bans new pipelines, new gas-
fired power plants, new anything to do with natural gas.
Even if natural gas extraction happened with magic fairy dust with absolutely no leaks or fugitive emissions, and even if the natural gas is burned in a closed-loop system where absolutely no CO2 is released — the Dems will still find a way to ban it. It is irrational insanity. The Dems in NY are gone — not able to think rationally. If it’s called a fossil fuel, no matter how it is extracted, it won’t be approved in NY State. It will be actively opposed.
But what if this company pushes its innovation via the courts? Good luck with that, too. Let’s say the company wins the right to try this new CO2 extraction technology, backed up by the courts. You can count on NY politicians to appeal it and keep it tied up in court for years (maybe decades). You can count on the Dept. of Environmental Conservation to slow walk and eventually deny any kind of permits related to this tech.
We’re not trying to be a Negative Nelly here. Nobody (!) would be happier to see an innovation that allows NY landowners to benefit from the abundant supplies of gas sitting beneath them than we are. We’re simply being realists. We sincerely hope this company is on to something good here. But shifting the risk from them to you (the landowner) is not a good plan in our book. Let the company assume the risk, not landowners. You should not
have to tie up your rights for 10 years on a hope and prayer this company will figure out how to navigate around NY’s Democrat machine.
Consider this: What if you sign the lease, and then want to sell your land in five years (without any action taken to pool and drill under your land)? How will a potential buyer view your property that is tied up with a mineral lease? Will it harm or help your chances of selling?
NOTE: We are not lawyers. You need a lawyer to advise you on all of these issues and to review the lease BEFORE you sign it. Maybe this is a good deal for some landowners. Maybe not. Only a lawyer can tell you.
The company also has a website with an extensive FAQ page where it answers questions: 🌐 Southern Tier CO2 to Clean Energy Solutions
southerntiersolutions.com
