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Thursday, May 10, 2012

Fracking follow-up 

The Clarion Content has been closely following the battle over fracking and subsurface mineral rights closely since we broke the story that national builder, D.R. Horton, had obtained fracking rights and mineral rights in the Triangle. Our sources are now saying that company holds these mineral rights in as many as sixty subdivisions in North Carolina.

However, they may be backing down in the face of massive amounts of bad publicity...

What? It isn't helping to sell homes when people discover you have the right to pump noxious chemicals 500 feet beneath the surface of their land? Just because those chemicals pollute groundwater and might cause earthquakes, people are concerned?

The Durham Herald-Sun's Laura Oleniacz reports that D.R. Horton gave mineral rights back to twenty-two Durham property owners according to the Durham County Register of Deeds office. The reason D.R. Horton gave was based on a technicality, "...company officials discovered last week that some property owners’ contracts didn’t mention that the company was reserving the mineral rights to some properties."

Oleniacz also notes that, "the D.R. Horton company also said that it is now stopping its practice of retaining mineral rights in cases where those rights have not already been reserved by a previous property owner, and until the state legislature 'has fully addressed the issues now pending before it.'"

Does not exactly sound like they have given up.

And clearly, statewide, the battle is not over yet, be prepared to hear the phrase "domestic energy production" hundreds of times in the upcoming presidential election cycle. Fracking is domestic energy production. Folks who attended the information session organized by Durham County Agricultural Cooperative Extension Services and Rural Advancement Foundation International-USA heard that while North Carolina farmers and landowners are being paid as little as a $1/acre for fracking rights, in some western states the going rate is $25/acre. Energy companies offer farmers and landowners, huge initial signing bonuses, too, in exchange for permission to frack on their property.

They build huge well pads, the hydraulic equivalent of open pit mines, often seven to ten acres in dimension. The pump their toxic brew beneath the surface, push what shale and natural gas products they can to the surface and leave, often with no reclamation provisions in place, not even minimal aesthetic repair.1

State Senator Bob Rucho, R-Mecklenburg, introduced a bill to the North Carolina Senate's Energy Policy Issues Committee that recommends to the General Assembly eliminating the state's current prohibitions on horizontal drilling (fracking).

In the status quo many questions remain unanswered. Is D.R. Horton giving back mineral rights to all the North Carolina properties where they have claimed them? Or only where they did not properly disclose they were obtaining them? Are they willing to give back these mineral and subsurface rights to any D.R. Horton homeowner who requests them? What if your neighbor doesn't request their return? What is the effect on the property values of the neighborhood? The individual?

Durham property attorney, Carey Ewing, who was an essential part of bringing the story to the public eye, says that uncertainty prevails, "Homeowners need more information and no one is giving it to them."2

And while D.R. Horton's spokespeople insist, "D.R. Horton is not in the mining business. It is in the business of building, and selling, quality homes and providing excellent value to its homeowners..." What is the other part of their conglomerate up to? What is D.R.H. Energy's role in this dirty business?3

Stay tuned. We will keep you updated.

1If North Carolina does end up legislating to allow fracking, at bare minimum, the state must put in place strong regulation about how the land is to be left afterward, both above and below the surface of the ground.

2Ms. Ewing is quoted in both the Durham Herald-Sun's and the AP's recent stories about fracking in North Carolina. Full disclosure: the Clarion Content editor has previously retained, on an entirely separate issue, Ms. Ewing's firm, the Ewing Law Center.

3D.R.H. Energy also owns mineral and subsurface drilling rights to many D.R. Horton properties in North Carolina. The energy company has not issued a public statement about its role or intentions.

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