Broome County, NY May Sign a Deal to Lease County-Owned Land for $15.9M

Lately it’s not been often MDN has reported on lease deals in New York State, due to the ongoing opposition of New York politicians to drilling in the state. So it’s with some surprise, and pleasure, that we noticed an article in today’s paper that Broome County, New York may soon sign a deal with Inflection Energy:

Broome County could get $15.9 million in a deal that will lease land for possible Marcellus Shale development.

Inflection Energy LLC, of Denver, has offered to pay $3,000 an acre for 5,300 acres of county-owned property at the landfill and the Greater Binghamton Airport for five years. The county also could get 20 percent royalties once drilling begins.*

The deal heads to the County legislature next week for discussion, and could be up for a vote on July 22. If the deal passes the legislature, Broome County, which had already planned on $5 million in lease payments as part of this year’s budget, will get a lump sum check for the whole amount within 90 days. Hats off to County Executive Barbara Fiala (Democrat) for the foresight and guts to put this deal together when so many in her party oppose drilling.

Inflection has been busy with private landowners in Broome County too:

In May, Inflection finalized a deal with about 130 Town of Maine residents for the right to develop 3,000 acres between Pollard Hill and Twist Run Road roads north to south; and Farm to Market and Edson roads east to west. The deal pays roughly $6,000 per acre over eight years.*

Either Inflection has a high tolerance for risk (like a hardened gambler’s tolerance), or they know something we don’t about the prospects for drilling in New York. Either way, best wishes and fingers crossed that their investment pays off for them and for the County and private landowners who have signed leases.

*Binghamton Press & Sun-Bulletin (July 7) – Broome close to signing $16 million Marcellus Shale drilling rights deal

  • What-The-Frack!

    Your first sentence asserts the dry spell in Empire State lease deals is “due to the ongoing opposition of New York politicians to drilling in the state.”

    I don’t think that’s accurate. (And, we have so much completely whacked-out misinformation coming from drilling opponents, I think it’s important that drilling supporters, by contrast, remain diligently truthful and accurate.)

    Here’s the latest political test in New York: Both houses of the state legislature were recently incapable of mustering enough support for bringing to the floor a formal one-year moratorium on hydraulic fracturing. (This came as a surprise to some.)

    Instead of blaming politicians (such an easy target), I would say lease deals (and practically all related exploration activity) have dried up in New York because:

    1) With shale gas now on the table, industry is less able to economically justify exploring in more conventional gas-bearing formations, such as sandstones and limestones.

    Many of these other prospects were active and rolling, for years and years beforehand, without much controversy, and still is absolutely nothing stopping this kind of drilling — except industry’s loss of economic interest.

    2) In New York, we have — dragging on and on — a temporary, de facto *regulatory* moratorium on permits for large-scale horizontal hydraulic fracturing in shale. Again, this was not put in place by politicians. The moratorium came from the state’s environmental agency (though certainly with the governor’s approval).

    In the beginning, the holdup had everything to do with the state’s environmental professionals coming to terms with the fact that their old school rules weren’t not really ready for all the challenges posed by the new school of shale gas exploration.

    In the end, however, the process wound up creating an arena in which the opposition has found the time and the space for building up its challenge.

    Don’t get me wrong: The politicians could still — blindly, ignorantly, and fearfully — kill New York’s entire shale gas resource, right in the nest. But so far they haven’t.

  • ADG1984

    It’s just another step in the USA’s descent to 3rd world status.

  • Greg Bohner

    My parents have lived up near there for 36 years are you (Big ol Barbara) are going to allow the wells to take on gas, and for the ground to be permanently tainted with chemicals. You can’t convince me or anyone who is aware of what is going on that this is a good thing. No money will ever replace the way things are right now. I am going mobilize as many people I can to stop Barbara Fiala from continuing to sign contracts before its even leagal to begin drilling. Take your Denver money and shove it back in your pockets, my parents want to enjoy their retirement not listen to you equiptment or taste your gas in thier wells.

  • Gary

    someone tell me, are these lease payments a “per year” payment, articles spoke of $3000, $6000 etc, or are they for a block of time, 5 years?

  • Typically a one-time payment for the duration of the lease. A common period for the lease is, as you point out, 5 years, so it would $X per acre, one-time payment.

    But the “real” money is in royalties. If a driller drills on or under your land, that’s when it gets serious. The signing bonuses are nice, but really just a small portion of what can ultimately be realized by a landowner should drilling happen.

  • Pingback: Broome County NY Landowners Receive Money to Stay in Lease |