Gas fracking leases may impact real estate values
from The Hancock News, 12-7-2011
Property owners with natural gas leases, and those interested in hearing realistic predictions of the jobs that might be created if gas drilling occurs in Maryland, can get information at a public meeting on Thursday evening, December 8, in Garrett County.
Paul Durham, government affairs director for the Garrett County Board of Realtors, and Emily Wurth from Washington, D.C.-based Food & Water Watch, will offer their perspectives at 7 p.m. in the Garrett College Auditorium in McHenry.
“Our county’s financial health is greatly dependent on real estate, especially vacation real estate, and local realtors are stepping up to the challenges associated with gas leasing,” said Natalie Atherton, acting director of CitizenShale, the group sponsoring the meeting.
Gas Lease Registry
Durham will outline a plan for a Maryland Gas Lease Registry that the local board submitted to a state commission studying shale gas development.
If enacted into law by the Maryland General Assembly, the registry would require everyone who has leased their property for gas development to record details of the lease at a state-run office.
“It is very important to the well-being of our local real estate industry that there be a central place where information about all gas leases in the county can be readily viewed,” Durham said.
“A state registry will allow local and state officials to get a grasp on the total amount of leasing and what impact it might have,” he said.
The Garrett County realtors were responding in part to anecdotal evidence that some prospective real estate buyers in Garrett County have grown cautious due to the widespread knowledge that gas leasing is prevalent, while precise information about what parcels are leased has been difficult to get.
Concerned about the possible impacts of gas development near a property listed for sale, such as damage to underground water supplies where “fracking” of gas wells has occurred, buyers want to know whether adjoining or nearby parcels have been leased.
“The transparency that a state lease registry would offer is better for everyone — buyer, seller, realtor, government, and mortgage-holder,” Durham said.
Impact on real estate
Conflicts associated with gas leases, which include the right in some mortgage contracts for the bank to foreclose on those who lease their properties for gas development, were highlighted in a New York Times investigation this fall.
The article described how banks worry that gas development could diminish real estate values.
One question asked was: “What happens if they lend money for a piece of land that ends up storing the equivalent of an Olympic-size swimming pool filled with toxic wastewater from drilling?”
Real estate loans backed by federally-funded sources like Fannie Mae and Freddie Mac require certain standards and disclosures of mineral leases.
Some banks are trying to avoid lending on properties where gas rights have been leased, or in areas where real estate values might be jeopardized by extensive gas development.
Governor Martin O’Malley set up the study commission earlier this year and called for a three-year halt to development, to allow time to consider the technology and the issues surrounding it.
Elected officials from Allegany and Garrett counties, along with business representatives, serve on the 14-member committee.
Jobs claims disputed
At the December 8 event meeting, Emily Wurth’s topic will be “Shale Gas: Are the Good Jobs Really Happening?”
Her remarks will draw on Food & Water Watch’s research of employment claims made by the oil and gas industry.
In New York, where gas development is expected to begin next year, one industry-backed organization attracted publicity with its claim that gas-drilling would create 62,620 direct and indirect jobs.
“Our staff really dug into those numbers, looked closely at the forecasting models, and found that only one-tenth of the direct jobs claimed are likely to materialize,” Wurth said.
Controversy also swirls around job claims made in Pennsylvania and by elected officials in Western Maryland.