When You're Contacted by an Oil and Gas Company
- Contact the oil and gas company representative or contact person and start a dialogue right away. That person knows you probably haven't thought through a response or done any research into your options, etc., so acknowledge that. Don't stall, but don't feel rushed into responding either. State that you are making a commitment to put attention to your questions and information about your perspective on their intended action and to keep them informed. If the company representative indicates that they want to proceed with a survey in the meantime, you may want to tell them that you prefer to wait until you have had a chance to think about a siting that will potentially have the least disruptive impact on your current or future uses of the surface. While they may indicate they don't want to wait, your suggestion makes perfect sense. A survey costs several thousands of dollars so unless their goal is to pressure you into quick action, it's in their best interests to wait for your input on siting before they spend the money surveying an inappropriate site.
- Start learning about the permitting process and your rights by contacting Brad Hill (801-538-5315), Oil and Gas Permitting Manager for the Utah Division of Oil Gas and Mining (DOGM) This is very important! Before a company can drill anywhere in Utah, it must get a permit from DOGM. That’s true regardless of who owns the surface or the minerals. By law and DOGM regulations, the Application for Permit to Drill (APD) requires that a company take several steps. Brad Hill is in charge of approving Applications for Permits to Drill. He carries out the regulations governing state activities related to oil and gas production and can answer many of your questions. He is interested in working with surface owners to ensure that they understand the processes and have a genuine opportunity to represent their interests in the Surface Use Agreement between the company and the surface owner. We also recommend that you cc Brad on any correspondence you have with an oil and gas company so that he is in the loop.
- Find out who owns the mineral rights under your surface--this will help you understand what legal rights you have as a surface owner. Utah’s Surface Owner Protection Act (passed in 2012) applies only to surface land where the subsurface mineral rights are privately owned. If the mineral rights are held by the federal government or an Indian Tribe, surface owner protections administered by the Bureau of Land Management (BLM) apply. By federal law, these provide the same protections to private surface owners as to public lands. SITLA (Utah School and Institutional Trust Land Administration) also holds the mineral rights under some surface lands; SITLA has its own rules, as well. If it turns out that your mineral rights are owned by a private individual or entity, you can ask DOGM or the Utah Department of Agriculture and Food to have an impartial mediator assist in the negotiations if you and the company can't agree on aspects of the Surface Use Agrreement.
- Prepare your questions and perspectives in a timely way, but also make sure you clearly express your questions and concerns. Develop a written list of questions, concerns, and potential types of loss and damage you will suffer and their value or costs. For example, think about 1) your current use of your surface land and what it could or would mean to you if that use were to be disrupted or prohibited by oil and gas operations. Think about losses and damages over the long term, since an operating well and facilities may be in place for several decades; 2) potential effects on the health and well-being of you, your family, your neighbors, and others in the community of oil and gas operations and associated noise, dust, traffic, road building; 3) questions about what operations will look like, 4) locations of well operations, roads, pipelines, etc., that could work better for you than others. It can be useful to provide this description in writing to the company so they have a clear picture of your situation, needs, and preferences. Provide that information to others you are working with such as your attorney, advisors, or agency personnel. We recommend that you submit your information to the company representative in writing and ask for their response that way, too.
- If a "landman" for the company call or visits you, discuss your views with him or her. Landmen are employees or independent contractors that perform a number of "on-the-ground" activities for the company, including negotiating with surface owners.
- If the company or landman presents you with a pre-prepared document called something like "Surface Use Agreement," be aware that this is the legal document that will be understood to outline agreements between you and the company. You may be asked to sign the agreement on the spot, as is, but you are under no obligation to do so. The SUA is your opportunity to try to obtain the best deal you can for yourself and your property. Inform the company that you will review any Surface Use Agreement they give you. Then read the information on the page entitled "Surface Use Agreements" very carefully and consider what provisions you may want to present to the company. You may want to seek legal advice, but if you can devote time and effort to working on this, you may choose to advocate for yourself. Remember that DOGM cannot deny an APD (Application for a Permit to Drill) just because you refuse to sign a Surface Use Agreement, but the agency wants to see that the company makes a good faith effort to accommodate your concerns and losses due to oil and gas operations. If you negotiate a positive surface use agreement and the company violates it, you can take them to court.
- Be aware that having oil and gas operations on your land will have property tax effects. When an oil or gas well goes in, that portion of your land is no longer used for agriculture and therefore subject to the Greenbelt Law. Under the law, you will be assessed for the 5-year decrease in taxes, even if the change in use was imposed on you. Consider attempting to include in the Surface Use Agreement a requirement that the company pay the full extent of “rollback taxes” due to the change in land use that occurs when their well goes in. Some companies voluntarily pay , but there’s nothing that requires that. Call your County Assessor for more information about this impact.
- Talk with your neighbors. An oil and gas well and associated operations on your land won’t just affect you. Traffic, dust, noise, lights, personnel, pipeline and road construction, air pollution, the possibility of water contamination and other potential negative impacts on drinking and surface water, etc., will create changes in their lives, plans, and land values almost as much as yours. People with health conditions can be especially vulnerable to air emissions—a reality with all oil and gas operations. Water contamination can occur. Communities need to be aware and can also provide support and suggestions about what to try to address in your negotiations with the company. Some counties have established ordinances related to well siting and distance from homes, for example.