2009-01-01 / Local & State

Landowners Fight To Save Land From Gas Companies

Firms intend to use land for gas storage field

CLEARVILLE (AP) - Some southcentral Pennsylvania landowners fighting an eminent domain lawsuit to take their lowground mineral rights for an underground natural gas storage field say they feel they never had a chance to have a say on what happens to their land.

"It's always almost a done deal before landowners can get in there and do anything," said Sandra McDaniel, one of the landowners in Bedford county.

The 10 landowners fighting the Steckman Ridge gas storage field say they believe they could get far more money from exploration companies interested in drilling in the Marcellus Shale rock formation.

The thick, black shale lies more than a mile below much of Pennsylvania and some expect it to become the nation's biggest gas-producing reservoir. Already, many of the country's largest gas exploration companies are rushing to Pennsylvania to drill on the Marcellus Shale. Exploration companies have given some landowners across Pennsylvania several thousand dollars per acre for the right to drill down to the Marcellus Shale, and as well as the promise of potentially hundreds of thousands of dollars or more in royalties from a successful well.

But during early negotiations, the 10 Steckman Ridge landowners received a top offer of $400 an acre from the group that wants to build the storage field, landowners said.

Last year, Houston-based Spectra Energy Corp. and New Jersey Resources of Wall, N.J., formed a joint venture to build the Steckman Ridge gas field, saying it will help supply gas to the heavily populated Northeast and Mid-Atlantic states.

In June, the Federal Energy Regulatory Commission approved the companies' application to build and operate the field in a process that the landowners say was far too complicated for an average citizen and virtually shut them out.

A month later, the companies sued the 10 landowners in federal court in an effort to force them to agree to a price, citing federal law that permits the use of eminent domain for natural gas projects.

The companies already had the below-ground storage rights for much of the land they needed after they bought the rights from an exploration company that had drilled there in recent years. McDaniel and the other nine landowners still owned their gas storage rights, and say Spectra Energy has not dealt fairly with them.

Susan Waller, a Spectra Energy vice president, said the company is not using eminent domain as a negotiating tactic and would rater settle out of court with the landowners.

"We've talked to everybody and we've tried," Waller said. "At this point, we'd give anything if we could settle with them. They can still settle with us. We can still resolve this."

A federal judge has not decided on a compensation amount. The field is expected to be completed in the first half of 2009.

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