Haynesville Shale, the largest field ever discovered in the continental US?
Trapped gas field in Louisiana makes Jed Clampetts of property owners
Are natural resources really meant to enrich only a lucky few? Or to benefit everyone equally? We trim and append this 2008 article from the Los Angeles Times of August 1.
By Miguel Bustillo, Staff WriterFortune has smiled on Chris Moreno: He's poised to become a millionaire, all because of 40 acres he bought eight years ago for hunting raccoons and catching catfish. Landowners in the three-state junction known as Ark-La-Tex may be sitting on the largest natural gas field ever found in the continental US.
The discovery of the Haynesville Shale, which lies mainly beneath Louisiana but branches into Texas and Arkansas, was disclosed in March by energy companies, which had been quietly buying up drilling rights for months before telling the public.
The news has triggered a flurry of speculation as frantic as anything seen here since a gusher on a Texas hill named Spindletop in 1901 ushered in the modern oil industry. Hordes of landmen, leasing agents for the energy companies, have descended on Shreveport, the unofficial capital of Ark-La-Tex, dangling gaudy sums before landowners in hopes of getting permission to drill beneath their properties. Firms that earlier this year were leasing land for $200 an acre are now paying homeowners upward of $20,000 an acre.
For people like Moreno, 38, they wonder whether to take the money now or hold out in hopes of getting even more. Energy companies have offered Moreno $750,000 upfront to drill his land, as well as 25% of whatever the wells yield, which could bring him an additional $900,000 a year. But Chesapeake Energy Corp., one of the major players, recently told investors that it thought the deposit was the world's fourth-largest.
Bank tellers share stories of customers walking in with wide smiles and $800,000 checks. “It's crazy money,” a landowner said. “But if they're willing to pay it, we/re willing to take it.” Other landowners are sitting there thinking, OK, I'm ready to make my million dollars.
Anger is simmering among some landowners who signed early for a relative pittance -- only to learn later that energy firms had strong scientific evidence that the Haynesville Shale could be historic. But others shrug and admit they would have done the same if they were the energy companies.
A similar frenzy years back over a gas deposit in central Louisiana called the Austin Chalk ended in failure for Chesapeake, though landowners walked away richer. There wasn't one person who came back and said, Sorry, fellas, here's your bonus money back.
Shreveport, where fortune has often shifted with the price of oil, is suddenly awash in dubious newcomers. Freelance landmen are coaxing naive landowners into signing away gas rights for small amounts and are then selling the contracts at huge profit.
Companies have complained of spies sneaking around their test wells at night, trying to glean how much gas they're pulling up. An energy executive claimed rivals were hiring exotic dancers to go door to door to entice landowners.
Never mind that only a few dozen wells have been drilled and the rest could come up dry. The mere promise of a big strike in natural gas, which has soared in price, has already brought hundreds of millions in investment dollars to Shreveport, a riverboat gambling hub. That's turned Ark-La-Tex into a particularly vivid example of how America's thirst for energy is creating wealth in a few lucky pockets of the country, even as high oil and gas prices drag the overall economy down.
The Haynesville Shale comes after the Barnett Shale, a similar natural gas find in the Dallas-Fort Worth area that has been extraordinarily productive and profitable. The Barnett Shale has spurred drilling in shopping mall parking lots and suburban subdivisions, and generated tens of thousands of jobs and more than a billion dollars a year in state and local taxes.
The Barnett and Haynesville formations are geologically similar, and companies have shown they can now extract gas from previously unreachable places, leading experts to predict that the Haynesville Shale will make fast fortunes in Shreveport and bring decades of lucrative royalty payments.
JJS: Easy "rent" for the taking drives even good people to a frenzy, not to mention the underhanded dealing of the unscrupulous. Because, now this huge natural bounty, to which we all have a right, enriches only a lucky few. OTOH, sharing the bounty, using it to eliminate counterproductive taxes on honest effort, would take the sting out of the underlying energy scarcity felt by the beneficiaries’ fellow citizens. Well, at least some of the eco-bonus, via royalties, finds its way into a public treasury.
We need to learn that Earth’s worth is not a windfall for some but a staple for us all. Understanding that will change not only how we treat Mother Earth but also how we treat each other. Plus leave our economies free to constantly find the next most efficient way of meeting our needs.
Jeffery J. Smith runs the Forum on Geonomics.
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