Bruce Murray lives on an undulating 150-acre property forested with hardwoods and pines near Ithaca, New York. At 57, Murray, who runs a house-painting business, is bald with a blond-gray beard. He has a hunter's relationship with the land and tries to "do what's right, conservation-wise." Over the years, he says, he has ignored offers to install cell-phone towers on his property and to sell the lumber.
In 2006, somebody called to offer him $35 per acre for the rights to drill for natural gas on his spread. Murray said no, but the solicitations continued. A few months later, someone from Mason Dixon Energy arrived at his door. The man's business card read "landman." Murray describes him as "a nice guy, straightforward," college-age, like Murray's children. "I did a lot of research, and he didn't seem to be giving me any false facts," Murray says.
The landman told Murray that his neighbors "were pretty much signed up." For drilling purposes in New York, land is divided into units, and if 60 percent of a unit is leased, a gas company doesn't need an owner's permission to drill under the remaining land. Murray talked to a lawyer and eventually decided, "Well, if I'm going to get forcibly integrated then I should have some kind of protection." (Compulsorily integrated landowners receive royalties but not typically signing bonuses.)
The landman also gave Murray a brochure from a different company, Denver-based Ansbro Petroleum. It explained that Ansbro is exploring for natural gas "buried one to two miles beneath the earth's surface. The Finger Lakes region has natural gas reserves trapped in a pervasive rock layer called the Black River Formation." Neither the pamphlet nor the landman mentioned hydrofracture drilling or the Marcellus Shale, buzzwords that might have raised landowners' eyebrows. The Marcellus is a gas-saturated expanse of shale rock that lies under much of Pennsylvania, New York, and West Virginia. Tapping it requires using a process called hydrofracture, injecting a pressurized cocktail of water, sand, and chemicals into the rock. Hydrofracking ('Tracking" for short) shale is far more invasive and environmentally risky than extracting conventional gas deposits.
Murray attended gas-company meetings, even dragging along a geologist, but the company never mentioned hydrofracking. Eventually, Murray came to think he could live with a few gas wells on his property. (New York state has more than 13,000 active wells. They're eyesores, but their footprint is relatively compact.) He says he landed a signing bonus of $190 per acre--about $28,500 total--and will receive 12.5 percent of the value of the gas recovered from his property, the minimum royalties required in New York.
Lessors like Murray strike a bargain, assuming some risk to their health and degradation to their surroundings as they wait for a windfall. According to Bill and Sandy Podulka, a married couple who have assembled the data using public records, almost 40 percent of the land in Tompkins County, which includes Ithaca, has been leased, but the lessors amounted to only 6 percent of the county's adult population. There is currently a de facto moratorium on fracking in the Marcellus in New York, but if it is lifted, the landowners will be most likely to profit from the ensuing economic boom and among the least likely to suffer if an influx of outside workers and capital pushes up rents and strains local services.
Before signing, Murray added stipulations. He demanded a drilling hiatus from October through December, when he might want to lead hiking or hunting trips, and market price for any trees the company cuts down. The company obliged. Murray also thought clean-water laws would provide additional protection; he says a brook through his land feeds into Ithaca's main water supply, restricting his land use ("I can't pee in it," he says. "I can't cross it with my tractor"). The company didn't mind complying with that, either. …