County's gas deal in Preston surprises some supervisors

NORWICH – Chenango County supervisors learned for the first time Monday that they had entered into a compulsory integration lease with Nornew, Inc. back in January on 4.5 acres of county-owned land in Preston.

Compulsory integration in New York is governed by the Oil, Gas and Solution Mining Law according to a well’s proposed depth and the type of shale sought. Following public hearings held by the New York State Department of Environmental Conservation, landowners within a specific space limit are contacted when a nearby well is set to be drilled and given the option to integrate.

The news came as a surprise to at least one supervisor, James J. McNeil, who asked Chairman Richard B. Decker twice during the board’s monthly meeting Monday about agreements made on behalf of the legislature.

“All agreements come before the board before you sign them, correct?” McNeil, D-City of Norwich, asked.

“Yes. Before I sign them,” Decker responded.

Nornew, an international energy company operating locally out of offices in Norwich, informed the county on Jan. 3 that some of its property would be contained within a state-sanctioned spacing unit near a private landowner’s drill site, and requested leasing it. The county was given the option to choose from three different proposals.

“It is our hope that ... we are able to reach a mutually satisfactory and a mutually beneficial arrangement,” Dennis L. Lutes, land manager for Nornew, Inc. wrote.

A compulsory integration election form, obtained from the planning department, was signed by Decker and notarized by the county’s attorney on Jan. 17. The form also required the signer to choose from three specific agreements having to do with royalties from the well being drilled near county Road 18.

Town of Preston Supervisor Peter C. Flanagan brought the matter before the board during a discussion of creating a stand-alone committee that would specifically address energy companies’ burgeoning interest in the region.

“These people (natural gas companies) are going to be with us for a long, long time. We need to perhaps be out front with some of these issues,” Flanagan said.

Instead of creating a new government committee, Flanagan suggested that issues about permits for rights-of-way and seismic testing should be addressed in the Public Works Committee and the potential for more compulsory integration as companies drill near highways or county-owned land should be addressed in the Agriculture, Buildings and Grounds Committee.