Letter to the Editor: Disclosure reveals true nature of gas drilling


The question of what a property owner can do on his or her property may be a simple matter to Mrs. LaTourette as it is to many unconventional drilling proponents. When you ask people who know something about the law, it is anything but that. What these people say is that if the activity is legal and it does not harm or impact anyone else on their land or on other property, there is no problem. This is hardly the case when you are talking about this highly dangerous activity. I know that LaTourette is tired of hearing people like me saying these things; telling lies she says. Because she would never believe me or one of the other faceless critics, I would like to quote something from a statement that Chesepeake Oil and Gas made in 2010 to the Security and Exchange Commission, Oil and Gas companies have to disclose risks that their operations pose to regulating governmental agancies. They have to tell these agencies the truth, unlike what they have to tell their stockholders, leaseholders and the rest of us poor slobs trying to survive in the world.


Form 10K page 29

“Natural gas and oil drilling and producing operations can be hazardous and may expose us to liabilities, including environmental liabilities.

Natural gas and oil operations are subject to many risks, including well blowouts, cratering and explosions, pipeline failures, fires, formations with abnormal pressures, uncontrollable flows of natural gas, oil, brine or well fluids and other environmental hazards and risks. Our drilling operations involverisks from high pressures and from mechanical difficulties such as stuck pipes, collapsed casings and separated cables. Some of these risks or hazards could materially and adversely affect our revenues and expenses by reducing or shutting in production from wells or otherwise negatively impacting the projected economic performance of our prospects.

If any of these risks occurs, we could sustain substantial losses as a result of:

• injury or loss of life;

• severe damage to or destruction of property, natural resources or equipment;

• pollution or other environmental damage;

• clean-up responsibilities;

• regulatory investigations and administrative, civil and criminal penalties; and injunctions resulting in limitation or suspension of operations.

There is inherent risk of incurring significant environmental costs and liabilities in our operations due to our generation, handling and disposal of materials, including wastes and petroleum hydrocarbons. We may incur joint and several, strict liability under applicable U.S. federal and state environmental laws in connection with releases of petrolieum hydrocarbons and other hazardous substances at, on, under or from our leased or owned properties, some of which have been used for natural gas and oil exploration and production activities for a number of years, often by third parties not under our control. For our non-operated properties, we are dependent on the operator for operational and regulatory compliance. While we may maintain insurance against some, but not all, of the risks described above, our insurance may not be adequate to cover casualty losses or liabilities, and our insurance does not cover penalties or fines that may be assessed by a governmental authority. Also, in the future we may not be able to obtain insurance at premium levels that justify its purchase.”

This disclosure is not unique, it is similar to the ones done by virtually all oil and gas companies engaging in unconventional natural gas drilling. They tell the truth to those who have some recourse if they lie.

David J. Davis


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