Protecting landowners in sustainable shale gas development Transatlantic Knowledge Sharing Conference on Unconventional Hydrocarbons, 21 June 2017 Meri-Katriina Pyhäranta
Content 1. Landowners legal role in shale gas development 2. Sustainability of shale gas development 3. Regulatory models to protect landowners in other countries 4. Lessons to learn 22.6.2017 2
1. Landowners legal role in shale gas development 22.6.2017 3
Petroleum versus land ownership State ownership of petroleum resources Sovereignty over natural resources Land ownership Surface land Subsurface land Title to petroleum Hydrocarbon directive National petroleum regimes Land access Permission from the landowner No financial benefits or other incentives for landowners No control over exploration and production activities on private land
2. Sustainability of shale gas development 22.6.2017 5
Impacts of shale gas production Adverse effects on landowners and land-use Limitations to land-use and agricultural activities due to competing land use, loss of income, value of properties, health of people and livestock Why is this unsustainable? Negative economic and social impacts Deterioration of the living and working environment Affecting fundamental and human rights Why is this bad also for the industry? Public opposition barrier to the development Protecting landowners' rights and interests is essential in promoting (more) sustainable shale gas development in Europe
3. Regulatory models to protect landowners in other countries 22.6.2017 7
Queensland, Australia
Queensland, Australia Goal: to balance landowners rights and land use with petroleum development activities A. Good relations between landowners and developers Land Access Code: best practice guidelines (not mandatory) Recommendations about how landowners and developers should communicate and do business with each other Adequate consultation and negotiation Transparency, equity, cooperation
Queensland, Australia B. Mandatory provisions regarding land access, petroleum activities on private land, and compensation to landowners Land Access Code + Petroleum and Gas (Production and Safety) Act 2004 Different provisions regarding authorised land vs access land preliminary vs advanced activities Key provisions: Notice of entry Agreement between landowners and developers Developers liability to compensate adverse effects of the production Dispute resolution
United States: North Dakota and Oklahoma 22.6.2017 11
United States: an overview Private ownership of petroleum resources Petroleum development is a private transaction between a mineral owner and a developer If minerals are severed from the surface land, the surface landowner does not have any right to the minerals Surface Protection Acts Goal: to minimize damage to surface landowners and enhance settlement in potential disagreements Enacted in 10 states, North Dakota as a forerunner Voluntary agreements between surface landowners and developers also in other states
North Dakota, USA Surface Protection Act (N.D. Century Code 38-11) Notice of entry to the surface landowner before entering upon land Obligation to negotiate on the work plan Another notice before commencing the planned operations Including information about the landowners rights Compensation for all damages caused by the oil and gas development Regulated process for dispute settlement
Oklahoma, USA Oklahoma Surface Damages Act (52 Oklahoma Statute 318.2-318.9) Notice and compensation as in N.D., but additionally a written agreement is required Option to nominate appraisers to evaluate the amount of compensation A corporate surety bond of $ 25,000 to secure the compensation for damages
4. Lessons to learn from other countries 1. Communication between landowners and developers 2. Written agreement 3. Liability to compensate damages 4. Dispute resolution 22.6.2017 15
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