A Question of Property Rights

4/14/2012 10:00 AM
By Marjorie Struckle New York Correspondent

Cooperstown, NY, Dairy Farmer in Middle of Drill-Ban Controversy

 COOPERSTOWN, N.Y. — When Jennifer Huntington and Eric Watson of Cooperstown Holsteins leased the mineral rights on 394 acres of their Otsego County, N.Y., farm five years ago — something farms in the area had been doing for decades — they had no idea of the firestorm that would follow.

But the groundswell of anti-hydrofracking sentiment in New York prompted the town of Middlefield (which contains part of the Village of Cooperstown) to pass legislation last year prohibiting all natural gas drilling within its borders.

And suddenly Huntington found herself in the middle of a very public controversy.

In a lawsuit she filed against the town last September, Huntington argued that only the state could regulate natural gas drilling; however, a state Supreme Court judge in February upheld the town’s ban.

Cooperstown Holsteins filed an appeal of that decision last week. A second state court decision upholding a similar drilling ban in the town of Dryden, N.Y., also has been appealed.

The two cases may be combined as they move forward in the appeals process, Huntington said..

The outcome could have long-ranging effects on issues such as landowner rights. But in the meantime, it has taken a toll on the family and the community.

***

Cooperstown Holsteins Corp. operates a 250 milking cow herd, with another 250 head of supporting animals. The family raises crops on 1,400 acres of land. Of the land, some has been rented for crops for 40 years. Recently, building developments have forced the farm to seek fallow land farther away.

The couple was approached in 2007 by Elexco, a company which arranges for mineral rights leases.

“This is not an unusual occurrence,” Huntington said. “We lease the land and can continue using it. There had been mineral leases in the area since the 1960s.”

Huntington acknowledges she doesn’t know everything, but said she surrounds herself with the best experts available, from veterinarians and nutritionists to experts in the field of mineral leasing.

“I don’t want to defend the gas companies,” she said, “I just want to tell my story.”

Coming from a long line of dairy farmers, Huntington said she continues the farm’s history of concern for family, industry and community while creating a safe food product. Responsibility to the environment has been a long-time effort of the farm, she said.

The farm had one of the first milking parlors in New York state during the early 1960s. The ’70s saw the use of one of the early self-propelled forage choppers.

During the 1980s, the farm installed a methane digester which used manure to create methane gas used on the farm and sold to the county nursing home next door to produce hot water. Later, with equipment upgrades, the procedure created electricity which was used on the farm, with the remainder going to New York State Gas and Electric at no charge.

Today, after more than 20 years of successful operation, the digester needs to be replaced. Funding may be difficult to come by, since most programs are geared toward the construction of new digesters, rather than retrofitting existing ones.

When CAFO regulations were proposed, the farm was again one of the first to seek accreditation from New York state, Huntington said. The farm was used as a training site for inspectors.

More recently, Watson has been growing soybeans and canola which he presses, both to create an oil to be mixed with diesel fuel to run the farm equipment and to produce cattle feed to reduce the amount of purchased feed.

“We feel that natural gas is another tool we can use to help the country become more energy independent,” Huntington said.

***

Half way through Cooperstown Holsteins’ five-year mineral rights lease, mining — and in particular hydrofracking — became a hot topic. Local residents opposed to fracking have taken up strong opposition to anyone leasing their mineral rights.

Ironically, the land Cooperstown Holsteins has leased is unsuitable for fracking because the layer of Marcellus shale is too shallow to drill. The next layer is sandstone, which could support conventional drilling, something that has been done for the past 60 years without incident in western New York state. Below the sandstone is the Utica shale, which is unproven.

The gas companies sell and trade the leases and are the only party which can terminate the lease. They can also offer renewals. The total lease payment on Cooperstown Holstein’s property is less than $1,300 for each year of the five-year lease.

The anti-drilling momentum has created friction among the community.

Letters to the editor have been printed in the local newspaper targeting both those in support and those in opposition to mineral leases. Huntington said the family was surprised to receive letters and a phone call from members of the community aggressively opposing their stance on mineral rights.

The experience has prompted the family to make some other changes, as well.

“We removed our daughter from public school a year ago. We are homeschooling her,” Huntington said of daughter Molly. “She is much happier and very proud of her agricultural roots and the agricultural community.”

Molly participates in many 4-H events, including exhibiting her dairy, beef and pigs at the county, state and national levels. She will also represent the district in the state Dairy Bowl competition this year.

Huntington said she may be the most public face in this debate, but she is not alone.

“Although I am the lightning rod in this discussion, there are a lot of folks who support what I am doing and I am representing them. I just happen to be the target,” she said.

Huntington said she is standing up for all landowners’ property rights and the unintended consequences that may occur when laws and bans are passed.

The legislation passed by the Town of Middlefield prohibits any gas, oil or solution drilling or mining, or heavy industry.

In its complaint filed against the town, Cooperstown Holstein alleged, “The Zoning Law will prevent the plaintiff and its lessee from being able to realize their respective rights under the Leases, frustrating the purposes of plaintiff’s Leases and denying plaintiff the economic benefits of the Leases including the right to market its minerals including oil and natural gas.”

Concerning the prohibition of heavy industry on land, Huntington said, “There are several exemptions from heavy industry, such as farming, cement, water wells, timber and breweries.”

Although the exemption allows farms to continue to operate, Huntington said she is concerned that when laws are being passed by people who do not make their living from the land, restrictions to normal operation practices could endanger local food production and the economy.

“Our towns are being controlled by folks without agricultural backgrounds,” she said, adding she fears that farmers will be targeted in the future about things like noise, dust and smells as more urban people move into rural areas.

An attorney for Middlefield said the town is not regulating gas drilling, but rather banning it entirely.

“A ban is the ultimate regulation,” Huntington said. “They are trying to use zoning to zone out the drilling industry. Some of the new information lawyers have found seems to say that the original intent of the legislation was to not allow zoning to control drilling. I was also told that a town cannot ban an entire industry but zone it to appropriate areas of their town. Some towns are now trying to specify drilling and zone it out specifically.”

The law also prohibits the construction of pipelines to bring the gas to communities in the area. The availability of natural gas, Huntington said, may be beneficial in attracting new businesses to the area.

***

Huntington’s lawsuit was heard in Wampsville, N.Y., by acting state Supreme Court Judge Donald F. Cerio Jr., who ruled on Feb. 24 that Middlefield was permitted by law to prohibit oil and gas exploration and production within the town limits.

Cooperstown Holsteins is funding the legal battle, along with farmers and some other concerned local citizens. The anti-fracking effort is being funded in part by the Ithaca, N.Y.-based Park Foundation, a nonprofit organization that funds education, media, environment and animal welfare causes.

In Middlefield, one can find both organic and conventional farmers, longtime and recent residents on either side of the leasing issue.

“We need to be able to discuss all the concerns with both sides. ... There are valid concerns on both sides. Neither position is wrong; it is just different,” Huntington said. “Both sides love the area where we live but see different views of the future.

“Our schools are losing enrollment by as much as 30 percent over 10 years ago. We need to encourage job growth. We need to work toward energy independence. We need to support agriculture in all of its forms,” she said.

The appeal filed by Cooperstown Holsteins seeks to reverse the lower court decision based on a supersession clause in the state’s Oil, Gas and Solution Mining Law that it says preempts the Middlefield law. Attorneys also argue that the town’s zoning amendment conflicts with New York’s Environmental Conservation Law and New York energy law.

The bans touch upon the home rule system of government which balances the town’s legislative authority with the central governing state law. The state may preempt local townships’ regulation over certain activities.

A total of 22 New York towns have adopted laws banning drilling.

The truth is somewhere in the middle of the two sides, Huntington said. The anti-drilling movement wants a 100 percent guarantee that the practice is safe, but being realistic, there is always risk, she said. The possibility, and probability, need to be factored in.

A small percentage of the population is farmers, but those farmers are a large percentage of the landowners, Huntington said, noting that farmers will not ruin the land to make a dollar because their livelihood and the food source for the general population depends on the land.

“My story is about property rights,” she said.

“Many of us have been here for generations and want to pass the land to the next generation. We want to preserve our way of life,” Huntington said. “Simple, neighborly, courteous. We don’t feel natural gas drilling will destroy these fundamental ideas.”

Cooperstown Holsteins will not be able to continue the expense of the lawsuit alone and hopes others affected will assist. Donations and support may be sent to the Middlefield Fund for Landowner Rights, NBT Bank, 2 Commons Drive, Cooperstown, NY 13326.


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