Change Has Become The Norm in Wyalusing
By Rick Hiduk
The old axioms, “same ol’, same ol’,” “nothing much happening here,” and “same situation, different day” have little bearing on life in the Wyalusing area in 2011. The natural gas drilling boom that began quietly five years ago and exploded onto the public conscience in the past two years has, in some way, altered the lives of almost all of its 7,000-plus residents. Wondering what will be different from one day to the next and deciding how to deal with it has become the new way of life in an area that will never be the same.
For many people, this is good news. For others, accepting progress in its present form has been painful and frustrating. The changes go way beyond the crumbled roads that are now being repaired and the much-tallied threats to the environment that require constant vigilance. The Wyalusing area has entered an era on which its residents will one day look back and say, “Wow. That was quite a ride.”
“I think that life as we knew it 10 to 15 years ago has gone,” said Subway franchise owner Linda Green, whose Wyalusing shop generally has a line out the door during the lunch hour. “We need to learn how to deal with it.”
“In the beginning, we were taken by surprise,” Wyalusing Township supervisor Marvin Meteer recalled. “The hype then was the individual leasing of mineral rights. It kind of escalated from there.” Meteer and fellow supervisors Lanny Stethers and Art Allyn agreed that selling mineral rights to developers was nothing new to farm owners. “People have been leasing their land for decades,” said Meteer, noting that struggling farmers welcome the occasional visit from gas or logging speculators. Having previously been paid as little as a dollar per acre for such ventures, Allyn noted, signing off at five dollars per acre in 2006 seemed like a pretty good deal. Fifty to 100 dollars an acre was, therefore, an incredible transaction.
“You’ve toiled all your life trying to farm the land,” said Wilmot Township farmer Linda Kisner, who has the unique distinction of having helped her father with his gas lease before taking on a position as a landman for both Chesapeake Energy and then Cabot Oil and Gas. Kisner related that, as a gas company employee, she said to landowners, “Look down the road and ask yourself how much longer you can sustain. At some point, you have to diversify.”
“Farming has not been profitable for a long time,” Meteer agreed. Outside of the initial controversy that arose when landowners began to figure out that some of their neighbors had signed on for hundreds of dollars per acre, “They were looking forward to those lease payments. It made a big difference for a lot of them. Even 20 dollars (per acre) helped.”
When people started catching on to the “hold out for more cash” philosophy, Stethers noted, they formed groups to consolidate their leasing power.
Neither the township supervisors nor Kisner feels that the way in which the gas companies acquired mineral rights was underhanded.
“That’s the way business is, though I think that people would have felt a little better about it if (the gas companies) had come in with a policy,” said Meteer.
Kisner related that her father is not bitter, although he was a little disappointed to learn that many people leased their land for much more money than he did. “Nobody twisted his arm,” Kisner remarked. “And milk prices were at rock bottom.”
Now Kisner farms in a large ring around a large gas pad that will eventually support six wells. Well number three is currently underway. Landowners do receive extra money when their property supports above-ground operations, she noted, which has more than covered the loss of 8.2 acres of productive farm land. “You get a heck of a lot more money than you would for alfalfa, and you can return to farming (most) of it,” she added.
Farmers are not the only people cashing in on the gas boom in the Wyalusing area. Packed dining rooms at the Ram Zone and the Wyalusing Hotel are evidence that a new segment of the population— whether or not they claim residency here—is more than willing to pay as they come and go. Green attributes at least 20 percent of her daily business to an influx of gas workers. In the past three years, she has been able to hire five more employees for her Wyalusing store alone, where she has seen the most consistent increase among the five locales in which she operates.
“There was a time that I could operate with two or three (employees) at lunchtime,” Green stated. “Now, I need four or five, even after lunchtime.”
Businesses that provide products and services needed by gas companies and supporting businesses are also thriving. Scott Farrell, a partner in the Wyalusing NAPA Auto Parts store on Route 6, explained, “When it comes to dealing with the needs of the industry, we’re definitely busier.” The increase in demand for filters, lubricants, and hydraulic parts has not only kept NAPA’s employees busy but has allowed the supply store to add to its staff, Farrell noted.
Assisting the gas companies and the many related service providers that they have attracted to the area is simply a matter of staying abreast of what the workers require to keep equipment and vehicles running, said Farrell. “When they come into town and want to do business, they let you know what they will need, and we make sure that we have it for them,” said Farrell. Because the Wyalusing store is affiliated with other NAPA stores in the area, most parts can be brought in via courier within a day.
“It’s a win-win situation,” Kisner maintains, noting that she has noticed the increase in business at eateries, gas stations, and car dealerships.
There are other entities that have not yet experienced such a windfall but expect things to improve as the industry expands and enters the pipeline phase. A prime example is the Wyalusing Area School District (WASD), which initially benefited from more than $431,000 paid by a gas company for the district’s mineral rights.
“I think that, overall, the amount of money that’s flying around out there will help the school district down the road,” WASD Superintendent Ray Fleming remarked. “We haven’t seen it yet, but we expect to get royalties from the gas wells.” The district will retain mineral rights for the four elementary school properties now up for sale.
According to Fleming, the initial payment had to be applied almost directly to a dramatic increase in the costs for special education services, much of which was attributed to an unexpected influx of about 57 children of gas workers two years ago.
“That went real quick,” Fleming said of the funds. He noted that many of the students arrived with individual education programs (IED), which school districts are mandated by law to adopt, requiring the district to add to its special education staff. The need for specialized instruction is not a reflection on the individual students, Fleming asserted, but rather to the inconsistency of their schooling. One mother bragged that her children had attended five schools in one year.
“That’s the case with a lot of these kids,” related Fleming. “If they had spent their entire career with the Wyalusing school district, they would not have an IEP. They are very capable children, but they have not been part of a consistent program.” Staff members and students have taken to the shared responsibility of making the new students feel welcome in the school district through the high school’s Rachel’s Club, which was established several years ago to help new students and existing students who appeared to be socially challenged better assimilate to the student body. The school district has also encouraged a number of high school students to take advantage of technical training offered by the vo-tech school in Towanda that will help them take advantage of the boom and land lucrative entry-level positions in the gas industry.
In the meantime, changing traffic patterns have created challenges for the school district, Fleming noted. “We had issues every day when they were laying pipes,” he explained. “Two years ago, we had roads down and 27 kids who couldn’t get to school. Of course, the parents couldn’t get to work either.” Since then, he added, contracting companies working in the area have been much better about contacting the superintendent each evening to discuss potential road closures and detours.
Unresolved water contamination suits and claims of unusual illnesses that are being blamed on gas drilling aside, a general improvement in the relationships between the gas companies and municipalities and landowners is ushering in a new era of diplomacy and proactive cooperation that was nearly nonexistent three years ago.
Wyalusing Township supervisors feel that Chesapeake Energy has been true to its word by maintaining an aggressive schedule of road renovations. The longer that each company stays on a site, adjacent landowners become better acquainted with site supervisors and feel less alienated by the processes related to the industry. Kisner encourages landowners to foster working relationships with the companies they are hosting on their properties as a way to address any problems that may arise more quickly and efficiently.
When she questioned the logic of running a gas pipeline through a field where there were several diversion ditches, Kisner found the gas company was willing to compromise and installed the pipes along the fence line instead. “They didn’t know the lay of the land,” she related, noting that gas companies initially work from flat, two-dimensional maps before assessing a site and working with the existing topography.
When unusual situations or problems arise, Kisner encourages landowners to “Keep a cool head and think things through. The majority of the issues can be worked out between the landowner and the gas company.” She does not recommend hiring an attorney unless the issue persists. “If you have to hire a lawyer, get a reputable one,” Kisner advised. “Many attorneys here are still learning.”
Kisner is more concerned that people who are not used to dealing with lease payments and royalty checks may not invest the funds frugally. “There are issues involved with getting money,” she stated in reference to the deal her father struck with the gas companies. “You’re not sure what to do with it.”
As a Chesapeake employee, Kisner continued, “I gave away millions of dollars. I told (clients) to take one third of it and put it in savings and reminded them that they will be taxed on the money.”
Kisner estimates that the gas boom in the Wyalusing area will last for another 40 years, while even the most conservative estimates average between 20 and 30 years. Fleming, who will retire as WASD superintendent at the end of this summer, agrees with Wyalusing Township supervisors that industry activity is years away from peaking, let alone reclining.
“In the long run, it’s going to be good,” he suggested.
“We’ve learned a lot about what was required by us to protect our people,” Stethers said of the current status of the drilling industry in the Wyalusing area.
“It’s a wonderful thing,” said Green of the booming economy. “I know that some people don’t feel the same, but I’m going with it. I think that we need to embrace it while it’s here.”