AVON — The first stop on what is to be a yearlong battle on hydrofracking occurred over the weekend, when the natural gas producer Lenape Resources released a letter to leasing landowners stating that the company will “shut in” its existing wells and pipelines in the Town of Avon, effective immediately.
In response to the new law banning any new gas exploration, the closing of these resources would mean landowners whose property contains these wells will no longer receive free natural gas, as well as royalty payments from the company. All homeowners with gas connections to Lenape’s Avon gathering system will be disrupted.
In the letter to property owners, President of Lenape Resources John Holko stated that the new law “may affect Lenape’s ability to conduct operations on or involving your property within the Town of Avon.” The letter went on to state the company was evoking a “Force Majeure” provision on the Oil and Gas agreement made with landowners, in which the company could “suspend performance of its lease obligations due to Government acts.”
The letter concluded directing any concerns on the new law to Town Supervisor David LeFeber, followed by his personal information.
“We gave our town attorney the direction to put together a local law which did not have any negative impact on the existing wells of the landowners who had royalties from those wells,” said Supervisor LeFeber. ” We had every indication that the document that we had in place should protect them.”
The Town Board passed the moratorium on gas exploration on June 28, after seven months of debate from within the town and three revisions on the law, which were to accommodate for the wells currently in operation. A representative from Lenape Resources was in attendance at the vote, making the argument that the law would jeopardize landowners rights. He went on to say Lenape has drilled more than 40 wells in Avon in the past 25 years. Currently, the company has 16 wells in the town.
“Our town attorney reach out to Lenape and asked them to review and be part of the process because the last thing we wanted to do was hurt their business in any way or hurt the people who had existing wells on their property,” said LeFeber. “We made every attempt to put a moratorium in place that would not hurt that relationship of their viability.”
The town government itself is a customer of Lenape affected by this sudden change in service, and will need to make arrangements to accommodate. LeFeber said the company had warned the town once before that gas would be shut off following the passing of the local law.
“The night that we passed the moratorium, one of Lenape’s representatives came up and said that they were going to turn off the gas at the highway garage and the Town of Avon’s pump station,” said LeFeber. “They said they were going to turn it off the 29 of June. They never did that.”
The letter from Lenape to landowners stated that the well will remain closed until the company can evaluate the local law with outside counsel, including the New York State Department of Environmental Conservation, the New York State Public Service Commission, and the New York State Attorney General.
Hydraulic fracturing has become a controversial topic in the state, a technique in which a massive volume of water, sand and chemicals is injected underground at high pressure to break up rock formations allowing gas or oil to flow up the drilled well.
The local law which was passed in Avon puts a ban on oil drilling within the town for a one-year period in order to better consider and research the risks of fracking. The law states “A one year moratorium and prohibition within the Town of Avon, Livingston County, New York, of natural gas and petroleum exploration and extraction activities, underground storage of natural gas, and disposal of natural gas or petroleum extraction, exploration and production wastes.”
For more information on the new law, visit the town website here.