Southern Illinois farmers and landowners have started leasing their land to major fracking companies to draw additional income.

In just one southern Illinois county, Wayne County, property owners have signed more than 3,000 leases with oil and gas companies in the last two years, though some leases may not be specifically for fracking. In 2011, just 400 leases were signed, according to county clerk records.

Overall in southern Illinois, companies have leased up hundreds of thousands of acres for the newly-legal process.

Despite lengthy legislative hurdles, Illinois policymakers passed rules for high-volume hydraulic fracturing on Nov. 6.

The rules were finalized late last week – about one year after their first draft was released.

A horizontal drilling rig managed by Woolsey Operating Company LLC in Kansas.
A horizontal drilling rig managed by Woolsey Operating Company LLC in Kansas.

Low-volume vertical fracking is already legal in Illinois, which means that companies can frack with less than 80,000 gallons of water or foam equivalent. The new law allows for high-volume horizontal fracking above that threshold.

“When we shoot seismic in Wayne County, we tend to be welcomed with open arms,” said Richard Straeter, district manager for Woolsey Operating Company LLC.

Straeter’s Kansas-based company has leased nearly 300,000 acres of land in southern Illinois and Indiana in search of oil and gas, which it will try to extract by shooting water and foam into the ground through the horizontal wells.

Straeter said the most acreage his company has leased is in Wayne, White, Franklin, Hamilton and Johnson counties.

Long wait for rules blamed on politics

So far, Woolsey Operating Company has drilled eight wells in Illinois, but it cannot implement high-volume hydraulic fracturing until the Illinois Department of Natural Resource implements the newly approved rules.

Some believe the lengthy approval time was a result of political concerns.

This graphic shows the general location of shale areas in Illinois, Indiana and Kentucky. Shale regions, such as this one, are well-suited for fracking projects.
This graphic shows the general location of shale areas in Illinois, Indiana and Kentucky. Shale regions, such as this one, are well-suited for fracking projects.

Earlier this year, Straeter said he was sure finalizing the rules would drag on until after the state elections because of the “political animal” that fracking has become.

Illinois Department of Natural Resources Director Marc Miller attributed the rule-making pace to process.

“I think we have a lot of work that remains to be done, but we are proud of the fact that we’ve done this in a thorough, thoughtful, open and transparent manner,” he said.

The department had a total of five public hearings, one of which was two days before Thanksgiving in 2013. The department received about 43,000 pages of public comments.

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Miller said part of the remaining work includes hiring and training about 50 people to administer fracking permits. More than 30 people had been hired as of Nov. 7.

Oil and gas companies can apply for a permit 30 days after they register with the department. There is a non-refundable $13,500 cost per application. The department then has an additional 60 days to accept or reject the permit application.

As of Nov. 7, three companies had applied for permits, according to department spokesperson Chris Young.

Bill Bodine, associate director of legislation for the Illinois Farm Bureau, said his organization supports high-volume hydraulic fracking. From a farmer’s perspective, though, he said he is concerned about soil damage.

In a public comment written on behalf of the Illinois Farm Bureau, Bodine brought up the possibility that companies may frack with heavy equipment on a farmer’s land and damage the soil. He questioned whether the companies will have to fix the soil damage when operations are finished.

“There may be subsurface drainage tile running through the land that they’re using for drilling operations,” Bodine said. “When drilling operations leave, we wanted to include regulations that would assure that those, say subsurface drainage tiles, are repaired properly, so they can continue to work and be used for production agriculture.”

Miller said the natural resources department listened to those concerns and strengthened the land-restoration requirement.

During the comment period, representatives from the Natural Resources Defense Council also found several environmental health risks that the rules did not address.

Those risks included wastewater from fracking stored on site.

As a result, the natural resources department changed the wastewater holding policy to a maximum period of seven days in a late draft.

Throughout the past 10 years, the Environmental Protection Agency has received at least $11 million to monitor fracking operations across the country. Even with the funding, a federal report recently found that the agency has done a subpar job evaluating the potential hazards of fracking.

‘An opportunity for additional income’

To prepare for fracking in Illinois, the Illinois Farm Bureau educates its members about what to look for in lease agreements. It also helps members find legal counsel to review leases.

“From an economic perspective, if the landowner owns the mineral interests for that property, there’s an opportunity for additional income,” Bodine said.

Landowners who lease land receive compensation from the company. They receive even more money, which Straeter said ranges from 12 to 18 percent, if oil or gas is eventually found.

Wayne County has about 1,500 farms, according to 2012 Ag Census data. The majority of those farms produce corn and soybeans.

Doug Anderson, manager of the Wayne County Farm Bureau, said Woolsey Operating Company and a company called Strata X have leased the most land for fracking.

“At the beginning of the process, they were buying land for about $50 an acre, and towards the end, it was about $350 to $400 per acre,” he said.

Group files legal complaint 

Forced pooling, when a company has access to minerals underneath private property without landowner permission, is legal in Illinois.

“[Landowners] are forced to a pool, where, because of the technology, and the interest driving the technology, trumps individual property issues,” Henry Henderson, Midwest director of the Natural Resources Defense Council, said. “This is a problem.”

Annette McMichael is the communications director for Southern Illinoisans Against Fracturing Our Environment, an advocacy group that seeks to prevent fracking in the state. McMichael said that several of her neighbors have already been coerced into signing surface leases.

“Our neighbor was told that he might as well sign, because they were going to frack on his property anyways, and he wouldn’t get any of the up-front money for leasing,” McMichael said.

“Farmers are going to be exposed to air pollution, noise pollution, potential water pollution,” she added. “Their wells could be compromised.”

Although state policymakers approved the fracking rules on Nov. 6, McMichael said her group’s mission to ban fracking would not stop.

On Nov. 12, McMichael’s group filed a legal complaint against the Illinois Department of Natural Resources and others that alleges the department did not consider scientific studies when creating fracking rules and department representatives were not available to answer questions at public hearings.

“We are very disappointed that Illinois politicians are not as concerned about the health and safety of families in southern Illinois as they are about pleasing the oil and gas industry,” McMichael said.

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