Average Landowners Become Millionaires
The Shale Boom has many Upstate New Yorkers brimming with joy this holiday season.
The merriest of the bunch might be an ordinary group of landowners and some hard-working oil company employees...
Some property owners are in for a big-break — perhaps the opportunity of a lifetime — with upcoming lease agreements for wanted property near the Marcellus Shale Formation ranging from several hundred thousands of dollars all the way to a cool million.
Take this guy for example...
Jeff Decker is a truck driver who owns about 120 acres of land near Binghamton, New York — my hometown.
In my opinion, there's nothing particularly fabulous about this specific part of the country (aside from childhood memories, of course).
In fact, it was quickly becoming an economically depressed area when I left about 16 years ago. The conditions there now — especially after being hit hard by the recent recession — are far from favorable.
But that's all about to change.
After a stroke of luck, Jeff Decker can certainly attest to that notion...
Although Mr. Decker is unable to disclose specific details regarding the lease offer for his land, experts have estimated it to be in the $700,000 range — and that's just the SIGNING BONUS for the sale!
If and when miners begin drilling on his property, he's entitled to even more money.
Jeff Decker, ordinary truck driver in the ordinary town of Binghamton, New York, may see about 20 percent royalty once drilling procedures begin.
Tack that on to the $700,000-ish from the signing bonus, and Jeff's now able to live a life akin to the rich and famous.
But it's not only landowners who are profiting considerably from oil projects in northern New York...
Workers participating in the drilling process will fall into prosperity as well.
According to Dean Lowry, president of Llama Horizontal Drilling Technologies based in Fort Worth, Texas:
“Fifty percent of the gas could be extracted in the first three or four years,” Mr. Lowry says. “You get your investment back in the first year to 18 months. Then you get seven to nine times your money over the next 20 to 25 years.”
Joining the lucky inhabitants of Upstate New York are residents of Pennsylvania, Ohio, West Virginia, and other adjacent states who may be subject to some of the sweet rewards on account of the natural gas extraction projects.
Needless to say, there is great potential in the Marcellus region.
Analysts with geology.com believe the Marcellus Shale Formation may hold 50 trillion cubic feet of natural gas. That equates to a two-year supply for our entire nation — valued at one trillion dollars.
Nonetheless, there's a lot of risk in the extraction processes.
In order to train and educate students in related technical fields, Youngstown State University in Ohio has initiated a new program dedicated to this very sector: A Natural Gas and Water Resources Institute.
The program offers students the opportunity to get involved with research projects where hydraulic fracturing ("fracking") takes place.
Ideally, this will help spread awareness about a growing industry, as well as get students thinking critically about the risks of contaminating water supply systems through these controversial mining processes.
One of the significant issues for the extraction of the gas is the use and recovery of large volumes of water used in the hydraulic fracturing process and the need to treat, analyze and monitor this water. Abraham said the YSU Natural Gas and Water Resources Institute will provide research on water-related issues such as analysis and monitoring, remote sensing, remediation and treatment, and reuse and recycling.
The Institute will utilize faculty and facilities in YSU's chemistry, mechanical engineering, environmental science, chemical engineering, geology and civil engineering departments.
Overall, this story will have a remarkable impact on the economy. One study indicates the Utica shale reserve will generate over 200,000 jobs relating to exploration, leasing, drilling, and pipeline construction endeavors.
Happy Holidays, shale boom beneficiaries!+6
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