The missing piece of this story is mineral rights. No one in
this neighborhood is making a dime from the fracking, because they do not own
the minerals. So, as the lawsuit makes clear, they are suffering the costs
while not getting any of the benefits.
This raises a larger question: How is the mineral wealth
produced by gas wells in Denton distributed? How much money actually stays
local in the pockets of Denton families?
I created a short video to answer those questions. The Myth
of the Local Fracking Boom shows how most of the wealth generated in Denton
drains out of town. All too often, the people living near fracking sites pay
the costs but do not see any of the benefits.
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Great presentation and video. This is the information that the Ed Ireland's of Industry don't want anyone to know about.
ReplyDeleteAnother great video in your series. Keep researching and sharing. Several things caught my attention. 1) 2:05, you told us XTO is a Houston company. XTO started in Fort Worth and is now part of ExxonMobil, which is based in Irving. 2) 1:42, you say appraised mineral values are proxy for royalties. Be careful assuming DCAD value is equal to the royalties paid. DCAD uses a formulaic approach to assessing a value on the potential production, which is very likely less than the actual value of the gas produced. Also, this value is only applied for taxing purposes and is not intended to represent royalty payments. Taxing entities like DISD or Denton use the DCAD number to apply their tax rate. The purpose of this is not as a proxy to royalties, so please be careful making that comparison or at least saying they’re equal. You may want to say that “Instead of researching royalty payments, I’m substituting a known value for this demonstration.” I think the tobacco lobby, sorry “big oil” lobby, will attack you for a little wording mistake. 3) 6:52, you say refracs increase the appraisal. I don’t think DCAD has the ability to know if/when a well is refracked. If they don’t change the initial formula, then the refracked well does impact the nearby residents, but provides no additional benefit to a taxing entity like the schools. The added profits just go to the gas company and out of town mineral owners.
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