Assessing how energy companies negotiate with landowners when obtaining land for hydraulic fracturing

Abstract

To extract natural gas through hydraulic fracturing, energy companies often need to obtain consent from many different private landowners, whose properties lie atop the gas reservoir. Negotiations with these landowners have important economic, environmental and social implications. In this paper we present a dataset on negotiations in Ohio and use these data to investigate how landowners may be advantaged or disadvantaged in these lease negotiations. We find that they are disadvantaged in two ways. First, because energy companies can use persistent and personal strategies to overcome landowner reluctance. Second, because of the institutional context: specifically the widespread use of compulsory unitization. We conclude by discussing the implications of these findings for equity in energy policy and by drawing out the other potential uses of these data. Energy companies must often obtain consent from private landowners for natural gas extraction. This study analyses lease negotiations between these two parties in Ohio, noting disadvantages on the side of the landowner in the process.