Chapter 47

CLANRO, Inc. II, The Ideals

As I said, every landowner in the area learned hatred of Hope Gas Company, and later Consolidated, early in life. When the coming storage field was announced and people became aware of the density of the wells and the frequent trips to the wells that would be required to turn them off and on to meet demand, and the size of the field, a near rebellion occurred. The fact that the surface was not owned by the people who get royalty, and this separation was likely to last indefinitely, contributed greatly to the uproar.

Jack Shock came up with the idea of forming a landowner’s organization and talked to several people he knew, including myself. Everyone encouraged him, and he set up a meeting at the Rockford Community Building one Saturday night. There was no publication of the time and place, but 156 people jammed into the little building that night. The only advertisement was by word of mouth, a fact that Jack was always proud of. A decision was made to form an organization and incorporate.

The first meeting was held at South Harrison High School on April 6, 1974. The officers elected were: Jack Shock, president; Paige Lockard, vice-president; Tom Bond (this author), second vice-president, Bob Mendez, secretary-treasurer. A Board of Directors was elected, and the name Concerned Land and Natural Resources Owners, Inc., familiarly called CLANRO, was adopted. This name was suggested by Jim Washburn of Good Hope. Lawyer Clarence “Sunny” Rogers was of considerable help getting the organization started. It never had a paid employee, did not pay travel expenses for its officers, did not seek grants, and was financed entirely by dues and contributions.

There was no formal statement of purpose developed at that time, but the interests of the group could be summarized as follows: (1) The first and most important thing people wanted was to have honest compensation for the surface damage. A well or road is a continuing burden on the surface estate – it denies the income that would be derived from the surface, it is a source of environmental damage, it means gates have to be opened and, hopefully, closed by the operator of the well, who has little interest in livestock. There are periodic discharges of saltwater from many wells, casual hunting by well tenders, and increased possibility of trespass. The lock to all wells for any given company uses the same key, therefore, many people not working for the gas company maintain a key to all these gas producing lands for their own pleasure.

(Illustration 47-1)

Well drilling equipment going on our hill

The appropriate payment to the surface owner would be a payment each year until the well is plugged and abandoned. Lawyers (including judges) are not businessmen, are not able to evaluate these matters, and tend to want to settle for one price, one traditional price, not increasing with inflation and the increasing value of the timber, pasture, hunting rights, etc. The oil and gas man wants simply to appropriate as much of the profit as possible to himself. The damage payment offered by the driller is low, and the legal system simply wants to get rid of the problem as soon as possible. The legal system tended (tends?) to see the landowner (especially if he gets his hands dirty) as a low, greedy fellow but does not see the driller, also a businessman, in the same light, because he is an executive one can play golf with.

(2) The second principle advocated by C. L. A. N. R. O., Inc. is that storage rights belong to the surface owner. Most leases say something about the lessor extracting oil and gas from certain defined property. The “law of capture” applies, so that if the oil or gas flows in from a neighbor’s land, it is legitimate to take it also. What is reserved to the surface owner is all that is not given in the oil and gas lease. Therefore, in Paige Lockard’s words, “The oil and gas is like the contents of a barn, they are sold without selling the barn.” Obviously, this does not appeal to the company extracting petroleum, since it is much easier to deal with the absentee mineral owners. Mineral owners do not see oil and gas as a legitimate product they are selling and have little inclination to bargain for a better royalty. They tend to see their royalty as manna from heaven. Also, the company would rather work with the old royalty owners, rather than with a new set of lessors, who would have to be sought out. As a result of C. L. A. N. R. O., Inc. efforts, there was some approval of the idea of storage rights belonging to the surface estate at the time, but it seems to be forgotten now.

(3) The next most important ideal was that the mineral owner should get one-eighth of the value of the oil and gas production. At the time there were many gas or gas with some oil production wells that had had the royalty reduced to $300 per year, or as little as $50 per year. Many people were getting a lower rate of royalty than they had forty or more years before, in spite of the increase in value of the product. There had been a squeeze during the Great Depression, when the companies threatened to plug and abandon wells unless the royalty owner agreed to reduction of royalties. In a few cases this may have been justified, but in many it was just a squeeze. When all the wells on a lease are abandoned, the land goes back to the owner, who may lease it to another driller. By the time C. L. A. N. R. O., Inc., was formed, there were thousands of wells that had no purpose but to continue a lease for future, deeper drilling. In other words, pure speculation on deeper oil, preventing the land from being available to other, more active companies. And the oil shortage was first being recognized, because oil was being imported in ever increasing quantities. The one-eighth royalty was eventually written into law, due more to the effort of a public advocacy group in Charleston which had lobbying ability, than to the direct effort of C. L. A. N. R. O., Inc. But we first publicized the idea.

(4) The fourth principal was distribution of information and mutual support. C. L. A. N. R. O., Inc. published a newsletter through several issues, held meetings widely in Harrison and adjacent counties and in Pennsylvania and Ohio, where chapters were formed, appeared on television programs. It helped fight Stonewall Jackson Dam, working with farmers in the area - an unsuccessful fight. From this came a pamphlet on condemnation of property, one of four pamphlets that were published and circulated, in addition to the one entitled “What Is CLANRO?” In later years this thread was picked up by Anthony Farrise, a West Virginia University Extension Professor, and booklets on some of these subjects continue to be available from the Extension Service to this day. Jack spent thousands of hours counseling people who had to deal with gas companies, the power company, the Dam, and so on, and did so long after the organization played out. Paige, Bob and I also did some of this work.

(Illustration 47-2)

Bend in road up to the well site

(5) The fifth principal was that the mineral owner’s royalty share of deep coal was quite inadequate. At that time coal was bought for three hundred dollars an acre. When the coal was mined that share was frequently as little as two-tenths of one percent of the sale price of the coal. There was a picture in the “What is CLANRO?” pamphlet of a white square three and a quarter inches on a side to represent the price the mining company got for the coal and a little black square in one corner three-sixteenths inch square to represent the royalty received by the lessor.

Other positions were: (6) Opposition to Land Use Planning (an ideal which stands strong to this day in much of Central West Virginia). (7) The secondary recovery of light petroleum compounds (propane, etc.) incidental to gas storage should be paid for, not stolen (a cause long forgotten). (8) Gas should be removed from coal seams before they are mined, an idea which is still under investigation 30 years later, and (9) Compensation for a “taking” under condemnation should reflect the true value of the property (rather than be a figure arrived at by an “in house” appraiser, or a nominally independent appraiser who was, in fact, kept by the condemning utility or the Corps of Engineers to minimize their expense.)

Let me quote from C. L. A. N. R. O., Inc. minutes to support the last position.

Mr. Mendez told about an acquaintance in Fairmont who has a right-of-way condemned    by Equitable [Gas Company]. The condemnation calls for 7.88 acres, including 2.8 acres of six-foot thick strippable Washington coal that could not be removed after the pipeline is laid. The “expert” who appraised the coal allowed $200 per acre for the coal, and $50 for the timber on the tract. Equitable’s “expert” said the whole right-of-way was worth $1320. Mendez’ friend was allowed to strike only one of sixteen commissioners at that stage of the proceedings. Shortly after this her lawyer died, and when she went to another, his response was “What’s wrong with $1320.” The appraisal contained statements to the effect that it was “confidential, not for TV or publication,” “not to be shown to any uninterested party,” “for establishing a fair price only.” All this from a professional appraiser. The land owner will be referred to a lawyer by C. L. A. N. R. O., Inc.

Aside (From the CLANRO Beacon ) Jack Shock and about 25 of our members sought to attend a trial against Consolidated Gas Supply Corporation. The case was brought by Emmaline and Thomas Menzel in behalf of the late French Young of Rockford, Harrison County. The daughter and grandson were seeking to revoke a deed granting the gas company a permanent roadway through the Young farm. Emmaline Menzel said she saw a gas company agent take her father’s hand and make an X on the deed. At the time Mr. Young was past 90 years of age and mentally incapacitated. Young was paid $250. He died soon after the deed was made. The Menzels contend that considerable damage was done to the farm property by the construction of the roadway.

When it was established at the trial that Tom Menzel was a member of CLANRO, attorneys for Consolidated objected strongly to members of the organization being allowed to attend the court session. Judge Zeigler moved the proceedings to the privacy of his chambers...

Another article in the same issue about Tom Garton, a second land owner who had trouble with the gas company, explains:

“ CLANRO believes it should be mandatory that any judge sitting on cases between landowners and utility companies should be questioned under oath as to their holdings in that utility. If a judge holds stock in that utility he should disqualify himself or divest himself of that stock forever…”

Copyright © 1998, 2006, 2008, 2011 S. Tom Bond (stombond at hughes.net)