One of the easily observable phenomena of modeling a network of people is that some people are connected and some are not. However, the nuance of connections between people rather than telephones is that some people are more closely connected than others. For example, nuclear families usually form strong ties. They speak often, communicate openly and may know each other’s telephone numbers by heart. Coworkers may form strong ties or weak ties depending on the person, the workplace and a variety of other factors.
Large groups of people form large social networks that are composed of a variety of strong and weak ties. As the scope of the social network widens, the importance of weak ties emerges. A network of very similar people with similar interests and backgrounds leans on their strong ties—they can isolate themselves from larger social spheres. Within an oil and gas development network, landowners may have strong ties with other landowners. Perhaps their families have lived in the same place for generations and they went to the same schools. They may have the same friends. These individuals would form an isolated group if not for the weak ties that some of them are bound to share with members of other groups. Widening the scope of the network to include regulatory agencies and operators, the weak ties between some landowners and their points of contact within the operator and the regulatory agency help to bind the group of landowners to the other stakeholders in oil and gas operations.
Weak ties bring new information, new opportunities and different kinds of protection and collaboration that benefit the entire network. One of our experts pulls many of the threads of communication and social networks together in this presentation about different stakeholders working together.
Transcript
Working Together: Operator, Landowner & Regulatory Agency – Dan Brockett – Penn State
Outside of oil and gas operations, construction projects usually occur on the owner’s property and under the owner’s direction. Like a shopping center, a nursing home or even a private residence. Oil and gas drilling often occurs on someone elses property. This means that in oil and gas production, land owners, operators and regulatory agencies depend on each other.
In the U.S. we are unique in having a lot of privately owned mineral rights. Many land owners are able to personally profit from having oil or gas produced on their property. It’s also not unusual to see rights segregated. That is, the mineral rights have been severed from the surface rights. One person owns the land, another owns what’s under the land.
In that case large scale operations could be occurring on a land owner’s property without much personal profit. Because of these various situations, operators, land owners and regulatory agencies all have stakes in these operations. Let’s consider the role and desires of each.
Land owners may have an oil and gas lease. A private contract with an operator. Land owners who lease their mineral rights usually want money in exchange for resources. They also want as little disturbance as possible. Land owners may have issues with disturbed areas, run off and soil compaction, as well as the permanent fixtures that come with wells, pipelines and facilities.
They’re likely to be concerned about how operations might affect their family’s health and safety. Additionally, there may be issues with noise, lights and traffic. A common complaint from landowners who live near operation is the sound of backup alarms on trucks and heavy equipment. You know the sound, beep, beep, beep. At three in the morning this guy’s saying, “Marge, do they only go in reverse here?”
Land owners may suggest then that operations only occur during daylight when noise and light operations are less disturbing. But this can be hard on operators since they’re paying to keep drilling and completions equipment on site whether or not it’s in use. Turning off back up alarms or limiting light on sites could also be a safety hazard and rule violation.
Some concerns like compaction and loss of farm land have a major impact on land owners. Whatever operators and regulators can do to minimize this is good for the land owner and the public. Operators want to produce and deliver hydrocarbons as efficiently as possible. That’s how they maximize their profit. They are also interested in the health and safety of anyone on the site including employees, land owners and other visitors, and they want to ensure protection of the natural environment.
The operator is restricted by three things. First, their own best management practices, and then state and local regulations, and finally any restrictions that may be spelled out in the lease that they have with the land owners. Operators can run into barriers with both land owners and regulations in trying to fulfill their obligations.
Legislators create laws often to support specific strategies or policy. Laws are then put to work when designated government agencies create regulations to provide details on the specific practices and technologies that are allowed under the law. These regulatory agencies are then tasked with enforcing these regulations.
On a practical basis, regulating oil and gas usually involves interpreting laws, reviewing and evaluating data, investigating oil and gas sites and preparing reports. But it also might involve explaining regulations and decisions to industry personnel, land owners and the public.
Sometimes regulatory agencies may be drawn into disputes with the land owner and the operator. The intersection of these three entities, land owner, operator and regulatory agency in the same space may create hardship. Much of this hardship can be mitigated if not avoided entirely by planning, communicating and adjusting to accommodate each other’s needs.
For example, a pipeline company should clearly mark a freshly planted right of way and ask the land owner not to run tractors through it. They should also plan an alternative route for tractor traffic. Or regulations may require a retention pond to contain runoff. Meaning some of the owner’s land may be taken out of use. If there was a contingency plan between the producer and the land owner, this dispute could be avoided.
Another example is a regulatory agency may require all topsoil to be stored on site. This means the land owner now has a mountain of top soil which must be maintained for the next 99 years. Could this be avoided or mitigated? These sorts of scenarios can lead to conflict and even costly litigation. The key is to educate all parties and create a process for open and clear communication.
Land owners need to be educated about what to expect and the various ways in which their lives, work and routines may be disrupted. Operators need to appreciate the impact their operations have on the land owner’s lives, and oil and gas inspectors need to work with both parties to foster understanding and ensure all relevant regulations are being followed.
When operators, land owners and regulatory agencies work together to understand each other’s goals, requirements and restrictions, conflict and disruption will be minimized. Smooth relationships and efficient operations will be more likely to occur.
Images: “Tied Down” by Yiannis Theologos Michellis licensed under CC BY SA 2.0