Citizens in states that don’t allow fracking don’t understand what they are missing out on

Years ago I bought a commercial building in the middle of no where in Texas as an investment property. It was in a high poverty area, but the building was being rented by the state as a food stamp office. Ironically, the low education and high unemployment rate made it a good long term investment. The property came with a vacant lot next door that served no purpose other than being something I had to pay to mow. I had not luck selling it and considered giving it to the town.

About 10 years ago, I started getting phone messages from oil companies wanting to include my property as a bundle of acreage for an oil lease. I ignored the calls for a while, thinking my 3 acres couldn’t be worth much anyway. Due to their persistence, I eventually started listening and was given a $13,000 signing bonus to include my property. Each well has to have a certain amount of acreage assigned to it, so each oil company was trying to lock in as many acres as they could. Surprisingly, the first royalty check was $6,700 with the monthly checks afterwards declining over the next couple of years until they averaged about $200 a month, which is based on a standard percentage that is paid based on the after expense income.

With the low price of oil and declining well output, the monthly royalty over the last couple of years has been about $100 month. Still not bad for the small amount of land I own. Adding all that cumulative income up, think about how much that means to the high poverty population and town governments in those regions. Also think about the tax revenue that is generated for the state of Texas. All that tax revenue from the oil goes to the education and rainy day funds for the state. I also started having a mineral rights property tax assessment for my lots which provides additional money for the county government and school district.

I was given an unexpected surprise when I received my statement on December 30th last year. Instead of the normal $100 a month that I had been receiving, I was sent $150,000. Obviously shocked and thinking a mistake had been made, I made some phone calls and found out that 7 additional wells had been assigned to my property. The $150,000 was for back royalties due to ownership not being assigned.

My point is, people that live in regions where fracking is banned are either stupid or don’t realize how much money they are giving up for themselves, local and state governments. I would have never thought I would benefit so much from a small amount of land, in a high poverty area, that I would have problems giving away. I don’t understand why states like New York and other people want to ban this huge source of tax money and income.