A few weeks ago, I wrote on The Foreclosure Flood. I was responding to a National Review editorial that criticized the system of recording land transfers and mortgage interests.
I thought the NR’s criticism was bizarre. The necessity of accessible, accurate public records of interests in land seemed beyond argument. The mortgage mess highlights what happens when banks circumvent what has proven over 150+ years to be a remarkably good system. It does not argue for replacing the system with one that affords less notice to both lenders and buyers.
I based my comments, in part, on my experiences nearly four decades ago in Recorders Offices in Ohio. A November 20 article in The Columbus Dispatch is headlined, ‘Eastern Ohio Swept by Drillers’ Land Rush’.
The promise of a largely untapped, potentially rich reserve of oil and natural gas deep underground has created a land rush in eastern Ohio, with tales of offers by energy companies of $1,000 to $1,500 per acre for the right to drill.
“It’s pure speculation,” said Craig Brown, the Columbiana County recorder.
The region’s previous oil-and-gas boom, along the Marcellus shale formation, promised billions of dollars for drillers in upstate New York, West Virginia and parts of Pennsylvania, but little for Ohio.
But geologists say the Utica shale formation, a layer of thick black rock that lies 8,000 feet beneath most of the state, might hold enormous oil and natural-gas reserves. This promise has oil-and-gas companies spending a lot of money to snap up mineral rights to land.
As many as 40 energy-company representatives file into Brown’s office every day, he said, combing through property records and filing new leases. Energy companies have filed 600 new mineral-rights leases in Columbiana County this year. They filed 197 new leases in the same period last year.
The Jefferson County recorder’s office reported 417 new leases since May. In the first four months of the year, there were 52.
Harrison County Recorder Tracy Boyer said her office has been “absolutely packed” with energy-company reps since April.
“It’s so full in here people are sitting on the floor,” she said. “We’ve got people in here from Canada, Oklahoma, Texas, Pennsylvania and West Virginia.”
Run those county names through Google. You’ll find they’re Appalachian counties. They’re deindustrialized, strip mined. If ever people needed the protection of good records, the residents of those counties do. It’s why reliable recordation is critical to our civil society. And, it’s why the foreclosure fisasco is a direct attack on how we get along.