Update: Landowners question Norse Energy about plan to cut off free natural gas

Wednesday 11pm Update:

Many Madison County neighbors have been receiving free natural gas for decades as part of a contract for a gas well on their property but Norse Energy is telling landowners the practice will stop. On Wednesday night neighbors got together at the Lebanon Town Hall to talk about their legal options.

Questions, frustrations and a claim that Norse Energy had forged landowner signatures on a right of way document all poured out at the standing room only meeting. Marie Smith's house has had free natural gas since the well on the property was tapped in 1957 She hoped that the landowners could work together to deal with Norse Energy.

"What they've done is try to separate. Divide and conquer - and if everybody sticks together they can't divide and conquer," said Smith.

Local attorney Jane Welsh hosted the meeting and said cutting off natural gas would likely be breach of contract she also advised landholders not to sign anything from Norse energy until they had gathered more information.

"I think it's a little disingenuous of Norse to approach it that way. I mean it's not a change in corporate policy - it is a breach of contract unless they get the signatures of the land owners who are affected by it," said Welsh.

They weren't invited and weren't welcome but representatives of Norse Energy came to the meeting anyway. They took some questions from the hostile crowd and said they just want to switch everyone over to propane and reimburse for fuel.

"Our intention isn't to shut the homeowners off. It's to change it to a propane system and remove you from our actual natural gas well," said Stephen Keyes from Norse Energy.

The representatives were then asked to leave the meeting so landowners could discuss their options.

A representative from the Attorney General's office also attended the meeting. He said his office is looking into whether any of the negotiations or correspondence from energy companies could be considered fraudulent or deceptive.

Landowners in Madison and Chenango counties have received letters from Norse Energy informing them the company will no longer offer free access to the natural gas from wells on their properties. The letter cites a change in corporate policy and promises to replace the free gas with a payment plus make arrangements to covert heating systems to propane.

Landowners that have received the letter plan to gather Wednesday evening at the Lebanon Town Hall to discuss their legal options. Meanwhile, Lebanon town Supervisor Jim Goldstein has called on the state attorney general, Assemblyman Bill Magee, and State Senator Dave Valesky to investigate Norse Energy's actions.

Goldstein says the decision to deny free gas presents a hardship to landowners who were using it to heat their homes and farm buildings.

According to attorney Jane Welsh, the landowners were promised free gas as a "material inducement" to sign leases allowing Norse to drill on their properties.

Jim Kenyon talked with three landowners who signed leases for gas wells on their properties in 1996. All three are refusing to sign an agreement to give up their rights for free gas.

Mike Mensche accuses Norse Energy of "breaking a promise." His neighbor Frank Ogden, says, "They pulled the rug out from under us."

Farmer Nelson Wedge says, "I wouldn't have signed the lease if it wasn't for the use of natural gas.

Contacted by phone Tuesday afternoon, Norse Energy Executive Vice President Dennis Holbrook said the decision to terminate the free gas provision was the result of a "safety concern." Holbrook pointed out that the residents were tapping into pressurized gas lines. Though the leases place all liability on the property owners, Holbrook said "he industry would get a black eye" if there was an accident or explosion. Holbrook denied there was any "profit motive" He says Norse Energy is "doing the right thing to protect property owners." He points out that the company is subsidizing the costs of switching to alternative fuels.