Shale Daily / NGI All News Access

Ohio AG Urged to Investigate Bizarre 'Talking Points'

Three Ohio legislators have asked the state's attorney general to determine the source of a five-page document that, if authentic, could prove individuals connected to the energy industry are using deceptive practices to persuade property owners to sign oil and gas leases.

The "Talking Points for Selling Oil and Gas Lease Rights" document was allegedly found in a binder along the driveway of a home in Yellow Springs -- located in Greene County -- shortly after the homeowner was solicited by someone trying to convince her to sign a lease.

"This document causes us great concern and apprehension over the possibility of a pattern of corrupt activity and actual fraud in the leasing of landowner oil and gas rights in Ohio," Rep. Teresa Fedor (D-Toledo) said in a letter Tuesday to Attorney General Mike DeWine. "The document highlights practices that are questionable at best and outright misleading on material issues of fact and law."

Reps. Dennis Murray (D-Sandusky) and Mark Okey (D-Carrollton) also signed the letter to DeWine.

"Attorney General DeWine will look into the concerns raised in the letter," Dan Tierney, a spokesman for the attorney general, told NGI's Shale Daily on Thursday.

The document contains the following statements, among others:

"The lease is for 5 years. Sometimes landowners will read the lease before signing and realize that the lease renews automatically if any oil/gas are produced from the well. Do not stress this point. Just state that the lease is for 5 years. They don't need to know, or discover through discussions with us, that the lease can extend indefinitely with no further permission from the landowner.

"Tell the landowner that all their neighbors have signed. Even if the neighbors have not, this often will push an undecided landowner in favor of signing.

"Men are more likely to sign than women. Men don't like to believe that you know more than they do, so they are also less likely to ask questions. In the state of Ohio the husband can sign the lease without spousal permission. Go that route if required. Tell them it is their decision. Write the lease agreement with only the husband's name on the paperwork."

The issue of the document's authenticity gave environmental groups and their supporters pause.

"[The document] is not really something that we would have a comment on yet, certainly not until it gets verified," Environment Ohio spokesman Julian Boggs told NGI's Shale Daily on Thursday. "But it was disturbing and not inconsistent from rumors and anecdotal things that we've heard. This investigation is a good idea. If it's true, the contents of that binder are certainly disturbing and should be addressed."

Teresa Mills, the Ohio director for the environmental group Center for Health, Environment & Justice, told NGI's Shale Daily that she received the document from another organization, the Green Environmental Coalition (GEC). Mills said she does not know the identity of the homeowner who found the document or where the original copy is.

"I do hope the attorney general's office follows through, and that if this is genuine that the leasing practices are halted." Mills said Thursday.

GEC, which is based in Yellow Springs, did not return calls seeking comment on Thursday.

Louis Giavasis, a trustee for Plain Township in Stark County, told NGI's Shale Daily that he received a copy of the document through an e-mail from Mills. That e-mail, dated April 10, said the homeowner had found the document in a white three-ring binder that appeared to have been run over by a car. There was speculation that whoever had approached the homeowner to discuss an oil and gas lease had left the binder on top of their car and then drove off.

"It's a pretty jaw-dropping document," Giavasis said Thursday. "If there's any validity to it, it would be pretty damning on behalf of the gas and oil industry if they have people actually out there doing those types of things."

Giavasis said that before becoming a politician he sold cars for 23 years. He admits that on the surface the document appears as straight sales plan methodology.

"But then it gets into demographic studies of people that live in Ohio and what their 'hot buttons' are," Giavasis said. "It says how to address certain questions involving environmental issues and what not to get into, reverting back to patriotism and overall energy needs of the country. I think are some very deceptive practices in there about the terms of the lease."

Tom Stewart, executive vice president of the Ohio Oil and Gas Association, called the document "bizarre" and told NGI's Shale Daily that he wasn't sure if it was genuine or not.

"Could I believe that some lease hounds would put together a document like that and develop a spiel to get some country boys to sign? I guess I could believe that," Stewart said Thursday. "If the thing is real, then it does not represent a company that is professional in their business activities."

He added, "It's a poor representation of the industry. It is not common to the people I know in this business on how they would approach questions or concerns from the landowners that they are trying to develop a business relationship that would hopefully end in a contractual relationship."