Leasors take ag to the cleaners

It's hard to make a living as a farmer and rancher. Any supplemental income you can get, with very few chances in isolated rural areas, you take.

The sharpies from the big city frequently take advantage of trusting rural folks, who are used to operating on a handshake and goodwill. The most common arrangements are with oil and gas companies, who seek leases to explore your land, or if you're up against a major highway or intersection, to take a corner of your place for a retail outlet.

Such is the plight of a farmer named Coyle, east of Denver near Strasburg, Colorado, who many years ago signed a lease with Valero Petroleum and its predecessors, for a gas station on the corner of his property, adjoining an intersection of I-70. It operated for many years, and then a fire closed it down. Coyle had soil tests run, as it was hard to grow crops on his land abutting the gas station, and sure enough underground tank leaks and lubricant spills on the ground had polluted the soil and groundwater.

He has been in court now for 8 years, with no end in sight, to try and force them to clean up the land and vacate the lease, which now pays him the princely sum of $100 per month. He is about down to his last dime, paying lawyers and expert witnesses to keep his case alive. The oil company, of course, has a substantial legal team on staff, so it costs them very little to brush off this nuisance.

It appears the oil company has the upper hand. Coyle not only has a pile of money invested, but due to the pollution, has trouble farming the rest of his land. The oil company has counter-sued, and could get his farm to compensate them for damages they claim to have suffered. Hindsight is 20-20, as they say, but in the quest for more income, signing up that long term oil company lease probably wasn't such a good idea.

Farmers and ranchers frequently report similar troubles with oil and gas exploration leases on their land. The company tears up the land, doesn't restore it adequately, leaves old equipment behind, and if oil or gas is discovered, pays a pittance in royalties, or even worse, caps the well and doesn't pump it.

If you enjoy the rural lifestyle, great caution is urged in signing up leases. They can come back to bite you.