North Carolina was the first state in the country to require “landmen” to register before they can try to woo property owners to lease their land for shale gas exploration.
The state’s landman registry, today containing 61 names, was designed as the first line of defense against predatory business practices.
Instead, the registry has become a useless exercise, an advisory group warns. The information landmen submit isn’t verified, and their names remain registered in perpetuity, even if a landman dies.
The Landman Registry Study Group, convened by the N.C. Mining and Energy Commission, met Friday to finalize a report to the state legislature that will urge lawmakers to turn the registry into a tool to protect the public against unscrupulous actors.
The issue has gained renewed urgency as North Carolina’s fracking moratorium ended Tuesday, opening the state to energy prospectors.
As it stands now, the study group says, an official roster of landmen posted on a state government website can lull residents into a false sense of security that a public official is dutifully monitoring land speculators and wildcatters.
“It’s actually worse than having nothing,” warned advisory group member James Womack, who is also a member of the Mining and Energy Commission. “By creating it, you’re creating the appearance of a layer of protection. You’ve implied these people are being monitored in some way.”
The working group’s report to the state legislature is due April 1. It will recommend that landmen registered here have current membership in a professional organization that requires continuing education, and that landmen pay an annual fee to register in North Carolina.
North Carolina has no fines for wayward landmen, except to boot them off the registry. Such a move would prevent them from legally signing fracking leases here.
The state’s landman registry was created in 2013, back when North Carolina lawmakers and regulators vowed to create the toughest fracking standards in the nation. Since then only one other state, Maryland, has created a landman registry.
The landman is typically a resident’s first contact with the fracking industry, the roving salesman who persuades locals to lease their drilling rights in exchange for bonus payments and future royalties.
“Basically, what landmen are is sales people,” said working group member Ray Carper, a Danville, Va.-based real estate lawyer. “Always remember, the job of the landman – if he wants to keep working – is to get that paper signed.”
During Friday’s two-hour discussion, Womack described landmen as “used car salesmen.” Womack promptly apologized after another group member, Mike Flores, objected to that unflattering characterization. Flores is a lawyer in California and sits on the board of directors for the American Association of Professional Landmen.
“We know there are used car salesmen in every profession,” said Flores, who participated in Friday’s meeting by phone linkup.
The study group will also recommend that the legislature take the landman registry out from under the N.C. Department of Environment and Natural Resources and move it to the N.C. Real Estate Commission, which regulates real estate brokers.
“We absolutely want to protect and educate North Carolina citizens and landowners,” said study group Chairman Ray Covington, who also sits on the Mining and Energy Commission.