It would appear the Pennsylvania company behind a number of bizarre mineral rights leasing offers in Durham and Chapel Hill has gotten on N.C. Attorney General Roy Cooper's bad side.
In a sharply worded letter mailed Monday, Cooper's office ordered Crimson Holdings Corporation—and its affiliated real estate firm Campbell Development LLC—to stop offering oil and gas leases in North Carolina. DOJ also demanded the prospective drillers, who sought to buy the mineral rights for nature preserves in Durham and the park at Meadowmont in Chapel Hill, reject and return any accepted lease offers from landowners.
"Until you can demonstrate that Campbell's practices and Crimson's leases are in compliance with North Carolina law, we demand that Campbell and Crimson immediately cease and desist from offering or accepting any oil and gas leases in the state of North Carolina," stated the letter from DOJ Special Deputy Attorney M. Lynne Weaver.
As reported in last week's Indy, the Crimson Holdings leasing offers were the first confirmed fracking bids in North Carolina in several years. They were mailed to an unknown number of Durham County landowners two months after state leaders lifted the fracking moratorium.
At least two of those landowners, the conservationist Ellerbe Creek Watershed Association and the Town of Chapel Hill, said they would not make any deals with the company.
According to Weaver's letter, there are numerous legal issues with the company's leasing offers. Neither Crimson nor Campbell are registered with the N.C. Secretary of State to do business. And, as pointed out by the Indy, the company's agent, Frank Sides, is not a registered oil and gas landman in the state.
Meanwhile, the 12-year leases offered by the company exceed the state's 10-year limit and fail to provide a copy of the state law laying out landowner protections. Weaver also complained that DOJ could not find a website for the relatively-unknown company.
"As our office is unable to reasonably locate any information on Crimson Holdings Corporation, we have serious concerns that North Carolina landowners will be unable to conduct any due diligence research or to obtain information on the ostensible company to which they are being asked to lease their oil and gas rights," the letter stated.
James Robinson, a leasing expert with Rural Advancement Foundation International, pointed out the leases would also potentially allow drilling within 300 feet of homes. Draft regulations in the N.C. Mining and Energy Commission require 650-foot setbacks, but allow companies to seek a waiver reducing the setback to 450 feet.
"I don’t want our landowners to see this and say, 'Oh boy, this is my chance to strike it rich,'" said Robinson, who is also a member of a Mining and Energy Commission study group on compulsory pooling. "Because these leases would not hold up in North Carolina."
Reps for the N.C. Department of Environment and Natural Resources (DENR) say they are investigating the Pennsylvania agent behind a handful of likely doomed offers to buy mineral rights in the Triangle.
As the Indy reported Wednesday, state law requires representatives for gas and oil companies, otherwise known as "landmen," to register with DENR or risk a civil penalty. Frank Sides, the agent named on the mineral rights offers of Crimson Holdings Incorporated, does not appear to be registered in the state, based on DENR's online registry.
DENR spokesman Jamie Kritzer said his agency was only recently informed of Sides' letters, and will be investigating to determine if he is breaking the law. Sides did not return an Indy phone call this week.
Documents obtained by the Indy this week show Crimson Holdings made offers to buy mineral rights in Durham and Chapel Hill. In Durham, the company sought to buy the rights for several tracts of nature preserves owned by the conservationist Ellerbe Creek Watershed Association. In Chapel Hill, Crimson Holdings offered to buy more than 50 acres of land owned by the town of Chapel Hill in a park abutting the upscale Meadowmont development.
Landowners say they have turned down the offers from Crimson Holdings. Still, it's the first confirmed reports of gas leasing offers made in the state in several years, and it comes weeks after state leaders lifted the fracking moratorium. More on this as it develops.
Almost two months after fracking was legalized in North Carolina, a Pennsylvania company is offering to buy mineral rights from landowners in Durham. And since the company’s agent has not registered with state officials, he could be breaking the law.
Leaders of the Ellerbe Creek Watershed Association, a conservationist nonprofit in Durham, say they recently have received offers from Crimson Holdings Corporation, a company based in Pittsburgh, seeking to buy mineral rights on multiple tracts. The association owns 340 acres and four public nature preserves in Durham.
Crimson Holdings has also approached at least one other landowner near Falls Lake in northeast Durham County, according to documents obtained by the INDY.
The offers are signed by Frank Sides, a Pennsylvania-based agent who, as of Tuesday, was not a registered “landman,” or a representative for oil and gas interests, in North Carolina. State law requires landmen to register with DENR or they may face a civil penalty. Sides did not return a phone call from the INDY.
James Robinson, a research associate and gas leasing expert with Rural Advancement Foundation International, says the Crimson Holdings offers are the first he’s seen in North Carolina since a drilling company began signing leases about four years ago in Lee County, a suburban county south of the Triangle where geologists expect the state’s drilling to be centralized.
In June, Gov. Pat McCrory signed legislation lifting North Carolina’s moratorium on fracking. Drilling is expected to begin sometime next spring.
Chris Dreps, executive director of the watershed association, says the Crimson Holdings offers seemed like the company was “fishing” for interested parties. In response, the association’s board of directors approved a policy last week forbidding the sale of mineral rights on their property, which is mostly found within Durham city limits along Ellerbe Creek.
“It doesn’t make sense for an organization that’s protecting our land for conservation purposes to sell our mineral rights,” said Dreps. “It’s a bit of a distraction from our mission, which is to keep Ellerbe Creek clean.”
While Durham technically falls within the state’s potential drilling area—the Triassic Basin— its dense population will likely complicate efforts to frack due to state-mandated setbacks from homes and schools, experts say. State law bars local governments from imposing drilling bans within their borders.
Both lease offers in Durham include few details about Crimson Holdings, other than saying the group is seeking to “explore the natural resources” in the area. The letters offer a paltry $5 per acre leasing bonus, coupled with a 12.5 percent royalty rate, the minimum royalty required by North Carolina law.
Signing bonuses can soar as high as tens of thousands of dollars per acre in areas of the country where plentiful gas stores are confirmed, Robinson said, but details about North Carolina’s supply are too murky to fetch much higher offers.
The company gives landowners a signing deadline of Nov. 1 or until the funds slotted for the project run out.
Robinson urged landowners to be cautious and patient, pointing out they may have greater negotiating leverage once the state has more information about shale gas reserves.
“Any landowner being told you have to sign right now or you’re going to miss your opportunity is not being given accurate information,” he said. “They need to take that lease to an attorney and talk about it with family members. That type of pressure is a tactic that companies use to make landowners feel like they’re running out of time.”
Hope Taylor, executive director of Clean Water for N.C., said landowners should also be wary of unregistered landmen such as Sides. The state registry was one of several items her group, an environmentalist nonprofit that opposes fracking, successfully pushed to save last year in the N.C. General Assembly.
The registry was intended to discourage predatory drilling operations in North Carolina. “We have a lot of concerns about someone who has not even taken the time to register in North Carolina making these kinds of approaches,” Taylor said.
Taylor added that, while it’s surprising for a company to be making lease offers in Durham, it’s important for Triangle residents to be prepared should gas companies contact them. “If anything, it says they’re pretty bold if they think it’s ok to reach out to land conservation groups,” Taylor said. “Do they not think there’s opposition down here?”
The state’s Mining and Energy Commission, which has created a draft of fracking regulations, will hold public hearings on the rules next month. The first scheduled hearing is set for Aug. 20 at N.C. State University’s McKimmon Center in Raleigh.
Because Duke University wants this story to keep going.
Rolling Stone is reporting that famed Duke porn star Belle Knox will be hosting her own online reality show, "The Sex Factor," beginning this fall.
The premise? Eight male and eight female actors compete for $1 million and the chance to shoot a scene with the Duke student, who made headlines this year when she revealed to various media outlets that she appears in porn films in order to pay her school bills.
Rolling Stone reports the show will be filmed in San Francisco.
Roughly 150 or so Durham residents craned forward to look Thursday night as Liberty Warehouse's prospective developers unveiled their site plan at the Durham County Public Library. The verdict? Not much surprise and a somewhat mixed reaction.
During a community meeting convened by Preservation Durham, builders from Chapel Hill-based East West Partners explained their intentions to convert the historic tobacco warehouse near Durham's Central Park into a 320,000 square-foot, mixed-use complex. Highlights include 246 apartments, 24,000 square feet of retail space and a 391-space parking deck at the project's center. At its tallest, the building will stand five stories.
Roger Perry, president of East West Partners, said developers will look to design a complex that retains some of the warehouse's historic charm, co-opting old signs and building materials to keep a resonant, if not identical, look. Builders will also look to retain the warehouse's historic brick wall facing Central Park, which they say will be cut slightly to help it "mesh" with the new development.
"That's what's important," Perry said. "Preserving the memory of the building. It's not necessarily preserving the building."
The developers say they submitted their site plan to Durham city leaders this month, with demolition slated to begin in May. Opening date for the development is sometime in early 2016.
East West Partners is behind a number of upscale Triangle developments, including Woodcroft in Durham and East 54 in Chapel Hill.
It's a sign of movement in a long-stalled warehouse, which is beloved by longtime Durham residents for its historic place as the last standing tobacco auction warehouse in the city. Meanwhile, the crumbling building has been a thorny issue for members of the Durham City Council, which stripped the warehouse of its historic landmark status last May to clear the way for demolition.
In recent years, the structure had been used as a space for local artists and nonprofits, but its been largely vacant since the roof collapsed in 2011. Liberty's longtime owners, Durham-based Greenfire Development, were dogged by negligence claims when it came to the warehouse.
Many of the locals in attendance Thursday indicated they were somewhat pleased with what they saw. Others grumbled audibly.
Meanwhile, Preservation Durham Executive Director Wendy Hillis told residents that, with efforts to save the historic warehouse all but lost, it's best now to focus on working with the builders to create a pleasing project. "That ship has sailed," Hillis said.
Expect a full rundown on the Liberty project and its implications in next week's Indy.
"Don't watch Gasland 2 alone," says Josh Fox. "It's too scary, kind of like Psycho. You'll never take a shower the same way again."
Fox isn't kidding. His much-anticipated, anti-fracking sequel screened at Durham's Carolina Theatre Monday night, with many of its otherwise sterile interviews darkened with a chilling horror movie score. There's even a scene in which Fox's beloved Delaware River Basin near his Pennsylvania home is besieged by CGI gas wells as if they're asteroids from on high. Where's Morgan Freeman when you need him?
Subtlety may not be Fox's trademark, but if he's going for shock and awe, he nails it. His sequel, which originally premiered on HBO this summer, continues to document the ongoing political turmoil over natural gas drilling. Both Republicans and Democrats, particularly President Obama's administration, take their lumps from Fox in the film.
Supporters tout fracking as a relatively clean drilling method that can reduce the country's dependence on foreign oil. Opponents see only disaster, noting the widespread reports of water and air contamination, as well as increased seismic activity. North Carolina Republicans side with the former, with hopes of permitting drilling as soon as 2015.
Fox's 2010 film was nominated for an Academy Award for "best documentary feature," even though industry types besmirched it as little more than environmentalist propaganda. He received a hero's welcome at last night's screening, which was organized by anti-fracking protestors from Clean Water for N.C. and Wilmington's Working Films Reel Power.
Clean Water Director Hope Taylor estimated 500 people attended the film, which included a Q&A session with the Pennsylvania-bred filmmaker immediately following the screening.
Of the interesting moments, Fox said he could not sleep for weeks after he was originally approached to consider natural gas drilling on his Pennsylvania land. "It was one of the most lonely and terrifying and isolating things," he said.
Meanwhile, Fox urged the protesters in attendance to continue their opposition, noting grassroots groups to stop the drilling have launched all over the country and the world. "You're a part of a movement," he said.
This post was updated at 11:09 a.m. with post-vote remarks by Eugene Brown.
The Durham City Council would not be pawns.
Council voted 4-3 Monday night against the annexation of 751 South, the controversial project planned for the Jordan Lake watershed. By doing so, the council also refused to extend water and sewer service to the 253-acre development that under recent negotiations, bundled the already-built Colvard Farms in southern Durham County into the deal.
Voting no were Councilors Eugene Brown, Diane Catotti, Don Moffitt and Steve Schewel.
Mayor Bill Bell, Mayor Pro Tempore Cora Cole-McFadden and Councilman Howard Clement voted yes.
The vote was the latest bold move in a four-year game of chess between the City of Durham, concerned citizens and Southern Durham Development over 751, which calls for 1,300 homes and 600,000-square feet of commercial space in an environmentally sensitive area near the Durham-Chatham county line.
SDD has used not only legitimate negotiations but also legal sleights of hand, political pressure and large campaign contributions—it formed Durham’s first Super PAC—to compel city and county leaders to approve the project.
“I cannot ignore the maneuvers that have gotten us to this point,” Catotti said shortly before voting no. “It’s the poster child for poor planning: backdoor schemes and intimidation, the disregard of sound science and the subversion of citizens’ rights to protest petition.”
Neither the developer Alex Mitchell nor SDD attorney Cal Cunningham attended Monday's Council meeting, which is highly unusual considering the importance of the vote.
In 2012, Durham County Commissioners voted to extend sewer service to the development, a controversial move with long-ranging ramifications.
“We were dealt the cards we have,” Mayor Bell said.
Mayor Bell negotiated additional concessions from SDD, including a widening of part of N.C. 751. However, the project, larger than the original, still included 81 acres of impervious surface—pavement—that could result in pollution running into the Jordan Lake watershed.
"Let's don't sell Durham's soul for a road widening," Schewel said.
By a 4-3 vote, Durham City Council voted against annexing 751 South and extending water and sewer service to the controversial proposed development.
Yes: Mayor Bill Bell, Mayor Pro Tempore Cora Cole-McFadden and Councilman Howard Clement
No: Councilmen Don Moffitt, Steve Schewel and Eugene Brown and Councilwoman Diane Catotti.
Check back tomorrow for more details and in the June 5 edition of INDY Week.