Some Central Calif. Landowners May Not Have Say On 'Fracking'

MONTEREY COUNTY (CBS 5) -- California landowners could be sitting on oil rich land deep beneath the land their home sits on. It's triggered a new oil rush with prospectors from all over the world descending on California, in hopes of tapping into 14 billion barrels of unexplored reserves.

The oil lies deep under a stretch of land called the Monterey Shale, which starts just south of the Bay Area and runs almost all the way down to Los Angeles.

Advances in a technique called hydraulic fracturing, or "fracking," is making drilling in the shale more cost effective, and mineral rights are being put up for lease.

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While landowners may own the surface land, what lies beneath could be sold off if oil is discovered.

"We are required to put those up for lease periodically," said the Bureau of Land Management's Rick Cooper. He said his agency has a mandate to auction off mineral rights whenever there is interest and right now there's a lot. "There's an interest in approximately 17,000 acres," said Cooper.

The auction is coming up in December and 82 percent of those 17,000 acres of mineral rights are under private land. "We ask the lessee then that they would contact the private landowner and begin to have a hopefully cooperative relationship," said Cooper.

Private landowners such as Jay Jacobsen have mixed feelings about this, but he may not have a choice.

He owns 1,400 acres of land in Monterey County and is worried about a recent letter from the federal Bureau of Land Management.

The letter reads, "Dear Surface Owner, it is our understanding that you are the surface owner of all or a portion of the land." BLM told him his private land is about to be leased off to an oil company.

The letter also said, "This could result in surface disturbing activities on your land."

Like most landowners, Jacobsen never expected an oil derrick could go up right next to his house. "If there is oil in say the next section over, and they need to drill for it, so be it," said Jacobsen. He doesn't want it to be done or attempted around his house.

Jacobsen said he already talked to the Bureau of Land Management and got some reassurances. "As a homeowner you do have rights, they can't just come in and just destroy the place," he said.

Environmentalists said that is exactly what could happen because drilling for oil in the area around Jacobsen's ranch would require hydraulic fracturing. It works by injecting water laced with chemicals thousands of feet below the surface, and has caused groundwater contamination in parts of the country.

"Water contamination with methane, with benzene have been documented around the country," said the Kassie Siegal of the Center for Biological Diversity.

Cooper said in California, "It's nothing new. It's been going on for 50 years. At this point I am not aware of any issues."

Siegal filed a 60-day intent to sue to stop the upcoming auction. "They have not disclosed the dangers to the environment and to the public of this activity before putting these lands up for sale," she said. "These beautiful areas that people use for hiking, for camping, for getting out in nature are at great risk of being transformed overnight from the Shale oil rush.

Jacobsen said he is not too worried about the fracking. "They know they would get sued if they screw up someone's well water or surface water," he said.

But just in case, Jacobsen has a backup plan: when the auction comes up, he said he might bid on his own mineral rights and buy them back.

If there's contamination and someone doesn't own their mineral rights, responsibility depends on the contract written up with the oil company. This is a way for landowners to make sure they are not stuck with the cleanup.

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