Sunday, March 18, 2012

Mortgage hurdles possible for some with fracking leases

Potential risks associated with hydraulic fracturing (fracking), the drilling technique that has revolutionized natural gas drilling in Pennsylvania and elsewhere in the country, has the federal Department of Agriculture considering requiring environmental reviews before issuing mortgages to people who have leased their land for oil and  gas drilling.

The New York Times reports today that more than 140,000 families, many of them with low incomes and living in rural areas, received roughly $18 billion in loans or loan guarantees last year from the department under the Rural Housing Service program. Much of the money went to residents in states that have seen the biggest growth in drilling in recent years, including Pennsylvania, Texas and Louisiana.
The program is popular because it generally requires no down payment. As its financing has grown and credit markets have tightened in recent years, the program’s loans have roughly quadrupled since 2004.
The decision, agriculture officials say, would also affect the department’s Rural Business and Cooperative program, which issued more than $1 billion in loans and grants last year to about 15,000 rural businesses.
The story says that the environmental reviews being proposed by the Agriculture Department are viewed by some as a way to give the public a fuller accounting of the potential environmental risks of drilling and also to help protect the agency from litigation from environmental groups — a cost that would ultimately be borne by taxpayers.

You can read the entire story here.

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