PITTSBURGH (KDKA) — All of his life, Mike Krajacic has coaxed a hard scrabble existence out of this 140-acre dairy farm in Avella, Washington County.
But with natural gas drilling going on in upper field, he says hard times are over.
“I have to feed it,” Krajacic said. “I don’t have to milk it, and it’s gonna feed me. We’ve worked for peanuts for 84 years and now we have this chance to have a little bit of a windfall.”
When he signed his lease with Range Resources, Krajacic got a big check. But next month is when the real money starts rolling. That’s when the gas starts flowing and he’ll collect the first of 30 years of royalty checks.
“I’ll make more money out of that field in one year than I made in 82 years of farming,” Krajacic said.
He’s not alone. Dozens of farmers throughout Washington, Fayette and Greene counties are now collecting royalties, but being private people, the ones KDKA’s Andy Sheehan spoke with didn’t want to discuss dollar amounts.
Gas prices fluctuate, but a drilling pad with multiple wells on a 200-acre farm will generate an estimated $4 million in royalties over the course of 30 years — about half of that money comes in the first few years and tapers off. Still, there’s a nice steady flow of royalty checks throughout.
“What we are doing is we are preserving open space in rural communities,” Rang Resources Spokesman Matt Pitzarella said.
In the past five years, Range itself has paid out nearly $1 billion of royalty to landowners in our region — many of them farmers.
Despite the concerns about drilling raised by environmentalists and other shale gas opponents, Pitzarella says farmers are putting that money back into farming.
“You’re infusing very responsible people with large sums of money and they’re going preserve that land for many years to come,” Pitzarella said. “So I view this as a big win of the environment.”
“It has saved many a family farm,” Krajacic said.
For Krajacic, it’s already meant the ability to buy this new tractor.
“Where would I get $60,000, $70,000 milking cows,” he said.
Environmentalists disagree but rather than a threat, farmers like Mike Krajacic say that shale gas drilling and these royalties will preserve the family farm for generations to come.