House lawmakers revive controversial gas royalties bill

June 23, 2015 | 4:42 PM

Marie Cusick/ StateImpact Pennsylvania

State Rep. Garth Everett blames leaders of his own party for blocking his attempt to ensure landowners are paid properly from gas drilling, "It's being held up in strategic places, by strategic people-- the leadership of the Republican caucus," he says.

State Rep. Garth Everett (R-Lycoming) is giving it another try.

Last year, his bill aimed at ensuring Pennsylvania landowners are fairly paid royalties from fracking died an unceremonious death in Harrisburg. Although the measure was approved by a House committee, it never came to the floor for a vote, where Everett believes it has the votes to succeed.

“It’s being held up in strategic places by strategic people– the leadership in the Republican caucus,” he says. “We just need to convince them. There are so many of us in favor of the bill, they’re obligated to allow us to take it to the floor.”

Everett reintroduced the measure as H.B. 1391 at an event in the Capitol rotunda Tuesday afternoon. The bill, which has 37 co-sponsors from both parties, is an attempt to address complaints that some gas companies are cheating leaseholders out of royalty money. Drillers have been accused of charging people exorbitant fees (known as post-production costs). These include the expenses of processing and transporting gas through pipelines and compressor stations. The royalty problems prompted numerous lawsuits and have also affected leases of public land at the state and local levels.

“The industry as a whole has behaved pretty well,” says Rep. John Maher (R- Allegheny). “But there are a handful of companies that persist in giving the industry a black eye and being unfair to our neighbors.”

Although a 1979 state law guarantees landowners a minimum one-eighth (12.5 percent) royalty from oil and gas wells, many people, like Eric Place of Susquehanna County, say with all the high fees, they’re getting far less.

“What do I feel was improperly deducted?” he says. “It would certainly be more than six figures.”

The gas industry lobbied against the previous version of Everett’s royalties bill. In a statement the trade group the Marcellus Shale Coalition says it’s still reviewing the new draft:

“It’s important to recognize that post production-related issues — which have been extremely localized and not widespread — are being actively addressed in the courts where contract matters should be addressed.”

House Speaker Mike Turzai (R- Allegheny) says his chamber has not dealt with the royalties issue lately because it’s currently busy negotiating a state budget, which is due June 30th.

Everett says he wanted to get the new version of the bill filed before legislative leaders leave for the summer and plans to do a “full court press” in the fall. The measure is also supported by the Pennsylvania Farm Bureau and the state chapter of the National Association of Royalty Owners.