Governor Corbett signed a controversial bill into law today, giving drillers the power to combine or “pool” leases for horizontal oil and gas drilling.
The legislation was originally promoted as an effort to bring more transparency to the deductions companies take out of royalty payments. Complaints over those deductions lead to a recent Senate hearing on the issue.
An organization representing Pennsylvania’s mineral owners was angered over language added later on, which allows pooling of some leases. They complained the measure sailed through the state legislature during budget negotiations and didn’t receive enough scrutiny.
“We are not pleased.” says Jackie Root, president of the Pennsylvania Chapter of the National Association of Royalty Owners (NARO-PA). “It is so vaguely written and so broad.”
The organization has argued the measure could adversely impact some people who signed contracts years ago and didn’t anticipate modern shale gas drilling. They say it leaves landowners at a disadvantage– hindering their ability to renegotiate old leases.
Governor Corbett has said publicly he would not sign any legislation that allows “forced pooling” –which would give drillers the right to take gas from a property owner who has not signed a lease.
This bill only applies to existing leases. It allows companies to combine land parcels for horizontal drilling, unless it’s explicitly prohibited in the lease.
Sen. Gene Yaw (R- Bradford) introduced the bill. He doesn’t feel the measure is unfair to landowners.
“Remember, this land is already leased,” he told StateImpact Pennsylvania recently, “It just seems to be logical that if you can go on the land and drill horizontal wells out, [then] you could drill horizontal wells under it.”
Rep. Garth Everett (R- Lycoming) who sponsored the controversial amendment was quoted in the Pittsburgh Tribune-Review last week saying he wasn’t sure where the idea came from.
Corbett issued a statement today acknowledging the concerns over the bill. However, he contends the language will enhance the efficient extraction of oil and gas, while protecting the rights of landowners.
“I do not believe anything in Senate Bill 259 expands the ability of an oil or gas operator to define the size of a drilling unit, or to expand the ability of an operator to hold by production any parcels of leased land.”
You can read the governor’s full statement below: