Legislation In The Works To Address Gas Royalty Concerns

  • Marie Cusick

A group of lawmakers plan to introduce legislation soon aimed at dealing with allegations some gas companies are underpaying royalties.
Earlier this summer Rep. Garth Everett (R-Lycoming) and three other lawmakers sent out a co-sponsorship memo to House members saying they plan to clarify the state’s 1979 Guaranteed Minimum Royalty Act, in an effort to ensure leaseholders are receiving the legal minimum — 12.5 percent.
From the Williamsport Sun-Gazette:

[Everett’s] legislation would give lease-owners full rights to the entire 12.5 royalty, as long as it doesn’t contradict specific language in their contracts.
These potential bills would not apply retroactively, but to contracts from that point on.
“The bottom line is, (the landowners) were told they would get 12.5 percent, and that’s what they should get. … I maintain legislatively we can say the minimum is the minimum is the minimum. I think we’re on good footing constitutionally,” Everett said.

The royalty concerns sparked a Senate hearing on the issue in late June. Many of the complaints come from Bradford County and are directed at the state’s biggest driller — Chesapeake Energy.
Bradford County’s Commissioners also met with Governor Corbett to discuss the issue earlier this month.
In an email to StateImpact Pennsylvania, Corbett’s Energy Executive, Patrick Henderson, said it’s a complex legal issue and there is no silver bullet, but the Governor is committed to protecting the interests of Pennsylvania’s landowners.
“The Governor’s primary interest is in ensuring that landowners are treated fairly and that their lease agreements are honored…” he wrote.
 

Up Next

How Could OSHA's New Silica Rules Impact The Natural Gas Industry?