Pennsylvania

Energy. Environment. Economy.

Corbett signs bills addressing gas transparency issues

Governor Tom Corbett has signed two bills aimed at providing more transparency for people who have leased their property to gas companies.

Marie Cusick/ StateImpact Pennsylvania

Governor Tom Corbett has signed two bills aimed at providing more transparency for people who have leased their property to gas companies.

Governor Corbett has signed two bills providing more transparency for people who have leased their property for natural gas drilling.

A landowner advocacy group calls the measures “helpful” but says more action is needed.

One measure would require drillers to submit monthly gas production reports; they are currently required to report every six months. The second bill requires companies to file a document with the county recorder of deeds surrendering a lease once it has expired.

Monthly production reports will bring Pennsylvania in line with other major gas-producing states. Some landowners have complained they are not able to compare the monthly gas production figures on their royalty statements with the bi-annual data collected by the state.

The lease surrender bill also makes it easier for property owners to get a clear title after the contract has expired.

The Marcellus Shale Coalition, a gas industry trade group, supports both new laws as adding more transparency.

“Our member companies remain committed to adhering to all reporting requirements and regulations,” wrote MSC spokesman Patrick Creighton in an email.

A group representing the state’s royalty owners argues more regulation is needed.

Some people who have leased their land accuse gas companies of exploiting a loophole in state law and paying them below the required 12.5 percent royalty.

Jackie Root heads the Pennsylvania chapter of the National Association of Royalty Owners (NARO-PA). She’s lobbied for the passage of House Bill 1684, which would limit the practice of companies deducting so-called “post-production costs” from royalty payments. The costs allow companies and landowners to share the expenses of processing and transporting gas from the well to the market.

Some landowners say the costs are so exorbitant, they’re left with little to no money at the end.

“We are on the right side of this with 1684,” says Root. “This is about fairness to the royalty owners that have signed contracts in good faith with companies. They want what was promised.”

There are plans to re-introduce the measure in January.

“Our eye is on that,” she says. “It’s game over for this year.”

The gas industry has called H.B. 1684 “a vast legislative overreach” and lobbied heavily against it. They argue that sharing post-production costs is a legitimate business practice and contend the bill is unconstitutional because it would change the terms of existing contracts.

 

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