Kane: gas royalties fraud investigation ‘wrapping up’ soon

• Marie Cusick
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  Marie Cusick was the Harrisburg reporter for StateImpact Pennsylvania.

State Attorney General Kathleen Kane says her investigation into allegations of underpaid gas royalties will be concluded in the near future.

“I can’t comment on where it is right now,” she told a Senate Appropriations committee Tuesday. “But I can tell you we’re almost wrapping it up.”

More than a year has passed since former Governor Tom Corbett and state Sen. Gene Yaw (R- Bradford) asked Kane to investigate Oklahoma City-based Chesapeake Energy, after leaseholders complained the company was cheating them out of gas royalty money.

“Both the anti-trust and bureau of consumer protection is working very hard,” said Kane. “They’ve conducted hundreds of interviews with landowners. It took a little bit longer than we may have hoped.”

State law requires gas companies pay a minimum 12.5 percent royalty to landowners who lease their property for drilling.

Drillers are allowed withhold some royalty money and charge landowners the costs of processing and transporting natural gas. These expenses are known as gathering fees or post-production costs. However, Chesapeake has been accused of skimming more than other companies, self-dealing, misreporting gas production data, and violating lease terms that explicitly prohibit the fees.

“I was very pleased to hear that the Attorney General’s investigation will be wrapping up soon,” Yaw said in a statement.  “My office has corresponded directly with General Kane since last year and sent over 50 leases on behalf of my constituents to her office for her consideration. This is a huge issue for people I represent.”

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