Pennsylvania

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‘People are furious’: Wolf aide criticized after downplaying royalty problems

Advocates for Pennsylvania mineral owners are criticizing a comment by one of Gov. Wolf's senior aides, who says complaints over royalty payments have subsided.

Joe Ulrich/ WITF

Advocates for Pennsylvania mineral owners are criticizing a comment by one of Gov. Wolf's senior aides, who says complaints over royalty payments have subsided.

Advocates for Pennsylvania landowners are challenging a statement made recently by one of Governor Tom Wolf’s top aides, after he said complaints over unfair gas royalty payments have subsided.

In some cases, Pennsylvania mineral owners have received royalty checks showing negative balances, saying they owe money to drillers. At an energy conference in Hershey last week, Wolf’s deputy policy director Sam Robinson said the administration hasn’t heard as much about it lately.

“I think there was a crescendo of that kind of claim in 2015 to 2016,” he told the audience. “There’s been real movement in a positive direction on that issue.”

‘People are furious’

But advocates for mineral owners dispute those claims. Over the years, the controversy around the payments has resulted in multiple class action lawsuits from landowners who say they’re being cheated by certain gas companies. Bradford County Commissioner Doug McLinko is in one of the most heavily-drilled parts of the state and has been hearing from constituents every day for more than four years.

“It is a huge topic in Northeast Pennsylvania,” says McLinko. “It has not quieted down. People are furious.”

Jackie Root agrees. She heads the National Association of Royalty Owners Pennsylvania Chapter.

“People out there in the countryside know how big this industry is that they’re battling,” Root says. “It’s obvious the money that the industry throws around in Harrisburg has an effect.”

At the energy conference Robinson pointed to an ongoing lawsuit by the state Attorney General’s Office, but he said efforts to overhaul Pennsylvania’s oil and gas royalty law have stalled.

“There have been a variety of different proposals in the General Assembly that the administration has supported to try and bring some [royalty] reform. None of them have gotten all that far, candidly,” Robinson said. “But it’s an important issue–one the governor’s attendant to.”

Thrown ‘under the bus’

But Roots says she feels like mineral owners recently got thrown “under the bus” by language added to a state budget bill, which Governor Wolf signed.

The bill, known as the fiscal code, frequently contains questionable earmarks and controversial provisions lawmakers don’t pass through a more transparent, traditional process. The language angering royalty owners limits a landowner’s ability to negotiate new lease terms for older, non-producing oil and gas wells.

Previously, if a modern Marcellus Shale drilling company, for example, buys a lease dating back to the early 20th century, a landowner could successfully argue his lease has expired, if the well has not been producing for decades. The company may then be forced to renegotiate the terms. It’s an issue that’s particularly relevant in western Pennsylvania with its long legacy of drilling. Root blames Pittsburgh-based driller EQT for inserting the new provision, which she says gives the industry the upper hand.

“The fiscal code is so damaging on so many levels,” she says. “It should have been an easy deal to get [this language] out. But I failed to get a response from my own state senator, and I failed to get a response from the governor’s office.”

EQT spokeswoman Linda Robertson confirmed the company worked with lawmakers on the language. She notes it does not change lease terms, but rather acts as a guide for the courts–helping to avoid disputes and expedite production.

“While it’s unlikely to affect the majority of lessors in Pennsylvania, it addresses a specific issue created by outdated case law, factoring in the practical challenges presented by the modern development of Pennsylvania’s shale plays,” she writes in an email.

 

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