Pennsylvania Governor Tom Corbett signed a bill into law this week that will allow gas companies to pool leases to some residents’ drilling rights, undercutting their ability to negotiate on terms.
Pooling means drilling companies can combined leased land into larger drilling units.
The new law will affect residents who are sitting on existing or legacy leases that currently lack contemporary language about pooling.
According to the Pittsburgh Tribune Review’s Timothy Puko, that means it may only affect a small number of people, probably concentrated in Western Pennsylvania, the historic home of mineral drilling in the state.
Still, it means those individuals will now be handcuffed if they wanted to bargain for more lucrative returns if a driller spots potential resources, according to Jackie Root, Pennsylvania chapter president of the National Association of Royalty Owners.
Root told us:
Those lessors should have the right to negotiate with the company to include language that would allow to unitize. The new legislation seeps that all away from people who were lucky enough to have a lease that didn’t include pooling.
The other, perhaps more worrisome part of this story is the manner in which the bill was passed.
The new pooling measure came in the form of two sentences slipped in to a five-page bill drafted mainly to get better information to royalty recipients, Puko says, and there was less than a week of debate on the bill
And lawmakers can’t really say who came up with the idea to include the text. Here’s what state representative Garth Everett told Puko:
I’m serious. I don’t know who exactly proposed (that amendment). We had a lot of proposals going into the bill. Legislation is brought to us by staff. I send them ideas, and they put them into a form of legislation and come back. Where the idea came from, who proposed this … section, I don’t know who that individual was.
That doesn’t seem like normal. It also seems problematic for a region that’s trying to balance resident concerns with the aggressive posture of drillers.
“We’re not as sophisticated as them,” Root said. “We’re landowners. I guess we need to get more sophisticated.”
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