Archive for the ‘forced pooling’ Category

Pennsylvania’s Top Papers Ignore Controversial ‘Forced Pooling’ Fracking Law

April 14, 2014

This post was originally published by Laura Beans at EcoWatch.

frackFI

A gas company is attempting to use a half-century old Pennsylvania law to frack underneath the land of property owners …

THE FOSSIL FUEL CAROUSEL

September 30, 2013

This post was originally published by Dory Hippauf at No Fracking Way | No Fracking Way.

brass ringSince the entrance of the natural gas industry in Pennsylvania, and all the hoopla about the good things it will bring, one of the talking points has been about how dirty coal is and how natural gas has less CO2 emissions than coal.  Periodically we see a battle royal between the Coal Industry and the Natural Gas Industry.

The often repeated question asked by the natural gas industry is “Are we going to rely on environmentally devastating coal-powered plants?”, the talking point continues to praise the cleanliness of natural gas.

coal is filthyThe industry’s front groups, public relations groups and astro-turf groups have all cherry-picked through various reports to show natural gas is better for the environment than coal.  American Clean Skies, a front group co-founded by former Chesapeake Energy CEO Aubrey McClendon, bankrolled the American Lung Association to squash coal burning power plants.   In April 2012, McClendon declared victory over coal.

We get the point.  Coal is bad, gas is good.

One of the loudest drum beaters for natural gas in the Pennsylvania Legislature has been Senator Gene Yaw (R-23).   His district covers Bradford, Lycoming, Sullivan, Susquehanna (parts) and Union (parts) Counties, some of the heaviest gas drilling sacrifice zones in northeast Pennsylvania.

Yaw is also chair of the Senate Environmental Resources & Energy Committee.

From backroom invite only meetings to expand drilling on public land, forced pooling (also known as compulsory integration) and requiring town to pay for expansion of pipelines and more, Yaw has championed natural gas in Pennsylvania.  Often at Yaw’s side and tooting the natural gas trumpet is Senator Tim Solobay (D-Washington).

HOW DEAD IS COAL?

Pennsylvania has been touted as the “NEW TEXAS”, the “SAUDIA ARABIA OF NATURAL GAS”, even Kathleen McGinty, a 2014 Democratic Candidate for Pennsylvania Governor, touts natural gas as transforming the state into the a “BLUE COLLAR SILICON VALLEY”.

Underlying all of this is the message of King Coal is dead, long live King Gas, right?

Not so fast.  If Yaw, Solobay and a few others are successful, coal will rise again.  You remember coal?  That dirty stuff which is suppose to be replaced by natural gas?

On September 25, 2013, Yaw announced the formation of the Senate Coal Caucus with himself and his trumpet tooting side-kick, Solobay, as co-chairs.

No, it’s not a typo.  Yaw and Solobay are co-chairs of  the Senate Coal Caucus and joined by Senate President Pro Tempore Joseph Scarnati (R-25), Senators Jake Corman (R-34), John Gordner (R-27), Richard Kasunic (D-32), Scott Hutchinson (R-21), Bob Robbins (R-50), Elder Vogel (R-47), Kim Ward (R-39), Don White (R-41), John Wozniak (D-35) and John Yudichak (D-14).

In his press release, Yaw states: (emphasis added)

“In recent years, Pennsylvania has been fortunate to have an abundance of natural gas located in the Marcellus Shale formation contributing significantly to our local and state economies,” Yaw said.  “Since the industrial revolution, coal has also fueled our economy having created hundreds of thousands of jobs.   Collaboratively, we can change the dynamic of coal as an energy resource.”

The newly formed Coal Caucus will serve as a forum through which legislators and industry representatives can collaborate on the needs of the coal industry, focus on the utilization and consumption of coal to significantly reduce consumer demands n foreign fuels and highlight new coal technologies within the industry.

“While we have focused our attention on other sources of energy such as gas, wind and solar, we can’t forget that we are sitting on approximately seventy billion tons of coal here in Pennsylvania,” Yaw added.  This Coal Caucus will serve as a champion for increased investment in coal and coal-driven technology.”

Please note – there is nothing in his statement about natural gas being cleaner than coal.

The emphasis is on the much debunked talking points of job creation.

Since December 2010, Pennsylvania is ranked 46th in the nation in job growth. The jobs that are being created are largely low paying, as illustrated by trends in wage growth, which show Pennsylvania at pre-millenium levels.

Yaw also cribs from the natural gas talking point about dependency on foreign fuels.  Coal is now going to reduce that dependency.

Confused?  We’re you under the impression that natural gas was going to reduce that dependency?  Natural gas has been given a green light for full speed ahead in the construction of liquid natural gas EXPORT terminals.

Yes, all that American Gas will soon be exported to European and Asian markets where they demand higher prices.

What about the cheap, abundant natural gas for America?  Right now, due to the gas glut created by industry itself, natural gas is cheaper and abundant.   Once exporting begins in earnest, the cheap abundant natural gas for Americans will become expensive and not so abundant.

SHALE ENERGY

One of the concerns regarding the pending natural gas exportation rush is it will increase drilling for natural gas.   A valid concern, but the talking points are changing again.

Pay attention to this quote (emphasis added):

When President Barack Obama made an offhand remark two months ago regarding the economic export opportunities provided by America’s unprecedented natural gas production (as a by-product of the current revolutionary oil shale development), it signaled a green light for full speed ahead in the construction of liquid natural gas terminals.

Although in parenthesis, note  “…current revolutionary OIL shale development….”.  Oil – not natural gas.

The recent SHALE Insight 2013 gathering of fossil fuel interest in Philadelphia has dropped the word gas.  The emphasis is now on shale OIL.  

This is a complete flip-flop from the still repeated talking point about natural gas replacing coal, and breaking the oil habit.

Meanwhile another talking point about natural gas, this one being “natural gas as a bridge fuel” is equally false.  A December 2012 US Department of Energy Report calls natural gas a “foundation fuel”, and this was touted by the American Gas Association (AGA).

We’re being taken for a ride on the Fossil Fuel Carousel where the brass ring means more profits for them and expansion of sacrifice zones for us.

© 2013 by Dory Hippauf

P.S. And forget about more regulations or stronger regulations to protect us, the only thing regulations do is set limits on how much the industries can poison us, and that’s assuming the regulations are even enforced.

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Fracking N. Carolina

September 2, 2013

This post was originally published by Chip Northrup at No Fracking Way | No Fracking Way.

Whether the land owners want it or not –  via privatized eminent domain, aka “compulsory integration.” The frackers are teeing up vast amounts of North Carolina to be fracked- by using compulsory integration / compulsory pooling – without the land owner’s consent, and even without the approval of the state’s minerals management agency. Follow the political payoffs on this one.

Compulsory pooling does not apply – either geologically or legally – to the extension of a horizontal well – that has to be drilled directly under an adjacent property in order to extract the oil or gas. 

As we have explained in some detail here, apply compulsory integration to shale wells is simply privatized eminent domain – the state giving the frackers the legal ability to seize mineral rights at the lowest possible price under the worst possible terms – without the owner’s consent:

http://www.scribd.com/doc/74790533/Compulsory-Integration-in-New-York

http://blog.shaleshockmedia.org/2013/03/14/nys-compulsory-integration-privatized-eminent-domain/

http://blog.shaleshockmedia.org/2013/03/05/compulsory-integration-at-last-something-we-can-all-agree-on/

And as attorney James Bacon details here, applying compulsory integration to extend a horizontal lateral under a neighboring property would be illegal under New York law:

http://www.scribd.com/doc/120333645/James-Bacon-Croton-Watershed-Coalition-Testimony-on-Fracking-Regulations

And I demonstrate in a video, which shows how pooling is legitimately applied to vertical wells :

http://my.brainshark.com/Compulsory-Pooling-of-Horizontal-Wells-134334393

http://www.newsobserver.com/2013/08/28/3145187/officials-ok-rule-to-force-fracking.html

Forced Fracking on NC landowners

Published: August 28, 2013

By John Murawski — jmurawski@newsobserver.com

RALEIGH — North Carolina landowners would be forced to sell the natural gas under their homes and farms – whether they want to or not – under a fracking recommendation approved Wednesday that’s expected to be enacted by the state legislature this fall.

The proposal by a state study group endorses a rarely used 1945 law that’s never been tried here on the kind of scale that would be required for shale gas exploration, or fracking. Thousands of property owners could potentially be affected in the state’s gas-rich midsection in Lee, Moore and Chatham counties.

The recommendation, dealing with one of the most emotional fracking issues, bypasses the N.C. Mining and Energy Commission, which holds regular public hearings on protecting the public and safeguarding the environment, and goes to the legislature.

“We are talking about a for-profit industry taking away personal freedoms with the blessing of the government,” Therese Vick, a community activist with the Blue Ridge Environmental Defense League, told the Compulsory Pooling Study Group. “Personal freedoms are seldom on the radar when the gas companies come to town.”

The panel does include four members of the Mining and Energy Commission, some of whom were deeply conflicted.

“I find it abhorrent personally that a simple majority of landowners could dictate what I can do with my land,” said James Womack, chairman of the Mining and Energy Commission and a member of the Lee County Board of Commissioners.

But Womack voted for the practice, called forced or compulsory pooling, saying there are compelling reasons to justify it. Forced pooling protects local residents from inadvertently having their gas sucked out without compensation and keeps neighbors from profiting from resources under someone else’s land.

(That argument only applies to vertical wells that might drain from a neighboring property – it does not apply to the extension of a horizontal lateral under an adjacent property- JLN)

Legislature has final say

However, the state legislature is not bound by the recommendations and will be able to set its own standards, using other states as guides or relying on its own collective judgment.

Pennsylvania and West Virginia, do not allow forced pooling in the Marcellus Shale region, one of the most intensively fracked regions in the world.

Forcing property owners into a drilling pool, typically 1 square mile from which shale gas would be extracted, raises another problem: How much should they be paid for their gas? Unlike their neighbors who voluntarily signed leases with royalty terms, people in compulsory pools never agreed to any terms.

(As a practical matter, the frackers will sign the cheapest leases first, then force adjacent owners in under those terms. Meaning the lowest common denominator governs the rest. And, of course, the fracker can be a scam operator. JLN)

The study group recommended that such property owners be given the option of accepting a standard royalty of 12.5 percent on the value of their prorated share of the gas for as long as the well produces gas.

Another option is to pay them a fraction of the value of the gas until the energy company recovers that property owner’s presumed share of the cost of drilling the well. After the well is paid for, the landowner would be paid the full value of their share.

It could take a forcibly pooled property owner months or even years to pay off the bill: Drilling a well roughly costs between $8,000 and $12,000 per acre in a 1-square mile drilling unit.

forced_pooling_cartoon

 

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NATURAL GAS, THE SHARED SACRIFICE

August 24, 2013

This post was originally published by Dory Hippauf at No Fracking Way | No Fracking Way.

sacrficeThe major natural gas industrialization areas in Pennsylvania are currently located in the northeastern and southwestern counties.  A number of residents in those areas refer to it as the sacrifice zone.

Senator Gene Yaw doesn’t think this is right.  Yaw doesn’t think just those counties should be sacrificed, it’s not fair.  The sacrifice should be shared, and Yaw is going to make sure it becomes a shared sacrifice for all of Pennsylvania.

The one-size-fits-all zoning provision in Act 13, which is still before the Pennsylvania Supreme Court doesn’t go far enough.   Forcing those with pre-Marcellus drilling leases to now frack is not enough.   Compulsory integration (also known as forced pooling) won’t solve the problem of too much gas and not enough profit.

The natural gas industry is suffering from bloated over-production.   All that gas and no where to sell it.   Their profits are down, and some on Wall Street are showing increased reluctance to invest for increasing the bloat.

Well, Senator Gene Yaw is going to fix all of that by calling on ALL Pennsylvanians to share the sacrifice.  He is introducing Senate Bill No. 738.

sb738

If passed, and signed into law by Governor Tom Corbett, all of Pennsylvania will become one big sacrifice zone.

SUBSIDIES and TAX BREAKS NOT ENOUGH

The natural gas industry can’t get by on subsidies and tax breaks alone.  Diversion of money from things like education, healthcare and road/bridge infrastructure to prop up the natural gas industry just won’t cut it anymore.

The Yaw Natural Gas Expansion bill will require municipalities all over Pennsylvania to submit plans to expand natural gas in their localities.   This means expanding the infrastructure with such things as compression stations and glycol dehydration plants and more.

Funding from this will come from “customer contribution”.   Customer Contribution won’t be cans on convenience store counters.  There won’t be natural gas telethons on local PBS stations, and no one will be robo-calling asking for a contribution.

Customer Contribution means all Pennsylvanians will be paying via taxes to ensure there’s a gas pipeline on every street, and a compressor station in every town.

Living in gasland will not be limited to a few counties.   We all will have the opportunity to experience the effects of breathing in toxic pollutants, learn what it is like to have sore throats, burning eyes, bloody noses and more.  Why should just a few areas have all the fun?

GAS IS CHEAP

The public relations hype is gas is cheap.  Yes, right now it is cheap.  Too much supply and not enough demand will cause prices to drop.

Yaw Natural Gas Expansion bill hopes to increase demand by socializing the costs and privatizing the profits.  Once demand meets supply the domestic price will increase, the gas bills will go up, and up and up as will the profits.

Don’t forget once we’ve paid for the gas line in the street, the compressor stations, metering stations, glycol dehydration plants and other infrastructure, there are the additional costs of purchasing/installing gas service to a home.  These costs are the responsibility of the property owner.

For now you do have a choice of actually hooking up to gas.  Will enough people make that choice to satisfy the natural gas industry’s appetite for profits?  If not, Senator Gene Yaw, the industry’s best friend, will probably force everyone to get gassed.

Related:

 

©2013 by Dory Hippauf

 

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FRACKERS AT THE GATE

August 18, 2013

This post was originally published by Dory Hippauf at No Fracking Way | No Fracking Way.

seigeThere’s an old saying that a man’s home is his castle.  To update that, let’s rephrase to a person’s home is their castle.

The phrase is based on the assumption that a person can do what they want in and with their own home.

While political conservatives bemoan government intrusions into individual rights, and want to shrink the size of government, one would think it would also apply to a person’s home.

Like every rule or assumption there is an exception.   A person’s home in Pennsylvania may soon NOT be their castle in the case of gas drilling.

CORBETT OPPOSED TO FORCED POOLING

Pennsylvania’s Governor Tom Corbett said in April of 2011 he was opposed to “forced pooling.

Speaking at the K&L Gates’ fourth annual Appalachian Basin Oil and Gas Seminar in Green Tree on Tuesday, Mr. Corbett said the required pooling of gas drilling rights, which has been a prominent part of the drilling industry’s wish list and occurs in several other gas-producing states, amounts to the use of eminent domain for private interests.

“It’s private eminent domain. I don’t think that’s right,” Mr. Corbett said in his keynote speech to about 400 people at the daylong seminar. “I was made aware that it’s on the industry’s wish list, but I don’t agree. If I see a bill that contains forced pooling, I won’t sign it.”

Legislation passed in July of this year and SIGNED by Corbett, people having pre-Marcellus craze drilling leases are being forced to frack.  If they refuse or had been previously in negotiation with gas corporations, they are being sued.

Corbett defended the legislation.

The Pennsylvania chapter of the National Association of Royalty Owners (NARO-PA) says the measure could impact people with older contracts that don’t mention pooling or horizontal drilling.

Corbett acknowledged those concerns in a letter to the General Assembly last week.

He defended the measure at a press event today, noting it passed both chambers with overwhelming support.

“We did not see any see anything illegal about the bill at this point in time,” he said. “It’s the people speaking through their General Assembly.”

While the force to frack legislation only applies to people with existing pre-Marcellus craze leases, it is the proverbial camel’s nose in the tent.

COMPULSORY INTEGRATION

In the fall of 2011, the Shale Gas Roundtable was created to explore natural gas development in Southwestern Pennsylvania.  It claims to include 26 civic leaders from private, nonprofit and public sectors.

Their report, Shale Gas Roundtable: Deliberations, Findings, and Recommendations-2013 was released this month.  I strongly urge you to read it.

Careful to avoid terms like forced pooling or eminent domain, the report calls it Compulsory Integration.

Basing their rational on the recently passed forced to frack legislation, the report states on page 13:

compulsory integration 01More details about forced pooling… oops…. Integration of units is found on page 49.

The frackers are at the gates, and our castles are under assault.

© 2013 by Dory Hippauf

 

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FRACK ANYWHERE ZONING DECISION SOON?

July 12, 2013

This post was originally published by Dory Hippauf at No Fracking Way | No Fracking Way.

judgeJudge Correale Stevens has been approved to take his seat on the PA Supreme Court.  The Pennsylvania Senate unanimously confirmed his nomination.

The PA Supreme Court is now filled, and previously tied decisions should be soon settled one way or the other.  The political affiliations are now 4 Republicans and 3 Democrats.

One of the decisions tied up in the courts is that of the Frack Anywhere Zoning provision in Act 13.  Frack Anywhere basically removes the power from local communities to determine where and if fracking would be allowed, and if allowed how it would be controlled.

The Frack Anywhere provision only applies to the natural gas industry and would force communities to a one-size-frack-all zoning as determined by the Commonwealth of Pennsylvania.  It empowers the state’s Public Utilities Commission to invalidate zoning codes that might block gas development, and tells the PUC it must act on behalf of “aggrieved” landowners or gas companies.  Act 13 gives gas companies eminent domain power to take property for drilling operations.

RELATED:

STEVENS AS AN UNKNOWN

With Stevens taking his seat on the PA Supreme Court, guess about how he would rule on the Frack Anywhere Zoning range from voting for it to against it.  Stevens is an unknown factor.  His previous judicial record gives no hints where he stands on natural gas drilling or the rights of communities to determine their own future development.

One troubling indication was pointed out.  In a radio interview, Stevens was asked about his judicial viewpoint.  Stevens stated he stands by the law.

Why is this troubling?  Technically, Frack Anywhere zoning IS the LAW.

Stevens, a Republican, tilts the court’s political balance in favor of Republicans who hold four of the seats.

But Tom Darr, deputy court administrator, said justices all say they check their politics at the door when they are sworn in. He said partisanship concerns involving the court are more a sport for the media and those who don’t like decisions made by the court.

Frack Anywhere Zoning lawsuit decision has been tied at 3-3, with 3 Republican judges voting to uphold the Frack Anywhere Zoning and 3 Democratic Judges voting to strike it down.

Politics checked at the door?  Don’t think so.

Checking politics at the door aside, what about family connections?  Are they also checked at the door?

A DOT

Broderick “Brody” Correale Stevens is the son of Judge Correale Stevens.  Brody Stevens is an attorney and received his license to practice law in 2006.

Brody was an associate partner with Dilworth Paxson LLP.    Former DEP Secretary Michael Krancer was also with Dilworth Paxson before Brody went to work there, so they weren’t there at the same time.

Krancer left Dilworth Paxson in 1992 and joined Blank-Rome.  After resigning as DEP Secretary, Krancer returned to work at Blank-Rome.

Brody is now Senior Counsel at PVR.    PVR is becoming a major player in the Marcellus Shale.  Will this have any influence over which way Judge Stevens will vote?

PVR’s Gassy Reach

PVR is probably better known for the forced eviction of the residents of the Riverdale Mobil Home Park.   PVR formed a joint subsidiary with Aqua America, called AQUA-PVR, bought the park and kick out the residents.  The park was purchased so a water withdrawal station could be built to supply water to the gas industry.

PVR also purchased Chief Gathering, a midstream corporation which was a subsidiary of Chief Oil & Gas.  In addition to gathering lines, there are the related facilities such as compressor stations and glycol dehydration plants.

In 2011, Dallas Township residents successfully prevented Chief Gathering from constructing a compressor station approximately 1,300 feet from the Dallas School District campus.   Chief Gathering subsequently built the compressor station and the Glycol Dehydration station in the nearby Monroe Township in Wyoming County.  Dallas Township is located in Luzerne County.

When PVR bought Chief Gathering they also took possession of these facilities.

Currently, PVR is faced with a lawsuit over the Chapin Glycol Dehydration Station.   Since coming on line about a year ago, the Chapin station has had 3 ‘incidents”.  Residents refer to the Chapin station as “the GREEN MONSTER”.

Keep in mind the Frack Anywhere zoning provision empowers the state’s Public Utilities Commission to invalidate zoning codes that might block gas development, and tells the PUC it must act on behalf of “aggrieved” landowners or gas companies.  Act 13 gives gas companies eminent domain power to take property for drilling operations.

If the Frack Anywhere Zoning provision is held up by the PA Supreme Court – how long before we are all forced to have a gas pad or a “green monster” in our back yards?

© 2013 by Dory Hippauf

 

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FORCED TO FRACK – GET A LAWYER

July 12, 2013

This post was originally published by Dory Hippauf at No Fracking Way | No Fracking Way.

force poolOld drilling leaseholders – get ready.  PA Governor Tom Corbett is forcing you into the Fracking Pool with his latest Gift to Gassers.

Gov. Tom Corbett on Wednesday defended the new Gift to Gassers which he signed into law this week.  Critics say it will undercut some landowners in lease negotiations with Marcellus shale gas drillers.

The Gift to Gassers was tacked onto legislation to clarify information on gas royalty payments, empowers oil and gas drillers to combine land into larger drilling units as long as a property owner’s lease doesn’t prohibit it (which majority of these old leases don’t prohibit).

It effectively forces people with existing contracts to allow their land to be pooled into larger drilling units without having full power to negotiate better deals in return, legal scholars and landowners advocates have said.

Under old leases oil and gas companies paid landowners $1 per acre and 1/8th royalty payments from any oil produced by the well. Today, companies are offering $3,000 to $4,000 per acre.

Speculations on the motives behind the newest Gift to Gassers involve Corbett and his “re-election” prospects range from encouraging more campaign contributions from natural gas interests, to expanding employment opportunities for himself should he be defeated in 2014.

Corbett’s current approval rating indicates a bag of doorknobs could beat him in the 2014 election.

GET A LAWYER

Some old leasers are refusing to be forced to frack and have retained lawyers.

Attorney Michael Grove recently filed a lawsuit in Trumbull County Common Pleas Court to help get those landowners out of the old leases, some of which he believes have been abandoned.

“Some of these older companies that have these old leases want to make the claim that their lease covers that Utica and that Marcellus shale formation and that their lease is still good,” Grove said.

One example is if there was a gap of several years in which the oil and gas company did not work the well, but came back to work the well just to keep the lease alive. The landowner then may have a claim that the lease is expired.

“He could freshly lease his property at the new going rate, which is much higher,” Grove said.

He feels many of the oil and gas companies abandoned the leases, and landowners should be able to take advantage of the current Utica shale boom.

BIG QUESTION: If Corbett can force old leaseholders into the frack pool, how long before he pushes in the rest of us?

RELATED: FORCED INTO THE FRACKING POOL

©2013 by Dory Hippauf

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FORCED INTO THE FRACKING POOL

July 3, 2013

This post was originally published by Dory Hippauf at No Fracking Way | No Fracking Way.

poolThe Pennsylvania Legislature and Gov. Tom Corbett are about to bestow another Gift to the Gassers.  Senate Bill 259 is n Act amending the act of July 20, 1979 (P.L.183, No.60), entitled “An act regulating the terms and conditions of certain leases regarding natural gas and oil,” adding definitions; providing for payment information to interest owners for accumulation of proceeds from production, for apportionment and for conflicts; and making editorial changes.”

The PA House vote was 167 Yeas, and 33 Nays.   In the Senate the final vote was 48 yeas, and 2 nays.

The Prime Sponsor of SB 259 was Senator Gene Yaw.

GRANDPA’S OIL/GAS LEASE

NOTE: SB 259 WOULD ONLY IMPACT PEOPLE WITH EXISTING OIL AND GAS LEASES.   If you do not have a gas lease (old or new) you are not being forced to frack…..yet.

It was not uncommon, years and years ago, for someone to lease their land for oil/gas drilling.  This was in the pre-frack frenzy days, and it usually involved CONVENTIONAL WELLS.

The gas industry likes to tell the public it’s been fracking for over 60 years.  However, the so called 60 years of fracking refers to Vertical Low Press Low Volume Conventional wells and not the high pressure, high volume slick water horizontal fracking (also known as unconventional drilling) we are seeing today.

Sixty years ago, the technology for unconventional drilling did not exist.  Sixty some odd years ago when Grandpa signed a gas/lease he was expecting that at some point in time a conventional vertical well would sprout up on his land.

These old leases are causing problems with gas industry.   Old leasers have stopped today’s gas drillers from fracking their land by virtue of the conditions of the old lease contracts.   This has prevented the drillers from forming large contiguous pools of land from which to drill and frack.

With SB 259, the latest gift to gassers, old leasers can not deny access to the gas industry.   In essence, SB 259 forces them to frack.

FRACKED IN MORE WAYS THAN ONE

When Grandpa signed a gas/oil lease the going rate per acre was probably miniscule compared to the per acre rate today as was the royalty rate.   Conditions placed on a potential driller with regards to environmental impact were also minimal.

SB 259 prevents old leasers from renegotiating the terms of the old lease to update it for the current lease rates, royalty payments and other conditions which may impact the property.   Majority of the old leases contained no language specifically prohibiting forced pooling.

OLD LEASERS WILL GET ROYALTIES

Recently there has been some noise made by leasers over the “post production” deductions on their royalty checks.  The amount on the check is way less than what the leasers were told to expect by the landmen and gas corporation when they first signed the lease.

In some cases, leasers are being charged RETROACTIVELY for “post production costs” resulting in receiving a bill instead of a check.  To add salt into the wound, future royalty checks would be withheld until the retroactive post production costs are paid in full.

RELATED: FRACKING ROYALTIES and OTHER NEWS

Depending on the specific payment terms of the pre-frack frenzy lease, old leasers will probably be receiving bills instead of checks, but they and current leasers will have small comfort in now knowing where all those royalty payments are going.

According to Senator Gene Yaw’s web page: Senate Bill 259 (formerly Senate Bill 460 of 2011-12) Division Order for Royalties: Requires gas companies to list all deductions on royalty check pay stubs. Currently, the state of Pennsylvania does not require gas companies to list deductions from royalties paid to the landowner on monthly payments.

(Yaw makes no mention of being forced to frack on his SB 259 blurb).

Wonderful, so now leasers will know why they have tiny checks or bills from the gas corporations.

YAW and FORCED POOLING

SB 259 didn’t just suddenly spring up out of thin air.  It had been in the works as far back as 2010.

Forced Pooling still an issue in Pennsylvania | By Elizabeth Skrapits |TIMES-SHAMROCK WRITER | October 12, 2010

EXCERPT (emphasis added):

However, state Sen. Gene Yaw said that forced pooling has benefits. It benefits the environment, because it will reduce the number of well pads needed to extract gas, he said. Forced pooling also benefits those landowners who want to see gas extracted from their land, but whose neighbors are blocking that extraction from occurring because they don’t want to enter into a gas lease, he said.

However, he said, “I know a significant number of landowners are not in favor of forced pooling.”

Yaw said he is therefore proposing that there be forced pooling in Pennsylvania, but that the forced pooling could only occur on parcels of land on which there is already a gas lease.

Yaw explained that his proposal would come into play if a gas company, such as Chesapeake Energy, wanted to extract gas from a drilling unit, but another gas company had a gas lease on property in the middle of it, like a hole in the middle of doughnut, and did not want to sell its lease to Chesapeake.

Yaw said that under his proposal, the reluctant gas company would be required to allow Chesapeake to extract gas from underneath the property where it had leased the gas rights, and would be compensated by Chesapeake for the extracted gas. And the landowner of the affected parcel would still receive the royalty payments that he is due under his gas lease, Yaw said.

Yaw said that his proposal would solve 90 percent of the issues that forced pooling is trying to address, and at the same time not force people to have gas extracted from underneath their property.

“If people don’t want to lease, I’m not forcing them,” Yaw said. “We can solve a lot of the issues, and if people don’t want to have their land developed individually, they would still have all their property rights.”

But forcing people to frack is exactly what he has done.

Three months later, in January 2011, Yaw introduced a bill to force pool old leases.

Pennsylvania Senator Gene Yaw (R) is already under scrutiny regarding possible conflicts of interest.   Yaw is chair of the Pennsylvania Senate Environmental Resource and Energy Committee, and has proposed a number of bills to encourage even more natural gas drilling in the commonwealth.

Yaw owns land in rural Lycoming County, a hotbed of a whole lotta natural gas drilling, and has leased more than 100 acres to Anadarko Petroleum.   Yaw represents district 23, which includes all of Bradford, LYCOMING, Sullivan and parts of Susquehanna and Union counties.

Yaw has pooh-poohed the notion of a conflict of interest…….but don’t they all?

Makes you wonder how much of the privately held land in Loyalsock State Forest will be forced to frack under the terms of SB 259.

Although SB 259 will only affect current old and new leasers, it does make you think how long before everyone in Pennsylvania will be forced to frack.  All it would take is for Yaw or some other frack friendly legislator to write up a bill and ram it through in the dead of the night.

Yaw will be up for re-election in 2016.   Those living in his district may want to seriously find someone who will represent the people living in the district and not the out-of-state corporations.  Those who currently have Senators and Representatives up for re-election in 2014 should be doing the same.

© 2013 by Dory Hippauf

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FRACKING ROYALTIES and OTHER NEWS

June 30, 2013

This post was originally published by Dory Hippauf at No Fracking Way | No Fracking Way.

money treeMoney doesn’t grow on trees, and as a number of drill leasers are finding out, it doesn’t spew from gas wells either.

As was stated in REVOLT OF THE DRILL LEASERS, royalty checks are not all they were fracked up to be.  Responding to complaints of tiny royalty checks, enormous post production costs, and the inability of some leasers to install their cement ponds, the Pennsylvania Senate swiftly held a hearing.

Senator Gene Yaw was joined at the hearing by Senators John Yudichak (D-14), Minority Committee Chairman, Lisa Baker (R-20), Kim Ward (R-39), Elder Vogel (R-47), Scott Hutchinson (R-21), as well as Representatives Garth Everett (R-84), Matthew Baker (R-68), Tina Pickett (R-110) and Sandra Major (R-111).

Yaw serves as Chairman of the Environmental Resources and Energy Committee and Vice Chairman of the Urban Affairs and Housing Committee.  He is also a member of the Judiciary, Law and Justice, Agriculture and Rural Affairs, Labor and Industry and Rules and Executive Nominations Committees and the Majority Policy Committee.  Yaw also serves on a number of Boards and Commissions including as Chairman of the Center for Rural Pennsylvania, a member of the Joint Legislative Air and Water Pollution Control and Conservation Committee and a member of the Environmental Quality Board.

Yaw holds gas leases with Anadarko and has been active in the controversy regarding fracking of Loyalsock State Forest. (See: FRACKED: LOYALSOCK STATE FOREST).   His interest in quickly rectifying post production cost charges is obvious.

Not only are the royalty checks tiny, in some instances leasers are being charged retroactively for post production costs which has resulted in receiving a BILL in the thousands of dollars instead of a check.

Testifying at a Senate Environmental Resources and Energy committee hearing on June 27, 2013, Bradford County Commissioners Chairman Doug McLinko said, “Our constituents have shown us evidence of extraordinary post-production cost in Bradford County, with deductions of 40 and 50% all the way up to as much as 90%.”  “…we have seen checks come with zero payment.  We have seen retroactive charges being billed to land owners for tens of thousands of dollars where the property owners actually have a bill sent to them and they go without any royalty payments until it is paid in full.” Similar concerns were raised by the Pennsylvania Farm Bureau at the same hearing.

Chesapeake Energy seems to be the big gas corporation taking the biggest chunk our of royalty checks.   However, April 2013, Chesapeake Energy sold much of its natural gas holdings in Pennsylvania to Southwestern Energy for a mere $93 million.  Lease holders formerly with Chesapeake may be surprised to find out they now have to deal with Southwestern regarding royalty payments and post production costs.

WHAT ABOUT THE JOBS?

In the past when Pennsylvanians have gone to their local Senators and Representatives with complaints about contaminated water, excessive noise, air pollution and other drilling related issues the typical response has been to pooh-pooh the concerns and point out “all those jobs”.

Conspicuous by its absence at the hearing was the usual talking point about “all those jobs” being created by the gas industry.  It doesn’t seem to occur to the legislators that royalty payments cost the gas corporations money which reduces their ability to create “all those jobs”.   Post production costs also reduce corporate profits which would prevent creation of “all those jobs.

YAW SAYS SUE’EM

After listening to the testimony, Yaw says he’s not sure why more people aren’t filing lawsuits, and is doubtful there can be any quick legislative fixes.

“We could take action,” he says, “But that’s not going to solve the problems some of the people face now. I think they need to take action themselves. But the encouraging thing is I think there are avenues for them to pursue it. They’re not alone. They just need to be willing to do it for themselves.”

There you have it lease holders; you are on your own, welcome to the Sacrifice Zone.

EXPANSION OF SACRIFICE ZONES

This week the Pennsylvania House passed a forced pooling bill.  The bill would allow gas corporations to drill on properties which have very old oil and gas leases.  Leases which were signed long before the shale boom hit Pennsylvania.

The bill would give gas corporations the right to pool the land unless the old contract expressly forbids it, which the old contracts usually don’t.

Old lease holders want the opportunity to “renegotiate” the contracts in light of the “new” horizontal fracking technology to be used.

Geeeee….don’t they know that according to the gas industry, fracking has been around for over 60 years?  And think about all those jobs that will be created by paying rates and royalties based on very old contract terms and recouping post production costs.

The SB-259 bill has been sent back to the Senate where it started.  Sponsors of the original bill include Senator Gene Yaw.

MASSACHUSETTS FRACKING BAN

More than 11,000 residents of Massachusetts have called for a Fracking Ban after seeing what is happening in Pennsylvania.

Rep. Kocot (D-MA) and Rep. Provost (D-MA) introduced H.788, to ban fracking and the processing of its toxic wastewater in the commonwealth.

“In states like Pennsylvania, we have already seen fracking contaminate drinking water and make nearby residents sick,” said John Rumpler, senior attorney for Environment Massachusetts. “Residents looking at this track record have one message for their legislators today: keep this dirty drilling out of Massachusetts.”

Along the Connecticut River Valley, in the middle of the state, lies the Hartford Basin.  In June 2012, the USGS stated:

Using a geology-based assessment method, the U.S. Geological Survey (USGS) estimated a mean undiscovered natural gas resource of 3,860 billion cubic feet and a mean undiscovered natural gas liquids resource of 135 million barrels in continuous accumulations within five of the East Coast Mesozoic basins (fig. 1; table 1): the Deep River, Dan River-Danville, and Richmond basins, which are within the Piedmont Province of North Carolina and Virginia; the Taylorsville basin, which is almost entirely within the Atlantic Coastal Plain Province of Virginia and Maryland; and the southern part of the Newark basin (herein referred to as the South Newark basin), which is within the Blue Ridge Thrust Belt Province of New Jersey (fig. 1). The provinces, which contain these extensional basins, extend across parts of Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, New Jersey, New York, Connecticut, and Massachusetts.

(SEE: Western Frackachusetts?)

Boston and the surrounding suburbs receive much of their drinking water from reservoirs in the western part of the state.  The largest of these reservoirs is the Quabbin Reservoir which is fed by many water sources from the surrounding communities which would include those in the Hartford Basin area.

The original project for creating the Quabbin Reservoir was enthusiastically supported by Boston lawmakers, and vehemently opposed by residents in Western Massachusetts who took their case to the Massachusetts Supreme Judicial Court.  They lost the case, four towns were disincorporated, razed and flooded to form the reservoir.

Despite long term attitudinal divisions between Western Mass and Eastern Mass residents, it appears the threat to drinking water and destruction of the Connecticut valley is giving them common ground lest Western Massa becomes yet another sacrifice zone.

©2013 by Dory Hippauf

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