Senate Approves Coal Bed Methane Well Dispute Act

The Senate this week passed Senate Bill 275 (D-White-R-Indiana) to establish a special review board to arbitrate coal bed methane well disputes. Currently, disputes between surface land owners and the holders of mineral rights for those properties are often resolved in county courts of common pleas.

 

“These disputes often end up becoming a lengthy, expensive and acrimonious process for all parties involved,” Sen. White said. “Given the recent activity surrounding the development of the Marcellus Shale natural gas reserves and the potential economic benefits that come with it, it is also important to recognize the inherent conflicts that occur when property rights are held by multiple owners. I would hope the principles embodied in Senate Bill 275 could be used as a model in dealing with future disputes surrounding the development of the Commonwealth’s vast natural resources.”

 

Senate Bill 275 creates a three-member Coal Bed Methane Review Board to consider objections and attempt to reach an agreement on issues such as the location of coal bed methane wells and/or access roads.

 

The Coal Bed Methane Review Board would be made up of a member appointed by the Pennsylvania Farm Bureau, a member appointed jointly by the Pennsylvania Oil and Gas Association, the Independent Oil and Gas Association and the Pennsylvania Coal Association, and a member appointed jointly by the deans of the College of Agricultural Sciences and the College of Earth and Mineral Sciences of Penn State University.

 

“Under a 1983 Pennsylvania Supreme Court ruling, coal bed methane is considered part of the property rights transferred under coal agreements,” Sen. White said. “Many landowners who previously entered into coal agreements and subsequently gave up their rights to coal bed methane are now confronted with mineral estate development on their property. This legislation is not intended to change the respective rights and obligations of either party, but rather to create a timely less expensive and less bitter process.”

 

Rep. Dave Reed (R-Indiana) has introduced a companion bill--House Bill 539-- in the House said he was encouraged by Senate passage and is hopeful the House of Representatives will soon take action.

 

“I’ve worked closely with Sen. White on this important legislation and I am hopeful it will move forward in the legislative process soon,” Rep. Reed said. “This legislation is a classic example of legislators responding to the concerns of constituents. The landowners need and deserve the opportunity to ensure the value of their property remains intact – and that’s exactly what our legislation does.”