Capitolwire.com reported late Tuesday and Thursday Attorney General Kathleen Kane has issued administrative subpoenas to Marcellus Shale drilling companies across the state as part of her Office’s review of gas well royalty payment issues.

The subpoenas demand dozens of pieces of information about corporate structure, post-production costs and royalty payment calculations, and where companies hold leases on public lands, according to a source with knowledge of the subpoena.

It's unclear if the information about public land leases and their location obtained through the subpoenas would reveal recent industry interest in state parks and forest land relating to Corbett's “non-surface impact” leasing proposal contained in the 2014-15 budget.

Democrats in the Legislature and environmentalists have asked the Corbett Administration for information about the governor's budget proposal to allow further leasing of state forest and park land for natural gas drilling on existing well pads, which the administration contends would cause “no additional surface impacts.”

Lawmakers predicted it would generate $95 million this fiscal year, but the proposal also is part of a pending lawsuit in state court.

In broadening her office's investigation, Kane issued administrative subpoenas, which differ from traditional subpoenas and are considered controversial because judicial oversight is not required.

Refusal to comply with the administrative subpoena could result in a contempt of court charge, according to the administrative code.

Spokespeople for both the Attorney General and the Marcellus Shale Coalition refused to comment on the matter.

In February Gov. Corbett, Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, and Sen. Joe Scarnati (R-Jefferson) asked the Attorney General for an official inquiry into post-production cost deductions by natural gas producer Chesapeake Energy.

In March Sen. Yaw said the Attorney General confirmed she would be starting an investigation.

On June 27, 2013, Sen. Yaw convened a public hearing of the Senate Environmental Resources and Energy Committee on royalty issues.

“During our hearing, the Committee heard testimony that deductions by Chesapeake were as high as 100 percent of some royalty checks.  This raises a significant consumer protection issue for hundreds of constituents in my Senate district,” said Sen. Yaw.

In light of the ongoing issues between Chesapeake Energy and Bradford County leaseholders, Sen. Yaw has also introduced a package of legislation, known as the Oil and Gas Lease Protection Package to safeguard leaseholder rights.

The bills include: Senate Bill 1236 (Yaw-R-Lycoming) amends the Oil and Gas Lease Act further providing for payment of royalties,Senate Bill 1237 (Yaw-R-Lycoming) establishing the Natural Gas Lease Anti-Retaliation Act to protect royalty interest owners andSenate Bill 1238 (Yaw-R-Lycoming) establishing the Oil and Gas Lease Satisfaction Act providing for certain forms and damages. Sponsor summary of all three bills.

All three bills passed the Senate in April over stiff opposition from the drilling industry.  They remain in the House Environmental Resources and Energy Committee.

Rep. Garth Everett introduced  House Bill 1684 to address the royalty issues in March.  The bill was reported out of the House Environmental Resources and Energy Committee in April after an industry-friendly amendment was added.  It was remained on the House Calendar since then.

NewsClips:

Report: AG Widens Investigation Into Gas Royalty Complaints

New Hearing Dates Set For Hilcorp Forced Pooling Requests

AG Kane Goes On Witch Hunt Over Drilling Royalties

9/1/2014