POSTPONED-The House Environmental Resources and Energy Committee is scheduled to hold a meeting October 9 to consider Senate Bill 138 (Yaw-R-Lycoming) providing oil and gas royalty interest landowners access to records of drilling companies to verify proper payment of royalties (sponsor summary).

A companion bill also passed by the Senate on this issue-- Senate Bill 139 (Yaw-R-Lycoming)-- is not on the agenda, along it is in the Committee.

The General Assembly has been wrestling with the issues surrounding Act 60 of 1979 which set a guaranteed minimum royalty of not less than 12.5 percent for royalty interest landowners and whether post-production costs should be deducted from that amount.

A 2010 PA Supreme Court ruling resulted in a decision allowing oil and gas producers to deduct the cost of moving gas from wellhead to the marketplace.

 As a result, shale gas drilling companies have been deducting post-production costs and paying landowners less than the 12.5 percent they believe they were guaranteed.  Companies also have provisions in their oil and gas leases with landowners allowing them to deduct post-production costs.

Rep. Garth Everett (R-Lycoming) has been introducing legislation since the 2013-14 legislative session to guarantee landowners the full 12.5 percent royalty without deducting post-production costs.

His most recent bill-- House Bill 557 (Everett-R-Lycoming)-- is also in the House Environmental Committee. 

Rep. Everett and other House members from shale gas areas have trying to attach language from their bill to any other potential vehicle that comes along.

A lengthy debate on legislation-- House Bill 1401 (DiGirolamo-R-Bucks) to impose a severance tax on natural gas production last December saw several attempts to amend the bill with minimum royalty payment language.

In May, Gov. Wolf came out in favor of bipartisan bills-- Senate Bill 1000 and House Bill 2253-- imposing a severance tax that includes minimum royalty payment language.  House Bill 2253 is also in the House Environmental Committee.

In February 2017, Rep. John Maher (R-Allegheny) Majority Chair of the House Environmental Committee was quoted in a StateImpact PA article as saying, “I think Senator Yaw’s ideas are good. But my concern last session was if those bills went into law, there can be tendency around the legislature to say, ‘Oh we’ve already addressed that issue.’ His ideas are good, but they’re not enough.”

The shale gas industry has been vigorously lobbying against Rep. Everett’s legislation.

There have also been a series of lawsuits filed by landowners with royalty interests against natural gas companies. 

One of the largest-- against Chesapeake Energy-- was settled by a large group of Pennsylvania landowners in August.  Last January another group of landowners reached a settlement with Chesapeake Energy in federal court.

The Attorney General also filed a lawsuit against Chesapeake Energy over royalty payments in 2015 and has not yet been resolved.

The Independent Fiscal Office reported in March of this year Pennsylvania landowners received over $5.325 billion in natural gas royalties from 2012 to 2016.

The Committee meeting will be held in Room B-31 Main Capitol and will be called Off the Floor, which means there is no specific meeting time and can be held whenever the House takes a break from its session.  House meetings are typically webcast through the House Republican Caucus website.

Rep. John Maher (R-Allegheny) serves as Majority Chair of the House Environmental Committee and can be contacted by calling 717-783-1522 or sending email to: jmaher@pahousegop.com.  Rep. Mike Carroll serves as Minority Chair and can be contacted by calling 717-787-3589 or sending email to: mcarroll@pahouse.net.

NewsClip:

Cusick: House Panel To Take Up Gas Royalty Bill, But Not The One Advocates Hoped For

[Posted: Oct. 1, 2018]

10/8/2018