The Senate Environmental Resources and Energy Committee this week held a public hearing on the issue of surface and mineral rights ownership surrounding coal bed methane wells now used as a source of energy.

The Committee heard testimony from the Pennsylvania Farm Bureau, the Pennsylvania Farmland Preservation Association, farmers from Cambria and Indiana counties, the Pennsylvania Coal Association, the Pennsylvania Oil and Gas Association and the Independent Oil and Gas Association of Pennsylvania.

Joel Rotz, Pennsylvania Farm Bureau, expressed concerns about a Pennsylvania Supreme Court ruling which said the owners of the coal reserves beneath a property also own the right to the coal bed methane and have the ability to access that resource independent of any permission from the surface rights owner.

Under Pennsylvania law, mineral rights can and have been for many years sold separately from surface property rights.

Betty Reefer, Pennsylvania Farmland Preservation Association, said it was only recently that coal bed methane became an economically viable resource to collect. It now supplies about 8 percent of total U.S. natural gas production. She suggested new legislation that would regulate coal bed methane drilling on farmlands by requiring verification of mineral rights ownership and to deal with concerns about interfering with farming operations.

George Ellis, Pennsylvania Coal Association, said the Pennsylvania Supreme Court settled the issue of coal bed methane ownership and the Joint Legislative Air and Water Pollution Control and Conservation Committee conducted a year-long study of allegations and found that property rights law is “well established and strikes an appropriate balance” among the rights of landowners, coal owner and coal bed methane driller.

Stephen Rhoads and Craig Mayer, Pennsylvania Oil and Gas Association and Independent Oil and Gas Association of Pennsylvania, said mineral owners are required to act reasonably within the confines of ther rights to develop their mineral rights. They emphasized that coal bed methane wells are regulated under the state Oil and Gas Act and must comply with those requirements.

Representatives of the farm, coal and oil and gas interests said they would be talking together about how issues between surface and mineral rights could best be handled.

“This issue is very important to me,” Sen. Wozniak (D-Cambria) said. “There are many farmers and lots of farmland in my district and it is my duty and responsibility to see that the rights of these farmers are not trampled on and at the same time ensure that the methane owners can adequately extract their gas and leave the owners’ property intact.”

The Senator’s legislation, Senate Bill 61, would allow property owners surface rights of first refusal of the purchase of the coal bed methane rights under their property.

A video of the hearing is available online.

Sen. Mary Jo White (R-Venango) serves as Majority Chair for the Committee and Sen. Ray Musto (D-Luzerne) serves as Minority Chair.

5/25/2007