Royalty owners see fracking up close and like what they see

Thank you to all those who participated in the survey and made this oped possible.

Read below or at the Washington Examiner

By Keith Mauck

With most U.S. oil and natural gas drilling occurring on privately-owned land, it's the royalty owners who most directly experience the impact of drilling and fracking operations.

As the people who have leased land to drilling companies, they monitor the drillers' performance very carefully.

Despite the stories of burning tap water and other exaggerations proffered by environmental groups with a political agenda, the vast majority of royalty owners are supportive of fracking and energy development.

In a survey conducted among the 40,000 royalty-owner members of three websites --GoMarcellusShale.com, EagleFordForum.com, and GoHaynesvilleShale.com -- 71 percent were satisfied or neutral with respect to operations on their land. More than 90 percent said they would lease their property again if given the opportunity.

Furthermore, 75 percent of the respondents were satisfied or neutral over the timeliness and accuracy of their royalty payments from energy production companies.

Many of the royalty owners have described how these payments made it possible for them to pay their bills, improve their standard-of-living, and achieve life-long dreams.

For Paul and Meredith Steurnagel, for example, the monthly natural gas royalty checks were the answer to a prayer. The proceeds paid for completion of his college education and for the adoption of a baby boy for the couple.

“We would not be the family we are without the royalty money,” she said. “That may sound dramatic to read but it’s the truth.”

Royalty owners are a growing segment of U.S. landowners who are sharing in the nation's "shale gale," the term that refers to the extraction of oil and natural gas from shale formations.

The National Association of Royalty Owners estimates there are more than 8.6 million royalty owners in the United States who receive payments from oil and gas companies producing energy on their land.

Natural gas exploration companies alone paid an estimated $21 billion in lease bonus and royalty payments in 2010, when the last analysis was conducted.

Today, as America’s energy boom continues and more wells are drilled, the figure is likely far higher.

Questions have arisen, however, regarding the details of some royalty payments. Royalty owners frequently ask, “Am I getting paid what I am owed?” or, “Why was this deduction subtracted from my payment, and why does it vary drastically from month-to-month?”

This concern surfaced in the survey. Forty-eight percent of the respondents reported being dissatisfied or highly dissatisfied with post-production deductions from their royalty payments.

These sentiments reached a fever pitch in Pennsylvania recently where Gov. Tom Corbett called for an investigation into how one company, Chesapeake Energy, deducts various costs from royalty payments.

Last month, the Pennsylvania Senate passed three bills aimed at improving transparency on deductions and ensuring landowners are justly compensated for their resources.

As royalty owners can attest, oil and natural gas development is helping their families and increasing the nation's prosperity during the otherwise lackluster economic recovery.

The shale gale has created thousands of jobs, greatly increased U.S. energy supplies, and is improving U.S. energy security.

And America’s shale gas production helped to reduce carbon dioxide emissions by 12 percent between 2005 and 2012.

Yet many environmental groups continue to criticize domestic oil and gas production while ignoring the benefits.

As a nation, we should listen less to them and pay more attention to the royalty owners who witness first-hand the plusses and minuses of energy development every day.

Keith Mauck is publisher of GoMarcellusShale.com, EagleFordForum.com, and GoHaynesvilleShale.com.

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Replies to This Discussion

Permalink Reply by David Perotto on May 20, 2014 at 12:48pm

As far as I am concerned it is time for people to stop complaining. The shale revolution's benefits far outweigh the negatives. If we turn this industry away, our economy would tank overnight. It is driving jobs and saving Obama's behind. All despite his rogue EPA's constant attempt to rid us of fossil fuels. I am not advocating lifting environmental safeguards, but we have lost our ability to prosper in a global economy as we have let the left smear the industry. I place the blame squarely on the media's shoulders. Shameless, biased reporting has spun the message - and that message is simply not true.

Permalink Reply by The Rooster on May 20, 2014 at 1:24pm

David

I totally agree!! as usual we always have complainers. I suspect if they were getting royalty checks, they would have "Drill baby Drill" tattooed across their A$$   Good article Keith!!

Permalink Reply by frank speaker on May 21, 2014 at 12:55am

I agree that the benefits of shale development outweigh the problems we've seen so far. But to "stop complaining" as you put it would only invite sloppy drilling practices and create unnecessary spills and dumping. The fact is the ODNR has an inadequate number of inspectors and we must all be aware that this is a dangerous and complex business that requires vigilance. Had this been the attitude in the Gulf we wouldn't have had the oil spill which is still poisoning our waters today. The industry smeared itself, please stop complaining about the people who inform us of what happened and the people whose duty it is to protect us.

Permalink Reply by D M on May 21, 2014 at 4:45am

Well said Frank. You can always find extremes on both sides of an issue. Those who paint with broad strokes to the left or to the right are almost always blind to the middle. The truth is usually found quietly waiting there. I am a landowner who hopes to be included in a well someday. If I am lucky enough for that to happen, I would like it to be produced safely and I would wish to be paid royalties honestly. History has proven that some in the O&G industry will not do that without careful scrutiny. I am not complaining, just being realistic.

Permalink Reply by Debra Lynn Pennell on May 21, 2014 at 4:31am
As a royalty owner who has yet to see a penny, I would like you to know that i am not of the mentality of Drill Baby Drill. I didnt ask for this i inheritrd it. I have been a progressive Democrat who has fought for environmental protection since the 70's. My first concern was for the people of western Pa. who live on the land and live in my great grandfathers house that was built in 1929. I went there last Oct. with my son and met the landowners and sat inside my great grandfathers house. If for onr second I thought that they would not sign a lease because of fracking I never would have signed the lease. Their land is all they have and my relatives who lived there were farmers who lived and worked there and preserved the land. I support fracking as long as it is done correctly. I see it as a transitinal fuel before we have to switch to solar and wind. So no, ,not all royalty owners are greedy. If I am able to retire from teaching and can help my daughter through college then I thank my relatives for leaving this to me. Thank you. Debbie Pennell

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