Tell Governor Corbett to veto SB 259 and Protect Landowner's Rights

SB 259 was passed and is awaiting the governors signature.

In short is takes away the property rights of land owners in favor of expediency of forming drilling units for drilling companies.

Landowners will no longer be allowed to re-negotiate their leases , this is a violation of the protections of property rights guaranteed under the U.S. Constitution.

Please take the time to e-mail the governor and ask that he veto SB 259.

governor.pa.gov towards the bottom of the page on the right is a tab for his e-mail. Plus there is a phone number.

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Replies to This Discussion

Permalink Reply by Joseph-Ohio on July 8, 2013 at 3:26pm
Yep.
Permalink Reply by Ronald Hayhurst on July 8, 2013 at 10:11pm

In reading the bill it allows the combining of leases into a unit.  I believe this combines not only the minerals but the surface tracts as well.  Thus they (the horizontal drilling company) will be able to build the pad , build roads, lay lines, etc. across any of the surface properties in the unit and pay little or no damages.  A lot of old leases contain more than one surface parcel.  Many people will be surprised that their property is under an old lease and thus subject to the building of pads , roads and pipelines.  This late admendment to the bill with the Apportionment section makes it a very wide covering FORCE POOLING Bill.   

Permalink Reply by Mark McGrail on July 8, 2013 at 11:31pm

Ronald,

Thanks for that very concise informative explanation.

Permalink Reply by Ed on July 9, 2013 at 4:40am

What a mess this will become.  Attorneys will get rich and landowners & oil & gas companies will pay.  The courts have long upheld that the wording of contracts could not be changed (or added to in this case) by way of legislative action.  State courts and federal courts alike. This will surley be challenged if enacted.

Secondly, while this is challenged any new contracts will be scary to enter in to because all of a sudden it no longer becomes a matter of what the wording of the contract says, but also, what it doesn't say. 

This will take years and cost millions to resolve.  There are a lot of voting landowners out there.  Govenor Corbett beware.  You will be voted out.

Permalink Reply by Joseph-Ohio on July 9, 2013 at 5:05am
Perhaps the reality is that O & G want the mess to help
waste / buy time.
Play the fiddle as Rome burns perhaps.
They pay their attornies whether or not anyway.
This all stinks big time.
IMHO
Permalink Reply by Billy Park Whyde on July 9, 2013 at 8:17am

 Hey who in the H do those landowners think they are? We are the big bad O&G companies and no litle landowner is going to stand in our way!

  Lets see Energy In Depth challenge that.

Permalink Reply by Joseph-Ohio on July 9, 2013 at 8:57am
Same thing as signing it the way I see it.
Un-signed equaling approval by default.
IMHO
Permalink Reply by Rick on July 9, 2013 at 9:05am

Yes Jesse, Corbett is in a jam... he stands to lose maybe thousands of votes if he signs it, and he stands to lose hundreds of thousands of dollars from O&G companies if he doesnt... what do you think is more valuabe to him?

I say, if in the end, we have to fight this out in courts, go for the whole enchilada and contest that those old vertical well leases have no grounds for application to horizontal drilling and the much larger disruption and loss of land than we were told, and was customary back in the days of vertical wells. If we had known a possibility of such destruction of property, and disturbing the peace, we may not have signed. 

And you know for all you here that think we are crying about spilled milk... think again... real hard, because you may think you have a wonderful lease and you have a great lawyer, and he covered every possible scenario and you sleep well at night. But there will come that day when a new word or technique appears that your attorney had no idea would be invented and you too will be screwed.

Maybe a technique similar to the tar sands procedure will be developed, and they will apply YOUR lease to that system of total desturction. Did you forget to put that into your lease? Of couerse it sounds silly, but its the same principle. If you didnt mention unitization in your lease at all, they want to assume you allow it.

Oh, by the way, when i called the gov yesterday, the woman i spoke to said she knew exactly what i was talking about and had recieved calls on it.

I also called my state rep who opposed adding the unitization clause, and voted against it. Her aide said she had also recieved sevaral calls on the issue... call yor state reps also!

Permalink Reply by Joseph-Ohio on July 9, 2013 at 9:23am
It stinks.
If an agreement / contract isn't honored the agreement / contract
doesn't exist as I understand such things.
How can a rule / law that's contrary to that very
basic tenet be created ?
Permalink Reply by Keith Mauck (Site Publisher) on July 9, 2013 at 11:00am

NARO-PA's stance

Trevor Walczak, NARO-PA Vice-President:


"This bill removes the ability for a mineral owner who already has shallow oil or gas
production on their property, to negotiate a clause with an interested producer, for their
Marcellus property. The old leases do not contain language which allows these leases to
be pooled, so the absence of this clause gives a mineral owner the ability to negotiate for
a pooling clause to be inserted into their existing lease. It is potentially a valuable
opportunity to these mineral owners, but it appears that the operator who pushed this
effort found their money would be better spent to negotiate in Harrisburg with lawmakers
rather than at kitchen tables with mineral owners. Mineral owners in this position have
now lost this great opportunity."


"This provision has no place in this bill. If the legislature wants to expand our antiquated
and predatory pooling laws, we should be doing it in the light of day with the people who
will be most effected, not behind closed doors with the people who will benefit the most
by it. This is the fox watching the hen house. It’s bad business and bad politics."


"Once this section was amended into SB259, this bill was fast-tracked, with no attempt to
include mineral owners in the discussion. I am shocked to see this legislation move
forward, especially on the heals of the Senate Environmental Resources and Energy
Committee's discovery that we need more checks and balances between the industry and
their mineral partners. On the road to passing this bill, the House and Senate even went so
far as to vote down all the suggested checks and balances which were recommended in
the committee’s hearing."


"This opens up an entire new set of problems for the royalty owners affected. Will they
be paid the state minimum 12.5% royalty with post-production costs allowed to be
deducted? Before this bill, mineral owners would have been able to negotiate a higher
royalty of 15 or 20% with no cost deductions. Are they even notified when they have
been force pooled?"


"We all know horizontal drilling is more efficient than vertical drilling for surface use,
but it's the people's property, not the governments to decide. There’s plenty of room to
drill until we can fully complete this debate."


Contact Trevor Walczak: pennroar@yahoo.com or (570)510-3952

Permalink Reply by Joseph-Ohio on July 9, 2013 at 1:32pm

Thanks for your reply Keith.

In Ohio ODNR has started to use old Forced Pooling Rules in application to long horizontal bore Utica Era wells.

This has similar and perhaps even more far-reaching consequences - especially insofar as integrating even unleased landowners into a unit.

Perhaps he already has contacted the appropriate individuals / groups but, I'll ask anyway; who what organizations can Mark McGrail contact to avert the Force Pooling tact from becoming S.O.P. in Ohio ?

I'm also thinking he's probably already contacted NARO / yourself on these goings-on in Ohio but thought it could do no harm to bring it up in this reply as well and ask the same question ?

Is there also a NARO - Ohio division to work with ?  I anticipate you are representing NARO nationwide but thought to ask for specific Ohio guidance on all of these fronts as well ?

Thank you again for your involvement.

Standing by for your interested and helpful reply.

Regards,

Joseph-Ohio 

Permalink Reply by Samuel J. Orr on July 9, 2013 at 1:40pm

The other side of the coin is that some landowner surrounded by many larger tracts could severely diminish the ability of large landowners to lease their property on favorable terms. Markets change. $500/acre ten years ago would have been a great lease. My view is that contracts are contracts not to be changed by legislation except prospectively. I suppose a government could pass a law saying royalties had to be at least 25% for any new leases. What this would do would severely decrease the amount of acreage being leased, because geology would have to be exceptionally good to make acreage subject to such leases profitable. I really do not think that the current bill is all that bad. I might add that some of the folks with old 12.5% leases with a company like Range may in the relatively near future be very happy when their land is drilled. Royalty income will dwarf bonus money. Acreage held by production or otherwise with a 12.5% landowner royalty are likely to be drilled before leased acreage subject to 18% or 20% royalties. Just some food for thought!

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