Yesterday a Pennsylvania State Senate panel met to discuss two bills that would help landowners in their quest for more visibility into how royalties are calculated–and what kinds of expenses are deducted (see 2 Royalty Bills Focus of PA Senate Hearing Today). As we said yesterday, Senate Bill (SB) 138 will allow landowners the right to review drilling company records to verify proper royalty payment. It also requires drillers to pay royalties within 90 days of production. SB 139 prohibits drillers from “retaliating” against a landowner who questions royalty payments by canceling the lease or stopping drilling activity. Both bills were unanimously approved by the Senate panel and will go to the full Senate for a vote. However, as the bill’s prime sponsor Sen. Gene Yaw indicated, the Senate is not the problem. Last session the same thing happened–speedy passage by the Senate. Then the bills got bogged down in the PA House because they were attached to another bill that guarantees a minimum royalty of 12.5% regardless of post-production costs. That bill has proven toxic–vigorously opposed by the drilling industry. Sen. Yaw’s not-so-subtle message to the House: Don’t repeat the same mistake this year. Let these bills stand on their own…
