MSC Corrects/Clarifies Article Touting HB 1391 Royalty Bill

rebuttalYesterday MDN ran a story reporting that a landowner rebellion against post-production cost deductions from royalties is spreading beyond just Bradford County in northeastern Pennsylvania–to counties in southwestern PA (see PA Royalty Unrest Spreads from Bradford County to Western PA). We picked up part of an article run by the Washington, PA Observer-Reporter. The Marcellus Shale Coalition sent along an email rebuttal of that article, to “correct/clarify several issues in the article” that they believe either mischaracterize the situation, or statements that are outright wrong. Here is the MSC’s rebuttal…
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Guest Post: HB 1391 Will Restore What Bradford Landowners are Owed

guest postLast Friday MDN ran a guest post from an executive who works for a Pennsylvania exploration and production company (E&P, what we call a “driller” here on MDN). In the post, titled Why PA HB 1391 Bill is Bad for the Marcellus, MDN invited those with an opposing view to send us a guest post on the other side of the issue. A landowner from Bradford County has done just that (read it below). We also include a recent AP article highlighting other landowners in Bradford who have been wronged by Chesapeake Energy (according to the landowners interviewed). With the highest amount of respect to the Bradford landowner writing the guest post, we must point out that in a way his post “makes the case” for the industry’s view as posted last Friday, a case *against* HB 1391. How?…
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Guest Post: Why PA HB 1391 Bill is Bad for the Marcellus

guest postWe don’t mind telling you that the royalty issue in Pennsylvania, specifically passage of House Bill (HB) 1391 to ensure landowners are guaranteed 12.5% royalty checks regardless of post-production costs, is a thorny issue for MDN. We can see both sides of the issue, but tend to favor the landowner side–slightly. The drilling industry knows that there is no bigger booster for them than MDN. So our periodic coverage and editorializing in favor of 1391 is a bone of contention. Drillers are not happy with your faithful editor. A long-time MDN subscriber and friend who works for a sizable driller in PA recently wrote us an email that (a) lays out the case for not tampering with existing, signed contracts, and (b) gently chides MDN for taking the landowners side in this issue. We asked for and received permission to bring you his email. As we responded to our friend, we are interested in getting this issue settled quickly. It breaks our heart to see allies divided. We all need to be firing at the other side, not within our own ranks. MDN is happy to run guest posts and views on this issue (or any issue). This letter writer does a good job, and makes a compelling case, for NOT passing HB 1391. Does he change your mind on the issue?…
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Twitter Fight Over PA HB 1391 Royalty Bill

tweetmeChanneling our inner Joan Rivers: Can we talk? It hurts when a good friend publicly criticizes you. It feels like you’ve been stabbed in the back. Perhaps a case of public criticism is one of the reasons for the developing rancor (we call it a civil war) between landowners and the Marcellus industry in Pennsylvania. Landowners are upset that their royalty checks are, in some cases, pennies–as in less than one dollar. Drillers claim that super low prices they receive for the gas are to blame–that nobody is making money right now. Landowners say that drillers (e.g. Chesapeake Energy) are deducting post-production costs that they shouldn’t be allowed to deduct, resulting in worthless royalty checks. For a number of years landowners in Pennsylvania have supported legislation to force drillers to pay a minimum 12.5% royalty, which is stipulated under a 1979 law. Drillers say post-production costs are written into many contracts and if it’s there, landowners must live by the contract. It’s turning into a mess. We’ve covered it extensively (see our articles on HB 1391). When we write about it, it’s from the perspective of a broken heart that we have a civil war brewing. When mainstream media writes about it, it’s typically with some degree of glee and happiness that “the other side” has infighting going on. An article appearing in today’s Pittsburgh Post-Gazette does a good job of summarizing what we’ve previously posted on the issue. However, the Post-Gazette article adds one new bit of information we didn’t know about: earlier this summer there was a Twitter fight/dust-up between PA-NARO (National Association of Royalty Owners) and the MSC (Marcellus Shale Coalition)…
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PA Landowners, Drillers Fight over HB 1391 Minimum Royalty Bill

Garth Everett
Rep. Garth Everett

It appears that legislation in the Pennsylvania House of Representatives, House Bill (HB) 1391 that would fix the issue of landowners getting shorted in royalty payments, is about to die. It’s not the first time a bill meant to ensure landowners get a minimum of 12.5% in royalties has died in the PA legislature. Bradford County Commissioners chairman Doug McLinko is blaming the Marcellus Shale Coalition and other drilling industry groups. And he’s not a happy camper. Last June MDN told you about a renewed effort by Pennsylvania State legislators to pass a minimum royalty bill that will guarantee PA’s landowners get at least 12.5% royalties (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). HB 1391 is was introduced by State Rep. Garth Everett, a Republican from Lycoming County, PA. Everett said in June the new bill was “narrowed” in focus from a previous bill (that had failed) and because the more narrowed focus, he hoped the Marcellus industry would not oppose it this time around. Everett was dead wrong. As we reported in June, the rift between landowners and drillers on the matter of minimum royalties continues (see Rift Continues Between Drillers & Landowners re Royalty Bill). Due to some hard work by Everett, the bill finally moved out of committee where it had been stalled, and on to the full House for a vote (see Progress: PA Minimum Royalty Bill Heads to Full House for Vote). But now the bill is stalled in the full House and it appears there will not be a vote by the end of the fall session, due to close in another two weeks…
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New Effort to Pass HB 1391 Minimum Royalty Bill in PA

Garth Everett
Garth Everett

Last June MDN told you about a renewed effort by Pennsylvania State legislators to pass a minimum royalty bill that will guarantee PA’s landowners get at least 12.5% royalties (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). House Bill (HB) 1391 is was introduced by State Rep. Garth Everett, Republican from Lycoming County, PA. Everett said in June the new bill was “narrowed” in focus from a previous bill (that had failed) and because the more narrowed focus, he hopes the Marcellus industry will not oppose it this time around. The issue of guaranteeing minimum royalties is one of those rare issues that has divided the drilling industry and landowners. Everett said he hasn’t (until now) pushed the bill because of the budget stalemate, but now that the budget impasse is mostly over, he’s going to make a renewed effort to get HB 1391 passed…
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New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties

Last week MDN told you that a new royalty bill would be introduced in the Pennsylvania legislature to guarantee landowners get a minimum 12.5% royalty (see New Bill Pushes 12.5% Guaranteed Minimum Royalty for PA Landowners). The new bill, House Bill (HB) 1391 is, according to the bill’s main sponsor State Rep. Garth Everett, more narrowly focused than the previous bill introduced in 2013 (HB 1684). Gareth and a group of supporters from the PA chapter of the National Association of Royalty Owners gathered in the Capitol Rotunda in Harrisburg on Tuesday in a bill launch rally. We don’t (yet) have the language of the new bill, but we do have Everett’s description of what’s in the bill, a brief video interview of Everett from Tuesday’s launch rally, and a newspaper write-up from the event…
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PA Rep. Garth Everett Reintroduces Minimum Royalty Bill, 3rd Time

Third time’s the charm? The Pennsylvania General Assembly convenes for two-year sessions. Almost six years ago during the 2013-2014 session of the General Assembly, PA Rep. Garth Everett introduced “minimum royalty” legislation that would guarantee PA landowners would get minimum royalty payments of 12.5%–regardless of any kind of post-production expenses. It was called House Bill (HB) 1684 and it failed to even come to the floor for a vote (see PA Royalty Bill 1684 Off the Agenda, Likely for Rest of 2014). Everett re-introduced it during the 2015-2016 session, renamed HB 1391. Once again, near the end of the term, it failed to get a full vote (see PA Royalty Bill Dead for Another Year – Supporters Vow to Fight On). Everett is not giving up. Last Friday he re-introduced the bill for the third time, this time called HB 557. Does it stand a chance?…
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Northeastern PA Counties Explore Alliance to Pass Royalty Reform

One of the issues that isn’t going away is the demand by landowners in some Pennsylvania counties, like Bradford, for lawmakers in the state to pass a bill that guarantees them what they believe they are already guaranteed–a 12.5% minimum royalty, based on a 1979 law that states they should get such a royalty. We’ve extensively covered what we call a civil war between two parties who are otherwise friendly toward each other–landowners and shale drillers. Last year the issue came to a head with House Bill (HB) 1391 (see our list of stories here). In a nutshell, landowners say Chesapeake Energy and some other drillers are taking post-production deductions out of landowners’ royalty checks, resulting in royalty payments far below 12.5%. In some cases landowners are receiving bills for money owed to the driller–after the driller pulled the gas out of the ground! Who in their right minds leases land for drilling so they can PAY the driller! It is an outrage and landowners want it stopped. Drillers, on the other hand, say you can’t just change contracts after they’ve been signed, punishing the entire industry for the bad actions of a few. Drillers say the proper response is for landowners to sue the bad apples. Frankly, it’s all a mess. The new news is that landowners from Bradford and several other northeastern PA counties, tired of being outmaneuvered by drillers, are actively talking about forming an alliance to try and garner enough support in Harrisburg to get a bill like HB 1391 passed this year…
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PA Royalty Bill Dead for Another Year – Supporters Vow to Fight On

civil-warMDN reported on Monday of this week that we are down to the wire with passing Pennsylvania House Bill (HB) 1391, a bill that would guarantee a 12.5% minimum royalty payment for PA landowners (see This Week Last Chance to Pass PA Royalty Bill – Slim to No Chance). Yesterday the bill’s sponsor, Republican Rep. Garth Everett from Lycoming County, PA, announced that the bill never came up for a vote and has officially died. Everett said he would re-introduce the bill next year when the PA legislature convenes for a new session. To say that landowners in Bradford County (and other locations) are disappointed is an understatement…
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This Week Last Chance to Pass PA Royalty Bill – Slim to No Chance

Grunge Stempel rot LAST CHANCEWe’ve written a number of stories about Pennsylvania House Bill (HB) 1391 that would guarantee landowners receive a 12.5% minimum royalty on the gas extracted from their land, regardless of post-production costs. The issue has led to what MDN calls a civil war between landowners (particularly in Bradford County, PA) and the drilling industry. The clock is ticking and this week is it for this legislative session in PA. If supporters of HB 1391 don’t get the bill passed this week, it will have to be reintroduced and go through the entire process again next year. Supporters like Doug McLinko, a Bradford County commissioner, have warned of serious consequences for the industry if the bill doesn’t get passed. The industry appears to have convinced enough lawmakers to keep the bill bottled up so it doesn’t come to the floor for a vote, which riles landowners. HB 1391’s supporters in the legislature are sounding like it’s already over for this year, and that they will have to fight again next year. We’re concerned what this ongoing situation will do for what has, in the past, been good relations between landowners and drillers. That relationship appears to be souring, at least for some landowners…
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Bradford Landowners Release Powerful Video: PA Royalty Ripoff

civil-warA little over a month ago, Bradford County, PA commissioners voted to hire a public relations firm to create a video to force the issue of passing House Bill (HB) 1391, a bill ensuring PA’s landowners will receive a 12.5% royalty check regardless of post-production costs (see Bradford Votes to Hire PR Firm, Targets PA Lawmakers re Royalties). The video is out and it is powerful–watch it below. The video leaves little doubt that Chesapeake Energy has dealt in bad faith with landowners in Bradford County. The local animal care shelter signed a lease with Chesapeake, and instead of getting royalty checks, they’ve gotten a bill from Chesapeake stating the shelter OWES Chesapeake $30,000! What landowner, in their right mind, will EVER sign a lease with Chesapeake again if others sign and end up owing the company money? It’s nuts–and everyone knows it. The purpose of the video is to push passage of House Bill (HB) 1391 which would guarantee landowners receive what they were promised–12.5% royalties from the gas sold. However, the drilling industry continues to push legislators to defeat the bill. Their argument is that the entire industry of already-signed contracts should not be abandoned over the actions of one bad actor. Last Friday the American Petroleum Institute sent a letter to PA legislators (copy below) outlining their reasons. The royalty civil war continues…
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PA Royalty Unrest Spreads from Bradford County to Western PA

pa-regions
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This week Pennsylvania House Bill (HB) 1391 is back on the docket. At least, that’s what landowners in Bradford County are hoping. As we’ve covered for some time now, there is a growing split between landowners and drillers over abuses in deducting post-production costs from royalty checks. HB 1391 aims to fix that situation by guaranteeing a minimum 12.5% royalty for landowners, regardless of post-production costs. Until now most of the complaints about royalty shafting have come from landowners in Bradford County. But it seems Bradford (in northeastern PA) is not alone in their discontent. Landowners in Washington and Greene counties (western PA) are also upset with diminished royalty checks and are adding their voices to the effort pushing for passage of HB 1391. Does the bill stand a chance of passing this year?…
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PA Landowners Rally in Harrisburg to Support Royalty Bill

Pennsylvania State CapitolLandowners from Bradford, Susquehanna, Wyoming and Lycoming counties (Pennsylvania) attended a rally in Harrisburg, at the Capitol, on Tuesday. They were there to lobby for and support passage of House Bill (HB) 1391, a bill that would guarantee landowners a minimum 12.5% royalty payment regardless of post-production costs. We have extensively covered this issue, which is causing a schism between landowners and drillers (see our most recent article: Guest Post: A Possible Solution for the PA Royalty Issue). Affected landowners are extremely mad, and want their legislators in Harrisburg to pass HB 1391. They were there to make the case. Although they had hoped the measure might come up for a vote on Wednesday, the bill’s sponsor, Garth Everett, said it won’t be considered until October when the House is back in session…
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Status Update for 5 Important Bills Affecting PA Fracking Industry

update.jpgThe legal beagles at the Norton Rose Fulbright law firm recently issued a post on their Hydraulic Fracking Blog with updates on five important bills currently before the PA House and Senate that will affect the Marcellus industry (drillers, midstreamers and landowners)–with details for what’s in the bills and the status for each bill. Likely the most controversial of the bills is House Bill (HB) 1391, which would guarantee PA landowners a 12.5% minimum royalty regardless of post-production costs. That bill is due for a procedural vote today. Other bills are in bottled up in various committees where they may or may not make it out for a full vote. The PA House is in session today, tomorrow, and then Oct 17, 18, 19, 24, 25, 26, and Nov 14, 15. That’s it–just 10 more days in session before the end of the year. The PA Senate is in session today, tomorrow, and then Oct 17, 18, 19, 24, 25, 26. Just 8 more days for the Senate. So whatever is going to happen must happen quickly. Here’s a rundown on the five important bills, including HB 1391 (“Amendments to Oil and Gas Lease Act”), HB 2275 (“Changes to Environmental Quality Board membership”), HB 2277 (“Amendment to Oil & Gas Act related to bonding requirements”), HB 2319 (“Amendment to Oil & Gas Lease Act”), and HB 2361 (“Pennsylvania Turnpike Right-of-Way Act”)…
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700+ Landowner Rally in Bradford County, PA Pushes Royalty Bill

civil-warFor some time now MDN has highlighted the ongoing internal division among the ranks between Pennsylvania landowners and drillers over the issue of royalty checks. PA landowners are supporting House Bill (HB) 1391 which would guarantee landowners receive a minimum 12.5% royalty check regardless of post-production costs (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). Disagreement over the bill has erupted into a full-blown civil war, with landowners in Bradford County, PA–one of the most heavily drilled counties in the state–leading the charge (see Civil War: Bradford PA Escalates Fight with MSC re Royalty Bill). Last night the troops in Bradford assembled, and their numbers were 700+ strong, a very impressive showing. The rally’s purpose in Bradford was to call attention to HB 1391 and to specifically put pressure on PA legislators, whom attendees said were bowing to pressure (and money) from industry lobbyists–namely the Marcellus Shale Coalition. Here’s what went down at last night’s assembling of the troops…
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