Landowners Go to Harrisburg to Pressure Lawmakers on Royalty Bill

Pennsylvania landowners are, as we recently pointed out, in a civil war with the Marcellus industry over the issue of royalties (see Deep Dive: PA Royalties Civil War Between Landowners & Drillers). Landowners want House Bill (HB) 1391 passed–a bill guaranteeing landowners will receive a minimum 12.5% royalty payment regardless of post-production costs. Drillers, being represented by the Marcellus Shale Coalition, are pushing back by saying landowners must live under the contracts they’ve signed. It’s complicated–read our previous articles about it here. With a short time left in this legislative session, landowners continue to press their case with lawmakers. The latest in the skirmish is that landowners have set up a table in the Capitol Rotunda in Harrisburg to lobby (i.e. pressure) lawmakers into taking action on the bill…
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Welcome to Pittsburgh! MDN editor Jim Willis always enjoys the City of Bridges. Today begins Shale Insight. If you’re attending (and a number of MDN subscribers do attend), please stop by Booth 208 and say hello. There will be a number of top notch speakers both today and tomorrow. The person grabbing most of the headlines is Donald Trump, who will speak tomorrow. However, there are many other noteworthy speakers on the agenda. Harold Hamm, CEO of Continental Resources is one of them. Gary Heminger, CEO of Marathon Petroleum is another. Other standouts for MDN: Stacey Olson, the new president of Chevron Appalachia; Gladys Brown, chairwoman of the PA Public Utility Commission; Keith Burdette, Secretary of the West Virginia Department of Commerce; Camera Bartolotta, PA Senator; and Alex Epstein, author of the book, “The Moral Case for Fossil Fuels” (great book, Jim has read it). For the list of speakers and a full agenda, visit:
Anti-coal, anti-natural gas, anti-oil, anti-logic…the radicals who make up the Sierra Club are anti-everything. They can’t even stand themselves! Self-loathing seems to be a requirement for membership. The Allegheny sub-group of the Sierra Club is planning to protest in front of the David L Lawrence Convention Center in Pittsburgh this coming Thursday morning. Why? Because presidential candidate Donald Trump is scheduled to speak and they HATE HIS GUTS. They also hate frackers and those who support them, like your humble editor. There’s no better unifier on the left than hatred. MDN will be on location at the event and if we get a chance we’ll snap a picture or two of the nutters out front protesting. Meanwhile, here’s the Sierra Club game plan for Thursday…
From time to time exploration and production companies (aka “drillers” or “producers”) decide to sell leases for acreage they don’t plan to drill on or under. Typically when a new play is discovered there is a bit of a land rush as drillers begin leasing. In the Marcellus, a driller may decide to concentrate on a specific county in the state, as Cabot Oil & Gas did with Susquehanna County in northeastern PA. Cabot happened to hit the jackpot with some of the most productive gas wells on the planet. Other times, when the leasing is done and drilling has begun drillers begin to figure out where they want to spend their money. It takes a lot of money to drill a Marcellus well–on the order of $7 million. Eventually drillers find there are isolated tracts of acreage they’ve leased that don’t fit with their future plans, so they either horse trade and swap, or perhaps put the acreage leases up for public auction. Such is the case with Shell’s SWEPI subsidiary. They recently posted three largish tracts of leased acreage up for auction–two in Tioga County, PA and one in Potter County, PA. Here’s a description of the land SWEPI is trying to dump…
This story is unbelievable on so many levels. A pointy-headed liberal who cloisters himself inside the insular Beltway of Washington, DC made a trip to Pittsburgh last week to talk to a small class of 70 students at Carnegie Mellon University. In this talk the lib proclaimed that the “incentives” provided by PA to Shell to lure a cracker plant to the state are, essentially, monies the state didn’t have to spend and a burden to the taxpayers of PA because Ohio and West Virginia may also reap some of the benefits of the cracker (without “paying” for it). The lib’s operating assumption is that 100% of everyone’s money belongs to the all-knowing government–including money made by big, evil corporations like Shell. He further states that by granting a few exemptions on taxes to Shell, PA is taking money out of the pockets of common folk. His philosophy and assumptions are so twisted it’s beyond belief. What’s more twisted is that the Pittsburgh Post-Gazette wrote a major story about the talk–as if it’s news…
For 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 

There is no doubt Sunoco Logistics Partners has been pushing a boulder up a hill when it comes to the Mariner East 2 pipeline project–a $2.5 billion, 350-mile natural gas liquids (NGL) pipeline that will run from eastern Ohio through the state of Pennsylvania to the Marcus Hook refinery near Philadelphia, carting ethane, butane and propane to the facility from both the Utica and Marcellus region. For over a year the project was mired in legal challenges of whether or not it can claim public utility status, with a right to use eminent domain. In July, PA’s Commonwealth Court ruled it is a public utility with a right to use eminent domain (see
On April 29, Spectra Energy’s Texas Eastern Transmission (TETCO) “Delmont Line 27” pipeline exploded in Westmoreland County, PA, seriously injuring one resident who still cannot walk after being burned over much of his body (see
Last week the U.S. Department of Energy (DOE) doled out a total of $13 million in grants for twelve multi-year research projects. The aim of the projects is to develop ways to mitigate methane emissions from natural gas pipelines and storage infrastructure, ways that don’t break the bank. Two of the twelve projects will be run in Pittsburgh. PPG Industries, the Gas Technology Institute and RTI International received a combined $876,639 to study remote monitoring of natural gas pipelines. The University of Pittsburgh and Corning together got a whopping $1.2 million to develop an advanced distributed optical fiber technology for natural gas infrastructure monitoring. Here’s the lowdown from the DOE…
Channeling 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 (
What happens when you put a virulent anti-driller in charge of a state’s forestry service, a state that previously had a small, safe, healthy program to allow some shale drilling, giving taxpayers a break with a source of new revenue? Of course the anti-driller immediately tries to quash any more new drilling efforts. And that’s just what has happened with former PennFuture president and current Secretary of the PA Dept. of Conservation and Natural Resources (DCNR), Cindy Dunn. We called for her firing back in June when she was caught using–we’d say misappropriating–taxpayer money to send her staff to Big Green reeducation events (see