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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Exclusive: MSC’s Dave Spigelmyer Goes On the Record with MDN

Dave Spigelmyer

Last Friday MDN editor Jim Willis had the pleasure of speaking (via phone) with the president of the Marcellus Shale Coalition, David Spigelmyer. Some 300 companies make up the membership of the organization–including all of the top exploration & production (E&P) companies and midstream (pipeline) companies operating in our region. Dave himself used to work for Chesapeake Energy once upon a time. He is a Pennsylvania boy, born and bred, and knows the industry inside and out. Dave made time to speak with MDN about a wide range of issues. We should note nothing was “off limits”–Jim asked some tough questions. Below is a transcript of that interview. We tackle topics including the Marcellus industry outlook for 2017, the commodity price of natural gas in our region vs. other locations, the proposed severance tax in PA, various pipeline projects, the Shell cracker, MSC’s lawsuit against DEP Chapter 78a regulations, and the “civil war” between drillers and landowners over the royalty issue. It’s all in there…
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Speculation: Transco Sending M-U Gas to Louisiana LNG Terminal

Over a year ago the mighty Transco turned bidirectional, sometimes sending gas northward from the Gulf (as it’s done for 50 years), and now, sometimes sending gas from the Marcellus/Utica southward, to the Gulf. Much more gas will head south once the Atlantic Sunrise Pipeline project gets built (see FERC Approves Atlantic Sunrise Pipeline! Cabot Grabs More Capacity). However, from various stories we’ve read, and from our speculation, we’ve assumed that at least some Marcellus/Utica gas now flows far enough south that perhaps some of it reaches the Cheniere Energy LNG export facility in Sabine Pass, Louisiana (see LNG Slowly Changing the NatGas Game in the Marcellus/Utica). Until now, the gas traveling from north to south has only made it as far as the Creole Trail pipeline and from there Creole Trail would conduct the gas to Cheniere’s LNG plant in Sabine Pass. But beginning yesterday Transco is now connected directly to the Sabine Pass facility. We have to confess this is speculation on our part, but we don’t think it’s much of a stretch to say that Marcellus/Utica gas is now flowing to Sabine Pass for export. And if our gas is not now flowing to Sabine Pass, it soon will be. Here’s our evidence…
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2 Royalty Bills Focus of PA Senate Hearing Today

PA Sen. Gene Yaw

Last week MDN brought you the news that several northeastern Pennsylvania counties are investigating an alliance to push for passage of a bill like last session’s House Bill (HB) 1391 to guarantee landowners receive a minimum 12.5% royalty regardless of post-production costs (see Northeastern PA Counties Explore Alliance to Pass Royalty Reform). However, landowners and those who support them in the PA legislature are not pinning all hopes on a guaranteed minimum royalty bill. Also proposed in the last session (2015/2016) were two bills meant to greatly assist landowners in their quest to monitor royalty payments and how they are calculated. In January 2015 (almost exactly two years ago) PA Senator Gene Yaw, who represents several counties in northeast PA, re-introduced Senate Bills (SB) 147 & 148 (see PA Senate Reintroduces Two Marcellus Royalty Bills, SB 147 & 148). “Re-introduced” in 2015 means both bills were introduced in the previous session (in 2013/2014). SB 147 would have allowed landowners the right to review drilling company records to verify proper royalty payment. It would also have required drillers to pay royalties within 90 days of production. SB 148 prohibits drillers from “retaliating” against a landowner who questions royalty payments by canceling the lease or stopping drilling activity. Both bills were embraced by the Pennsylvania chapter of the National Association of Royalty Owners (NARO). They both passed the Senate and stalled in the House. Now, for the third time (going on the sixth year) Sen. Yaw has re-introduced both bills again. This time they are called SB 138 & 139 (full copies below). Sen. Yaw isn’t wasting any time–he’s holding a hearing today to discuss both bills. Will this time be successful?…
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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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Marcellus & Utica Shale Story Links: Tue, Dec 6, 2016

best of the restThe “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Pipeline projects in PA deserve support; Mass. AG tries to change story re Exxon in federal court; Trump offers opportunity to correct country’s energy policy; shale companies hedging is turning oil market “upside down”; natgas prices hit near 2-year high; EPA close to releasing final fracking report; OPEC should be very afraid of US shale companies; 3 Sec State candidates have o&g connection; India moving to natgas economy; and more!
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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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War of Words Continues in PA Royalty Civil War

civil-warBradford County, PA landowners and their titular leader, county commissioner Doug McLinko, are keeping up the pressure on PA’s legislators to pass House Bill (HB) 1391 to guarantee landowners receive 12.5% royalties. Earlier this week we noted the county had released a powerful new video to support their cause (see Bradford Landowners Release Powerful Video: PA Royalty Ripoff). The video was followed up by an impassioned letter to the editor from McLinko, appearing in the Harrisburg Patriot-News’ website, under the title, “Tell lawmakers to stop the mugging in The Endless Mountains.” Not to be outdone, the Marcellus Shale Coalition responded a few days later with a “we feel your pain, but this bill isn’t the answer” letter to the editor of its own…
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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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Landowners Go to Harrisburg to Pressure Lawmakers on Royalty Bill

Mr. Smith Goes to Washington
Mr. Smith Goes to Washington

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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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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