Gas well pooling provision mystifies state lawmakers

| Thursday, July 4, 2013, 12:01 a.m.

The state House member who sponsored amendments that would make it easier for energy companies in Pennsylvania to combine land leased for gas drilling said on Wednesday that he did not know who wrote the provision or where the idea came from.

The General Assembly passed a bill last weekend that would empower drilling companies to combine leased land into larger drilling units as long as the contracts don't prohibit it. The bill would likely have its biggest effect in Western Pennsylvania, where many people hold old oil and gas leases that don't mention pooling. For that small set of landowners, it could undercut the power to renegotiate when drillers need to assemble large tracts for modern, horizontal shale drilling, experts and critics have said.

Legislators said discussions about the problem started months ago, but Rep. Garth Everett, R-Lycoming County, said he could not remember who pointed out the problem or suggested this solution. Everett introduced it in his bill in May, and then again June 25 to amend a sister bill sponsored by Sen. Gene Yaw, R-Williamsport. Yaw's bill passed both houses. Their staff members collaborated to write it, Everett said.

“I'm serious. I don't know who exactly proposed (that amendment). We had a lot of proposals going into the bill,” Everett said. “Legislation is brought to us by staff. I send them ideas, and they put them into a form of legislation and come back. Where the idea came from, who proposed this ... section, I don't know who that individual was.”

Everett did remember a lobbyist from EQT Corp. had stopped him in a Capitol hallway to encourage the bill's passage. That's so common in Harrisburg that he could not remember other specific people from interest groups who had talked to him, he said.

Landowners advocates have criticized not only the effect of the provision but the way it passed. It is two sentences in a five-page bill drafted primarily to get better information to royalty recipients.

Both houses also passed it in less than a week, while most media attention stayed focused on the June 30 budget deadline and failed efforts to pass big-ticket bills on transportation, liquor sales and health care.

“By calling this a royalty owners bill and then throwing this forced pooling provision into it, it's really ridiculous,” said Robert Burnett, an attorney at Houston Harbaugh P.C., Downtown, who represents landowners. “It's a Trojan horse.”

Gov. Tom Corbett has 10 days to sign the bill. He is evaluating it and doesn't have plans to sign it this week, a spokesman said.

Corbett's energy adviser, Patrick Henderson, has spoken in support of the bill. He and other supporters have tried to distinguish it from the type of forced pooling common in other states that has often met fiery opposition in Pennsylvania. This would pool only land with leases that approve gas drilling, though they have not approved combining their lands with other plots.

“I was sort of ambivalent about (it), but I didn't see that it compromised anybody,” Everett said of his initial reaction to the provision. “I am a supporter of gas development in Pennsylvania, so if it facilitates development without hurting anybody, I'm fine with it.”

Everett named Michael Killion as the EQT lobbyist who had encouraged the bill. Reached by phone Wednesday afternoon, Killion said he would call “right back” to talk about the bill. He did not, nor did he answer calls and voice mails later in the day. Several other EQT officials have not responded to requests for comment.

In November, the EQT executive who oversees exploration and production said at an industry conference that combining plots of land had been a problem in the region. The company was not advocating for forced pooling, but it did want the legislature to make it easier to combine leased properties, Steven T. Schlotterbeck, a senior vice president at EQT, said in an interview with the Tribune-Review.

Tim Puko is a staff writer with Trib Total Media.

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