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State Senate OKs legislation to let drilling companies pool land

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By Josh Fatzick and Tim Puko
Sunday, June 30, 2013, 4:12 p.m.
 

HARRISBURG — A bill allowing drilling companies to pool land from some landowners into gas-drilling units is on its way to Gov. Tom Corbett after Senate approval.

The bill was approved 48-2 on Sunday with no debate.

The legislation could impact shale drilling operations in Western Pennsylvania, where many people signed oil and gas contracts years before shale drilling became a major industry.

“A requirement of the bill is that all the units must be under lease,” said Drew Crompton, chief counsel for Senate President Pro Tempore Joe Scarnati, R-Jefferson County. “No one is forced. Each (owner) has agreed to lease for gas drilling.”

But the bill will affect people who have not necessarily agreed to lease their land for modern shale drilling.

Experts have said it's likely to affect old contracts that don't mention whether drillers can combine their leases into the large pools that cover several parcels of land, common in today's drilling.

If it passes, it will give the drilling companies the right to pool leases as long as their contracts don't specifically prohibit it, which older contracts typically don't, experts have said.

That creates a problem for the landowners by undercutting the leverage they would otherwise have to renegotiate old contracts, legal experts and landowners' advocates said recently. Drillers want to put those leases into larger pools so they can access more land from one well, and when old contracts don't permit that, the landowners could ask for larger payments or other benefits in exchange for allowing it, they said.

“This is the paradigm shift in politics, the point in time we can look back to where PA gas law began to prey upon the people rather than protect,” Trevor Walczak, vice president of the Pennsylvania chapter of the National Association of Royalty Owners, wrote in an email.

“The lawmakers have blatantly over-reached ignoring the need for checks & balances,” Walczak wrote. “Unfortunately, this is just a taste of what is to come. The rules need to catch up (to) the technology, but the rules need to be drafted by the people.”

The provision allowing drilling companies to pool the land was amended into the bill and approved by the House early Saturday before it was fast-tracked for a vote in the Senate.

Timothy Puko is a staff writer for Trib Total Media. He can be reached at 412-320-7991 or tpuko@tribweb.com. Josh Fatzick is an intern with the Legislative Correspondents Association.

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