Royalty payments cause concern
BY STACI WILSON
Concerns about natural gas royalty payments were brought to light at the Wednesday, July 24 meeting of the county commissioners.
Gloria DiGirolamo said that with the gas companies taking the readings at the wells, there is no way to prove exactly what royalty-owners should be paid.
“They can not give us a formula,” DiGirolamo said. “Without (a formula) we can’t find out if we’re being ripped off or not.”
She also said that Senate Bill 259 – recently signed into law by the governor – did nothing to address the underlying issue. She also suggested pursuing the matter through Securities & Exchange Commission regulations.
SB 259 requires royalty check stubs to include production taxes and deductions taken from the royalty payment but does not protect the royalty owners from the production costs.
Earlier this summer, Susquehanna County Commissioners passed a resolution requesting the legislature to define the state’s “guaranteed minimum royalty” set at 12-1/2 percent advising that post-production costs should not part of the minimum royalties paid to property owners.
Commissioner Michael Giangrieco said that a 2010 Pennsylvania Supreme Court decision noted the legislature should better define “guaranteed royalties.”
“None (of the legislators) stepped up to the plate,” Giangrieco said.
The commissioner said that Sen. Gene Yaw had said that existing contracts could not be amended.
Some of the early leases signed in the county did not provide for royalty payments without post-production costs. Many leases written more recently keep the gas companies from charging a portion of the post-production costs back to the landowner.
Giangrieco said he had worked with Rep. Sandra Major on the issue in 2008. “There was no support from anyone to look at it then,” he said.
The commissioner said he felt SB 259 hurt the landowners even more.
“Who’s looking out for the landowners?” he questioned. “It should be our elected officials who are supposed to be looking out for us.”
“Whose pockets are being taken care of,” questioned DiGirolamo.
“Nothing has been passed in favor of the landowner,” replied Giangrieco.
Jackie Root, of NARO-PA (National Association of Royalty Owners of Pennsylvania), said the grassroots group has now hired a consultant in order to have “boots on the ground” in Harrisburg.
“We’re the only ones out there making the argument (for the royalty owners),” Root said.
Root said there are over 150,000 royalty owners but she feels the group’s role was marginalized when SB 259 was drafted.
According to Root, NARO-PA plans to hold town hall style meetings and coffee shop talks over the next few months for its members.
Another audience member, Edna Paskoff said she had spoken with Rep. Tina Pickett’s office regarding the “rule of capture.”
Paskoff said she was advised to hire an attorney to determine if she should be receiving any royalties from nearby gas drilling.
“Now I have to employ an attorney,” Paskoff said, adding the person’s she spoke with said to her, “Good luck in your pursuit.”
Vera Scroggins, also in attendance at the meeting, asked why none of the legislators had come forward on the issue.
“Call them,” Giangrieco said. “They think they’re doing a wonderful job.”
But DiGirolamo wasn’t just at the meeting to discuss royalties. She also spoke about the nine-mile drilling moratorium still in place in parts of Dimock Twp.
“It’s locking up landowners that are not even close to (Carter Rd.),” she said.