House panel approves gas royalty bill
BY ROBERT SWIFT
Times Shamrock Writer
A bill addressing a wave of complaints from landowners in Northeast Pennsylvania about company deductions that cut Marcellus royalty payments was approved Monday by a House committee.
The measure that cleared the Environmental Resources and Energy Committee by a 15-10 vote after contentious debate would limit deductions tied to post-production costs associated with Marcellus drilling from royalty payments to landowners who lease property for drilling. It now goes to the House floor.
The bill would buttress a 1979 state law that guarantees leaseholders receive at least 12.5 percent of the value of the gas extracted. A key provision would calculate royalties at the point where the gas enters the commercial market or an interstate transmission system rather than at the wellhead. “We are trying to make sure our landowners get paid the 12.5 percent royalty that has existed since 1979,” said Rep. Garth Everett, R-84, Muncy, the bill’s sponsor. Panel members Reps. Mike Carroll, D-118, Avoca, and Frank Farina, D-115, Jessup, voted for the bill. In a show of support for the bill, Reps. Sandra Major, R-111, Montrose, Matt Baker, R-68, Wellsboro, Tina Pickett, R-110, Towanda and Karen Boback, R-117, Harveys Lake attended the committee meeting.
The bill would apply to gas production on existing and future leases, but it doesn’t address the issue of landowners seeking retroactive repayment of royalties through legal action.
The affected landowners asked for legislation that would apply to future royalties, said Mr. Everett.Opposition to the bill came mainly from Republican lawmakers representing western Pennsylvania. Some voiced concerns about its impact on shallow gas and oil leases as new drilling technology is introduced while others said that legislation interfering with contracts is unconstitutional.