FRACKING ROYALTIES and OTHER NEWS
Dory Hippauf, of Shakeshock Media, recently posted an incredibly informative article on the myth of fracking royalties and how Pennsylvania citizens are being treated unjustly by the oil and gas industry. Go to her blog page to read the entire article and to see other posts by Dory Hippauf.
From Dory Hippauf’s Fracking Royalties and Other News:
Money doesn’t grow on trees, and as a number of drill leasers are finding out, it doesn’t spew from gas wells either.
As was stated in REVOLT OF THE DRILL LEASERS, royalty checks are not all they were fracked up to be. Responding to complaints of tiny royalty checks, enormous post production costs, and the inability of some leasers to install their cement ponds, the Pennsylvania Senate swiftly held a hearing.
Senator Gene Yaw was joined at the hearing by Senators John Yudichak (D-14), Minority Committee Chairman, Lisa Baker (R-20), Kim Ward (R-39), Elder Vogel (R-47), Scott Hutchinson (R-21), as well as Representatives Garth Everett (R-84), Matthew Baker (R-68), Tina Pickett (R-110) and Sandra Major (R-111).
Yaw serves as Chairman of the Environmental Resources and Energy Committee and Vice Chairman of the Urban Affairs and Housing Committee. He is also a member of the Judiciary, Law and Justice, Agriculture and Rural Affairs, Labor and Industry and Rules and Executive Nominations Committees and the Majority Policy Committee. Yaw also serves on a number of Boards and Commissions including as Chairman of the Center for Rural Pennsylvania, a member of the Joint Legislative Air and Water Pollution Control and Conservation Committee and a member of the Environmental Quality Board.
Yaw holds gas leases with Anadarko and has been active in the controversy regarding fracking of Loyalsock State Forest. (See: FRACKED: LOYALSOCK STATE FOREST). His interest in quickly rectifying post production cost charges is obvious.
Not only are the royalty checks tiny, in some instances leasers are being charged retroactively for post production costs which has resulted in receiving a BILL in the thousands of dollars instead of a check.
Testifying at a Senate Environmental Resources and Energy committee hearing on June 27, 2013, Bradford County Commissioners Chairman Doug McLinko said, “Our constituents have shown us evidence of extraordinary post-production cost in Bradford County, with deductions of 40 and 50% all the way up to as much as 90%.” “…we have seen checks come with zero payment. We have seen retroactive charges being billed to land owners for tens of thousands of dollars where the property owners actually have a bill sent to them and they go without any royalty payments until it is paid in full.” Similar concerns were raised by the Pennsylvania Farm Bureau at the same hearing.
Chesapeake Energy seems to be the big gas corporation taking the biggest chunk our of royalty checks. However, April 2013, Chesapeake Energy sold much of its natural gas holdings in Pennsylvania to Southwestern Energy for a mere $93 million. Lease holders formerly with Chesapeake may be surprised to find out they now have to deal with Southwestern regarding royalty payments and post production costs.
WHAT ABOUT THE JOBS?
In the past when Pennsylvanians have gone to their local Senators and Representatives with complaints about contaminated water, excessive noise, air pollution and other drilling related issues the typical response has been to pooh-pooh the concerns and point out “all those jobs”.
Conspicuous by its absence at the hearing was the usual talking point about “all those jobs” being created by the gas industry. It doesn’t seem to occur to the legislators that royalty payments cost the gas corporations money which reduces their ability to create “all those jobs”. Post production costs also reduce corporate profits which would prevent creation of “all those jobs.
YAW SAYS SUE’EM
After listening to the testimony, Yaw says he’s not sure why more people aren’t filing lawsuits, and is doubtful there can be any quick legislative fixes.
“We could take action,” he says, “But that’s not going to solve the problems some of the people face now. I think they need to take action themselves. But the encouraging thing is I think there are avenues for them to pursue it. They’re not alone. They just need to be willing to do it for themselves.”
There you have it lease holders; you are on your own, welcome to the Sacrifice Zone.