Gas leaseholders want action

Answering questions from gas lease holders concerning their rights and possible courses of action during a town meeting Wednesday are, from left, Bill Wilson of the Wyoming County Landowners Group; Bradford County Commissioner Daryl Miller; and MeeCee Baker, NARO Pennsylvania Legislative Consultant.

At least 200 people showed up at a town meeting in Black Walnut on Wednesday, May 31, to discuss their rights and options concerning natural gas royalties in Pennsylvania.
The meeting was organized by the Pennsylvania Chapter of the National Association of Royalty Owners, under the direction of the Pennsylvania President Jackie Root. The event’s proceedings included a panel discussion, of which Bill Wilson, representing the Wyoming County Landowners Group, was a participant.
Wilson said a possibility existed that the organization would request arbitration concerning its gas royalty payments.
Wilson later explained after the meeting that the Wyoming County Landowners Group has asked for audit reports of the amount of natural gas that has been obtained by the gas companies from the its affected properties.
Information obtained from the reports will determine whether the group decides to seek arbitration. Wilson said the audit is expected to take about a year.
The Wyoming County Landowners Group represents 1,200 parcels of land in Wyoming County containing 48,000 acres leased by the gas companies.
Root began the proceedings by providing an update on NARO’s efforts to provide assistance to gas lease owners in Pennsylvania. Root urged all owners of gas leases to contact their state legislators and express their support of House Bill 557, which is currently being considered in Harrisburg.
The bill, Root said, would amend Pennsylvania’s Oil and Gas Lease Act.
If the bill becomes law, she said, lease owners would receive a guaranteed minimum of 12.5 percent royalty payments for the natural gas extracted from their properties.
HB 557 represents a very grass roots effort to obtain fair treatment for the gas lease holders, Root explained. She said that 37 state legislators have signed on in support of the bill, but a show of support from the voters is also needed.
MeeCee Baker, of Versant Strategies and a NARO Pennsylvania Legislative Consultant, provided information on how HB 577 is moving through the House, and the best way people can express to state lawmakers their support of it.
“We are all rural people and we’re in this together,” Baker explained.
She urged people – particularly leaseholders who have received negative royalty statements from gas companies – to send an email to Harrisburg.
People should identify themselves and provide contact information, politely explain their situation in a few sentences, ask them to please move HB 557, and thank them for their service, she said.
In addition to their local legislators, it is particularly important that people contact Rep. Garth D. Everett, the bill’s sponsor, Baker said, so he can demonstrate its support to his fellow lawmakers. Other important legislators include the Speaker of the House Mike Turzai, House Majority Leader David Reed, House Majority Whip Bryan Cutler, and Chairman of the Environmental Resources and Energy Committee John Maher.
“They want to hear your story. And those stories, gain ground,” Baker explained.
It is also very important to provide copies of the emails sent to the House leaders to their local state legislators as well as Everett, she said.
“We don’t have big checkbooks,” Baker said. “But what we do have is the power of the pen. There’s money and there’s votes. And we’re rural Pennsylvania. And I think its time that we be heard.”
Attorney Chip Abrahamsen Jr. spoke about the challenges he has faced when representing gas lease holders in court. One of the biggest problems, he said, is the courts re-interpreting the word ‘may’ as the word ‘will.’
As a result, when he has asked for a jury trial for gas lease holders in civil cases, the courts have always ruled that ‘may submit’ in the event of a dispute worded in a lease means ‘will submit,’ and the matter goes to arbitration as a result.
But even with this restriction, Abrahamsen explained, he has always won for his clients, obtaining fairer distribution of their royalty money, even though the process can sometimes take years.
One person asked why, if Abrahamsen is winning those cases, the courts have not used that as a precedent.
The attorney explained that the leases require the cases be sent to a private arbitrator, so the courts are having no say in the rulings.
Bradford County Commissioner Daryl Miller spoke about how the impact of post production costs are costing millions of dollars in lost county and local revenues.
The problem, he said, is the state Supreme Court ruled in 2010 that the Pennsylvania’s Oil and Gas Lease Act says nothing about post production costs, allowing gas companies to apply them against the royalty fees owed to the lease holders.
Yet in that same ruling, the court indicated that the state legislature has the authority to set guidelines in such matters, including requiring minimum payments to royalty owners.
“It’s been seven years, and we’re still dealing with this issue,” Miller said.