Old drilling leaseholders – get ready. PA Governor Tom Corbett is forcing you into the Fracking Pool with his latest Gift to Gassers.
Gov. Tom Corbett on Wednesday defended the new Gift to Gassers which he signed into law this week.
Critics say it will undercut some landowners in lease negotiations with Marcellus shale gas drillers.
The Gift to Gassers was tacked onto legislation to clarify information on gas royalty payments, empowers oil and gas drillers to combine land into larger drilling units as long as a property owner’s lease doesn’t prohibit it (which majority of these old leases don’t prohibit).
It effectively forces people with existing contracts to allow their land to be pooled into larger drilling units without having full power to negotiate better deals in return, legal scholars and landowners advocates have said.
Under old leases oil and gas companies paid landowners $1 per acre and 1/8th royalty payments from any oil produced by the well. Today, companies are offering $3,000 to $4,000 per acre.
Speculations on the motives behind the newest Gift to Gassers involve Corbett and his “re-election” prospects range from encouraging more campaign contributions from natural gas interests, to expanding employment opportunities for himself should he be defeated in 2014.
Corbett’s current approval rating indicates a bag of doorknobs could beat him in the 2014 election.
GET A LAWYER
Some old leasers are refusing to be forced to frack and have retained lawyers.
Attorney Michael Grove recently filed a lawsuit in Trumbull County Common Pleas Court to help get those landowners out of the old leases, some of which he believes have been abandoned.
“Some of these older companies that have these old leases want to make the claim that their lease covers that Utica and that Marcellus shale formation and that their lease is still good,” Grove said.
One example is if there was a gap of several years in which the oil and gas company did not work the well, but came back to work the well just to keep the lease alive. The landowner then may have a claim that the lease is expired.
“He could freshly lease his property at the new going rate, which is much higher,” Grove said.
He feels many of the oil and gas companies abandoned the leases, and landowners should be able to take advantage of the current Utica shale boom.
BIG QUESTION: If Corbett can force old leaseholdersinto the frack pool, how long before he pushes in the rest of us?
RELATED: FORCED INTO THE FRACKING POOL
©2013 by Dory Hippauf