Republican Gov. Tom Corbett is defending legislation that an oil and gas royalty owners group said undermines some landowners’ negotiating rights when dealing with Marcellus Shale drilling companies.

Corbett signed the bill without public comment Tuesday after it won overwhelming support from the Republican-controlled Legislature in June. In a letter to lawmakers, Corbett said he believes the new law enhances the efficiency of drilling for oil and gas while limiting environmental damage and protecting the rights of landowners and leaseholders.

He said it is not his intention to affect the agreed-to terms of an existing lease.

The law is designed to advance the Marcellus Shale industry’s ability to vacuum up natural gas through the recent advent of underground, horizontally drilled bores that can extend out thousands of feet from the vertical well bore, sometimes even crossing property lines.

Marcellus Shale wells can be drilled on land that was leased for the traditional, shallow oil and gas wells drilled in western Pennsylvania in the decades before a boom began in 2008, the bill’s proponents say.

However, those leases had no provision in them to allow a drilling company to extract gas through horizontal well bores that extend from an adjacent property. This law gives that power to drilling companies, instead of forcing them to ask the permission of the landowner or whoever leased the mineral rights, or simply drilling a well on the property to get the gas.

The absence of such permission from the lease gave the landowner or mineral rights owner the ability to negotiate to allow it to be inserted into the existing lease, said the National Association of Royalty Owners, a group that generally favors drilling.

“It is potentially a valuable opportunity to these mineral owners, but it appears that the operator who pushed this effort found their money would be better spent to negotiate in Harrisburg rather than at kitchen tables,” said Trevor Walczak, vice president of the association’s Pennsylvania chapter.

The provision was in a bill sponsored by Rep. Garth Everett, R-Lycoming, and passed the House Energy Resources and Environmental Committee on June 4 and the full House unanimously on June 11. Two weeks later, the provision was amended into a separate bill, which passed the House and Senate overwhelmingly.

An industry group, the Marcellus Shale Coalition, supports the new law. Everett said Wednesday that House staff had brought the idea to him and he did not know which company was seeking the solution.

Instead, he said, he believed it would clarify a practice that was already underway while heading off lawsuits.

“I don’t personally believe it compromises anybody’s rights,” he said.

No hearing was held on the provision, and NARO said many lawmakers did not understand the provision.

 

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