Forced Land Leases To Gas Companies Debated

on September 09, 2011 at 6:00 AM

Pennsylvania’s booming shale-gas industry has called for so-called pooling that would require landowners who don’t want to lease their land for drilling to do so if their neighbors have agreed.

The state’s legislators aren’t likely this year to pass any laws that would force unwilling landowners to lease their land to gas drillers or impose state law on localities that want to pass their own regulations on the industry, Pennsylvania lawmakers said on Thursday.

Energy companies have also argued for statewide standards governing the ability of municipalities to control drilling within their jurisdictions. The City of Pittsburgh and some smaller communities in the state have passed ordinances that ban gas drilling.

While state lawmakers are eager to reap the benefits of the shale-gas boom across much of Pennsylvania, they are not ready to concede to industry wishes on either issue, said Senator Dominic Pileggi, leader of the Republican majority in the state Senate.

Pooling and local regulation are two possible impediments to the current boom in development of the Marcellus Shale, a massive natural gas field underlying Pennsylvania and parts of surrounding states. The field is believed to contain enough gas to meet total US needs for 20 years at current consumption rates.

Pooling Resources

Pooling is a “very difficult issue to get support for,” Pileggi told a panel at Shale Gas Insight, an industry conference in Philadelphia. “It’s a new concept in Pennsylvania. Of all the issues, that is probably the most difficult issue to get consensus on at this point in time.”

Sandra Major, chair of the Republican majority caucus in the state House of Representatives, said people in her northeastern Pennsylvania constituency, one of the state’s most active drilling areas, are opposed to the idea of being forced to give up gas under their land.

“The whole idea of them being told that gas was going to be taken from under their land becomes a real concern,” she said. “Whether that will be part of the package this coming fall…probably not.”

But she urged the industry – which argues that pooling reduces the environmental impact of drilling – to step up its efforts to educate the public on the issue if it wants to win support among lawmakers.

A spokesman for the Marcellus Shale Coalition, an industry group, said discussion on the pooling issue would likely extend beyond this fall.

“From the perspective of an environmental advocate and a mineral owner, fair pooling is a win-win for Pennsylvania,” the spokesman said in a statement.

State Control

Major also played down the chances of state lawmakers limiting the ability of towns and cities to pass their own ordinances that would control gas drilling.

“I support local control,” she said. “It would be a challenge for legislators to tighten that up too much.”

Pileggi said there is a “long, proud tradition of local control” among Pennsylvania’s approximately 2,500 local government units, and there’s a “difficult balance” between state and local rights.

But he said there should be uniform standards across the state, and a statewide model ordinance may be a way to achieve that.

In their work on Marcellus Shale-related issues this fall, state lawmakers will focus on the safety of pipelines that are being built to take natural gas from thousands of wells across the state, Pileggi said.

Lawmakers will also revisit the issue of a tax or fee on gas production following the failure of a “severance tax” on gas production that was proposed by former Democratic Governor Ed Rendell but rejected by the legislature at the end of the last administration.

Current Republican Governor Tom Corbett has refused to agree to a severance tax but said he would consider charging the industry an “impact fee” to compensate communities for damage to roads and other infrastructure caused by the industry.

Photo Caption: The historic Codori farm at the Gettysburg National Military Park in Gettysburg Pennsylvania.