Pooling Gas Leases Now Pennsylvania Law

A new law signed by Governor Tom Corbett and passed by state lawmakers was meant to make royalty payments on gas leases more transparent.

However, advocates for landowners claim an amendment in the bill actually benefits the gas companies.

Natural gas well pads dot the landscape throughout the Marcellus Shale region.

Many of the gas wells are drilled down vertically then out horizontally in one direction.

Anyone with a gas lease that did not mention “pooling,” could negotiate with gas drillers for a price if they were to be incorporated into a company’s drilling unit.

All that changes now that state lawmakers have passed Senate Bill 259. The governor signed it into law this week.

An amendment to the bill lets gas companies pool leases together with horizontal drilling even if the individual leases do not mention pooling.

Attorney Mary Kilgus of Hughesville says landowners don’t benefit.

“[The amendment] was tacked onto what was supposed to be an environmental bill. A move to benefit the gas companies,” said Kilgus.

According to the PA Chapter of the National Association of Royalty Owners, if you had a gas lease from 2004 or 2006 that does not include the wording pooling, but your neighbors do, then the gas company can drill horizontally through your neighbor’s land, under your land. And that means gas companies can now determine how much money you get in return for your gas.

“It also has an environmental provision in it about consolidating leases to reduce the number of drilling pads,” said Senator Gene Yaw, R, Lycoming County on WKOK Radio’s “On the Mark” program Wednesday.

Yaw was the prime sponsor of the bill, but would not return our calls to find out if any environmental groups supported the pooling amendment.

Act 66 – Comment from Sen. Gene Yaw (R)

Another lawmaker from our area, Representative Garth Everett, R, Muncy also had a hand in the bill but told a Pittsburgh newspaper he does not know who proposed the amendment, adding:

“Legislation is brought to us by staff. I send them ideas, and they put them into a form of legislation and come back. Where the idea came from, who proposed this… section, I don`t know who that individual was.”

The law does not enact “forced pooling” which would take control away from landowners who do not have leases with gas companies.

SB 259 Gov. Corbett Letter