Commissioners Try To Clear Up Gas Lease Concerns

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TOWANDA -- Commissioners called a special meeting in Bradford County Tuesday to try to tackle what they call problems with the gas industry.

Some residents in Bradford County say one gas company is taking out large deductions from royalty checks and local leaders say those deductions are unreasonable.

Residents say Chesapeake Energy has dipped into their leaseholder royalty checks, taking out big deductions for what's called "post -production costs."

County commissioners say they're calling on state leaders for help to firm up legislation that would keep more money in residents' pockets.

Landowners who collect royalty checks from gas drilling say they've been getting more of a reality check.

"Things weren't adding up, no. Not to what we were promised. We were promised a minimum of 12.5 percent and it doesn't add up to that," said Jackie Kingsley of Smithfield Township.

Residents say Chesapeake Energy is taking deductions out of royalty checks for "post-production costs."  Some landowners get less than two percent, with monthly royalty checks of about $80.

Bradford County commissioners say they're trying to stop this "unreasonable and unfair business."

"When you have them basically taking everything, it's just a little ridiculous, when you have companies taking nothing," said Commissioner Doug McLinko, (R) Bradford County.

McLinko and other commissioners say according to the Guaranteed Minimum Royalty Act, leaseholders should  get at least a 12.5 percent profit on their lease to gas drilling companies. But a state Supreme Court decision says the law is vague and that allows gas companies to find loopholes.

Now people are hoping state leaders can help clarify the law, making it stronger and keep more money locally.

"This money goes to pay taxes, as he said, it goes to put, in senior citizen's cases, it goes towards putting food on their table and buy their medicines."

The commissioners said this resolution isn't just about helping people here, but it's about helping people all throughout the state of Pennsylvania.

State lawmakers say it's much easier said than done.

Representative Tina Pickett said, "I am already working on this issue and am aware of the problems. But at this time, we don't have a legal solution in hand."

While at least one other state leader is frustrated, commissioners haven't had any conversations with him prior to this resolution.

"If there really is a concern, it would seem to me that you would call somebody and talk to them before you would do some public splash for a resolution that I'm not sure does anything," said Representative Gene Yaw.

But residents hope this resolution is the first step in the right direction.

State leaders say commissioners in Susquehanna County passed a similar resolution a few weeks ago.

We reached out to Chesapeake Energy officials to find out why their post-production deductions are so high. They didn't have an official comment at this time, but said any lease owners with questions should give them a call.