TOWANDA -- A rally for people who feel they haven't been getting their fair share of royalties from Chesapeake Energy was held Wednesday night in Bradford County.
The rally is aimed to drum up support for a bill going through Harrisburg that would guarantee that companies pay a minimum fee to people who own land leased to the companies to drill and remove their natural gas.
It's been several years since the gas drilling rigs moved into parts of Bradford County, specifically the Barrett Farm south of Wysox. The farm has been around for more than a century and a half and added natural gas to the list of things produced there.
"To a farmer or farm family, words are important. A handshake contract is fine," said Jim Barrett.
Barrett admits he was disillusioned expecting a minimum amount of money in return for the energy below his property. Now, Barrett is one of many leaseholders with Chesapeake Energy seeking six figures he believes is owed to him in unpaid royalties.
"Maybe I'm more disappointed in our lawmakers that they didn't see exactly what was happening."
Back in 2008, Barrett believed he was signing a fair lease with Chesapeake Energy. As it turned out, several years later after a court decision reversed a state law requiring a minimum royalty, Barrett found himself getting no royalties at all.
"(We) hope legislators see this is not a fair game. I'm disappointed that they don't think enough of us to follow the law. Instead, they let a lobbyist decide how a law comes out," said Barrett.
Bradford County Commissioner Doug McLinko doesn't blame every gas company for shortchanging landowners but demands state lawmakers make this right, perhaps with proposed legislation to fix the minimum gas royalties for all.
"It's just a few. And do I think we're represented? I think the Marcellus Shale Coalition has misled lawmakers in Harrisburg. They've been at leading front of $55 million that have been sprinkled in the hallways down there," said Commissioner McLinko.
Residents packed the auditorium at Towanda Area High School with the intent to send a strong message to state lawmakers and to Chesapeake Energy, the country's second largest producer of natural gas. These residents of Bradford County say they are not taking it anymore.
“They're thieves! That's what's going on as far as I'm concerned.”
“We thought we were going to be getting some money,” said Elsie Bailey. “I figured I could help my kids a little, make life easier for us, but it hasn't and we've hardly gotten anything, especially lately, it's down to nothing.”
Leaseholders who allowed Chesapeake to drill gas wells on their land in exchange for a 12.5 percent royalty payment say the company is not making good on its promise.
It's been applying post-production fees, cutting those checks down to zero; sometimes the leaseholder even ends up owing Chesapeake.
“In the last four months I should have gotten $6,600, and I've got $577,” said Ed Bronson.
“They deduct for this. They deduct for that and Chesapeake,” said Bailey. “The last checks I think like 90, 91 percent they're taking, of our share.”
Clair Black from Dushore says it's happening to folks in Sullivan County as well.
“They're still taking between 50 and 75 percent out of us down in Sullivan County and up here they're taking even more out of them,” said Black.
The Bradford County Commissioners hosted this town hall meeting to show support for proposed legislation that would hold gas companies' feet to the fire.
State Representatives Garth Everett and Tina Pickett are sponsors of that bill.
“Pennsylvania's had a minimum royalty statutes since 1979 and a few of the gas companies that I call the bad actors have found a way to get around that and pay our folks less than that,” said Rep. Everett.
Currently, Chesapeake energy is being sued by the state attorney general's office over those royalty payments or lack thereof. The attorney general's office accuses the company of using “bait and switch” practices.
Chesapeake Energy issued a statement in regards to the royalty payments:
“Individual leases spell out different contractual obligations for the parties involved. Chesapeake recognizes that lease interpretation and royalty calculation is complicated. We are committed to working with our royalty owners to answer any questions they may have and are happy to schedule a time to review their lease provisions. Where questions arise, Chesapeake has and will continue to engage in meaningful discussions in attempt to arrive at mutually acceptable resolutions.”
