The hydraulic fracturing industry in Pennsylvania is pushing for the enactment of a so-called “pooling” law. Such a law would force Pennsylvania property owners to sell their below-ground natural gas rights to a drilling company if their neighbors were doing the same.
According to an article published last month in Business Week, other states have enacted pooling laws. Such laws typically allow a state authority to force a holdout landowner into a pool with neighbors who wish to sell their mineral rights in a block to a drilling company. The state authority determines how the holdout is to be compensated for the gas, Business Week said.
Those who object to such laws say they allow drillers to abuse landowner rights, and may limit a landowner’s ability to negotiate a better deal from a drilling company.
According to Business Week, no pooling bills have yet been introduced in the Pennsylvania legislature. However, talks between state officials and the industry are expected to pick up in the coming weeks before the Legislature returns to session next month. At least a couple of bills are in the drafting stages.
The state’s Governor, Democrat Ed Rendell, has promised that any such law would have to include certain environmental protections and landowner compensation requirements before he would sign it, Business Week said. John Hanger, Rendell’s Environmental Secretary, told Business Week that any bill must contain explicit requirements for distance between well sites and promise “full, fair” compensation to the anyone whose gas was forced into a pool.
Drilling in the Marcellus shale, a rock formation rich in natural gas that lies beneath parts of West Virginia, Pennsylvania, New York, Ohio and Maryland, has resulted in gas boom in some parts of Pennsylvania. But it has also led to instances of water contamination, as well as other problems.
According to a report recently released by the Pennsylvania Land Trust Association, the state has identified 1,435 violations by 43 Marcellus Shale drilling companies since January 2008. Of those, 952 were identified as having or likely to have an impact on the environment. Keep in mind, there are only about 1,458 Marcellus wells drilled in the state at this time. A separate analysis by Clean Water Action released late last month found 565 violations at Marcellus Shale gas drilling sites between Jan. 1 and June 18 this year alone.
On the other hand, the drilling industry has been very kind to former Pennsylvania officials. In just the past year, three top Rendell staff members left their state posts to work in governmental relations jobs for the industry. And earlier this month, we reported that two consulting firms belonging to ex-Governor Tom Ridge signed one year contracts to serve as strategic advisers to the Marcellus Shale Coalition. The contracts will net Ridgeâ€™s firms a total of $900,000 this year. Two former aids who served Ridge while he was governor will be part of a legislative advocacy group that will lobby the state legislature.