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Pooling changes opposed

Gas drillers seek more access

HARRISBURG — Pooling isn't popular.

If you haven't heard of it, it's an obscure provision that was at the top of the list of changes to Pennsylvania law being sought this year by companies unearthing natural gas from the rich Marcellus Shale formation that sits below much of the state.

But senator after senator in Harrisburg has voiced opposition to the concept, which, simply put, could be used to force holdout landowners to lease their below-ground gas rights under certain conditions. Landowners would be paid for the methane sucked from beneath their turf, and no well would be drilled on their land — but they'd be unable to say "No" to a drilling company.

Opponents call it tantamount to government taking property rights to benefit private companies, and say industry representatives could wield it as a weapon to limit a landowner's ability to negotiate a better lease.

Senate President Joe Scarnati, a key industry ally, said he'll continue to try to develop a provision that satisfies the concerns of his fellow senators. But he acknowledged concern over taking property rights is a major hurdle.

Citizens "take it seriously, and I think that it's maybe a toss-up — take their property or take their guns," Scarnati, R-Jefferson, said.

Scarnati had hoped to put a pooling provision into a wider bill addressing Marcellus Shale issues, including an extraction tax sought by House Democrats since shortly after the drilling boom began two years ago. However, pooling is likely to be punted into next year.

The Senate's last scheduled voting day this year is Oct. 14 and no pooling proposal has received a public hearing or even a lengthy floor debate. The issue is thorny enough, even if legislators weren't facing an election in four weeks.

An industry spokesman said Friday he hadn't given up on the provision.

"The ongoing negotiations on taxation and modernizations to the statutory framework for our industry will likely ebb and flow over the next two weeks," said David Spigelmyer, vice chairman of the industry group, Marcellus Shale, and the director of governmental relations for Oklahoma City-based Chesapeake Energy.

Pennsylvania already has a pooling law, but it is unused, outdated and applies to a different gas formation below the Marcellus Shale. Such laws are on the books in other states — including neighboring West Virginia, New York and Ohio.

In West Virginia, where Marcellus Shale drilling is also brisk, discussion about updating the state's pooling law is under way. Currently, the state law applies to just vertical wells, not the horizontal wells that are being used with success to gather gas from the shale, said David McMahon of the West Virginia Surface Owners' Rights Organization.

Proponents of pooling, including McMahon, say it is an environmentally sound idea that ensures property owners get the most out of their gas rights.

Pooling laws typically allow a drilling company to petition a state authority to force holdout landowners into a pool with neighbors who already leased their gas rights. The state authority must determine whether forcing the holdouts into the pool is in the broader public interest, and then how the holdouts are to be compensated for their gas.

A landowner who does not want to sign a lease can force a company to drill more wells, build more roads and lay more gathering lines to harvest all the gas to which it owns the rights, pooling proponents say. In theory, all that extra activity inflicts more environmental harm and costs more money, potentially reducing the amount of a landowner's royalty.

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