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Stop gas royalty cuts

I have been reading with interest the articles, commentaries and letters concerning leaseholders and natural gas drillers.

My family signed leases in Butler County in 2006. At that time we thought the Guaranteed Minimum Royalty Act of 1979 covered us, and for the beginning of REX Energy’s payments it did, There were no processing fees taken out for the first six payments from the well in 2010.

But after the Pennsylvania Supreme Court’s 2010 decision in Kilmer v. Elexco, REX started taking out “processing, marketing and gathering fees” beginning with the in the first royalty check of 2011. We were told they are deducting the fees “because they can”.

These fees have increased over the years to the point that this spring they actually charged us 76 percent of our check for electrical costs retroactively that they “found” going back to 2012.

What will they find next?

Last year, state House Bill 1684 made it to the House floor. But as a Butler Eagle Editorial related, the gas industry did what was needed to kill it.

This year a similar bill, HB1391 states, “The minimum royalty to a lessor for unconventional gas well production shall not be less than one-eighth of the lessor’s percentage ownership in the production from the production unit calculated on the total price received by the operator for the production in an arm’s-length transaction. No deductions of any costs shall result in a royalty payment less than one-eighth as provided in this section. The requirement for a minium royalty payment shall apply to all existing and future leases for unconventional gas well production and shall commence upon the effective date of this section.”

House Bill 1391 currently sits in the Environment Resources and Energy Committee. Rep. Jared Gibbons of Slippery Rock is on this committee.

Rep. Brian Ellis of Butler is a co-sponsor of the bill and needs to do like U.S. Rep. Mike Kelly: have an interview with the Butler Eagle and explain this bill to the thousands of his constituents with leases.

Call Gibbons, Ellis or whomever your state representative is. Tell them to support and vote in favor of HB1391. Tell them you vote and they shouldn’t sell out to the gas companies.

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