Lawmakers should do their part to protect leaseholders
You'd think that Pa. lawmakers would aggressively try to protect the interests of state residents who benefit directly from gas extraction.
But a request this week by our Bradford County commissioners asking the Department of Justice to investigate Chesapeake Energy Corp. for allegedly shorting gas royalty payments to leaseholders, demonstrates that the state government has failed to protect leaseholders' interests.
Many leaseholders have complained that the company allegedly has withheld excessive post-production costs, such as processing expenses and pipeline transmission fees, from the royalties they pay to leaseholders.
Two class action lawsuits have been filed against the company and the state attorney general's office has launched an investigation.
Royalty payments are governed by a state law that was passed in 1979. It requires that companies pay no less than 12.5 percent of the value of the gas.
Lawmakers from the Marcellus Shale region have introduced legislation to update the law and account for post-production costs imposed by the companies. Such an update should be a no-brainer, but lawmakers recessed for the rest of the summer without adopting it.
The industry vigorously opposed the bill and legislative leaders kept it in limbo, claiming that the need to pass the state budget was a higher priority. They could have moved the bill long before the budget deadline approached, however. They should pass it when they reconvene.