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Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=13103
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: July 11, 2013 09:33 PM
From: Representative Jesse White
To: All House members
Subject: Prohibiting "Forced Pooling" or "Private Eminent Domain" of property for natural gas drilling
 
In the near future, I will be introducing legislation expressly banning the practice of "forced pooling" or "unitization" of property for natural gas drilling, also known as "private eminent domain for drillers".

Forced pooling would allow gas drilling companies to drill under property even if the property owner doesn't want to lease his/her land, pooling his property together with adjacent property owners that have agreed to lease their land for drilling.

The recent signing of Act 66 of 2013 (formerly SB 259) by Governor Corbett enables a form of "unitization" or "forced pooling" in Pennsylvania. Act 66 permits a drilling company to force people with old leases (that were signed for shallow wells years ago, NOT Marcellus Shale) to allow their land to be pooled into larger drilling units without having full power to negotiate better deals in return.

To be clear, the money does not necessarily go to the current owner of the surface property- it will go to the person who signed the original lease many years ago. This potentially deprives a surface owner of any potential of reclaiming their dormant or severed mineral rights.

Gov. Corbett claims the language in Act 66 is not a form of forced pooling, despite the clear claims of many legal scholars and the National Association of Royalty Owners. The only benefit to this provision is for the drilling company, which no longer has to negotiate a lease; it takes away all negotiating power and leverage for lease terms, which encompass more than just money, from the landowner.

In order to clarify the issue and protect all Pennsylvania landowners, I am introducing legislation which will expressly prohibit the use of "forced pooling" or "unitization" of any kind. Presumably even Gov. Corbett will be supportive of this proposal, based on his statement to the Pittsburgh Post-Gazette on April 27, 2011:"It's private eminent domain. I don't think that's right," Mr. Corbett said in his keynote speech to about 400 people at the daylong seminar. "I was made aware that it's on the industry's wish list, but I don't agree. If I see a bill that contains forced pooling, I won't sign it."

The governor said that in talks he's had with industry officials, the drilling industry's tentative acquiescence to a local impact fee has been tied to the state's approval of forced pooling. "That's the dirty secret," he said. "The industry will take the tax but only if it gets the regulations on forced pooling."

The best way to avoid confusion and to clarify that Pennsylvania does not support forced pooling or unitization is to pass a law saying so in simple and unambiguous terms. My legislation will repeal the forced pooling/unitization provision in Act 66 of 2013 and expressly prohibit forced pooling or unitization of any kind in Pennsylvania.

Please join me in demonstrating the property rights of Pennsylvanians are more valuable than the bottom line of the natural gas drilling companies by co-sponsoring this legislation.



Introduced as HB1700