CREDIT: AP Photo/Jim Suhr
An old state law in Pennsylvania could allow an energy company to force landowners to allow oil and gas drilling under their land, even if the landowners are opposed.
Oil and gas company Hilcorp is trying to use a 1961 Pennsylvania law that would allow the company to bundle properties of people who don’t sign drilling leases with their neighbors who do, meaning that even landowners who don’t sign leases will be forced to allow drilling under their land if enough of their neighbors sign leases. Hilcorp is seeking to use the law, which is known as the Oil and Gas Conservation Law and was tailored for the Utica shale formation rather than the Marcellus shale, to force four landowners in New Bedford, PA to open their properties up to drilling. The company says 99 percent of the property owners in the tract of land they’re looking to drill have signed leases.
This isn’t the first time Hilcorp has tried to use “forced pooling” to secure leases from holdout landowners, though. The company has been pushing since July to get permission to use the law, and it took legal action in October in an attempt to guarantee the law would be available for it to use on Pennsylvania residents. That case centered around landowner Bob Svetlak, who has lived on his family’s homestead since 1949 and didn’t want to give up that land to oil and gas drilling.
“I didn’t buy this land to sell it,” Svetlak said in October. “I bought it for peace and property, like a lot of people in this country. I live here for the tranquility.”
In November, a state environmental court ruled that Pennsylvania’s Department of Environmental Protection must consider whether or not to allow Hillcorp to use forced pooling to secure oil and gas leases. The DEP was supposed to hold a hearing on the law last week, but the agency abruptly postponed it on Monday, and a new date hasn’t yet been set.
If the company succeeds in gaining permission to use the law to allow forced pooling, it will be the first time the law has been used in about 30 years. Landowners are split on the issue, with those who have signed leases opposed to the idea that neighbors who don’t want drilling could prevent them from getting the most monetary value out of their land. But among forced pooling’s opponents is Pennsylvania Gov. Tom Corbett, who in 2011 called using the 1961 law for forced pooling a case of “private eminent domain.”
Pennsylvania isn’t the only state struggling to determine what rights landowners have over the oil and gas under their land. In October, a Reuters investigation uncovered the unsettling trend of homebuilders and developers across the U.S. quietly holding on to the rights to the oil and gas resources beneath the houses when they’re sold — so that when buyers purchase their homes, they don’t know that the gas and oil underneath doesn’t belong to them and can be sold off to energy companies at any time. As it now stands, it’s perfectly legal in many states for a developer to retain the rights to mineral resources underneath homes and bury the specifics of that ownership in the housing contract.