Pennsylvania Farmers with Gas Leases Feel Shortchanged

Post-production costs for transportation and processing ‘gutting’ gas royalty payments below the required 12.5% minimum

An August 25, 2022 story by Mike Jones “Farmers discuss natural gas royalties with state, local leaders” in the Observer-Reporter included quotes from several local farmers lamenting their shrinking royalties from the natural gas industry on land leases due to deductions and the depletion rate of their wells.

One of the farmers is Bill Black, who owns a 127-acre farm in Hopewell Township, Washington County, PA who said that he lucked out when he signed his lease in 2008 at the height of the natural gas boom and was able to secure 16.25% royalties along with $2,000 per-acre signing bonus.

“I know we’re blessed. We’re not getting wealthy. We’re not living high. I feel sorry for the people who signed up for the minimum (because) the deductions really took them down.”

Bill Black

Slideshow of gas well development at the Black Unit and its gathering pipeline that runs cross country to the Lowry Compressor Station next to Cross Creek County Park:

“Post-production costs are associated with moving natural gas from wellhead to market and are negotiated, agreed upon terms in contracts between the landowner and operator. We have helped advance and continue to support royalty check transparency measures, but contract-related disputes will always be most effectively addressed by the courts.”

Jim Welty, vice president of government affairs for the Marcellus Shale Coalition
Tim O’Neal

“I’ve told them this is the biggest issue they have to resolve. It’s not an easy thing to do, but I think there is a solution.”

PA state Rep. Tim O’Neal said of the shale gas industry

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