House Environmental Committee Reports Out Oil & Gas Royalties Bill

The House Environmental Resources and Energy Committee Monday reported out House Bill 1391 (Everett-R-Lycoming) requiring the payment of minimum royalties to the owners of oil and gas mineral rights.  The bill was then referred to the House Rules Committee.

“There has been a great deal of work done with legislative colleagues and stakeholders on this issue for some time and House Bill 1391 represents a more simplified effort to provide fairness for natural gas drilling lease holders,” said Rep. Garth Everett (R-Lycoming), prime sponsor of the bill.  “The approval by the committee signals that this is a good bill worthy of open debate on the House floor.

“This bill would protect lease owners by guaranteeing that a minimum royalty payment for unconventional gas well production would not be less than one-eighth (12.5 percent). Companies have reduced royalty payments by deducting post-production costs.

“A 2010 Pennsylvania Supreme Court case determined that the General Assembly is the proper branch of government to determine public policy regarding royalty valuation. We have continued to push this effort for the protection of the shale gas well lease holders.

“We anticipate the floor debate to include an amendment process and we look forward to a spirit of cooperation as we get to the final passage of this legislation.”

A sponsor summary of the bill is available.

Rep. John Maher (R-Allegheny) serves as Majority Chair of the House Environmental Committee and can be contacted by sending email to: jmaher@pahousegop.com.  Rep. Greg Vitali (D-Delaware) serves as Minority Chair and can be contacted by sending email to: gvitali@pahouse.net.

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