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News Series Entry: Shortchanged: The Fight Over Royalities

Written by Tim Lambert, witf Multimedia News Director | Jan 18, 2014 1:10 PM

As the natural gas industry has grown, many Pennsylvanians signed leases with the understanding that under state law, they were entitled to a certain percentage of the money companies made selling the gas.

However, some of these leases contracts allow companies to deduct the expenses they incur processing and transporting the gas– for things like compressor stations and pipelines. These are known as “post-production costs” or “gathering fees.”

Landowners are now complaining they’re being underpaid. The issue has become particularly hot topic in the state’s busiest drilling hub – Bradford County. witf's StateImpact Pennsylvania reporter Marie Cusick spent several months looking into the issue:

(StateImpact Pennsylvania is a collaborative project among witf in Harrisburg and WHYY in Philadelphia to cover Pennsylvania’s booming energy economy. The initiative seeks to inform and engage the public on energy issues through data analysis, accountability reporting and well-crafted broadcast and digital narratives.)

Story 1:

Chesapeake Energy is the biggest natural gas producer in Pennsylvania and the second largest in the nation.

But it’s recently faced financial troubles amid low natural gas prices.

StateImpact Pennsylvania’s Marie Cusick reports some landowners in the commonwealth’s most-drilled-on county now claim the company is trying to save money by cheating them out of royalty payments.

Story 2:

Many of the questions about Pennsylvania’s natural gas boom have revolved around environmental concerns, but now some landowners are raising the issue of the financial side of drilling.

Earlier this month, StateImpact Pennsylvania talked with some who say they're being cheated out of royalty payments.

Now, a state Senate panel is taking note, as StateImpact Pennsylvania's Marie Cusick reports.

Story 3:

The Marcellus Shale is one of the most productive natural gas formations in the world.

But when it comes to measuring precisely how productive it is, Pennsylvania doesn’t audit the numbers.

Natural gas production data is submitted directly from drillers to the state Department of Environmental Protection twice a year, and published online before it’s checked.

As StateImpact Pennsylvania’s Marie Cusick reports, some landowners receiving gas royalties are frustrated there is nowhere for them to go to verify the accuracy of those numbers.

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