Neighbors Bicker in Pa. over Forced Gas Drilling

Business News/Analysis, Pennsylvania

April 1, 2014

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by Kevin Begos and Marc Levy (Associated Press/Fuel Fix) An energy company is dusting off an old, unused state law that can force property owners to accept oil and gas drilling under their land, pitting neighbor against neighbor in a Pennsylvania community and raising the possibility that lawmakers will have to take sides.
Houston-based Hilcorp seeks to use a 1961 Pennsylvania law to drill under the property of four holdout landowners in New Bedford, near the Ohio border an hour north of Pittsburgh. The concept, known as “forced pooling,” means that people who don’t sign leases get bundled in with those who do, to make drilling more efficient and compensate all the landowners.
The stakes are high. Property owners can reap royalties totaling hundreds of thousands or even millions of dollars from drilling in the Utica Shale formation, which lies below the better-known Marcellus Shale.
Suzanne Matteo, one of the four who has refused to sign a lease, said she is furious that the company may be able to drill under her property without her permission.
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Matteo said she’s resigned to drilling in the area, since her neighbors have signed leases. But she’s concerned about possible pollution and effects on property values, so is refusing to sign “on principle.”
The whole battle also has a political edge, since the state Department of Environmental Protection will make the final ruling on whether to approve the request. The response to Hilcorp’s proposal has been so strong that two hearings that had been planned for last week have been postponed until early May.
Over 5,000 new wells have been drilled in Pennsylvania since 2008 using hydraulic fracturing, or fracking. The law does not apply to the Marcellus Shale formation, the source of most of the gas being produced, but does to the Utica Shale, which energy companies see as a new frontier, since it also holds oil. READ MORE

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