Landowner rights in the Commonwealth in jeopardy from gas company...

Gas companies are running rampant all over the Commonwealth of Pennsylvania.  For the most part, these are companies in search of profits, and while one can blame them or not, that is the free market system.  However, the gas companies have become reckless.  They have begun to claim that they are above the law of contracts.  Their mantra has been that if they "own" the oil and gas, they have a "right" to access that oil and gas in any manner THEY deem reasonable.

This belief is based on an interpretation of the case of Belden and Blake v. Commonwealth, Department of Conservation and Natural Resources, 600 Pa. 559, 969 A.2d 528 (Pa. 2009).  Belden and Blake was about a Commonwealth agency trying to exert powers over and above those of a private landowner under the guise of Pennsylvania's Environmental Amendment. The court found in favor of the gas company, but cited Chartiers Block Coal Company, 152 Pa. 286, 25 A.597 (Pa. 1893) for the proposition that an oil and gas owner has a right to access their reserves.

The problem is, Chartiers Block did not involve a surface owner, or even a question of split estates.  Chartiers Block was a lawsuit by an owner of a coal estate to stop an owner of oil and gas estate from drilling through the coal to reach the oil and gas.  A lower court Chancellor, noting the difficulties of the decision, decided to allow the oil and gas estate to be accessed, noting that any damage could be paid for later.  The Court was troubled by its holding, stating:

This is a new question, and one that is full of difficulty.  The discovery of new sources of wealth, and the springing up of new industries which were never dreamed of half a century ago, sometimes present questions to which it is difficult to apply the law, as it has heretofore existed.  It is the crowning merit of the common law, however, that it is not composed of ironclad rules, but may be modified to a reasonable extent to meet new questions as they arise.  This may be called the ‘expansive property of the common law.’  Mining rights are peculiar, and exist from necessity, and the necessity must be recognized, and the rights of mine and land owners adjusted and protected accordingly.

Id., at 294, 295.

The Supreme Court, on appeal, noted these problems, adopted the findings of the Chancellor and refused to disturb the decision on appeal.  This is not a resounding decision that oil and gas estate owners have a "right" to access oil and gas, as referenced in the dicta of Belden and Blake.

In fact, these cases really have nothing to do with the intent of the parties, or the protection of a ladowner's right to contract.  Chartiers Block turned on the balancing of competing rights in portions of the subsurface estate and Belden and Blake turned on the fact the Commonwealth as a landowner enjoyed no more rights than a private landowner.  But in neither case did the courts address a situation where a landowner specifically limited the estate granted to an oil and gas company.    

Despite these facts, the oil and gas industry has decided to push this alleged "right" to the hilt.  Knowing that most landowners cannot afford to fight back, the oil and gas industry has drilled first and dared landowners to sue.  One very well known company has even challenged the Commonwealth to file suit to stop it from drilling.  When the Commonwealth indicated it did not agree with the position of the company, the company decided it would drill from off the property in dispute.  They went so far as to permit a well two properties away (so they would not have to give notice under DEP regulations).  When the Commonwealth sued, the company had the temerity to argue that a restriction on methods of production stating that only methods ordinarily in use in 1928 could be used actually was to protect the "surface owner" from the methods in use in 1850.  Of course, gas was not discovered until Drake's well in 1859.

The Supreme Court in Chartiers Block cried out for a legislative solution.  Perhaps it is now time for the people of the Commonwealth to demand their rights to contract and protect themselves from the gas companies.  Gas companies should not be given super powers (any more than the Commonwealth) to walk all over landowners and dare landowners to sue to stop the gas company.  Gas companies are not above the law.  If gas companies improperly act and are challenged, they should be penalized.  Attorney's fees should be allowed to give incentive to attorneys to represent landowners who often are land rich and cash poor.  Common law nuisance should be utilized when "tremors" shake the ground. 

The gas companies have money to take care of themselves.  Exxon Mobile was the number one company in 2012.  Google the amount of campaign contributions these companies make.  The number is so high that EQT shareholders are actually questioning if it is prudent.

If you are a landowner in the Commonwealth, you are at risk. Associate with other landowners, become vigilant discuss these issues with your legislators.  There is too much to lose if we abdicate our private property rights to gas companies.