About cberl

Chris Berl is President and CEO of Restroom Direct and Managing Director of Bavada.com. Both companies specialize in the sales of commercial restroom accessories and hand dryers. Chris is also a Director at Hoyt Royalty which is a family run enterprise managing mineral rights in the Marcellus Shale region of Pennsylvania.

Marcellus Shale Gas Boom Sparks Land Disputes

Hoyt Royalty weighed in with limited comments for this Philadelphia Inquirer piece that appeared in last Sunday’s paper. The article, by Andrew Maykuth, looks at the the Herder v Keller case and the issue of land and mineral (oil and gas) ownership rights in Pennsylvania.  

While there is certainly more to be said, Mr. Maykuth did a nice job describing the history and the complex issues around this case.  Here is the beginning of the article:

The Marcellus Shale natural gas discovery has triggered an associated boom in Pennsylvania land disputes, as formerly valueless mineral rights are now potentially worth millions.

The heirs of a Centre County landowner asked the Pennsylvania Supreme Court this month to resolve a case that stripped them of their 19th-century mineral rights, now claimed by a hunting club that bought the land in 1959.

The convoluted legal question affects the natural resources beneath huge expanses of timberland in the heart of the Marcellus Shale, which now accounts for nearly a quarter of the nation’s natural gas production.

“Although this case concerns a dispute over the ownership of oil and natural gas under roughly 433 acres of property, the questions presented potentially affect the mineral ownership rights of hundreds of thousands of acres of property located in this commonwealth,” Ronald L. Hicks, a Pittsburgh lawyer who represents the aggrieved heirs, wrote in an Aug. 8 Supreme Court filing.

The entire article can be seen here:  Oil and Gas Mineral Rights in PA

 

Link

Debunking The Myths Surrounding Natural Gas Title Washing

How can one’s title be divested if natural gas was not and cannot be the subject of a proper real estate tax assessment?

With the ever-growing potential that Pennsylvania will play a significant role in the United States’ production of natural gas in the 21st Century, more lawsuits are being filed over who owns the rights to the subsurface gas. Generally, such lawsuits involve a dispute between the heirs of the early landowner who recorded a deed that severed the natural gas from the surface estate and one whose chain of title emanates from a tax sale held after the severance was recorded. Several commentators have opined that if the land was “unseated” at the time of the tax sale and the severed subsurface estate was not separately assessed, then the tax sale “washed” the prior recorded severance and passed title of the natural gas to the tax sale purchaser even though the underlying tax assessment was directed solely to the surface estate or other mineral interests.

Pennsylvania federal and state courts alike, including several from the trial courts in north-central Pennsylvania where such “title washing” was purportedly practiced at the turn of the 20th Century, have cast serious doubts on the extent to which severed natural gas titles have been lost or divested by these early tax sales.

INTRODUCTION

This article summarizes Pennsylvania’s real estate tax laws and the historical taxation of natural gas interests. Also, this article discusses the concept of title washing and its proper application to the real estate taxation of natural gas interests. Finally, it addresses how title washing is being misconstrued by commentators and those claiming title via tax sales in order to improperly deprive owners or the heirs and assigns of their severed natural gas interests.

 

Please follow the link to see the entire article.  http://www.muslaw.com/Files/Admin/Debunking%20The%20Myths%20Surrounding%20Natural%20Gas%20Title%20Washing%20-%20January%202014.pdf

 

Pennsylvania Supreme Court Gives Towns More Control Over Drilling Rights

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HARRISBURG, Pa. (AP) — The Pennsylvania Supreme Court on Thursday struck down portions of a law that stripped some of the powers municipalities have to decide where the natural gas industry can operate — portions that the industry had sought from Gov. Tom Corbett and lawmakers.

The justices ruled the 2012 law unconstitutionally restricted the power of municipalities, although the 4-to-2 majority disagreed as to why it was unconstitutional.

Seven municipalities challenged a law known as Act 13, which restricted local municipalities’ ability to control where companies may place rigs, waste pits, pipelines and compressor and processing stations.

Among the objectionable provisions cited by the lawsuit are requirements that drilling, waste pits and pipelines be allowed in every zoning district, including residential districts, as long as certain buffers are observed.

“It’s a tremendous victory for local governments, for local democracy, for public health and for the environment,” said one of the plaintiffs’ lawyers. “It’s a huge, huge victory for the people of Pennsylvania.”

The booming drilling industry had sought the changes, and Corbett and Republican lawmakers approved them over the objections of Democrats.

A narrowly divided lower court had said the zoning rules ran afoul of the state constitution, but Corbett appealed, saying lawmakers have clear authority to override local zoning.

The municipalities said the zoning restrictions run counter to objectives of protecting the environment, health and safety of people who live there, and three of the six justices agreed. A fourth justice ruled that the law violated the municipalities’ constitutional rights to due process.

A lawyer for Senate President Pro Tempore Joe Scarnati, R-Jefferson, said the decision is a setback that will reopen the door to legal fights between municipalities and the drilling industry that the Legislature had sought to settle.

Efforts by communities to limit drilling, in some cases imposing an effective ban, drew complaints from the companies.

The law also imposed new safety regulations for drilling and an impact fee tax for areas where the drilling occurs. Through the end of last year the industry had paid out more than $406 million in impact fees.

http://www.syracuse.com/news/index.ssf/2013/12/pa_supreme_court_strikes_down_key_portions_of_natural_gas_drilling_law.html

Herder Spring Hunt Club v. Keller: Amicus Brief

Herder Spring Hunt Club v. Keller is a case currently pending before the Pennsylvania Superior Court that addresses whether tax sales can impact one’s title to subsurface oil and gas interests.   The Kellers won this case in the trial court by showing that a 1935 tax sale did not “wash” their ancestors’ title to the severed subsurface interests because, among other things, the oil and gas interests were not accessed or taxable under Pennsylvania law.

As the oil and gas owners of severed estates, the Kellers have a number of similarities to Hoyt Royalty and Thorne Heritage Resources.   Hoyt and Thorne have filed an Amicus brief in this case.  That brief can be seen here:

Herder Hunt Club Brief of Amici Curiae Hoyt Royalty and Thorne Heritage

Truckers Tap into Gas Boom

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October 30, 2013 Wall Street Journal on how truck fleets are rapidly adapting to the lower cost of natural gas.

By

Mike Ramsey              
Oct. 29, 2013 6:37 p.m. ET
Operators of some of the largest U.S. truck fleets, including Lowe’s,  Procter & Gamble Co. United Parcel Service Inc., are accelerating a shift to natural gas fueled trucks, betting on new engine technology that promises to drop the cost of shifting from diesel fuel.

Home-improvement retailer Lowe’s wants its delivery company to shift all of its several hundred trucks to natural gas by 2017. P&G already has 7% of its trucks on gas and could reach as much as 20% within two years. UPS says it plans to buy 1,000 natural gas trucks by the end of next year.  FedEx Corp. plans to shift 30% of its long-distance trucks to natural gas over the next decade.

The nation’s supply of relatively cheap natural gas is helping spur this shift. So are new natural gas engines that can power heavy-duty trucks that weigh up to 80,000 pounds. The first, a 12-liter Cummins Westport Inc. natural gas engine went on sale in July. Next year,   Volvo AB, the Swedish heavy truck maker, will introduce a natural gas engine for its trucks.

Please see the full Wall Street Journal Article Here:

http://online.wsj.com/news/articles/SB10001424052702304200804579165780477330844

Gas Leaks in Fracking Less Than Estimated: NY Times Article

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Gas Leaks in Fracking Disputed in Study

By Michael Wines, NY Times, 16 Sept 2013

(Click on the link above to see the entire article at NYTimes.com.)

The study, conducted by the University of Texas and sponsored by the Environmental Defense Fund and nine petroleum companies, bolsters the contention by advocates of fracking — and some environmental groups as well — that shale gas is cleaner and better than coal, at least until more renewable-energy sources are developed. More than 500 wells were analyzed.

The Texas study concluded that while the total amount of escaped methane from shale-gas operations was substantial — more than one million tons annually — it was probably less than the Environmental Protection Agency estimated in 2011.

In particular, it indicated that containment measures captured 99 percent of methane that escaped from new wells being prepared for production, a process known as completion.

The Environmental Protection Agency has begun to require drillers to control leaks during completions, which are believed to be one of the major sources of methane losses at fracking wells. Although controls will not be required until January 2015, a number of companies already capture escaped gases at wells being prepared for production.

“Can we control it? Thanks to new E.P.A. regulations coming online, the answer to that is good news,” Eric Pooley, a senior vice president at the Environmental Defense Fund, said in an interview.

The report was published Monday in The Proceedings of the National Academy of Sciences. With the study, which ran from May through December of last year, the university was the first to conduct detailed examinations of individual drilling sites. It did so with the consent of petroleum companies, which provided about 90 percent of the financing for the study. Previous E.P.A. estimates relied on engineering calculations, and other studies gathered data via aircraft flights over drilling sites.

The study’s connection to the petroleum industry — among its sponsors and financiers are Shell, Anadarko Petroleum Corporation, Exxon Mobil and Chevron — may lead some to question its objectivity, some outside experts said. But most said the research and the reputations of the researchers appear solid.

“Previous studies that have gotten a lot of attention have had red flags jumping out all over them. This one didn’t,” said Michael A. Levi, the director of the program on energy security and climate change at the Council on Foreign Relations. In an e-mailed statement, Shell’s president, Marvin Odum, called the study “a prime example of key groups — that may not have the exact same interests — working collaboratively and taking a science-based approach” to the methane problem.

Mr. Odum said that collecting actual emissions data, rather than relying on estimates, would “ensure that both improvement efforts and regulatory changes can be focused on the areas that will have the biggest impact.”

The report comes at a time when shale-gas drilling is growing at a breakneck pace — production, now 30 percent of all United States natural gas, is expected to reach 50 percent by 2040 — but also when the industry is beset by controversy.

Citizen groups accuse drillers of despoiling streams and water supplies, and suppliers of wrecking local roads with parades of massive trucks. Environmental groups have split sharply over whether to support shale-gas development as a cleaner fuel that will suffice until wind and solar power assume a greater share of the nation’s energy supply.

The Texas study is the most comprehensive look to date at a contentious issue in the debate over fracking: the extent to which methane leaks during drilling and production offset the environmental benefits of the clean-burning natural gas the wells produce.

When burned as fuel, methane — the main component of natural gas — is comparatively clean, producing less carbon dioxide than coal and oil. But vented to the air, it is a short-lived but extremely potent greenhouse gas, trapping heat at a much higher rate than carbon dioxide, the main greenhouse gas.

Such potency means that even a small loss of methane to the air — just 3.4 percent, scientists say — can negate its climate-changing advantage over coal.

Some previous studies suggested that as much as 7.9 percent of all shale gas was lost to the atmosphere, a figure that included every stage of the gas process, from well to stove or furnace burner.

The Texas study did not examine potential losses outside the drilling pad. But its conclusion that losses at the well were comparatively low could remove one issue from the debate. The Environmental Defense Fund is leading other research efforts that should address losses elsewhere, including a look at methane leaks in municipal gas-distribution lines.

The American Petroleum Institute hailed the study’s conclusions, saying in a statement that its own efforts to reduce methane emissions “are paying off.” But while E.P.A.-mandated measures appear to have reduced emissions during well completions, the study also concluded that leaks elsewhere in the fracking process were higher than the E.P.A. had previously estimated.

Estimates of leaks from chemical pumps, while small, were twice past estimates, while leaks from pneumatic controllers, or valves, were pegged at more than 639,000 tons a year, roughly a third greater. None of those components are currently subject to federal regulation.

So What’s the Matter with Shale Gas Anyway?

Excerpts from the July 19th Wall Street Journal

So What’s the Matter with Shale Gas Anyway? Environmental Groups Want It to Replace Coal, but Not at the Expense of Wind and Solar

“Shale gas and oil are widely viewed as one of the biggest forces to hit the US economy in modern history … The new narrative about shale gas is about jobs, economic growth, global competitiveness and a US manufacturing renaissance …  For years, environmental groups saw gas as something as an ally in the cause.  Gas has half the carbon footprint as coal.  It was the ideal substitute for coal and a bridge to greater use of renewable energy such as wind and solar.  But as shale gas production soared, the price of natural gas plummeted.  Environmental groups now worry that gas is moving in to stay, taking the momentum out of the shift to nonpolluting renewables.”

Title Wash – a Brief Overview

July 15, 2013 12:03 am

When some property owners in the Marcellus Shale region want to contract with drilling companies to explore for natural gas on their land, they may find that others have laid claim to their sub-surface rights.

Disputed ownership results from Pennsylvania laws that are more than a century old and a long-dormant practice called “title washing.”

A title wash occurred when someone bought undeveloped property at a tax sale. Former Pennsylvania tax laws gave the purchaser clear title to the taxed property. According to these early tax laws, the obligation to pay taxes on undeveloped property ran with the property. An owner could therefore default on taxes and then purchase the same property at a tax sale, thereby “washing” the property’s title from any prior obligations. From 1900-1950, Pennsylvania saw a lot of “title-washing.”

Some legal scholars believe that even if the tax assessment was directed at only the surface estate, the tax sale of the unseated surface could nonetheless “wash” the title of the unassessed subsurface rights to minerals, oil and gas. These scholars rely on early court decisions which they contend ruled that tax sales “washed” the title to the subsurface interests.

Judges more recently have focused on whether subsurface rights could have been or were taxed. Pennsylvania’s highest court has now declared that oil and natural gas cannot be assessed for property taxes. With no assessment possible, courts have ruled that title to the oil and gas in question was not “washed” when the surface rights were sold for taxes.

It is imperative that property owners have a careful title search done before negotiating a drilling contract, paying close attention to any past tax sales. In some cases, the property owner may not own or will have to defend his or her right to sell the subsurface rights.

Ronald L. Hicks, Jr., Meyer, Unkovic & Scott, rlh@muslaw.com

Business workshop is a weekly feature from local experts offering tidbits on matters affecting business. To contribute, contact Business Editor Brian Hyslop at bhyslop@post-gazette.com.