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.

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US Approves Expanded Gas Exports

Obama administration approves $10 billion natural gas export facility in Texas.  Just a few years ago we were building import terminals.  What a difference shale gas has made to the strength of the US economy.

Dow Chemical has been in opposition to exporting gas from the US because they say that this will drive up prices and make US industry less competitive.  However they support this measure because it still calls for a case by case review of all new export facilities.  Still, if Dow thinks that we should curtail US exports to keep prices down in the US, then they should not be allowed to export for the same reason.  Right?

Click on this article’s title to see the article from today’s Wall Street Journal.  Log-in may be required.

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Gas Wells in PA Up; Revenue to Towns Down

While the number of natural gas wells in Pennsylvania increased by 26% to 5,500 this year, revenues from fees to municipalities are down.  The culprit? The low price of natural gas.  But in rosier news, gas prices have increased 50% to almost $4.00 from about $2.00 last August.

http://www.foxbusiness.com/news/2013/04/04/natural-gas-futures-climb-after-eia-reports-inventory-draw/