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CPBJ Blog Extras

If royalty deduction issues are unique to Pa., then government must act

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Brent Burkey
Brent Burkey

The head of a national group representing people who receive royalties related to oil and gas activity on their property recently testified that the types of deductions reported in checks people have gotten in Pennsylvania aren't happening elsewhere, according to recent StateImpact Pennsylvania coverage.

That's a pretty important piece of information as lawmakers continue to look at the concerns that some royalty owners in the commonwealth might not be getting what they are owed.

Specifically, David Sikes, who heads the National Association of Royalty Owners, is quoted as saying, "We're not seeing the kind of deductions — percentage wise — being taken out in other parts of the country that we're seeing here, and that's problematic."

The comments were made as part of a state Senate Environmental Resources and Energy Committee hearing last week, when state Sen. Gene Yaw also reportedly questioned why people aren't filing more lawsuits based on what he heard.

Sure, lawsuits are a recourse if there is legitimate concern about whether a business contract is being followed.

But if deductions of this degree aren't happening in other parts of the country, then a simple process of elimination says the problem might be the laws and rules within this state's boundaries that are supposed to protect business interests.

And turns out, one issue brought up has been a state Supreme Court ruling that found the state's definition of "royalty" wasn't spelled out enough.

At a time when there's a lot of talk about what the core functions of government should be, it's hard to think of one more important than making sure the rules are fair and clear.

A farmer on a plot of land in the northern tier shouldn't have to sue to get what he or she thinks a royalty agreement calls for in the first place, let alone if government might not have acted to put a proper legal and accountability framework in place to begin with.

Brent Burkey covers retail, tourism, and Lebanon and York counties. Have a tip or question for him? Email him at brentb@centralpennbusiness.com. You can also follow him on Twitter, @brentburkey.

Brent Burkey

Brent Burkey

Brent Burkey covers York County, agribusiness, energy and environment, and workforce issues. Have a tip or question for him? Email him at brentb@cpbj.com. Follow him on Twitter, @brentburkey.

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