Corbett takes stand against forced pooling

Says the gas industry practice is 'private eminent domain'

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Gov. Tom Corbett said he is opposed to "forced pooling," a practice that would give the Marcellus Shale gas well industry the right to drill under and take gas from a property owner who has not signed a lease to sell the gas.

Speaking at the K&L Gates' fourth annual Appalachian Basin Oil and Gas Seminar in Green Tree on Tuesday, Mr. Corbett said the required pooling of gas drilling rights, which has been a prominent part of the drilling industry's wish list and occurs in several other gas-producing states, amounts to the use of eminent domain for private interests.

"It's private eminent domain. I don't think that's right," Mr. Corbett said in his keynote speech to about 400 people at the daylong seminar. "I was made aware that it's on the industry's wish list, but I don't agree. If I see a bill that contains forced pooling, I won't sign it."

The governor said that in talks he's had with industry officials, the drilling industry's tentative acquiescence to a local impact fee has been tied to the state's approval of forced pooling.

"That's the dirty secret," he said. "The industry will take the tax but only if it gets the regulations on forced pooling."

Neither state House Speaker Sam Smith, R-Jefferson, nor Senate President Pro Tem Joe Scarnati, R-Brockway, supports forced pooling. They are not planning to include it in any new legislation.

Forced pooling, opponents say, would allow gas drilling companies to drill under property even if the property owner doesn't want to lease his land, pooling his property together with adjacent property owners that have agreed to lease their land for drilling.

Proponents of forced pooling, which the industry calls "fair pooling," say pooling of gas ownership interests promotes efficiency in gas extraction and reduces the number of drilling sites and their environmental impacts and maximizes the amount of gas extracted.

The Marcellus Shale Coalition has said pooling has been passed in at least 15 gas-producing states, including New York, West Virginia and Ohio. Coalition President and Executive Director Kathryn Klaber wrote in an opinion article last year that it works well in those states.

Mr. Corbett also repeated his opposition to a severance tax on gas from the Marcellus Shale, a position that played well to the audience populated by industry executives and attorneys that work for the industry. He said his controversial position on the issue -- all other major gas producing states have a severance tax -- is grounded in a desire to continue the industry's job growth in the commonwealth at a time when jobs in other industries are in decline.

According to Mr. Corbett, the gas industry is "a cornerstone of the economic recovery for Pennsylvania," and in 2010 produced 11,431 jobs, at an average wage of $67,000 a year. Other industrial jobs in the state have average annual wages of $44,436.

Mr. Corbett also promised to enforce environmental laws and warned the industry that if it violates those rules, "we're coming after you."

Other speakers at the seminar, sponsored by K&L Gates, an international law and lobbying firm, spoke of tighter drilling regulations by states and closer federal oversight of the industry.

Robert Powelson, chairman of the Pennsylvania Public Utility Commission, said the gas industry must pay serious attention to an aging pipeline system and public safety.

"The PUC is willing to step up on gas line safety," he said. "But we've only got eight gas safety inspectors statewide and we'll have to ramp up."

Don Hopey: or 412-263-1983. Staff writer Laura Olson contributed.


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