Royal mistreatment: The AG should probe Chesapeake’s leases

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Pennsylvania property owners who lease their land for natural gas drilling want a couple of things. Feeling like a sucker is not one of them.

Yet that’s the experience of many northern Pennsylvanians who are doing business with Chesapeake Energy Corp. Although they have allowed the Oklahoma-based company to drill on their property in exchange for the promise of royalty checks and helping the cause of energy independence, they say the firm deducts too many costs from their royalties, sometimes to the point that the charges exceed the amount of the check.

Gov. Tom Corbett and state Sen. Gene Yaw, R-Lycoming County, have heard the complaints and confronted Chesapeake. Last week they asked state Attorney General Kathleen Kane to investigate.

We hope the attorney general, who has jurisdiction over consumer affairs, looks into the claims. 

There are thousands of drilling leases in Pennsylvania with assorted companies and Chesapeake is the state’s largest driller.

“The words commonly used by landowners to describe what is happening,” Sen. Yaw said, “are ‘cheating,’ ‘stealing’ and ‘fraud.’ ” And Chesapeake has been down this path before.

In September it agreed to pay $7.5 million to settle a class-action complaint by leaseholders in Pennsylvania who had similar claims — that the energy company was making unauthorized deductions from royalty payments for drilling expenses. The agreement, which was filed in U.S. District Court in Scranton, came after two months of negotiations between attorneys under the mediation of a retired federal judge.

Given this new round of complaints, one wonders if Chesapeake learned a lesson. Attorney General Kane must decide if it should be taught another.

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