ALCS Comments on State Oil and Gas Legislation
October 25, 2007
Hon. Scott Hutchinson, State Representative
302 Seneca Street
Oil City, PA 16301
You recently submitted a bill on oil and gas leasing on PA DCNR lands (HB 32). While emphasizing the value of subsurface oil and gas on the agency's lands, a laudable effort, the bill could also address adjoining private landowners and promote market forces.
In the case where a public agency makes a determination that its lands should be off-limits to oil and gas exploration and production, but an adjoining private landowner has leased his land and has subsequently benefited from the drilling of a productive well, then it should follow that the public agency cannot thereafter expect to be included in a drilling unit with that private land (and thereby gain a share of the royalties from the gas from that private land). Once an agency has made a determination about the ecological value of its land, and has precluded oil and gas extraction on it, it follows that it would not be fair that the agency could then benefit in the sharing of oil and gas royalties from adjoining productive land, where that landowner has taken the risk of ecological damage and the reduction in privacy.
This incentives and market-based approach is a more results and performance-oriented solution to the question of leveraging natural resources on state lands. It ensures that adjoining private landowners will be treated fairly, and that public land managers are more likely to make sound decisions that reflect the true ecological value of their lands. Simply requiring a public agency by fiat to drill everywhere all of the time, regardless of the reduction of ecological values on public lands, is just as poorly reasoned as putting every square inch of public land off-limits to drilling.
Thank you for your consideration.
cc: Hon. M. J. White, Pa Senate Environmental Resources Comm.
Hon. Jeff Piccola, Pa Senate
Hon. Ron Buxton, State Rep.
Jan Jarrett, PennFuture
John Quigley, PA DCNR