Pennsylvania Raised $19 Million From Leases to Drill Beneath Waterways

pennsylvania-riverPower Source

By Laura Legere

When Gov. Tom Wolf issued an executive order prohibiting the state from signing new leases for gas drilling beneath state parks and forests in January, he left a third category open for business: public lands managed by the state’s conservation agency.

The Department of Conservation and Natural Resources routinely leases publicly owned gas rights far beneath the beds of streams and rivers to companies drilling horizontally from well pads built on neighboring properties. The Wolf administration plans to let that continue.

“When a stream is outside a state forest or state park and runs through private property, gas leasing remains an option as long as applicable laws are followed,” said Jeffrey Sheridan, Mr. Wolf’s press secretary.

Since 2010, DCNR has signed 21 leases for natural gas drilling under 3,500 acres of publicly owned waterways, mostly in southwestern and north-central Pennsylvania. Twenty of those leases were signed in the last two years, including seven that were signed on Jan. 9.

The state has raised $19 million in bonus payments and royalties from the contracts.

More leases are in the pipeline. DCNR spokeswoman Christina Novak said six new leases are in an advanced stage of development and 13 are in early discussions.

Streambed leases are only a sliver, in terms of both acreage and revenue, compared to the state’s better-known state forest leasing program. DCNR leased nearly 140,000 acres of state forests for Marcellus Shale gas development and has collected more than $700 million through bonus payments and royalties on the leases since 2008.

Unlike state forest lease sales that were offered in order to raise money for the state budget, river leases have been seen as a way to collect money owed to the state from drilling that would have taken place anyway.

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