Forced Pooling Coming to a Town Near You?

Posted by on Mar 20, 2014 in Posts, Shale Gas | Comments Off on Forced Pooling Coming to a Town Near You?

We are grateful to Bob Donnan of www.marcellus-shale.us for use of the photo of a drilling site near Avella, Pennsylvania which accompanies this post.

On March 25th and 26th in New Castle, PA, the DEP will be holding a hearing regarding an application made by Hilcorp for a spacing order under the Oil and Gas Conservation Law of 1961 (“OGC”).  While the hearing is open to the public, participation is not.  A second hearing will be held (date and location TBD) where the public can provide five minutes of oral testimony.   Why does this matter?  It matters because the outcome could set the stage for forced pooling in Pennsylvania.  Forced pooling equates to private eminent domain of an individual’s gas rights.  It means that even if you choose not to lease the gas rights to your property, you can be compelled under the law to allow drilling regardless.   As the image highlights, your property could be the holdout in the middle of other leases, and then the choice of whether or not to lease removed.

Hilcorp is seeking to establish that within a specific geographic boundary there is a self-contained pool of gas in the Utica Shale layer (Marcellus Shale is not at issue).   This is a very complex matter, and the outcome is not certain.  If Hilcorp establishes the existence of the pool within the Utica layer, that could set precedent with consequences for all landowners living above that layer.   If it fails to meets its burden, then the ability to force pool under the OGC would be significantly impaired.

The issues at stake in this matter will be “litigated” at the hearings, and ultimately decided by DEP Secretary Abruzzo.  What is troubling about the entire process is the lack of ability for the public to participate, and lack of transparency from the DEP.  This will be the first hearing of its kind, ever, and it is entirely a DEP creation.  In creating this hearing, the DEP did not follow the proper legal procedures, and is jeopardizing the rights of Pennsylvanians.     For a more detailed analysis on this issue, please click here for a more detailed analysis.

If interested in participating in the second hearing you must submit a brief statement of interest, along with name, address, and phone number to Glenda Davidson at (717) 787-4449 seven days prior to the date of the hearing.  If planning to speak, three written copies of the oral testimony must be submitted to the hearing officer.    If you have any questions or comments please email Nick or call 724/455-4200, ext. 6#.