Driller EQT sues 70 Allegheny property owners under pooling law
EQT Corp. has sued scores of landowners in Allegheny County for access to their properties under a recently enacted law that gives gas drilling companies the power to combine some neighboring parcels into drilling units without compensating owners.
The 69 individuals and one golf course in Forward named in the lawsuit are accused of blocking the company from conducting surveys on their land to determine where to drill for shale gas. It appears to be the gas industry’s first attempt at using the controversial law.
“The fact that it’s being used (to sue people) is disgusting,” said Robert J. Burnett, a Downtown attorney working with the National Association of Royalty Owners but not involved in the EQT case. The state “gave the drilling companies a weapon to beat down landowners,” he said.
EQT spokeswoman Linda Robertson said the company had been negotiating in “good faith” in Forward and still does, though it doesn’t have to.
“Prior to the bill, we were working with landowners to obtain modifications and, although this bill means we no longer need to do that, EQT will honor those offers,” Robertson said. “It was determined that putting the issues before a court would be the most expeditious way to reach resolution.”
The golf course, Riverview Golf Course Inc., and lawyers for some of the defendants did not return calls.
The law, which the governor signed on July 9, gives drillers power to pool leased properties into one unit for wells that drill sideways, as long as contracts don’t prohibit such combinations. Before the law, landowners could have demanded more money or better legal terms from drillers to include their properties in a pool.
The Forward contracts, like most old oil and gas leases, don’t mention pooling and so the law makes it clear that Downtown-based EQT can combine them into units it needs without permission from landowners, the company claimed in its lawsuit filed July 22 in Common Pleas Court.
EQT is looking to cash in on land it controlled long before the shale gas boom. Its subsidiaries, including the old Equitable Gas Co., kept gas leases alive for decades by storing gas under the Mon Valley township, with one lease dating to 1899, the complaint said.
EQT lobbied for the law on pooling, according to state Rep. Garth Everett, who sponsored the legislation.
Most of the defendants started an alliance called the Monongahela Group, the lawsuit claimed. Its members refused to allow the company to do seismic testing unless it renegotiates their gas contracts. That “wrongfully” and “substantially impeded” EQT, lawyer Patricia L. Dodd of Meyer, Unkovic & Scott LLP wrote for EQT in the complaint.
Landowners rejected several offers, Robertson said.
EQT hasn’t negotiated for months, said several residents and a lawyer working with Forward residents who aren’t involved in the case. One of its offers was a one-page lease modification to allow land pooling. It offered no extra money, stating it would be for “mutual advantage,” according to the offer obtained by lawyer Steven A. Walton. Company officials stopped negotiating last fall, Walton and others said.
In November, an EQT vice president told the Tribune-Review at an industry conference that EQT wanted the state to pass the pooling legislation. The Legislature passed the bill the last weekend of June, as lawmakers rushed to meet a budget deadline before their summer recess. Gov. Tom Corbett signed it on July 9.
“Some of the Legislature didn’t know better. They just kind of did whatever. If a lobbyist gives them something and tells them what to do, they’ll do it,” said William Beinlich, one defendant and an organizer of the Monongahela Group.
He isn’t bothered by the law and believes it won’t be decisive in the case, he said. Many leases are ambiguous and may not back up EQT’s claims, he said, declining to explain.
Timothy Puko is a Trib Total Media staff writer. Reach him at 412-320-7991 or [email protected].