‘Forced pooling’ should be off the table
Simply put, the numbers are stunning: In Allegheny County alone, estimates of “total technically recoverable reserves” of shale natural gas exceed 150 trillion cubic feet.
“This is nearly five times the minimum required for classification as a super-giant gas field and enough natural gas to provide all of America’s needs for more than five years,” write Gregory Wrightstone and Justin Skaggs in Oil and Gas Investor.
Wrightstone, a petroleum geologist/consultant at Wrightstone Energy Consulting in Allison Park, and Skaggs, a geologist with Pin Oak Energy Partners in Akron, Ohio, say at today’s depressed market prices, “the total value of this resource exceeds $400 billion and the value of potential royalty payments to landowners in (Allegheny County) is more than $60 billion.”
Allegheny, Washington and Greene counties are situated within the “core of the core” of the recently named Appalachian Mega-Giant Gas Field, they note. One analysis — by Range Resources — suggests Allegheny and Washington counties contain the highest in-place gas reserves not only in the Appalachian Basin but “perhaps in the world.”
But as Wrightstone and Skaggs remind, there’s a difference between what shale gas “technically” can be recovered and what actually can be tapped.
Of the three counties, Allegheny provides the greatest challenges, primarily due to its majority urban/suburban nature, they say.
So, how can such a vast and valuable resource be tapped?
One part of the solution, the authors argue, would be to allow for “forced pooling” in Pennsylvania’s Marcellus shale play, which currently is not permitted. That is, being forced by state law to participate in a natural gas producing unit.
To wit, current law requires drillers to negotiate leases with each property owner. But, because hydraulic fracturing (fracking) is a horizontal drilling process that crosses property lines, property owners who do not want to participate can scuttle an entire producing unit.
In forced pooling, those mandated to participate are compensated (though, some argue, to a lesser degree than those who willingly have negotiated), in a process akin, loosely, to eminent domain. But instead of government taking your property (with “just” compensation) for a “public purpose,” a forced pooling law would allow a private concern to, with compensation, frack your property to benefit those who have willingly allowed fracking.
As Wrightstone told me in an email (after I asked him how does one balance liberty and property rights with forced pooling): “Not having forced pooling means that one holdout prevents tens or hundreds of other property owners from accessing their resources.”
But as U.S. Supreme Court Justice Stanley Matthews wrote in Pritchard v. Norton (1882), “Property … is equally protected against arbitrary interference.”
Forced pooling by a private entity to benefit another private entity (or entities) is an unlawful taking. It must remain incumbent upon fracking operators to gain voluntary cooperation with property owners — or to develop new fracking techniques that make forced pooling a non-issue — and not the state to determine whose property rights are more pre-eminent.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (firstname.lastname@example.org).