The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) is grabbing more money that we think belongs to private landowners. This time from leasing land underneath the Youghiogheny River and Little Pine Creek. DCNR has leased 124.2 acres for a signing bonus of $496,800 (or $4,000 per acre). Plus the state’s customary royalty rate of 20% on anything produced. And no, the state does not allow post-production deductions–they get their full 20% royalty.
The DCNR has been, for years, claimed that under a centuries-old law that the state of PA “owns” the property under “navigable” waterways–including rivers and streams (see PA DCNR Publishes Lease Agreements for Deals Under Rivers/Creeks). We understand the state claiming the Delaware River, and *maybe* the Susquehanna River, as “navigable” bodies of water. But smaller rivers and streams? No way.
The DCNR uses the “navigable waterway” excuse to sign leases with drillers under much smaller waterways than the Delaware and Susquehanna–siphoning money that would have gone to landowners. A landowner might own the land on both sides of, say, Little Pine Creek, a body of water that nobody would have used to transport goods back in the day. However, the land under Little Pine Creek does not technically belong to the landowners along its banks. The state grabs it and says they own it. Bugs us.
Here’s the latest theft:
The Department of Conservation and Natural Resources published 2 notices of submerged land leases for oil and gas development in the April 13 PA Bulletin–
— Chevron Appalachia for an additional 95.8 acres of submerged lands on the Youghiogheny River in South Versailles and Elizabeth Townships, Allegheny, Sewickley Township, Westmoreland County and Perry Township, Fayette County for $383,200. The original lease was for 239.4 acres in this same area for $975,600.
— PA General Energy Company for 28.4 acres of submerged lands in Cummings Township, Lycoming County for $113,600. (1)
The notice appearing the PA Bulletin on Saturday announcing the deal with Chevron for land under the Youghiogheny River:
Effective January 28, 2019, a First Amendment to Oil and Gas Lease for Publicly-Owned Streambeds, Contract No. M-2102008-04, was executed by and between the Commonwealth, acting through the Department of Conservation and Natural Resources (Department) (lessor), and Chevron Appalachia, LLC (lessee), with its principal place of business located at 700 Cherrington Parkway, Coraopolis, PA 15108.
The lease is for Streambed Tract 2008 on the Youghiogheny River encompassing a total of 335.2 acres of submerged lands located in South Versailles and Elizabeth Townships, Allegheny County; Sewickley Town-ship, Westmoreland County; and Perry Township, Fayette County. The lease was recorded at the Allegheny County Courthouse on March 1, 2019, instrument No. 2019-5452, BK-DE VL-17534, page 76; in Westmoreland County Courthouse on February 28, 2019, instrument No. 201902280005520; and in Fayette County Courthouse on February 28, 2019, instrument No. 201900001785, book 3395, page 2395. The lease allows for the development of oil and natural gas below and between the ordinary low water marks of the Youghiogheny River solely by means of directional, including horizontal, drilling on a nondevelopment basis that will not disturb the river or its bed. Contract No. M-2102008-04 may be viewed online at http://contracts.patreasury.gov/Admin/Upload/483943_M-2102008-04%20First%20Amendment%20Streambed%20Lease%20Tract%202008%20Youghiogheny%20-%20Chevron%20Appalachia%20-%2001_28_2019.pdf. (2)
We snagged a copy of the contract, which shows the deal was actually signed in January:
The notice in the PA Bulletin for the deal with PA General Energy for land under Little Pine Creek:
Effective June 19, 2018, an Oil and Gas Lease for Publicly-Owned Streambeds, Contract No. M-2102021-12, was executed by and between the Commonwealth, acting through the Department of Conservation and Natural Resources (Department) (lessor), and Pennsylvania General Energy Company, LLC (lessee), with its principal place of business located at 120 Market Street, Warren, PA 16365.
The lease is for Streambed Tract 2021 on Little Pine Creek encompassing a total of 28.4 acres of submerged lands located in Cummings Township, Lycoming County. The lease was recorded at the Lycoming County Courthouse on February 04, 2019, document No. 201900017019, book 9179, page 3310-3346. The lease allows for the development of oil and natural gas below and between the ordinary low water marks of Little Pine Creek solely by means of directional, including horizontal, drilling on a nondevelopment basis that will not disturb the river or its bed. Contract No. M-2102021-12 may be viewed online at http://contracts.patreasury.gov/Admin/Upload/480411_M-2102021-12%20Little%20Pine%20Creek%20Streambed%20Lease%20-%20PGE%20-%2006_19_2018.pdf. (3)
Copy of the contract with PA General Energy, showing it was signed last June:
(1) PA Environment Digest Blog (Apr 12, 2019) – DCNR Signs 2 Submerged Land Leases For Gas Development Covering 124.2 Acres For $496,800
(2) Pennsylvania Bulletin (Apr 13, 2019) – Execution of Oil and Gas Lease for Publicly-Owned Streambeds
(3) Pennsylvania Bulletin (Apr 13, 2019) – Execution of Oil and Gas Lease for Publicly-Owned Streambeds
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