All Wet on Fair Pooling

Fair Pooling protects the environment, reduces environmental footprints, and generates more revenue for environmental programs – so why do environmentalists oppose it?

CANONSBURG – When is an environmentalist not an environmentalist? How about when he sends a letter to lawmakers in Harrisburg demanding they reject a proposal that would result in greater efficiency in developing clean-burning natural gas from the Marcellus, far less disturbance to land while doing it, and millions in revenue for state programs to protect and preserve the environment?

Unfortunately, that’s precisely the letter that members of the General Assembly received this week – sent by a coalition of more than 30 groups that claim to support all the things that a Fair Pooling statute in Pennsylvania would make possible (smaller footprints and more revenue, especially), but nonetheless stand in opposition to the adoption of the actual plan.

Of course, virtually every energy-producing state in America has fair pooling protection on the books – and for good reason. Fair pooling allows for “equitable and efficient development of [natural gas] while preventing the drilling of unnecessary wells,” according to Michigan’s Department of Environmental Quality – “at the same time, it protects an owner from having his or her oil and gas drained without compensation.”

The Harvard Law Review agrees: “Pooling is important in the prevention of drilling of unnecessary and uneconomic wells, which will usually result in physical and economic waste.” That line comes from an article on efforts to conserve oil and natural gas published in the Review back in 1952.

So if these environmental groups can’t defend their opposition to Fair Pooling on environmental grounds, what arguments do they use instead? See below a quick side-by-side of the charges leveled by these groups’ compared with the actual facts of what Fair Pooling is, and what it is not.

Activists search for reasons to oppose Fair Pooling …… Even though Fair Pooling is a clear win for PA’s environment and landowners
“[P]ooling … would force property owners in Pennsylvania to lease their mineral rights to a gas company…”

(Letter from Myron Arnowitt to General Assembly, PA Campaign for Clean Water; co-signed by 30 others; June 29, 2010)
Fair pooling isn’t about forcing anyone to do anything. It’s about creating an equitable system that allows private landowners to exercise their private mineral rights for the benefit of themselves and their families.

Landowners who decide not to lease will not be considered leasees, nor will they see a rig on their property or an inch of their land disturbed. The only thing they will see? A check in their mailbox each month.
“Some landowners have decided they do not want to lease their mineral rights ... The oil and gas industry would like the General Assembly to overturn the landowners' decisions.” (letter)Once again, they have it exactly backwards. Landowners who don’t want to lease their land for Marcellus development will not be forced to lease their land under Fair Pooling. But they also won’t be allowed to deny their neighbors that same choice.

Click Here for MSC’s fact sheet on Fair Pooling.
“It has been argued that … pooling would result in a less disruptive and more environmentally protective approach to drilling for natural gas in the Marcellus Shale. However, there is no evidence that … pooling diminishes environmental impact. … [P]ooling should not result in forced pollution.” (letter)No evidence?

The principle of Fair Pooling as a tool of oil and gas conservation and environmental protection is as old the development of energy itself – and “a vital regulatory tool created to conserve oil and gas, protect correlative rights and prevent waste,” according to Texas Tech University (in case you don’t believe the Harvard Law Review or the state of Michigan).
“[Pooling] essentially extends the concept of eminent domain but instead of using private property for the public good, it takes private property for private gain.” (letter)For the small minority of landowners who have not leased, conservation pooling ensures two important outcomes: (1) a fair share of royalties (whereas, under current law, gas can be extracted from under their property without any compensation); and, (2) a guarantee of no surface interference (i.e., no drill, no pipelines, no roads, etc.).