Corbett calls for investigation into Chesapeake Energy
In this April 23, 2010 file photo, a Chesapeake Energy natural gas well site is seen near Burlington, Pa. (Ralph Wilson/AP Photo, file)
Governor Corbett is calling for an investigation into allegations of fraud against Pennsylvania’s biggest natural gas driller– Chesapeake Energy.
Corbett sent a letter to Chesapeake’s CEO Doug Lawler, saying he has reached out to state Attorney General Kathleen Kane to investigate allegations the company is shortchanging landowners on natural gas royalty payments.
“I have received complaints from my constituents and your leaseholders regarding practices of Chesapeake Energy which strike many as unfair and perhaps illegal.” Corbett wrote to Lawler. “I remain disappointed that the complaints continue to go unheeded.”
State law requires companies pay a minimum 12.5 percent royalty to landowners who lease their property for drilling. The royalty deductions– known as gathering fees, or post-production costs– are legal in many cases. Companies can charge landowners the costs of processing and transporting natural gas.
However, Chesapeake has been accused of skimming more than other companies, self-dealing, misreporting gas production data, and violating lease terms that explicitly prohibit the deductions.
The Oklahoma City-based company has faced similar accusations around the country. Most of the Chesapeake’s Pennsylvania operations are in Bradford County.
Corbett sent another letter today to Bradford County Commissioner Doug McLinko (R), saying he looks forward to working with the legislature to protect the rights of royalty owners.
McLinko says he’s glad the governor is stepping in.
“Bradford County is still pro-gas,” he tells StateImpact Pennsylvania. “But we believe in protecting working families and retired people in their private property rights.”
Corbett’s letter to Bradford County comes a day after state Senator Gene Yaw (R- Bradford) sent a letter to Kane, also asking her to investigate the allegations.
A spokesman for Kane’s office says they have received the letters and are evaluating whether they have jurisdiction in the matter. Chesapeake Energy declined to comment.
Note: this story has been updated with reaction from Bradford County
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