Natural gas price slump impacts Pa. landowners
Friday, September 13, 2019
Low natural gas prices have left Pennsylvania property owners with diminished royalty checks, despite record amounts of gas being pulled from the commonwealth’s shale plays, according to the Pittsburgh Post-Gazette.
The low prices, driven by a supply that has outpaced demand, have angered shareholders and forced shale companies to slow new development. Meanwhile, royalty owners have few options outside of hoping for prices to rebound.
In addition to the impact they’ve had on smaller leaseholders, larger royalty holders have felt the effects of low prices as well. As one of the largest royalty holders in Pennsylvania, the common wealth’s royalty revenue was cut in half last year, dropping from $135 million in 2014 to $67 million in 2018.
Learn more: Pittsburgh Post-Gazette > Pennsylvania landowners share the pain of low natural gas prices
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.