Bill Text: PA HB2276 | 2009-2010 | Regular Session | Introduced

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Bill Title: Further providing for definitions and for applicability, exclusions and construction.

Spectrum: Slight Partisan Bill (Republican 15-6)

Status: (Introduced - Dead) 2010-03-17 - Referred to ENVIRONMENTAL RESOURCES AND ENERGY [HB2276 Detail]

Download: Pennsylvania-2009-HB2276-Introduced.html

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PRINTER'S NO. 3381
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2276 Session of2010
INTRODUCED BY MAJOR, EVERETT, PICKETT, BAKER, DONATUCCI, FAIRCHILD, GEORGE, GINGRICH, GOODMAN, GRUCELA, HARRIS, M. KELLER, MELIO, MILLARD, MILLER, MOUL, MURT AND SIPTROTH, MARCH 17, 2010
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, MARCH 17, 2010
AN ACT
Amending the act of July 25, 1961 (P.L.825, No.359), entitled
"An act defining and prohibiting waste in the production of
oil and gas; defining the powers and duties of the Oil and
Gas Conservation Commission and the Oil and Gas Division of
the Department of Mines and Mineral Industries with respect
to the prevention of waste in the production of oil and gas
from certain geological horizons; the protection of
correlative rights; the spacing of well drilling operations;
the unitization of lands and horizons for the purpose of
regulating well spacing; providing for the enforcement of
this act; and the issuance of rules, regulations and orders
prescribing the rights, obligations and duties of owners and
operators of interests in lands and leasehold interests
therein with respect to the drilling of oil and gas wells
thereon; providing for hearings and the procedures to be
followed therein; imposing duties upon the courts; providing
methods for the enforcement of the provisions of this act,
limiting all the provisions hereof to certain geological
horizons; imposing penalties and making an appropriation,"
further providing for definitions and for applicability,
exclusions and construction.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 2(7) and (8) of the act of July 25, 1961
(P.L.825, No.359), known as the Oil and Gas Conservation Law,
are amended and the section is amended by adding a clause to
read:
Section 2. Definitions.--As used in this act--
* * *
(5.1) "Lease" means a contract between an owner of real
property and an operator, in which the owner grants the operator
a right to explore, drill and produce oil, gas and other
minerals for a specified primary term and as long thereafter as
oil, gas or other minerals are being produced in paying
quantities in exchange for monetary compensation to the owner.
* * *
(7) "Operator" shall mean any owner of the right to develop,
operate, and produce oil and gas from the pool. In the event
that there is no oil and gas lease in existence, the owner of
the oil and gas rights shall be considered as "operator" to the
extent of seven-eighths of the oil and gas in that portion of
the pool underlying the tract owned by such owner, and a royalty
owner as to a one-eighth interest in such oil and gas. The
dollar amount of the one-eighth interest shall represent one-
eighth of the current market value of the oil and gas, and
constituents thereof, at the point the operator markets the
product calculated without deduction directly or indirectly for
the cost of producing, gathering, storing, separating, treating,
dehydration compressing, processing, transporting or marketing
the product. In the event that the oil is owned separately from
the gas, the owner of the substance being produced or sought to
be produced from the pool shall be considered as "operator" as
to such pool. Nothing in this clause shall be construed as
prohibiting an owner of real property from negotiating a royalty
under a lease that is greater than a one-eighth interest.
* * *
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(8) "Royalty owner" means [any owner of oil or gas in place,
or oil or gas rights, subject to a lease covering such oil or
gas in place or oil or gas rights. "Royalty owner" also means
any owner of an interest in an oil or gas lease which entitles
him to a share in the production of the oil or gas under such
lease or the proceeds therefrom without obligating him to pay
any costs under such lease. "Royalty owner" also means the owner
of any interest in the oil or gas in place, or oil or gas
rights, who has not executed an oil and gas lease, to the extent
that such owner is not designated an "operator" under the
preceding clause.]:
(i) Any owner of oil or gas in place, or oil or gas rights,
subject to a lease covering such oil or gas in place or oil or
gas rights.
(ii) Any owner of an interest in an oil or gas lease which
entitles the owner to a share in the production of the oil or
gas under the lease or the proceeds from the lease without
obligating the owner to pay any costs under the lease, including
any costs of production under the lease.
(iii) The owner of an interest in the oil or gas in place,
or oil or gas rights, who has not executed an oil and gas lease,
to the extent that the owner is not designated an "operator."
* * *
Section 2. Section 3 of the act is amended by adding a
subsection to read:
Section 3. Applicability; Exclusions; Construction.--* * *
(b.1) Before drilling any well which is to penetrate the
Marcellus Shale or deeper horizons or a depth of thirty-eight
hundred feet, whichever is deeper, the well operator shall on
the plat prepared on the same form required by the division
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under the act of December 19, 1984 (P.L.1140, No.223), known as
the "Oil and Gas Act," demonstrate and assure that any
anticipated horizontal drilling shall not be conducted under or
through any lands where an oil and gas lease does not exist
between an owner of real property and an operator.
* * *
Section 3. This act shall take effect immediately.
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