Pa. prosecutor eyes gas royalty check complaints

Published on NewsOK Modified: February 15, 2014 at 2:53 pm •  Published: February 15, 2014

HARRISBURG, Pa. (AP) — Following a request by a state senator from northern Pennsylvania, state Attorney General Kathleen Kane is reviewing whether her office has jurisdiction to investigate complaints into the costs that natural gas exploration giant Chesapeake Energy Corp. deducts before it pays royalties to the owners of land where it drills.

A Kane spokesman said Saturday that her office was undertaking the review at the request of Lycoming County Sen. Gene Yaw, whose district includes heavily drilled areas of the Marcellus Shale natural gas reservoir.

"Attorney General Kane takes her duties to protect Pennsylvania's consumers as among her top priorities," spokesman Joe Peters said.

Yaw wrote Thursday to Kane and asked for an immediate inquiry. He said his office has been inundated with complaints, primarily involving the deduction of post-production costs by the Oklahoma City-based Chesapeake Energy.

Chesapeake Energy spokesman Gordon Pennoyer declined comment Saturday on the complaints and declined to explain which costs Chesapeake deducts.

Yaw said the deductions sometimes exceed the amount of the royalty check and that one landowner complained it was costing them money to have gas extracted from their property.

"The words commonly used by landowners to describe what is happening are "cheating,' 'stealing' and 'fraud,'" Yaw wrote.

It is a significant consumer protection issue for hundreds of his constituents, he wrote.

In a separate letter Thursday, Gov. Tom Corbett wrote to Chesapeake Energy's president and CEO, Doug Lawler, suggesting that he has complained to Lawler several times about the company's deduction of post-production costs.

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