Propublica: Frackers Cheating PA. Govt. and Landowners Out of Billions

[JPZenger]

http://www.philly.com/philly/business/Frackers_.html

"But manipulation of costs and other data by oil companies is keeping billions of dollars in royalties out of the hands of private and government landholders, an investigation by ProPublica has found. An analysis of lease agreements, government documents and thousands of pages of court records shows that such underpayments are widespread.

Thousands of landowners like Feusner are receiving far less than they expected based on the sales value of gas or oil produced on their property. In some cases, they are being paid virtually nothing at all. In many cases, lawyers and auditors who specialize in production accounting tell ProPublica energy companies are using complex accounting and business arrangements to skim profits off the sale of resources and increase the expenses charged to landowners.

But some companies deduct expenses for transporting and processing natural gas, even when leases contain clauses explicitly prohibiting such deductions. In other cases, according to court files and documents obtained by ProPublica, they withhold money without explanation for other, unauthorized expenses, and without telling landowners that the money is being withheld."

[Laelth]

1. k&r for exposure. n/t

-Laelth

[Curmudgeoness]

2. The hard part for the landowner

is getting through all the bullshit. And most landowners do not know how much they should expect to be receiving, nor do they know the right questions to ask. I wouldn't be surprised to hear that they are just grateful to be getting the checks at all....until they find out that they are being screwed.

[JPZenger]

3. many landowners WERE getting large regular checks, and then started getting peanuts

the landowners with productive wells were getting large regular checks. Then, after the State Supreme Court interpreted the law in favor of the frackers, the checks suddenly shrank to peanuts.

[Curmudgeoness]

4. Well, that explains how this was noticed so quickly.

I was surprised that this came to light so quickly. Not a bad surprise.

All the PR spending in the world will not counter complaints from the very people who were advocating fracking.