Hess Corporation and Newfield Exploration Company recently terminated lease agreements with about 1,300 property owners in Wayne County, Pennsylvania, where the Delaware River Basin Commission (DRBC) has imposed a moratorium on gas drilling since May 2010. The moratorium is not intended to be permanent, but only until the DRBC develops environmental regulations for drilling in the watershed. The landowners received a combined $150 million (at $3,000 per acre) initially, and would have received an estimated $187 million in royalties had the wells been drilled. The landowners are free to negotiate with other energy companies, but it is unclear whether any drillers would be interested given the moratorium. Several weeks ago, the Northern Wayne Property Owners Alliance threatened to sue the DRBC “to regain [their] right to access [their] mineral estates.”
Responding to Governor Corbett’s recent letter urging the Delaware River Basin Commission (DRBC) to take action to end its moratorium on gas development, the Delaware Riverkeeper Network sent DRBC a memorandum defending the moratorium and responding to leaseholder claims that DRBC’s inaction constitutes an uncompensated regulatory taking. Delaware Riverkeeper emphasized that the moratorium does not deprive landowners of all economically beneficial use of their land, and that economic loss resulting from the moratorium is mitigated by the ability to use the land for other reasonable purposes. DRBC is scheduled to hold its next public hearing on Tuesday, July 16, followed by a business meeting on Wednesday, July 17.
Pennsylvania Governor Tom Corbett recently sent a letter to the Delaware River Basin Commission urging the Commission to end a three-year moratorium on hydraulically fractured wells. Corbett reportedly wrote that “[o]perators interested in developing natural gas have closed offices and laid off employees, lease payments have been withheld . . . and communities have watched their neighbors outside the basin benefit tremendously.” The Delaware River Basin Commission governs water quality in Pennsylvania, New Jersey, Delaware and New York. The Commission released proposed rules addressing oil and gas activity in the Basin but these have yet to be finalized. A vote on the proposed rules was scheduled in November 2011, but was cancelled when Delaware Governor Jack Markell withdrew his support and New York expressed that it wanted to complete its own environmental and health studies, which are still ongoing.