"To keep royalties low, companies sometimes set up subsidiaries or limited partnerships to which they sell oil and gas at reduced prices, only to recoup the full value of the resources when their subsidiaries resell it. Royalty payments are usually based on the initial transaction."
I've read about this above issue before along with some others but this is just outright theft. We need our states to protect land owners from this. Land owners getting screwed doesn't help future development or economic development. Operators and land owners need to act with ethics for a win/win situation at all times. If they can't, then our elected officials are going to have to act.
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I sent a letter to my local state representitive on this subject today and hope others will to.
Not only do companies do this, but they set up their own gathering system with affiliated companies. The affiliates charge extremely high prices for gathering, marketing, etc. The company really doesn't care, because it's just one side of the company paying the other. But the royalty owner gets screwed.
How do you say..... Chesapeake
Louisiana Senate Natural Resources Committee
Senator Gerald Long (Chairman) longg@legis.la.gov |
Senator Rick Ward, III (Vice-Chairman) wardr@legis.la.gov |
Senator R.L. "Bret" Allain, II allainb@legis.la.gov |
Senator "Jody" Amedee amedeej@legis.la.gov |
Senator Norb�rt N. "Norby" Chabert chabertn@legis.la.gov |
Senator Jean-Paul J. Morrell Democrat morrelljp@legis.la.gov |
Senator Dan "Blade" Morrish morrishd@legis.la.gov |
Louisiana House Natural Resources Committee
Armes, James K. |
armesj@legis.la.gov |
(337)238-7004 |
(337)238-7007 |
Billiot, Robert E. |
billiotr@legis.la.gov |
(504)436-8929 |
(504)436-8994 |
Bishop, Stuart J. |
bishops@legis.la.gov |
(337)981-7409 |
(337)981-7411 |
Chaney, Charles R. |
chaneyb@legis.la.gov |
(318)728-5875 |
(318)728-5876 |
Connick, Patrick |
connickp@legis.la.gov |
(504)371-0240 |
(504)371-0242 |
Dove, Gordon |
larep052@legis.la.gov |
(985)876-8823 |
(985)873-2077 |
Foil, Franklin J. |
foilf@legis.la.gov |
(225)342-6777 |
(225)342-6785 |
Garofalo, Raymond E. |
garofalor@legis.la.gov |
(504)277-4729 |
(504)278-6597 |
Gisclair, Jerry |
gisclairj@legis.la.gov |
(985)798-7707 |
(985)798-7757 |
Guinn, John E. |
guinnj@legis.la.gov |
(337)824-0376 |
(337)824-4780 |
Harrison, Joe |
harrisoj@legis.la.gov |
(800)935-2081 |
(985)655-9011 |
James, Edward C. "Ted" |
james.ted@legis.la.gov |
(225)925-4859 |
(225)925-4885 |
Jones, Sam |
joness@legis.la.gov |
(337)828-7778 |
(337)828-4511 |
Kleckley, Chuck |
larep036@legis.la.gov |
(337)475-3016 |
(337)475-3018 |
Lambert, Eddie J. |
larep059@legis.la.gov |
(225)673-5048 |
(225)673-6980 |
Leger, Walt III |
legerw@legis.la.gov |
(504)556-9970 |
(504)556-9972 |
Leopold, Christopher J. |
leopoldc@legis.la.gov |
(504)393-5649 |
(504)393-5603 |
Montoucet, Jack |
montoucj@legis.la.gov |
(337)783-2999 |
(337)788-4957 |
Morris, James "Jim" |
larep001@legis.la.gov |
(318)995-6852 |
(318)995-6890 |
Ortego, Stephen J. |
ortegos@legis.la.gov |
(337)886-4687 |
(337)886-4689 |
Schexnayder, Clay |
schexnayderc@legis.la.gov |
(225)473-6016 |
(225)473-6018 |
The protections in the law for the mineral owner pretty much make leases not worth the paper they are written on.....
You have to sue to enforce any part of it and unless you are a large mineral owner with the financial means...pretty much screws the little guys....
I am a strong beliver that our elected officials should correct this problem. I sent a letter to my representive, he responded that I should contact the LA. Natural Resourse Office with my concern, as Skip has listed above. Thank you Skip for the contact information.
I really believe that if natural gas is going to such an important part of the futures energy, then the laws that were last changed in the 50s need to be updated and more fair. I also get screwed by CHK. each month they just refuse to honnor the contract.
All I can do is try. I wish everyone would do the same and maybe something would change. These companies will not do it on their own.
Jo Ann, I suspect that your representative was suggesting that you contact the Department of Natural Resources. That state department does have oversight of the energy industry however the commissioner is appointed and speculation is that he wishes to run for governor. He is close to Governor Jindal and therefore to the industry. The Department of Natural Resources will not address this issue but I imagine that many senators and representative will attempt to shift this question from themselves to the DNR. They will also claim that this is a legal question for the courts. That's a more defensible claim. However the legislature could address this issue and others that are sorely in need of codes reflecting modern realities. I just don't think a grass roots effort has much chance of affecting change in the face of opposition from the industry. The energy industry has spent decades and billions of dollars amassing the political influence that shields them from any legislation such the issue under discussion here.
Also if the LA legislation gets uppity the O&G industry will remind them that Texas, PA, WV etc. all have NG and are begging the industry to shift drilling and associated $$$ to their states. All companies/industries are great at pitting one state against another for extra benefits.
I think this is where a populist candidate or current elected official gets his foot in the door especially with landowners in rural areas. David versus Goliath seems to resonate with the masses, regardless of who is funding campaign coffers. How does anyone think Huey Long got as far as he did? He could have been president.
In my view you could even pit oil company against oil company just as land men tried to do when I was dealing with my lease.
(Something like this might help teach a lesson to the oil companies)
Landman "Hey we're ehticle go with us"
Landowner "I don't think you can spell ethical I'm going with the other guy with a good track record."
The problem with all these Huey Long references is that back in his day it didn't cost $1m to be elected dog catcher. Even if a person like him was elected the powerful party cactus would bury him so deep that the only committees (where laws are really determined) he would be involved with would only involve dog issues.
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