Study examines ownership, control of land with Marcellus Shale gas

UNIVERSITY PARK, Pa. -- Ownership of the land in Pennsylvania counties with the most Marcellus Shale natural-gas drilling activity is concentrated among relatively few residents and people living outside the counties, according to a study by researchers in Penn State’s College of Agricultural Sciences.

The majority of residents in these counties together own little of the total land area and, therefore, have relatively little "voice" in the critical leasing decisions that affect whether and how Marcellus Shale drilling will occur in the counties, noted the lead investigator Timothy Kelsey, professor of agricultural economics.

Together, half of the resident landowners in these counties control only about 1 percent of the land area, and renters have no "voice" at all, the study suggests. Rather it is the top 10 percent of resident landowners, plus outside landowners (both public and private), who are able to make the major leasing decisions that affect communities.

"In some counties, such as Sullivan, Tioga and Lycoming, nonresidents have more voice about what occurs than do county residents, because more than half of the land is owned by those outside the county," Kelsey said.

"Our analysis indicates that a majority of lease and royalty income from Marcellus Shale development will go to a relatively small share of the resident population in these counties, with much of the remainder going to others outside the counties."

The study, "Marcellus Shale: Land Ownership, Local Voice, and the Distribution of Lease and Royalty Dollars," was done by Penn State’s Center For Economic and Community Development , which is housed in the College of the Agricultural Sciences.

Co-authored by Alex Metcalf, a post-doctoral scholar in forest resources, and Rodrigo Salcedo, a doctoral candidate in agricultural, environmental, and regional economics,
Penn State researchers felt it was important to look at the ownership of the land within 11 Pennsylvania counties with Marcellus natural-gas development activity because land ownership determines who has a voice in decisions about the activity and for the distribution of lease and royalty dollars, Kelsey explained.

"Much of the public debate about Marcellus Shale development revolves around differing views of fairness and equity," he said. "These discussions often focus on the environmental, health, and other risks, the proper role for local government regulation and oversight of industry activities, and the ability of individual owners to use their resources as they believe is appropriate."

The study was not intended to evaluate or make judgments about Act 13 of 2012 -- the state law that allows counties to decide whether to allow Marcellus drilling and to impose an impact fee on wells -- or the current distribution of control and income, Kelsey stressed.