Questions abound about royalty payments in the United States

A recent article about shale gas developments in the Bradford County (Pennsylvania) reports on popular uncertainty about the royalty payment schemes through which gas companies compensate landowners in exchange for drilling on their property. Some of the doubts that have arisen concern the complexity of the payments process as well as the impact that the engagement in lease agreements has had on landowners' well-being, stress and mental health. The article says that agreements with gas companies were variable and the landowners found it difficult to assess whether they were being paid fairly and whether the volumes of gas extracted claimed by the company were accurate. There were fears that the companies might be “under measuring” gas quantities to increase their profits at the expense of landowners. Here is an example of the mistrust of the royalty payment system that the authors cite in their analysis: “Many farmers are waiting for the hope and promise that they will become rich as soon as the well is hooked up to the pipeline, but because of our old leases that were signed, usually you will find the gas companies don’t have to pay royalties on your entire property, you may be paying double production cost before receiving royalties, and you may be waiting a long time before you receive any royalties if your lease doesn’t provide a time frame on when the gas produced must go to market” (537).


Powers, M., Saberi, P., Pepino, R., Strupp, E., Bugos, E., & Cannuscio, C. C. (2015). Popular Epidemiology and ‘Fracking’: Citizens’ Concerns Regarding the Economic, Environmental, Health and Social Impacts of Unconventional Natural Gas Drilling Operations. Journal of Community Health, 40(3), 534–541.