Property Owner Loses Land to Natural Gas Company on Split Estate

One of three Marcellus wells on David Barndt's property. (background: David Barndt, David's father, Joshua B. Pribanic) photo: Melissa Troutman

Pennsylvania property owner David Barndt has lost over a dozen acres of his property, including 50-year old timber, to Triana Energy Corporation, which has taken over his land to drill and frack for natural gas without his consent.

Barndt only owns the surface property, but the minerals thousands of feet below belong to someone else, in what’s known as a split estate. That someone else has signed a lease with Triana Energy to extract Marcellus Shale natural gas.

In Pennsylvania, mineral rights trump surface rights, and according to the Department of Environmental Protection (DEP), “If you do not own the oil and gas under your land, you cannot prevent the mineral owner’s reasonable access for development and production.” DEP recommends in its regulations that drilling companies give due regard to surface owners and attempt to come to a surface use agreement, but this is in no way required.

Meanwhile, the surface owner continues to pay property taxes on land that, essentially, is no longer his. And the gas companies pay no tax on the minerals they take from underneath.

Barndt resides in Richlandtown, Pa. but owns 150 acres of family land in Hebron Township five hours northwest from his home. The mineral rights were separated from the land, or surface estate, before his grandfather purchased it about 50 years ago. Triana Energy, LLC, a natural gas company from Charleston, West Virginia, leased the minerals under Barndt’s land in 2010.

According to Barndt, Triana sent him permits issued by the Pennsylvania Department of Environmental Protection (DEP) to drill on his property in Hebron Township last September. Two weeks later, another letter arrived asking him to sign and return. However, living 250 miles away from his Hebron property, having never talked to anyone in person, and nowhere near ready to sign anything without knowing more, Barndt returned an unsigned letter.

In the last week of October, he was contacted for the first time by phone and spoke with Triana Land Manager Mark Moyer.

“[Mark] wanted to meet up in Hebron, which I did,” Barndt said. “All he wanted me to do was sign a surface agreement and write in whatever dollar amount I wanted. I could have written in ‘three million’ but they don’t have to approve that amount. But they would have had my signature, so it wouldn’t have mattered what I wrote.”

According to Barndt, Moyer had no solid answers to any of his questions, replying he was new to the job. Uncertain, Barndt returned to Richlandtown without signing anything.

While Barndt was out-of-state in late November and outside cell service range, Moyer called to notify him that Triana was having some timber cut on the property. Once home, Barndt found out that nine acres of timber on his property were cleared. After the trees were cut and being hauled away he was offered $1,000 for the timber by the excavation company Fox & Sons.

“The whole community knows there are hardwoods on that land,” Barndt said. “I don’t trust the numbers one bit.”

He rejected the $1000 and hunted down a lawyer who dealt with mineral rights issues in “split estate” cases such as his. The lawyer he hired contacted Triana requesting a look at the company’s title search, to show details about the mineral deed for under Barndt’s property. Triana refused to show the title search results and the lawyer advised him to conduct his own title search.

The only paper regarding the mineral deed Barndt has ever received from Triana is an addendum to a title for mineral rights, which did not give specific enough information.

Triana continued with their well site development on Barndt’s land.

“I was just the afterthought of this whole thing,” Brandt stated. “At the [community] meeting [in February] they told everyone they’d been planning this for a year, so why didn’t they come to me last February? Why did they only give me six weeks between the time they first contacted me and when they started work?

“It’s a crooked way of doing things. They’re not up-front. They stole my timber.”

He also stated that if the company showed him the mineral rights title search he would have been willing work with them. Instead, the company has stopped returning his phone calls since his lawyer became involved.

Other Hebron residents expressed concerns at a community meeting with Triana in February over the increase in truck traffic and reckless driving on the part of some truck drivers. One Hebron resident complained about almost being run off the road near an intersection by one truck that didn’t bother to heed a stop sign.

Residents complained of trucks driving too fast on the narrow, winding roads. “We are a farming community,” one woman said, adding that children and animals could be in the road and unseen by a truck driving too fast around a corner until it was too late.

Residents also expressed concerns about road degradation, which Triana said the company would fix.

“Yes, but meanwhile, those that live on these roads will have their suspension and tires ruined on their vehicles until work is done,” said Hebron resident John Pete.

Triana Energy Regulatory Affairs Director Rachelle King assured residents of Hebron that she understood their concerns. Senior Vice President James “Eddy” Grey explained that Triana gives contracted companies one warning about not operating to standards before firing any company that repeats offenses, including truckers.

Grey also stated at the meeting that Triana goes “above and beyond” and wants “to be good neighbors.” Grey told residents to contact King or Moyer if any other problems occurred.

Barndt, however, fears his problems won’t be going away anytime soon.“I pay all the property taxes. The gas company doesn’t have to pay taxes on the minerals they take from this property. Yet their rights under the mineral lease trump my taxpaying surface-owner rights. That’s our legislators hard at work.”

Currently in Pennsylvania, natural gas companies do not have to pay a tax on the gas they extract. Newly-elected Governor Tom Corbett promised during his campaign for governor of Pennsylvania that he would impose no new taxes.

“Their attitude the whole time has been – so sue us,” said Barndt. “I’m fortunate that I can take Triana to court and still be okay. But what about people that can’t afford to? They’d be helpless against a company this big.”

Barndt and his lawyer were successful in fighting off an over 14-acre freshwater containment pond Triana had planned for his property earlier this year. Because the containment pond was not “essential” considering water can be pumped in via above-ground pipes that are later removed, Barndt was able to save the 30 acres Triana had taped off for constructing the pond on his property.

Questions regarding the companies plans and lack of agreement with Barndt were left unanswered by Triana’s Senior Vice President, who wrote in an email that “Triana does not believe it appropriate to discuss individual landowners in the media.”

Grey also wrote, “Typically, companies like Triana go out of their way to work with the surface owners to minimize surface disturbance…in a vast majority of cases, the producer of the minerals and the surface owner reach a mutually acceptable accommodation and the surface owner is compensated for damage to the surface.”

Since work began on his property last fall, Barndt has never been compensated.

Triana contacted Barndt in March to discuss two buildings the company plans to build on his property, one a metering station and the other Barndt’s still unsure of. Since he and his lawyer “drew a line in the sand” and “said no to the buildings, Triana has handed the matter off” to Tennessee Gas, a pipeline and distribution company operating in Potter County.

Last month, the Pennsylvania Utility Commission announced plans to grant public utility status to Laser Northeast Gathering, another pipeline company operating in the state, giving the company the power to condemn private property by eminent domain.

This, Barndt fears, means that Tennessee Gas will be able to do whatever is necessary to his property if given the same public utility status. He’s not sure if the buildings Triana and Tennessee Gas plan to build are essential to the extraction process, how many more of his acres they will consume, or whether the gas company has to contribute to the taxes on the buildings they put on his property?

Meanwhile, Barndt’s land loses value. He is unable to sell or subdivide. “Who would want to buy this?” he said. “They’re going to be taking natural gas from here for 30 or more years, and I’ll still have to pay property taxes on land that is no longer mine.”

Calls to Potter County tax assessors, the Potter County Commissioners, and the Pennsylvania State Commissioners Association yielded no definite answers regarding the tax issues. Split estate cases such as Barndt’s stump officials due to a lack of such previous cases in Pennsylvania.

Triana has leased or owns rights to produce natural gas from approximately 26,000 acres in Potter County alone and controls about 130,000 gross acres of the Appalachian Basin in the northern tier of Pennsylvania.

A version of this report appeared in the Potter Leader-Enterprise

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