Published: February 15, 2008 11:55 pm         

Coal rights up for grabs

EBENSBURG — Some worried landowners came early to the courthouse on Friday.

They sat down at a snackbar table to negotiate a deal with the independent broker who was trying to buy the coal rights under their ground for $100.

He would not bid against them if they offered $200 at the auction, he said.

“I told you I was a reasonable man if someone made me an offer,” David Jenkins of Somerset County told a reporter.

Even before Friday’s sale, the Cambria County commissioners had protected the coal rights under Duman Park, and therefore protected it against coalbed methane drilling, by pulling 11 defunct coal company parcels from the sale list.

But all that was just a prelude to a tax auction that pitted Jenkins against farmers and a gas company, as more than 100 worried landowners packed Cambria County’s largest courtroom to protect their properties from methane drilling.

At stake?

Whoever owns the underground coal rights, the Pennsylvania Supreme Court has ruled, has the right to drill for methane on the surface above.

Many landowners – farmers, doctors, businessmen and plainly dressed Amish workers – outbid Jenkins and the gas company for the coal rights under their land in northern Cambria County.

The Kline family of Barr Township spent almost $10,000.

Kevin and Norman Krug, with Jenkins bidding against them, had to spend $1,500 for the coal rights under one family parcel. The Amish were more fortunate, with their bid of $200 against Jenkins’ $100 uncontested.

But the real bidding wars were between Jenkins and William J. McIntire Coal, Oil and Gas Co. of Indiana County, where time after time the two raised each other to prices of hundreds and then thousands per parcel.

A few parcels of coal rights went for prices like $2,200, $3,800, $4,600 and even $5,000.

“At least they didn’t just walk away with it,” said Robert Davis, president of the Cambria County Farm Board and an advocate of landowners’ rights to avoid methane drilling without their permission.

Some buyers are bitter about Pennsylvania law.

“We shouldn’t even have to do this,” said a woman who did not wish to be identified for fear of damage to her property.

Most are furious that the coal rights being auctioned were advertised under the name of defunct coal companies, without the surface owners being identified. Only after newspaper articles explained the significance did owners began calling the tax office.

Sam Runzo, director of the county Tax Claim office, said the county will develop a method of listing both the mineral owners and the surface owners before the next coal rights sale.

Runzo said the prices were higher than the December sale, when few attended and Jenkins was rarely outbid.

He estimated that the average price at Friday’s auction was $1,200 to $1,400.

Once the back taxes are paid – most of them ranging from $125 to $175 – coal company debtors are paid off. If any money is left over, they go to the surface owner, he said.

     

• Click to discuss this story with other readers on our forums.