State officials are signing over mineral rights of public land to energy companies for a fixed minimum. Not surprisingly, perhaps, that has given rise to questions about whose interest is being served: The public’s? Or the industry’s?

Under long-standing policy, New York’s share of royalties from natural gas wells on state-owned land is fixed at 12.5 percent — the minimum allowable by law. By contrast, royalties are seen as a vital part of the deal-making process for private landowners, who have been negotiating rates up to 18 percent.

Revenues from natural gas drilling and who’s getting them has taken on added significance this year as energy companies gear up to tap the Marcellus Shale. It’s thought by some geologists to be the largest untapped natural gas resource in the country, and it runs under the Southern Tier and throughout Pennsylvania.

Soaring energy prices and growing emphasis on domestic production have pushed the stakes even higher. As production and prices climb, a change in royalty payments by a percentage point or two can quickly add up to significant sums.

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  1. LVTfan said...

    Seems like we-the-people are entitled to more than 12.5%.

    Wouldn't we be a lot smarter to take more in royalties and less in sales and income and corporate taxes? The effects on the economy would be far better than what we're doing now. The top 1% or 2% of us might not get as large a share of the economy as is currently the case, but we would certainly grow the pie. Seems like a worthwhile tradeoff to me.

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