Sunday, March 21, 2010
An end to government-approved theft
Luanne Rife
Recent columns
- Incentives to do business in Roanoke
- In support of informed opinions
- When values slide, rates rise
- City taxes fly through loophole
From the RoundTable blog
Daniel Gilbert sat through one of those countless meetings reporters are assigned. This one, in November 2008, was a hearing of the Virginia Gas and Oil Board, where he watched powerless landowners rage against gas companies that had drilled wells on their land without their permission and without compensation.
Then came a parade of gas company representatives and their lawyers seeking board permission -- that was quickly granted -- to force even more owners to let them drill.
This scene, Gilbert discovered, had been going on for nearly 20 years. The reporter in him had stumbled across a huge, untold story that would take him the better part of a year to research by combing through thousands of government documents.
On Dec. 6, the first of his eight-part series "Underfoot, Out of Reach" hit the doorsteps of Bristol Herald Courier subscribers with this opening:
"Every month, a bank in Roanoke receives checks for thousands of dollars belonging to people who might never cash them.
"The checks are royalty payments for people whose mineral rights the state of Virginia has leased -- against their will or without their knowledge -- to private energy corporations. These payments represent the financial crumbs of natural gas production in Southwest Virginia -- a multibillion-dollar industry that in 2008 produced enough gas every second to heat the average home for 16 days."
Story after story detailed the terrible injustice to property owners in the southwestern coalfields that mushroomed in the wake of the 1990 Virginia Gas and Oil Act. The act authorized a form of eminent domain that allows gas companies to extract coalbed methane without owners' permission -- but the owners are supposed to be compensated.
Gilbert found $25 million in royalties was parked in an escrow account. The account had not been audited in at least a decade. No one knew whether the gas companies were paying all that they should or whether the money was managed well.
Worse, owners couldn't get their money, especially if they had sold the coal rights many years before. A 2004 state Supreme Court ruled that a surface owner retained the right to the gas unless he specifically sold it along with the coal. But, Gilbert reported, the Department of Mines, Minerals and Energy viewed that as one particular case, not precedent, meaning each case -- if the property owner has the means to hire an attorney, which few do -- had to be litigated separately.
The stalemate might have continued for another 20 years if Gilbert, with his newspaper's backing and support, hadn't exposed this horrendous government-sanctioned theft.
Much has now changed.
A month after Gilbert questioned the two major corporations that dominate the market about discrepancies in royalty payments, the companies deposited more than $700,000 in corrective payments into escrow accounts that he identified as short.
Next, the Gas and Oil Board was prompted finally to authorize an audit of the escrow fund.
While those actions were an expected reaction to the exposure and scrutiny the series prompted, what came next is even more stunning: Lawmakers who seem to argue over the proper way to tie a square knot were nearly unanimous in support for three pieces of legislation (now awaiting the governor's signature) that should finally free up the money:
The first presumes the landowner owns the gas unless he specifically signed away his rights, as is in keeping with the Supreme Court ruling.
The second requires that disputed cases be decided quickly through binding arbitration conducted by a mineral rights attorney without substantial ties to industry.
The third requires the Virginia Coal and Energy Commission to study ownership rights and report back to lawmakers prior to their next session. This last one has the potential to clear up any remaining ambiguities, but it also could allow for corporate influence to sway policy.
Gilbert's influential stories are a fine example of enterprise journalism that makes a difference in the lives of readers. And they are also a terrific illustration of the value of open government records.
This past week, our editorial pages joined in the nationwide observance of Sunshine Week. It is an annual event in which we remind readers that government gains its powers from the people; therefore, citizens have the right and the responsibility to keep a watchful eye on government's handiwork.
More often than not, citizens rely on the press, as their proxy, to remain ever vigilant. To that end, we often push for more transparency in government and fewer reasons to close off records and meetings, which can bring criticism that we are looking out for our own interests during Sunshine Week or that we're trumpeting our own horns.
Yet stories like Gilbert's remind us of the lives affected by government action, or inaction, and how using the government's records can expose wrongdoings that, once in the light of day, demand justice.
Traud is a member of The Roanoke Times editorial board.
