By Ellen Thompson/Havre Daily Newsfirstname.lastname@example.org
Gov. Brian Schweitzer has signed into law a measure that requires oil and gas companies to provide more information in royalty statements to Montana landowners.
The law, sponsored in the Legislature by Rep. John Musgrove, D-Havre, was introduced at the suggestion of the Montana Land and Mineral Owners Association.
Association secretary Cathy Gregoire said the problem is that landowners are sometimes given too little information about the royalty checks they receive.
"They weren't ever saying that the gas company was taking money that they shouldn't," she said. "You wouldn't accept your paycheck without disclosure of deductions. Why should you accept your royalty checks?"
The law requires that companies itemize charges to the owner as well as include contact information for the company on the royalty statements.
"Hopefully, after this bill takes effect, these companies will be a little more honorable about answering questions people will have," said Herb Vasseur, association president. "I don't foresee a lot of changes because most of the companies were being good about it, but there are some bad companies that were withholding and not telling. We want to make it a uniform, or level field, where everyone is doing the same thing."
Vasseur said that at a January hearing before the Legislature, a landowner brought in one of his royalty stubs to share when he testified. The stub showed a charge under a category called "Code S." In the list of codes included with the statement, there was no "S," Vasseur said.
"We wanted more clarity and transparency in the checks that the royalty owners receive," he said.
Musgrove said today the association's goals may not be accomplished by the new law alone. "We want to work it for two years and see if there are more changes" that need to be made, he said.
A similar bill to the one signed into law on Friday failed in the 2001 Legislature.
Musgrove said a meeting between landowners and industry representatives went a long way toward the bill's success.
Vasseur said everyone had a chance to speak up, and then Musgrove followed up with both sides, making amendments to the bill.
Todd Ennenga, who works in governmental affairs for Devon Energy, said his company is in favor of the law.
"We supported the bill because we knew it was designed to help royalty owners and we have a policy within our company that we do that," he said.
"We, quite frankly, have always had a pretty detailed check stub, so this new law isn't going to be too difficult for us to work with," he said. "It's good for everybody."
Another association bill before the Legislature is HB 790, which proposes a study on split estates - when the mineral rights and the surface rights to a property are owned by separate parties.
Vasseur said a problem that sometimes arises is that an oil or gas company will not negotiate with the surface owner before conducting mineral exploration. The surface owner's only recourse, under current law, is to take the company to court, he said. A Senate bill that was killed earlier in the session proposed mediation prior to mineral exploration. The House bill proposes a study on the subject.
The House Natural Resources Committee held a hearing on the bill on Monday.
The Montana Land and Mineral Owners Association's next monthly meeting is Thursday at 7 p.m. at the USDA building in Havre.