Scott Perry

Energy innovation and technology continues to create thousands of much-needed jobs all across the Commonwealth and in southwestern Pennsylvania in particular. But could opposition from environmental groups and the prospect of politicians seeking new sources of tax revenue slow or perhaps even stall that economic progress?

Southwestern Pennsylvania has a long, proud history as an energy-producing region. Readily available (and seemingly endless) supplies of energy from coal, oil and natural gas were among the chief reasons that men such as Henry Clay Frick, George Westinghouse and their contemporaries selected this region as the place in which to bring their innovations and ideas to fruition and to seek their great fortunes in the late 19^th and early 20^th centuries.

Today, we still have the immense deposits of coal, along with the largest known reserve of natural gas shale and dozens of local firms involved in the development of alternative energy sources like wind farms and solar power. All that, plus the nation's only domestic manufacturer of nuclear power generation equipment all right in our own back yard, and it's easy to see why this region has so rapidly become a beehive of activity for industries and international investors seeking to capitalize on these vast energy resources. It's also been a boon for a lot of abstractors and examiners across the region, myself included, who felt the pinch of the recession when many of the smaller local title agencies and mortgage brokers closed their doors.

Current estimates are that the Marcellus Shale, the huge rock formation which runs throughout most of the Appalachian Basin, contains enough natural gas to meet the energy needs of the entire nation well into the next decade. Interest in Marcellus gas has attracted billions of dollars in international investment from firms in China and Great Britain. Westinghouse Electric Company LLC, which recently relocated its corporate headquarters to a brand-new 775,000 square-foot facility in Cranberry Township, Butler County, plans to hire as many as 1,000 people, according to a recent article in the Pittsburgh Tribune-Review. Company officials cite the rapid expansion of the nuclear energy industry worldwide as the reason for that growth.

Just last year, as a paralegal consultant at Westinghouse's Legal & Contracts Group, I had the privilege of working closely with many of the attorneys and other professionals involved in contract negotiations for the company's AP1000 nuclear reactor program. Four AP1000 plants are currently under construction in China, with a total of 12 units scheduled to go online in that country sometime in 2014 or 2015. Here in the US, the AP1000 reactor design has already received preliminary approval from the Nuclear Regulatory Commission and at this writing, NRC license applications for the construction of fourteen reactors at seven power plants across the country are pending.

A recent Penn State University study sponsored by the Marcellus Shale Coalition predicts that natural gas producers will spend over $8 billion in 2010, generating about $790 million in state and local tax revenues and creating more than 88,000 jobs, more than double the numbers from 2009. But critics in the environmental movement have expressed concerns over the method of extracting natural gas from shale formations by a process known as "fracking" (short for "fracturing").

Gas drilling by Cabot Oil & Gas of Houston, Texas caused problems in a small township in Susquehanna County when methane gas seeped into the water supply through a cracked underground casing in one of Cabot's gas wells. In response, the state Department of Environmental Protection ordered Cabot to plug the wells and gave the company 30 days to supply the affected residents with water treatment systems at its own expense. In addition, Cabot was hit with nearly a quarter million dollars in fines and has been barred from drilling any new wells for at least a year.

As you can well imagine, all this talk of jobs, energy production and environmental hazards has become fodder for local candidates on both sides of the aisle seeking to score political points with their respective constituencies. Senator Bob Casey, Jr. (D-PA), for example has introduced a bill that would remove the long-standing exemption from the federal Clean Water Act that allows hydrofracking. Critics of the bill contend that there has never been an instance of contamination of ground water by fracking.

A proposed three-year moratorium on leases for gas drilling on state-owned lands has passed in the state House of Representatives. Lame duck Governor Edward G. Rendell (D-PA) has promised that he will sign the bill if it reaches his desk. Rendell also advocates a severance tax on natural gas production, a measure supported by Allegheny County Executive and Democratic gubernatorial nominee Dan Onorato. His Republican challenger, Attorney General Tom Corbett opposes the moratorium, saying that it will discourage energy development and cost the state jobs. Corbett instead favors a tax on the royalties produced by oil and gas leases on public lands, rather than a severance tax as a means of raising revenue.

In my view, regulation and oversight is best handled by the state authorities, who are closer to the concerns of the citizens and are therefore in a better position to respond to any issues that may arise. Believe me, having clean water to drink is just as important to me as it is to anyone. No one in their right mind wants to have to deal with dirty air or water. At the same time, however, I'm also a big fan of having a job, being able to pay my bills, taking hot showers and keeping warm in the dead of winter. I dunno, call me crazy.

Well, the 'net is buzzing once again with news of the latest screw-up by Bank of America. Seems that they took possession on the wrong house...again. My question is: how does a thing like this keep happening with the same company over and over again?

This time, it's Angela Iannelli of Gibsonia, PA just north of Pittsburgh who is the victim of BoA's gaffe. But she's not taking things lying down and has filed suit against the bank.

"If you or I did to Bank of America what Bank of America did to my client, we would be in prison for 10 years," says attorney Michael Rosenzweig, a partner at Edgar Snyder & Associates, the law firm which represents Ms. Iannelli.

The suit, filed Monday in Allegheny County Common Pleas Court, alleges that the bank's third-party contractor Snyder Property Services of Ebensburg, PA damaged her furniture, cut off the utilities to the house, put dangerous chemicals in the drains and water fixtures, removed Ms. Iannelli's pet parrot and padlocked the house.

According to Attorney Rosenzweig, the contractor "[t]ook her family pet of 10 years and denied any involvement in it for over a week before they finally told her how she could seek retrieval of her pet." She did eventually get her parrot back, but had to drive to Ebensburg, Cambria County some 80 miles away to do so. Ms. Iannelli says that she has always made her payments on time and that her mortgage has never been in default. Under Pennsylvania law, a lender must give a 10-day notice before entry of default and notice of intent to foreclose at least 60 days before any proceedings are initiated.

This isn't the first time Bank of America has pulled a stunt like this. Similar cases in Florida and Texas have resulted in a spate of lawsuits against the mortgage giant, which recently took ownership of Countrywide Financial. One guy whose home was wrongfully siezed doesn't even have a mortgage with BoA.

I could see this happening in an isolated incident, after all, with all the foreclosure activity taking place, someone was bound to get careless. But my question is how does a thing like this keep happening over and over again, and with the same lender? Who at Bank of America is responsible for seeing to it that proper procedure is being followed? A little due diligence on the part of the contractor could have gone a long way toward avoiding a lot of hassles for Ms. Iannelli and the others as well. Maybe I'm thinking too much like a researcher, but it seems to me that a trip to the local courthouse to verify the defaulting borrower's name and address could have prevented this from happening. For its part, BoA says it's "sincerely sorry" for the mixup and says it has "zero tolerance for this kind of error."

Yeah, and as Dr. Phil would say, "how's that workin' for ya?"

A recent local news item provides the perfect illustration of why the proper evidencing and reporting of title to real estate interests is so important to our fundamental rights as well as to our regional and national economies.

A local businessman is filing suit against Allegheny County, PA, claiming that the county is denying him the right to remove about 700,000 tons of coal that he owns. 74-year-old Nello Fiore, of Whitehall, PA says that if the county won't let him mine the coal, then they should pay him for the value of the coal, which lies beneath 92 wooded acres in the Sleepy Hollow section of the county's South Park, located just south of Pittsburgh. The high-quality coal, which sells for about $143 per ton locally, could be worth well over of $100 million, according to Attorney Thomas W. King, who represents Mr. Fiore.

Southwestern Pennsylvania, which lies in the heart of the Appalachian Basin, has often been referred to the "Saudi Arabia of Coal". In fact, coal mining has been a mainstay of our region's economy since the dawn of the Industrial Age. Because of this, Pennsylvania real estate law recognizes surface and subsurface interests separately. Typically, when someone purchases a parcel of real estate in Pennsylvania, only the surface interest is conveyed unless the mineral or subsurface interest is specifically mentioned in the deed. (See my previous blog entry, Searching Mineral Interests: Don't Try This at Home.)

The county, to which the surface interest in the land was donated in the 1930s, considered a proposal to strip mine the coal at a community meeting this past June, which was attended by about 300 people, including Allegheny County Executive Dan Onorato. Mr. Onorato nixed the plan after it was discovered that a 2001 County Parks Master Plan designates the area as "an important biological zone" which has also been recommended for designation as an Open Space Reserve.

Mr. Fiore's lawsuit alleges that the county is acting unlawfully in preventing him from removing the coal, which he inherited from his brother, who purchased it from Consolidation Coal Co., the predecessor to Consol Energy. According to Attorney King, the deed gives Mr. Fiore the right to mine the coal at any time, regardless of who owns the surface interest. "If the county will continue to tell us we can't mine the coal, Mr. Fiore, under the Pennsylvania Constitution has a right to be paid for it." Mr. Fiore and his attorney claim that to deny his mining rights amounts to the county exercising eminent domain over his coal, thus he is entitled to reimbursement.

The county says that it's not preventing Mr. Fiore from mining his coal because he can still retrieve it by underground mining. "He has access to his coal," says Kevin Evanto, a spokesman for the County Executive's office, "[the county] is just saying that we're not willing to allow you to destroy 91 acres of park land to get at it." However, the lawsuit states that "the coal cannot be recovered by the deep-mining process." Attorney King says that Mr. Fiore has offered to include a post-mining reclamation plan for soccer and football practice fields and picnic facilities, as well as royalties to the county in excess of $1 million.

Several members of the County Council are on record as saying that they wouldn't support the proposal, which would be subject to review by the state Department of Environmental Protection. Local residents like Mary Franko have also expressed concern about what strip mining operations will do to their property values. Some nearby homes are located as little as 1,000 feet away from the proposed mining area. In an interview with a local television station, Ms. Franko said, "It's dangerous, dirty, and I don't know how they can possibly protect the perimeter when there's going to be blasting going on. I'm afraid that this is going to devastate our township. We're a small township. Our property values will absolutely diminish".

To be honest, I'm not really sure where I come down on this one. Mr. Fiore certainly does seem to be on firm legal ground here, (no pun intended) and if I was in his position, I'd probably move to assert my rights as well. On the other hand, if I was one of the residents of that area, I'm not sure I'd want someone coming in and "tearing up my back yard", regardless of any promises to improve the area afterward. One thing is for sure, the Court is going to have its work cut out for it in dealing with this issue. Let's just hope the abstractors who researched this thing knew what they were doing.