West Virginia Legislative Update
The Joint Select Committee on Marcellus Shale (the “Committee”) reported a 121 page bill governing horizontal wells that utilize 210,000 gallons of water or more per month or that involve surface disturbance of 3 acres or more. The final version of the bill was posted to the West Virginia Legislature’s website on November 18, 2011 (the “Bill”). The Bill is based in large part on Senate Bill 424 as passed by the Senate during the 2011 Regular Session, but was further modified by the adoption of 33 amendments by the Committee. A pitfall is that the myriad of amendments distract from what is most important to the long term interests of the State of West Virginia and its citizens: the establishment of a set of laws and regulations that can be interpreted and enforced consistently. Such legislation would serve to reduce uncertainty and create a sense of stability, thereby encouraging employers to invest in West Virginia projects that yield jobs for West Virginians and generate tax revenue for the State. These amendments are undermining the opportunity to address through targeted and specific legislation legitimate concerns, including (1) the protection of water supplies, (2) the use and disposal of waters of the State, and (3) the use, maintenance and repair of county roads for natural gas exploration and development.
Amendments inhibiting the ability to quickly enact legislation include the following provisions:
a. Expanded well location restrictions that preclude drilling within 100 feet of any “watercourse,” lake, pond or reservoir, or 200 feet from a “wetland,” or 300 feet from a naturally producing trout stream, or 1,000 feet from a surface water or groundwater source of a public water supply. These limitations are not supported by science and are not necessary based on the broad base of experience obtained through decades of natural gas drilling operations;
b. Requiring the Secretary of the DEP to suspend a well work permit upon a notice from the Division of Highways that an operator has been found in violation of a letter of certification related to using public roadways without any due process protections;
c. An exclusion to preemption language for the “traditional power of local government to regulate zoning and land development of gas activities as well as other aspects, such as the time and the place of operations to protect the health, safety and welfare of the general public through local ordinances and enactments.” This exclusion would virtually cancel the preemption language;
d. Expanding the rights of surface owners, including making an offer of compensation before construction begins and giving surface owners the right to recover attorneys fees. Expansion beyond existing law does not remedy the issues created by drilling and completing horizontal wells in shale formations. Current law provides adequate rights to surface owners’ compensation under § 22-7-3;
e. Establishing detailed casing and cementing standards, on a cookie-cutter, one-size-fits-all basis, rather than allowing regulators to perform the work of shaping standards that will work for the particular facts involved in each drilling scenario. Natural gas drilling operations involve complex engineering practices that can vary from well to well and formation to formation. Establishing a single statutory standard simply ignores the realities of drilling operations. The standards should provide for adequate flexibility to implement new and improved techniques that fulfill the policy.
Governor Tomblin has yet to announce whether he will call a special session to consider legislation governing horizontal well development. We can all hope that legislation will be developed to address the truly important issues, leaving the extraneous matters for consideration at another time.