Gas Industry is Pushing Forced Pooling Again this Year in WV Legislature

Citizen Input to the Legislature is Essential on Most Bills

From an Article by Casey Junkins, Wheeling Intelligencer, February 20, 2015

Whether one wants to call it “forced pooling” or “unitization,” Tim Greene said allowing Marcellus and Utica shale natural gas producers to drill on unleased land will give the industry an unfair advantage in dealing with mineral owners.

Identical bills, both introduced Friday, are now up for committee debate in both the West Virginia House and Senate. The House bill – H.B. 4558 – is sponsored by Speaker Tim Miley, D-Harrison, among others. The Senate bill – S.B. 578 – is sponsored by President Jeff Kessler, D-Marshall, and Senator Larry Edgell, D-Wetzel, among others.

In both 2011 and 2013, similar bills that would have allowed frackers to include unleased minerals in horizontal drilling pads failed to pass in the state Legislature. Reached late Wednesday, Edgell said the pooling bill is “not going to pass,” adding that he had asked his name to be removed from its list of sponsors.”The way this is crafted, it just is not fair to a bunch of landowners I know back home,” Edgell said. “There is a lot of opposition to this.”

Meanwhile, Greene is a former West Virginia Department of Environmental Protection oil and gas inspector who now owns Land and Mineral Management of Appalachia. He said “small” mineral owners throughout the Mountain State will suffer if legislators approve the practice he calls forced pooling.

“I just hate to see it being used as a hammer against the small mineral owner. They deserve the right to negotiate a fair lease,” Greene said. “There are landmen now going around the state telling mineral owners, ‘You either sign this or we are going to force pool you.’ And it is not even the law yet.”

Under the legislation, if surrounding property owners have signed leases with a particular drilling company but one property owner has not, that property owner could be forced to allow their land to be used by gas drillers for the development of the neighbors’ gas. The pooling provision would require gas companies to pay pooled property owners royalties comparable to those paid to neighbors.

In the case of a mineral owner who refuses to sign, he said the bill would require drillers to lease a “supermajority” of the adjoining acreage before they can act on pooling.

Corky Demarco, executive director of the West Virginia Oil and Natural Gas Association, said any royalties paid to an absent property owner would be placed into an escrow account. “Pennsylvania and Ohio have statutes allowing this,” he said. “If we are going to maximize our opportunity with the shale industry, we need some certainty. We can’t allow one mineral owner who wants to hold out to shut down a drilling operation.”

The Legislature ultimately decided against forced pooling in 2011 after many landowners voiced concerns about losing their ability to negotiate better lease deals from the gas companies. The industry tried to pass a similar bill last year without much success.

“There is a lot of acreage in this state that is just not going to be developed unless we get this,” Demarco said. As with Demarco, Greene is not sure of the bill’s destiny, but said companies should not be able to “bully” mineral owners.

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West Virginia Environmental Council Action Alert – February 21, 2015

There are three–yes, three–items about which you might contact Senate Judiciary members.

1. Any day, we’re expecting that committee to take up S.B. 423, “Amending the Aboveground Storage Tank Act.” This bill would gut the water protections gained in last year’s S.B. 373. Tell committee members to reject this bill!

2. We’re also expecting the committee to take up S.B. 482 any day. This bill would seriously weaken air pollution permitting for smaller sources, and establish unrealistic deadlines for the WV-DEP to review permit applications. And it says that if the DEP does not act, the permit is deemed granted as applied for. Tell committee members to reject this bill also!

3. Sooner or later, this committee will take up S.B. 167, the DEP rule that would restore “Category A” (drinking water) status to the portion of the Kanawha River that flows past Charleston. Tell committee members to pass this rule without amendment!

Note:  The House Judiciary Committee meeting at 9 am this Monday will take up “Coal Jobs and Safety Act” (H.B. 2566/S.B. 357); this bill would relieve coal companies from meeting water quality standards in their pollution permits and also weaken aluminum criteria for streams. Mine workers oppose it too, because it weakens mine safety.

This is the mid-point of the 2015 Session of the Legislature, the last (60^th) day is March 14^th.

Tagged as: air pollution, drilling, fracking, gas industry, leasing, legislature, marcellus shale, natural gas, pooling, residual waste, toxic chemicals, wastewater, water pollution, wv