Forced Pooling Resurfaces in the WV Legislature

Delegate Woody Ireland (R – Ritchie County) Strongly Pushing Forced Pooling

From an Article by Liz McCormick, WV Public Broadcasting, November 17, 2015

Two bills that both died on the final night of the 2015 legislative session, resurfaced (Monday) during interim meetings – forced pooling and public charter schools. Both ideas erupted in debate in 2015, but (Monday’s) discussions were calm and reflective – but not without some concerns.

The separate discussions (Monday) on forced pooling and charter schools were mostly on how to make these controversial pieces of legislation work for lawmakers and interested parties on both sides of the issues.

First, forced pooling -

Delegate Woody Ireland chairs the House Energy Committee and sponsored the forced pooling legislation during the 2015 session. He told his fellow lawmakers (Monday) they must do something about pooling, even if they don’t all agree.

Forced pooling works like this – When companies prepare to drill a well, they create a giant rectangle of land parcels and then negotiate with the mineral owners within that rectangle for their gas rights.

The 2015 bill would have allowed companies to force owners to sell their minerals if they could get 80 percent of the owners in their parcel to agree to the drilling. However, the 20 percent forced to sell would still get paid for their proportion of gas drilled.

Democrats and some tea party Republicans were strongly against the bill, even showing their discontent through demonstrations on the floor. On the final night, the bill died on a tie vote in the House.

Now, Delegate Ireland has proposed a new pooling bill.

“With the passage of this bill, it would create a lot of land owner protections that currently aren’t available,” explained Seth Gaskins, counsel to the committees on Energy, “and the new title for the bill is the Horizontal Well Unitization of Landowner Protection Act. We wanted to make sure that this bill is known as a protection bill as well as a pooling bill.”

One aspect of this new bill would clarify the royalty rights of mineral owners. It would protect owners from deductions if they are included in a pool without their consent.

But there’s more – Ireland is also proposing what he calls a companion bill to compliment the Horizontal Well Unitization of Landowner Protection Act.

“This bill attempts to create some transparency,” Gaskins said, “in the royalty payment process as well as institute or establish rather, reporting more frequent report of production…reporting of production data to the office of oil and gas.”

While there was little debate during the meeting, a couple lawmakers did express some concern over the two new draft bills, but Ireland says the legislature has to make pooling a priority.

“I think what we have currently is an opportunity to really improve on personal property rights,” Ireland said, “If you look at the statutes that includes forced pooling from the deep strata, and you look at what’s going on in the industry with a movement towards the Utica shale, which is a deep strata, so if we don’t do something, we basically have forced pooling already.”

The second controversial piece of legislation taken up during November interims (Monday) – public charter schools. The 2015 bill on charter schools also died on the final night but not quite as loudly as forced pooling. See the original article here for that discussion.

Note:  Forced pooling is permitted already for so-called deep wells in WV, e.g. Utica shale wells —which are significantly more expensive.  But, giving forced pooling rights to the drilling & fracking companies is similar to giving eminent domain rights to pipeline companies.  Forced pooling takes rights from mineral owners and eminent domain takes rights from surface land owners.  DGN

Tagged as: drilling, eminent domain, forced pooling, fracking, marcellus shale, mineral rights, natural gas, WV Legislature