Business, Government Legal News from throughout WVInterest groups react to Governor’s Marcellus shale bill

Interest groups react to Governor’s Marcellus shale bill

Despite, or perhaps because of promises to draw input from all sides of the natural gas drilling debate, legislators have ended up with a Marcellus shale bill that doesn't seem to be please any of the affected parties.

At a Monday meeting of the Senate Judiciary Committee, numerous parties aired their concern or praise of the bill. Details of the Governor's Marcellus shale bill were reported here, and amendments ultimately offered by the Senate Judiciary committee are detailed here.

Union

AFL-CIO President Kenny Perdue said the study of the work force enlisted by natural gas operators was drafted in consultation with Steve White, director of Affiliated Construction Trades. He said he supported that piece of the legislation.

The law pushes for a study of the amount of in- and out-of-state workers employed as well as the wages of those workers. Perdue said his group was in support of the bill.

Environmentalists

Don Garvin, legislative coordinator for the West Virginia Environmental Council, took issue with bill, calling the efforts of the Department of Environmental Protection and lawmakers a "disappointment."

"We feel the governor's bill falls short," Garvin said. "I'm really disappointed that the governor doesn't believe the public deserves notice and comment periods. These are huge operations, a lot more than the surface tract that is being disturbed."

Garvin said the notifications required by the bill are a major disappointment. He also was critical of the handling of air emission regulations in the bill.

According to a position paper provided by the WVEC, the group opposes several elements of the bill.

WVEC is calling for increased public notice and comment, and re-inclusion of language that would allow the DEP to regulate aggregate air emissions. The governor's bill also removes provisions that allow the DEP to condition or deny permits based on proximity to water supplies, cities, impact on water tables, public resources, natural landmarks, archaeological sites, historical sites, rare flora and fauna and other special places, the paper states.

The WVEC also takes issue with portions of the bill that allows drill cuttings and drilling mud be buried on site, with approval from the DEP.

Additionally, the WVEC's complaint includes such issues as inadequate well location restrictions, inadequate restrictions on Karst formation drilling and inadequate regulation of water withdrawal.

A measure to allow $250,000 blanket bonds for all of an operator's wells also falls far short, Garvin said.

"The $50,000 in the bill, is fine, for an individual well bond," Garvin said. "But $250,000 blanket bond for every well that an operator owns is — that's just useless. You will not be able to plug or reclaim all of an operator's well with a $250,000 blanket bond."

Surface owners

The West Virginia Surface Owners Rights Organization was also unhappy with provisions in the bill.

"While we support the fee increases in the bill, there is plenty of money to provide the increased inspectors that are needed now without this bill," the WV-SORO position paper states. "There is not time to fix this bill in a special session. This bill should die, and this issue should be dealt with in the regular session."

WV-SORO is critical that the governor's bill only includes horizontal wells and not conventional wells. Horizontal wells using less than 210,000 gallons of water and disturbing less than three acres of land would also be exempt.

WV-SORO co-founder Dave McMahon said the bill also makes the surface owner's rights "servient" to those of the minerals owner. Legislative counsel indicated that this was not necessarily true, and could be interpreted differently by different lawyers.

McMahon also argued that the 625 feet from well pad to drilling operation requirement was insufficient.

"If a well is 625 feet from your residence you will not be able to sleep at night," McMahon said.

McMahon also criticized the governor's bill for mandating studies, but not funding them as well as additional issues with distance requirements of the bill.

"There's a lot of problems we have with this bill," McMahon told the Judiciary Committee.

Industry

The gas industry itself also remains in opposition to the bill, but industry representatives have largely concluded that they would support the bill in exchange for the predictability.

"I guess we've got some major problems," Nicholas "Corky" DeMarco of the West Virginia Oil and Natural Gas Association said, holding up a copy of the legislation. "Yellow is caution, orange is we don't like it and red is awful."

DeMarco said there are some real concerns about setbacks, but that "nothing is more important than this bill."

"We will agree to support the governor's bill, in lieu of that, because the potential we have economically in this state to go on past where we are today requires certainty," DeMarco said. "I think this bill will provide that certainty. Again, we don't like it. We don't think we got anything out of it."

DeMarco said the bill does not allow West Virginia to be competitive with other states because of severance taxes and other elements of regulation of gas in West Virginia.

"We will grin and bear it because we don't want to lose the opportunity," DeMarco said. "We don't want to see rigs go to Ohio, we don't want to see rigs go to Pennsylvania. We want to develop gas in the state."

DeMarco said the certainty provided by the bill would likely aid in the attractiveness of the state to ethane cracker investment.

"I believe that the DEP has got all the regulatory authority to do whatever they need to do, but the public perception is that they don't," DeMarco said. "The public is reaching out to you all on a continual basis for something that is not in place that provides for this protection they think they need in excess of regulatory abilities right now."

Phil Reale of the Independent Oil and Gas Association said the bill does not help to attract an ethane cracker facility and numerous elements of the bill are harmful to industry. Reale said the bill "takes from some, gives to others; takes from others, gives to some."

"Do we like everything in this bill? Of course not," Reale told the committee. "Do we want that same sort of certainty … absolutely."

Reale said much of the bill and things discussed by the joint select committee have already been addressed in some form by the DEP or industry. He said the bill may have the benefit of changing public perception of the drilling operations.