MORGANTOWN -
Even in a year with an unusual gubernatorial election and a redistricting controversy, no topic occupied more minutes of water cooler conversation or more inches of newsprint than the extraction of natural gas from the Marcellus shale.
It was a year of academic and governmental studies on shale's economic potential and environmental threat, a year of municipal drilling bans passed and repealed and, most of all, a year of lawmaker wrangling.
"Marcellus," the name of a geologic formation, has become shorthand for West Virginians for a complex set of opportunities and concerns. But what drives the hubbub are the technologies that have made the Marcellus, Utica and shales nationwide productive: the horizontal drilling and hydraulic fracturing that have allowed for fewer, larger wellpads and changed the way natural gas extraction affects the land and people.
West Virginia lawmakers' second run at comprehensive legislation regulating shale gas extraction — addressing everything from the reporting of chemicals used in fracturing fluid to "forced" or "fair" pooling that would bring holdout landowners into contracts — failed when the regular session ended in March, setting the stage for much that followed.
Within days, the city of Lewisburg banned drilling. Wellsburg and Morgantown followed in June and New Martinsville in July. Inadequate environmental protections at the state level were among major reasons cited for the bans.
Legislators established a House-Senate committee in June to hammer out a compromise bill that could be passed efficiently in special session. And in July, then-acting Gov. Earl Ray Tomblin asked the Department of Environmental Protection for emergency regulations.
Then came the studies, and lots of them. Duke University researchers found methane in drinking water and pointed to faulty well casings as a likely cause. Pennsylvania economists, funded by the industry, predicted 250,000 Marcellus jobs in the state by 2020, sparking an ongoing region-wide debate on jobs forecasts. A high-level Department of Energy committee called for faster implementation of better protections for water and air. The Environmental Protection Agency issued a plan for studying a broad range of effects of hydraulic fracturing over the coming several years.
And, in West Virginia, the House-Senate committee met repeatedly through the summer and fall, seeking information and debating policy on an ever-broadening list of topics.
Most prominently at issue: surface owners' rights, permit fees, a method for determining employment levels, setback distances from dwellings and water, and public notice and comment for drilling permits.
Meanwhile, any doubt about the business community's enthusiasm for the Marcellus industry had to be dispelled in October with the first annual West Virginia Oil and Gas Expo in Morgantown.
"We were hoping to get 75 to 100 vendors," said Nicholas "Corky" DeMarco, executive director of the West Virginia Oil and Natural Gas Association, which co-hosted the expo. "In the end, we had 257 registered participants. We didn't want to, but we had to turn people away."
The House-Senate effort succeeded Dec. 14 as a compromise bill, with some tweaking by Tomblin, passed in special session.
"For all West Virginians, the Legislature and I have worked together to open the door to new job opportunities and reasonable regulations for Marcellus shale development with the passage of the Horizontal Well Act," Tomblin said in a news conference. "This landmark piece of legislation provides clear rules to the natural gas industry, protects our communities, surface owners and waterways while sending a clear message: West Virginia wants jobs, and we will protect our rights and our environment."
Industry and citizens' groups alike found fault with the bill, but many conceded that dissatisfaction all around likely is the only way such sweeping legislation could come out.
Notably unaddressed was municipal drilling bans. Morgantown's ban had been overturned in circuit court in August, with the finding that regulation of oil and gas activity is the purview of the state; the ban, however, remains on the books as council considers zoning as a means of regulating the activity. Wellsburg and New Martinsville repealed their bans in August and September under pressure from industry. Lewisburg, situated away from intense Marcellus exploration, has not had a challenge to its ban.
What of the point of all this: the gas boom? The numbers are more ambiguous than all the ado would suggest.
In 2010, WVDEP issued 442 permits for horizontal wells into the Marcellus and other formations. Permitting is up more than 20 percent in just the first 11 months of 2011, at 535.
However, while 148 horizontal wells were completed in 2010, or about 12 per month, only 47 were reported completed over through Dec. 1. Companies have up to 90 days to report completions, but the greatest possible rate of completions is not quite six per month.
As 2011 comes to a close, bills are in draft to amend the horizontal drilling legislation in 2012. Municipal drilling bans likely will come up, as will air quality issues. Also still to be resolved is pooling, an issue judged in the end as being too hot to touch as part of the comprehensive legislation.
And the state's economic developers eagerly anticipate, on a closely related topic, the announcement in January by Shell Chemical of its choice of site for an ethane cracker — a $2 billion investment that would process that substance associated with natural gas into a raw material for plastics, revitalizing the state's and region's chemical industry.
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