Saturday, November 20, 2010

Taxing the Working Interest

On Friday Nov. 19, 2010, the WV Assessors Association presented a resolution to the West Virginia Property Valuation, Training and Procedures Commission asking it to order the State Tax Commissioner to amend the W.Va. Tax Commissioner’s valuation plan for the appraisal of industrial property. The amendment included a detailed methodology for the appraisal of chattel real interests in producing mined mineral properties, which includes coal, for the tax year 2011 and subsequent tax years. The resolution was tabled, but the Commission expects to review this issue in the future...and it will be a topic before the 2011 session of the W.Va. Legislature. The effect of the resolution would be to value, assess and then tax as personal property mined minerals including coal from producing mines as chattel real property. The working interest in a producing natural gas well is currently taxed as chattel real property. The Assessors Association believes this is and has been statutorily and constitutionally required by West Virginia law to ensure fair and equitable taxation. Nick Casey of LGCR participated in the Assessors Association’s presentation to the Commission.

Thursday, November 18, 2010

Natural Gas Trade Groups Objecting To Proposed Permit Increases, Other Regulatory Changes

The state’s two natural gas trade groups are speaking out against possible substantial increases on permit fees imposed on natural gas drilling and production activities in West Virginia. The fee increases were discussed at a legislative interim committee meeting held this week. A legislative interim committee is examining possible changes to the state’s oil and natural gas regulations, and a draft of a bill was presented to the committee. The bill in question also proposes changes to spacing requirements, would impose new water use and disposal regulations and create added requirements to minimize adverse impacts on state roadways due to drilling activities and vehicles. Click to read article: http://www.wvgazette.com/News/201011180334

This latest legislative proposal on drilling and production activities is in addition to one that has been drafted the state Department of Environmental Protection. Deliberations on both are expected as the interim committee continues to meeting in advance of the 2011 regular session of the W.Va. Legislature, which starts in January. Lewis Glasser,and its government relations affiliated, LGCR Government Solutions, are closely monitoring these activities.

Tuesday, November 16, 2010

West Virginia Considering Added Drilling, Production Regulations

The West Virginia DEP is considering the establishment of significant new regulations on the state's natural gas drilling and production industry. DEP has developed a draft of legislation that, if enacted, would require operators to identify when, where and how much water they will withdraw from creeks and streams for drilling operations. The department also wants to require the reporting of the chemicals used in hydraulic fracturing, how much wastewater is produced, and when and where wastewater would be disposed. Lewis Glasser has a copy of the proposed legislation and is reviewing it.

Tuesday, November 9, 2010

API Economist Estimates Marcellus Shale May Be 500 Tcf

Another industry expert, this time from the American Petroleum Institute, is out promoting the benefits of Marcellus Shale production. In an article in the Charleston Daily Mail, API's Chief Economist John Felmy speculates that the Marcellus Shale may contain up to 500 trillion cubic feet of natural gas. Click to read the Daily Mail article.

Monday, November 8, 2010

Conference Highlights Economic Benefits From Marcellus Activity

Attendees to a recent conference on Marcellus Shale were told that leasing, drilling and production activity produced a $1.3 billion economic benefit to West Virginia in 2009. This also provided West Virginia state and local governments with an added $109.5 million. Click to read news article about the conference.

Thursday, November 4, 2010

State Supreme Court Clears Way For Drilling In Chief Logan

The West Virginia Supreme Court of Appeals has cleared the way for natural gas drilling to start in Chief Logan State Park in Logan County, W.Va. In a unanimous opinion, the high court rejected attempts by the state DEP and environmentalists who wanted to block drilling. The justices noted that a state law banning drilling in state parks did not apply in this circumstance. Click to read the Supreme Court's opinion.

Click to read news article.