Friday, February 25, 2011

Scaled Back Marcellus Regulatory Bills Remain Alive, But Without Forced Pooling

Legislators in both houses of the West Virginia Legislature scaled back legislative proposals related to added regulations and fees on Marcellus Shale drilling activities in the state. The bills were approved by committees in both houses….in an effort to keep them alive during the remaining two weeks of the 2011 regular legislative session. Neither proposal includes any forced pooling provisions. If each bill is passed by its respective house, then lawmakers will need to see if they can reconcile the differing versions in the bills.

Read articles:

Marcellus shale bills progressing
Charleston Daily Mail

Lawmakers scale back proposed Marcellus regulations
The Charleston Gazette

Wednesday, February 23, 2011

Prospects For Passage Of Marcellus Legislation Becoming Uncertain

A subcommittee of the House Judiciary Committee voted earlier this week to delete statutory pooling from a natural gas regulatory reform bill. Following this, the subcommittee finalized the proposed bill and sent it on with a recommendation that the full committee approve the measure. The pooling provision was struck from the bill due to opposition by minerals owners and others. On the Senate side, the Senate Energy, Industry and Mining Committee has sent its DEP bill to a subcommittee.

However, with the 60-day session nearing its final two weeks, passage of any legislation related to natural gas regulatory changes may be problematic. Click to read article in today’s Charleston Daily Mail.

Monday, February 21, 2011

Vocal Support From Marcellus Producers Needed Now To Preserve Statutory Pooling

A Marcellus Shale stakeholders group worked for more than four hours Sunday night refining a regulatory bill that contains statutory pooling provisions. Although the two most significant Marcellus drillers in West Virginia continue to work to advance the bill, a lack of vocal support from other Marcellus drillers may doom the pooling provisions of the bill. Mineral owners, farmers and small drillers are aggressively contacting their legislators urging defeat of the Marcellus provisions and other regulatory aspects of the bill. The opportunity for forced pooling may be lost if Marcellus drillers do not immediately make their voices heard. Key legislators who should be contacted are those in the north, northwestern and northcentral parts of the state. Legislators and their districts can be identified and contacted by email or toll free phone numbers. See http://www.legis.state.wv.us/ for legislative information.

Friday, February 18, 2011

House Judiciary Committee Develops New Version of Horizontal Drilling, Pooling Bill

The House Judiciary Committee has prepared a new draft (Com. Sub. For HB 2878) of its version of a natural gas regulatory program and statutory pooling bill. The new draft of the bill, click to read, is expected to be considered by a subcommittee starting next week. Lewis Glasser and its GR affiliate, LGCR Government Solutions, continue to monitor the 2011 legislative proceedings, which now are past the half-way point.

Articles:
Marcellus gas legislation ready for review
Associated, Press, Feb. 20, 2011
Forced pooling imperils shale bill
Charleston Daily Mail, Feb. 18, 2011

Marcellus Drilling Regs, Statutory Pooling Topics Of Public Hearing At The Capitol

A public hearing at the State Capitol yesterday afternoon brought forth a number of differing views about the pros and cons of increased natural gas drilling in West Virginia. The hearing was called so the public could provide comments on proposed legislation that would expand the state’s regulatory powers on natural gas drilling, particularly horizontal drilling activities, and would allow for statutory forced pooling. Trade groups leaders and companies talked about the economic benefits of expanded horizontal drilling, while surface owners and environmentalists expressed a variety of concerns and fears. Provided are links to articles about the hearing:
- The Charleston Gazette
- Charleston Daily Mail
- Associated Press

Tuesday, February 15, 2011

Governor Tomblin Forms Marcellus Shale Development Task Force

Governor Earl Ray Tomblin today announced the creation of a special Marcellus to Manufacturing Task Force. Speaking at the State Capitol, Tomblin said he is taking “a step forward with an economic development opportunity that I believe is right for West Virginia and our future.” “I believe Marcellus Shale is an opportunity whose time has come for us.” He noted that not only does Marcellus Shale production benefit the state as an energy source, but it also can benefit through the extraction of ethane, which could reinvigorate the state’s manufacturing sector.

Tomblin said he has asked the team of experts to come together to address these areas:
1) Research of all natural gas byproducts for potential economic development;
2) Identify existing facilities that could be modified to support such byproduct industries in West Virginia and formulate a West Virginia Marcellus-to-manufacturing action plan;
3) Research and analyze the feasibility of converting ethane to ethylene;
4) Identify potential companies that specialize in constructing or operating thermal or steam crackers in West Virginia; and
5) Develop strategies for recruiting such companies and studying existing pipelines or storage facilities that may be upgraded to accommodate the manufacturing processes associated with ethane and ethylene.

The Task Force Members are:
• Greg Babe, President and CEO Of Bayer Corporation and Bayer Material Science LLC;
• Kevin DiGregorio, Ph.D., Executive Director, Chemical Alliance Zone West Virginia;
• Patrick Donovan, Director, Maritime and Intermodal Transportation, Rahall Appalachian Transportation Institute;
• Don Garvin, Legislative Coordinator, West Virginia Environmental Council;
• W. Henry Harmon, President and CEO, Triana Energy;
• Michael John, President and CEO, Northeast Natural Energy;
• Jack Lafield, President and CEO, Caiman Energy;
• Steve Perdue, Government Affairs Manager, EQT;
• Scott Rotruck, Vice President of Corporate Development and State Government Relations, Chesapeake Energy;
• Steven H. White, Director, Affiliated Construction Trades;
• Kurt Dettinger, General Counsel for Governor Tomblin; and
• Keith Burdette, Cabinet Secretary of the West Virginia Department of Commerce.

Click to listen to the Governor's announcement.
Click to read the Governor's statement.

Thursday, February 10, 2011

EPA Issues Draft Plan For Study On Hydraulic Fracturing

The U.S. Environmental Protection Agency (EPA) has submitted a draft study plan on hydraulic fracturing for review by the agency’s Science Advisory Board (SAB), a group of independent scientists. The scope of the proposed research includes "the full lifespan of water in hydraulic fracturing, from acquisition of the water, through the mixing of chemicals and actual fracturing, to the post-fracturing stage, including the management of flowback and produced or used water and its ultimate treatment and disposal," according to the EPA's press release (click to read). The EPA says the SAB plans to review the draft plan March 7-8, 2011.

"EPA scientists, under this administration and at the direction of Congress, are undertaking a study of this practice to better understand any potential impacts it may have, including on groundwater," the agency adds.

Subcommittee Considering Adding Pooling To House Marcellus Bill

A subcommittee of the House Judiciary Committee is discussing H.B. 2878 (Hydraulic Fracturing and Horizontal Drilling Gas Act), which is the natural gas regulatory reform bill that came out of the joint interim committee meetings held in 2010. The bill, as drafted, does not include provisions for statutory pooling, but the subcommittee is considering adding these provisions. Kevin West, Managing Director for External Affairs for EQT, provided comments this morning to the subcommittee in support of statutory pooling. Other speakers who are commenting to the subcommittee on the issue of pooling include representatives for surface owner, mineral owner and royalty owner groups. LGCR Government Solutions is monitoring the subcommittee meeting, and will provide an update as things progress.

Wednesday, February 9, 2011

Ethane Cracker Incentive Bill Introduced In West Virginia Senate

Legislation has been introduced in the West Virginia Senate designed to help spur natural gas use and encourage investment in multi-billion-dollar ethane cracker facilities. The bill (S.B. 465) is the Marcellus Shale Gas and Manufacturing Development Act. Among its provisions are ones that call for the state to dedicate a portion of future Severance Tax revenues 1) to counties and cities and 2) to the state Division of Highways (to repair roads damaged by drilling activities). The bill also provides tax credits for natural gas vehicles and refueling infrastructure. Click to read more in an article in today's Charleston Daily Mail.

Monday, February 7, 2011

DEP Regulatory, Pooling Bill Introduced In West Virginia Legislature

The Tomblin Administration's version of a DEP regulatory reform bill has been introduced in both houses of the West Virginia Legislature. The bills are S.B. 424 and H.B. 3042. The legislation adds a new category of well, the "horizontal shallow well," to the regulatory structure and includes a statutory pooling provision for those shallow horizontal wells. The bills are largely based on the existing requirements for statutory pooling of deep wells with certain revisions. Under the bills, a slightly reconstituted Oil and Gas Commission shall decide pooling and unitization issues for shallow horizontal wells.

Saturday, February 5, 2011

Legislators Holding Informational Meetings On Marcellus Shale Development

The Finance and Judiciary Committees of the West Virginia Legislature are holding special joint meetings to learn about natural gas activities related to development of the Marcellus Shale. The public meetings are an outgrowth of a series of interim committee meetings held throughout 2010. The most recent meeting on February 4 focused on investment potential that the Marcellus Shale development may provide to the state, as well as a new permit and bonding policy of the state DOH that is in response to horizontal drilling activity impacts on roads. A future meeting will focus on proposed statutory pooling provisions, which are being advocated by LGCR and natural gas trade groups. Click to read an article on the meetings in The Charleston Gazette.

Lewis Glasser and its government relations affiliate, LGCR Government Solutions, are monitoring these meetings as well as other legislative matters related to the natural gas industry.

Friday, February 4, 2011

State Leaders Should Develop Policies, Laws To Attract Cracker, Other Investments

Stripping out and using ethane from 'wet' Marcellus Shale gas is being discussed more and more in West Virginia regarding its added economic benefits to the state. That was a topic of discussion yesterday between a chemicial industry official and state lawmakers who were meeting in Charleston. A vice president with Bayer CropScience told lawmakers that state officials and business leaders should work together to develop policies and laws that will encourage investment in an ethane cracker plant in the state. Read more.