Monday, August 29, 2011

West Virginia's Emergency Marcellus Rule Approved, In Effect

West Virginia Secretary of State Natalie E. Tennant today approved the filing of a Department of Environmental Protection emergency rule temporarily regulating Marcellus shale natural gas extraction. Under West Virginia code, Tennant could have taken up to 42 days to approve or deny the filing. However, "Tennant signed the emergency rule less than a week after it was filed with her office, believing there could be no further delay in specific regulation or delay in the opportunity to responsibly develop the industry and improve West Virginia’s economy," according to a statement on the Secretary of State's web site.

Click to read Secretary Tennant's statement.

Click to read the approved emergency rule.

Monday, August 22, 2011

Office Of Oil & Gas Submits Emergency Rules Covering Horizontal Drilling Regulations

The W.Va. DEP’s Office of Oil & Gas has finalized and submitted its emergency rules to the W.Va. Secretary of State’s Office. The rules were developed as part of an Executive Order issued on July 12 by Governor Earl Ray Tomblin. The rules, which outline new regulatory guidelines and procedures for horizontal drilling activities in West Virginia, become effective after approval by the Secretary of State or the 42nd day after filing, whichever occurs first.

Click to see emergency rules.

Thursday, August 18, 2011

Marcellus Shale Bill Likely Won't Be Completed This Year

The two co-chairs of the state Legislature's Marcellus Shale study committee have differing viewpoints on the pace with which they will work on possible regulatory legislation. The Senate's Chair, Senator Doug Facemire, reportedly is wanting to go more slowly than his House counterpart on the development of a Marcellus legislative proposal. As a result, it appears the matter will await full legislative consideration until the 2012 regular session of the W.Va. Legislature. Some lawmakers had hoped that the issue would be dealt with this year during a special session. However, lawmakers are scheduled to complete work on a redistricting bill during this week's special session, and another special session in 2011 appears unlikely.

Click to read more.

Saturday, August 13, 2011

Circuit Court Judge Invalidates Morgantown's Ban On Natural Gas Drilling, Hydraulic Fracturing

A Monongalia Circuit Court Judge has issued a ruling that invalidates Morgantown's new ordinance that would have banned natural gas drilling and hydraulic fracturing. The judge ruled that regulation of natural gas development and drilling lies soley with the state Department of Environmental Protection, not with a city such as Morgantown.

"Based upon this analysis, this Court concludes that the State's interest in oil and gas development and production throughout the State as set forth in the W,VA. CODE § 22-6. et seq.(1994)., provides for the exclusive control of this area of law to be within the hands of the WVDEP. These regulations do not provide any exception or latitude to permit the City of Morgantown to impose a complete ban on frackinng or to regulate oil and gas development and production."

Click to read the order.

Wednesday, August 10, 2011

Onerous Amendments Being Offered To Proposed Marcellus Regulatory Bill

The Legislature's special Marcellus study group met last week to continue its examination and deliberations on a proposed regulatory bill. The committee is using S.B. 424 as the starting point for its work (click to read a detailed abstract of the proposed draft of the bill -- which has been prepared by legislative staff counsel).

The committee also has begun to consider a number of amendments to S.B. 424, and among these are ones that would (if adopted):
1) provide for the suspension of a drilling permit by the state Department of Transportation;
2) authorize the Legislature to study issues involving pit safety and impoundments, radioactive materials and toxins and possible tougher regulations;
3) add regulations and inspections of well site air emissions by the state Office of Air Quality; and
4) impose a new reporting requirement on horizontal drillers who would have to provide certain employee information to the state Division of Labor.

Provided is a link to these proposed amendments: click to read.

The next meeting of the Marcellus legislative study group is expected to be held during the September legislative interim meetings, which are scheduled for September 11-13 in Charleston. Lewis Glasser Casey & Rollins will continue to monitor the special legislative group's deliberations.

Pro-Marcellus Citizens Getting Cities To Rescind Drilling Bans

Citizens supportive of the growing Marcellus opportunities in West Virginia are speaking out in opposition to local bans against natural gas drilling. City councils in two Northern Panhandle towns are rescinding bans that were recently put in place. Those cities are Wellsburg and New Martinsville. Click to read stories:

Wellsburg Lifts Gas Drilling Ban
The Intelligencer/Wheeling News-Register, Aug. 10, 2011

Industry pushes back on W.Va. city drilling bans
Associated Press, August 8, 2011

Monday, August 8, 2011

DEP Seeking Drilling Fee Hike To Generate $2M For Nine New Inspectors

The state Department of Environmental Protection wants to increase drilling permit fees to generate $2 million to help fund nine new oil and natural gas inspectors positions. That is what was shared with lawmakers last week during a meeting of the Legislature's special Marcellus study group. If the state were to establish a $5,000 permit fee, then that would generate the needed $2 million in revenue, according to statements made by the DEP's general counsel.

Read more: MetroNews, August 8, 2011

Chemical Industry Touts Widespread Benefits From Shale Gas Production

Editorial: The Marcellus shale has huge potential
West Virginians would welcomea renewed chemical industry

This is a reprint of an editorial that was published in the August 8, 2011 edition of the Charleston Daily Mail.

Cal Dooley, president and CEO of the American Chemistry Council, recently laid out in a letter to the Wall Street Journal the impact that shale gas could have on the U.S. chemical industry. In a word, huge.

Production from the Marcellus shale already has turned a $100 million deficit in the U.S. balance of trade for chemicals to a $3.7 billion surplus last year. "Plastic exports alone were up 10 percent last year," he said. "Industry leaders such as Dow Chemical and Eastman Chemical have re-started plants idled by the recession. Other companies are expected to announce expansion plans in the U.S."

The council's March study of shale gas potential found that a theoretical but realistic 25 percent increase in U.S. ethane supply would bring:
* 17,000 new knowledge-intensive, high-paying jobs in the U.S. chemical industry.
* 395,000 jobs in related industries, and 230,000 jobs from new capital investment by the chemical industry.
* $4.4 billion more in federal, state, and local tax revenue, annually ($43.9 billion over 10 years).
* A $32.8 billion increase in U.S. chemical production.
* $16.2 billion in capital investment by the chemical industry to build new petrochemical and derivatives capacity.
* $132.4 billion in U.S. economic output - $83.4 billion related to increased chemical production, including additional supplier and induced impacts, plus $49 billion related to capital investment by the U.S. chemical industry).

The executive summary of the council's study notes that the scenario outlined in the report is corroborated by trends in the chemical industry. "Member companies, including the Dow Chemical Company, Shell Chemical, LyondellBasell, Bayer MaterianScience and others have announced new investments in U.S. petrochemical capacity..."

"Some of these investments are bring made in areas of the country that have been hardest hit by declines in manufacturing, improving the outlook in economically depressed areas of the country."

If that sounds like West Virginia, that's because it is. Dominion Energy announced Friday that it will build a half-billion-dollar natural gas processing plant adjacent to PPG's Natrium plant in Marshall County. It will process "wet" gas from the Marcellus and Utica shales and ship products via barge, rail, truck and pipe. The company has already converted an existing pipeline to handle the gas.

West Virginians know the value of the chemical industry, now a shadow of its former economic self. State, county and city officials should make sure development-friendly policies are in place. The industry has an almost unbelievable chance to recover.

Wednesday, August 3, 2011

Marcellus Legislative Study Group Beginning To Draft Proposed Regulatory Bill

The special joint Marcellus legislative study group has started its work on developing a proposed bill on regulatory changes. The committee’s ten members have been holding meetings during this week’s special session of the Legislature. The committee is using S.B. 424 as the starting point for its work (click to read a detailed abstract of the proposed draft of the bill -- which has been prepared by legislative staff counsel). The committee’s next meeting is set for 9 a.m. tomorrow at the Capitol, and a number of amendments are expected to be offered and considered. LGCR Government Solutions is closely monitoring the special committee’s activities.