Friday, October 28, 2011

Surface Use Amendments To Be Considered During Next Meeting Of Marcellus Study Group

The co-chair of the Legislature's special Marcellus regulation study group is hoping to hold another meeting next week. Delegate Tim Manchin said he expects the group to take up four remaining amendments during this meeting. Two of the amendments deal with surface use/owner issues. According to an article in today's The Register-Herald, Manchin said the amendments would induce operators work out issues (well location, impoundments, roads, etc.) with surface owners:

Manchin said property owners have long sought a mandatory sit-down with operators to spell out just where they intended to set up well sites, impoundments and roads, and secondly, to negotiate terms of compensation. “That’s never been mandatory,” the delegate said.

“There are some states where it is mandatory. In our first proposed amendment, we made it mandatory. The amendment under consideration does not make it mandatory. It attempts to induce the operators to do so through the use of attorneys’ fees being awarded in a subsequent disagreement over compensation.”

If a surface owner prevailed in litigation, Manchin explained, under normal circumstances, they receive the fees. “If the operator had attempted to utilize the surface owner agreement process, even if it wasn’t successful, as long as they give them notice, provided them a copy of the code section dealing with compensation, gave them some other information in that part of the process — even if they didn’t reach agreement on where it should be located, or the compensation — then, in order to get attorneys’ fees, the surface owner would have to prevail by more than 15 percent,” he said. “In other words, they would have to get 115 percent of whatever the last best offer was by the industry.”

The amendment also requires the surface owner to provide a 30-day notice of intent to sue so the industry isn’t ambushed, allowing time to make a best offer before being taken into court.

Click to read the entire article.